D072 Unit 2 Common Ethical Issues

A company leader facilitates a planning meeting to engage everyone in the company's decision to use postconsumer recycled materials in its packaging. Which impact does this meeting have on the organization?

It enhances government support

It provides more packaging choices

It increases employee awareness

It improves company profitability

It increases employee awareness

A senior manager makes an effort to engage in corporate social responsibility (CSR) activities to build the company's reputation. Which action should the manager take to continue to move towards this goal?

Pay fair wages to employees

Manufacture an inexpensive product

Focus on marketing efforts

Focus on increasing profit margins

Pay fair wages to employees

A chief executive officer (CEO) of a company that engages in corporate social responsibility is trying to cut costs. As a result, the CEO decides to move the operations overseas to a country with low wages and plans on paying a more than the prevailing wage in that location. Which description accurately describes this company's action?

Legal but socially irresponsible

Illegal but socially responsible

Illegal and socially irresponsible

Legal and socially responsible

Legal and socially responsible

A manager in a large corporation is trying to encourage the employees to engage in individual corporate social responsibility (CSR) activities. Which action should the manager take to support this employee behavior?

Encourage them to attend meetings to brainstorm new project ideas

Ask them to work extra time at the offices so they can earn more money

Encourage them to volunteer their time for social concerns

Ask them to take a pay cut and contribute the missing funds to a department party

Encourage them to volunteer their time for social concerns

A manager understands the importance of the company's transparent and ethical supply chain but learns about a foreign supplier's unethical conduct. During a meeting with the supplier, the manager makes a point of reviewing the company's code of conduct without explicitly discussing the supplier's unethical practices. What is the manager discussing in this meeting with the supplier?

Organizational culture

Organizational leadership

International business success

International business culture

Organizational culture

An entry-level employee decides to borrow the company car for the weekend despite the company's code of ethics against the practice. Which ethical analysis applies to this behavior?

It is not acceptable since it clearly violates policy

It is not acceptable because the employee could have an accident while driving the car

It is acceptable as long as no one discovers the car was borrowed

It is acceptable since the employee is in an entry-level position

It is not acceptable since it clearly violates policy

A chief executive officer (CEO) wants to implement a corporate social responsibility (CSR) strategy that will positively affect the company's employees, unions, suppliers, consumers, and local and national governments. Which group is being targeted by this CSR activity?

Stakeholders

Board of directors

Shareholders

Market niche

Stakeholders

A junior accountant discovered fraud in the recording of accounts receivable and plans to report this information to the local media. Which law protects this junior accountant from retaliation by management of the company?

Fair Labor Standards Act

Civil Rights Act of 1964

Securities and Exchange Act

Sarbanes-Oxley Act

Sarbanes-Oxley Act

A chief executive officer (CEO) personally supports internal transparency for the organization. Which action by the CEO reflects this personal ethical belief?

Funding art initiatives for children's programs at the local art museum

Sharing with employees how annual bonuses will be computed and awarded

Designating offices as smoke-free to promote health and well-being

Hosting a community forum where local citizens can learn about the corporation

Sharing with employees how annual bonuses will be computed and awarded

A judge believes that the use of cannabis should never be allowed regardless of the situation due to personal principles of what is right and wrong. A law was recently passed, however, allowing individuals to use cannabis. Which type of issue does the judge face?

Immoral-illegal

Illegal-ethical

Values-morals

Legal-unethical

Legal-unethical

The judge's personal ethics are that cannabis use is unethical even though it is legal.

A job candidate asks questions during an interview to determine whether their personal life goals align with those of the organization. Which factor is the candidate using to guide the decision?

Values

Cultural norms

Morals

Personal experiences

Values

Values are personal ideas about what is important and are consistent and relevant to establishing goals.

A company insists on treating suppliers with respect and refuses to push them to the lowest pricing possible. Which level of organizational ethics is being used by this company?

Internal policy issues

Societal issues

Personal issues

Stakeholder's issues

Stakeholder's issues

Stakeholders include anyone affected by the organization, including suppliers.

A retail company frequently updates its principles, rules, and guidelines to reflect input by employees. Which level of organizational ethics is being illustrated by this company?

Internal policy issues

Personal issues

Stakeholder issues

Societal issues

Internal policy issues

Internal policies are between the organization and its internal stakeholders, the employees. The regular policy updates will include employee input and reflect internal policy issues.

Who is responsible for setting the ethical tone of a corporation?

Frontline employees

Creditors

Shareholders

Managers

Managers

Integrity and ethics starts at the top with organizations' leadership and trickles down to everyone else.

