Practice Test

What are the primary reasons for studying business ethics?

It helps managers make better decisions, builds trust with employees and customers, prevents legal and reputation issues, and leads to better long-term performance.

What is the difference between individual ethics and professional ethics?

Individual ethics are personal moral values, while professional ethics are the rules and standards specific to a profession.

What is the distinction between ethics and law?

Law refers to what is legally required, whereas ethics pertains to what is morally right; something can be legal but still unethical.

Can business ethics be taught?

Yes, ethics training can enhance moral awareness and decision-making skills, influenced by one's environment.

Are ethical businesses more profitable?

Generally, yes, ethical companies tend to gain loyal customers, good employees, and face fewer scandals, leading to long-term profitability.

What does the stakeholder theory encompass?

Stakeholder theory includes any group or individual affected by or able to affect the organization.

What are the major components of Justice Theory?

It includes distributive fairness, procedural fairness, interactional fairness, and retributive fairness.

What are the Eight Steps to Sound Ethical Decision Making?

1. Gather the facts 2. Define the ethical issue 3. Identify affected parties 4. Identify consequences 5. Identify obligations 6. Consider integrity and character 7. Think creatively about actions 8. Check your gut.

What is normative myopia?

The failure to recognize the ethical aspects of a situation, focusing only on business goals.

What is the difference between internal and external locus of control?

Internal locus of control refers to belief in personal control over actions, leading to more ethical behavior, while external locus of control suggests that fate or others control outcomes, thereby reducing responsibility.

What are the key facilitators and barriers to ethical judgment?

Facilitators include moral awareness, ethical culture, and time to think; barriers include pressure, goals, and obedience to authority.

What are some mechanisms of moral disengagement?

They include reframing, reducing responsibility, distorting consequences, and reducing identification with victims.

What is the importance of diverse leadership within an organization?

It enhances innovation, decision-making, and overall profitability.

What is equity versus equality?

Equality means everyone gets the same, while equity refers to fairness based on individual needs or circumstances.

How does ethical culture manifest in an organization?

Ethical culture consists of shared beliefs about what is ethically correct and how to act within the organization.

What impact does ethical leadership have on an organization?

Ethical leadership models ethical behavior, integrates ethics into daily operations, and fosters an ethical culture.

What is the best approach to ethical systems in organizations?

The best approach is to combine compliance-based and values-based systems.

What types of employees exist regarding their understanding and adherence to ethics?

Good Soldiers (follow rules), Loose Cannons (need training), and Grenades (need strict control).

What are effective strategies for structuring ethics management in organizations?

Create effective ethics and compliance programs as encouraged by the U.S. Sentencing Guidelines.

What should organizations regularly evaluate to ensure ethical practices?

Regular reviews of employee surveys, reporting systems, and outcomes to assess if employees trust and use ethics resources.