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Ethics Exam 1
Chapters 1,2,3,4
| Question | Answer |
|---|---|
| During which timeframe did the field of business ethics begin to form and businesses became concerned with their image? | The 1970s |
| During which timeframe did stakeholder theory becomes the dominant business ethics theory and organizations worked individually or as an industry to establish ethical guidelines? | The 1980s |
| ________ are defined as specific and pervasive boundaries for behavior that should not be violated. | Principles |
| ________ are defined as enduring beliefs and ideals that are socially enforced. | Values |
| Which of the following is NOT a benefit that ethical businesses experience? | Six Sigma Certification |
| Social responsibility can be viewed as ________, whereas business ethics involves carefully thought out ________. | a contract with society; rules or heuristics of business conduct that guide decision making |
| Which of the following is Step 3 of implementing a stakeholder orientation? | Identifying Stakeholder Issues |
| The stakeholder model of corporate governance is ________. | a broader view of the purpose of business that considers stakeholder welfare in tandem with corporate needs and interests |
| Which of the following is Step 6 of implementing a stakeholder orientation? | Gaining Stakeholder Feedback |
| A stakeholder is an individual or group that ________. | A stakeholder is an individual or group that ________. |
| Through risk analysis it is possible to quantify the trade-offs and environmental risks associated with business decisions in order to ________. | determine whether to accept or reject environmentally-related activities and programs |
| Pollution, acid rain, and climate change are all environmental issues that are associated with which of the following? | Atmosphere |
| Sustainable Development is ________. | meeting the needs of the present without compromising the ability of future generations to meet their own needs, with an emphasis on the natural environment |
| A strategic environmental audit is ________. | the evaluation of sustainability efforts reported to stakeholders |
| Pollution, waste management, deforestation, urban sprawl, biodiversity, and genetically modified organisms are all environmental issues that are associated with which of the following? | Land |
| Strategic philanthropy is defined as ________. | the synergistic and mutually beneficial use of an organization’s core competencies and resources to deal with key stakeholders so as to bring about organizational and societal benefits |
| Major criticisms of the ________ include that it will create chaos in the regulatory system and the government will gain too much power. | Dodd-Frank Wall Street Reform and Consumer Protection Act |
| Sarbanes-Oxley Act (SOX), Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), and Federal Sentencing Guidelines for Organizations (FSGO) all fall under the ________ category of laws. | Incentives to Encourage Organizational Compliance Programs to Deter Misconduct |
| The Consumer Financial Protection Bureau was created to ________. | regulate consumer financial products and services |
| Laws Regulating Competition include those that ________. | prevent monopolies, inequitable pricing practices, and other practices that reduce or restrict competition |
| Before 1960 | Ethical issues discussed within theology/philosophy or from a legal perspective |
| The 1960s | Rise of consumerism and anti-business trend |
| The 1970s | The field of business ethics began to form, and businesses became concerned with their image |
| The 1980s | Stakeholder theory becomes the dominant business ethics theory and organizations worked individually or as an industry to establish ethical guidelines |
| The 1990s | Federal Sentencing Guidelines for Organizations (FSGO) incentivizes organizations to have ethical guidelines |
| The 2000s | FSGO amendments and Sarbanes Oxley Act (SOX) |
| The 2010s | Dodd-Frank Wall Street Reform and Consumer Protection Act and distrust of corporate America |
| The 2020s | Environmental social governance and technology (AI and data) focus |
| Shareholder | Anyone who own stock in a publicly traded company. |
| Stakeholder | Anyone who has a “stake” or claim in some aspect of a company’s products, operations, markets, industry, and/or outcomes |
| What is corporate governance | nvolves the development of formal systems of accountability, oversight and control that helps remove the possibility for employees to make unethical decisions |
| why is corporate governance important? | Allows companies to limit unethical behavior without changing the morals/principles/values of their employees, which is easier than changing the hearts and minds of employees. |
| Two Models of Corporate Governance | Shareholder and Stakeholder model |
| Shareholder Model | Founded in classic economic precepts, including the goal of maximizing wealth for investors and owners |
| Is a limited model that only accounts for the wants/needs of one stakeholder group: | shareholders |
| Stakeholder Model | An organization must answer to all stakeholders, while deciding which groups to satisfy if only limited resources ◦ Is a broader model that accounts for the wants/needs of all stakeholder groups. |
| Duty of Care (Diligence) | -The legal obligation of an individual or organization to make informed and prudent decisions and avoid behavior that could cause harm to others -Focuses on exercising reasonable diligence and making informed decisions |
