Answer the following statements true (T) or false (F)

Question

1. Paul, who is normally an ethical person, has an opportunity to acquire what he feels is "easy" money in his job, and he believes it is safe to steal the money because nobody would know if he does take it. Paul rationalizes that it is fine to steal the money because he needs it more than the person whom the money belongs to. The psychological mechanism that causes Paul to want to steal the money is poor self-esteem.
2. Habitual cheating tends to begin with small infractions, such as illegally downloading books and songs, and then grows by increments into an ongoing deliberate strategy of deception or fraud.
3. Prior to a 2010 natural-gas pipeline explosion in San Bruno, California, Pacific Gas & Electric chose to use its surplus revenues to improve safety, an example of ethical decision making.
4. The employees of a production facility that produce parts for boats are meeting to discuss ways to control rising costs, which are affecting their bonus (incentive pay). The employees are internal stakeholders of the factory.
5. The task environment of Top-Notch Sewing consists of just two groups, customers and stockholders, who give the employees and management of Top-Notch the daily tasks that the company's employees will handle.

Answer 1

1. FALSE
People know stealing is wrong, but they do it because of psychological mechanisms such as motivated blindness, the tendency to overlook information that works against their best interest. Motivated blindness allows us to behave unethically while maintaining a positive self-image.
2. TRUE
As Carey has noted, habitual cheating tends to begin with small infractions, such as illegally downloading books and songs, and then grows by increments into an ongoing deliberate strategy of deception or fraud.
3. FALSE
Prior to the explosion, PG&E's own internal audit found the incentives actually encouraged crews to produce inaccurate surveys. An independent audit found that over an 11-year period PG&E collected $430 million more from its gas operations than the government had authorized—and it "chose to use the surplus revenues for general corporate purposes" rather than for improved safety. In fact, in the three years prior to the explosion, the company spent $56 million a year on an incentive plan—stock awards, performance shares, and deferred compensation—for its executives and directors, including millions to the CEO.
4. TRUE
Internal stakeholders include employees, owners, and the board of directors. Some of the directors on the board (inside directors) may be top executives of the firm.
5. FALSE
The task environment consists of 11 groups that present employees with daily tasks to handle. The 11 groups are customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media.