81. An organization that is owned by shareholders but managed by agents on their behalf isconventionally known as the modern:
A. Conglomerate
B. Corporation
C. Company
D. Firm
Answer
B. Corporation
82. The modern corporation has four characteristics. These are limited liability, legal personality,centralized management and:
A. Fiduciary duty
B. Stakeholders
C. Shareholders
D. Transferability
Answer
D. Transferability
83. What makes a corporation distinct from a partnership?
A. If the members of a corporation die, the corporation remains in existence providing it has capital
B. If the members of a corporation die, the corporation ceases to exist
C. A corporation cannot own property
D. A corporation cannot be held responsible for the illegal acts of its employees
Answer
A. If the members of a corporation die, the corporation remains in existence providing it has capital
84. The term ‘asymmetry of information’ means information in a corporation is:
A. Transferable to all stakeholders
B. Not transferable to all stakeholders
C. Not equally transparent to all stakeholders
D. Equally transparent to all stakeholders
Answer
C. Not equally transparent to all stakeholders
85. The view that sees profit maximization as the main objective is known as:
A. Shareholder theory
B. Principal-agent problem
C. Stakeholder theory
D. Corporation theory
Answer
C. Stakeholder theory
86. Where an organization takes into account the effect its strategic decisions have on society, thisis known as:
A. Corporate governance
B. Business policy
C. Business ethics
D. Corporate social responsibility
Answer
D. Corporate social responsibility
87. Which intervention resulted from the Enron scandal?
A. The Hampel Committee
B. The Sarbannes-Oxley Act
C. The Greenbury Committee
D. The Cadbury Committee
Answer
B. The Sarbannes-Oxley Act
88. Periodic ethics audits
A. Are required by the Indian stock exchange
B. A method of fostering ethics
C. A method of quantitative assessment
D. Always use external consultants
Answer
B. A method of fostering ethics
89. Political intrusion into business
A. May be desirable in some circumstances
B. Is anathema
C. Politics should have no say in how business is conducted
D. state legislation over-rides Federal Legislation
Answer
A. May be desirable in some circumstances
90. Quantification in ethics may be done by
A. Putting monetary value on prospective actions
B. Comparing the value of one action with another
C. Both A and B
D. Neither A or B
Answer
C. Both A and B
91. The ___ approach to formal corporate ethics initiatives is proactive and inspirational.
A. Rules
B. Compliance
C. Principles
D. Values
Answer
D. Values
92. The ___ approach to formal corporate ethics initiatives focuses on meeting requiredbehaviour norms or obeying the letter of the law
A. Rules
B. Compliance
C. Principles
D. Values
Answer
B. Compliance
93. Which of the following is associated with the classical view of social responsibility?
A. economist Robert Reich
B. concern for social welfare
C. stockholder financial return
D. voluntary activities
Answer
C. stockholder financial return
94. How many stages are in the model of an organization social responsibility progression?
A. 3
B. 4
C. 5
D. 6
Answer
B. 4
95. The belief that a firm pursuit of social goals would give them too much power is known aswhat argument in opposition to a firm being socially responsible?
A. Costs
B. lack of skills
C. lack of broad public support
D. too much power
Answer
D. too much power
96. Social responsiveness refers to the capacity of a firm to adapt to changing ___
A. societal conditions
B. organizational conditions
C. societal leaders
D. organizational managers
Answer
A. societal conditions
97. Applying social criteria to an investment decision refers to ___
A. socioeconomic view
B. social responsiveness
C. social responsibility
D. social screening
Answer
D. social screening
98. Which of the following is a basic definition of ethics?
A. moral guidelines for behaviour
B. rules for acknowledging the spirit of the law
C. rules or principles that define right and wrong conduct
D. principles for legal and moral development
Answer
C. rules or principles that define right and wrong conduct
99. Global organizations must ___ their ethical guidelines so that employees know whatis expected of them while working in a foreign location
A. Clarify
B. Provide
C. Establish
D. broaden
Answer
A. Clarify
100. ___ is a document that outlines principles for doing business globally in theareas of human rights, labour, the environment, and anticorruption.
A. A code of ethics
B. The Global Compact
C. The Foreign Corrupt Practices Act
D. Global Ethics
Answer
B. The Global Compact
51. Which of the following does the term Corporate Social Responsibility relate to?
A. Ethical conduct
B. Environmental practice
C. Community investment
D. All of the above
Answer
D. All of the above
52. Who are organisational stakeholders?
A. Government
B. Employees
C. Customers
D. All of the above
Answer
D. All of the above
53. What is Ethics to do with?
A. The wider community
B. Business
C. Right and wrong
D. Nothing
Answer
C. Right and wrong
54. Which of the following is an example of an area where business ethics apply?
A. Conduct of international operations
B. Nowhere
C. In the personal life of staff
D. None of the above
Answer
A. Conduct of international operations
55. Which legislation relates to the concept of business ethics?
A. Freedom of Information Act
B. Food Act
C. Building regulations
D. All of these
Answer
A. Freedom of Information Act
56. The four types of social responsibility include:
A. legal, philanthropic, economic, and ethical
B. ethical, moral, social, and economic
C. philanthropic, justice, economic, and ethical
D. legal, moral, ethical, and economic
Answer
A. legal, philanthropic, economic, and ethical
57. The ___ dimension of social responsibility refers to a business’s societal contribution oftime, money, and other resources.
