Business and Society Stakeholders Ethics Public Policy 15th Edition Lawrence Test Bank

Business and Society Stakeholders
Ethics Public Policy 15th Edition

Lawrence Test Bank
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Chapter 06
Organizational Ethics
True / False Questions
1. Personal values and moral character play key roles in improving a company's ethical
performance.
True False
2. In most companies, a moral atmosphere cannot be detected.
True False
3. In a benevolence ethical climate, the interests of the company's employees and external
stakeholders most likely would be given high priority.
True False
4. Managers, as major decision-makers, are one of the keys to whether a company will act ethically
or unethically.
True False
5. It is impossible for multiple ethical climates to exist within one organization.
True False
6-1
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
6. All ethics issues in business are the same.
True False
7. Honesty, integrity and accuracy are absolute requirements of the accounting function.
True False
8. The American Institute of Certified Public Accountants Code directs accountants to be

responsible to their clients and their profession, but not to the public.
True False
9. Marketing ethics include having concern for consumer health and safety issues.
True False
10. The majority of large U.S. corporations do not have codes of ethics.
True False
11. In the United States, most ethics policies are primarily based on the company's mission and
vision.
True False
12. Ethics training is typically the most costly element of an ethics program.
True False
6-2
13. According to a recent Transparency International survey, Denmark and New Zealand are two
countries that are least likely to be subjected to bribery.
True False
14. Today, more companies than ever, are turning to formal ethics audits to measure the quality of
their ethics programs.
True False
15. Bribery is found in nearly every sector of the global marketplace, but can be worse in some parts
of the world.
True False
Multiple Choice Questions
16. The core components upon which a company's ethical performance depends include:
A. The values and virtues of the managers.
B. The personal character of the managers and employees.
C. The traditions, attitudes, and business practices built into a company's culture.
D. All of the above.
6-3
17. The unspoken understanding among employees of what is and is not acceptable behavior is
called:
A. Ethical climate.
B. Efficiency.
C. Success.
D. Rites and rituals.
18. If a manager approaches ethical issues with a self-centered approach, emphasis will be on:
A. Integrity.
B. Social relationship.
C. Economic efficiency.
D. Laws.
19. Which of the following is not an example of an ethical criterion?
A. Egoism.
B. Concern for others.
C. Principle.
D. Corporate driven.
6-4
20. If a manger approaches ethics with benevolence in mind, he or she would stress what?
A. Friendly relations with an employee.
B. Company rules and procedures.
C. Laws and professional codes.
D. Economic efficiency.
21. Which ethical criterion is described by the idea that a company should strive for efficiency?
A. Egoism.
B. Benevolence.
C. Principle.
D. Business-centered.
22. By law, the financial records of publicly held companies are required to be:
A. Managed by an accounting department of at least five CPAs.
B. Summarized in the employee manual for new hires.
C. Reviewed quarterly by the IRS.
D. Audited by a certified professional accounting firm.
6-5
23. All of the following are commitments of the Principles of the Code of Professional Conduct of the
American Institute of Certified Public Accountants except:
A. The Public Interest.
B. Objectivity and Independence.
C. Due Process.
D. Due Care.
24. A member of the Chartered Financial Analyst Institute (CFA) must:
A. Promote the integrity of and uphold the rules governing global capital markets.
B. Act with integrity, competence, diligence, respect, and in an ethical manner with the public.
C. Maintain and improve their professional competence.
25. All of the following are considered to be ethical issues for marketing professionals except:
A. Fostering trust in the marketing system.
B. Embracing ethical values.
C. Doing no harm.
D. Ignoring market fair dealing.
6-6
26. Ethical challenges for information technology employees include:
A. Data privacy.
B. Laptop speed.
C. Copyright protection.
D. Both A and C, but not B.
27. When attempting to build ethical safeguards into the company, businesses can take the following
specific approaches:
A. Institutional and Legal.
B. Legal and Practical.
C. Compliance and Integrity.
D. Value-based and Consequentialism.
28. Building ethical safeguards into a company's everyday routines is called:
A. Change management.
B. Justifying ethics.
C. Institutionalizing ethics.
D. Ethical awareness.
6-7
29. A company that channels employee behavior in a lawful direction by emphasizing the threat of
detection and punishment is:
A. Operating under the compliance-based approach.
B. Practicing "tone at the top."
C. Operating under the integrity-based approach.
D. Operating under the instrumental policy approach.
30. Integrity-based ethics programs:
A. Seeks to avoid legal sanctions.
B. Combines concern for the law with an emphasis on employee responsibility.
C. Threatens employees with punishment for non-compliance with the ethics program.
