Business Ethics and Corporate Governance 1


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Part -A

Q1: (a) Write notes on the following:

(i) Role of Company Secretary in ensuring risk management (ii) Corporate governance in public sector undertakings


Q2: “The Chairman’s primary responsibility is to lead the Board and ensure its effectiveness.” Elucidate this statement.

Q3: Discuss the principles of corporate governance evolved by the Institute of Company Secretaries of India.

Q4: “Corporate Social Responsibility (CSR) is also called corporate citizenship or corporate responsibility.” Discuss

Q5: (a) Describe briefly the following:

(i) Barriers to ‘visionary leadership’,

(ii) Diligence report in banks.

(iii) Scope of work of the Asian Corporate Governance Association.

Q6: Describe and differentiate ‘risk reduction’ and ‘risk retention’.



Part -B


Q1: You are the Company Secretary of Universal Development Ltd. The company often faces ethical dilemma. The Board wants to circulate a guidance note for its managers to resolve ethical dilemma. Draft guidance note for the consideration and approval of the Board.

Q2: “An organization’s structure is important to the study of business ethics.” Comment

Q3: “The Chairman’s primary responsibility is to lead the Board and ensure its effectiveness.” Elucidate this statement.



Trade in human Organs

An entrepreneur in a certain country conceives of a business that is designed to avoid waste and is committed to recycling. One of the first actions is to contact an undertaker with a view to purchasing spectacles from the deceased with a view to setting up a shop that sells such recycled goods. The undertaker saw no problem with that idea and entered into an arrangement to sell the goods, they being of no further use to the former owner.

That was such a successful venture that the entrepreneur extended the idea and suggested to the undertaker that artificial dentures would be a good next venture. With some misgivings the undertaker agreed, but with the proviso that they were properly sterilised first. Among the reservations by the undertaker here was the notion of who is the owner? Should the relatives be consulted? How were the proceeds to be divided? Having solved that problem satisfactorily the entrepreneur found business so good that he wished to extend it further.

The next stage was seen as a rather personal form of recycling, that of body organs. Where a corpse had an undamaged and potentially useful, organ that too might be harvested. Here the problems become more complicated. The recycling of organs needs much more technical knowledge than is available to the average undertaker. Among the technical problems are those of tissue typing, of preservation and prompt use, of the setting up of a register and of financial compensation and to whom. Add to this is the problem of whose permission is needed.

If this venture is successfully exploited with a proper setup is then the demand could well increase. Suppose that the entrepreneur is so successful that he wanted to extend the supply and, ideally, have fresh organs from young healthy cadavers. Being a lateral thinker he contacted prison authorities who might have a supply of those executed. At least, he argued, they were not put to death in vain. If the prison authorities agreed and appropriate rules were framed, then the pressure might be on the system to ensure a steady supply and thus affect the rate at which prisoners were condemned to death.

One of the interesting ideas that the entrepreneur had was a prisoner who was not condemned to death might agree to the removal of a non-vital removal (say, one kidney) in return for a commutation of sentence and thus save the state the cost of further imprisonment as well as providing the prisoner with funds to start a new life.

Suppose, instead of a prison situation there is a hospital one. In a hospital there are always those who are very ill and in need of a transplant. For organ removal one needs to be certain that the donor is really dead before removal and dead from natural causes rather than being ‘helped’ along the way because of an urgent need for the organ. The criteria of ‘death’ then becomes a crucial one. A patient might be physically surviving, put be brain dead. Could one harvest an organ from a brain dead patient, which would involve ignoring other vital signs?

In this case one can see the escalation of a comparatively small moral issue into one which has very wide ramifications. This engaging case has some further aspects: one is the moral position of starting with simple items from the dead and escalates into a problem involving some very complex issues. Put in interrogative form here are some of the issues and questions for solution.

Q1: Is the selling of spectacles from cadavers morally correct provided permission is given?

Q2: Does that same point apply to full dentures?



1 Which markets embody sense of justice?

A Mixed markets

B Liberal markets

C Free markets

D None of the above


2 Which of the following choices does NOT describe a situation that is covered by the concept of rights?

A The absence of prohibitions against an activity

B The authorization to do something to secure one’s interests

C The necessity of doing something required by authority

D The existence of prohibitions on others to enable individuals to pursue an activity


