Business Ethics Now Andrew Ghillyer 5th Edition – Test Bank

 

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Sample Test

Chapter 03

Organizational Ethics

 

True / False Questions

1.	Shareholders lack interest in the ethical performance of an organization. True    False

 

2.	Organizational culture can be defined as the values, beliefs, and norms shared by the employees as well as the competitors of that organization. True    False

 

3.	An organization’s operating culture represents the sum of all the policies and procedures, both written and informal. True    False

 

4.	A value chain is composed of the key functional inputs that an organization provides in the transformation of raw materials into a delivered product or service. True    False

 

5.	Finance, which is a primary activity of an organization’s value chain, sources components and builds products for an organization. True    False

 

6.	Marketing, sales, and customer service are identified as the key functions in a value chain. True    False

 

7.	Marketing (and advertising) is one of the key functions in a value chain. True    False

 

8.	Distribution and marketing are line functions, supporting each of the key functional areas. True    False

 

9.	Information systems team coordinate the recruitment, training, and development of personnel for all aspects of an organization. True    False

 

10.	Research and development (R&D) professionals carry the responsibility for the future growth of an organization. True    False

 

11.	Given that research and development (R&D) teams do not interact directly with customers, the potential for ethical dilemmas is nonexistent. True    False

 

12.	For a research and development (R&D) team, the real ethical dilemmas come when decisions are made about product quality. True    False

 

13.	The manufacturing process is responsible for ensuring that a product reaches the hands of a satisfied customer. True    False

 

14.	Utilitarianism refers to the theory that suggests actions are taken out of duty and obligation to a purely moral ideal, rather than based on the needs of the situation. True    False

 

15.	Universal ethics refers to ethical choices that offer the greatest good for the greatest number of people. True    False

 

16.	Marketing professionals abide by a code of ethics adapted by the American Marketing Association. True    False

 

17.	The code of ethics adapted by the American Marketing Association speaks about improving “customer confidence in the integrity of the marketing exchange system.” True    False

 

18.	The human resources function within an organization should ideally be directly involved in the marketing process of the organization. True    False

 

19.	The human resources function within an organization should ideally be directly involved in the maintenance of the technology in the organization. True    False

 

20.	The human resources function within an organization should ideally be directly involved in the creation of a career development program of an employee. True    False

 

21.	If an employee leaves a company, the human resources department is responsible for hosting an exit interview to ensure that anything that the organization can learn from the employee’s departure is fed back into the company’s strategic plan for future growth and development. True    False

 

22.	The human resources function within an organization seldom needs to be involved in the relationship between the company and an employee. True    False

 

23.	The advocates of ethical business conduct argue that an organization’s marketing team should be at the center of any corporate code of ethics. True    False

 

24.	The advocates of ethical business conduct argue that an organization’s human resources (HR) should be the sole creator of any corporate code of ethics. True    False

 

25.	An organization’s human resources (HR) must ensure that the leadership selection and development processes include an ethics component. True    False

 

26.	An organization’s human resources (HR) professionals must help ensure that ethics is a top organizational priority. True    False

 

27.	Marketing professionals are responsible for ensuring that the right programs and policies for ethical business conduct are in place. True    False

 

28.	The human resources function of an organization can be divided into three distinct areas: financial transactions, auditing, and accounting function. True    False

 

29.	The accounting function provides the certification, by an impartial third-party professional, that an organization’s financial statements are accurate. True    False

 

30.	The auditing function keeps track of all the financial transactions of an organization by documenting the money coming in and money going out and balancing the accounts at the end of the period. True    False

 

31.	The accounting profession is governed by a set of laws and established legal precedents. True    False

 

32.	It is illegal to defer receipts from one quarter to the next to manage one’s tax liabilities. True    False

 

33.	Some of the illegal financial functions carried out by an organization include underreporting income, overvaluing assets, and taking questionable deductions. True    False

 

34.	When a company’s financial statements have been certified by an objective third-party to be “clean,” that certification is meant to be for the public’s benefit rather than the company’s benefit. True    False

