Organizational Conduct: Ethical Decision-Making

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Questions and Answers

An organization is deciding whether to outsource its manufacturing to a country with lower labor costs. While this would increase profits, it could also lead to job losses in the home country and potentially exploit workers in the foreign country. Which aspect of organizational conduct does this dilemma primarily highlight?

Enhancing internal communication strategies.
Compliance with local environmental regulations.
Ethical decision-making and corporate social responsibility. (correct)
Adherence to standardized accounting principles.

A company discovers that one of its products has a safety flaw that could potentially harm consumers. What is the most ethically responsible course of action for the company to take, considering organizational conduct principles?

Implement a cover-up strategy to hide the safety flaw and avoid potential lawsuits.
Delay the disclosure until a less impactful time to minimize potential damage to the company's reputation.
Continue selling the product until the flaw is widely publicized to maximize profits.
Immediately disclose the flaw to consumers, issue a recall if necessary, and work to fix the problem. (correct)

A manager observes an employee consistently violating the company's code of conduct by misusing company resources for personal gain. According to the principles of promoting ethical conduct, what should the manager do?

Document the violations, address the issue with the employee, and take appropriate disciplinary action as outlined in company policy. (correct)
Ignore the behavior, as long as the employee's overall performance is satisfactory.
Publicly shame the employee to deter others from similar behavior.
Informally warn the employee without documenting the incident to avoid creating a negative record.

Which of the following scenarios best illustrates a conflict of interest in organizational conduct?

An employee uses their position to steer contracts to a company owned by a family member without disclosing the relationship. (B) Signup and view all the answers

An organization is facing increasing pressure from investors to maximize short-term profits, even if it means cutting corners on product safety and environmental protection. How should ethical leadership respond to this pressure?

Find a balance between short-term profits and long-term sustainability, while remaining transparent with investors about the ethical considerations. (D) Signup and view all the answers

What role does transparency play in fostering ethical organizational conduct?

Transparency builds trust with stakeholders, promotes accountability, and reduces the likelihood of misconduct. (A) Signup and view all the answers

A company discovers that its environmental practices are causing harm to the local community's water supply. Which action aligns with the principles of corporate social responsibility (CSR)?

Taking responsibility for the harm, implementing measures to mitigate the damage, and working with the community to find solutions. (C) Signup and view all the answers

An employee observes a colleague engaging in fraudulent financial reporting to inflate the company's earnings. What action should the employee take, according to ethical organizational conduct?

Report the fraudulent activity through established whistleblowing channels within the organization or to external authorities. (C) Signup and view all the answers

An organization is implementing a new artificial intelligence (AI) system for hiring. What ethical considerations should the organization address to ensure responsible use of technology?

Ensure that the AI system does not perpetuate or amplify existing biases in hiring decisions and that data privacy is protected. (D) Signup and view all the answers

An organization operates in a country with weak environmental regulations. What approach should the organization take regarding its environmental impact?

Apply higher international standards for environmental protection, regardless of local regulations, to demonstrate corporate social responsibility. (B) Signup and view all the answers

A company's code of conduct has not been updated in over a decade. Why might this pose a risk to ethical organizational conduct?

An outdated code of conduct may not address new ethical challenges posed by technological advancements, globalization, or changes in societal values. (B) Signup and view all the answers

Which of the following best describes the role of reward systems in promoting ethical organizational conduct?

Reward systems should align with ethical values and discourage unethical behavior, promoting a culture of integrity. (B) Signup and view all the answers

How does globalization complicate organizational conduct, and what is a key consideration for organizations operating in multiple countries?

Globalization increases the complexity of organizational conduct by necessitating the navigation of different legal, cultural, and ethical norms; organizations must ensure their conduct aligns with international standards. (A) Signup and view all the answers

During an ethical crisis, what is the most important step an organization should take to mitigate damage and restore trust?

Be transparent and accountable by investigating the incident, communicating with stakeholders, and taking corrective action. (A) Signup and view all the answers

What strategies can an organization implement to continuously improve its ethical performance and maintain stakeholder trust?

Regularly assess their ethical performance, identify areas for improvement, implement strategies to enhance their ethical culture, and monitor compliance. (D) Signup and view all the answers

Flashcards

Organizational Conduct

Actions and behaviors of individuals and the organization itself, in relation to stakeholders and the community.

Ethical Decision-Making

Choosing actions aligned with moral principles and values.