Answer to Question 1
Rationalization: When we do something wrong, we tend to be creative at explaining why it did not really count. In other words, rationalizing our behavior. Some common rationalizations are: If I don't do it, someone else will, Just this once, or This is someone else's responsibility.
Conformity: Conformity is the notion that Everybody else is doing it. Because humans are social animals, they are often willing to follow the leader. So if an employee notices everyone else acting in an unethical manner, he or she may follow (or conform) to that behavior.
Following Orders: When someone in authority issues orders, even to do something clearly wrong, it is very tempting to comply. Fear of punishment, the belief in authority figures, and the ability to rationalize all play a role.
Lost in a Crowd: When in a group, people are less likely to take responsibility, because they assume (hope?) that someone else will. They tend to check the reactions of others and, if everyone else seems calm, they assume that all is right. Bystanders are much more likely to react if they are alone and have to form an independent judgment.
Blind Spots: We all have a tendency to ignore even blatant evidence that we would rather not know.
Answer to Question 2
B
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