Unit 6: Social responsibilities of Business and Business Ethics
1. **What does the concept of social responsibility in business refer to?**
- A) Maximizing profits only
- B) Taking actions that are desirable in terms of society's values and objectives
- C) Expanding business without societal concern
- D) Avoiding legal regulations
- **Answer:** B) Taking actions that are desirable in terms of society's values and objectives
2. **Which of the following is NOT a category of social responsibility according to the document?**
- A) Economic responsibility
- B) Environmental responsibility
- C) Ethical responsibility
- D) Discretionary responsibility
- **Answer:** B) Environmental responsibility
3. **The main reason businesses adopt pollution control measures is to:**
- A) Reduce production costs
- B) Improve employee morale
- C) Reduce health hazards and improve public image
- D) Avoid tax obligations
- **Answer:** C) Reduce health hazards and improve public image
4. **Which element of business ethics involves the development of a ‘Code of Conduct’?**
- A) Top management commitment
- B) Compliance mechanisms
- C) Publication of a 'Code'
- D) Employee involvement
- **Answer:** C) Publication of a 'Code'
5. **According to the Companies Act, 2013 in India, what is the required CSR spending for eligible companies?**
- A) 1% of average net profit from the last three years
- B) 2% of average net profit from the last three years
- C) 3% of average net profit from the last three years
- D) 5% of average net profit from the last three years
- **Answer:** B) 2% of average net profit from the last three years
6. **Which type of pollution is primarily caused by carbon monoxide emissions from automobiles?**
- A) Air pollution
- B) Water pollution
- C) Land pollution
- D) Noise pollution
- **Answer:** A) Air pollution
7. **What does the ethical responsibility of a business encompass?**
- A) Following laws strictly
- B) Respecting social expectations that go beyond legal requirements
- C) Maximizing profits
- D) Avoiding any corporate social responsibility
- **Answer:** B) Respecting social expectations that go beyond legal requirements
8. **The principle of ‘customer is king’ relates to which aspect of social responsibility?**
- A) Responsibility towards shareholders
- B) Responsibility towards workers
- C) Responsibility towards consumers
- D) Responsibility towards government
- **Answer:** C) Responsibility towards consumers
9. **Which argument supports the idea that businesses should voluntarily assume social responsibility?**
- A) Burden on consumers
- B) Violation of profit maximization objective
- C) Justification for existence and growth
- D) Lack of public support
- **Answer:** C) Justification for existence and growth
10. **What is the main objective of business ethics as discussed in the document?**
- A) Maximizing profits above all
- B) Establishing a link between individual and societal good
- C) Ensuring legal compliance only
- D) Reducing business competition
- **Answer:** B) Establishing a link between individual and societal good
11. **Which type of pollution is caused by waste dumping into rivers and lakes?**
- A) Air pollution
- B) Water pollution
- C) Land pollution
- D) Noise pollution
- **Answer:** B) Water pollution
12. **According to the document, what is the first step a business should take to protect the environment?**
- A) Establish compliance mechanisms
- B) Develop pollution control technologies
- C) Commit top management to environmental protection
- D) Involve employees at all levels
- **Answer:** C) Commit top management to environmental protection
13. **What is the 'discretionary responsibility' of a business?**
- A) Legally required duties towards shareholders
- B) Obligations mandated by government laws
- C) Voluntary acts of goodwill like charitable contributions
- D) Ensuring products are of high quality
- **Answer:** C) Voluntary acts of goodwill like charitable contributions
14. **Which of the following is considered a cause of environmental pollution by businesses?**
- A) Importing goods from foreign markets
- B) Excessive use of digital marketing
- C) Improper disposal of industrial waste
- D) Establishing a customer service helpline
- **Answer:** C) Improper disposal of industrial waste
15. **Which of these is NOT a reason why businesses should control pollution, according to the text?**
- A) Reduction of health hazards
- B) Decreased financial liability
- C) Increased regulatory freedom
- D) Improved public image
