Pe MCQS

MCQ on CSR and Cultural Ethics
Q.1. What is meant by the phrase CSR?

a) Corporate Social b) Company Social Responsibility
Responsibility
c) Corporate Society d) Company Society
Responsibility Responsibility
Q.2. What is meant by the phrase 'teleological ethics'?

a) Is used to judge is an action is right, fair and honest.
b) An action can only be judged by its consequences.
c) Developing the individual personal characteristics.
d) The key purpose of ethics is to increase freedom.
Q.3. What does Milton Friedman believe to be the sole responsibility of business?
a) The only social responsibility of business is to its shareholders.
b) Managers should act in ways that balance the interest of society and
shareholders.
c) The primary responsibility organizations have is to its employees.
d) The primary responsibility organizations have is to its stakeholders.
Q.4. Why, according to stakeholder theory, is it in companies' best interests to pay attention
to their stakeholders?
a) If firms only act in their own self-interest employees may feel exploited.
b) If firms only act in their own self-interest government might put more regulation
on them.
c) If firms only act in their own self-interest customers might not like the image that
the company portray.
d) If firms only act in their own self-interest and inflict harm on stakeholders then
society might withdraw its support.
Q.5. What is the enlightened self-interest model of CSR?

a) That it is in an organization's own best interest to put itself first rather than its
ethics.
b) That it is in an organization's best interest to consider what a shareholder would
want.
c) That it is in an organization's own best interest to act in an ethical way.
d) That it is in an organization's own best interest to follow the legislation and abide
by the law.
Q.6. What is green washing?
a) Transforming products to be more ethical.
b) Making a product appear more ethical that it really is.
c) Converting the company to green production methods.
d) Convincing customers to buy ethically.
Q.7. What is triple bottom line?

a) An accounting tool that looks at the impact on people, planet and profits.
b) A management strategy which states all the attention should be on profits.
c) An accounting tool that looks at cost, profit and loss.
d) A management strategy which focuses on corporate social responsibility.
Q.8. Why do alternative organizations run differently from conventional

shareholder led approach?
a) They do not have shareholders.
b) They are run in non-hierarchical ways which aim to provide a positive impact on
society rather than to make profit.
c) They priorities corporate social responsibility.
d) They aim to give money to charities and good causes.
Q.9. What does and Ethical Foundation for an organisation embody?

a) The structure, operational and conduct of the activities of the organization
b) The basic principles which govern the external and internal relations of the
organization
c) Neither of the above
d) All of these
Q.10. A sets out the purpose and general direction for the
organisation?
a) Mission statement b) Purpose statement

c) Vision d) Profit statement
Q.11. Which of the following would most effectively act as the primary objective of a
business organisation?
a) To make a profit
b) To procure resources
c) To communicate with shareholders
d) To mediate between the organisation and the environment
Q.12. 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
Q.13.Who are organisational stakeholders?
a) Government b) c) Employees
d) Customers e) f) All of the above
Q.14. What is Ethics to do with?

a) The wider community b) Business
c) Right and wrong d) Nothing
Q.15. 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
Q.16. 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
Q.17. The dimension of social responsibility refers to a business's societal

contribution of time, money, and other resources.
a) Ethical b) Philanthropic
c) Volunteerism d) Strategic
Q.18.A stakeholder orientation includes all of the following activities except:

a) generating data about stakeholder groups
b) assessing the firm's effects on stakeholder groups
c) distributing stakeholder information throughout the firm
d) minimizing the influence of stakeholder information on the firm
Q.19. 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
Q.20. is a problem, situation, or opportunity requiring an individual, group, or organization

to choose among several actions that must be evaluated as right or wrong.
a) Crisis b) ethical issue
c) indictment d) fraud
Q.21. Which moral philosophy seeks the greatest good for the greatest number of people?
a) Consequentialism b) Utilitarianism
c) Egoism d) Ethical formalism
Q.22. Better access to certain markets, differentiation of products, and the sale of pollution-
control technology are ways in which better environmental performance can:
a) increase revenue b) increase costs
c) decrease revenue d) decrease costs
Q.23. Atmospheric issues include all of the following except:

a) acid rain b) global warming
c) air pollution d) water quantity
Q.24. To be successful, business ethics training programs need to:

a) focus on personal opinions of employees.
b) be limited to upper executives.
c) educate employees on formal ethical frameworks and models of ethical decision
making.
d) promote the use of emotions in making tough ethical decisions.
Q.25. Most companies begin the process of establishing organizational ethics programs by
developing:
a) ethics training programs.
b) codes of conduct.
c) ethics enforcement mechanisms.
d) hidden agendas.
Q.26. The ability to interpret and adapt successfully to different national, organizational,
and professional cultures is called:
a) national competitiveness. b) global development.
c) cultural intelligence. d) stakeholder sensitivity.
Q.27. 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.
Q.28. 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.
Q.29. 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.
Q.30. An organisation's obligation to act to protect and improve society's welfare as well as
its own interests is referred to as
a) organisational social responsibility
b) organisational social responsiveness
c) corporate obligation
d) business ethics
Q.31. 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
Q.32. 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
Q.33. 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
Q.34. 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
Q.35. Which of the following actions will not help directors to protect themselves from
non-compliance with their obligations and responsibilities?
a) keeping themselves fully informed about company affairs
b) ensuring that regular management accounts are prepared by the company
c) seeking professional help
d) including a disclaimer clause in their service contracts
Q.36. 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
Q.37. Where an organization takes into account the effect its strategic decisions have on
society, this is known as:
a) Corporate governance
b) Business policy
c) Business ethics
d) Corporate social responsibility
Q.38. A is a formal statement of an organization primary values and
the ethical rules it expects its employees to follow
a) mission statement b) statement of purpose
c) code of ethics d) vision statement
Q.39. Which of these is a factor that affects ethical and unethical behaviour?
a) Ethical dilemma b) Diversity

c) Teamwork d) Open communication
Q.40. The term refers to principles, values and beliefs that define right
and wrong behaviour
a. Ethics
b. Values
c. Morals
d. CSR
Q.41. are those individuals who raise ethical concerns or issues to

others inside or outside the organisation.
a. Entrepreneur
b. Whistle blowers
c. Social entrepreneur
d. Social impact management
Q.42. CSR is mandatory under which section of the Companies Act 2013. a. 135
b. 49
c. 2A
d. 245
Q.43. Philanthropy is derived from which Greek word
a. Philantry
b. Philosophy
c. Philanthropos
d. Physiology
Q.44. Triple Bottom Line consist of
a. Profit, Production , People,
b. People, Planet, Profit
c. Period, People , Planet
d. Production, Profit, People
Q.45. J.R.P. Daza developed which model

