Communication Is Important in Keeping a Firm on Its Ethical

question 5

Multiple Choice

Communication is important in keeping a firm on its ethical course because

• A) centralization may reduce the opportunity for unethical conduct.
• B) top executives must enforce overall ethical standards within the organization.
• C) the moral philosophies of employees are always consistent with the moral philosophies of top management.
• D) employees must learn when unethical behavior is appropriate to maximize profits.
• E) issues such as price collusion and bribery must be decided on a decentralized basis.

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Definitions:

Personal Liability

The legal obligation of an individual to bear the cost of damages or losses themselves, rather than the liability being absorbed by an entity or insurance.

Agency Relationship

A fiduciary relationship in which one party (the agent) agrees to act on behalf of another party (the principal).

Ratify

To formally approve or confirm, often used in the context of treaties, agreements, or legislation.

Commission

A fee paid to an agent or employee for completing a task or making a sale, which is often a percentage of the sale's total value.