Test Questions & Answers Conflicts Of Interest Ch.9

Package Title: Godfrey Test Bank

Course Title: Ethics and Business WileyPLUS

Chapter Number 9

Question type: Multiple-Choice

1) Which one of the following statements best describes the United States Department of Defense, according to the textbook material?

a) has recently been downsized due to the national deficit

b) is the country’s largest employer, operating in multiple countries

c) does not allow contract bidding by third parties for security reasons

d) is managed by the United States secretary of state

Title: Chapter 5 Test Bank, Question 1

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: The United States Department of Defense is the country’s largest employer, operating in multiple countries.

2) Which of the following statements best defines a conflict of interest?

a) a situation where the right choice is typically clear

b) a situation where two employees are vying for the same promotion

c) when a person has an obligation to more than one person or organization

d) a situation where an employee wishes to leave an organization due to poor treatment

Title: Chapter 5 Test Bank, Question 2

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: A conflict of interest is when a person has an obligation to more than one person or organization.

3) Which one of the following statements best describes how conflicts of interest may arise?

a) Employees are torn between two supervisors they really like.

b) A difference arises between self-interest and loyalty to an employer.

c) A situation involves no moral temptation.

d) An employee’s values and belief system align with that of the organization.

Title: Chapter 5 Test Bank, Question 3

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: Conflicts of interest may arise when a difference arises between loyalty to oneself and an employer.

4) Which of the following statements best describes how conflicts of interest may become ethical dilemmas?

a) when an employee’s loyalty to the organization conflicts with loyalty to other organizations

b) when an employee is torn between two offers of promotion

c) when an employee receives an offer of employment from a competing firm

d) when the employee’s most ethical course of action is clear

Title: Chapter 5 Test Bank, Question 4

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: Conflicts of interest may become ethical dilemmas when an employee’s loyalty to the organization conflicts with loyalty to other organizations.

5) Which one of the following statements correctly describes moral courage?

a) the ability of an individual to avoid ethical dilemmas

b) something with which employees generally struggle

c) helps employees to resolve ethical conflicts

d) Moral courage is usually a job requirement.

Title: Chapter 5 Test Bank, Question 5

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: Moral courage helps employees to resolve ethical conflicts.

6) Which of the following statements about conflicts of interest is true?

a) Conflicts of interest are generally easy to avoid.

b) Conflicts of interest will never arise in an ethical organization.

c) Conflicts of interest should be resolved only by the firm’s human resources function.

d) It seems that there are an endless number of conflicts of interest.

Title: Chapter 5 Test Bank, Question 6

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: It seems that there are an endless number of conflicts of interest.

7) Which of the following statements is accurate concerning conflicts of interest?

a) They can be avoided if the employee chooses to always act ethically.

b) Employees who experience a conflict of interest in the workplace typically resign.

c) They often involve transactions, potential for personal gain, and problematic situations.

d) These types of situations typically involve an alignment of values between the employee and employer.

Title: Chapter 5 Test Bank, Question 7

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: Conflicts of interest often involve transactions, potential for personal gain, and problematic situations.

8) Which one of the following statements best describes when it is easier for an employee to experience a workplace conflict of interest?

a) They often represent their company as part of their employment.

b) They have a history of strong, ethical decision making.

c) They are often known for doing the right thing.

d) They work for a firm that has an ethical, honest, and transparent culture.

Title: Chapter 5 Test Bank, Question 8

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: It may be easier for an employee to experience a workplace conflict of interest if they often represent their company as part of their employment.

9) Situations that may cause conflicts of interest?

a) are typically ones where the right choice of action is unclear

b) often represent situations where employees’ loyalties are divided

c) are extremely rare in the workplace and not something an employee should worry about

d) usually involve promotion opportunities within the firm

Title: Chapter 5 Test Bank, Question 9

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: Situations that may cause conflicts of interest often represent situations where employees’ loyalties are divided and where the right course of action may be unclear

10) Which of the following statements are examples of a situation where a conflict of interest may arise?

a) When an employee has the potential to profit from external activities that are related to his or her job activities

b) When a manager informs only members of his or her own family of an upcoming promotion

c) When a company determines it must downsize and must lay off employees

d) When a firm’s board of directors is torn on whether or not to pay dividends to its shareholders

Title: Chapter 5 Test Bank, Question 10

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: An example of a situation where a conflict of interest may arise is when an employee has the potential to profit from external activities that are related to his or her job activities and when a manager informs only members of his or her own family of an upcoming promotion.

11) An effective tool that organizational leaders can use to help mitigate conflicts of interest is

a) an institutional conflict of interest policy

b) the threat of being written up or terminated

c) to make all employees sign a contract banning all such conflicts

d) the threat of publicizing an employee’s conflicts of interest

Title: Chapter 5 Test Bank, Question 11

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: An institutional conflict of interest policy is an effective tool that organizational leaders can use to help mitigate conflicts of interest.

12) Which of the following statements best describe conflict of interest policies?

a) rare in the workplace, as conflicts of interest tend to rarely arise

b) often described in employment agreements and contracts

c) usually reserved for management and executives

d) legally mandated at all companies

Title: Chapter 5 Test Bank, Question 12

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Conflict of interest policies are often described in employment agreements and contracts.