a. Ripple Effect model
b. Analytical model
c. Reference model
d. Pearl model
Q.46. CSR 2.0 Model was developed by:

a. G.K. Kanji and P.K Chopra
b. C Marsden and J. Andiof
c. Wayne Visser
d. C.H. Chen
Q.47. Which of the below is not a general models of CSR
a. Stakeholder Model
b. Ethical Model
c. Statist Model
d. Company Model
Q.48. Which of the following are Category under FICCI Corporate Social
Responsibility Award.
a. Women Empowerment
b. Environment Sustainability
c. Health, Water and Sanitation
d. Marketing Excellence
Q.49. What percentage of average net profits shall be spent on CSR as per
provisions of the Companies Act 2013.
a. 3%
b. 2%
c. 1.5%
d. 3%
Q.50. Which of these activities are listed in Schedule VII of Companies Act 2013
a. Promotion of Education
b. Rural Development Projects
c. Eradicating extreme hunger and poverty d:
Production of resources
Q.51. NGO stands for
a. National Government Organisation.

b. Non-governmental Organisation
c. National governmental Officer
d. Non-governmental Official
Q.52. Which of the following standards are not internationally recognised CSR
Standards.
a. ISO 14000
b. SA 8000
c. AA 1000
d. AGMARK
Q.53. How many principals for social responsibility are laid in UN Global
Compact
a: 5
b. 10
c.7
d. 18
Q.54. Which award is an initative of NGOBOX
a. CSR Impact
b. Global CSR
c. FICCI-CSR
d. Golden Peacock
Q.55. Rules & Norms for interacting with others on internet is called
a. Nanotech
b. Plagiarism
c. Code
d. Netiquettes
Q.56. Study of ethical issues arising out of the case & development of electronic
technologies is known as
a. Marketing Ethics
b. HRM Ethics
c. IT Ethics
d. Sales Ethics
Q.57. Which of the below term places emphasis on meeting the needs of the present
and future generations
a. Education
b. Sustainable Development
c. Healthy Living
d. Physiological Development
Q.58. Act of copying another persons ideas , words or work and pretending as if they are
tour own is known as
a. Plagiarism
b. Duplication
c. Editing
d. Rewriting
Q.59. Gandhian principle concerning wealth and wealth creation was based on
a. Trusteeship
b. Fellowship
c. Capitalism
d. Socialism
Q.60. The reduction of employees through VRS and CRS schemes is called
a. Outsourcing
b. Reducing
c. Downsizing
d. Layoff
Q.61. The tool used by management to track various data pertaining to an

organisation is known as
a. BIS
b.CRM
c. MIS
d. CSR
Q.62. The bundle of rights given by law to the creators of musical and artistic works is
called
a. GIS
b. Trademark
c. Copyright
d. Patent
Q.63. In which Country was the Ethical Trading Initative initiated Ethical Trading
Initative initiated in 1998
a. England
b. France
c. China
d. USA
Q.64. Chairman of audit committee is an Director

a. Executive
b. Independent
c. Nominee
d. Representative
Q.65. What enlists principle of responsible investment
a. SA 8000
b. PRI
c. OHSAS
d. GRI
Q.66. Netwoth of companies undertaking CSR as per Companies Act 2013 should
be
a. 500 crore
b. 50 crore
c. 5 Crore
d. 5000 crore
Q.67. Which legislation in India mandates compulsory undertaking of CSR

activities by prescribed companies
a. Companies Act 1956

b. Companies Act 2013
c. Prevention of Water Pollution Act
d. Environment Protection Act
Q.68. Which legislation in India mandates compulsory undertaking of CSR

activities by prescribed companies
a. Companies Act 1956

b. Companies Act 2013
c. Prevention of Water Pollution Act
d. Environment Protection Act
Q.69. ISO 14000 standard deals with
a. Production Management
b. Environmental Management
c. Ethics Management
d. Total Quality Management
Q. 70. Dow Jones Sustainability Indices
a. Companies forming part of BSE Sensex

b. Companies forming part of MCX
c. Companies forming part of NSE Nifty 50
d.Companies in terms of economic, environmental and social criteria.
Q. 71. CSR is positively correlated with revenue and profit because:
a. Consumers do not respond positively to links between the organization and ethical and
environmentally acceptable outcomes
b. Consumers respond positively to links between the organization and ethical and
environmentally acceptable outcomes
c. Being ethical costs money
d. An increase in demand will reduce revenue and profitability
Q. 72. Themes which emphasise the existence of universal principles to be followed because of
their intrinsic 'rightness' are called:
a. Ethical learning and growth

b. Deontological ethics
c. Virtue ethics
d. Teleological ethics
Q 73. Themes which see institutions as necessary to achieve desirable ethical outcomes are called:
a. Deontological ethics
b. Ethical learning and growth
c. Virtue ethics
d. Teleological ethics
Q 74. A set of rules or instructions which identify specific and detailed actions that must be
undertaken or avoided is called a:
a. Code of conduct
b. Auditor's report
c. Mission statement
d. Chairman's report
Q 75. Which of the following word refers to 'doing business with your grandchildren's interests at
heart'?
a. Responsibility b. Sustainability
c. Agility d. Integrity
Q 76. Which of the below is not social responsibility of business towards the owners of business
includes
a. Maximum ROI. b. Report about progress.

c. Report of Profit. d. Negative Networth
Q 78. Which of these is not an ethical issue in Marketing.
a. Unhealthy Competition b. Surrogate Advertising

c. Use of Children in Advertising d. Brand Building
Q 79. Which of the below is not an ethical issue related to Information Technology
a. Invasion of Privacy b. Data Theft

c. Workplace Monitoring d. Use of Computers
Q 80. Carbon monoxide emitted by automobile directly contributes to

(a) Water pollution (b) Noise pollution
(c) Land pollution (d) Air Pollution
Q 81. That an enterprise must behave as a good citizen is an example of its responsibility
towards
(a) Owners (b) Workers

(c) Consumers (d) Community
Q 82. The primary stakeholders of a business are:
a. Customers. b. Suppliers.
c. Shareholders. d. Creditors.
Q83. The goal of corporate governance and business ethics education is to:
a. Teach students their professional accountability and to uphold their personal

