Business Ethics and Corporate Governance Quiz - 1

1. Mr. Anand Desai is in an ethical dilemma regarding purchase of a machine. If he buys the machine from Best Electronics, who are ready to give 5 years warranty, he will not get any monetary benefit for himself. Therefore he decides to buy the machinery from GL Electronics, who is giving only 1year warranty, in order to gain the personal monetary benefit. Which of the following factors involved in decision-making affects the ethical dilemma of Mr. Anand Desai?
[A]Concentration of effect
[B]Time interval
[C]Proximity
[D]Social agreement


2. When the implications and consequences of managers’ decisions become more evident, managers are faced with the challenge of ethical dilemma. To avoid ethical dilemmas managers can follow the approaches by Clutterbuck and Drummond and Carmichael’s. Which of the following does not belong to Clutterbuck’s approach?
[A]It includes ethics in recruitment criteria
[B]It uses reward and punishment mechanisms
[C]It establishes openness and transparency into decision-making processes
[D]It draws up personal and corporate ethics checklist


3. When a company adopts an anti-pollution environment policy, it is said to be ‘going green’. Organizations adopt green initiative due to which of the following reasons?
I. Economic benefits from increased efficiency.
II. Competitive advantage through innovation.
III. Set a standard or code for moral behavior.
IV. Public image.
[A]Only (I) above
[B]Only (II) above
[C]Both (II) and (III) above
[D](I), (II) and (IV) above


4. If Vijay Motors is taken over by Vishnu Motors, Mr. Feroz and many other top executives are going to lose their jobs. Therefore in order to discourage the unwanted takeover attempt, the management of Vijay Motors gave stock options, bonuses and severance pay to all the top executives. By adopting which of the following techniques, was the management of Vijay Motors able to protect themselves from hostile takeover?
[A]Golden parachute
[B]Sandbag
[C]Greenmail
[D]People pill


5. The primary role of the board is to supervise the quality of strategic thinking of the executive committee and performs its role in strategy development at various levels. Structural and portfolio level of strategic thinking involves discussions among the board of directors and the management, relating to which of the following?
I. External environment.
II. Mergers and acquisitions.
III. Potential market trends.
IV. Strategic alliance.
[A]Only (IV) above
[B]Both (I) and (III) above
[C]Both (II) and (IV) above
[D](I), (III) and (IV) above


6. Prakash Industries Ltd. concentrates on profits so that they can continue to sponsor the blind school and the other social activities they have undertaken. They measure their success not only in financial terms but also in terms of contribution to society. In which of the following stages of ethical consciousness Prakash Industries Ltd., can be placed?
[A]Law of the jungle
[B]Corporate citizenship
[C]Profit maximizing in the long-term
[D]Stakeholder concept


7. The accountants who look into the operations of internal accounts of various departments and make a record of the financial activities are management accountants and financial accountants. Which of the following is/are true regarding management accountants?
I. The role of management accountant is to provide information that the management needs for formulating policies.
II. The management accountant provides economic information to the investors.
III. The role of management accountant also involves advising directors on the items that have to be included in the financial statement.
IV. The task of management accountant is to provide trustworthy and credible information on which management can base its decisions.
[A]Only (I) above
[B]Both (I) and (II) above
[C]Both (I) and (IV) above
[D](I), (II) and (III) above


8. Global Tech Ltd., as a corporation enjoys the right to make donations to the leading political parties to push an agenda in favor of it. Which of the following characteristics of a corporation, is Global Tech Ltd. enjoying?
[A]Transferability
[B]Limited liability
[C]Liability for investors
[D]Legal personality


9. 9. Apart from taking strategic decisions and carrying moral risks of the business, a leader even has to maintain a healthy relationship with stakeholders through ‘contracts’. Psychological contract is one among the various Cannon contracts. Psychological contract
I. Aims at motivating employees and giving recognition to stakeholders and also offers some security.
II. Enables managers to use their competence and skills for the benefit of the enterprise.
III. Helps managers to make decisions that minimize wastage and at the same time, maintain a consistent effort in reward standards.
[A]Only (I) above
[B]Only (II) above
[C]Only (III) above
[D]Both (I) and (II) above


10. Governance is concerned with the intrinsic nature, purpose, integrity and identity of the institution. Corporate management is more of hands on activity. Which of the following is/are true regarding corporate management?
I. External focus.
II. Management assumes an open system.
III. Task oriented.
IV. Concerned with where the company is going.
[A]Only (I) above
[B]Only (III) above
[C]Both (I) and (IV) above
[D](I), (II) and (III) above


11. When relationships among peers, superiors and subordinates are based on trust, there is less friction among employees and a reduction in employee turnover. Jitendra Mishra and Molly Morrissey have identified which of the following factor(s) that promote trust in an organization?
I. Open communication.
II. Sharing of critical or important information.
III. Encouraging employee participation in decision-making.
IV. Sharing of perceptions and feelings.
[A]Only (I) above
[B]Both (I) and (III) above
[C]Both (II) and (IV) above
[D]All (I), (II), (III) and (IV) above


12. Managers generally adopt different ethical standards when carrying different tasks. They justify their behavior in resolving the dilemma rationalization. According to Gelleraman, a manager uses which of the following rationalizations?
I. They will be protected by their family.
II. Their actions are aimed at the individuals or corporations best interest.
III. Their actions are within reasonable ethical and legal limits.
IV. Their actions will be disclosed and published.
[A]Only (I) above
[B]Both (I) and (IV) above
[C]Both (II) and (III) above
[D](II), (III) and (IV) above


13. Marketing mix which includes 4P’s is crucial for the marketing decision making process. Assembling and managing these 4P’s is an important task for any marketer. Marketing mix also includes the service aspects of
I. People.
II. Action.
III. Process.
[A]Only (I) above
[B]Only (II) above
[C]Only (III) above
[D]Both (I) and (III) above


14. The decisions taken at Fashions Ltd. were always influenced by Mr. Pratap, uncle of Mr. Rahul who owns the company. Mr. Pratap was held responsible along with the board directors for the acts of the company. Mr. Pratap is playing the role of which of the following types of directors?
[A]Non-executive director
[B]Alternate director
[C]Shadow director
[D]Associate director


15. Corporate codes are voluntary to organizations and enhance the freedom to address any issue such as employees’ safety and health, workers rights, etc. A corporate code can be developed in various formats. Which of the following formats reflects the company’s policies on certain issues concerning suppliers, contractors and buying agents?
[A]Circulated letters
[B]Special documents
[C]Management philosophy statements
[D]Purchase orders