13) Which of the following statements describes a best practice with respect to conflict of interest policies?

a) Conflict of interest policies should be discussed only when a conflict of interest arises.

b) Any employee who discloses a conflict of interest should be immediately terminated.

c) Every employee should be given a written copy of the conflict of interest policy.

d) Conflict of interest policies should be used and enforced only for company executives.

Title: Chapter 5 Test Bank, Question 13

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Every employee should be given a written copy of the conflict of interest policy.

14) A code of conduct could best be described by which one of the following statements?

a) an umbrella policy, as it usually encompasses all of a firm’s major policies and procedures

b) unenforceable, as employees will sign codes of conduct and then still not disclose conflicts of interest

c) an effective tool for ensuring upper management acts ethically and discloses any conflicts

d) something that is generally required only in large organizations

Title: Chapter 5 Test Bank, Question 14

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: A code of conduct could be described as an umbrella policy, as it usually encompasses all of a firm’s major policies and procedures.

15) Which one of the following statements best describes codes of conduct for publicly traded companies in the United States?

a) Codes of conduct are optional but recommended.

b) Codes of conduct are required for all employees.

c) Codes of conduct are not required .

d) Codes of conduct are required, but only for executives and upper management.

Title: Chapter 5 Test Bank, Question 15

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: For publicly traded companies, codes of conduct are required under the Sarbanes-Oxley Act.

16) Another effective tool that can help prevent conflicts of interest:

a) is an effective training and education program for employees

b) is to threaten all employees with dismissal if they disclose a conflict of interest

c) is to advise employees to keep conflicts of interest confidential

d) is to conduct weekly background checks on employees

Title: Chapter 5 Test Bank, Question 16

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: An effective training and education program for employees is another effective tool that can help prevent conflicts of interest.

17) Conflicts of interest could best be described by which one of the following choices?:

a) pervasive in the business world

b) rarely encountered in the business world

c) encountered more often at small, private companies

d) encountered more often at large, publicly traded firms

Title: Chapter 5 Test Bank, Question 17

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: Conflicts of interest could be described as pervasive in the business world.

18) If an employee experiences a conflict of interest, that employee should follow the advice in which one of the following statements?

a) The employee should disclose the conflict and continue as normal.

b) The employee should consider resigning immediately.

c) He or she should consult company policies and procedures in this area.

d) He or she should not disclose it and continue as normal.

Title: Chapter 5 Test Bank, Question 18

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: If an employee experiences a conflict of interest, he or she should consult company policies and procedures in this area.

19) When an employee is faced with a situation involving a conflict of interest

a) a prudent step would be contacting friends and/or mentors for advice

b) the best course of action is to not disclose it and continue as normal

c) he or she should tender their resignation upon disclosing the conflict of interest

d) the employee should allow the company to decide his or her best course of action

Title: Chapter 5 Test Bank, Question 19

Difficulty: Easy

Bloomcode: Knowledge

Min: 1

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: When an employee is faced with a situation involving a conflict of interest, a prudent step would be contacting friends and/or mentors for advice.

20) The Department of Defense case discussed in the chapter is illustrative of a conflict of interest because

a) many large companies with competing interests were competing for the contract

b) companies from other countries were not allowed to bid on the project

c) some employees felt conflicted as to the ethicality of the project

d) firms taking on such a project would have to focus resources on this project and potentially away from other clients

Title: Chapter 5 Test Bank, Question 20

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: The Department of Defense case discussed in the chapter is illustrative of a conflict of interest because some employees felt conflicted as to the ethicality of the project.

21) Which one of the following statements is the best advice for when conflicts of interest arise in an organization?

a) An employee is legally bound to choose the option that favors his or her employer.

b) The employee may be legally liable for not choosing the correct option.

c) Conflicts of interest do not generally fall into the class of moral temptations.

d) The employee may feel genuinely torn between choosing the option that is right for him or her versus right for the company.

Title: Chapter 5 Test Bank, Question 21

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: When conflicts of interest arise, the employee may feel genuinely torn between choosing the option that is right for him or her versus right for the company.

22) Which one of the following statements best describes an individual who possesses a high level of moral courage?

a) He or she is likely to be easily drawn into situations involving conflicts of interest.

b) He or she will always be able to avoid situations involving conflicts of interest.

c) He or she is more likely able to demonstrate restraint and make the ethical choice when a conflict of interest arises.

d) Such an individual is much more likely to get promoted and work his or her way into senior positions within the firm.

Title: Chapter 5 Test Bank, Question 22

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: An individual who possesses a high level of moral courage is more likely able to demonstrate restraint and make the ethical choice when a conflict of interest arises.

23) When a conflict of interest arises for an employee

a) the correct option is to always do what is best for the employer

b) the correct option is to always do what is best for the employee

c) the employee should disclose the conflict of interest and allow the firm to decide the most appropriate course of action

d) an easy and/or readily apparent right course of action might not always be available

Title: Chapter 5 Test Bank, Question 23

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: When a conflict of interest arises for an employee, an easy and/or readily apparent right course of action might not always be available.