| Duty of Loyalty | -The obligation of individuals to make decisions that are in the best interest of the corporation and its stakeholders -Focuses on acting without personal conflicts and prioritizing the organization's interests above one's own personal gain |
| Stakeholder Assessment | Acknowledging and actively monitoring the environmental concerns of all legitimate stakeholders – Ask your stakeholders which environmental issues are important to them |
| Risk Analysis | Assess environmental risks associated with business decisions, but the difficulty lies in measuring the costs and benefits of such decisions – Think about what risks you may have based on the type of company |
| Strategic Environmental Audit | Evaluation of sustainability efforts reported to stakeholders – A small scale ethics audit only focused on the environment |
| SOX | Provided oversight of corporate accounting practices including making fraudulent financial reporting a criminal offense and increasing fraud penalties. |
| When was SOX Created | 2002 in response to Enron, WorldCom, etc. |
| Dodd-Frank | Improved financial regulation, increased oversight of the industry, and prevented risk- taking and deceptive practices. |
| When was Dodd-Frank created? | 2010 in response to the 2008-2009 financial crisis |
| FSGO | Fostered ethical awareness and incentives. |
| When was FSGO created? | 1991 and has been continually updated and strengthened |
| Voluntary Responsibilities | Business’s contributions to stakeholders, often via donations |
| Cause-Related Marketing | Ties a product to a social concern through a marketing program |
| Strategic Philanthropy | Mutually beneficial use of an organization’s core competencies and resources to aid key stakeholders, which brings about organizational and societal benefits |
| Social Entrepreneurship | When an entrepreneur founds an organization with the purpose of creating social value |
| As Business Ethics has developed, there has been an overall trend of increasing in all EXCEPT which of the following? government involvement | religious collaboration |
| During which timeframe were ethical issues discussed within theology/philosophy or from a legal perspective? | before 1960 |
| During which timeframe did the Federal Sentencing Guidelines for Organizations (FSGO) incentivize organizations to have ethical guidelines? | The 1990s |
| During which timeframe was environmental social governance and technology (AI and data) the focus of ethics? | The 2020s |
| Which of the following is not one of the benefits of being ethical and socially responsible in business? | Increased stock trading |
| Stakeholder orientation involves three distinct activities, including all of the following EXCEPT ________. | distribution of information about stakeholder groups to the media |
| Strong corporate governance removes ________. | the opportunity for employees to make unethical decisions |
| The four levels of social responsibility are ________. | economic, legal, ethical, and philanthropic |
| Which of the following is Step 1 of implementing a stakeholder orientation? | Assessing the Corporate Culture |
| Which of the following is NOT an example of a primary stakeholder? | Media |
| A strategic environmental audit is ________. | the evaluation of sustainability efforts reported to stakeholders |
| Sustainable Development is ________. | meeting the needs of the present without compromising the ability of future generations to meet their own needs, with an emphasis on the natural environment |
| Stakeholder assessment involves ________. | acknowledging and actively monitoring the environmental concerns of all legitimate stakeholders |
| Misleading a consumer into thinking a product or service is more environmentally friendly than it really is is called ________. | greenwashing |
| Which of the following provides an organization with competitive advantage, customer loyalty, and increased profit, while maintaining the natural environment? | Sustainability |
| Which of the following is NOT a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act? | Creates an organization to monitor accounting firms auditing public corporations and establishes standards and rules for auditors in accounting firms |
| Civil law ________ and is enforced by ________. | defines the rights and duties of individuals and organizations; individuals and organizations via lawsuit |
| The Consumer Financial Protection Bureau was created to ________. | regulate consumer financial products and services |
| Externally imposed boundaries of conduct (laws, rules, regulations, and other requirements) are called ________. | Mandated Boundaries |
| Which of the following groups is NOT a group that receives special legal protections under laws that promote equity? | The highly educated |
| Why we study ethics? | Organizational -Employee commitment -Investor Loyalty -Customer satisfaction -Profit -trust |
| 1 step to stakeholder framework: | assess corporate culture |
| 2nd step to stakeholder framework: | Identify stakeholder groups |
| 3rd step to stakeholder framework: | Identify stakeholder issues |
| 4th step to stakeholder framework: | Assessing organizational commitment to social responsibility |
| 5th step to stakeholder framework: | identify resources and determine urgency |
| 6th step to stakeholder framework: | Gaining stakeholder feedback |
Created by:
Brooke Lindenberger
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