Chapter 4

Question 1

Ethics

Answer 1

the set of moral principles or values that defines right and wrong for a person or group

Question 2

Ethical Behavior

Answer 2

Behavior that conforms to a society’s accepted principles of right and wrong

Question 3

Workplace Deviance

Answer 3

unethical behavior that violates organizational norms about right and wrong

Question 4

Product Deviance

Answer 4

unethical behavior that hurts the quality and quantity of work produced

Question 5

Property Deviance

Answer 5

unethical behavior aimed at the organization’s property or products

Question 6

Employee Shrinkage

Answer 6

employee theft of company merchandise

Question 7

Political Deviance

Answer 7

using one’s influence to harm others in the company

Question 8

Personal Aggression

Answer 8

hostile or aggressive behavior toward others

Question 9

US Sentencing Commission Guidelines Manual for
Organizations

Answer 9

• Cover offenses defined by federal laws
• Encourage companies to take proactive steps that will discourage or prevent white-collar crime
• Give companies an incentive to cooperate and disclose illegal
  activities to federal authorities

Question 10

Determining Punishment

Answer 10

• Step 1 – Computation of base fine by determining the level of
  offense
  – Level of offense varies depending on the kind of crime, loss incurred, and the amount of planning that went into the crime
• Step 2 – Judicial determination of a culpability score
• Step 3 – Determination of total fine
  – Multiplying the base fine by the culpability score

Question 11

Influences on Ethical Decision Making

Answer 11

• Ethical intensity
• Moral Development
• Principles of ethical decision making

Question 12

Ethical Intensity

Answer 12

the degree of concern people have about an ethical issue

Question 13

Factors that contribute to Ethical Intensity

Answer 13

• Magnitude of consequences
• Social Consensus
• Probability of effect
• Temporal immediacy
• Proximity of effect
• Concentration of effect

Question 14

Magnitude of consequences

Answer 14

the total harm or benefited derived from an ethical decision

Question 15

Social Consensus

Answer 15

Agreement on whether behavior is bad or good

Question 16

Temporal immediacy

Answer 16

the time between an act and the consequences the act produces

Question 17

Probability of effect

Answer 17

the chance that something will happen that results in harm to others

Question 18

Proximity of effect

Answer 18

the social, psychological, cultural, or
physical distance between a decision maker and those affected
by his or her decisions

Question 19

Concentration of effect

Answer 19

the total harm or benefit that an act produces on the average person

Question 20

Kohlberg’s Stages of Moral Development

Answer 20

Preconventional - Self Interest
1. Punishment and Obedience
2. Instrumental Exchange
Conventional - Societal Expectations
3. Good Boy, Nice Girl
4. Law and Order
Postconventional- Internalized Principles
5. Social Contract
6. Universal Principle

Question 21

Principles of Ethical Decision-Making

Answer 21

• Long-term self-interest
• Religious injunctions
• Government requirements
• Individual rights
• Personal Virtue
• Distributed justice
• Utilitarian benefits

Question 22

Principle of long-term self-interest

Answer 22

an ethical principle that
holds that you should never take any action that is not in your or
your organization’s long-term self-interest

Question 23

Principle of religious injunctions

Answer 23

an ethical principle that
holds that you should never take any action that is not kind and
that does not build a sense of community

Question 24

Principle of government requirements

Answer 24

an ethical principle that holds that you should never take any action that violates the law, for the law represents the minimal moral standard

Question 25

Principle of individual rights

Answer 25

an ethical principle that holds that you should never take any action that infringes on others’ agreed-upon rights

Question 26

Principle of personal virtue

Answer 26

an ethical principle that holds that you should never do anything that is not honest, open, and truthful and that you would not be glad to see reported in the newspapers or on TV

Question 27

Principle of distributive justice

Answer 27

an ethical principle that holds that you should never take any action that harms the least fortunate among us: the poor, the uneducated, the unemployed