24) Which of the following statements provides the best example of a situation involving a conflict of interest between short versus long term conflict of interest?

a) A salesperson can accelerate sales and revenue to increase monthly bonuses.

b) An executive at a large, publicly traded firm is told that he or she will receive stock options after working for the firm for five years.

c) A manager has learned of a new position being created and encourages certain employees to apply for it.

d) A firm decides to spend extra money during a building project to help ensure a local stream is not polluted.

Title: Chapter 5 Test Bank, Question 24

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: A salesperson accelerating sales and revenue to increase monthly bonuses would be an example of a short versus long-term conflict of interest.

25) Which of the following statements represents the best example of an employee facing a conflict of interest?

a) Samantha has received a promotion and a substantial pay raise.

b) A financial advisor is trying to decide between selling financial products that are best for the customer versus higher-commission products from which the customer may not benefit as much.

c) An executive at a large, publicly traded firm is deciding whether to sell or hold on to stock options that he was granted upon commencement of employment.

d) The board of a large firm is meeting to discuss the firm paying day-care expenses for its employees as a perk.

Title: Chapter 5 Test Bank, Question 25

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: The best example of an employee facing a conflict of interest would be a financial advisor trying to decide between selling financial products that are best for the customer versus higher-commission products from which the customer may not benefit as much.

26) The Department of Defense case discussed in the text provides a good example of a conflict of interest because

a) the Department of Defense is notorious for canceling contracts

b) it represents a case where employees’ values and company values appeared inconsistent

c) it highlights the inconsistencies among employees when it comes to ethical values

d) the department was accepting bids from vendors with questionable ethical policies

Title: Chapter 5 Test Bank, Question 26

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: The Department of Defense case discussed in the text provides a good example of a conflict of interest because it represents a case where employees’ values and company values appeared inconsistent.

27) The Department of Defense case discussed in the text highlights the importance of which of the following?

a) why companies should not attempt to bid on government contracts

b) why firms should not bother with conflict of interest policies

c) how conflict of interest policies, even when in place, can be disregarded or circumvented

d) how top executives can restructure contracts to favor themselves and their own interests

Title: Chapter 5 Test Bank, Question 27

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: The Department of Defense case discussed in the text highlights how conflict of interest policies, even when in place, can be disregarded or circumvented.

28) Which of the following statements is correct regarding conflicts of interest?

a) Companies with strong and robust codes of conduct will avoid conflicts of interest.

b) Sometimes just the perception of a conflict of interest is as harmful as an actual one.

c) Incidents involving conflicts of interest will usually be prosecuted by state courts.

d) Research indicates that firms with no codes of conduct fare about as well as firms with codes of conduct when it comes to incidences of conflicts of interest.

Title: Chapter 5 Test Bank, Question 28

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: Sometimes just the perception of a conflict of interest is as harmful as an actual one.

29) How can employees attempt to resolve ethical dilemmas?

a) Employees should avoid all workplace situations involving conflicts of interest.

b) Employees should attempt to have a strong moral compass and set of values by which they abide.

c) Employees should refer all ethical dilemmas to either their supervisor or human resources.

d) Employees should not disclose any such dilemmas, as they are confidential.

Title: Chapter 5 Test Bank, Question 29

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: Employees should attempt to have a strong moral compass and set of values by which they abide. In so doing, they may be better equipped to successfully resolve ethical dilemmas.

30) Which of the following statements best describes an employee’s ethical obligation to his or her employer?

a) This ethical obligation will always supersede any obligation they have to themselves.

b) This ethical obligation is typically contractual, and the employee can be prosecuted for breaching this contract.

c) This ethical obligation should be disregarded in situations involving conflicts of interest.

d) This ethical obligation should be taken seriously when attempting to resolve any conflict of interest.

Title: Chapter 5 Test Bank, Question 30

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: An employee’s ethical obligation to his or her employer should be taken seriously when attempting to resolve any conflict of interest.

31) Which of the following statements represents the best example of a potential conflict of interest?

a) A vendor often gives an employee gifts at a business meeting, despite the firm having a “no gifts” policy.

b) A salesperson decides that he or she wants to beat his or her sales goal from last month by five percent.

c) A senior executive at a large firm is considering retirement and wants to cash in a large number of stock options.

d) One of a firm’s best customers asks for a five percent discount on all future sales due to the large order volume over the last two years.

Title: Chapter 5 Test Bank, Question 31

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: A vendor often gives an employee gifts at a business meeting, despite the firm having a “no gifts” policy.

32) Which of the following statements best describes the term moral imagination?

a) how creative an employee is at his or her job

b) whether an executive has a long-term ethical path laid out for a firm

c) an employee vocalizing values that conflict with those of the organization

d) how well the human resources department can brainstorm new ethical policies and codes of conduct for the firm

Title: Chapter 5 Test Bank, Question 32

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: An employee vocalizing values that conflict with those of the organization would be the best example of the term moral imagination.

