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Question PaperBusiness Ethics & Corporate Governance (MB321) : January 2006
Section A : Basic Concepts (30 Marks)
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This section consists of questions with serial number 1 - 30.
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Answer all questions.
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Each question carries one mark.
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Maximum time for answering Section A is 30 Minutes.
1.
Which of the following illustrates the idea of "morally relevant differences?"(a) Different principles generate different results(b) Similar principles generate similar results(c) Different principles generate similar results(d) Similar principles generate different results(e) Different principles generate no results.
< Answer >
2.
Which of the following environmental laws in India allows private rights to use groundwater by viewingit as an attachment to land?(a) The River Boards Act (b) The Water Cess Act (c) The Water Act(d) The Water Cess Rules (e) The Easement Act.
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3.
According to analysis by Premeaux and Mundy, which of the following is
not
an ethical standard to befollowed by operations managers in terms of ‘
rights
?
’
(a) Authorize correct claims (b) Reject excessive claims(c) Amend erroneous claims (d) Act professionally at all times(e) Consider the fairness of decisions.
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4.
Which of the following reflect the company values, principles and guidelines?(a) Special documents (b) Management philosophy statement(c) Compliance codes (d) Circulated letters(e) Compliance certificates.
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5.
Which of the following is
not
a liability that a director can be subjected to?(a) Liability for breach of statutory duties(b) Liability for breach of fiduciary duties(c) Unlimited liability(d) Personal liability(e) Criminal liability.
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6.
Ethical problems mostly result in managerial dilemmas because(a) Considerable expenses are involved in solving the ethical problems(b) They may lead to high employee turnover(c) They represent a conflict between an organization’s economic performance and its socialperformance(d) They require specialized skills to be resolved(e) Ethical behaviour at individual level and at a collective level, have no bearing on each other.
< Answer >
7.
Which of the following could be problem(s) with applying utilitarian theories to real problems?I. Interpersonal comparisons of utility are difficult to perform.II. The information burden associated with utilitarianism is impossible to satisfy.III. There are no "rough comparisons" of utility available.(a) Only (I) above (b) Only (III) above(c) Both (I) and (II) above (d) Both (II) and (III) above(e) All (I), (II) and (III) above.
< Answer >
8.
Which of the following is
not
a power of the audit committee?(a) Power to investigate any activity within its terms of usage
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 1
 
 2(b) Power to seek information from any employee(c) Power to obtain outside legal or other professional advice(d) Power to secure attendance of outsiders with relevant expertise(e) Power to review with the management the annual financial statements before submission to theboard.
9.
Which of the following practices are
not
necessarily illegal?I. Improper financial management.II. Insider trading.III. Money laundering.IV. Fund embezzlement.V. Management buy-out.(a) Both (I) and (V) above (b) Both (II) and (III) above(c) Both (II) and (IV) above (d) (I), (II) and (V) above(e) (II), (III) and (IV) above.
< Answer >
10.
Which of the following are conclusions about the relationship between moral judgements and law?I. The requirements of law overlap to a considerable extent but do not duplicate the probable moralstandards of society.II. The requirements of law tend to be negative, while the standards of morality more often arepositive.III. The requirements of the law tend to lag behind the apparent moral standards of society.IV. The law always represents collective moral judgements.(a) Both (I) and (IV) above (b) Both (II) and (III) above(c) (I), (II) and (III) above (d) (I), (III) and (IV) above(e) All (I), (II), (III) and (IV) above.
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11.
Six factors are involved in decision-making. According to which factor may a manager adopt thatdecision which is beneficial to him or those affected socially,culturally, psychologically or physicallyby the decision?(a) Probability of the effect (b) Social agreement (c) Proximity(d) Magnitude of consequence (e) Concentration of effect.
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12.
Which of the following is
not
an area covered by OECD principles of corporate governance?(a) The rights of shareholders (b) The role of stakeholders(c) Disclosure and transparency (d) Role of audit committee(e) The responsibilities of the board.
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13.
Which of the following standards for ethical conduct implies ‘
objectivity’?