Question 28

Principle of utilitarian benefits

Answer 28

an ethical principle that holds that you should never take any action that does not result in greater good for society

Question 29

Managers can encourage more ethical decision-making in their organizations by

Answer 29

* carefully selecting and hiring ethical employees * establishing a specific code of ethics * training employees to make ethical decisions * creating an ethical climate

Question 30

Overt integrity test

Answer 30

a written test that estimates job applicants’ honesty by directly asking them what they think or feel about theft or about punishment of unethical behaviors

Question 31

Personality-based integrity test

Answer 31

a written test that indirectly estimates job applicants’ honesty by measuring psychological traits, such as dependability and conscientiousness

Question 32

Code of Ethics

Answer 32

Companies establish a specific code of ethics, or code for business conduct among organization’s members *Communicate the code to others both inside and outside the company *Develop standards and procedures specific to the company

Question 33

Training employees to make ethical decisions involves

Answer 33

* developing employees' awareness of ethics * achieving credibility with employees * teaching a practical model of ethical decision-making

Question 34

Ethical Climate

Answer 34

Fostering ethical decision-making starts with the organizational culture: * Ensure that managers act ethically themselves * Promote top management activity and commitment to the company ethics program * Develop a system that encourages report of violations * Fairly and consistently punish those who violate the code of ethics

Question 35

Whistleblowing

Answer 35

reporting others' ethics violations to management or legal authorities

Question 36

Social responsibility

Answer 36

a business’s obligation to pursue policies, make decisions, and take actions that benefit society

Question 37

Shareholder model

Answer 37

a view of social responsibility that holds that an organization’s overriding goal should be profit maximization for the benefit of shareholders

Question 38

View held by economist Milton Friedman who believed

Answer 38

* organizations are not effective moral agents * attention to social causes undermines market efficiency

Question 39

Stakeholder model

Answer 39

a theory of corporate responsibility that holds that management’s most important responsibility, long-term survival, is achieved by satisfying the interests of multiple corporate stakeholders

Question 40

Stakeholders

Answer 40

persons or groups with a stake, or legitimate interest, in a company’s actions

Question 41

Primary Stakeholder

Answer 41

any group on which an organization relies for its long-term survival

Question 42

Secondary Stakeholder

Answer 42

any group that can influence or be influenced by a company and can affect public perceptions about the company’s socially responsible behavior

Question 43

Companies best benefit their stakeholders by fulfilling these responsibilities

Answer 43

* Economic * Legal * Ethical * Discretionary

Question 44

Economic responsibility

Answer 44

a company’s social responsibility to make a profit by producing a valued product or service

Question 45

Legal responsibility

Answer 45

a company’s social responsibility to obey society’s laws and regulations

Question 46

Ethical responsibility

Answer 46

a company’s social responsibility not to violate accepted principles of right and wrong when conducting its business

Question 47

Discretionary responsibilities

Answer 47

he social roles that a company fulfills beyond its economic, legal, and ethical responsibilities

Question 48

Social responsiveness

Answer 48

a company’s strategy to respond to stakeholders’ economic, legal, ethical, or discretionary expectations concerning social responsibility

Question 49

Reactive strategy

Answer 49

a social responsiveness strategy in which a company does less than society expects

Question 50

Defensive strategy

Answer 50

a social responsiveness strategy in which a company admits responsibility for a problem but does the least required to meet societal expectations

Question 51

Accommodative strategy

Answer 51

a social responsiveness strategy in which a company accepts responsibility for a problem and does all that society expects to solve that problem

Question 52

Proactive strategy

Answer 52

a social responsiveness strategy in which a company anticipates a problem before it occurs and does more than society expects to take responsibility for and address the problem

Question 53

Social Responsibility and Economic Performance

Answer 53

* No trade-off between being socially responsible and economic performance * Relationship becomes stronger when a company has a strong reputation for social responsibility * No guarantee that socially responsible companies will be profitable