 

35.	The obligation that an auditing firm has to a paying client while owing an objective, third-party assessment of that client’s financial stability to stakeholders and potential investors represents a potentially significant conflict of interest. True    False

 

36.	A situation in which one relationship or obligation places an individual or firm in direct conflict with an existing relationship or obligation refers to a conflict of interest. True    False

 

37.	Selling a product that has the potential to be harmful to a firm’s customers represents a significant conflict of interest. True    False

 

38.	Nonprofit organizations do not face problems with unethical behavior. True    False

 

39.	Profits are the main reason behind stretching the truth and bending the rules that have become a regular occurrence in a workplace. True    False

 

 

Multiple Choice Questions

40.

Identify a true statement about a company’s organizational culture. A. It represents the sum of all the policies and procedures from each of the functional departments in the organization.   B. It is governed by a set of laws and legal precedents and is closed to interpretation.   C. It consists of suggestions established in an organization on how to make fraudulent practices look legal.   D. It refers to the characteristic of publicly committing to the highest professional standards and sticking to that commitment.

 

41.

Which of the following statements is true of organizational culture? A. Organizational culture represents only the written policies and procedures of an organization.   B. Organizational culture includes the values, beliefs, and norms shared by all employees of that organization.   C. Employees’ personal value system is always in tune with the ethical standards of the organization’s operating culture.   D. Stakeholders lack interest in the ethical performance of an organization.

 

42.

Anderson Enterprises endorses low power distance which implies that the firm lays emphasis on a less consultative or democratic work structure. Subordinates work on important assignments and managers often socialize with them. Which of the following concepts is being reflected in the above scenario? A. Ethical relativism   B. Value chain   C. Organizational culture   D. Corporate conscience

 

43.

Identify a true statement about value chain. A. It is inclusive of the values, beliefs, and norms shared by all the employees of an organization.   B. It represents the sum of all the policies and procedures—both written and informal—from each of the functional departments in an organization.   C. It is composed of the key functional inputs that an organization provides in the transformation of raw materials into a delivered product or service.   D. It helps coordinate with human resources in the recruitment, training, and development of personnel for all aspects of an organization.

 

44.	A composition of the key functional inputs that an organization provides in the transformation of raw materials into a delivered product or service is termed _____. A. value chain   B. cognitive work analysis   C. dynamic simulation   D. corporate governance

 

45.	According to the value chain of an organization, which of the following is classified as a primary activity? A. Human resources management   B. General administration   C. Systems development   D. Sales and marketing

 

46.	A primary activity of an organization according to the value chain is that of _____. A. human resources management   B. recruitment and remuneration management   C. supply chain management   D. organizational development management

 

47.	In the context of the value chain of an organization, _____ is a support activity. A. marketing   B. general administration   C. distribution   D. customer service

 

48.	In the context of the value chain of an organization, which of the following is a line function of an organization? A. Marketing   B. Supply chain management   C. Distribution   D. Human resources management

 

49.	_____ serves as a support line function to key functional areas in an organization’s value chain. A. Technology   B. Manufacturing   C. Supply chain management   D. Distribution

 

50.	_____ serves as a support line function to key functional areas in an organization’s value chain. A. Advertising   B. Supply chain management   C. Human resources management   D. Distribution

 

51.

Which of the following statements is true of a company’s value chain? A. Marketing, sales, and customer service are the support activities.   B. The research and development department coordinates the recruitment of personnel for all aspects of the organization.   C. The marketing department sources the components and builds the product.   D. Supply chain management and operations are the primary activities.

 

52.

The research and development (R&D) department of an organization: A. is solely responsible for creating employees’ career development programs.   B. has a minute impact on the success of the organization.   C. carries the responsibility for the future growth of the organization.   D. is the most important department of the organization.

 

53.

