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Managing Business Ethics Straight Talk

About How to Do It Right 6th Edition By


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Managing Business Ethics Straight Talk About How to Do It Right 6th Edition By Trevino – TEST BANK

File: Chapter 6, Managing Ethics and Legal Compliance

True/False
1. In 2004 Congress created the U.S. Sentencing Commission in response to criticism of judicial
discretion in sentencing and perceived disparities between sentences for “white-collar” and
other types of crimes.

Ans: False

Response: See pages 208.

Difficulty: Medium

2. Pursuant to the U. S. Sentencing Guidelines, an organization can be convicted even if only one
employee is caught breaking the law.

Ans.: True

Response: See page 208

Difficulty: Easy

3. An organization can be convicted of a crime even if only one employee breaks the law.

Ans: True

Response: See page 208.

Difficulty: Medium
4. According to United States v. Booker, judges are no longer required to follow strictly the U. S.
Sentencing Guidelines.

Ans.: True

Response: See page 210

Difficulty: Moderate

5. According to ethics and compliance officers, a respected and trusted insider who knows the
company’s culture and people is a preferable choice for a firm’s ethics or compliance officer.

Ans.: True

Response: See page 212

Difficulty: Moderate

6. The job of ethics officer has been called “the newest profession in American business.”

Ans. True

Response: See page 213.


Difficulty: Medium

7. Centralized ethics offices are nearly always the best choice as these provide for greater
consistency and commitment to the organization’s key values.

Ans.: False

Response: See page 214. Students will be tempted to say True. However, the culture of the
company and many other variables set out in pages 214-215 help students understand why this is
not the case.

Difficulty: Difficult

8. Depending on the organization’s culture, the word “ethics” may carry a negative connotation
and need to be replaced with “business conduct.”

Ans: True

Response: See page 215.

Difficulty: Medium

9. Seldom should ethics information be included in a company’s external website.


Ans. False

Response: See page 220

Difficulty: Moderate

10. Research suggests that ethics only needs to be communicated in orientation materials for new
employees.

Ans: False

Response: See pages 220.

Difficulty: Easy

11. According to Peters and Waterman, an effective leader must be the master of two ends of the
spectrum: ideas at the highest level of abstraction and actions at the most mundane level of
detail.

Ans.: True

Response: See page 229.

Difficulty: Difficult
12. Command-and-control is a term frequently used to describe ethics initiatives that begin at the
top of the organization and work their way down, level by level.

Ans: False

Response: See pages 233.

Difficulty: Medium

13. Organizational experience suggests that an “ethics action line” is unnecessary because it
promotes “tattling” on people an employee doesn’t like.

Ans: False

Response: See pages 237.

Difficulty: Medium

14. An increase in the number of calls on the “ethics action line” is a sign that there are more
reportable problems in the company now.

Ans: False
Response: See page 237.

Difficulty: Medium

Multiple Choice

15. The US Sentencing Guidelines use a “carrot and stick” approach to managing corporate crime.
What is meant by the use of “carrot” and “stick”?

1. a) The carrot dangles at the end of the stick as an incentive for organizations to continue to
behave ethically.
2. b) The carrot refers to the guidelines as “food for thought” and the stick refers to the
punishment if the guidelines are not followed.
3. c) The carrot refers to incentives in the guidelines to behave ethically and the stick refers to the
punishment if the guidelines are not followed.
4. d) None of the above.

Ans: c

Response: See page 208-209.

Difficulty: Difficult
16. Under the U. S. Sentencing Guidelines, the same crime can be subject to a wide range of
penalties. In determining the penalty, the following will be considered:

1. Prior violations
2. Whether management reports itself
3. Whether management cooperates with authorities
4. Whether the firm has an effective program in place to prevent and detect illegal behavior
5. All of the above

Ans.: e

Response: See Page 209.

Difficulty: Moderate

17. Under the 2004 sentencing guidelines, the __________ are expected to oversee the compliance
and ethics program while __________ is/are charged with ensuring its effectiveness within the
company.

1. a) board of directors; top management


2. b) board of directors; the CEO
3. c) CEO; general managers
4. d) company’s ethics officer; board of directors

Ans: a

Response: See page 210.

Difficulty: Medium
18. Which of the following is true?

