Developing and Implementing an Effective Ethics Program

Developing and Implementing an Effective Ethics Program 1. In the "bad apple–bad barrel" analogy, the bad barrel refers to which of the following? a. Unethical employees b. A corrupt society c. A criminal organization d. Indifferent management e. An unethical corporate culture ANSWER: e 2. Which of the following statements about codes of conduct are true? (Select four) a. They show employees that the business is both responsible and ethical. b. They address every ethical issue that an employee may face. c. They help communicate expectations for employees. d. They provide rules and guidelines for employees to follow. e. They give the company culture an ethical foundation. a, c, d, e ANSWER: 3. A strong ethics program includes which of the following elements? (Select four) a. A clause promising good stock market performance b. A written code of conduct or ethics c. Formal ethics training d. Auditing, monitoring, enforcement, and revision of standards e. High-level personnel to oversee the program ANSWER: b, c, d, e 4. In the absence of ethics programs, employees are likely to make decisions based on which of the following? a. Their observations of how their coworkers and superiors behave b. How they and their family members behave at home c. Whatever they can get away with d. Their educational backgrounds e. What they did at their previous organizations ANSWER: a 5. Formal statements that describe what an organization expects of its employees in terms of ethical behavior are known as _______. a. mission statements b. codes of conduct c. policies on confidentiality d. environmental policies e. the Federal Sentencing Guidelines for Organizations ANSWER: b 6. Because a corporation can be considered a moral agent, it is therefore _______. a. obligated to perform philanthropic responsibilities b. required to have an ethics officer c. responsible to society for its actions d. required to adopt moral philosophies e. not accountable for the conduct of its employees ANSWER: c 7. Which type of orientation strives to develop shared standards? a. Obedience b. Values c. Legal d. Complianc e e. Systematic ANSWER: b 8. For an ethics and compliance program to properly function, which of the following is true? a. Consistent enforcement and disciplinary action are essential. b. Employees must be monitored using any means necessary. c. It is not necessary to set measurable program objectives. d. The same program should be used in all countries of operation, regardless of cultural differences. e. The company must wait until after misconduct occurs to develop a means of preventing it. ANSWER: a 9. Which of the following is the most comprehensive? a. Code of values b. Mission statement c. Code of ethics d. Statement of values e. Statement of principles ANSWER: c 10. At the heart of the Federal Sentencing Guidelines for Organizations is a(n) _______. a. "tit-for-tat" philosophy that punishes wrongdoing b. foundation based on the Golden Rule philosophy c. Iron Fist philosophy that severely punishes wrongdoing d. carrot-and-stick philosophy that rewards efforts to improve ethics e. utilitarian philosophy of the greatest good for the greatest number ANSWER: d 11. Which of the following pieces of legislation has increased the responsibilities on ethics officers and boards of directors to monitor financial reporting? a. Sarbanes-Oxley Act b. Robinson-Patman Act c. Ethics Officer Responsibility Act d. Sherman Antitrust Act e. Enron Financial Responsibility Act ANSWER: a 12. Because of social isolation that creates insensitivity and a lower level of motivation to regulate ethical decision making, which of the following may be more inclined to engage in unethical organizational conduct? a. Low-level employees b. International managers c. High-status officials d. Government officials e. Fortune 500 companies ANSWER: c 13. Because their jobs and personal identity are often intimately connected to quarterly returns, top managers tend to focus on which of the following? a. Financial performance b. Ethical performance c. Ethical performance d. Board of directors’ recommendations e. Adherence to the code of conduct ANSWER: a 14. Which of the following is one responsibility of an ethics officer? a. Prosecuting illegal activities b. Signing off on financial documents c. Monitoring and auditing ethical conduct d. Conducting employee performance evaluations e. Answering the ethics hotline ANSWER: c 15. Which of the following is one of the key goals of successful ethics training programs? a. To completely eliminate any chances of misconduct b. To identify key risk areas employees will face c. To make the company look good to stakeholders d. To comply with legal requirements e. To train employees on how to address every ethical situation they may encounter b ANSWER: 16. Which of the following is a major problem organizations tend to have when implementing an organizational ethics program? a. They fail to adopt formal corporate codes of ethics. b. Government requirements for ethics programs are too ambiguous. c. Wall Street investors demand companies take illegal action to increase profits. d. Financial problems make ethical conduct impossible to pursue. e. Top managers don't integrate codes, values, and standards into their firms' corporate cultures. ANSWER: e 17. Which of the following is an advantage of a values-based ethics program over a compliance-based one? a. Employees learn to make decisions based on values such as fairness, compassion, respect, and transparency. b.Diverse employees no longer have differing values. c. It requires employees to identify with and commit to specific required conduct. d.A values orientation uses legal terms, statutes, and contracts that teach employees the rules and penalties for noncompliance. e. Unlike values-based programs, compliance-based programs cannot prevent misconduct. ANSWER: a 18. Which of the following is a common mistake made when implementing an ethics program? a. Setting specific program objectives b. Developing materials that are not understandable by the average employee c. Adapting a firm's ethics program to its international operations d. Allowing lower-level employees to make ethical decisions e. Having one person take responsibility for implementing the ethics program b ANSWER: 19. Hotline 100 is a company that offers ethics hotline maintenance for organizations. The company accepts anonymous calls 24/7, 365 days a year. Which component of the Federal Sentencing Guidelines for Organizations compliance program does a company like