Brendon joins Almer Inc. as the head of the research and development (R&D) team. In order to allow Almer Inc. to capture and maintain a leading position in the market, Brendon should _____. A. incorporate customer feedback from market research and competitive feedback from closely monitoring the organization’s competition   B. coordinate the recruitment, training, and development of personnel for all aspects of the organization   C. audit and certify the accuracy of the company’s financial statements   D. maintain the technological backbone of the organization

 

54.

Cathy heads the research and development (R&D) team of Anderson Enterprises. Which of the following R&D functions should Cathy and her team undertake to allow the organization capture and maintain a leading position in its market? A. Cathy and her team should manage individual hardware and software needs that are specific to the organization and its line of business.   B. Cathy and her team should coordinate the recruitment, training, and development of personnel for all aspects of the organization.   C. Cathy and her team should certify the accuracy of the company’s financial statements.   D. Cathy and her team should make a complex set of risk assessments and technical judgments in order to deliver a product design.

 

55.

Exotic Crafts Inc., a handicraft manufacturing company, has an established marketing department responsible for various important functions. The marketing department is most likely engaged in _____. A. managing individual hardware and software needs that are specific to the organization   B. ensuring that the products reach the hands of a satisfied customer   C. coordinating the recruitment, promotion, and remuneration of the employees   D. auditing and certifying the accuracy of the company’s financial statements

 

56.

Which of the following statements is true of marketing? A. The marketing process is responsible for ensuring that the product design meets all the required specifications.   B. Marketers see themselves as responsible for ensuring product quality.   C. Marketers see themselves as providing products (or services) to customers who have already expressed a need for and a desire to purchase those products.   D. The marketing process is responsible for ensuring that products gets manufactured within the stipulated period of time.

 

57.	_____ is represented by ethical choices that offer the greatest good for the greatest number of people. A. Deontology   B. Utilitarianism   C. Virtue ethics   D. State consequentialism

 

58.	Actions that are taken out of duty and obligation to a purely moral ideal, rather than based on the needs of the situation, are known as _____. A. utilitarianism   B. virtue ethics   C. consequentialism   D. universal ethics

 

59.	Actions placed within a strictly moral context instead of basing actions on the needs of a particular situation is termed _____. A. pragmatic ethics   B. virtue ethics   C. normative ethics   D. universal ethics

 

60.	Marketing professionals abide by a code of ethics adapted by the _____. A. Society for Marketing Resources   B. American Marketing Association   C. American Ethics Association   D. Marketers’ Ethics Resource Center

 

61.

The code of ethics adapted by the _____ speaks about doing no harm, fostering trust, and improving “customer confidence in the integrity of the marketing exchange system.” A. American Counseling Association (ACA)   B. Society for Marketing Resources   C. American Marketing Association (AMA)   D. Marketing Research Association (MRA)

 

62.

ThinkNow is an advertising firm based in Dallas, Texas. One of its departments is in charge of the hiring process and is responsible for the orientation of newly hired employees. Which of the following organizational areas does this department represent? A. Finance   B. Human resources   C. Research and development   D. Information systems

 

63.	The efficient management of providing payroll and benefits for happy and productive employees is looked after by the _____ department of an organization. A. research and development   B. human resources   C. consumer relations   D. marketing

 

64.

Amanda heads the human resources department in Elenear Enterprises. The management has entrusted her with certain functions. Within the organization, Amanda should be directly involved in: A. the marketing of the organization’s products.   B. the maintenance of the technology in the organization.   C. the recruitment and selection of the right candidates for different positions.   D. the incorporation of customer feedback and competitive feedback.

 

65.	Which of the following is a human resources function within an organization? A. Incorporation of customer feedback and competitive feedback   B. Maintenance of the technology in the organization   C. Marketing of the organization’s products   D. Documentation of periodic performance reviews

 

66.

Ideally, the human resources function within an organization should be directly involved in: A. the documentation of disciplinary behavior and remedial training, if needed.   B. the maintenance of the technology in the organization—data transfer and security, e-mail communications, internal and external websites, and so on.   C. the marketing of the organization’s products.   D. the incorporation of customer feedback from market research and competitive feedback from closely monitoring the competitors.