 (a) Performing professional duties in accordance with relevant laws, regulations and technicalstandards(b) Refraining from disclosing confidential information unless authorized(c) Avoiding actual or apparent conflicts of interest and advising all appropriate parties of anypotential conflict(d) Recognizing and communicating professional limitations or other constraints that would precluderesponsible judgement or completion of an activity(e) Disclosing fully, all relevant information that could reasonably be expected to influence anintended user’s understanding of the reports, comments and recommendations presented.
< Answer >
14.
The center for advanced purchasing studies, researched the relationships of American buyers withforeign suppliers. Which of the following is
not
a result of this study?(a) Significant differences did exist between buyers’ and suppliers’ perceptions regarding howinvolved each believed the other to be in these activities(b) Bribery figured as an unethical practice in the lists of both the buyer and the supplier(c) There is no relationship between the supplier’s nationality and the level of unethical activity in thebuyer-supplier relationship(d) Buyers least satisfied with the supplier relationship were those who perceived them to be mostinvolved in unethical activities(e) Buyers who believed that suppliers are involved in unethical practices felt that suppliers areperforming less effectively.
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15.
There are various approaches for implementing a corporate code. In this respect, which of the followingis/are approaches recommended by Lickona to help managers address ethical dilemmas in the businessworld?I. Use of Socratic questioning of isolate views and confront reasoning.II. Encouraging open and integrative discussions.III. Eliciting the full range of ethical values.IV. Coordination across department in terms of following the same ethical code.(a) Only (I) above (b) Only (IV) above(c) Both (II) and (III) above (d) (I), (II) and (III) above(e) All (I), (II), (III) and (IV) above.
< Answer >
16.
Which of the following information about India pertaining to the environment is
false
?(a) Carbon intensity levels are high in India compare to other Asian countries(b) As per a WHO report, Delhi is one of the top ten most polluted cities in the world(c) Majority of environmental issues that India faces are related to air pollution(d) Carbon emission in India has grown nine times over the past decade(e) India is the largest commercial energy consumer in non-OECD Asia.
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17.
Which of the following is/are
true
with respect to ‘Consequentialism?’I. It revolves around the concept of value and maximization of that value.II. It revolves around the implications for an organization due to illegal acts.III. An act, even though it does not maximize happiness, is ethically permissible.IV. People who support it believe that the morally correct decision often depends on the circumstancesof the person making it.V. Teleological theories are also called consequentialist theories.(a) Only (I) above (b) Both (I) and (V) above(c) Both (II) and (IV) above (d) (I), (III) and (V) above(e) (II), (III) and (IV) above.
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18.
Which of the following is
true
?(a) The right of employees to a safe and healthy workplace can be justified by appealing to a right notto be injured or killed(b) Employees have a right to a safe and healthy workplace, even if it means certain inherentlydangerous jobs such as firefighter never get done(c) The right of employees to a safe and healthy workplace can only be determined by looking at thelevel of risk and the thorny issue of coercion(d) Employees have no right to a safe and healthy workplace(e) Employees need to ensure their own safety at the work place.
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19.
Which of the following is/are steps taken by SEBI to strengthen corporate governance in India?I. Separation of the roles of Chairman and Chief Executive.II. Declaration of quarterly results.III. Strengthening of disclosure norms for Initial Public Offers.IV. Issue of guidelines for preferential allotment at market related prices.(a) Only (III) above (b) Both (I) and (III) above(c) Both (II) and (IV) above (d) (I), (II) and (IV) above(e) (II), (III) and (IV) above.
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20.
Altruistic actions, such as donating money, time, goods or services to charitable, humanitarian, oreducational institutions is known as(a) Stake-holding (b) Philanthropy(c) Social auditing (d) Corporate social responsibility(e) An ethical dilemma. 
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21.
Which of the following is/are deceptive or manipulative marketing practice/s?I. Markdowns from a suggested retail price that is never charged.II. Multiple pricing.III. Updating products.(a) Only (I) above (b) Only (II) above
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