Integrity to society.
b. Change the way in which ethics is taught to students.
c. Create more ethics standards by which corporate professionals must operate.
d. Increase the workload for accounting students
Q84. The internal audit function is least effective when the department:
a. Is non-independent.
b. Is competent.
c. Is objective.
d. Exhibits integrity
Q85. Under the , both internal and external corporate governance

mechanisms are intended to induce managerial actions that maximize profit and shareholder
value.
a. Shareholder theory.
b. Agency theory.
c. Stakeholder theory.
d. Corporate governance theory
Q86.One of the objectives of the Sarbanes-Oxley Act was to:
a. Increase the cost of compliance with federal regulations.

b. Force foreign companies to delist from U.S. capital market exchanges.
c. Improve the quality and transparency of financial reporting.
d. Increase the compliance burden for small companies.
Q87. An organization’s appropriate tone at the top promoting ethical conduct is an example of:
a. Ethics sensitivity.
b. Ethics incentives.
c. Ethical behavior.
d. Consequentialist.
Q88. An independent director is one who:
a. Did not attend a school supported by the company.

b. Does not have outside relationships with other directors.
c. Does not have any other relationships with the company other than his or her
directorship.
d. Is closely associated with company in day to day business activities Q 89.
The environmental analysis includes
a. Political conditions
b.Social factors
c.Economic conditions
d. All of the above
Q 90. If you believe in making decisions for the good of most people, you can be described as
following which school of thought?
a. utilitarianism
b. teleology
c. deontology
d. egoism
Q 91. Values and ethics shape the-
(a) Corporate unity (b) Corporate discipline

(c) Corporate culture (d) Corporate differences
Q 92. The moral principles, standards of behaviour, or set of values that guide a person’s actions
in the workplace is called
(a) Office place ethics (b) factory place ethics

(c) behavioural ethics (d) work place ethics
Q 93. Which of the following factors encourage good ethics in the workplace?
(a) Transparency (b) fair treatment to the employees of all levels
(c) both (a) and (b) (d) bribe
Q 94. Which of the following are ethical issues in financial markets-?
(a) Churning (b) Illegal dividend payment

(c) creative accounting (d) none of these
Q 95. The trading of a public company’s stock or other securities like bonds or stock options by
individual with possession of material, non-public information about the security is called-
(a) Insider trading (b) online trading

(c) offline trading (d) direct trading
Q96. Which of the following methods are used in creative accounting?
(a) Off balance sheet financing

(b) Abuses of accounting concepts and conventions
(c) Manipulating assets and liabilities
(d) Over and under valuation of inventories
Q 97. The process by which accountants use their knowledge of accounting rules to manipulate
the figures reported in the accounts of a business in known as-
(a) Financial accounting (b) creative accounting

(c) cost accounting (d) fair value accounting
Q 98. An organisation's obligation to act to protect and improve society's welfare as well as its
own interests is referred to as
a. organisational social responsibility

b. organisational social responsiveness
c. corporate obligation
d. business ethics
Q 99: Corporate contributions for charitable and social responsibility purposes is called
a. corporate philanthropy b. corporate charities

c. corporate donations d. corporate discretionaries
Q 100. : Business ethics deals primarily with
a. social responsibility b. the pricing of products and services

c. moral obligation d. being unfair to the competition
Q101. Which of these is a factor that affects ethical and unethical behaviour?
a. Ethical dilemma
b. Diversity
c. Teamwork
d. Open communication
Q 102 The term refers to principles, values and beliefs that define right and
wrong behaviour.
a. Customer satisfaction
b. Empowerment
c. Innovation
d. Ethics
Q 103. A sets out the purpose and general direction for the
organisation?
A. Vision statement B. Purpose statement

C. Mission statement D. Profit statement
Q 104 . Which of the following would most effectively act as the primary objective of a business
organization?
A. To communicate with shareholders.

B. To make a profit.
C. To mediate between the organization and the environment.
D. All of the above.
Q 105. What is the purpose of a balanced scorecard?

A. To relate business performance to financial measures.
B. To measure contribution of people to business growth.
C. To relate business performance to customer satisfaction.
D. To combine a range of qualitative and quantitative indicators of performance.
Q106. To which of the following does Corporate Social Responsibility relate to?
A. Environmental practice.
B. Ethical conduct.
C. Human rights and employee relations.
Q 107. Who are organisational stakeholders?
A. Employees
B. Government
C. Customers
Q 108. What is Ethics to do with?
A. The wider community.

B. Right and wrong.
C. Business!
D. None of the above.
Q 109. Which is the element of business ethics?
A. discipline.
B. It is an art & science both.
C. Good intention.
Q 110. Which of the following statements about CSR is untrue?
A. It has a strong impact on corporate reporting practices,investment strategies, SCM &

public relations.
B. It is about striking balance between economic performance , meeting stakeholders
expectations & responsibility towards society.
C. It is about recognizing that no organisation is an island & must operate in partnership
with the outside world.
D. Its main concern is about maintaining a competitive edge in global market
Q 111. Which is the principle of corporate responsibility?
A. Trusteeship principle
B. Principle of stewardship
C. Principle of charity
D. All of the above
Q 112. Which is the element of social responsibility?

A. Universal concept.
B. Supremancy of public interest.
C. It is related to business organization.
D. All of the above
Q 113. Which one of the following is not principle of business ethics?

A. Principle of universality.
B. Principle of humanity.
C. Principle of autonomy.
D. Principle of dissatisfaction.
Q 114. Business ethics is a dynamic philosophy of ---------------- economic adjustment whose

field is widening day-by-day
A. Socio
B. Political
C. Historical
D. Traditional
Q 115. The social responsibility of business towards the owners of business includes
A. Maximum ROI.
B. Report about progress.
C. Report of Profit.
Q 116. CSR that extends beyond legal mandates can help meet social expectations in the absence
of:
A. Statutory devices.
B. Social tool
C. Cost tool & technique
D. Science tool
Q 117. The relationship between standards of CSR & potential legal requirements governing
corporate operation lies at the heart of the
A. The business community.

B. Unattaniable
C. Formulation
D. The social activity.
Q 118. The argument for CSR involves
A. Recognition of moral obligations by business.

B. Need to balance power with responsibility.
C. Voluntary actions would prevent government regulations.
D. All of the above
Q 119. The spending on CSR activity is mandatory in India for following organisations:
A. 3% spending for above 5 cr profit organisations.