33) Which one of the following statements is a potentially effective way for a firm to handle a conflict of interest?

a) to examine its core values and belief systems and decide with whom to do business in alignment with those values and beliefs

b) to only do business with customers and vendors who have been thoroughly vetted by the firm’s human resources function

c) to dismiss any employees who voice any opposing or dissenting opinions

d) to only allow executives and top managers to make decisions involving conflicts of interest

Title: Chapter 5 Test Bank, Question 33

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: A potentially effective way for a firm to handle a conflict of interest is to examine its core values and belief systems and decide with whom to do business in alignment with those values and beliefs.

34) Which one of the following statements best describes why it is important for employees to recognize the three elements of conflicts of interest?

a) If they don’t, they are legally liable for any negative consequences.

b) A failure to do so may result in an employee not effectively dealing with a conflict of interest.

c) Conflicts of interest are usually hard to determine.

d) It ensures that they present all components of the issue effectively to firm management.

Title: Chapter 5 Test Bank, Question 34

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: It is important for employees to recognize the three elements of conflicts of interest because a failure to do so may result in an employee not effectively dealing with a conflict of interest.

35) Which of the following statements represents the best example of a conflict of interest?

a) Sarah is responsible for her firm’s purchasing function and routinely orders products in bulk amounts from a company that employs her spouse.

b) Upon leaving the company, an employee is offered the chance to transfer his retirement account to his new employer.

c) Gene overhears that the company might be bought out and debates whether to tell his family.

d) A company has just adopted a standardized process for all bids on contracts.

Title: Chapter 5 Test Bank, Question 35

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: Sarah is responsible for her firm’s purchasing function and routinely orders products in bulk amounts from a company that employs her spouse.

36) Which of the following statements most accurately describes the term nepotism?

a) when an individual is passed up for a job or promotion because they weren’t the best qualified

b) when a firm expands into foreign markets and sends domestic managers to help start operations

c) when managers within a firm hire a family member despite that person not being the best qualified

d) when managers have no effective conflict of interest policy in place within a firm

Title: Chapter 5 Test Bank, Question 36

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: the term nepotism describes when managers within a firm hire a family member despite that person not being the best qualified.

37) A viable example of a conflict of interest is best described by which one of the following statements?

a) when an employee recommends a friend who has recently graduated from college for a job

b) when an employee pulls strings to secure a close friend an interview for a job

c) when an employee is passed up for a job promotion because of being unsuitably qualified

d) when an employee quits his or her job because he or she is tired of not receiving market raises

Title: Chapter 5 Test Bank, Question 37

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: A viable example of a conflict of interest is when an employee pulls strings to secure a close friend an interview for a job.

38) Which of the following employees is most likely to experience a conflict of interest?

a) A divisional manager is paid a flat salary each year with no bonuses.

b) A divisional manager is paid a flat salary each year with bonuses each month.

c) A salesperson works a commission-only sales job at a local car dealership.

d) A salesperson has recently been switched from commission to salary.

Title: Chapter 5 Test Bank, Question 38

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: A salesperson who works a commission-only sales job at a local car dealership would be most likely to experience a conflict of interest because of the temptation to arrange his or her compensation to most benefit himself or herself. This could include selling customers the wrong types of vehicles that do not meet their needs.

39) Which of the following scenarios best represents a potential conflict of interest?

a) An accountant is debating deferring some expenses to the next month to improve this month’s net income and increase the likelihood of a bonus.

b) A divisional manager has just been assigned an overseas segment and is torn between the time he should spend on the different areas.

c) An employee has recently started working a second job and is debating whether or not to quit his or her first job.

d) Shareholders of a new, growth firm have requested the firm not pay dividends, as they would rather the firm use the money to help grow and expand.

Title: Chapter 5 Test Bank, Question 39

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: An accountant is debating deferring some expenses to next month to improve this month’s net income and increase the likelihood of a bonus.

40) How are conflicts of interest and confidential information related?

a) There is no relationship between conflicts of interest and confidential information.

b) An employee may find himself or herself in a situation where he or she could directly benefit from the release of confidential information.

c) The two are related in the sense that an employee may be torn as to whom to release the confidential information.

d) An employee might have to decide how much to charge two competitors for his or her firm’s confidential information when both are willing to bid against each other for the information.

Title: Chapter 5 Test Bank, Question 40

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: Conflicts of interest and confidential information are related because an employee may find himself or herself in a situation where he or she could directly benefit from the release of confidential information.

41) Which of the following statements represents a situation where an employee’s loyalties may be divided?

a) An employee is offered a promotion to district manager with a substantial pay increase.

b) An employee works two jobs and can’t decide which he likes better.

c) An employee operates a small business on the side and often takes stationary from his day job to use for his personal business.

d) An employee is offered the chance to have his hourly job converted to salary.

Title: Chapter 5 Test Bank, Question 41

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: An employee who operates a small business on the side and often takes stationary from his day job to use for his personal business would be an example of divided loyalties.

42) Many firms have policies and procedures covering social media. Which one of the following statements best describes why?

a) to ensure that firms can prosecute and terminate employees who post anything negative about the firm

b) because social media can be an outlet whereby a conflict of interest is created for employees

c) because management wants to ensure that what the firm and the employees post is exactly in alignment

d) to allow firms to recover monetary losses incurred as a result of an employee’s negative posts

Title: Chapter 5 Test Bank, Question 42

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: Many firms have policies and procedures covering social media because social media can potentially be an outlet whereby a conflict of interest is created for employees.