D. Are predominately implemented within the European Union.
31. A giant step is taken toward improving ethical performance throughout the company when:
A. The firm hires a university ethics professor to lecture employees on moral philosophy.
B. The Justice Department launches an investigation of the firm's pricing practices.
C. Senior-level managers signal to employees that they believe ethics is a high priority.
D. A consumer hot line is created and staffed 24 hours a day.
6-8
32. Business managers need a set of ethical guidelines to help them:
A. Understand the changing customs throughout the world.
B. Justify the resolution which best helps them.
C. Identify and analyze the nature of the ethical problem.
D. None of the above.
33. Ethics policies typically cover all of the following issues except:
A. Developing guidelines for accepting or refusing gifts from suppliers.
B. Encouraging discriminatory personnel practices.
C. Avoiding conflict of interest.
D. Maintaining the security of proprietary information.
34. Most ethics or compliance officers are generally entrusted to:
A. Act as a liaison between the company and the Securities and Exchange Commission.
B. Reduce the risks to the company of employee misconduct.
C. Annually distribute copies of the company's code of ethics to all interested stakeholders.
D. Arrange for ethics training for employees at a nearby university.
35. Which type of employee is most likely to report ethical issues in the workplace?
A. Rank and file.
B. Middle managers.
C. Executives.
D. Temporary workers.
6-9
36. The most effective ethics programs utilize which of the following?
A. Written policy.
B. Posters.
C. Quick reference guides.
37. The critical component in installing an effective ethics program is:
A. To allow all employees the freedom to act as they wish.
B. In hiring an expensive ethics consultant.
C. The integration of various ethics safeguards into a comprehensive program.
D. Maintaining the position as the industry sales leader.
38. Which company ethics safeguard is commonly implemented as an employee "helpline"?
A. Top management commitment.
B. Code of ethics.
C. Reporting mechanisms.
D. Compliance tracking.
6-10
39. Which of these components are not considered during a risk assessment audit to gauge the
effectiveness of a firm's ethics programs?
A. The financial bottom line.
B. Top management commitment.
C. Training programs.
D. Ethical policies.
40. Ethisphere Magazine recognizes and rewards ethical leadership and business practices
worldwide according to their:
A. Regulatory Percentage Track (RPT).
B. Ethics and Leadership Radar (ELR).
C. Quality Measurement (QM).
D. Ethical Quotient (EQ).
41. Recipients of the corporate ethics awards show that:
A. Awards are based on economic power, not ethical performance.
B. Firms can be financially successful and ethically focused.
C. Being legally compliant results in receiving an ethics award.
D. Improving ethical performance is very costly, but bolsters a firm's reputation.
6-11
42. The purpose of the Institute of Business Ethics' mobile application "Say No Toolkit" is to:
A. Monitor inter-office dating.
B. Always get the lowest prices on supplies.
C. Minimize the risk of corruption.
D. Avoid drugs in the workplace.
43. Which U.S. Act prohibits executives representing U.S.-based companies from paying bribes to
foreign government officials, political parties, or political candidates?
A. The USA Patriot Act.
B. The U.K. Bribery Act.
C. The Corruption of Foreign Officials Act.
D. The U.S. Foreign Corrupt Practices Act.
44. Which of these statements is true about the U.K. Bribery Act?
A. Provides an exemption for "facilitating payments".
B. Contains a strict liability offense for failure to prevent bribery by commercial organizations.
C. Prohibits bribery only for government officials.
D. Requires that improper actions be made "corruptly."
6-12
45. Which country recently enacted new laws to counter bribery and corruption?
A. Russia.
B. Somalia.
C. Brazil.
D. Argentina.
Short Answer Questions
46. Define ethical climate. Discuss the differences and similarities among the ethical climates outlined
in the textbook.
6-13
47. How are firms honored for their efforts to create an ethical climate? Provide examples of role
model companies and what efforts they took to develop effective ethics programs.
48. Not all ethics issues in business are the same. Discuss the distinct ethical issues across three
different organizational functions. Highlight details of the professional codes of conduct for each.
49. Construct a comprehensive ethics program using four of the five ethical safeguards identified in
the textbook.
6-14
50. Discuss the importance of ethics training at different levels of an organization. Is it more important
for mangers to receive ethical training? Why or why not?
51. Define bribery. Explain why certain countries are less likely to participate in such acts.
52. Describe how a firm might implement the "Say No Toolkit" to help combat corruption. How could
potential employee resistance be overcome? Could there be any downsides to using the tool? In
what ways could the firm benefit?
6-15
Chapter 06 Organizational Ethics Answer Key
True / False Questions
1. Personal values and moral character play key roles in improving a company's ethical
performance.
TRUE
Accessibility: Keyboard Navigation