B. 2% spending for above 5 cr profit organisations.
C. 1% spending for above 5 cr profit organizations.
D. Some spending on above 5cr profit organizations
Q 120. Which of the following are the strengths of teleological ethical theories?
A. They fit with much of our ordinary moral reasoning.

B. They focus on the nature of actions and the rules from which they follow
C. They ignore the consequences of actions.
D. None of these.
Q 121. Which of the following are the strengths of deontological ethical theories?
A. They fit with very little of our ordinary moral reasoning.

B. They focus on the nature of actions and the rules from which they follow
C. They pay close attention to the consequences of actions.
D. None of these.
Q 121. Utilitarianism is an example of which of the following ethical theories?
A. Egoism
B. Intuitionism
C. Deontological
D. Teleological
Q 122. Rights that are recognized and enforced as part of a legal system are, strictly speaking,:
A. Moral rights.
B. Legal rights.
C. Both moral and legal rights.
D. Neither moral nor legal rights.
Q 123. Morality means
A) What is considered as correct within a society

B) Making the right decisions when there is a chance to do wrong
C) Defining what is right and wrong for an individual or a community
D) Where individuals have a conscious choice to make a right and ethical decision Q 124.
What is business ethics?
A) The study of business situations, activities, and decisions where issues of right and wrong
are addressed
B) Defined as decisions that organizations make on issues that could be considered right
or wrong
C) Ethics that can be applied to an organisation’s practises
D) Ethical processes businesses use in order to achieve a good ethical standard
Q 125. Various Customs, traditions and habits developed over a period of time are called
a. Values
b. ethics
c. Ethos
d. Pathos
Q 126. Good Advertising refers to advertising
a. Honest
b. Convenient
c. Surrogate
d. Influencers
Q 127. Philanthrophy comes from the Greek word.
a. Philanthropos
b. Philosophy
c. Philanthry
d. Philosophy
Q 128. Which of the following is not part of ISO 14000 Series
a. ISO 14001
b. ISO 14004
c. ISO 14064
d. ISO 10001
Q 129. Social Accountability International developed which standard a. ISO
14001 b. SA 8000
c. ISI d. AGMARk
Q130. AA 1000 was introduced by
a. AccountAbility Organisation
b. Social Accountability International
c. United Nation
d. India Standard organisation.
Q 131. UN Global Compact does not cover which of the below areas
a. Human Rights
b. Anti Corruption
c. International Trade
d. Human RIghts
Q 131. People Plant Profit is a covered under which of the below concept
a. Human Development Index

b. Triple Bottom Line
c. Environmental Management
d. Social Development Index
Q.132. Applying social criteria to an investment decision refers to

.
a) socioeconomic viewb) social responsiveness

c) social responsibility d) social screening
Q.133. is a document that outlines principles for doing business globally

in the areas of human rights, labor, the environment, and anticorruption.
a) A code of ethics
b) The Global Compact
c) The Foreign Corrupt Practices Act
d) Global Ethics
Q 134. 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
Q.135. Under the concept of social obligation, the organization .
a) does what it can to meet the law, and a little bit more for stakeholders
b) fulfills its obligation to the stakeholders, which makes it fulfill the law, too
c) does the minimum required by law
d) fulfills its obligation to the law and its stakeholders
Q.136. The approach to formal corporate ethics initiatives focuses on meeting
required behavior norms or obeying the letter of the law
a) Rules b) Compliance
c) Principles d) Values
Q.137. The approach to formal corporate ethics initiatives is proactive and

inspirational.
a) Rules b) Compliance
c) Principles d) Values
Q.138. 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 Q
139. PEST analysis does not cover
A) Political
B) Social
C) Technological
D) Medical
Q 140. Which of the below is not a Human Resource ethics issue
a. Employment of Children
b. Improper Working condition
c. Fexi Working Hours
d. Exploitation of women in work places Q
141. Corporate governance structure
a) varies a great deal across countries.

b) has become homogenized following the integration of capital markets.
c) has become homogenized due to cross-listing of shares of many public corporations.
d) none of the above
Q 142. 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
Q.143 . An organization that is owned by shareholders but managed by agents on their behalf is
conventionally known as the modern:
a) Conglomerate b) Corporation
c) Company d) Firm
Q.144. The modern corporation has four characteristics. These are limited liability, legal
personality, centralized management and:
a) Fiduciary duty b) Stakeholders

c) Shareholders d) Transferability
Q.145 Fraudulent trading may be

Q.146. A company may become insolvent if it

c) makes a loss
d) cannot pay creditors in full after realisation of its assets Q
147. Which BEST defines the principle value?
A. Foundation upon which other values and measures integrity are based
B. Foundation relative to the values and attitudes of a society
C. Foundation encompassing the values and ethics concerns of humanism
D. Foundation of integrity, accountability and humanism
Q 148. If a person’s personal conduct is evaluated and judged in comparison to the norms of society,
there is a judgement of:
A. Professional behaviour
B. Moral behaviour
C. Ethical behaviour
D. None of the above
Q 149. All of the following describes professional attitudes and behaviours except:
A. Altruism
B. Humanism
C. Responsibility
D. Religious
Q 150. Which stage of development of a professional is described below: Experienced in employing

and expanding and renew the cognitive process with new attainment.
A. Preprofessionals
B. Appliers
C. Analysts
D. Integrator
1.What is the classical view of management's social responsibility?
a. To create specific environment in work place

b. To maximise profits
c. To protect and improve society's welfare
d. All of the above
2. What does the socio - economic view of social responsibility talk about?
a. Social responsibility goes beyond making profits to include protecting and improving
society's welfare
b. Encourage business
c. Financial return
d. None of the above
Corporate Governance and Business Ethics Page 1

3. ho was the most outspoken advocate of the classical view of management's
responsibility?
a. Wieck and Adams

b. Jacques and Patchen
c. Milton Friedman
4. What is the only concern of stock holders?
a. Financial return
b. Make profits
c. Encourage business to take up social responsibility
5. Which of the following is a disadvantage of social responsibility?
a. Possession of resources
b. Ethical obligation
c. Public image
d. Violation of profit maximization
6. __________ is when a firm engages in social actions because of its obligation to
meet certain economic and legal responsibilities.
a. Social obligation
b. Social responsibility
c. Social responsiveness
7. When social criteria is applied on investment decisions it is called ____
a. Social responsiveness
b. Ethical obligation
c. Social screening
d. Financial return
8. The recognition of the close link between an organisation's decisions and activities
and its impact on the natural environment is called __________.
a. Global environment
b. Greening of management
c. Social actions
9. Which of these is called a light green approach?
a. Market approach
b. Activist
c. Stakeholder approach
d. Legal

