Business Ethics: Loyalty and Confidentiality
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Questions and Answers

What is the primary advantage of using internal reporting channels before going public with a whistleblowing case?

  • It guarantees financial compensation for the whistleblower.
  • It allows the company an opportunity to investigate and possibly correct the issue. (correct)
  • It automatically resolves the issue without further action needed.
  • It protects the whistleblower from any potential backlash.

What is a key factor that whistleblowers must consider before making their report?

  • They must have strong evidence and a legitimate reason for their actions. (correct)
  • They must ensure they have sufficient support from colleagues.
  • They should evaluate their own personal grievances first.
  • They would need to prepare for immediate media coverage.

What potential benefit can whistleblowers receive upon reporting serious misconduct?

  • Financial rewards based on penalties imposed on wrongdoing parties. (correct)
  • Guaranteed job security within the company.
  • Immediate recognition from the media for their bravery.
  • A chance to negotiate improved working conditions.

What are some risks associated with whistleblowing?

<p>Facing potential blacklisting which complicates securing future employment. (A)</p> Signup and view all the answers

Which statement best describes the role of whistleblowing in business practices?

<p>Whistleblowing is considered a necessary evil for enforcing ethical standards. (C)</p> Signup and view all the answers

What type of violence occurs when an employee attacks a coworker?

<p>Worker-on-Worker Violence (B)</p> Signup and view all the answers

Which of the following is considered unethical behavior in financial markets?

<p>Insider Trading (A)</p> Signup and view all the answers

Which topic is NOT typically covered in a company's code of conduct?

<p>Customer Service Protocols (B)</p> Signup and view all the answers

What is a potential risk faced by whistleblowers?

<p>Career setbacks (B)</p> Signup and view all the answers

What is the consequence of insider trading on trust in financial markets?

<p>It damages trust among investors. (A)</p> Signup and view all the answers

Who can be classified as an 'insider' regarding insider trading?

<p>Temporary insiders like consultants and reporters (A)</p> Signup and view all the answers

Customer violence is frequently seen in which type of establishments?

<p>Nightclubs and restaurants (B)</p> Signup and view all the answers

What is a primary purpose of a company's code of ethics?

<p>To ensure ethical decision-making (B)</p> Signup and view all the answers

What does the duty of loyalty primarily require from an employee?

<p>To render loyal and faithful service to the employer (A)</p> Signup and view all the answers

Why is confidentiality important in the workplace?

<p>To prevent competitors from gaining access to proprietary information (D)</p> Signup and view all the answers

Which scenario best illustrates a violation of the duty of loyalty?

<p>An employee shares confidential customer data with a friend (B)</p> Signup and view all the answers

What increases the strength of an employee's duty of loyalty to an employer?

<p>Gaining more trust and responsibility from the employer (B)</p> Signup and view all the answers

What is considered a fiduciary duty?

<p>A higher level of loyalty and confidentiality due to significant authority (B)</p> Signup and view all the answers

Which of the following best describes proprietary information?

<p>Information with economic value that is kept secret (B)</p> Signup and view all the answers

Under what condition might confidentiality obligations arise?

<p>From an employment contract or company policies (D)</p> Signup and view all the answers

What can be a consequence of breaching the duty of loyalty?

<p>Facing enforceable rights taken by the employer (B)</p> Signup and view all the answers

What is the role of internal marketing in a business?

<p>It involves getting employees to believe in and commit to the company's products. (C)</p> Signup and view all the answers

How can employers empower employees to enhance customer interactions?

<p>By allowing employees to use their best judgment when dealing with customers. (C)</p> Signup and view all the answers

Which of the following actions can help improve relationships among coworkers?

<p>Accepting lunch invitations and participating in social activities. (B)</p> Signup and view all the answers

What behavior is considered unprofessional in a workplace setting?

<p>Gossiping about coworkers on social media. (A)</p> Signup and view all the answers

What is the primary responsibility of managers concerning workplace violence?

<p>To prevent and address situations that may lead to violence. (A)</p> Signup and view all the answers

What is one consequence of poor interactions with customers?

<p>Negative impact on the employer-employee relationship. (C)</p> Signup and view all the answers

Which category of workplace violence involves a perpetrator with no legitimate relationship to the business?

<p>Traditional criminal intent. (C)</p> Signup and view all the answers

How should employees conduct themselves to maintain a positive work atmosphere?

