bApart from the $$business of business is business, not ethics$$ kind of thinking, three other factors contribute to unethical business behavior: $(1)$ faulty oversight that enables the unscrupulous pursuit of personal gain, $(2)$ heavy pressures on company managers to meet or beat short$-$term earnings targets, and $(3)$ a company culture that puts profitability and good business performance ahead of ethical behavior. In contrast, culture can function as a powerful mechanism for promoting ethical business conduct when high ethical principles are deeply ingrained in the corporate culture of a company.

The goal of this exercise is for you to understand the conditions that give rise to unethical business strategies and behavior.

Before completing this exercise, be sure to review Chapter $9,$Ethics$,$ Corporate Social Responsibility, Environmental Sustainability, and Strategy;$$ specifically, the section entitled $$Drivers of Unethical Business Strategies and Behavior.$$

The subprime residential real estate scandal that resulted in heavy fines to banks and mortgage companies as well as a new set of robust monitoring and enforcement regulations is an example of

Multiple Choice

the achievement of performance targets set by management.

faulty oversight that enabled unscrupulous pursuit of personal gain and self$-$interest.

a company culture that puts ethical behavior ahead of profitability and business performance.

an attitude to do whatever it takes to meet investor expectations.

short$-$termism.