 

67.

If an employee leaves a company, the _____ department should host an exit interview to ensure that anything the organization can learn from the employee’s departure is fed back into the company’s strategic plan for future growth and development. A. research and development   B. marketing   C. finance   D. human resources

 

68.

Walter’s Inc., a cement manufacturing firm, fails to meet the deadline for delivering 500 kg of cement to QuickContruct Inc. The officer responsible for the distribution and sale at Walter Inc. bribes the officer at QuickContruct Inc. to alter the date of delivery in the original contract. Which of the following concepts is best illustrated in the above scenario? A. Ethical dilemma   B. Social loafing   C. Ethical transgression   D. Utilitarianism

 

69.

An argument made by the advocates of ethical business conduct about the human resources department is that it should _____. A. sideline issues related to ethics   B. ensure that ethics is given the least priority   C. not include an ethics component in the leadership selection process   D. not be the sole creator of the code

 

70.	The _____ keeps track of a company’s financial transactions by documenting money coming in and money going out and balances the accounts at the end of the period. A. auditing function   B. compliance function   C. accounting function   D. financial transactions function

 

71.	The certification of an organization’s financial statements or books, by an impartial third-party professional, as being accurate is offered by the _____. A. auditing function   B. compliance function   C. accounting function   D. financial transactions function

 

72.	The accounting profession is governed by a set of _____. A. generally accepted accounting principles   B. laws for accounting   C. established legal precedents for accounting   D. universal ethics

 

73.	Which of the following represents a legal accounting practice? A. Taking questionable deductions   B. Overvaluing assets   C. Deferring receipts from one quarter to the next to manage tax liability   D. Underreporting income to decrease the amount paid as taxes

 

74.

For the accounting profession, the last resort for ethical guidance and leadership is the Code of Conduct issued by the _____. A. International Association of Public Accountants   B. Certified Public Accountants Association   C. Accounting Institute of Ethical Conduct   D. American Institute of Certified Public Accountants

 

75.	_____ is defined as a situation where one relationship or obligation places an individual or firm in direct dispute with an existing relationship or obligation. A. Disconfirmed expectancy   B. Conflict of interest   C. Right of option   D. Moral hazard

 

76.

A company is of the view that what is best for its shareholders may not be best for its employees and the community. It also believes that the most efficient means to achieve increased profits is to close its factory and move production overseas, which is not agreed upon by its shareholders. This is an example of _____. A. a disconfirmed expectancy   B. a conflict of interest   C. emotional contagion   D. social loafing

 

77.

Which of the following statements is true of ethical challenges in organizations? A. Nonprofit organizations do not face problems with unethical behavior.   B. The main reason behind bending the rules regularly in organizations is the motive of gaining profits.   C. The pursuit of profit in any circumstance is unethical.   D. People across all organizations face the same kind of ethical challenges in their day-to-day activities.

 

78.	In an organization, _____ see themselves as providing products (or services) to customers who have already expressed a need for and a desire to purchase those products. A. Appraisers   B. Marketers   C. Decision analysts   D. Purchasing managers

 

79.	The marketing challenge is more directly aligned to the debate between universal ethics and _____. A. consequentialism   B. pragmatism   C. utilitarianism   D. subjectivism

 

80.

The need for certified financial docu­ments assumes great importance for an organization when _____. A. it goes public by selling stock in the organization on a public stock exchange   B. it needs to recruit a large number of employees   C. it has to increase its corporate social responsibility (CSR) activities   D. it is being charged of fraudulent practices by its employees and shareholders

 

81.

Which of the following is the most likely reason why organiza­tions maintain their own internal auditors? A. To interact with customers regarding the organizations’ products   B. To conduct internal training needs assessment   C. To allocate personnel on specific duties   D. To monitor the accuracy of financial functions

 

82.