Difficulty: 1 Easy
Learning Objective: 06-01 Classifying an organization's culture and ethical climate.
2. In most companies, a moral atmosphere cannot be detected.
FALSE

Difficulty: 1 Easy
3. In a benevolence ethical climate, the interests of the company's employees and external
stakeholders most likely would be given high priority.
TRUE

Difficulty: 1 Easy
6-16
4. Managers, as major decision-makers, are one of the keys to whether a company will act
ethically or unethically.
TRUE

Difficulty: 1 Easy
5. It is impossible for multiple ethical climates to exist within one organization.
FALSE

Difficulty: 1 Easy
Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business.
6. All ethics issues in business are the same.
FALSE

Difficulty: 1 Easy
7. Honesty, integrity and accuracy are absolute requirements of the accounting function.
TRUE

Difficulty: 1 Easy
6-17
8. The American Institute of Certified Public Accountants Code directs accountants to be
responsible to their clients and their profession, but not to the public.
FALSE

Difficulty: 1 Easy
9. Marketing ethics include having concern for consumer health and safety issues.
TRUE

Difficulty: 1 Easy
10. The majority of large U.S. corporations do not have codes of ethics.
FALSE

Difficulty: 1 Easy
Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar
safeguards.
11. In the United States, most ethics policies are primarily based on the company's mission and
vision.
FALSE

Difficulty: 1 Easy
safeguards.
6-18
12. Ethics training is typically the most costly element of an ethics program.
TRUE

Difficulty: 1 Easy
safeguards.
13. According to a recent Transparency International survey, Denmark and New Zealand are two
countries that are least likely to be subjected to bribery.
TRUE

Difficulty: 1 Easy
safeguards.
14. Today, more companies than ever, are turning to formal ethics audits to measure the quality of
their ethics programs.
FALSE

Difficulty: 1 Easy
Learning Objective: 06-04 Assessing the strengths and weaknesses of a comprehensive ethics program.
15. Bribery is found in nearly every sector of the global marketplace, but can be worse in some
parts of the world.
TRUE

Difficulty: 1 Easy
6-19
Learning Objective: 06-05 Understanding how to conduct business ethically in the global marketplace.
Multiple Choice Questions
16. The core components upon which a company's ethical performance depends include:
A. The values and virtues of the managers.
B. The personal character of the managers and employees.
C. The traditions, attitudes, and business practices built into a company's culture.

Difficulty: 2 Medium
17. The unspoken understanding among employees of what is and is not acceptable behavior is
called:
A. Ethical climate.
B. Efficiency.
C. Success.
D. Rites and rituals.

Difficulty: 1 Easy
6-20
18. If a manager approaches ethical issues with a self-centered approach, emphasis will be on:
A. Integrity.
B. Social relationship.
C. Economic efficiency.
D. Laws.

Difficulty: 1 Easy
19. Which of the following is not an example of an ethical criterion?
A. Egoism.
B. Concern for others.
C. Principle.
D. Corporate driven.

Difficulty: 1 Easy
20. If a manger approaches ethics with benevolence in mind, he or she would stress what?
A. Friendly relations with an employee.
B. Company rules and procedures.
C. Laws and professional codes.
D. Economic efficiency.

6-21
21. Which ethical criterion is described by the idea that a company should strive for efficiency?
A. Egoism.
B. Benevolence.
C. Principle.
D. Business-centered.

22. By law, the financial records of publicly held companies are required to be:
A. Managed by an accounting department of at least five CPAs.
B. Summarized in the employee manual for new hires.
C. Reviewed quarterly by the IRS.
D. Audited by a certified professional accounting firm.

6-22
23. All of the following are commitments of the Principles of the Code of Professional Conduct of
the American Institute of Certified Public Accountants except:
A. The Public Interest.
B. Objectivity and Independence.
C. Due Process.
D. Due Care.

24. A member of the Chartered Financial Analyst Institute (CFA) must:
A. Promote the integrity of and uphold the rules governing global capital markets.
B. Act with integrity, competence, diligence, respect, and in an ethical manner with the public.
C. Maintain and improve their professional competence.