A company is working hard to establish objectives that promote ethics and standards. What terms describe how these objectives are defined?

Specific and qualitative

Specific and measurable

Broad and measurable

Broad and qualitative

Specific and measurable

Specific outcomes define a desired outcome, and measurable outcomes define a method for determining whether an objective has been met. Promoting ethics and standards requires specifically defining which ethics and standards have been established and should be measurable based on outcomes.

A company has embraced the philosophy of CSR. Which practice reflects this commitment?

Abiding by state environmental laws

Holding a food drive to support local residents in need

Ensuring that local, state, and federal taxes are paid on time

Providing the workers with free coffee and tea during their shifts

Holding a food drive to support local residents in need

CSR refers to voluntary actions taken by a company that benefit the community at large. A food drive is both voluntary and works to benefit the local community.

What is the strategic value of implementing CSR?

To maintain global operating guidelines such as those set by the WTO

To generate a profit and meet the letter of the law in their business operations

To help recruit, train, and maintain groups of local employees

To increase profits and trust in the long-term while promoting positive community relations

To increase profits and trust in the long-term while promoting positive community relations

CSR is designed to increase long-term profits and shareholder trust while promoting positive community relations and maintaining high ethical standards.

A company develops a program to help guide employees in decision-making and defines expectations for accepting gift from clients. What is the name of the program?

Social responsibility

Internal transparency

Compliance and ethics

Whistleblower and protection

Compliance and ethics

Many organizations implement compliance and ethics programs to help guide decision-making and employee behavior.

A large manufacturer of ice cream products has a core value of "making the world a better place." However, it was discovered that the manufacturer sourced their main raw ingredient from a company that used practices considered detrimental to the well-being of animals. Which situation is occurring with this discrepancy?

Publicizing

Whistleblowing

Greenwashing

Kickbacking

Greenwashing

Greenwashing is when a company's ethical commitments and statements run contrary to their actual practices. Sourcing ingredients from suppliers who have practices detrimental to the well-being of animals is clearly contrary to the manufacturer's commitment to "making the world a better place."

The top management of a publicly traded company has been cited for violation of the transparency standards with respect to their financial and accounting reporting practices. Which law has this company violated?

Sarbanes-Oxley Act (SOX)

Governmental Accounting Standards Act (GAS)

Corporate Social Responsibility Act (CSR)

Generally Accepted Accounting Principles Act (GAAP)

Sarbanes-Oxley Act (SOX)

SOX mandates publicly traded companies to follow reporting transparency in financial and accounting reporting. The law also makes the top management of the company personally responsible for errors in financial reporting.

A group of employees discovered alleged misconduct by senior managers of their company and leaked information about the situation to the press and general public. What is term for this group of employees?

Greenwashers

Compliance board

Whistleblowers

Public auditors

Whistleblowers

A whistleblower is someone like an employee or group of employees who informs the public about alleged misconduct occurring in an organization.

The top management of a company implemented a policy in which all employees can attend the board meetings so they can be present when important decisions are made. Which practice is being followed by this company?

Internal transparency

Greenwashing

Internal auditing

Social responsibility

Internal transparency

Internal transparency is the ability of all individuals in an organization to operate in an environment of openness, communication, and accountability.

A company leader facilitates a planning meeting to engage everyone in the company's decision to use postconsumer recycled materials in its packaging. Which impact does this meeting have on the organization?

It enhances government support.

Corporation Social Responsibility

Philosophy in which a company voluntarily engages in actions that benefit society-economically, socially, politically, or environmental.

Stakeholders

Those who have a stake in the performance and output of an organization, such as employees, unions, investors, suppliers, consumers, local and national governments, and communities.

World Trade Organization (WTO)

International organization tasked with promoting global trade, enforcing common trade regulations, and helping promote ethical behavior among members. WTO's mission is to improve the stability and predictability of global trade. Members are required to publish their trade regulations and follow a system that allows external parties to review and evaluate any administrative decisions and their impact. These transparency requirements encourage ethical behavior from members and create an ethical baseline.

Code of ethics

Guide that publicly sets out an organizations' key values and ethical obligations.

Greenwashing

When organizations carry about CSR missions in an inauthentic way, using them to increase publicity rather than to spur real change.

Internal transparency

Degree to which an organization operates with openness, communication, and accountability. Internal transparency is the perceived quality of intentionally shared information. Within organizations, this is a complex multilayered system composing company leadership and all employees of the company.