Hotline 100 help organizations to satisfy? a. Code of conduct b. Enforcement of standards, codes, and rules c. Delegation of authority to ethical persons d. Systems for monitoring, auditing, and reporting misconduct e. Ethics training d ANSWER: 20. Which of the following statements about ethics training are true? (Select four) a. Ethics training can educate employees about the firm's policies and expectations, as well as about relevant laws and regulations and general social standards. b.Ethics training can dictate personal ethics on the job so employees no longer have differences in beliefs. c. Ethics training can make employees aware of available resources, support systems, and designated personnel who can assist them with ethical and legal advice. d.Ethics training can empower employees to ask tough questions and make ethical decisions. e. Ethics training can affect the influence of organizational culture, coworkers and superiors, and opportunity. ANSWER: a, c, d, e 21. Which of the following generates an ethical program that creates order by requiring that employees identify with and commit to specific required conduct using legal terms and statutes? Values orientation a. b. Code of conduct c. Statement of values d. Code of ethics e. Compliance orientation ANSWER: e 22. Which of the following are key goals of successful ethics training programs? (Select four) a. Identify key risk areas employees will face. b.Align employee conduct with organizational reputation and branding. c. Provide a hierarchy of leadership for employees to contact when they are faced with an ethical dilemma they do not know how to resolve. d.Allow employees to solve ethical issues using their best judgment. e. Allow a mechanism for employees to voice their concerns that is anonymous but provides answers to key questions. ANSWER: a, b, c, e 23. Which individual is generally responsible for implementing disciplinary action for violation of a firm's ethics standards? a. CEO b. President c. Immediate supervisors d. Ethics officer e. Chairman of the Board ANSWER: d 24. To ensure that an ethics program addresses the needs of the average employee, it should include which of the following? (Select four) a. Feedback from employees across the firm b. A question-and-answer section c. Additional resources for guidance d. Lengthy legal documents e. User-friendly checklists, illustrations, and cartoons ANSWER: a, b, c, e 25. Which of the following serve as a central contact point where critical comments, dilemmas, and advice can be assigned to the person most appropriate for handling a specific case? a. Training programs b. Mission statements c. Codes of conduct d. Hotlines e. Boards of directors ANSWER: d 26. Which of the following is one of the main reasons employees do not report observed misconduct? a. Apathy b. Most employees do not observe any misconduct c. Fear of retaliation d. Laws and regulations do not protect employees e. Hotlines do not work well c ANSWER: 27. Because top managers may be more insensitive to ethical issues due to their focus on financial performance, the FSGO guidelines suggest that ethics officers instead report to which of the following? a. Stock market b. Board of directors c. Middle managers d. Customers e. Stakeholders b ANSWER: 28. List the minimum requirements for ethics and compliance programs according to the Federal Sentencing Guidelines for Organizations. ANSWER: 1. Establish standards and procedures to prevent and detect criminal conduct. 2. Ensure the firm’s board, top management, and high-level personnel exercise reasonable oversight of those standards and procedures. 3. Make reasonable efforts to keep individuals whom organizations knew or should have known to have engaged in illegal activities out of key positions. 4. Communicate standards and procedures by training directors, employees, and appropriate agents. 5. Monitor and audit the program to detect criminal conduct, evaluate the program periodically, and have a system for reporting suspected violations. 6. Promote and consistently enforce the program through appropriate incentives and appropriate discipline. 7. After criminal conduct is detected, take reasonable steps to respond appropriately and prevent further similar criminal conduct, including necessary modifications to the ethics and compliance program. 29. Explain how ethical dilemmas and behavioral simulations can help employees make more ethical decisions. Many feel “hands on” training when employees are forced to confront actual or ANSWER: hypothetical ethical dilemmas helps them understand how their organization would like them to deal with potential problems. Lockheed Martin, for example, developed training games that include dilemmas that can be resolved in teams. Each team member offers his or her perspective, thereby helping other team members fully understand the ramifications of a decision for coworkers and the organization. 30. List the key goals of successful ethics training programs. ANSWER: 1. Identify key risk areas employees will face. 2. Provide experience in dealing with hypothetical or disguised ethical issues within the industry through mini-cases, online challenges, DVDs, or other experiential learning opportunities. 3. Let employees know wrongdoing will never be supported in the organization and employee evaluations will take their conduct in this area into consideration. 4. Let employees know they are individually accountable for their behavior. 5. Align employee conduct with organizational reputation and branding. 6. Provide ongoing feedback to employees about how they are handling ethical issues. 7. Allow a mechanism for employees to voice their concerns that is anonymous but provides answers to key questions (24-hour hotlines). 8. Provide a hierarchy of leadership for employees to contact when they are faced with an ethical dilemma they do not know how to resolve. 31. Describe the responsibilities of an ethics officer within an organization. ANSWER: Ethics officers are responsible for managing their organizations’ ethics and legal compliance programs. They are usually responsible for assessing the needs and risks to be addressed in an organization-wide ethics program, developing and distributing a code of conduct or ethics, conducting training programs for employees, establishing and maintaining a confidential service to answer questions about ethical issues, making sure the company is complying with government regulations, monitoring and auditing ethical conduct, taking action on possible violations of the company’s code, and reviewing and updating the code.