25. All of the following are considered to be ethical issues for marketing professionals except:
A. Fostering trust in the marketing system.
B. Embracing ethical values.
C. Doing no harm.
D. Ignoring market fair dealing.
6-23
26. Ethical challenges for information technology employees include:
A. Data privacy.
B. Laptop speed.
C. Copyright protection.
D. Both A and C, but not B.

27. When attempting to build ethical safeguards into the company, businesses can take the
following specific approaches:
A. Institutional and Legal.
B. Legal and Practical.
C. Compliance and Integrity.
D. Value-based and Consequentialism.

safeguards.
6-24
28. Building ethical safeguards into a company's everyday routines is called:
A. Change management.
B. Justifying ethics.
C. Institutionalizing ethics.
D. Ethical awareness.

safeguards.
29. A company that channels employee behavior in a lawful direction by emphasizing the threat of
detection and punishment is:
A. Operating under the compliance-based approach.
B. Practicing "tone at the top."
C. Operating under the integrity-based approach.
D. Operating under the instrumental policy approach.

Difficulty: 1 Easy
safeguards.
6-25
30. Integrity-based ethics programs:
A. Seeks to avoid legal sanctions.
B. Combines concern for the law with an emphasis on employee responsibility.
C. Threatens employees with punishment for non-compliance with the ethics program.
D. Are predominately implemented within the European Union.

safeguards.
31. A giant step is taken toward improving ethical performance throughout the company when:
A. The firm hires a university ethics professor to lecture employees on moral philosophy.
B. The Justice Department launches an investigation of the firm's pricing practices.
C. Senior-level managers signal to employees that they believe ethics is a high priority.
D. A consumer hot line is created and staffed 24 hours a day.

safeguards.
6-26
32. Business managers need a set of ethical guidelines to help them:
A. Understand the changing customs throughout the world.
B. Justify the resolution which best helps them.
C. Identify and analyze the nature of the ethical problem.
D. None of the above.

Difficulty: 3 Hard
safeguards.
33. Ethics policies typically cover all of the following issues except:
A. Developing guidelines for accepting or refusing gifts from suppliers.
B. Encouraging discriminatory personnel practices.
C. Avoiding conflict of interest.
D. Maintaining the security of proprietary information.

safeguards.
6-27
34. Most ethics or compliance officers are generally entrusted to:
A. Act as a liaison between the company and the Securities and Exchange Commission.
B. Reduce the risks to the company of employee misconduct.
C. Annually distribute copies of the company's code of ethics to all interested stakeholders.
D. Arrange for ethics training for employees at a nearby university.

safeguards.
35. Which type of employee is most likely to report ethical issues in the workplace?
A. Rank and file.
B. Middle managers.
C. Executives.
D. Temporary workers.

safeguards.
6-28
36. The most effective ethics programs utilize which of the following?
A. Written policy.
B. Posters.
C. Quick reference guides.

Difficulty: 1 Easy
safeguards.
37. The critical component in installing an effective ethics program is:
A. To allow all employees the freedom to act as they wish.
B. In hiring an expensive ethics consultant.
C. The integration of various ethics safeguards into a comprehensive program.
D. Maintaining the position as the industry sales leader.

safeguards.
6-29
38. Which company ethics safeguard is commonly implemented as an employee "helpline"?
A. Top management commitment.
B. Code of ethics.
C. Reporting mechanisms.
D. Compliance tracking.

safeguards.
39. Which of these components are not considered during a risk assessment audit to gauge the
effectiveness of a firm's ethics programs?
A. The financial bottom line.
B. Top management commitment.
C. Training programs.
D. Ethical policies.

6-30
40. Ethisphere Magazine recognizes and rewards ethical leadership and business practices
worldwide according to their:
A. Regulatory Percentage Track (RPT).
B. Ethics and Leadership Radar (ELR).
C. Quality Measurement (QM).
D. Ethical Quotient (EQ).

41. Recipients of the corporate ethics awards show that:
A. Awards are based on economic power, not ethical performance.
B. Firms can be financially successful and ethically focused.
C. Being legally compliant results in receiving an ethics award.
D. Improving ethical performance is very costly, but bolsters a firm's reputation.

42. The purpose of the Institute of Business Ethics' mobile application "Say No Toolkit" is to:
A. Monitor inter-office dating.
B. Always get the lowest prices on supplies.
C. Minimize the risk of corruption.
D. Avoid drugs in the workplace.
6-31
43. Which U.S. Act prohibits executives representing U.S.-based companies from paying bribes to
foreign government officials, political parties, or political candidates?
A. The USA Patriot Act.
B. The U.K. Bribery Act.
C. The Corruption of Foreign Officials Act.
D. The U.S. Foreign Corrupt Practices Act.