1990. a) Fines applied by the US Sentencing Commission have decreased on average since
1990.
1991. b) Only the presence of a code of ethics in the organization is necessary to meet the US
Sentencing Commission’s idea of an effective compliance program.
1992. c) The US Sentencing Commission allows prosecutors to assess the quality of an
organization’s compliance program in order to determine appropriate penalties.
1993. d) The 1987 sentencing guidelines mandated incarceration for only the worst felony
offenders.

Ans: c

Response: See page 210.

Difficulty: Difficult

19. All of the following about Ethics Officer is true EXCEPT:

1. a) The ethics officer is typically a first-line to middle-level manager.


2. b) The ethics officer typically reports directly to the CEO.
3. c) The ethics officer can be hired from inside or outside of the firm.
4. d) The ethics officer can also be called the “director of ethics” or “director of internal audit.”

Ans: a

Response: See page 212.

Difficulty: Medium
20. According to research, what percent of the information that passes through the grapevine is
accurate?

1. a) Between 10 to 30%
2. b) Between 30 to 50%
3. c) Between 50 to 70%
4. d) Between 70 to 90%

Ans: d

Response: See page 216.

Difficulty: Medium

21. ___________ may have good ethical compasses, but they don’t know their corporation’s
policies. Without guidance, ethics may not even be a consideration.

1. a) Loose ammo
2. b) Loose cannons
3. c) Misguided cannons
4. d) Grenades

Ans: b

Response: See page 217.


Difficulty: Easy

22. ___________ have their own agenda and lack any company or professional loyalty.

1. a) Deserters
2. b) Misguided cannons
3. c) Grenades
4. d) Toxic ammo

Ans: c

Response: See page 217.

Difficulty: Easy

23. Which of the following is false?

1. a) A mission statement describes “how we do business.”


2. b) Mission statements should be short and memorable.
3. c) Mission statements should be written by outsiders who are unbiased.
4. d) For some companies, mission statements are a mainstay of the corporate culture.

Ans: c

Response: See page 225.


Difficulty: Medium

24. When communicating policies:

1. a) It is important to use legalese to demonstrate the formality of the document.


2. b) Eliminate the legalese and tell employees what the policy means.
3. c) Policies should be alphabetized to communicate that all policies are important.
4. d) Include policies from all departments so the manual is standardized.

Ans: b

Response: See pages 227.

Difficulty: Medium

25. When communicating a code of conduct:

1. a) Focus on values that should guide decision making.


2. b) Provide the same code of conduct to all departments regardless of its length.
3. c) Refrain from changing the code of conduct regularly.
4. d) Fewer employees will read the code if it is short.

Ans: a

Response: See page 228.


Difficulty: Medium

26. Your friend, Jamira, has been selected to create a new ethics training program at work. What
advice should you give Jamira?

1. a) Ensure that all employees receive the same training content.


2. b) Focus on new employees only; the other employees already know this stuff.
3. c) Provide separate training depending on the needs of different groups of employees.
4. d) Bring in outside consultants to conduct the training.

Ans: c

Response: See page 232.

Difficulty: Medium

27. ______ is a term frequently used to describe ethics initiatives that begin at the top of the
organization and work their way down, level by level.

1. a) Command-and-control
2. b) Cascading
3. c) Codes of conduct
4. d) Good soldiers

Ans: b

Response: See pages 233.

Difficulty: Medium
28. The __________ approach to formal corporate ethics initiatives is proactive and aspirational.

1. a) rules
2. b) compliance
3. c) competitive
4. d) values

Ans: d

Response: See page 241.

Difficulty: Easy

29. The _________ approach to formal corporate ethics initiatives focuses on meeting required
behavior norms or obeying the letter of the law.

1. a) rules
2. b) compliance
3. c) principles
4. d) values

Ans: b

Response: See page 242.

Difficulty: Easy
30. Which of the following is false?

1. a) An effective approach to managing ethics has a compliance-only focus.


2. b) Abstract value statements can appear hypocritical to employees.
3. c) Strictly compliance-oriented programs are often viewed by employees with cynicism.
4. d) With a compliance-only focus, employees believe anything goes as long as there isn’t a rule
against it.

Ans: a

Response: See page 242.