<p>By treating all coworkers with kindness and respect. (C)</p> Signup and view all the answers

What is the primary purpose of non-disclosure agreements?

<p>To protect the company’s sensitive information from being stolen. (A)</p> Signup and view all the answers

Which option describes what trade dress refers to?

<p>The overall appearance and packaging of a product. (D)</p> Signup and view all the answers

How do non-compete agreements protect a company?

<p>By ensuring employees do not start their own competing business shortly after leaving. (A)</p> Signup and view all the answers

What is the function of a non-solicitation clause in an employment contract?

<p>To stop a former employee from poaching customers or colleagues. (B)</p> Signup and view all the answers

Which of the following is NOT considered a type of intellectual property protection?

<p>Non-disclosure agreements (A)</p> Signup and view all the answers

What aspect of a brand is emphasized as crucial for corporate goodwill?

<p>The reputation and image of the brand. (A)</p> Signup and view all the answers

Which of the following statements is true regarding loyalty to brand and customers?

<p>Employees are expected to contribute to the branding efforts. (B)</p> Signup and view all the answers

What does the term ‘copyright’ specifically protect?

<p>Original literary and artistic expressions. (D)</p> Signup and view all the answers

Flashcards

Duty of Loyalty

An employee's obligation to act in the best interest of their employer, avoiding actions that could harm the company.

Fiduciary Duty

A legal and ethical obligation that binds individuals in positions of trust to act solely for the benefit of their employer.

Proprietary Information

Information that companies keep secret to maintain a competitive advantage, including details of patents, copyrights, employee records, salaries, and customer data.

Trade Secrets

Information that holds significant economic value due to its secrecy and is protected by reasonable measures.

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Duty of Confidentiality

A legal and ethical obligation for employees to protect confidential information, including trade secrets, customer data, and company strategies.

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Loyalty and Trust Correlation

The level of loyalty an employee owes their employer is often proportional to the degree of responsibility and trust bestowed upon them.

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Personal Gain vs. Employer's Interest

Making work decisions solely for personal gain or benefitting third parties, potentially harming the employer's interests, is considered unethical.

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Employer's Right to Confidentiality

Companies have the right to expect employees to honor their duty of confidentiality, protecting proprietary information and trade secrets from competitors and the public.

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Internal Marketing

The process of motivating employees to believe in and promote the company's products and services, often through internal marketing campaigns and activities.

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Obligations to Customers

Employing actions that demonstrate respect and courtesy towards customers to build a positive customer experience, ultimately enhancing business relationships and brand image.

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Positive Work Atmosphere

Creating a positive work environment characterized by collaboration, respect, and open communication, leading to improved productivity and job satisfaction.

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Workplace Violence

Any violent act that occurs within a workplace, including physical assaults, verbal threats, or intimidation.

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Traditional Criminal Intent

A type of workplace violence where the perpetrator has no connection to the workplace and commits violence during a crime, such as robbery.

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Employee-on-Employee Violence

A type of workplace violence where the perpetrator is a current or former employee who targets coworkers, managers, or the company itself.

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Violence by an Outside Relation

A type of workplace violence where the perpetrator is not an employee but has a personal relationship with an employee, often targeting the employee at the workplace.

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Customer-on-Employee Violence

A type of workplace violence where the perpetrator is a customer, client, or supplier who becomes violent during a business interaction.

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Non-Disclosure Agreement (NDA)

A legal agreement where one party promises to keep another party's information confidential, often used to protect trade secrets.

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Trademark

Legal protection granted to unique brand identifiers, like logos, slogans, and product packaging, to prevent others from using them.

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Copyright

Legal protection for original creative works like books, songs, and software, preventing unauthorized copying.

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Patent

Legal protection for new and useful inventions, allowing the inventor exclusive rights to use, sell, or manufacture the invention.

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Non-Compete Agreement

A legal agreement that prevents an employee from competing with their former employer after leaving the company, used to safeguard company information and protect trade secrets.

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Non-Solicitation Clause

A clause in an employment contract that stops an employee from soliciting customers or colleagues from their previous employer.

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Non-Disparagement Clause

A clause in an employment contract that prohibits an employee from making negative or damaging statements about their former employer.

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Whistleblowing

The act of exposing illegal or unethical activities within an organization, often by an employee who witnesses or suspects wrongdoing.