44. Which of these statements is true about the U.K. Bribery Act?
A. Provides an exemption for "facilitating payments".
B. Contains a strict liability offense for failure to prevent bribery by commercial organizations.
C. Prohibits bribery only for government officials.
D. Requires that improper actions be made "corruptly."

Difficulty: 3 Hard
6-32
45. Which country recently enacted new laws to counter bribery and corruption?
A. Russia.
B. Somalia.
C. Brazil.
D. Argentina.

Short Answer Questions
46. Define ethical climate. Discuss the differences and similarities among the ethical climates
outlined in the textbook.
Answers may vary.
Difficulty: 3 Hard
6-33
47. How are firms honored for their efforts to create an ethical climate? Provide examples of role
model companies and what efforts they took to develop effective ethics programs.
Answers may vary.
Difficulty: 3 Hard
48. Not all ethics issues in business are the same. Discuss the distinct ethical issues across three
different organizational functions. Highlight details of the professional codes of conduct for
each.
Answers may vary.
Difficulty: 3 Hard
49. Construct a comprehensive ethics program using four of the five ethical safeguards identified
in the textbook.
Answers may vary.
Difficulty: 3 Hard
safeguards.
6-34
50. Discuss the importance of ethics training at different levels of an organization. Is it more
important for mangers to receive ethical training? Why or why not?
Answers may vary.
Difficulty: 3 Hard
safeguards.
51. Define bribery. Explain why certain countries are less likely to participate in such acts.
Answers may vary.
Difficulty: 3 Hard
52. Describe how a firm might implement the "Say No Toolkit" to help combat corruption. How
could potential employee resistance be overcome? Could there be any downsides to using the
tool? In what ways could the firm benefit?
Answers may vary.
Difficulty: 3 Hard
6-35

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Business and Society Stakeholders

Ethics Public Policy 15th Edition

True / False Questions

2. In most companies, a moral atmosphere cannot be detected.

stakeholders most likely would be given high priority.

5. It is impossible for multiple ethical climates to exist within one organization.

8. The American Institute of Certified Public Accountants Code directs accountants to be

Multiple Choice Questions

A. The values and virtues of the managers.

B. The personal character of the managers and employees.

D. All of the above.

D. Rites and rituals.

19. Which of the following is not an example of an ethical criterion?

B. Concern for others.

A. Friendly relations with an employee.

B. Company rules and procedures.

C. Laws and professional codes.

A. Managed by an accounting department of at least five CPAs.

B. Summarized in the employee manual for new hires.

C. Reviewed quarterly by the IRS.

D. Audited by a certified professional accounting firm.

A. The Public Interest.

B. Objectivity and Independence.

24. A member of the Chartered Financial Analyst Institute (CFA) must:

C. Maintain and improve their professional competence.

D. All of the above.

A. Fostering trust in the marketing system.

B. Embracing ethical values.

D. Ignoring market fair dealing.

D. Both A and C, but not B.

A. Institutional and Legal.

B. Legal and Practical.

C. Compliance and Integrity.

D. Value-based and Consequentialism.

28. Building ethical safeguards into a company's everyday routines is called:

A. Operating under the compliance-based approach.

B. Practicing "tone at the top."

C. Operating under the integrity-based approach.

D. Operating under the instrumental policy approach.

30. Integrity-based ethics programs:

A. Seeks to avoid legal sanctions.

B. Combines concern for the law with an emphasis on employee responsibility.

D. Are predominately implemented within the European Union.

B. The Justice Department launches an investigation of the firm's pricing practices.

D. A consumer hot line is created and staffed 24 hours a day.

A. Understand the changing customs throughout the world.

B. Justify the resolution which best helps them.

C. Identify and analyze the nature of the ethical problem.

D. None of the above.

A. Developing guidelines for accepting or refusing gifts from suppliers.

B. Encouraging discriminatory personnel practices.

C. Avoiding conflict of interest.

D. Maintaining the security of proprietary information.

34. Most ethics or compliance officers are generally entrusted to:

B. Reduce the risks to the company of employee misconduct.

D. Arrange for ethics training for employees at a nearby university.

A. Rank and file.

C. Quick reference guides.

D. All of the above.

37. The critical component in installing an effective ethics program is:

A. To allow all employees the freedom to act as they wish.

B. In hiring an expensive ethics consultant.

C. The integration of various ethics safeguards into a comprehensive program.

D. Maintaining the position as the industry sales leader.