Difficulty: Medium

Short Answer

31. You are a top executive charged with evaluating the state of ethics communications in your
company. List four key questions you will need to ask as part of your evaluation. In addition,
provide an example that clarifies the meaning of each question.
Ans: (1) What kinds of ethical dilemmas are employees likely to encounter? (2) What don’t
employees know? (3) How are policies currently communicated? And (4) What communication
channels exist?

Response: See pages 218-220.

Difficulty: Medium

32. You are a top executive charged with developing a plan for the company’s formal
communication of ethics. Briefly describe three communication channels and an example of
how you would use each one.

Ans: Students can select from a variety of communication channels including recruiting
brochures, orientation materials, newsletters, magazines, company internet, and booklets.

Response: See pages 220-222.

Difficulty: Medium

File: Chapter 7, Managing for Ethical Conduct

True/False
1. In business, when people talk about ethics, they’re talking about behavior.

Ans: True

Response: See page 251.

Difficulty: Easy

2. A statement such as “integrity is important here” is enough for subordinates to understand


expected behavior.

Ans: False

Response: See page 252.

Difficulty: Easy

3. Generally, people take a single “ethical self” from situation to situation.

Ans: False

Response: See pages 252.

Difficulty: Medium
4. In combination with rewards, goal setting is one of the most powerful motivational tools.

Ans: True

Response: See pages 252.

Difficulty: Easy

5. Researchers have found that employees may be less likely to report ethical problems to
management if they are intently focused on achieving a task.

Ans.: True

Response: Page 257.

Difficulty: Medium

6. Workers have to be personally rewarded or punished for the message to have an impact.

Ans.: False

Response: Page 260.

Difficulty: Medium
7. Workers expect to be rewarded for behaviors that are expected of everyone—that is, for doing
the “right thing.”

Ans: False

Response: See page 262.

Difficulty: Easy

8. Work roles can support either ethical or unethical behavior.

Ans: True

Response: See page 263.

Difficulty: Easy

9. If punishment occurs in private, few employees will know that unethical behavior was
admonished; thus, managers should ensure that employees who behave unethically are
punished publicly so that others learn from the process.

Ans.: False

Response: Page 263.


Difficulty: Medium

10. Workers expect managers to discipline fairly, and they are morally outraged when management
doesn’t do its job.

Ans.: True

Response: Page 266.

Difficulty: Easy

11. Norms often arise to support behaviors that are implicitly rewarded.

Ans: True

Response: See page 267.

Difficulty: Medium

12. Roles can support ethical behavior thus it makes sense to include in a Code of Conduct a
statement that calls for employees who see misconduct to report it.
Ans.: True

Response: Page 271.

Difficulty: Medium

13. People are much more likely to act ethically if they perceive themselves as personally
responsible for the outcomes of their decisions and actions.

Ans.: True

Response: Page 279.

Difficulty: Easy

14. When an employee brings up an ethical concern at work, the manager is obliged to take the
issues completely off the employee’s hands.

Ans: False

Response: See page 279.

Difficulty: Medium
15. A decrease in levels in the organizational hierarchy leads to better lateral communication among
employees and makes it more difficult for employees to rationalize that higher-ups were
responsible.

Ans.: True

Response: Page 279-280

Difficulty: Medium

Matching

Reference: Matching Key Terms and Definitions

1. a) Integrity
2. b) Reinforcement theory
3. c) Social learning theory
4. d) Pygmalion effect

16. People are likely to behave in ways that are rewarded.

Ans: b

Response: See page 260.


Difficulty: Easy

17. People generally live up to the expectations that are set for them—high or low.

Ans: d

Response: See page 260.

Difficulty: Easy

18. That quality or state of being complete, whole, and undivided.

Ans: a

Response: See page 256.

Difficulty: Easy

19. People learn from observing the rewards and punishments of others.

Ans: c
Response: See page 260.

Difficulty: Easy

Multiple Choice

20. Which of the following is true?

1. a) Attempting to achieve a task goal can decrease risky behavior.


2. b) Employees focus on what managers say more than what managers do.
3. c) Employees will not search for clues about what gets rewarded; they must be told by managers
that it is important.
4. d) Meeting a goal provides psychological benefits.

Ans: d

Response: See page 257.

