Fostering ethical decision making within an organization requires improving the firm's ethical standards and
terminating the "bad apples" in the organization
Which of the following statements about codes of conduct is false?
They guarantee an ethical business climate
A strong ethics program includes all of the following elements except
a clause promising good stock market performance
In the absence of ethics programs, employees are likely to make decisions based on
their observations of how their coworkers and superiors behave
Codes of conduct
formal statements that describe what an organization expects of its employees in terms of ethical behavior.
What is not a common mistake when designing and implementing an ethics program?
Having top management take ownership of the ethics program
For an ethical compliance program to properly function
consistent enforcement and disciplinary action are essential
Which of the following is the most comprehensive?
Code of ethics
At the heart of the Federal Sentencing Guidelines for Organizations is a
carrot-and-stick philosophy that rewards efforts to improve ethics.
The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually
tolerate misconduct.
Sarbanes-Oxley Act
increased the responsibilities on ethics officers and boards of directors to monitor financial reporting?
________________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.
Top managers
Which of the following is the most comprehensive?
Code of ethics
All of the following are useful in monitoring ethical conduct and measuring the effectiveness of the ethical program
except
firing
A code of ethics that does not address specific high-risk activities within the scope of daily activities is
inadequate.
Organizational Misconduct
can contribute to diminished employee trust and increased employee turnover
Most executives feel that which of the following is the primary reason for much of the unchecked misconduct in business?
Inadequate ethics and compliance programs
Which of the following is an advantage of a values-based ethics program over a compliance-based one?
Employees learn to make decisions based on values such as fairness, compassion, respect, and transparency
Which of the following is a common mistake made in implementing an ethics program?
Developing materials that do not address the needs of the average employee
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?
Systems for monitoring, auditing, and reporting misconduct
Organizations can become "bad barrels" not because of unethical individuals but because
the pressure to succeed creates opportunities that reward unethical decisions
Which of the following statements about training is false?
It can dictate personal ethics on the job
Which of the following is not an advantage of having a comprehensive code of conduct?
To help employees fight for satisfactory levels of compensation and benefits.
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.
compliance orientation
In the long run, a(n)___________orientation may be better for companies, perhaps because it increases employees' awareness of ethics issues at work.
values
Which of the following is not a main goal of successful ethics programs?
Allow employees to solve ethical issues themselves using their best judgment
The individual responsible for implementing disciplinary action for violation of a firm's ethics standards is usually the
ethics officer.
To ensure that an ethics program addresses the needs of the average employee, it should include all of the following
except
lengthy legal documents
______________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.
Hotlines
One of the main reasons employees do not report observed misconduct is
fear of retaliation
Effective Ethics Program
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
Ethics Audit
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.
Social Audit
Assessing and reporting on a business's performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholders
Types of Controls
Formal, Output, Process
Formal Control
Include input controls such as proper selection of employees, effective ethics training, and strong structural systems
Output Control
Comparing standards with actual behavior
Process Controls
Management's commitment to the ethics program and the methods or system for ethics evaluation
Measuring non-Financial Performance---Balanced Scorecard
...
Measuring non-Financial Performance------Triple Bottom Line
Economic, social, and environmental indicators
Risks in Ethics Auditing
Auditing does not assure that ethical risks and challenges can be avoided
Assessing risk and identifying standards of comparison can be challenging
Audit Process
...
Benefits of Ethics Auditing
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 stakehold
Global Reporting Initiative (GRI)
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