- **Answer:** C) Increased regulatory freedom
16. **What concept highlights a business's duty to provide accurate, regular information to shareholders?**
- A) Economic responsibility
- B) Responsibility towards government
- C) Responsibility towards consumers
- D) Responsibility towards shareholders
- **Answer:** D) Responsibility towards shareholders
17. **Which type of responsibility ensures a business respects religious sentiments in its advertisements?**
- A) Economic responsibility
- B) Legal responsibility
- C) Ethical responsibility
- D) Discretionary responsibility
- **Answer:** C) Ethical responsibility
18. **What is the purpose of the 'Code of Ethics' in a business environment?**
- A) To establish employee dress codes
- B) To define principles of conduct for the entire organization
- C) To increase product prices
- D) To comply strictly with government regulations
- **Answer:** B) To define principles of conduct for the entire organization
19. **Which is an example of social responsibility towards the community?**
- A) Maximizing profits for shareholders
- B) Creating hazardous waste without a plan for disposal
- C) Engaging in environmentally friendly practices
- D) Only serving the company’s immediate customers
- **Answer:** C) Engaging in environmentally friendly practices
20. **A business that does NOT comply with pollution control measures is likely to face:**
- A) Better public reputation
- B) Higher liability risks
- C) Reduced operational costs
- D) Improved employee morale
- **Answer:** B) Higher liability risks
21. **Which of the following is a core element of business ethics as discussed in the text?**
- A) Hiring only family members
- B) Developing compliance mechanisms
- C) Investing in luxury facilities for management
- D) Increasing profits through price hikes
- **Answer:** B) Developing compliance mechanisms
22. **Social responsibility towards workers includes:**
- A) Maximizing shareholder returns
- B) Providing fair wages and safe working conditions
- C) Increasing product prices annually
- D) Avoiding social interactions
- **Answer:** B) Providing fair wages and safe working conditions
23. **Which of the following arguments is made against social responsibility?**
- A) Long-term interest of the firm
- B) Better environment for doing business
- C) Lack of social skills within the business
- D) Justification for business growth
- **Answer:** C) Lack of social skills within the business
24. **An example of ‘noise pollution’ as caused by business activities is:**
- A) Smoke emissions from factories
- B) Waste dumping in rivers
- C) Loud machinery operations in manufacturing
- D) Chemical spills on land
- **Answer:** C) Loud machinery operations in manufacturing
25. **Why should businesses consider social responsibility, according to the text?**
- A) To boost short-term profits quickly
- B) To avoid competitive market environments
- C) To maintain a sustainable relationship with society
- D) To eliminate all legal regulations
- **Answer:** C) To maintain a sustainable relationship with society
26. **The ‘reality of social responsibility’ is shaped by various forces, including:**
- A) Threat of public regulation and labor movements
- B) Exclusive focus on profit maximization
- C) Decreasing competition in the market
- D) Increasing product price without reason
- **Answer:** A) Threat of public regulation and labor movements
27. **Which responsibility involves providing clear information and fair dealings with customers?**
- A) Economic responsibility
- B) Legal responsibility
- C) Consumer responsibility
- D) Discretionary responsibility
- **Answer:** C) Consumer responsibility
28. **Business ethics are particularly significant because:**
- A) They ensure every business maximizes profits
- B) They create a culture of integrity and trust in society
- C) They eliminate the need for consumer rights
- D) They reduce costs in all operations
- **Answer:** B) They create a culture of integrity and trust in society
29. **Which of the following describes the role of business in environmental protection?**
- A) Following strict profit goals
- B) Ignoring pollution issues
- C) Leading initiatives to minimize pollution
- D) Only selling eco-friendly products
- **Answer:** C) Leading initiatives to minimize pollution
30. **One of the arguments for social responsibility is the 'availability of resources with business.' This means:**
- A) Businesses have financial and human resources to address societal problems