3 Which theory claims that people would be lazy without private property?

A Capitalism

B Socialism

C Utilitarianism

D None of the above


4 The most influential economic institutions are designed to achieve? Select correct option:

A Production of the goods

B Distribution of the goods

C Both a & b

D None of the above


5 According to Aristotle’s view, how do we learn virtue?

A By habit

B By dialectical argument

C By rational instruction

D By learning from our mistakes


6 Which philosopher defended the idea that we should always treat humanity as an end in itself rather than a means?

A Kant

B Mill

C Bentham

D Rawls


7 The concept that there are no relevant differences among people that can justify unequal treatment is known as?

A Egalitarianism

B Utilitarianism

C Socialism

D None of the above


8 Commodities that are considered valuable only because they lead to other good things are called:

A Instrumental goods

B Instrumental values

C Intrinsic goods

D Intrinsic values


9 Socialist view on distribution is best described as:

A From each according to his ability, to each according to his needs

B The benefits a person receives should be proportional to his contribution

C From each they choose, to each as they are chosen

D Always treat humanity as an end in itself rather than as a means


10 Factual evidence has the following properties except?

A Time bound

B Accurate

C Relevant

D Complete


11 In which country Locke’s property rights have been influential?

A England

B Germany

C America

D Greek


12 Which of the following are the criteria for determining moral right and wrong?

A Universalizability

B Reversibility

C Both a & b

D None of the above


13 Utilitarianism is unable to deal with following kind of moral issues?

A Rights

B Justice

C Both a & b

D None of the above


14 What are the levels on which ethical decision making occurs?

A Individual

B Organizational

C Business system

D All of the given


15 Privacy is an example of?

A Positive right

B Basic need

C Negative right

D None of the above


16 Which theory includes means of production and selling one’s labor?

A Capitalist systems

B Free economy system

C Socialist system

D None of the above


17 Equality of income and equality of opportunity is refers to:

A Equality

B Political equality

C Economic equality

D Human equality


18 Through utilitarianism offers a clear-cut method of calculating morality. What is the number of problems identified with this method?

A 5

B 4

C 3

D 2


19 Who presented the theory of absolute advantage?

A Adam Smith

B Friedrich A. Hike

C Murray Roth bard

D Eric Mack


20 Which of the following are components of free market systems?

A Private property system

B Voluntary exchange system

C Both a & b

D None of the above


21. The most important reason for having a Code is that:

A it provides a formal frame of reference for values

B it is required by the Board

C it helps establish a good reputation D it gives employment to HR staff


22. Despite cultural diversity it is important that we consider:

A various principles of value

B always follow the UN principles

C give salience to the dominant national culture

D follow only your own religious laws


23. Cultural relativism means

A One culture is quite as good as any other nominated culture

B Culture is the only reference point for a values system

C activities should be interpreted in terms of one’s own culture

D One culture should be compared to another


24 It is the function of an ethics code to:

A set standards

B apply sanctions

C neither Dboth


25. Ethics is about

A -improvement in standards

B rewards and sanctions

C reputation

D all of the above


26. Ethics is about

A tangible and intangible benefits

B only tangible benefits

C only intangible benefits

D something other than the above


27. Ethics is the same as

A legality

B strict compliance

C conformance to agreed values

D following black letter law


28. Where does ethical loyalty primarily lie?

A towards family

B towards agreed principles

C towards the company

D towards professional standards


29.Ethics is concerned about

A the means of achieving something

B the ends to be achieved

C neither of those

D both of those


30. Time frames are

A crucial part of ethics

B irrelevant to ethics

C of marginal interest to ethics

D an explanation of spatiality


31 Circumstances that leave a person uncertain but not altogether unsure about what he or she is doing is a feature of

(a)Excusing Conditions

(b)Moral reasoning

(c)Mitigating factors



32 What type of resource depletion is marked by increasing rates of usage and sudden, complete depletion within a short period of time?

(a) Depletion of fossil fuels

(b)Exponential Depletion

(c)Peaked depletion

(d)Species depletion


33 Which of the following is not considered as part of the three stages of moral development proposed by Carol Gilligan?

(a)Social Contract Orientation

(b)Principled morality

(c)conventional morality

(d)progressing from selfish


34 Which of the following is the type of moral standards?

A Utilitarianism

B Rights

C Justice

D All of the above


35 What are the levels on which ethical decision making occurs?

A Individual

B Organizational

C Business system

D All of the given


36 Which one of the following is not an essential component of moral reasoning? Select correct option:

A Understanding of reasonable requirement of moral standard

B Evidence or information regarding these moral standards

C Botha&b

D None of the given options


37 Which of the following refers to the ability of a person or a country to produce a particular good at a lower opportunity cost than another country?

A Absolute advantage

B Comparative advantage

C Resource efficiency

D Natural advantage


38 Which one of the following is not a basic type of moral standards?

A Utilitarianism

B Rights C Justice D Relevant


39 Which philosopher defended the idea that we should always treat humanity as an end in itself rather than a means?

A Kant

B Mill

C Bentham

D Rawls


40 Which one of the following is NOT a trait of character that makes an individual a morally good human being?

A Courage

B Temperance

C Hope

D Justice


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