Exam 22: Ethics and Organizational Architecture

Recently the White House press secretary, after serving for three years, wrote a book criticizing president Bush's policies in the middle east. Professionals in the field are of the view that the press secretary was:

In the United States, there are numerous organizations - some sponsored by business and others that are independent of business - that monitor the behavior, the product quality, and the service provided by businesses. What role do these organizations have in the process of promoting ethical behavior?

"The goal of the corporation is to make money for its owners" is viewed:

If managers are rational, they will only cheat - engage in unethical behavior - when:

Citigroup, of which Solomon is one division, was found guilty of unethical behavior in 2003. The separate divisions of brokerage, investment banking, and insurance were coordinated for the benefit of the company, but to the detriment of external investors. This scandal followed the one in the 1990s. Discuss the issues of organization architecture that can lead to recurring corporate scandals like this. What possible changes in organizational architecture might reduce the temptation for managers to cheat in the process of wealth creation?

Which of the following will control incentive problems in a corporation?

Economist Milton Friedman argued that ethical behavior is really the same as:

Economist Milton Friedman argued that the goal of corporations should be "to make as much money for its owners as possible while conforming to the basic rules of society." What does this mean in terms of corporate ethical behavior?

Consumer Reports and other organizations rank companies on the quality of their products and the reliability of their services. These companies provide:

Ethics is about making good decisions. Sometimes it is hard to see what economics has to do with ethics until you remember that economics is often defined as the:

The key mission of a firm's managers or owners is:

Ethics codes in corporate life tend to emphasize (a) compliance with laws and regulations, (b) honesty and integrity, and (c) avoidance of conflicts of interests. Which one is the most important in today's world? How does economics help in understanding its importance?

Business norms:

Economist Jack Hirshleifer notes that, "Altruism economizes on the costs of policing and enforcing contracts." Since economics assumes that people act in a self-interested manner, what could he possibly mean?

Martha Stewart seems to have made a bad decision concerning the use of insider information in selling ImClone stock. The resulting negative publicity on the issue caused value of her corporation, Martha Stewart Living, to fall by almost half. This example is supposed to show that:

If a manager complies with all laws and regulations, then he can be confident that he:

Corporate ethics problem is basically:

Many businesses face the same customers over and over again. Repeat business generally:

Information asymmetries in constructing a contract between buyer and seller can lead the seller to:

Contracts ensure: