Business Ethics

Directions: For this question, select the best of the answer choices given.

In an attempt to discourage the widespread acceptance of clothing manufactured in sweatshops, the council of a small town plans to ban the sale of sweatshop goods for which substitutes manufactured under humane conditions exist. The council argues that non-sweatshop apparel is morally preferable. Which of the following, if true, indicates that the plan to ban the sale of sweatshop goods is ill suited to the town council's moral objectives?

Directions: Read the following information and answer the question that follows.

As an Executive Engineer, you are required to inspect the material that is supplied by various suppliers for conformity to governmental regulations. On one such inspection, you find that the material that has been supplied conforms to the guidelines that have just been supplanted by more stringent guidelines. Upon being asked for an explanation, the supplier says that the specifications match the requirements that were mandatory as per the terms of the supply order.

What would be the most ethical way of tackling the issue?

Directions: For the given question, select one entry for the blank from the given choices, to best complete the text.

For as long as the culture of business has been an integral part of American life, it has also been frowned upon by important sectors of our society. Among our intellectuals especially, the business world has been the subject of many __________, portraying corporations large and small, and the people who run them, as heartless, soulless agents of greed. Not to be left behind, the Church has called them (the corporations) the agents of devil.

According to the passage, good governance is

Directions: Answer the given question based on the following passage:

Corporate governance suffers in companies where the allegiance of independent directors is to the officers of the company rather than to its shareholders. To make the shareholder-board relationship more effective, we need better shareholder surveillance. Shareholders must actively step up as owners, and engage directors on corporate issues. Independent directors in general, and chairmen of all companies in particular, must participate more actively in annual general meetings by owning up to their board decisions and answering shareholder queries.
The abuse of corporate power results from incentives within firms that encourage a culture of corruption. For example, former employees within a now-demised corporation described a ‘yes man’ culture in which only those employees who did everything to please their bosses prospered. ‘Corporate culture is what determines how people behave when they are not being watched,’ remarked a former managing partner of a consultancy firm. Unethical companies have typified corporate cultures that voiced their commitment to one value system while their processes and incentives reflected an entirely different value system in practice. The responsibility to change this lies with the top management.
Clearly, good governance requires a mindset within the corporation which integrates the corporate code of ethics into the day-to-day activities of its managers and workers. As the sociologists opine, companies must move from the ‘reactive and compliance mode’ of corporate ethics to the ‘integrity mode’, where the functions of the entire organisation are completely aligned with its value system. To achieve this, we must address the system of incentives that exists within corporations.
Corporations must integrate their value systems into their recruitment programmes. They must mandate compliance with their values as a key requirement from each potential employee. They must ensure that every employee owns responsibility for accountability and ethics in every transaction. Corporations must also publicly recognise internal role models for ethical behaviour. They must reinforce exemplary ethical conduct among employees through reward and recognition programmes. Ethical standards and best practices must be applied fairly and uniformly across all levels of the organisation. Any non-compliance must be swiftly dealt with and publicised. Additionally, there should be strong whistleblower mechanisms within the corporation for exposing unethical or illegal activities.
The need of the hour is for all voices in a corporation to unanimously extol the values of decency, honesty and transparency. In other words, every employee has to appreciate that the future of the corporation is safe only if he/she does the right thing in every transaction. Corporates have to create systems, structures and incentives to promote transparency, since transparency brings accountability. In an ideal organisation, every employee remembers and follows the adage, ‘when in doubt, disclose.’
None of this can happen unless corporate leaders believe in the values of the company, and walk the talk. Corporate leaders are powerful role models. Every employee watches them carefully and imitates them. For example, many corporations talk about cutting costs as a way to improve profitability. Such cost consciousness has to come from the top. If leaders want employees to spend carefully, they have to show the way. 

According to the passage, what is the ‘integrity mode’?

Directions: Answer the given question based on the following passage:

Corporate governance suffers in companies where the allegiance of independent directors is to the officers of the company rather than to its shareholders. To make the shareholder-board relationship more effective, we need better shareholder surveillance. Shareholders must actively step up as owners, and engage directors on corporate issues. Independent directors in general, and chairmen of all companies in particular, must participate more actively in annual general meetings by owning up to their board decisions and answering shareholder queries.
The abuse of corporate power results from incentives within firms that encourage a culture of corruption. For example, former employees within a now-demised corporation described a ‘yes man’ culture in which only those employees who did everything to please their bosses prospered. ‘Corporate culture is what determines how people behave when they are not being watched,’ remarked a former managing partner of a consultancy firm. Unethical companies have typified corporate cultures that voiced their commitment to one value system while their processes and incentives reflected an entirely different value system in practice. The responsibility to change this lies with the top management.
Clearly, good governance requires a mindset within the corporation which integrates the corporate code of ethics into the day-to-day activities of its managers and workers. As the sociologists opine, companies must move from the ‘reactive and compliance mode’ of corporate ethics to the ‘integrity mode’, where the functions of the entire organisation are completely aligned with its value system. To achieve this, we must address the system of incentives that exists within corporations.
Corporations must integrate their value systems into their recruitment programmes. They must mandate compliance with their values as a key requirement from each potential employee. They must ensure that every employee owns responsibility for accountability and ethics in every transaction. Corporations must also publicly recognise internal role models for ethical behaviour. They must reinforce exemplary ethical conduct among employees through reward and recognition programmes. Ethical standards and best practices must be applied fairly and uniformly across all levels of the organisation. Any non-compliance must be swiftly dealt with and publicised. Additionally, there should be strong whistleblower mechanisms within the corporation for exposing unethical or illegal activities.
The need of the hour is for all voices in a corporation to unanimously extol the values of decency, honesty and transparency. In other words, every employee has to appreciate that the future of the corporation is safe only if he/she does the right thing in every transaction. Corporates have to create systems, structures and incentives to promote transparency, since transparency brings accountability. In an ideal organisation, every employee remembers and follows the adage, ‘when in doubt, disclose.’
None of this can happen unless corporate leaders believe in the values of the company, and walk the talk. Corporate leaders are powerful role models. Every employee watches them carefully and imitates them. For example, many corporations talk about cutting costs as a way to improve profitability. Such cost consciousness has to come from the top. If leaders want employees to spend carefully, they have to show the way. 

When the author writes that corporations must ‘extol the values of decency, honesty and transparency’, the suggestion is

Directions: Answer the given question based on the following passage:

Corporate governance suffers in companies where the allegiance of independent directors is to the officers of the company rather than to its shareholders. To make the shareholder-board relationship more effective, we need better shareholder surveillance. Shareholders must actively step up as owners, and engage directors on corporate issues. Independent directors in general, and chairmen of all companies in particular, must participate more actively in annual general meetings by owning up to their board decisions and answering shareholder queries.
The abuse of corporate power results from incentives within firms that encourage a culture of corruption. For example, former employees within a now-demised corporation described a ‘yes man’ culture in which only those employees who did everything to please their bosses prospered. ‘Corporate culture is what determines how people behave when they are not being watched,’ remarked a former managing partner of a consultancy firm. Unethical companies have typified corporate cultures that voiced their commitment to one value system while their processes and incentives reflected an entirely different value system in practice. The responsibility to change this lies with the top management.
Clearly, good governance requires a mindset within the corporation which integrates the corporate code of ethics into the day-to-day activities of its managers and workers. As the sociologists opine, companies must move from the ‘reactive and compliance mode’ of corporate ethics to the ‘integrity mode’, where the functions of the entire organisation are completely aligned with its value system. To achieve this, we must address the system of incentives that exists within corporations.
Corporations must integrate their value systems into their recruitment programmes. They must mandate compliance with their values as a key requirement from each potential employee. They must ensure that every employee owns responsibility for accountability and ethics in every transaction. Corporations must also publicly recognise internal role models for ethical behaviour. They must reinforce exemplary ethical conduct among employees through reward and recognition programmes. Ethical standards and best practices must be applied fairly and uniformly across all levels of the organisation. Any non-compliance must be swiftly dealt with and publicised. Additionally, there should be strong whistleblower mechanisms within the corporation for exposing unethical or illegal activities.
The need of the hour is for all voices in a corporation to unanimously extol the values of decency, honesty and transparency. In other words, every employee has to appreciate that the future of the corporation is safe only if he/she does the right thing in every transaction. Corporates have to create systems, structures and incentives to promote transparency, since transparency brings accountability. In an ideal organisation, every employee remembers and follows the adage, ‘when in doubt, disclose.’
None of this can happen unless corporate leaders believe in the values of the company, and walk the talk. Corporate leaders are powerful role models. Every employee watches them carefully and imitates them. For example, many corporations talk about cutting costs as a way to improve profitability. Such cost consciousness has to come from the top. If leaders want employees to spend carefully, they have to show the way. 