10. Activist approach is also called as the dark green approach.
a. True
b. False
CORPORATE GOVERNANCE AND BUSINESS ETHICS

1. The framework for establishing good corporate governance and accountability was originally
setup by
a) Nestle committee b) Rowntree committee
c) Cadbury committee d)Thornton committee
2. Which of the following is not one of the underlying principles of the corporate governance
combined code of practice?
a) Accountability b) Openness
c) Acceptability d) Integrity
3. 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 2006
c) At the discretion of the shareholders
d) To detect fraud
4. Directors responsibilities are unlikely to include
a) a duty to keep proper accounting records
b) a fiduciary duty
d) a duty of care
5. A company may become insolvent if it
a) makes a loss
b) has negative working capital
c) cannot meet its budgeted level of profit

6. Fraudulent trading may be
a) a criminal offence committed only by directors of a limited company
b) a civil and a criminal offence committed by an employee
d) a civil offence committed by an employee
7. A director of a limited company may not be liable for wrongful trading if he or she
a) increased the valuation of its inventories to cover any potential shortfall
b) brought in some expected sales from next year in to the current year
c) took every step to minimise the potential loss to creditors
d) introduce into the balance sheet an asset based on a valuation of its brands sufficient to meet
any shortfall
8. Disqualification of directors may result from breaches under the
a) Health and Safety Act b) Financial Services Act
c) Sale of Goods Act d)Companies Act
9. According to clause 49 on independent directors. What should be minimum age of independent
director.
a)21 b)22 c) 23 d)24
10. who formed the ICGN?
a) European governments b) US share holders
c) Pension funds d)Stock markets
11. A company cannot issue redeemable preference shares for a period exceeding
a) 5 years b) 10 years c) 15 years d) 20 years
12. which one is the dimension(approach) of corporate social responsibility?
a) Corporate philanthropy
b) Stake holders priorities and sustainable development
c) Ethical business
d) All of the above
13. According to clause 49 on independent directors. What can be maximum tenure of
independent director.
a) 2 terms of 5 years each b) 3 terms of 5 years each
c) 2 terms of 10 years each d) 3 terms of 4 years each

14. According to section 179 which one of the following is a power of director?
a) To buy back its shares
b) Sell lease or otherwise dispose of the undertakings of the company
c) Remit or give time for the repayment of any debt due by a director
d) Making political contributions exceeding specified limits
15. What is kieretsu
a) Pension fund b) Corporate group
c) Stock exchange d) Futures Market
16. The concept of Corporate Social Responsibility originated in which time period?
a. 1920’s and 1930’s b. 19th Century
c. 1980’s and 1990’s d. 1960’s and 1970’s
17. Worldwide, about percent of businesses in the private sector are small or
medium sized.
a. 80 b. 85 c. 90 d. 99
18. The generally accepted definition of a small business is one with or fewer
employees.
a. 10 b. 20 c. 25 d. 50
19. The generally accepted definition of a medium business is one with or fewer
employees.
a. 50 b.100 c. 200 d. 250
20. In the United States, small or medium sized businesses provide over percent of
total employment.
a. 25 b. 40 c. 50 d. 75
21. Owners of stock in a corporation are only liable for .
a. the amount they have invested in the company’s stock
b. their personal assets
c. the amount they have invested in the company’s stock and their personal assets
d. none of the above.
22. A of an issue consists of weighing and balancing all of the competing
demands on a firm by each of those who have a claim on it.
a. stakeholder analysis b. board of directors analysis
c. corporation analysis d. management analysis

23. The that corporations must meet is “do no harm”.
a. moral obligation b. moral minimum
c. moral requirement d. moral duty
24. In large corporations, the is/are the legal overseers of management.
a. CEO b. shareholders
c. board members d. none of the above
25. The position is that a corporation can and should be evaluated not only in
terms of its financial bottom line, but also in terms of its environmental bottom line and its
social/ethical bottom line.
a. Bottom line b. Double Bottom line
c. Triple Bottom line d. Final line
26. Triple Bottom Line reporting refers to:
a. using a low, medium and high estimates for profitability forecasts.
b. measuring the impact of the firm on stockholders, customers and employees.
c. measuring the social, environmental, and financial performance of the firm.
d. measuring the impact of local, state, and federal governments on the firm.
27. Corporate governance can be defined as:
a. the system used by firms to control the actions of their employees.
b. the election process used to vote in a new Board of Director.
c. the corporate compliance system used by the firm.
d. the system used by firms to identify who the critical stakeholders are for the firm.
28. The system that is used by firms to control and direct their operations and the operations of
their employees is called:
a. Corporate Compliance. b. Corporate Governance.
c. Corporate Control. d. Corporate Directive.
29. Which board of directors committee is responsible for the guidelines on how the board of
directors should operate.
a. Operating b. Corporate governance
c. Corporate compliance d. Guiding
30. The Sarbanes-Oxley Act was a direct response to which ethics scandals?
a. Tyco b. WorldCom c. Enron d. None of the above.

