A New Business Fails to Prioritize Ethics Training for Its

question 57

Multiple Choice

A new business fails to prioritize ethics training for its employees, and as a result a low-trust environment develops among the different departments of the business. Based on management theorist W. Edwards Deming's quoted thoughts about the importance of trust, what might one predict will happen?

• A) A culture of intense corruption will form, with most employees acting unethically with respect to the customer.
• B) Each department will pursue its own self-interest instead of the interests of the entire business, and the business will suffer.
• C) The business's profits and public image may rise to new heights, but internal dynamics and employees' happiness with their work will suffer.
• D) The loss of trust will lead to a rapid confrontation with governmental ethics authorities and a likely demise of the business.

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Definitions:

Required Return

The minimum expected return an investor demands for holding a particularly risky investment.

Plowback Ratio

The percentage of profits a company keeps instead of paying out to shareholders in the form of dividends.

Risk-Free Rate

This refers to the theoretical rate of return of an investment with no risk of financial loss, typically represented by government bonds.

Intrinsic Value

The fundamental, true value of an asset based on its characteristics and cash flow, independent of its current market price.