Fostering ethical decision making within an organization requires improving the firm's ethical standards and
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terminating the "bad apples" in the organization
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Which of the following statements about codes of conduct is false?
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They guarantee an ethical business climate
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A strong ethics program includes all of the following elements except
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a clause promising good stock market performance
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In the absence of ethics programs, employees are likely to make decisions based on
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their observations of how their coworkers and superiors behave
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Codes of conduct
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formal statements that describe what an organization expects of its employees in terms of ethical behavior.
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What is not a common mistake when designing and implementing an ethics program?
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Having top management take ownership of the ethics program
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For an ethical compliance program to properly function
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consistent enforcement and disciplinary action are essential
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Which of the following is the most comprehensive?
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Code of ethics
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At the heart of the Federal Sentencing Guidelines for Organizations is a
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carrot-and-stick philosophy that rewards efforts to improve ethics.
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The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually
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tolerate misconduct.
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Sarbanes-Oxley Act
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increased the responsibilities on ethics officers and boards of directors to monitor financial reporting?
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________________may be more inclined to engage in unethical organizational conduct because of social isolation that creates insensitivity and a lower level of motivation to regulate ethical decision making.
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Top managers
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Which of the following is the most comprehensive?
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Code of ethics
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All of the following are useful in monitoring ethical conduct and measuring the effectiveness of the ethical program
except
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firing
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A code of ethics that does not address specific high-risk activities within the scope of daily activities is
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inadequate.
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Organizational Misconduct
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can contribute to diminished employee trust and increased employee turnover
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Most executives feel that which of the following is the primary reason for much of the unchecked misconduct in business?
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Inadequate ethics and compliance programs
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Which of the following is an advantage of a values-based ethics program over a compliance-based one?
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Employees learn to make decisions based on values such as fairness, compassion, respect, and transparency
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Which of the following is a common mistake made in implementing an ethics program?
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Developing materials that do not address the needs of the average employee
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Aurico is a company that offers ethics hotline maintenance and monitoring services for organizations. Which component of the Federal Sentencing Guidelines for Organizations compliance program does this service help organizations to satisfy?
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Systems for monitoring, auditing, and reporting misconduct
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Organizations can become "bad barrels" not because of unethical individuals but because
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the pressure to succeed creates opportunities that reward unethical decisions
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Which of the following statements about training is false?
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It can dictate personal ethics on the job
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Which of the following is not an advantage of having a comprehensive code of conduct?
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To help employees fight for satisfactory levels of compensation and benefits.
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A_________________generates an ethical program that creates order by requiring that employees identify with and commit to specific required conduct using legal terms and statutes.
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compliance orientation
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In the long run, a(n)___________orientation may be better for companies, perhaps because it increases employees' awareness of ethics issues at work.
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values
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Which of the following is not a main goal of successful ethics programs?
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Allow employees to solve ethical issues themselves using their best judgment
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The individual responsible for implementing disciplinary action for violation of a firm's ethics standards is usually the
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ethics officer.
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To ensure that an ethics program addresses the needs of the average employee, it should include all of the following
except
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lengthy legal documents
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______________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.
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Hotlines
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One of the main reasons employees do not report observed misconduct is
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fear of retaliation
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Effective Ethics Program
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Ensures employees understand ethical values and comply with the policies and codes of conduct
Helps avoid legal problems
Developed as an organizational control system to help predict employee behavior
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Ethics Audit
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Systematic evaluation of an organization's ethics program and performance to determine effectiveness
EX: is a tool that companies can employ to identify and measure their ethical commitment to stakeholders.
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Social Audit
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Assessing and reporting on a business's performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholders
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Types of Controls
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Formal, Output, Process
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Formal Control
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Include input controls such as proper selection of employees, effective ethics training, and strong structural systems
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Output Control
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Comparing standards with actual behavior
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Process Controls
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Management's commitment to the ethics program and the methods or system for ethics evaluation
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Measuring non-Financial Performance------Triple Bottom Line
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Economic, social, and environmental indicators
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Risks in Ethics Auditing
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Auditing does not assure that ethical risks and challenges can be avoided
Assessing risk and identifying standards of comparison can be challenging
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Benefits of Ethics Auditing
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Detects misconduct before it becomes a major problem
Helps understand the ethical culture in an organization
Highlights trends, improves organizational learning, and facilitates communication and working relationships
Improves relationships with stakeholders
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Global Reporting Initiative (GRI)
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Framework that companies have adopted to report their social and sustainability progress
Goal - Mainstreaming of disclosure on environmental, social, and governance performance
Used by businesses to develop a standardized method of reporting nonfinancial results
Provides users a point of comparison with other companies' sustainability initiatives
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