43) Which one of the following statements best describes why companies may be concerned about employees working second or third jobs?

a) because it may cause an employee to pay less attention, and his or her performance may suffer at his or her first job

b) because an employee often speaks negatively about his or her day job to other employers

c) because the employees may decide to leave and pursue other opportunities at these alternative employers

d) because the second or third job may not be compensating him or her commensurate with his or her skillset and qualifications

Title: Chapter 5 Test Bank, Question 43

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: Companies may be concerned about an employee working second or third jobs because it may cause him or her to pay less attention and his or her performance may suffer at the first job.

44) In a scenario where an employee is working multiple jobs, which one of the following statements best describes what should be done?

a) The employer should check in regularly with the employee and make the employee sign a conflict of interest waiver.

b) It is up to the employee to become aware of and ethically handle any conflicts of interest that may arise.

c) It is legally up to the employer to ensure that the employee is accommodated as necessary to enable him or her to fulfill requirements at the other job.

d) The employee should generally not disclose any conflicts of interest to his or her main employer and instead resolve them internally and confidentially.

Title: Chapter 5 Test Bank, Question 44

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: In a scenario where an employee is working multiple jobs, it is up to the employee to become aware of and ethically handle any conflicts of interest that may arise.

45) Which one of the following statements best describes why many companies prohibit or at minimum require prompt disclosure of workplace relationships?

a) It may affect the profitability of the firm.

b) In many instances, employees will try to hide such relationships unless it is mandated that they be disclosed.

c) The employer can move the affected employees immediately to avoid conflicts of interest.

d) Such a relationship could potentially cause an issue with favoritism and may make other employees feel discouraged.

Title: Chapter 5 Test Bank, Question 45

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: Many companies prohibit or at minimum require prompt disclosure of workplace relationships because such a relationship could potentially cause an issue with favoritism and may make other employees feel discouraged.

46) Which one of the following statements best describes a potential issue associated with a firm’s employees initiating a start-up firm outside their regular working hours?

a) Employees might be too tired from their full-time day job to focus properly on the new venture.

b) Employees might take ideas and processes from the firm and use these in the new venture.

c) Employees might not be able to afford to pay themselves early on, increasing the likelihood of theft from the company.

d) Employees might or might not collectively have the knowledge and experience to get the firm and venture off the ground.

Title: Chapter 5 Test Bank, Question 46

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: A potential issue associated with a firm’s employees initiating a start-up firm outside their regular working hours is that employees might take ideas and processes from the firm and use these in their new venture.

47) Which one of the following statements best describes why the term fiduciary is associated with conflicts of interest?

a) The term refers to the difficulty that employees often have navigating their way through such conflicts.

b) The term fiduciary is related to looking after the well-being and welfare of the company and its shareholders above one’s own welfare.

c) Executives often find themselves in difficult positions related to whether or not to cash in on share options.

d) If one has a fiduciary responsibility to another, nondisclosure of a conflict of interest is generally illegal.

Title: Chapter 5 Test Bank, Question 47

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: The term fiduciary is associated with conflicts of interest because the term is related to looking after the well-being and welfare of the company and its shareholders above one’s own welfare.

48) An executive’s fiduciary duty is related to which of the following statements?

a) the duty the executive has to the betterment of the firm’s shareholders above his or her own betterment

b) the duty the executive has to keep earnings and income targets above certain thresholds

c) the duty the executive has for the welfare and opportunities for the firm’s employees

d) the duty the executive has to keep the firm’s expenses as low as possible

Title: Chapter 5 Test Bank, Question 48

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: An executive’s fiduciary duty is related to the duty the executive has to the betterment of the firm’s shareholders above his or her own betterment.

49) Which one of the following statements best describes an effective method by which an organization may be able to help mitigate conflicts of interest?

a) by informing all new hires and existing employees that conflicts of interest will result in dismissal from the company

b) by advising all employees that conflicts of interest should be kept confidential and the employer need not be notified of them

c) through a clear, concise, and thoughtfully drafted conflict of interest policy

d) through an honor system, whereby instead of a formal code of conduct, the employees are trusted to disclose any such conflicts

Title: Chapter 5 Test Bank, Question 49

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: An effective method by which an organization may be able to help mitigate conflicts of interest is through a clear, concise, and thoughtfully drafted conflict of interest policy.

50) Which of the following statements are true regarding conflict of interest policies in the workplace?

a) They should generally be centralized, and thus only appear in the firm’s formal code of conduct.

b) They should appear in the code of conduct but possibly also in other ancillary places.

c) They should generally apply only to executives, due to their fiduciary capacity within the firm.

d) They can be effective when employees disclose conflicts of interest.

Title: Chapter 5 Test Bank, Question 50

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Conflict of interest policies in the workplace should appear in the code of conduct, but possibly also in other ancillary places. They can be effective when employees disclose conflicts of interest.

