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Chapter 5—The Moral Aspects of Leadership

MULTIPLE CHOICE

1. Ethics deals mostly with

a. being socially responsible.
b. separating right from wrong.
c. legal versus illegal behavior.
d. professional codes of conduct.
ANS: B PTS: 1

2. Ethics can be considered the

a. vehicle for putting values into action.
b. opposing force to values.
c. equivalent of the organizational culture.
d. opposite of moral leadership.
ANS: A PTS: 1

3. An authority cited in the leadership text argues that ethics is at the center of leadership because the
ethical leader
a. wants to create a positive public appearance.
b. promote conflicts of interest.
c. attempts to keep profits at a bare minimum.
d. wants everybody to benefit.
ANS: D PTS: 1

4. Rita is a leader of high integrity. According to the technical meaning of integrity, Rita will
 a. have high morals in every facet of her life.
b. be kind to employees even if she does not like them.
c. steal only to benefit poor people.
d. stick to the principles she thinks are right.
ANS: D PTS: 1

5. A principle of ethical and moral leadership is to

a. regularly publicize moral victories.
b. maximize personal returns in business transactions.
c. pay attention to all stakeholders.
d. seek to maximize shareholder wealth.
ANS: C PTS: 1

6. A major source of individual differences in ethics and morality among leaders is

a. the products and services offered by the firm.
b. government regulations about ethics.
c. the leader's rank in the organizational hierarchy.
d. the leader's level of greed, gluttony, and avarice.
ANS: D PTS: 1

7. A leader at the postconventional level of moral development is likely to

a. attempt to do the most good for the most people.
b. maximize personal gain in most business transactions.
c. falsify earnings statements to be eligible for a big bonus.
d. be moral just enough to look good.
ANS: A PTS: 1

8. Chief financial officer Justin takes himself and his family on an Asian vacation using the company jet.
He excuses his behavior by stating, "My family and I were spreading good will around the world for
the company." Justin appears to be
a. showing concern for stakeholders.
b. rationalizing.
c. outright lying.
d. exercising his rights as a CFO.
ANS: B PTS: 1

9. According to the idea of entitlement, some corporate executives behave unethically because they feel
they are
a. entitled to make up for a poor childhood.
b. entitled to whatever they can get away with or steal.
c. servants of an unfair system.
d. underpaid in comparison to top professional athletes and entertainers.
ANS: B PTS: 1

10. Chief operations officer Joan has an ethical mind, so she has a point of view that helps workers
a. figure out when stretching the truth is acceptable.
b. catch expense account cheats.
c. aspire to good work that matters to many people.
d. fear being unethical and dishonest.
 ANS: C PTS: 1

11. An ethical screen is used primarily when facing a decision that

a. is in opposition to the organizational culture.
b. affects the majority of employees within the firm.
c. is not obviously ethical or blatantly unethical.
d. is widely recognized as criminal behavior.
ANS: C PTS: 1

12. Which one of the following questions in an ethical screen deals with the principle of reversibility?
a. How does it smell?
b. What would you tell your child, sibling, or young relative to do?
c. Who gets hurt?
d. Is it fair?
ANS: B PTS: 1

13. A major problem noted with extreme unethical behavior in the executive suite is that such behavior
has
a. brought companies into bankruptcy.
b. led to investor distrust in the stock market.
c. led to layoffs of thousands of workers.
d. all of these choices.
ANS: D PTS: 1

14. Corporate social responsibility centers on a firm's

a. contributions to charity.
b. responsibility to society.
c. adherence to laws.
d. adherence to ethics.
ANS: B PTS: 1

15. Which one of the following is the clearest example of socially responsible behavior on the part of a
business firm?
a. Ensuring that all workers get paid
b. Safely disposing of mercury
c. Creating a pleasant workplace
d. Avoiding involvement in political causes
ANS: C PTS: 1

16. An example of an executive leader helping sustain the environment would be to

a. use as much renewable energy as possible at the company.
b. create attractive designs on packages.
c. take a little company trash home with them after work.
d. charge customers for shipping and delivery.
ANS: A PTS: 1

17. A recent development in corporate philanthropy is for corporate leaders to demand

a. a good return on investment, in terms of social impact, for their donated money.
b. that the causes receiving the money become good customers.
c. that recipients of their generosity all believe in capitalism.
 d. respect and recognition from all recipients.
ANS: A PTS: 1

18. Which one of the following is a recommended initiative for achieving an ethical and socially
responsible organization?
a. Establishing severe penalties for whistleblowers
b. Encouraging employees to learn ethics mostly by trial and error
c. Leadership by example
d. Developing informal mechanisms for dealing with ethical problems
ANS: C PTS: 1

19. When faced with a supplier who uses unsafe working conditions, a socially responsible alternative is
to
a. quit working with the supplier.
b. impose a price cut on the supplier.
c. begin a boycott against the supplier.
d. work with the supplier to improve working conditions.
ANS: D PTS: 1

20. A unit of the U. S. Federal Government publishes on the Internet an Encyclopedia of Ethical Failure.
The purpose of the document is to
a. make elected officials look foolish.
b. make public highly unethical behavior by government employees.
c. make public the good deeds of government employees.
d. create the case for a balanced budget.
ANS: B PTS: 1

21. When senior management provides strategic leadership for ethics,

a. senior managers emphasize being whistle blowers.
b. marketing strategy is converted into ethical strategy.
c. senior managers become ethics leaders.
d. the roles of stockholders and shareholders become reversed.
ANS: C PTS: 1

22. Chief financial officer Barry turns in travel and expense reports that are 100 percent honest, and he
encourages employees in his division to inspect his reports. Barry is using the ethical initiative called
a. leading by example.
b. open-book management.
c. accepting whistleblowers.
d. developing formal mechanisms for dealing with ethical problems.
ANS: A PTS: 1

23. A recommended approach to promoting ethical behavior throughout the organization is to

a. base rewards on seniority so people will not cut corners to perform well.
b. implement a recognition program called "whistleblower of the month."
c. hire only those candidates who have taken a course in ethics.
d. reward people who have performed well and behaved ethically.
ANS: D PTS: 1
 24. An example of a formal mechanism for dealing with ethical problems is
a. leadership by example of ethical behavior.
b. an ethics committee for reviewing complaints about ethical problems.
c. training programs in ethics.
d. accepting whistleblowers.
ANS: B PTS: 1

25. An example of a whistleblower (in relation to ethics) would be a(n)

a. security guard who sent notices to employees who drove too fast in the company parking
lot.
b. executive who imposed fines on employees who behaved unethically.
c. company specialist conducting training programs about ethics.
d. bookkeeper who told a journalist about fraudulent accounting in the company
ANS: D PTS: 1

26. A practical suggestions for business leaders to behave ethically is to

a. be "I" leaders.
b. focus on self-interests.
c. place personal interests over company interests.
d. place company interests over personal interests.
ANS: D PTS: 1

27. The virtuous cycle in relation to social responsibility suggests that

a. recycling pays off in increased profits.
b. ethical executives attract ethical employees.
c. corporate social performance and corporate financial performance feed and reinforce each
other.
d. employee ethics runs in cycles.
ANS: C PTS: 1

28. An explanation offered for ethical behavior in terms of interpersonal skills is that when you are close
with people, you are more likely to
a. behave ethically with them.
b. take advantage of them from an ethical standpoint.
c. overlook their ethical flaws.
d. ask them to join you in unethical deeds.
ANS: A PTS: 1

TRUE/FALSE

29. Ethics deals mostly with complying with rules and regulations.

ANS: F PTS: 1

30. An important goal of a rational leader is to merge the interests of all parties so that everyone benefits
and the organization becomes prosperous.

ANS: T PTS: 1
31. Whether or not the leader has done the right thing is based on the perception by a consensus of
reasonable people.

ANS: T PTS: 1

32. Middle manager Sylvie regularly tells her group members about the importance of treating people
fairly, and she is fair with her employees. Sylvie therefore has integrity.

ANS: T PTS: 1

33. A leader who focuses on maximizing shareholder wealth will automatically behave ethically from the
standpoint of the principle "pay attention to all stakeholders."

ANS: F PTS: 1

34. To build community, a leader should search for goals compatible to all the constituents.

ANS: T PTS: 1

35. A major factor contributing to differences in ethical behavior among executives is their level of greed,
gluttony, and avarice.

ANS: T PTS: 1

36. Rationalization can lead to unethical behavior because the person will focus on the intention of the act
rather than the act itself.

ANS: T PTS: 1

37. Head of accounts payable, Bertha, engages in rationalization when she creates a few false invoices,
and then says, "I was only trying to lower the company's tax burden.".

ANS: T PTS: 1

38. If you are at the conventional level of moral development, you probably will not cheat on this test or
any other aspect of your leadership course.

ANS: T PTS: 1

39. Several psychiatrists and corporate governance experts have decided that some executives are
unethical because they feel they are entitled to whatever they can get away with or steal.

ANS: T PTS: 1

40. Information technology manager George displays an ethical mind as a leader when he makes up a list
of company workers who do not deserve to be protected against computer viruses.

ANS: F PTS: 1

41. The deontological theory of ethics focuses on the consequences of a decision, such as "Who gets
hurt?"

ANS: F PTS: 1
42. One of the questions included in an ethical screen is, "How does it [the decision in question] smell?"

ANS: T PTS: 1

43. A theme to the unethical acts committed by major executives in recent years is that they diverted funds
from the company so they could help less fortunate people.

ANS: F PTS: 1

44. Corporate social responsibility deals with a firm's impact on society more than its impact on company
employees.

ANS: T PTS: 1

45. An important factor of being judged a "best company to work for" is the input provided by company
employees.

ANS: T PTS: 1

46. A key part of a company's designation as a "best company to work for" is an evaluation of the
company's organizational culture.

ANS: T PTS: 1

47. One of the many ways in which company leadership at Wal-Mart is helping create a sustainable
environment is to encourage customers to purchase more of the traditional light bulbs instead of the
fluorescent type.

ANS: F PTS: 1

48. Strategic leadership of ethics and social responsibility includes the idea that senior management sets
the tone for ethics and social responsibility throughout the organization.

ANS: T PTS: 1

49. A recommended way of creating a socially responsible organizational culture is for managers to lead
by example.

ANS: T PTS: 1

50. Written codes of unethical conduct have become less important today because of the presence of so
many self-managing work teams.

ANS: F PTS: 1

51. To maintain an ethical climate, many companies today create the position of whistleblower, and the
person holding this job investigates potential ethical violations full time.

ANS: F PTS: 1

52. CEO Lois wants to create an ethical and socially responsible company, so it is recommended that she
place personal interests over company interests.

ANS: F PTS: 1
53. According to the virtuous circle, corporate profits→good social performance→more profits→more
good social performance.

ANS: T PTS: 1

54. When the relationship between two people is strong, they are more likely to behave ethically toward
each other.

ANS: T PTS: 1