The author’s tone in the passage is

Directions: Answer the given question based on the following passage:

Corporate governance suffers in companies where the allegiance of independent directors is to the officers of the company rather than to its shareholders. To make the shareholder-board relationship more effective, we need better shareholder surveillance. Shareholders must actively step up as owners, and engage directors on corporate issues. Independent directors in general, and chairmen of all companies in particular, must participate more actively in annual general meetings by owning up to their board decisions and answering shareholder queries.
The abuse of corporate power results from incentives within firms that encourage a culture of corruption. For example, former employees within a now-demised corporation described a ‘yes man’ culture in which only those employees who did everything to please their bosses prospered. ‘Corporate culture is what determines how people behave when they are not being watched,’ remarked a former managing partner of a consultancy firm. Unethical companies have typified corporate cultures that voiced their commitment to one value system while their processes and incentives reflected an entirely different value system in practice. The responsibility to change this lies with the top management.
Clearly, good governance requires a mindset within the corporation which integrates the corporate code of ethics into the day-to-day activities of its managers and workers. As the sociologists opine, companies must move from the ‘reactive and compliance mode’ of corporate ethics to the ‘integrity mode’, where the functions of the entire organisation are completely aligned with its value system. To achieve this, we must address the system of incentives that exists within corporations.
Corporations must integrate their value systems into their recruitment programmes. They must mandate compliance with their values as a key requirement from each potential employee. They must ensure that every employee owns responsibility for accountability and ethics in every transaction. Corporations must also publicly recognise internal role models for ethical behaviour. They must reinforce exemplary ethical conduct among employees through reward and recognition programmes. Ethical standards and best practices must be applied fairly and uniformly across all levels of the organisation. Any non-compliance must be swiftly dealt with and publicised. Additionally, there should be strong whistleblower mechanisms within the corporation for exposing unethical or illegal activities.
The need of the hour is for all voices in a corporation to unanimously extol the values of decency, honesty and transparency. In other words, every employee has to appreciate that the future of the corporation is safe only if he/she does the right thing in every transaction. Corporates have to create systems, structures and incentives to promote transparency, since transparency brings accountability. In an ideal organisation, every employee remembers and follows the adage, ‘when in doubt, disclose.’
None of this can happen unless corporate leaders believe in the values of the company, and walk the talk. Corporate leaders are powerful role models. Every employee watches them carefully and imitates them. For example, many corporations talk about cutting costs as a way to improve profitability. Such cost consciousness has to come from the top. If leaders want employees to spend carefully, they have to show the way. 

According to the author, the corporate governance will improve if

Directions: Answer the given question based on the following passage:

Corporate governance suffers in companies where the allegiance of independent directors is to the officers of the company rather than to its shareholders. To make the shareholder-board relationship more effective, we need better shareholder surveillance. Shareholders must actively step up as owners, and engage directors on corporate issues. Independent directors in general, and chairmen of all companies in particular, must participate more actively in annual general meetings by owning up to their board decisions and answering shareholder queries.
The abuse of corporate power results from incentives within firms that encourage a culture of corruption. For example, former employees within a now-demised corporation described a ‘yes man’ culture in which only those employees who did everything to please their bosses prospered. ‘Corporate culture is what determines how people behave when they are not being watched,’ remarked a former managing partner of a consultancy firm. Unethical companies have typified corporate cultures that voiced their commitment to one value system while their processes and incentives reflected an entirely different value system in practice. The responsibility to change this lies with the top management.
Clearly, good governance requires a mindset within the corporation which integrates the corporate code of ethics into the day-to-day activities of its managers and workers. As the sociologists opine, companies must move from the ‘reactive and compliance mode’ of corporate ethics to the ‘integrity mode’, where the functions of the entire organisation are completely aligned with its value system. To achieve this, we must address the system of incentives that exists within corporations.
Corporations must integrate their value systems into their recruitment programmes. They must mandate compliance with their values as a key requirement from each potential employee. They must ensure that every employee owns responsibility for accountability and ethics in every transaction. Corporations must also publicly recognise internal role models for ethical behaviour. They must reinforce exemplary ethical conduct among employees through reward and recognition programmes. Ethical standards and best practices must be applied fairly and uniformly across all levels of the organisation. Any non-compliance must be swiftly dealt with and publicised. Additionally, there should be strong whistleblower mechanisms within the corporation for exposing unethical or illegal activities.
The need of the hour is for all voices in a corporation to unanimously extol the values of decency, honesty and transparency. In other words, every employee has to appreciate that the future of the corporation is safe only if he/she does the right thing in every transaction. Corporates have to create systems, structures and incentives to promote transparency, since transparency brings accountability. In an ideal organisation, every employee remembers and follows the adage, ‘when in doubt, disclose.’
None of this can happen unless corporate leaders believe in the values of the company, and walk the talk. Corporate leaders are powerful role models. Every employee watches them carefully and imitates them. For example, many corporations talk about cutting costs as a way to improve profitability. Such cost consciousness has to come from the top. If leaders want employees to spend carefully, they have to show the way.