In an organization, conflict of interest is most likely to occur when: A. the organization’s product has the potential to be harm­ful to the organization’s customers.   B. an employee is unhappy with the performance ratings given by his or her manager.   C. an interviewer has lesser experience than the candidate being interviewed.   D. the hourly wage paid by the organization is less than the National Minimum Wage (NMW).

 

 

Fill in the Blank Questions

83.	_____ can be defined as the values, beliefs, and norms shared by all the employees of an organization. ________________________________________

 

84.

An organization’s _____ represents the sum of all its policies and procedures—both written and informal—from each of the functional departments in the organization in addition to the policies and procedures that are established for the organization as a whole. ________________________________________

 

85.	A _____ is composed of the key functional inputs that an organization provides during the transformation of raw materials into a delivered product or service. ________________________________________

 

86.	_____ is the line function that coordinates the recruitment, training, and development of personnel for all aspects of the organization. ________________________________________

 

87.

_____ refer to the line function that maintains the technology backbone of an organization—data transfer and security, e-mail communications, internal and external websites, as well as the individual hardware and software needs that are specific to the organization and its line of business. ________________________________________

 

88.

The _____ department of an organization incorporates customer feedback from market research and competitive feedback from closely monitoring the competition in the market to develop product designs that will allow the organization to capture and maintain a leading position in its market. ________________________________________

 

89.	For a research and development team, the real ethical dilemmas come when decisions are made about _____. ________________________________________

 

90.	Ethical choices that offer the greatest good for the greatest number of people refer to the theory of _____. ________________________________________

 

91.	Actions that are taken out of duty and obligation to a purely moral ideal, rather than based on the needs of a situation, since the principles are seen to apply to everyone, everywhere, and all the time are termed _____. ________________________________________

 

92.	The code of ethics adapted by the _____ speaks about doing no harm, fostering trust, and improving “customer confidence in the integrity of the marketing exchange system.” ________________________________________

 

93.	The _____ department of an organization carries the responsibility of corporate compliance to all prevailing employment legislation. ________________________________________

 

94.	The _____ department of an organization should ensure that leadership selection and development processes include an ethics component. ________________________________________

 

95.	_____ professionals must help ensure that ethics is a top organizational priority. ________________________________________

 

96.	The _____ function of an organization keeps track of the company’s financial transactions by documenting the money coming in and going out and by balancing the accounts at the end of the period. ________________________________________

 

97.	_____ function of an organization refers to the certification of the organization’s financial statements or books as being accurate by an impartial third-party professional. ________________________________________

 

98.	The _____ is a set of principles that governs the accounting profession. ________________________________________

 

99.	The last resort for ethical guidance in an accounting profession is the Code of Ethics issued by the _____. ________________________________________

 

100.	A situation in which one relationship or obligation places the individual or organization in direct conflict with an existing relationship or obligation is referred to as a _____. ________________________________________

 

 

Essay Questions

101.	What is a value chain? Identify the key functions of a company’s value chain.

 

102.	Discuss the potential ethical dilemmas associated with manufacturing.

 

103.	Discuss the statement that an organization’s human resources (HR) should be at the center of any corporate code of ethics.

 

104.	Discuss the pressures placed on an organization’s accounting department to maintain creative bookkeeping techniques.

 

105.	Discuss conflict of interest with an example.

 

Chapter 03 Organizational Ethics Answer Key

True / False Questions

1.	Shareholders lack interest in the ethical performance of an organization. FALSE Business ethics is proposed as an area of study separate from the general subject of ethics because the other parties (the stakeholders) have a vested interest in the ethical performance of an organization.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

2.	Organizational culture can be defined as the values, beliefs, and norms shared by the employees as well as the competitors of that organization. FALSE Organizational culture can be defined as the values, beliefs, and norms shared by all the employees of that organization.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

3.	An organization’s operating culture represents the sum of all the policies and procedures, both written and informal. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

4.	A value chain is composed of the key functional inputs that an organization provides in the transformation of raw materials into a delivered product or service. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

5.	Finance, which is a primary activity of an organization’s value chain, sources components and builds products for an organization. FALSE Manufacturing, a primary activity of an organization’s value chain, sources components and builds products for an organization.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