A. Ethical
B. Philanthropic
C. Volunteerism
D. Strategic
Answer
B. Philanthropic
58. Stakeholders are considered more important to an organization when:
A. they can make use of their power on the organization
B. they do not emphasize the urgency of their issues
C. their issues are not legitimate
D. they can express themselves articulately
Answer
A. they can make use of their power on the organization
59. A ___ is a problem, situation, or opportunity requiring an individual, group, ororganization to choose among several actions that must be evaluated as right or wrong.
A. Crisis
B. ethical issue
C. indictment
D. fraud
Answer
B. ethical issue
60. Which moral philosophy seeks the greatest good for the greatest number of people?
A. Consequentialism
B. Utilitarianism
C. Egoism
D. Ethical formalism
Answer
B. Utilitarianism
61. What type of justice exists if employees are being open, honest, and truthful in theircommunications at work?
A. Procedural
B. Distributive
C. Ethical
D. Interactional
Answer
D. Interactional
62. A high-commitment approach to environmental issues may include all of the following except:
A. risk analysis
B. stakeholder analysis
C. green-washing
D. strategic sustainability auditing
Answer
C. green-washing
63. Better access to certain markets, differentiation of products, and the sale of pollution-controltechnology are ways in which better environmental performance can:
A. increase revenue
B. increase costs
C. decrease revenue
D. decrease costs
Answer
A. increase revenue
64. Most companies begin the process of establishing organizational ethics programs bydeveloping:
A. ethics training programs.
B. codes of conduct.
C. ethics enforcement mechanisms.
D. hidden agendas.
Answer
B. codes of conduct.
65. When a firm charges different prices to different groups of customers, it may be accused of:
A. cultural relativism
B. money laundering
C. facilitating payments
D. price discrimination
Answer
A. cultural relativism
66. The social economy partnership philosophy emphasizes:
A. cooperation and assistance.
B. profit maximization.
C. competition.
D. restricting resources and support.
Answer
A. cooperation and assistance.
67. Which of the following is not a driver of responsible competitiveness?
A. Policy drivers
B. Development drivers
C. Business action
D. Social enablers
Answer
B. Development drivers
68. Which of the following is a problem presented by ethics audits?
A. They may be used to reallocate resources.
B. They identify practices that need improvement.
C. Selecting auditors may be difficult.
D. They may pinpoint problems with stakeholder relationships.
Answer
C. Selecting auditors may be difficult.
69. The first step in the auditing process should be to secure the commitment of:
A. employees.
B. top executives and directors.
C. stockholders.
D. customers.
Answer
B. top executives and directors.
70. Codes of conduct and codes of ethics
A. are formal statements that describe what an organization expects of its employees.
B. become necessary only after a company has been in legal trouble.
C. are designed for top executives and managers, not regular employees.
D. rarely become an effective component of the ethics and compliance program.
Answer
A. are formal statements that describe what an organization expects of its employees.
71. Which of the following is NOT one of the primary elements of a strong organizationalcompliance program?
A. A written code of conduct
B. An ethics officer
C. Significant financial expenditures
D. A formal ethics training program
Answer
C. Significant financial expenditures
72. ___ are standards of behaviour that groups expect of their members.
