Commerce Accountancy · General Awareness

Business Ethics

815 Questions

Business ethics evaluates moral principles, stakeholder management, and workplace conduct within organizations. Competitive exams test the application of these standards in real scenarios. Understanding these dilemmas builds critical reasoning.

Ethical dilemmas in businessCorporate social responsibilityEngineering and software ethicsStakeholder managementWorkplace conduct standards

Business Ethics Questions

Multiple choice

Find the appropriate word and fill blank (iv).

Directions: Complete this passage by selecting the most suitable option for the corresponding gap.

Ethics in the workplace are a set of _____(i)______ consisting of “right conduct” which involves the basic moral values like honesty and _____(ii)______. Some companies may have certain code of _____(iii)______ but in other companies the employees follow what they see those above them do. Ethics are about making choices that may not always feel good, probably because we have to ______(iv)______ by some basic rules and moral values.

  1. follow

  2. lead

  3. abide

  4. respect
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The phrase 'abide by' means to follow, obey, or adhere to rules, principles, or standards. In the context of ethics, this means following moral rules and values even when difficult. While 'follow' and 'respect' might seem similar, 'abide by' is the standard collocation with rules. 'Lead' is opposite in meaning. The context suggests compliance with established moral standards.

Multiple choice

Find the appropriate word and fill blank (ii).

Directions: Complete this passage by selecting the most suitable option for the corresponding gap.

Ethics in the workplace are a set of _____(i)______ consisting of “right conduct” which involves the basic moral values like honesty and _____(ii)______. Some companies may have certain code of _____(iii)______ but in other companies the employees follow what they see those above them do. Ethics are about making choices that may not always feel good, probably because we have to ______(iv)______ by some basic rules and moral values.

  1. cunningness

  2. purpose

  3. integrity

  4. feebleness
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Integrity is a fundamental moral value that encompasses honesty, strong moral principles, and ethical conduct. The passage mentions 'basic moral values like honesty,' and integrity directly represents honesty and uprightness in character. 'Cunningness' is the opposite of moral, 'purpose' is an aim or goal, and 'feebleness' suggests weakness - none of which fit the context of positive moral values.

Multiple choice

Find the appropriate word and fill blank (iii).

Directions: Complete this passage by selecting the most suitable option for the corresponding gap.

Ethics in the workplace are a set of _____(i)______ consisting of “right conduct” which involves the basic moral values like honesty and _____(ii)______. Some companies may have certain code of _____(iii)______ but in other companies the employees follow what they see those above them do. Ethics are about making choices that may not always feel good, probably because we have to ______(iv)______ by some basic rules and moral values.

  1. honour

  2. dignity

  3. objectives

  4. conduct
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A 'code of conduct' is a set of rules outlining the proper behavior and responsibilities for individuals or organizations. The passage mentions that some companies have a formal set of guidelines, which is best described as a 'code of conduct'. While 'honor' and 'dignity' are positive values, they are not systematic codes. 'Objectives' are goals rather than behavioral guidelines.

Multiple choice

Salomon v. Salomon and Co Ltd is a case on

  1. corporate morality

  2. corporate conspiracy

  3. corporate personality

  4. corporate financing
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Salomon v Salomon and Co Ltd is a landmark UK company law case. The effect of the Lords' unanimous ruling was to uphold firmly the doctrine of corporate personality, as set out in the Companies Act, 1862. Creditors of an insolvent company could not sue the company's shareholders to pay up outstanding debts.

Multiple choice

Corporate social responsibility is also known as

  1. corporate responsibility and corporate accountability

  2. corporate ethics, corporate citizenship or stewardship

  3. responsible entrepreneurship

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Corporate social responsibility (CSR) is also known as corporate responsibility and corporate citizenship. Since society is fundamentally based upon performance and profit, so it is necessary to impart a sense of corporate social responsibility with regard to modern commerce. The ethical approaches of purpose, principle and consequence are integral components of business social performance; itemising these contributions involves incorporating the interests of ethics and morality within the corporate structure.

Multiple choice

CSR is the way through which a company achieves a balance of

  1. social imperatives

  2. environmental imperatives

  3. environmental and social imperatives

  4. economic, environmental and social imperatives
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Corporate social responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. Thus, CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line-Approach”).

Multiple choice

Key corporate social responsibility issues are

  1. environmental management, eco-efficiency, responsible sourcing and stakeholder engagement

  2. labour standards, working conditions, employee and community relations

  3. social equity, gender balance, human rights, good governance and anti-corruption measures

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Key corporate social responsibility issues are: Integration of environmental management tools into business plans, environmental management standards and eco-labelling Benefits to the community and the general public Improved financial performance Increased sales and customer loyalty Better product durability and functionality Greater use of renewable resources, etc.  

Multiple choice

Which of the following is/are not included in the core principles of the Corporate Social Responsibility Voluntary Guidelines 2009?

  1. Respect for the environment

  2. Activities for social and inclusive development

  3. Abusive, unfair, corrupt or anti-competitive business practices

  4. Respect the interests of employees, customers and suppliers
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Abusive, unfair, corrupt or anti-competitive business practices are not included in the core principles of the Corporate Social Responsibility Voluntary Guidelines 2009.