6.	Marketing, sales, and customer service are identified as the key functions in a value chain. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

7.	Marketing (and advertising) is one of the key functions in a value chain. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

8.	Distribution and marketing are line functions, supporting each of the key functional areas. FALSE Human resources management and systems development are line functions, supporting each of the key functional areas.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

9.	Information systems team coordinate the recruitment, training, and development of personnel for all aspects of an organization. FALSE Human resources management (HRM) coordinates the recruitment, training, and development of personnel for all aspects of an organization.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Define organizational ethics.

 

10.	Research and development (R&D) professionals carry the responsibility for the future growth of an organization. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

11.

Given that research and development (R&D) teams do not interact directly with customers, the potential for ethical dilemmas is nonexistent. FALSE Research and development (R&D) teams incorporate customer feedback from market research, and each area of an organization that can face ethical challenges and dilemmas which can be unique to their departmental responsibilities. For the R&D team, the real ethical dilemmas come when decisions are made about product quality.

 

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

12.	For a research and development (R&D) team, the real ethical dilemmas come when decisions are made about product quality. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

13.	The manufacturing process is responsible for ensuring that a product reaches the hands of a satisfied customer. FALSE The marketing process is responsible for ensuring that a product reaches the hands of a satisfied customer.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

14.	Utilitarianism refers to the theory that suggests actions are taken out of duty and obligation to a purely moral ideal, rather than based on the needs of the situation. FALSE Utilitarianism is the theory that refers to ethical choices that offer the greatest good for the greatest number of people.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

15.

Universal ethics refers to ethical choices that offer the greatest good for the greatest number of people. FALSE Universal ethics refers to actions that are taken out of duty and obligation to a purely moral ideal, rather than based on the needs of the situation, since the universal principles are seen to apply to everyone, everywhere, all the time.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

16.	Marketing professionals abide by a code of ethics adapted by the American Marketing Association. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

17.	The code of ethics adapted by the American Marketing Association speaks about improving “customer confidence in the integrity of the marketing exchange system.” TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Explain the respective ethical challenges facing the functional departments of an organization.

 

18.	The human resources function within an organization should ideally be directly involved in the marketing process of the organization. FALSE The human resources function within an organization should ideally be directly involved in the orientation of newly hired employees.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

19.	The human resources function within an organization should ideally be directly involved in the maintenance of the technology in the organization. FALSE The human resources function within an organization should ideally be directly involved in the documentation of periodic performance reviews.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

20.	The human resources function within an organization should ideally be directly involved in the creation of a career development program of an employee. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

21.	If an employee leaves a company, the human resources department is responsible for hosting an exit interview to ensure that anything that the organization can learn from the employee’s departure is fed back into the company’s strategic plan for future growth and development. TRUE

 

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

22.	The human resources function within an organization seldom needs to be involved in the relationship between the company and an employee. FALSE The human resources function within an organization needs to be directly involved in the relationship between the company and an employee.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

23.	The advocates of ethical business conduct argue that an organization’s marketing team should be at the center of any corporate code of ethics. FALSE The advocates of ethical business conduct argue that an organization’s human resources should be at the center of any corporate code of ethics.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

24.

The advocates of ethical business conduct argue that an organization’s human resources (HR) should be the sole creator of any corporate code of ethics. FALSE The advocates of ethical business conduct argue that human resources (HR) should not be the sole creator of the code of ethics since it is a document that should represent the entire organization.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

25.	An organization’s human resources (HR) must ensure that the leadership selection and development processes include an ethics component. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

26.	An organization’s human resources (HR) professionals must help ensure that ethics is a top organizational priority. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

27.	Marketing professionals are responsible for ensuring that the right programs and policies for ethical business conduct are in place. FALSE Human resources professionals are responsible for ensuring that the right programs and policies for ethical business conduct are in place.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Discuss the position that a human resources (HR) department should be at the center of any corporate code of ethics.