31. What is the name of the process in which an employee informs another responsible employee
in the company about potentially unethical behavior?
a. Whistle-blowing b. Purging and releasing
c. Identification d, Information transfer
32. There are conditions that, if satisfied, change the moral status of whistle
blowing.
a. three b. four c. five d. six
33. An example of a whistle blower whose actions were a form of internal government whistle
blowing is:
a. Sherron Watkins. b. Coleen Rowley.
c. Cynthia Cooper. d. Lee Iacocca.
34. One whistle blower the text mentions is Cynthia Cooper who was the vice president of
internal audit at .
a. Enron b. WorldCom c. Tyco d. none of the above
35. One classic example of whistle-blowing is the:
a. Ford Pinto case. b. Lincoln case.
c. Toyota case. d. none of the above.
36. A whistle-blower:
a. doesn’t have to be a past or present member of the organization.
b. doesn’t have to report activity that is illegal, immoral, or harmful.
c. is any employer who spreads gossip.
d. far from being disloyal, may be acting in the best interest of the organization.
37. The Sarbanes-Oxley Act:
a. makes it easier to fire whistle blowers.
b. reduces the law’s protection of employees who disclose securities fraud.
c. makes it illegal for executives to retaliate against employees who report possible violations of
federal law.
d. provides penalties for blowing the whistle illegitimately or maliciously.
38. Inside traders ordinarily defend their actions by claiming that they don’t injure:
a. their boss. b. their family.
c. the government. d. any one.
39. Shareholders have the right to know all except:
a. Information on the management of the corporation
b. Trade secrets
c. The companies financial position
d. The companies general plans for the future.
40. Which act provides sweeping new legal protection for employees who report possible
securities fraud making it unlawful for companies to “discharge, demote, suspend, threaten,
harass, or in any other manner discriminate against” them?
a. Sarbanes-Oxley Act of 2002 b. Foreign Corruption Act
c. Economic Espionage Act d. U.S. vs. O’Hagan
41. What is meant by the phrase CSR?
a) Corporate Social Responsibility b) Company Social Responsibility
c) Corporate Society Responsibility d) Company Society Responsibility
42. What is meant by the phrase 'teleological ethics'?
a) Is used to judge is an action is right, fair and honest.
b) An action can only be judged by its consequences
c) Developing the individual personal characteristics
d) The key purpose of ethics is to increase freedom.
43. What, according to Adam Smith, is the best way to promote collective interest?
a) Through government making decisions about what is in the public interest.
b) Through everyone working together to support each other.
c) Through everyone working on their own self interest
d) Through individuals forgoing their personal interest for the good of the collective.
44. Why, according to stakeholder theory, is it in companies' best interests to pay attention to their
stakeholders?
a) If firms only act in their own self-interest employees may feel exploited.
b) If firms only act in their own self-interest government might put more regulation on them.
c) If firms only act in their own self-interest customers might not like the image that the company
portray.
d) If firms only act in their own self-interest and inflict harm on stakeholders then society might
withdraw its support.
45. What is the enlightened self-interest model of CSR?
a) That it is in an organization's own best interest to put itself first rather than its ethics.
b) That it is in an organization's best interest to consider what a shareholder would want.
c) That it is in an organization's own best interest to act in an ethical way.
d) That it is in an organization's own best interest to follow the legislation and abide by the law.
46. What is green washing?
a) Transforming products to be more ethical.
b) Making a product appear more ethical that it really is.
c) Converting the company to green production methods.
d) Convincing customers to buy ethically.
47. What is triple bottom line?
a) An accounting tool that looks at the impact on people, planet and profits.
b) A management strategy which states all the attention should be on profits.
c) An accounting tool that looks at cost, profit and loss.
d) A management strategy which focuses on corporate social responsibility.
48.A sets out the purpose and general direction for the organisation?
a) Mission statement b) Purpose statement
c) Vision d) Profit statement
49.Which of the following would most effectively act as the primary objective of a business
organisation?
a) To make a profit
b) To procure resources
c) To communicate with shareholders
d) To mediate between the organisation and the environment
50.What is the purpose of a balanced scorecard?
a) To measure contribution of people to business growth
b) To combine a range of qualitative and quantitative indicators of performance
c) To relate business performance to customer satisfaction
d) All of the above
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
52.Who are organisational stakeholders?
a) Government b) Employees c) Customers d) All of the above

53. What is Ethics to do with?
a) The wider community b) Business

c) Right and wrong d) Nothing
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
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
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
57. The dimension of social responsibility refers to a business's societal contribution of

time, money, and other resources.
a) Ethical b) Philanthropic
c) Volunteerism d) Strategic
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
59.A is a problem, situation, or opportunity requiring an individual, group, or
organization to choose among several actions that must be evaluated as right or wrong.
a) Crisis b) ethical issue c) indictment d) fraud
60.Which moral philosophy seeks the greatest good for the greatest number of people?
a) Consequentialism b) Utilitarianism
c) Egoism d) Ethical formalism
61.What type of justice exists if employees are being open, honest, and truthful in their
communications at work?
a) Procedural b) Distributive
c) Ethical 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
63. Better access to certain markets, differentiation of products, and the sale of pollution-control
technology are ways in which better environmental performance can:
a) increase revenue b) increase costs
c) decrease revenue d) decrease costs
64. Most companies begin the process of establishing organizational ethics programs by
developing:
a) ethics training programs. b) codes of conduct.
c) ethics enforcement mechanisms. d) hidden agendas.
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
66. The social economy partnership philosophy emphasizes:
a) cooperation and assistance. b) profit maximization.

c) competition. d) restricting resources and support.
67.Which of the following is not a driver of responsible competitiveness?
a) Policy drivers b) Development drivers
c) Business action d) Social enablers
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.
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.
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.
71. Which of the following is NOT one of the primary elements of a strong organizational
compliance program?
a) A written code of conduct b) An ethics officer
c) Significant financial expenditures d) A formal ethics training program
72. are standards of behaviour that groups expect of their members.
a) Codes of conduct. b) Group values.
c) Group norms. d) Organizational norms.
73. In a organization, decision making is delegated as far down the chain of
command as possible.
a) Decentralized b) Creative
c) Flexible 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
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
76. Directors’ responsibilities are unlikely to include.
a) a fiduciary duty
b) a duty to keep proper accounting records
d) a duty of care
77. A company may become insolvent if it

c) makes a loss

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
79. Fraudulent trading may be

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
81. An organization that is owned by shareholders but managed by agents on their behalf is
conventionally known as the modern:
a) Conglomerate b) Corporation
c) Company d) Firm
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
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
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

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
86. Where an organization takes into account the effect its strategic decisions have on society, this
is known as:
a) Corporate governance b) Business policy
c) Business ethics 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
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
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
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
91. The approach to formal corporate ethics initiatives is proactive and inspirational.
a) Rules b) Compliance c) Principles d) Values
92. The approach to formal corporate ethics initiatives focuses on meeting required
behaviour norms or obeying the letter of the law
a) Rules b) Compliance c) Principles d) Values
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

