Professional Conduct & Organizational Ethics Flashcards

Which term describes the gradual erosion of ethical standards within an organization over time?

Answer: Ethical drift

Ethical drift occurs when small, incremental compromises accumulate over time, shifting organizational norms away from ethical standards.

An employee refuses to follow a supervisor's instruction because it violates company policy. This is an example of:

Answer: Ethical courage

Ethical courage involves standing firm on ethical principles even when facing pressure from authority figures.

Which of the following is a key component of an effective organizational ethics program?

Answer: A confidential reporting mechanism for ethical violations

A confidential reporting mechanism (such as a hotline) is a foundational element of any effective ethics program.

An employee who witnesses misconduct but does nothing because 'everyone does it' is exhibiting which cognitive bias?

Answer: Social proof

Social proof is the tendency to assume behavior is acceptable because others are engaging in it, which can normalize unethical conduct.

A manager rewards employees based on results alone without regard to how those results were achieved. What ethical concern does this create?

Answer: It may incentivize unethical means to achieve goals

When only outcomes are rewarded, employees may feel pressure to use unethical means to meet targets.

According to best practices for CEA, an organization's code of ethics should be:

Answer: Specific enough to provide clear guidance on expected behaviors

Codes of ethics should provide clear, actionable guidance so employees understand expected behaviors in various situations.

Which of the following scenarios represents a structural conflict of interest?

Answer: An auditor reviewing the financial statements of a firm in which he owns stock

An auditor owning stock in the firm being audited creates a structural conflict of interest because personal financial gain is tied to the audit outcome.