- B) Only governments should manage all societal issues
- C) Resources should be solely dedicated to business profit
- D) Businesses should reduce all external responsibilities
- **Answer:** A) Businesses have financial and human resources to address societal problems
31. **Which of the following is NOT listed as a cause of pollution by business activities?**
- A) Air pollution
- B) Noise pollution
- C) Overproduction
- D) Water pollution
- **Answer:** C) Overproduction
32. **Which social responsibility is fulfilled by a business that provides fair returns and secure investments for shareholders?**
- A) Responsibility towards government
- B) Responsibility towards community
- C) Responsibility towards shareholders
- D) Responsibility towards consumers
- **Answer:** C) Responsibility towards shareholders
33. **According to the document, which of the following is a benefit of pollution control for businesses?**
- A) Increased legal fees
- B) Improved public image
- C) Higher production costs
- D) Decreased employee morale
- **Answer:** B) Improved public image
34. **A business that sponsors education and disaster relief is fulfilling its:**
- A) Economic responsibility
- B) Ethical responsibility
- C) Discretionary responsibility
- D) Legal responsibility
- **Answer:** C) Discretionary responsibility
35. **The Companies Act 2013 in India mandates CSR for companies with certain financial thresholds. This law is an example of which type of responsibility?**
- A) Economic
- B) Legal
- C) Ethical
- D) Discretionary
- **Answer:** B) Legal
36. **Which of these is NOT listed as an environmental issue identified by the United Nations?**
- A) Ozone depletion
- B) Food shortages
- C) Global warming
- D) Deforestation
- **Answer:** B) Food shortages
37. **How does the document define ‘business ethics’?**
- A) Moral principles guiding profit maximization
- B) Socially determined moral principles that guide business activities
- C) Rules set by the government for business conduct
- D) Codes for reducing competition in the market
- **Answer:** B) Socially determined moral principles that guide business activities
38. **According to the document, top management should demonstrate commitment to ethics by:**
- A) Offering high salaries to employees
- B) Continuously guiding the organization towards ethical behavior
- C) Increasing sales goals each quarter
- D) Reducing all consumer protections
- **Answer:** B) Continuously guiding the organization towards ethical behavior
39. **Noise pollution can negatively impact health by causing:**
- A) Respiratory diseases
- B) Mental disorders and hearing loss
- C) Skin irritation
- D) Increased immunity
- **Answer:** B) Mental disorders and hearing loss
40. **Which responsibility towards the government and community involves maintaining a proper environmental image?**
- A) Economic responsibility
- B) Ethical responsibility
- C) Legal responsibility
- D) Discretionary responsibility
- **Answer:** C) Legal responsibility
41. **Which action reflects a company's responsibility towards its employees?**
- A) Paying fair wages
- B) Increasing production quotas
- C) Reducing product quality
- D) Avoiding tax obligations
- **Answer:** A) Paying fair wages
42. **The principle of 'caveat emptor' has been largely replaced by which concept in consumer responsibility?**
- A) “Government is responsible”
- B) “Customer is king”
- C) “Business is always right”
- D) “Shareholders come first”
- **Answer:** B) “Customer is king”
43. **What is the main reason businesses should adopt a long-term approach to social responsibility, as per the document?**
- A) To ensure higher immediate profits
- B) To avoid future government regulations
- C) To secure a lasting positive public image and success
- D) To increase production efficiency
- **Answer:** C) To secure a lasting positive public image and success
44. **Which of these is a core argument against social responsibility in business?**
- A) Social responsibility leads to consumer trust
- B) Social responsibility increases regulatory restrictions
- C) Social responsibility creates unnecessary public support
- D) Social responsibility can add costs and burden consumers
- **Answer:** D) Social responsibility can add costs and burden consumers
45. **Which category of responsibility involves a business choosing to undertake charitable activities without external pressure?**
- A) Economic
- B) Legal
- C) Ethical
- D) Discretionary
- **Answer:** D) Discretionary
