Bachelor of General Studies (BGS) Degree Practice Exam

What core component affects a company's ethical performance?

1. The revenue generated by the company

2. The values and virtues of the managers

3. The marketing strategies employed

4. The size of the company

The correct answer is: The values and virtues of the managers

The core component that affects a company's ethical performance is the values and virtues of the managers. Managers play a crucial role in shaping the ethical climate of an organization, as their beliefs and behaviors directly influence how ethical standards are established and maintained within the company. When managers prioritize ethical behavior and demonstrate strong values, it fosters a culture of integrity, accountability, and transparency throughout the organization. This, in turn, affects how employees make decisions, interact with each other, and engage with stakeholders. A company's revenue, while important for its success, does not inherently dictate its ethical performance. Revenue generation can occur through various means, some of which might not align with ethical standards. Marketing strategies focus on how a company promotes itself and its products, but they do not directly determine the ethical framework within which decisions are made. Lastly, the size of the company can impact resources and capabilities, but it does not establish the ethical compass of an organization, which is fundamentally rooted in the leadership's values and approach to governance. Therefore, the values and virtues of the managers are key to understanding and influencing the ethical performance of a company.