A. Codes of conduct.
B. Group values.
C. Group norms.
D. Organizational norms.
Answer
C. Group norms.
73. In a ___ organization, decision making is delegated as far down the chain ofcommand as possible.
A. Decentralized
B. Creative
C. Flexible
D. Centralized
Answer
D. Centralized
74. Managerial ethics can be characterised by all of the following levels except
A. immoral management
B. amoral management
C. demoral management
D. moral management
Answer
C. demoral management
75. External audit of the accounts of a limited company is required
A. because it is demanded by the company’s bankers
B. by the Companies Act 2013
C. at the discretion of the shareholders
D. to detect fraud
Answer
B. by the Companies Act 2013
76. Directors’ responsibilities are unlikely to include.
A. a fiduciary duty
B. a duty to keep proper accounting records
C. a duty to propose high dividends for shareholders
D. a duty of care
Answer
C. a duty to propose high dividends for shareholders
77. A company may become insolvent if it
A. has negative working capital
B. cannot meet its budgeted level of profit
C. makes a loss
D. cannot pay creditors in full after realisation of its assets
Answer
D. cannot pay creditors in full after realisation of its assets
78. A director of a limited company may not be liable for wrongful trading if he or she
A. took every step to minimise the potential loss to creditors
B. increased the valuation of its inventories to cover any potential shortfall
C. introduced into the balance sheet an asset based on a valuation of its brands sufficient to meet any shortfall
D. brought in some expected sales from next year into the current year
Answer
A. took every step to minimise the potential loss to creditors
79. Fraudulent trading may be
A. a civil offence committed by any employee
B. a criminal offence committed only by directors of a limited company
C. a civil and a criminal offence committed only by directors of a limited company
D. a civil and a criminal offence committed by any employee
Answer
D. a civil and a criminal offence committed by any employee
80. The OECD argues that corporate governance problems arise because:
A. Ownership and control is separated
B. Managers always act in their own self interest
C. Profit maximization is the main objective of organizations
D. Stakeholders have differing levels of power
Answer
A. Ownership and control is separated
81. An organization that is owned by shareholders but managed by agents on their behalf isconventionally known as the modern:
A. Conglomerate
B. Corporation
C. Company
D. Firm
Answer
B. Corporation
82. The modern corporation has four characteristics. These are limited liability, legal personality,centralized management and:
A. Fiduciary duty
B. Stakeholders
C. Shareholders
D. Transferability
Answer
D. Transferability
83. What makes a corporation distinct from a partnership?
A. If the members of a corporation die, the corporation remains in existence providing it has capital
B. If the members of a corporation die, the corporation ceases to exist
C. A corporation cannot own property
D. A corporation cannot be held responsible for the illegal acts of its employees
Answer
A. If the members of a corporation die, the corporation remains in existence providing it has capital
84. The term ‘asymmetry of information’ means information in a corporation is:
A. Transferable to all stakeholders
B. Not transferable to all stakeholders
C. Not equally transparent to all stakeholders
D. Equally transparent to all stakeholders
Answer
C. Not equally transparent to all stakeholders
85. The view that sees profit maximization as the main objective is known as:
A. Shareholder theory
B. Principal-agent problem
C. Stakeholder theory
D. Corporation theory
Answer
C. Stakeholder theory
86. Where an organization takes into account the effect its strategic decisions have on society, thisis known as:
A. Corporate governance
B. Business policy
C. Business ethics
D. Corporate social responsibility
Answer
D. Corporate social responsibility
87. Which intervention resulted from the Enron scandal?
A. The Hampel Committee
B. The Sarbannes-Oxley Act
C. The Greenbury Committee
D. The Cadbury Committee
Answer
B. The Sarbannes-Oxley Act
88. Periodic ethics audits
A. Are required by the Indian stock exchange
B. A method of fostering ethics
C. A method of quantitative assessment
D. Always use external consultants
Answer
B. A method of fostering ethics
89. Political intrusion into business
A. May be desirable in some circumstances
B. Is anathema
C. Politics should have no say in how business is conducted
D. state legislation over-rides Federal Legislation
Answer
A. May be desirable in some circumstances
90. Quantification in ethics may be done by
A. Putting monetary value on prospective actions
B. Comparing the value of one action with another
C. Both A and B
D. Neither A or B
Answer
C. Both A and B
91. The ___ approach to formal corporate ethics initiatives is proactive and inspirational.
A. Rules
B. Compliance
C. Principles
D. Values
Answer
D. Values
92. The ___ approach to formal corporate ethics initiatives focuses on meeting requiredbehaviour norms or obeying the letter of the law
A. Rules
B. Compliance
C. Principles
D. Values
Answer
B. Compliance
93. Which of the following is associated with the classical view of social responsibility?
A. economist Robert Reich
B. concern for social welfare
C. stockholder financial return
D. voluntary activities
Answer
C. stockholder financial return
94. How many stages are in the model of an organization social responsibility progression?
A. 3
B. 4
C. 5
D. 6
Answer
B. 4
95. The belief that a firm pursuit of social goals would give them too much power is known aswhat argument in opposition to a firm being socially responsible?
A. Costs
B. lack of skills
C. lack of broad public support
D. too much power
Answer
D. too much power
96. Social responsiveness refers to the capacity of a firm to adapt to changing ___
A. societal conditions
B. organizational conditions
C. societal leaders
D. organizational managers
Answer
A. societal conditions
97. Applying social criteria to an investment decision refers to ___
A. socioeconomic view
B. social responsiveness
C. social responsibility
D. social screening
Answer
D. social screening
98. Which of the following is a basic definition of ethics?
A. moral guidelines for behaviour
B. rules for acknowledging the spirit of the law
C. rules or principles that define right and wrong conduct
D. principles for legal and moral development
Answer
C. rules or principles that define right and wrong conduct
99. Global organizations must ___ their ethical guidelines so that employees know whatis expected of them while working in a foreign location
A. Clarify
B. Provide
C. Establish
D. broaden
Answer
A. Clarify
100. ___ is a document that outlines principles for doing business globally in theareas of human rights, labour, the environment, and anticorruption.
A. A code of ethics
B. The Global Compact
C. The Foreign Corrupt Practices Act
D. Global Ethics
Answer
B. The Global Compact