94. How many stages are in the model of an organization social responsibility progression?
a) 3 b) 4 c) 5 d) 6
95. The belief that a firm pursuit of social goals would give them too much power is known as
what 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
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
97. Applying social criteria to an investment decision refers to .
a) socioeconomic view b) social responsiveness
c) social responsibility 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
99. Global organizations must their ethical guidelines so that employees know what
is expected of them while working in a foreign location
a) Clarify b) Provide c) Establish d) broaden
100. is a document that outlines principles for doing business globally in the
areas 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 KEY
1 B 21 D 41 A 61 D 81 B
2 C 22 A 42 B 62 C 82 D
3 B 23 B 43 C 63 A 83 A
4 C 24 C 44 D 64 B 84 C
5 D 25 B 45 C 65 A 85 C
6 B 26 C 46 B 66 A 86 D
7 C 27 A 47 A 67 B 87 B
8 D 28 B 48 A 68 C 88 B
9 A 29 B 49 A 69 B 89 A
10 C 30 C 50 B 70 A 90 C
11 D 31 A 51 D 71 C 91 D
12 D 32 C 52 D 72 C 92 B
13 A 33 B 53 C 73 D 93 C
14 A 34 B 54 A 74 C 94 B
15 B 35 A 55 A 75 B 95 D
16 D 36 C 56 A 76 C 96 A
17 C 37 D 57 B 77 D 97 D
18 D 38 D 58 A 78 A 98 C
19 D 39 B 59 B 79 D 99 A
20 C 40 A 60 B 80 A 100 B
CORPORATE CULTURE
Que: 1 The foundation for corporate culture are laid by _
a. Corporate members
b. Competitors
c. Founders
d. Industry standard
Ans: (c)
Que: 2 An organization’s embraces the behavior, rituals and shared
meaning held by employees that distinguishes the organization from all others.
a. External environment
b. Culture
c. Dominant culture
d. Ethics
Ans: (b)
Que: 3 Components of corporate culture includes _
a. Vision and values

b. Practices and people
c. Narrative and place
d. All of these
Ans: (d)
Que: 4 Commitment, competence and consistency are three distinct characteristics that result in
a. Culture building
b. Values
c. Organizational socialization
d. Attitudes
Ans: (a)
Que: 5 Types of corporate culture are
a. Clan culture and Adhocracy culture

b. Market culture and hierarchy culture
c. Both (a) & (b)
d. None of these
Ans: (c)
Que: 6 The practices of a company for which it is accountable in relation to other parties is called
a. Social responsibility
b. Code of Ethics
c. Values
d. Culture
Ans: (a)
Que: 7 Culture needs to be kept alive by _
a. Workers
b. Salesman
c. Top managers

d. Human resource managers
Ans: (c)
Que: 8 National culture is based on
a. Language
b. The territory of the state
c. The sense of belonging of a people
d. The nation-state.
Ans: (c)
Que: 9 A low context culture is
a. A culture where much goes unsaid

b. A culture in which communication is clear and direct
c. A culture where ambiguity is the norm, and directness is avoided
d. A culture in which body language and ‘reading between the lines’ are
important
Ans: (b)
Que: 10 Characteristics of organizational culture include all but which one of the following?
a. Common language, terminology and norms of behavior

b. Sustainability policies
c. Preference for formal or informal communication
d. Rulebook of do’s and don’ts for staff
Ans: (b)

UNIT- V CORPORATE GOVERNANCE
(MCQ)
Que: 1 The primary stakeholders are-
a. Consumers
b. Suppliers
c. Shareholders
d. Creditors
Ans: (c)
Que: 2 The corporate governance structure of a company reflects the individual companies-
a. Cultural & economic system

b. Legal & business system
c. Social& regulatory system
d. All of these
Ans: (d)
Que: 3 Corporate governance is a form of-
a. External regulation
b. Self regulation
c. Government control
d. Charitable action
Ans: (b)
Que: 4 CSR & corporate governance represent a -------- between business and society.
a. Social climate
b. Special contract
c. Special climate
d. Social contract
Ans: (d)

Que: 5 the framework for establishing good corporate governance & accountability was originally set up
by-
a. Rowntree Committe
b. Cadbury Committee
c. Nestle Committee
d. Thornton Committee
Ans: (b)
Que: 6 ------ may be defined as the enhancement of long-term shareholders while at the same time
protecting the interests of other stakeholders.
a. Business ethics
b. B. CSR
c. Cultural relativism
d. Corporate governance
Ans: (d)
Que:7 Which of the following is/are feature of corporate governance?
a. Non- universality
b. Accountability
c. Ambiguity
d. None of these
Ans: (b)
Que:8 There are usually ...................................... key participants in corporate governance.
a. Three
b. Four
c. Five
d. Eight
Ans: (a)
Que: 9 Corporate governance is a .......................................... approach.
a. Top-down

b. Bottom-up
c. Hybrid
d. Scientific
Ans: (a)
Que: 10 Corporate governance is concerned with the formation of ……………
term objective
a. Very short
b. Short
c. Medium
d. Long
Ans: (d)
Meaning of Corporate Governance

Corporate governance is the system of rules, practices and processes by which a firm is directed and
controlled. It involves balancing the interests of a company’s many stakeholders, management, customers,
suppliers, financiers, government and community. Since corporate governance also provides the framework
for attaining a company’s objectives, it encompasses practically every sphere of management from action
plans and internal control to performance measurement and corporate disclosure.
According to Catherwood-
“Corporate governance means that company manages its business in manner that is accountable and
responsible to the shareholders. In a wider interpretation, corporate governance includes company’s
accountability to shareholders and other stakeholders such as employees, suppliers, customers and local
community.”
Need of Corporate Governance
i. Widespread of Shareholders

In today’s scenario there has been widespread of shareholders all over the nations and majority of
shareholders are being unorganized and having an indifferent attitude towards corporate affairs also they
remain confined only to the law and the Articles of Association therefore it requires a practical
implementation through code of conduct of corporate governance.
ii. Changing Ownership Structure
At present the pattern of corporate ownership has been changed with institutional investors and mutual
funds. These investors have become the greatest challenge to corporate managements forcing the latter to
abide by some established code of corporate governance in order to build up its image in society.
iii. Corporate Scams or Scandals

Corporate scams or frauds in the recent years have shaken public confidence in corporate management.
Therefore the need for corporate governance is then imperative for reviving investors’ confidence in the
corporate sector towards the economic development in society.
iv. Greater Expectations of society towards the Corporate Sector

In today’s scenario, the expectation of society towards corporate sector is higher in terms of reasonable
price, better quality, pollution control etc. To meet these social expectations there is a need for a code of
corporate governance.
v. Hostile take-overs
There should be hostile take-over of the companies so that efficiency of management can be maintained.
This factor points out the need of corporate governance in the form of efficient code of conduct for the
corporate management.
vi. Huge increase in top management compensation