Multiple choice

The corporate social responsibility committee shall

  1. formulate and recommend to the board, a corporate social responsibility policy, which shall indicate the activities to be undertaken by the company as specified in Schedule VII

  2. recommend the amount of expenditure to be incurred on the activities referred to in clause (a)

  3. monitor the corporate social responsibility policy of the company from time to time

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 135 of the Companies Act, 2013 states that the corporate social responsibility committee shall (a) formulate and recommend to the board, a corporate social responsibility policy, which shall indicate the activities to be undertaken by the company as specified in Schedule VII (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a) (c) monitor the corporate social responsibility policy of the company from time to time

Multiple choice

Which of the following statements is/are correct about the corporate social responsibility?

  1. The CSR activities shall be undertaken by the company as per its stated CSR policy as projects or programs or activities.

  2. A company may also collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR committees of respective companies are in a position to report separately on such projects or programs in accordance with these rules.

  3. The CSR projects or programs or activities undertaken in India only shall amount to CSR expenditure.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The CSR activities shall be undertaken by the company as per its stated CSR Policy, as projects or programs or activities. A company may also collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR committees of respective companies are in a position to report separately on such projects or programs in accordance with these rules. The CSR projects or programs or activities undertaken in India only shall amount to CSR expenditure.

Multiple choice

The triple bottom line approach is used as a framework for measuring and reporting corporate performance against

  1. economic and environmental performance

  2. social and environmental performance

  3. environmental performance only

  4. economic, social and environmental performance
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The triple bottom line approach focuses on sustainability and requires that any company weighs its actions on three independent scales: economic sustainability, social sustainability and environmental sustainability.

Multiple choice

Which of the following statements is correct?

  1. Ethical behavior is impossible while selling insurance.

  2. Ethical behavior is not necessary for insurance agents.

  3. Ethical behavior helps in developing trust between the agent and the insurer.

  4. Ethical behavior is expected from the top management only.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Ethical behavior is not necessary for insurance agents, as it helps in developing trust between the agent and the insurer.

Multiple choice

Which of the following statements about the Sullivan Principles can best be inferred from the passage?

Directions: The question
is based on the following reading passage.
Choose the best answer to the question on the
basis of what is stated or implied in the passage.

            Multinational corporations frequently
            encounter impediments in their attempts
            to explain to politicians, human rights
            groups, and (perhaps most importantly)
(5)        their consumer base why they do business
            with, even seek closer business ties to,
            countries whose human rights records
            are considered heinous by United States
            standards. The CEOs propound that
(10)      in the business trenches, the issue of
            human rights must effectively be detached
            from the wider spectrum of free trade.
            Discussion of the uneasy alliance between
            trade and human rights has trickled down
(15)      from the boardrooms of large multinational
            corporations to the consumer on the street
            who, given the wide variety of products
            available to him, is eager to show support
            for human rights by boycotting the products
(20)      of a company he feels does not  do
            enough to help its overseas workers.
            International human rights organization also
            are pressuring the multinationals to push
            for more humane working conditions in
(25)      other countries and to in effect develop a
            code of business conduct that must be
            adhered to if the American company is to
            continue working with the overseas partner.
            The president, in drawing up a plane for
(30)     what he calls the "e;economic architecture
           of our times,"e; wants economists, business
            leaders, and human rights groups to work
            together to develop a set of principles that
            the foreign partners of United States
(35)      corporations will voluntarily embrace.
            Humans rights activists, incensed at the
            nebulous plans for implementing such
            rules, charge that their agenda is being
            given low priority by the State Department.
(40)      The president vociferously denies their
            charges, arguing that each situation is
            approached on its merits without
            prejudice, and hopes that all the groups
            can work together to develop principles
(45)      based on empirical research rather than
            political fiat, emphasizing that the
            businesses with experience in the field
            must initiate the process of developing
            such guidelines. Business leaders, while
(50)      paying lip service to the concept of these
            principles, fight stealthily against their
            formal endorsement as they fear such
            "e;voluntary"e; concepts may someday be
            given the force of law. Few business
(55)      leaders have forgotten the Sullivan
            Principles, in which a set of voluntary
            rules regarding business conduct with
            South Africa (giving benefits to workers
            and banning apartheid in the companies
(60)      that worked with U.S. partners) became
            legislation.

  1. They had a detrimental effect on the profits of those corporations doing business with South Africa.

  2. They represented an improper alliance between political and business groups.

  3. They placed the needs of the foreign workers over those of the domestic workers whose jobs would therefore be in jeopardy.

  4. They will be used as a model to create future voluntary business guidelines.

  5. They will have a chilling effect on future adoption of voluntary guidelines.
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Choice (1) is the major trap here. Nothing was said in the passage about profits. In choice (5), the words chilling effect means negative effect, discouraging effect. Because few corporations have forgotten the Sullivan Principles, it can be inferred that these principles may discourage the companies from agreeing to voluntary principles in the future.