51) Having employees formally sign and acknowledge that they have read and will abide by a formal conflict of interest policy is most likely to produce which one of the following results?

a) ineffective, as employees will likely refuse to disclose conflicts of interest

b) prudent, as it may make employees feel more responsible and accountable in this area

c) a tool that managers can use to immediately terminate any employee who then violates this policy

d) effective, but can only be enforced for those employees who hold a fiduciary responsibility to the organization

Title: Chapter 5 Test Bank, Question 51

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Having employees formally sign and acknowledge that they have read and will abide by a formal conflict of interest policy is prudent, as it may make employees feel more responsible and accountable in this area.

52) An employee has become aware of a situation in his personal life that he anticipates will very likely cause a conflict of interest at his full-time job. Which of the following statements represents his best course of action?

a) The employee should wait and see how the situation develops before disclosing it.

b) The employee should simply not disclose it and hope to not get caught.

c) The employee should proactively proceed with disclosure, erring on the side of caution.

d) The employee should discuss the issue with friends on social media.

Title: Chapter 5 Test Bank, Question 52

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: The employee should proactively proceed with disclosure and err on the side of caution.

53) Which of the following statements are true concerning employee codes of conduct in the United States?

a) They are optional at some privately held firms.

b) Research indicates that codes of conduct are generally ineffective in holding employees accountable.

c) Employees generally have the option to sign up for the code of conduct.

d) Such codes of conduct should be the starting point for other, more specific policies, such as a specific conflict of interest policy.

Title: Chapter 5 Test Bank, Question 53

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Such codes of conduct should be the starting point for other, more specific policies, such as a specific conflict of interest policy. They are optional at some privately held firms.

54) Which of the following statements represents an effective strategy to help employees handle conflicts of interest that may arise?

a) Employees should be made to formally sign and acknowledge a contract holding them liable for any monetary losses incurred by the firm as a result of any conflicts of interest.

b) Firms should consider ongoing training programs to help employees recognize conflicts of interest and report them in a timely manner.

c) Provide general education surrounding conflicts of interest, as more specific training programs have been proven through research to give employees ideas on how to hide conflicts of interest.

d) Employees should be encouraged to seek external legal counsel with respect to the disclosure of conflicts of interest.

Title: Chapter 5 Test Bank, Question 54

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Firms should consider ongoing training programs to help employees recognize conflicts of interest and report them in a timely manner.

55) The most effective conflict of interest training programs

a) are typically generic, as so many potential incidences of conflicts of interest could arise

b) require employees to demonstrate their understanding of the material at completion of the course

c) may occur annually to reinforce the importance of this area to employees

d) immediately terminate any employees who do not pass the initial and refresher courses

Title: Chapter 5 Test Bank, Question 55

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: The most effective conflict of interest training programs require that employees demonstrate understanding of the material at completion of the course. They may occur annually to reinforce the importance of this area to employees.

56) Effective workplace conflict of interest training programs

a) generally occur every six months in publicly traded firms

b) are optional, so employees don’t feel pressure to participate in them

c) ask employees to certify their understanding, and also disclose any conflicts at the conclusion of the course

d) focus on executives and senior managers only, due to their fiduciary obligation to the firm

Title: Chapter 5 Test Bank, Question 56

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Effective workplace conflict of interest training programs ask employees to certify their understanding, and also disclose any conflicts at the conclusion of the course.

57) Which of the following statements are critical components of an effective and accessible conflict of interest policy?

a) Making sure that employees wait until they’re absolutely sure a conflict of interest exists before reporting it

b) Ensuring that employees understand that such policies are required, and they must report any incidences of conflicts of interest

c) Ensuring that employees understand and are familiar with the disclosure process

d) Ensuring that employees talk to their peers around the workplace who can help them determine if disclosure is required or not

Title: Chapter 5 Test Bank, Question 57

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: A critical component of an effective and accessible conflict of interest policy is ensuring that employees understand and are familiar with the disclosure process. Also, ensuring that employees understand that such policies are required, and they must report any incidences of conflicts of interest

58) Which one of the following statements best describes an effective method to help with the ease and timeliness of disclosures of conflicts of interest?

a) Use the Internet and Web-based platforms to make disclosure convenient and timely.

b) Centralize the point of contact for disclosures to only one person within the firm.

c) Make sure that employees know and understand that all such disclosures are optional.

d) Reinforce to employees that disclosures are only necessary in situations where employees are absolutely certain that a conflict of interest exists.

Title: Chapter 5 Test Bank, Question 58

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: An effective method to help with the ease and timeliness of disclosures of conflicts of interest can be using the Internet and Web-based platforms to make disclosure convenient and timely.

59) Which one of the following statements best describes the pervasiveness of conflicts of interest?

a) Employees should consider proactively determining how they might react if such a situation arises.

b) It is impossible to effectively train employees; thus, companies do not spend money on training programs.

c) The only prudent way to enforce disclosure is to threaten dismissal of all employees who are caught not disclosing conflicts of interest.

d) Firms should consider hiring more staff for the human resources function to exclusively deal with conflicts of interest.

Title: Chapter 5 Test Bank, Question 59

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: Because of the pervasiveness of conflicts of interest, employees should consider proactively determining how they might react if such a situation arises.

