Textbook Exercise Questions and Answers
I. Choose the Correct Answer
Question 1.
Which of the following helps in maximising sale of goods to society?
(a) Business success
(b) laws and regulations
(c) Ethics
(d) Professional management
Answer:
(c) Ethics
Question 2.
Ethics is important for …………….
(a) Top management
(b) Middle level managers
(c) Non – managerial employees
(d) All of them
Answer:
(d) All of them
Question 3.
Which of the following does not ensure effective ethical practices in a business enterprise?
(a) Publication of a code
(b) Involvement of employees
(c) Establishment of compliance mechanisms
(d) none of them
Answer:
(a) Publication of a code
Question 4.
The role of top management is to guide the entire organisation towards …………….
(a) General behaviour
(b) Organisation behaviour
(c) Ethically upright behaviour
(d) Individual behaviour
Answer:
(c) Ethically upright behaviour
Question 5.
The ethical conduct of employees leading to standard practices results in …………….
(a) Good behaviour
(b) Bad behaviour
(c) Ethical behaviour
(d) Correct decision making
Answer:
(d) Correct decision making
II. Very Short Answer Questions
Question 1.
What is ethics?
Answer:
Ethics is derived from the Greek word ‘ethos’ which means a person’s fundamental orientation towards life. It governs the behaviour, derived from the moral standards which help to determine right or wrong, good or evil.
Question 2.
What do you mean by code?
Answer:
The organisation principles are defined in the written document called code.
Question 3.
State two ways by which ethics influences behaviour.
Answer:
Ethical behaviour is the acts consistent with the moral standards or codes of conduct established by society.
Question 4.
What is need for Corporate Governance?
Answer:
Corporate Governance is the system by which businesses are directed and controlled in the best interests of all stakeholders.Good corporate governance enables corporate success and economic development.
Question 5.
What are MNCs?
Answer:
MNC is defined to be an enterprise operating in several countries but managed from one country. A Multinational corporation is an organization doing business in more than one country.
III. Short Answer Questions
Question 1.
Define business ethics.
Answer:
Business ethics may be defined as a set of moral standards to be followed by owners, managers and business people. These standards determine the conduct and behaviour of business people. Business ethics reflects the conduct in the context of business.
Question 2.
What do you mean by the concept of business ethics?
Answer:
Business exists to supply goods and services to the people from social point of view but from individual point of view, the primary objective of any business unit is to make profit. The individual objective should not be in conflict with societal objective. These two objectives normally contradict each other, as one business enterprise may be good in individual objective and bad at social objective and vice versa.
Question 3.
Why is ethics necessary in business?
Answer:
All business units have realized that ethics is vitally important for the existence and progress of the business as well as the society. It is very important as it improves public image, earns public confidence, and leads to greater success. Ethics and profits go together in the long run. It enhances the quality of life, standard of living and business.
Question 4.
What are the benefit of Corporate Governance to Share holders.
Answer:
Question 5.
Illustrate with example the working of a MNC.
Answer:
Any company is referred to as a multinational company or corporation (M. N. C.) when that company manages its operation or production or service delivery from more than a single country. It has its Headquarter based in one country with several other operating branches in different other countries. IBM, Microsoft, Pepsi Co., Sony, etc. are the examples of MNC’s.
IV. Long Answer Questions
Question 1.
Explain the different key elements of business ethics.
Answer:
1. Top Management Coriimitment:
Top management has a very important role to guide the entire organization towards ethical behaviour. The top level personnel in any organisation should work openly and strongly committed towards ethical conducts and guide people working at middle and low level to follow ethical behaviour.
2. Establishment of Compliance Mechanism:
To make sure that actual decisions match with a firm’s ethical standards, suitable mechanism should be established..
3. Publication of a “Code”:
Generally organisations formulate their own ethical codes for the conduct of the enterprise; it should followed by the employees of the organisation. The organisation principles are defined in the written docunient called code.
4. Involving Employees at All Levels:
It is the employees at different levels who implement ethics policies to make ethical business a reality. Therefore, their involvement in ethics programmes becomes a must.
5. Measuring Results:
The organisations from time to time keep a check on ethical practise followed. Although it is difficult to accurately measure the end results of ethics programmes, the firms can certainly audit to monitor compliance with ethical standards.
Question 2.
Describe the code of business ethics.
Answer:
Code of ethics documents the generally accepted principles of ethical conduct. They are statements of values and principles which define the purpose of an organisation. It gives a clear picture of the standards that employees should follow. It guides them in decision making. The code of business ethics can include the following:
Question 3.
Explain the significance of Corporate Governance from the point of Stakeholders.
Answer:
Balanced economic development is made possible through transparent management under corporate governance. All Stakeholders interests are protected and promoted through corporate governance. Some of the benefits of corporate governance are as follows.
Question 4.
Discuss the role of International Benchmarking on the working of Companies in India.
Answer:
Question 5.
Describe the benefits of increasing the number of MNCs.
Answer:
The entry of MNC’s into India has proved quite beneficial for the growth and development of the Indian economy providing employment Opportunities for the young generation.
Additional Questions and Answers
I. Choose the Correct Answer:
Question 1.
Which of the following is not one of the underlying principles of the corporate governance combined code of practice?
a) acceptability
b) integrity
c) openness
d) accountability
Answer:
a) acceptability
Question 2.
The organisation principles are defined in the written document called ……………..
(a) Code
(b) Law
(c) Behaviour
(d) Ethical
Answer:
(a) Code
Question 3.
The primary stakeholders are ……………
a) Customers
b) Suppliers
c) Shareholders
d) Creditors
Answer:
c) Shareholders
Question 4.
There are …………….. primary types of bench making.
(a) Two
(b) Three
(c) Four
(d) Five
Answer:
(c) Four
Question 5.
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 operate.
d) Increase the workload for accounting students.
Answer:
c) Create more ethics standards by which corporate professionals operate.
Future Learning
Question a.
Money earning cannot be the sole objective of business or life.
Answer:
The primary objective is to make a profit. The individual objective should not be with societal objectives.
Question b.
The mind of students to accept that ethics and consideration for the environment, law, etc can lengthen the income-earning of an individual or business
Answer:
All business units have realized that ethics is vitally important for the existence and progress of the business as well as society. Ethics and profits go together in the long run. It enhances the quality of life, the standard of living, and business.