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Blacklisting

A potential risk for whistleblowers, where they face difficulty finding future employment due to their actions.

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Internal Reporting

The process of reporting wrongdoing or concerns within an organization before going public, allowing the company to investigate and address the issue internally.

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Strong Evidence & Legitimate Reason

Whistleblowers should have solid proof and a valid reason for their actions, such as compliance enforcement or protection of others.

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Whistleblower Rewards

Rewards offered to whistleblowers who report serious fraud or misconduct, typically based on the penalties imposed on the wrongdoers.

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Worker-on-Worker Violence

This occurs when an employee attacks a coworker. Examples include verbal abuse, physical assaults, and threats.

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Personal Relationship Violence

This type involves a perpetrator who has a personal relationship with the victim, who is an employee, not with the business itself.

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Customer Violence

Occurs when a customer or client becomes violent on the premises. This is common in service industries.

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Codes of Conduct

Companies' written guidelines that set expectations for ethical behavior, addressing areas like workplace romance, harassment, and cybersecurity.

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Insider Trading

Buying or selling stocks or other investments based on confidential information that could influence the price.

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Whistleblowing Risks

The potential drawbacks of whistleblowing, such as job loss, reputational damage, and retaliation.

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Whistleblowing Rewards

The benefits of whistleblowing, such as preventing harm, exposing unethical practices, and upholding ethics.

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Study Notes

Objective 7.1: Loyalty to the Company

  • Employees owe a duty of loyalty to their employer
  • This requires refraining from actions detrimental to the employer's interests
  • Employees are obligated to give "loyal and faithful" service
  • They must not act in ways that benefit themselves or others against the employer's best interests
  • The level of duty depends on the trust placed in the employee; more trust equates to a stronger duty
  • Employees with significant authority or access to confidential information have a fiduciary duty

Confidentiality

  • Employees often encounter confidential information in their work
  • This includes proprietary information, patent and copyright details, employee records, salary histories, and customer data
  • Employers have the right to expect employees to keep this information confidential
  • Confidentiality can be explicitly stated in employment contracts
  • "Trade secrets" are also confidential, and are information with economic value that is not generally known and kept secret
  • Non-disclosure agreements (NDAs) protect against the theft of such information
  • Legally protected intellectual property includes trademarks, copyrights, and patents
  • Non-compete agreements restrict employees from competing with their former employer for a time period

Objective 7.2: Loyalty to the Brand and to Customers

  • Companies invest in developing a brand image
  • Branding is vital for marketing and creating goodwill
  • Employees play a role in upholding the brand, building a positive customer perception
  • Employees hold obligations to customers; treating them with respect and assisting their positive company experiences
  • Treating customers well benefits the company and the employee

Objective 7.3: Contributing to a Positive Work Atmosphere

  • Employees can positively contribute to the workplace by getting along with coworkers, avoiding prejudgments, engaging in office activities, and exhibiting kindness
  • Avoiding offensive jokes, comments, taking credit for others' work, and narrow-mindedness are important.
  • Showing respect, even with difficult coworkers, is crucial to a positive work environment
  • Avoid using social media to gossip about colleagues; it can be detrimental.

Reducing Workplace Violence

  • Workplace violence has four categories:
    • Traditional criminal intent (robbery)
    • Worker-on-worker violence
    • Personal relationship violence (conflict between employees that are personally involved)
    • Customer violence (violence occurring at the customer's interaction with the business)
  • Employees have a legal and ethical duty to maintain a safe workplace

Objective 7.4: Financial Integrity

  • Insider trading involves using non-public information to profit in financial markets
  • It is unethical and harmful to financial markets
  • It damages trust and gives an unfair advantage

Objective 7.5: Criticism of the Company and Whistleblowing

  • Whistleblowing is disclosing illegal activities to government authorities
  • Whistleblowers face significant personal and professional risks, including job loss and negative professional repercussions
  • Companies have internal reporting channels, which should be used first, before going public
  • Whistleblowers can be rewarded for reporting illegal activities.

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BMGT380 Business Ethics Fall 2024-2025 PDF

Description

This quiz explores the concepts of employee loyalty and confidentiality within a business context. It covers the obligations employees have towards their employer, including the duty of loyalty and the management of confidential information. Understanding these principles is essential for maintaining trust and integrity in the workplace.

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