Difficulty: Medium

21. The Tailhook scandal represents an example of which of these?


1. a) Management focusing too much on the ends rather than the means
2. b) The ethical Pygmalion effect
3. c) Social learning theory
4. d) Employees ignoring management’s clear message

Ans: c

Response: See pages 260.

Difficulty: Medium

22. Which of the following is true?

1. a) Rewards set the tone for what’s expected and rewarded in the long term.
2. b) Employees need to be rewarded for engaging in specific ethical behaviors.
3. c) Punishment is an inherently bad practice.
4. d) Rewards are better to control short-run ethical behavior.

Ans: a

Response: See page 262.

Difficulty: Medium

23. Which of the following is false?


1. a) The idea that punishment should be avoided is based on research on rats and small children.
2. b) People are less likely to engage in unethical behavior if it is likely to be detected and
punished.
3. c) Other employees are affected by the punishment of just one employee.
4. d) People do not care if violators of ethical conduct are punished.

Ans: d

Response: See page 264.

Difficulty: Medium

24. Group norms can cause an “everyone is doing it” mentality. This means:

1. a) People are more likely to recognize issues as “ethical issues.”


2. b) Many individuals will go along with unethical behavior because of a strong need for peer
acceptance.
3. c) Managers cannot blame individual employees for unethical behavior.
4. d) Employees are actively disengaged in groups.

Ans: b

Response: See page 267-268.

Difficulty: Medium

25. The __________ experiment demonstrated how normal students accepted and acted on their
randomly assigned role of prisoner or guard.
1. a) Milgram
2. b) Manville
3. c) Zimbardo
4. d) My Lai

Ans: c

Response: See pages 269-270.

Difficulty: Easy

26. Which of the following is false?

1. a) People enter organizations in a state of “role readiness.”


2. b) Roles reduce a person’s sense of individuality.
3. c) Managers do not have roles as much as their subordinates do.
4. d) Conflicting role expectations can cause increased incidences of lying.

Ans: c

Response: See page 272.

Difficulty: Medium
27. The ___________ experiment demonstrated the power of legitimate authority. Teachers were
unwilling to question the experimenter’s authority for fear of personal embarrassment or
upsetting the status quo.

1. a) Milgram
2. b) Manville
3. c) Zimbardo
4. d) My Lai

Ans: a

Response: See pages 273-274.

Difficulty: Easy

28. The Zimbardo experiment provides insight into ___________ just as the Milgram experiment
provides insight into ____________.

1. a) My Lai massacre; Abu Ghraib prison scandal


2. b) Watergate scandal; My Lai massacre
3. c) Abu Ghraib prison scandal; McDonald’s case
4. d) My Lai massacre; Watergate scandal

Ans: c

Response: See pages 270-274.

Difficulty: Difficult
29. Groupthink occurs when:

1. a) A group is working together in a cohesive, flowing manner for peak performance.


2. b) Group members know each other so well that they are able to anticipate each other’s ideas.
3. c) Group members conform to the group’s decision and are unwilling to express disagreement.
4. d) A group cannot make a decision because members are unwilling to compromise.

Ans: c

Response: See page 276-277.

Difficulty: Easy

Short Answer

30. You are a manager in an electronics department that sells TVs. Corporate headquarters has
provided a new incentive to salespeople—they will receive higher commissions when they sell
higher priced TV models. What should you do in order to maintain high ethical integrity in your
department?

Ans: Students should discuss the importance of communicating that how a goal is achieved is
just as important as achieving the goal itself. The manager needs to let his or her workers know
that the organization cares about how the TVs are sold; he or she may also provide information
on the best way to sell the TVs.

Response: See pages 258-259.


Difficulty: Difficult

31. As a manager, you are faced with the particularly daunting task of disciplining an employee. You
remember that punishment must be “fair.” Briefly describe what is expected of you in order for
the punishment is to be seen as “fair.”

Ans: Students should recognize that fairness has two components: (1) the punishment fits the
crime and (2) punishment is consistent across employees.

Response: See pages 263.

Difficulty: Difficult

32. Briefly describe four ways in which diffusion of responsibility occurs in an organization.

Ans: Students should describe some variation of the following: (1) the manager tells the
employee to “don’t worry”; (2) decisions are made in a group; (3) individuals are just a “cog” in
a machine and can’t see the “big picture”; and (4) psychological distance from the victim

Response: See pages 276-279.

Difficulty: Medium