60) Which of the following actions should an employee take in a situation where an employee is deciding whether or not to disclose a conflict of interest?

a) Disclosure is necessary only if the firm’s policy expressly addresses that particular conflict of interest.

b) The best course of action is to avoid disclosure and simply not bring it up.

c) An employee should consider what he or she knows about their employer’s policy and what is the general intent behind that policy.

d) The most prudent course of action is to wait until a conflict of interest is definitely present, and then disclose it.

Title: Chapter 5 Test Bank, Question 60

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: In a situation where an employee is deciding whether or not to disclose a conflict of interest, an employee should consider what he or she knows about their employer’s policy and what is the general intent behind that policy.

61) Which of the following statements is true regarding conflicts of interest in the workplace?

a) They can be avoided completely if the firm has the right training programs in place.

b) Sometimes just the appearance of a conflict of interest may be enough for an employee’s peers to question his or her ethics.

c) Due to their pervasive nature, they are impossible to avoid.

d) Conflicts of interest only tend to be present at publicly traded companies due to the presence of stockholders and managers.

Title: Chapter 5 Test Bank, Question 61

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: Sometimes just the appearance of a conflict of interest may be enough for an employee’s peers to question his or her ethics.

62) When it comes to apprising others of a potential or actual conflict of interest, which of the following actions should an employee follow?

a) It is best to share a conflict only with one’s immediate supervisor.

b) Do not share or discuss a conflict with friends outside the workplace.

c) The best practice is to let all those potentially affected by the conflict of interest know about it.

d) The employee should follow company policies and guidelines and refrain from disclosing to friends until the company gives permission.

Title: Chapter 5 Test Bank, Question 62

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: When it comes to apprising others of a potential or actual conflict of interest, the best practice is to let all those potentially affected by the conflict of interest know about it. They should also not share or discuss a conflict with friends outside the workplace.

63) Any employee faced with a potential or actual conflict of interest should do what is noted in which of the following statements?

a) Never disclose the conflict of interest to his or her employer for fear of repercussions.

b) Report the conflict of interest under condition of anonymity, if necessary.

c) Consult with individuals whom the employee trusts and receive input and advice on the best path forward.

d) Avoid disclosure and simply trust himself or herself to make the correct ethical decision.

Title: Chapter 5 Test Bank, Question 63

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: Prudent advice for any employee faced with a potential or actual conflict of interest is to consult with individuals whom the employee trusts and receive input and advice on the best path forward. The employee should also report the conflict of interest under condition of anonymity, if necessary.

64) Which one of the following choices is a key question that all employees should ask when faced with a workplace conflict of interest?

a) Is there a way out of the conflict of interest that he or she has not considered?

b) Who else can he or she involve in the conflict of interest, so if he or she is caught, the blame can be spread to other people?

c) How much can he or she profit and gain from the conflict of interest before being caught?

d) How likely is it that I will be caught?

Title: Chapter 5 Test Bank, Question 64

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: A key question that all employees should ask when faced with a workplace conflict of interest is whether there may be a way out of the conflict of interest that he or she has not considered.

65) Which of the following individuals represents a good choice for an employee to informally disclose a potential or actual conflict of interest to?

a) a human resources manager or executive

b) the employee’s immediate supervisor or line manager

c) friends on social media platforms such as Facebook and Instagram

d) a friend or colleague within the company who may be able to give good advice on the situation

Title: Chapter 5 Test Bank, Question 65

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: A good choice for an employee to informally disclose a potential or actual conflict of interest to would be a friend or colleague within the company who may be able to give good advice on the situation.

66) Which of the following individuals represents the best choice for effective counsel if an employee is facing a conflict of interest?

a) a member of a religious order, such as a clergyperson

b) an individual who has experienced a similar situation in the past

c) a colleague the employee does not know well or at all so there will be no bias

d) a member of the firm’s board of directors

Title: Chapter 5 Test Bank, Question 66

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: An individual who has experienced a similar situation in the past represents the best choice for effective counsel if an employee is facing a conflict of interest.

67) Which of the following statements should be key considerations for an employee facing a conflict of interest?

a) How can I keep it quiet for as long as possible in order to maximize my gain before getting caught?

b) When is the next conflict of interest training session scheduled, so I know the deadline for disclosing the conflict of interest?

c) If I proceed with disclosure of the conflict of interest, will my coworkers judge me?

d) How will disclosure or nondisclosure of a potential or actual conflict of interest affect relationships with others, both inside and outside the workplace?

Title: Chapter 5 Test Bank, Question 67

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: A key consideration that an employee facing a conflict of interest should consider is how disclosure or nondisclosure of a potential or actual conflict of interest will affect relationships with others, both inside and outside the workplace.

68) Which one of the following statements best describes the most effective way for an employee to think ahead to potential consequences of a conflict of interest?

a) Estimate how much they can gain before disclosing to their employer.

b) Consider how much they can gain if they don’t disclose to their employer.

c) Identify how people may perceive him or her differently if he or she doesn’t disclose it and is found out.

d) Begin looking for another job in case they are caught and terminated.