In both developed and developing economies there has been a great increase in salary or compensation
packages to the top level corporate executives and there is no justification for high payment to the top
management. And this

factor necessitates corporate governance to contain all the ill-practices of top management of the company.
vii. Globalization
The want and desire of more Indian companies to get listed on International stock exchanges also focused
on the need for corporate governance as the international market recognized only those companies which
are well- managed according to standard code of corporate governance.
Scope of Corporate Governance
i. Accountability
The board of directors should be accountable to the owners of the company
i.e. shareholders. Corporate Governance is the interaction between various participants in shaping
corporation’s performance. The relationship between the owners and the managers in an
organization must be healthy and there should be no conflict between the two. The owners must see
that individual’s actual performance is according to the standard performance and all these
dimension should not be overlooked.
ii. Clarity in responsibilities

Corporate Governance distinguishes between the owners and the managers. The managers are the
deciding authority. Thus, the functions or tasks of owners and managers should be clearly defined rather
harmonizing.
iii. Quality and competence of Directors

Corporate Governance deals with determining the ways to take effective strategic decisions. It gives
ultimate responsibility to the Board of Directors.
iv. Transparency
Transparency i.e. the right to information, time liners and integrity of the information produced.
Corporate Governance ensures transparency which brings strong and balanced economic development.
This also ensures that the interest of all shareholders is safeguarded. It ensures that all the shareholders
fully exercise their rights and that the organization fully recognizes their rights.

v. Broad coverage or scope
Corporate Governance has a broad scope. It includes both social and institutional aspects. Corporate
Governance encourages a trustworthy, moral as well as ethical environment.
vi. Adherence to the rules

Systems, practices and procedures by which the individual corporation regulates itself in order to
remain competitive, sustainable, relevant and legitimate for competitiveness and sustainability.
Benefits of Corporate Governance
i. Good corporate governance ensures corporate success and economic growth.

ii. Strong corporate governance maintains investors’ confidence as a result of
which company can raise capital efficiently and effectively.
iii. It lowers the capital cost.
iv. There is a positive impact on the share price.
v. It provides proper inducement to the owners as well as the managers to achieve
objectives that are in interests of the shareholders and the organization.
vi. Good corporate governance also minimizes wastages, corruption, risks and
mis-management.
vii. It helps in brand formation and development.
viii. It ensures organization to be managed in a manner that fits the best interests of
all.
Principles of Corporate Governance
i. Transparency
Transparency is something which brings openness and enables one to understand the truth easily. In
the context of corporate governance it implies an accurate, adequate and timely dis-closure of relevant
information about the operating system of the enterprise to the stakeholders.
In fact transparency is the foundation of corporate governance which helps to develop a high level
of public confidence in the corporate sector. For ensuring transparency in corporate administration, a
company should publish

relevant information about corporate affairs in leading newspaper e.g. on quarterly or half yearly or
annual basis.
ii. Accounatbility
Accountability is a liability to explain the results of one’s decision taken in the interest of others. In the
context of corporate governance, accountability implies the responsibility of the chairman, the Board
of directors and the chief- executives for the use of company’s resources in the best interest of company
and its stakeholders.
iii. Independence
Good corporate governance requires independence on the part of the top management of the corporation
i.e. the Board of Directors must be strong, non- partisan body so that it can take all corporate decisions
based on business prudence. Without the top management of the company being independent, good
corporate governance is only a mere dream.
Advantages of Corporate Governance
1. Growth & Development

2. Goodwill & image creation
3. Maintenance of investor confidence
4. Increase value of shares
5. Reduces the chances of mismanagement
6. Increase of productivity
7. Increase of market capitalization of the business
8. Benefits to all stakeholders
9. Payment of regular tax to the government.
Disadvantages of Corporate Governance
1. Separation of ownership & management

2. Increase in administrative co


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MCQ on CSR and Cultural Ethics

Q.1. What is meant by the phrase CSR?

Q.2. What is meant by the phrase 'teleological ethics'?

Q.5. What is the enlightened self-interest model of CSR?

Q.7. What is triple bottom line?

Q.8. Why do alternative organizations run differently from conventional

Q.9. What does and Ethical Foundation for an organisation embody?

a) Mission statement b) Purpose statement

Q.13.Who are organisational stakeholders?

Q.14. What is Ethics to do with?

Q.16. The four types of social responsibility include:

Q.17. The dimension of social responsibility refers to a business's societal

Q.18.A stakeholder orientation includes all of the following activities except:

Q.20. is a problem, situation, or opportunity requiring an individual, group, or organization

Q.23. Atmospheric issues include all of the following except:

Q.24. To be successful, business ethics training programs need to:

Q.27. Which of the following is a problem presented by ethics audits?

Q.29. Codes of conduct and codes of ethics

Q.31. External audit of the accounts of a limited company is required

Q.33. A company may become insolvent if it

Q.34. Fraudulent trading may be

a) Ethical dilemma b) Diversity

Q.41. are those individuals who raise ethical concerns or issues to

Q.43. Philanthropy is derived from which Greek word

Q.45. J.R.P. Daza developed which model

Q.46. CSR 2.0 Model was developed by:

Q.47. Which of the below is not a general models of CSR

Q.51. NGO stands for

a. National Government Organisation.

Q.54. Which award is an initative of NGOBOX

Q.61. The tool used by management to track various data pertaining to an

Q.64. Chairman of audit committee is an Director

Q.67. Which legislation in India mandates compulsory undertaking of CSR

a. Companies Act 1956

Q.68. Which legislation in India mandates compulsory undertaking of CSR

a. Companies Act 1956

Q.69. ISO 14000 standard deals with

a. Companies forming part of BSE Sensex

Q. 71. CSR is positively correlated with revenue and profit because:

a. Ethical learning and growth

a. Maximum ROI. b. Report about progress.

Q 78. Which of these is not an ethical issue in Marketing.

a. Unhealthy Competition b. Surrogate Advertising

a. Invasion of Privacy b. Data Theft

Q 80. Carbon monoxide emitted by automobile directly contributes to

(a) Owners (b) Workers

Q 82. The primary stakeholders of a business are:

a. Teach students their professional accountability and to uphold their personal

Q85. Under the , both internal and external corporate governance

Q86.One of the objectives of the Sarbanes-Oxley Act was to:

a. Increase the cost of compliance with federal regulations.

a. Did not attend a school supported by the company.

The environmental analysis includes

d. All of the above

Q 91. Values and ethics shape the-

(a) Corporate unity (b) Corporate discipline

(a) Office place ethics (b) factory place ethics

(a) Churning (b) Illegal dividend payment

(a) Insider trading (b) online trading

Q96. Which of the following methods are used in creative accounting?

(a) Off balance sheet financing

(a) Financial accounting (b) creative accounting

a. organisational social responsibility