46. **What is a key reason for businesses to voluntarily follow social responsibility, beyond legal requirements?**
- A) To avoid hiring more employees
- B) To gain public trust and maintain a positive reputation
- C) To reduce production costs
- D) To increase dependence on government subsidies
- **Answer:** B) To gain public trust and maintain a positive reputation
47. **A business’s ethical responsibility includes which of the following?**
- A) Following only the law strictly
- B) Voluntarily meeting societal expectations beyond legal compliance
- C) Prioritizing profits above all else
- D) Relying on consumer protection organizations
- **Answer:** B) Voluntarily meeting societal expectations beyond legal compliance
48. **What is the main function of compliance mechanisms in a business’s ethical policy?**
- A) To ensure employees follow ethical standards
- B) To increase product prices
- C) To focus only on legal aspects of operations
- D) To maximize short-term profits
- **Answer:** A) To ensure employees follow ethical standards
49. **Which type of pollution results from excessive noise from machinery and vehicles?**
- A) Water pollution
- B) Noise pollution
- C) Air pollution
- D) Land pollution
- **Answer:** B) Noise pollution
50. **Why is top management’s commitment essential in promoting business ethics?**
- A) It helps set high profit goals
- B) It drives ethical behavior across all levels of the organization
- C) It ensures only top executives act ethically
- D) It focuses on increasing market share
- **Answer:** B) It drives ethical behavior across all levels of the organization
51. **The ‘Code of Ethics’ in a business is primarily intended to:**
- A) Guide employees on ethical practices
- B) Improve sales and profit targets
- C) Limit employee rights
- D) Decrease public interactions
- **Answer:** A) Guide employees on ethical practices
52. **Which of the following is a discretionary responsibility for a business?**
- A) Paying taxes
- B) Ensuring product safety
- C) Donating to charitable causes
- D) Providing accurate financial reports
- **Answer:** C) Donating to charitable causes
53. **Which reason for pollution control highlights avoiding legal liabilities for businesses?**
- A) Improved employee morale
- B) Reduced risk of liability
- C) Higher public demand for products
- D) Increased competition
- **Answer:** B) Reduced risk of liability
54. **An enterprise fulfills its responsibility towards consumers by:**
- A) Setting high product prices
- B) Ensuring quality, safety, and fair pricing of goods and services
- C) Reducing customer service options
- D) Avoiding new product development
- **Answer:** B) Ensuring quality, safety, and fair pricing of goods and services
55. **The term ‘business ethics’ refers to:**
- A) Legal obligations only
- B) Profit-driven business practices
- C) Principles that define right and wrong in business behavior
- D) Exclusive rights of business owners
- **Answer:** C) Principles that define right and wrong in business behavior
56. **The concept of Corporate Social Responsibility (CSR) in India is mandated by which regulation?**
- A) Consumer Protection Act
- B) Companies Act, 2013
- C) Environmental Protection Act
- D) Labor Rights Act
- **Answer:** B) Companies Act, 2013
57. **According to the document, which of the following best describes a ‘socially responsible business’?**
- A) A business that seeks profit only
- B) A business that respects legal, ethical, and discretionary responsibilities
- C) A business that avoids all external stakeholders
- D) A business focused exclusively on product innovation
- **Answer:** B) A business that respects legal, ethical, and discretionary responsibilities
58. **Which argument against social responsibility is based on the idea that it could increase costs for consumers?**
- A) Violation of profit maximization
- B) Burden on consumers
- C) Lack of managerial experience
- D) Short-term revenue goals
- **Answer:** B) Burden on consumers
59. **Environmental pollution caused by chemicals and industrial waste in rivers is referred to as:**
- A) Noise pollution
- B) Air pollution
- C) Water pollution
- D) Soil erosion
- **Answer:** C) Water pollution
60. **The phrase 'customer is king' indicates that businesses should:**
- A) Charge premium prices for products
- B) Focus on product exclusivity
- C) Prioritize consumer needs and satisfaction
- D) Restrict consumer rights to product returns
- **Answer:** C) Prioritize consumer needs and satisfaction
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