 

28.	The human resources function of an organization can be divided into three distinct areas: financial transactions, auditing, and accounting function. FALSE The finance function of an organization can be divided into three distinct areas: financial transactions, accounting, and auditing.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP).

 

29.

The accounting function provides the certification, by an impartial third-party professional, that an organization’s financial statements are accurate. FALSE The accounting function keeps track of all the company’s financial transactions by documenting the money coming in and money going out and balancing the accounts at the end of the period.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP).

 

30.

The auditing function keeps track of all the financial transactions of an organization by documenting the money coming in and money going out and balancing the accounts at the end of the period. FALSE The auditing function provides the certification, by an impartial third-party professional, that an organization’s financial statements are accurate.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP).

 

31.	The accounting profession is governed by a set of laws and established legal precedents. FALSE The accounting profession is governed not by a set of laws and established legal precedents but by a set of generally accepted accounting principles, typically referred to as GAAP.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP).

 

32.

It is illegal to defer receipts from one quarter to the next to manage one’s tax liabilities. FALSE It is legal to defer receipts from one quarter to the next to manage one’s tax liability. However, accountants face ethical challenges when requests are made for far more illegal practices, such as falsifying accounts, underreporting income, overvaluing assets, and taking questionable deductions.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP).

 

33.	Some of the illegal financial functions carried out by an organization include underreporting income, overvaluing assets, and taking questionable deductions. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP).

 

34.	When a company’s financial statements have been certified by an objective third-party to be “clean,” that certification is meant to be for the public’s benefit rather than the company’s benefit. TRUE

 

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-04 Explain the potential ethical challenges presented by generally accepted accounting principles (GAAP).

 

35.	The obligation that an auditing firm has to a paying client while owing an objective, third-party assessment of that client’s financial stability to stakeholders and potential investors represents a potentially significant conflict of interest. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-05 Determine potential conflicts of interest within any organizational function.

 

36.	A situation in which one relationship or obligation places an individual or firm in direct conflict with an existing relationship or obligation refers to a conflict of interest. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-05 Determine potential conflicts of interest within any organizational function.

 

37.	Selling a product that has the potential to be harmful to a firm’s customers represents a significant conflict of interest. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-05 Determine potential conflicts of interest within any organizational function.

 

38.

Nonprofit organizations do not face problems with unethical behavior. FALSE Profits are the main reason behind stretching the truth and bending the rules that have become a regular occurrence in any workplace. This does not mean that nonprofit organizations do not face problems with unethical behavior or that the pursuit of profit is unethical.

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-05 Determine potential conflicts of interest within any organizational function.

 

39.	Profits are the main reason behind stretching the truth and bending the rules that have become a regular occurrence in a workplace. TRUE

 

Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-05 Determine potential conflicts of interest within any organizational function.

 

Multiple Choice Questions

40.

Identify a true statement about a company’s organizational culture. A. It represents the sum of all the policies and procedures from each of the functional departments in the organization.   B. It is governed by a set of laws and legal precedents and is closed to interpretation.   C. It consists of suggestions established in an organization on how to make fraudulent practices look legal.   D. It refers to the characteristic of publicly committing to the highest professional standards and sticking to that commitment.

 

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-01 Define organizational ethics.

 

41.

Which of the following statements is true of organizational culture? A. Organizational culture represents only the written policies and procedures of an organization.   B. Organizational culture includes the values, beliefs, and norms shared by all employees of that organization.   C. Employees’ personal value system is always in tune with the ethical standards of the organization’s operating culture.   D. Stakeholders lack interest in the ethical performance of an organization.

 

Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-01 Define organizational ethics.

 

42.

Anderson Enterprises endorses low power distance which implies that the firm lays emphasis on a less consultative or democratic work structure. Subordinates work on important assignments and managers often socialize with them. Which of the following concepts is being reflected in the above scenario? A. Ethical relativism   B. Value chain   C. Organizational culture   D. Corporate conscience

 

Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-01 Define organizational ethics.