Ethical Decision-Making Chapter Overview

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Questions and Answers

Which of the following best exemplifies a 'means value'?

Achieving a secure retirement after a long career.

Demonstrating competence in completing a complex project. (correct)

Gaining social recognition for important achievements.

Contributing to a world where peace is the norm.

A company's mission statement, which outlines its distilled values, primarily serves to:

Limit interactions with the external world.

Guarantee the financial success of the organization.

Establish expectations for employee behavior aligned with the company's values. (correct)

Dictate all the personal goals of the company’s employees.

What could be a potential consequence if a company’s 'means values' do not align with its 'end values'?

Experiencing organizational challenges and ethical failures. (correct)

A stronger public image and greater customer confidence.

Increased success in achieving its goals.

A unified value system.

The concept of 'tone at the top' in financial services firms most directly refers to:

The importance of ethical behavior in the leadership that permeates the organization. (B) Signup and view all the answers

How should a company handle the process of clarifying and articulating its values?

It should let the process be guided by its values first then set business objectives. (D) Signup and view all the answers

What is a key reason why some companies might experience reduced profits, increased environmental liabilities, and poor decision-making, despite adhering to current laws?

They base their standards solely on compliance, ignoring ethical values. (D) Signup and view all the answers

Why is the legal structure of preferred shareholders potentially problematic from an ethical standpoint, according to the text?

It can create a conflict of interest where they prioritize their needs at the expense of the company. (A) Signup and view all the answers

What is the primary role of core values in an ethically driven corporation, as defined in the text?

To establish a foundation for corporate culture and ethical behavior beyond mere compliance (C) Signup and view all the answers

Why did some accountants and auditing firms disregard transparent accounting procedures before the collapse of Enron?

They were confident that their actions would not be discovered or penalized. (D) Signup and view all the answers

Based on the text, why is 'value awareness' crucial for professionals in the securities industry?

It enables them to justify self-regulation. (C) Signup and view all the answers

In Murray's ethical dilemma, which of the following values does NOT represent a conflict he needs to consider?

Personal satisfaction in his daily work (D) Signup and view all the answers

What distinguishes a 'right-versus-wrong' ethical issue from the dilemma Murray is facing?

Right-versus-wrong issues have a single obvious right answer, while Murray faces multiple 'right' possibilities in conflict. (C) Signup and view all the answers

Which of the following best describes the core challenge in Murray's ethical situation?

Balancing competing obligations to different stakeholders. (B) Signup and view all the answers

How might Murray's fiduciary responsibility conflict with his firm's goals?

His fiduciary duty to all his clients conflicts with his firms focus on revenue targets by dropping unprofitable clients. (B) Signup and view all the answers

What is the primary conflict between long-term business goals and short-term needs in Murray's case?

Retaining his teenage clients for future profits versus the immediate need to satisfy short-term business goals. (A) Signup and view all the answers

In a right-versus-right dilemma, what is a core characteristic that complicates decision-making?

Each choice contains elements that align with core values. (C) Signup and view all the answers

What is the initial step recommended when faced with a potential ethical dilemma?

Identifying if it's a right-versus-right dilemma. (C) Signup and view all the answers

In a truth-versus-loyalty dilemma, what are the competing values?

Honesty or integrity versus commitment or promise keeping. (C) Signup and view all the answers

An investment advisor recommends an in-house product that is competitive but not the highest performing on the market, which dilemma is most exemplified?

Truth versus loyalty. (D) Signup and view all the answers

What is the primary conflict in an individual-versus-group dilemma?

The clash between the rights of a few versus the many. (A) Signup and view all the answers

Flashcards

Corporate Governance

The system of rules and practices that direct and control a company.

Ethical Corporation

A company that defines its core values and integrates them into its culture.