Sarbanes-Oxley Act (SOX)

Law aimed at improving corporate transparency by requiring clear reporting practices. Passed in 2002, in response to several highly publicized corporate fraud cases. SOX mandates reporting transparency in areas ranging from finance to accounting to supply chain activities. Essentially, makes it both unethical and illegal to deceive shareholders, creditors, and the public at large. Applies to publicly traded companies and is enforced by the Securities and Exchange Commission (SEC). It covers multiple topics such as the independence of corporate boards and outside certified public accounting firms that audit corporations. The law also makes CEOs and CFOs personally responsible for errors in annual audits—thus making it harder to "cook the books." SOX also grants protection to whistleblowers.

Whistleblowers

Those who tell the public or the authorities about alleged misconduct occurring in a government department, private company, or organization. Whistleblowing becomes a moral choice that pits the employee's loyalty to an employer against the employee's responsibility to serve the public interest. Whistleblowers have the right to file complaints that they believe give reasonable evidence of a violation of a law, rule, or regulation; gross mismanagement; gross waste of funds; an abuse of authority; or a substantial and specific danger to public health or safety.

GAAP

Generally Accepted Accounting Practices. GAAP aims to maintain transparency and consistency when reporting financial information. In the US, all publicly held companies must adhere to this set of standards and record-keeping. The intent is to help protect shareholders and the public at large from fraud.

How is a company's CSR approach shaped?

Depends on resources, available assets, corporate culture.

What is included in a company's code of ethics?

Organization's key values/ethical obligations.

What steps can organizations take encourage transparent practices?

Annual training, having a company-wide code of ethics, condemning unethical actions, operating with openness, communication, and accountability, intentionally sharing information.

Why was Sarbanes-Oxley Act (SOX) passed?

To improve corporate transparency/clear reporting practices. It makes it unethical/illegal to deceive shareholders.

Which of the following is true about Corporate Social Responsibility?

It can be framed as a response to public backlash for a long track record of harming environments

It guarantees the company is acting ethically

It encourages promotion from within the organization

It comes at little additional cost to the organization

It can be framed as a response to public backlash for a long track record of harming environments

Why is Corporate Social Responsibility important to an organization and its local community?

CSR refers to voluntary actions taken by a company that can benefit the community. Employees more often than not live locally in the community so they can see the huge benefits their company is contributing with CSR activities, which will impact directly on their families, friends and neighbors. This "feel good" factor has really positive implications for staff retention, recruitment and loyalty, leading to more employment and better long term prospects for these communities. Having a corporate social responsibility strategy can also have a ripple effect to encourage others to act responsibly too in other areas of their life.

Cheyenne Jenkins, VP for a large gas company, wrote a letter to her boss regarding the extremely fraudulent accounting practices in their publicly traded company. She demanded that the company take action. Her letter became public five months after she wrote it and was fodder for national outrage. This is an example of ______________. Cheyenne continues to work while the matter is investigated. She is likely protected under ________.

whistleblowing, Sarbanes-Oxley Act

Ethics

Principles that serve as a compass about how to behave.

Legal

An act that is allowed or is in conformity with the law of the land.

Legal-ethical

When the law and personal/organizational ethics are in accordance with each other.

Legal-unethical

Dilemma in which established laws are not in accordance or do not uphold the ethical choice.

Illegal-ethical

Dilemma in which the ethical choice would be in violation of established laws. IE: Pentagon papers case, illegal-ethical conflict in which US government officials leaked top secret papers to inform the public about government actions during the Vietnam War.

Personal ethics

Codes, principles, and values that shape people's interactions with others.

Values

Stable life goals that reflect what is most important to them.

Morals

Rules that people develop as a result of cultural norms/values. Are traditionally passed down through generations and characterize a cultural group.

Organizational ethics

Rules, principals, and standards for deciding what is morally right or wrong when doing business. Individuals determine organizational ethics. Four levels of ethical issues within organizations are societal issues, stakeholder issues, internal policy issues, personal issues.

Societal issues

Concerns issues relating to the world as a whole. Involvement happens because of the ethics the organization creates out of care and concern for individuals.

Stakeholder issues

Concerns policies that affect its customers, employees, suppliers, and people within the community.

3. Internal policy issues

Concerns internal relationships between company and its employees. IE: fairness in management, pay, and employee participation.

Personal issues

Concerns how people treat others in their organization. IE, gossiping at work or taking credit for another's work.

Code of conduct

The organizational code of ethics that governs responsible and respectful behavior. IE, WGU Code of Student Conduct.

Personal ethics

refers to the principals that guide a person's behavior in everyday life. Helps determine what is right/wrong regarding a person's interactions with others.

Organizational ethics

is a branch of ethics that focuses on rules, principles, and standards in the context of business activities.