Title: Chapter 5 Test Bank, Question 68

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: An effective way for an employee to think ahead to potential consequences of a conflict of interest is to envision how people may perceive him or her differently if he or she doesn’t disclose it and is found out.

69) Which one of the following statements is a prudent option that an employee should consider if facing a conflict of interest?

a) brainstorming the short- and long-term gains of disclosure versus nondisclosure

b) boasting to colleagues about the gains he or she can make outside the workplace

c) proactively contacting a lawyer in case his or her company threatens legal actions or dismisses him or her

d) recruiting other employees as they will be less likely to report him or her

Title: Chapter 5 Test Bank, Question 69

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: One prudent option an employee might wish to consider if facing a conflict of interest is brainstorming the short- and long-term gains of disclosure versus nondisclosure.

70) Which of the following statements is a true statement concerning conflicts of interest an employee may experience in the workplace?

a) Employees will always know the correct ethical choice; thus, training and education are not needed.

b) An employee should always wait until he or she is absolutely sure there actually is a case to report before disclosure.

c) An employee may experience feelings of guilt and remorse after the conflict has ended, even if the employee did not get caught.

d) It is illegal for an employer to terminate an employee who violates a conflict of interest policy.

Title: Chapter 5 Test Bank, Question 70

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: An employee may experience feelings of guilt and remorse after the conflict has ended, even if the employee did not get caught.

71) Which one of the following statements best describes an effective way for an employee to think about the potential consequences and ramifications of conflicts of interest in the workplace?

a) Envision how relationships with coworkers and colleagues may be after the incident.

b) Carefully calculate how much money can be made before they get caught, to determine if the risk is worth the benefit or not.

c) Avoid initiating such discussions in the workplace, as colleagues and supervisors may become suspicious.

d) Avoid discussing such ramifications with loved ones, so as to avoid being judged.

Title: Chapter 5 Test Bank, Question 71

Difficulty: Medium

Bloomcode: Application

Min: 2

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: An effective way for an employee to think about the potential consequences and ramifications of conflicts of interest in the workplace is to envision how relationships with coworkers and colleagues may be after the incident.

Question type: Short Answer

72) Describe a situation or time in your life when you experienced a conflict of interest. How did you resolve this conflict of interest? Are you happy with the outcome and the decisions you made?

Title: Chapter 5 Test Bank, Question 72

Difficulty: Hard

Bloomcode: Evaluation

Min: 5

AACSB: Ethics

Learning Objective: LO 9.1 Define and describe a “conflict of interest.”

Section Reference: Sec: 9.1 Conflicts of Interest

Solution: An example of a conflict of interest could be getting the opportunity to receive test answers for an upcoming test. It is hoped that the student would resist the temptation and employ moral courage to take the ethical course of action. It is likely that if the student chooses this path, they will feel better knowing they made the right and ethical decision.

73) How will you go about recognizing conflicts of interest that may arise in your career? How will you decide whether or not to disclose them?

Title: Chapter 5 Test Bank, Question 73

Difficulty: Hard

Bloomcode: Evaluation

Min: 5

AACSB: Ethics

Learning Objective: LO 9.2 Identify several common examples of workplace conflicts of interest.

Section Reference: Sec: 9.2 How Conflicts of Interest Arise

Solution: An example of a conflict of interest that could arise in one’s career would be the opportunity to consult on the side in a similar field as one’s full-time job. A temptation may arise to use company resources (both physical and intellectual) to help with the consulting work. It is hoped that for the betterment of the individual, if placed in this situation, he or she would proactively disclose the conflict of interest early on and avoid using company resources (in whatever form they may be).

74) Imagine you are a human resources manager and have been tasked by the company to formulate and roll out a workplace conflict of interest policy. What might be some key components of this policy? How might you ensure that there is employee buy-in to this policy?

Title: Chapter 5 Test Bank, Question 74

Difficulty: Hard

Bloomcode: Evaluation

Min: 5

AACSB: Ethics

Learning Objective: LO 9.3 Describe ways that individuals and organizations can avoid or mitigate conflicts of interest at work.

Section Reference: Sec: 9.3 Mitigating Conflicts of Interest

Solution: Some key components of this policy could be the initial disclosure process and what notifications and support the employee can expect to receive having disclosed a potential or actual conflict of interest. Employee buy-in is more likely if an employee feels reassured that by proactively disclosing a conflict of interest, he or she will not suffer reprisal from the firm.

75) Discuss why others’ perceptions of an individual who fails to disclose a conflict of interest and gets caught are extremely important. Why is it important for an individual who may soon experience a conflict of interest to be mindful of this?

Title: Chapter 5 Test Bank, Question 75

Difficulty: Hard

Bloomcode: Evaluation

Min: 5

AACSB: Ethics

Learning Objective: LO 9.4 Illustrate how personal values can help avoid the adverse effects of conflicts of interest.

Section Reference: Sec: 9.4 Resolving Conflicts of Interest as Individuals

Solution: If an individual is caught having not disclosed a conflict of interest, he or she is likely to be viewed as unethical and self-serving by colleagues, managers, friends, and others. Such a reputation and perception of the individual could hurt future job prospects and chances of promotion as well as potentially negatively affect relationships with individuals both inside and outside the organization.