Category: CS Foundation

Business Correspondence – Business Management Ethics and Entrepreneurship Notes

Meaning of Business Correspondence:
Communication through exchange of letters is known as correspondence. We communicate our feelings, thoughts etc. to our friends and relatives through letters that may be called personal correspondence. A Businessman also writes and receives letters in his day-to-day transactions, which is called business correspondence.

Business correspondence or business letter is a written communication between two parties. Businessmen may write letters to suppliers of goods and also receive letters from the suppliers. Customers may write letters to businessmen, seeking information about availability of goods, price, quality, sample etc. or place order for purchase of goods.

Importance of Business Correspondence:

• Help in maintaining proper relationship
• Inexpensive and convenient mode
• Create and maintain goodwill
• Serves as evidence
• Help in expansion of business.

Essential Qualities of a Good Business Letter:
(a) Inner Qualities: The inner qualities of a good business letter refer to the quality of language, its presentation, etc. These facilitate quick processing of the request and that leads to prompt action. Let us discuss the various inner qualities of a good business letter.

• Simplicity
• Clarity
• Accuracy
• Completeness
• Relevance
• Courtesy
• Neatness

(b) Outer Qualities: The outer qualities of a good business letter refers to the appearance of the letter. It includes the quality of paper used, colour of the paper, size of the paper etc. Good quality paper gives a favourable impression in the mind of the reader. It also helps in documenting the letters properly. Let us discuss the various outer qualities of a good business letter.

• Quality of paper
• Colour of the paper
• Size of the paper
• Folding of letter
• Envelope

Parts of a Business Letter:
The essential parts of a business letter are as follows:
1. Heading: The heading of a business letter usually contains the name and postal address of the business, E-mail address, website address, Telephone Number, Fax Number, Trade Mark or logo of the business (if any)

2. Date: The date is normally written on the right-hand side corner after the heading as the day, month and years. Some examples are 28th Feb 2003 or Feb. 28, 2003.

3. Reference: It indicates letter number and the department from where the letter is being sent and the year. It helps in future reference.

4. Inside address: This includes the name and full address of the person or the firm to whom the letter is to be sent. This is written on the left-hand side of the sheet below the reference number.

5. Subject: It is a statement in brief, that indicates the matter to which the letter relates. It attracts the attention of the receiver immediately and helps him to know quickly what the letter is about.

6. Salutation: This is placed below the inside address. It is usually followed by a comma (,). Various forms of salutation are:
Sir/Madam: For official and formal correspondence Dear Sir/Madam: For addressing an individual Dear Sir/Dear Madam For addressing a firm or company.

7. Body of the letter: This comes after salutation. This is the main part of the letter and it contains the actual message of the sender. It is divided into three parts.
(a) Opening part: It is the introductory part of the letter. In this part, attention of the reader should be drawn to the previous correspondence, if any. For example with reference to your letter no.326 dated. 12th March, 2003,1 would like to draw your attention towards the new brand of television.

(b) Main part: This part usually contains the subject matter of the letter. It should be precise and written in clear words.

(c) Concluding Part: It contains a statement of the sender’s intentions, hopes or expectations concerning the next step to be taken. Further, the sender should always look forward to getting a positive response. At the end, terms like Thanking you, With regards, With warm regards may be used.

8. Complimentary close: It is merely a polite way of ending a letter. It must be in accordance with the salutation.

9. Signature: It is written in ink, immediately below the complimentary close. As far as possible, the signature should be legible. The name of the writer should be typed immediately below the signature.

10. Enclosures: This is required when some documents like cheque, draft, bills receipts, lists, invoices etc. are attached with the letter.

11. Copy circulation: This is required when copies of the letter are also sent to persons apart of the addressee. It is denoted as C. C. For example.

C.C.

• The Chairman, Electric Supply Corporation
• The Director, Electric Supply Corporation
• The Secretary, Electric Supply Corporation

12. Postscript: This is required when the writer wants to add something, which is not included in the body of the letter.

Types of Business Letters:

Human Resource Correspondence:
Personnel department deals with all matters relating to staffing night, from recruitment to retrenchment. In earlier times, the administration sections charges these functions. Later on, it acquired the name of personnel department. With the passage of time, more and more CEOs realised the is men and not necessarily the machines that change the fortunes undertakings.

Effective HR Letters:
HR letters are also called EmploymentJEmployer/Personnel Letters.
HR Letters includes the following:

• Acknowledging a receipt of resume
• Making job offer
• Rejecting a candidate
• Welcoming a new employee
• Notifying an employee of a promotion
• Recognizing an employee for superior performance
• Disciplining an employee etc.

These letters must be coherent, informative and legally sound.
Letter must satisfy the goal of avoiding, reducing or reasoning liability (in accordance with the situation i.e. rejection letters).

Job Application:

• Job Application is always drafted in response to advertisement.
• Job Application is like sales circular because in job application we are offering our skills for a price.
• A person may write a comprehensive application which would contain all details about one’s education and experience.
• Job application is similar to sales circular.
• To receive curriculum vitae (CV) by fax or email.

How to write an Effective Application Letter:
1. Get off to a direct start: In your first paragraph explain why you are writing, job title, name of company etc.

2. Offer something different than what’s in your resume: Your application must differ from your resume, you can be a bit personal (but not much).

3. Make a good case: Write it in the sense which move you at the next level; an interview. Then finally toward ultimate goal: get a job offer. So include all necessary details and remove all unnecessary.

4. Closure with important details: Include contact information and end up with a polite thank you.

Resume:

• Resume is pronounced as rez-Qom-ay
• It is a record of ones professional as well as personal detail.
• It may be enclosed with job application.
• A good resume should not be very long.
• One should not let it go beyond three pages.
• Terms like Bio-data, curriculum vitae or datasheet are also used describe documents.
• Personal details, like age, sex, race or nationality.
• Minor details should be omitted to make room for achievements & skills.

Notes:
1. Resume should contain following characteristics:
→ Career goal and specific job objective should be mentioned.
→ Revealing adequate knowledge about the company being approached. –
→Explaining how your qualification and experience suits the position offered by the company.
→ Giving evidence of writing skills to company.

2. Points common to all CV’s/Resumes:

• Personal particulars
• Academic Qualification
• Additional Qualification
• Experience
  Functional: emphasizing the skill and talent of the applicant
  Chronological: emphasizing on work experience or listing job description
• Additional Information may include languages known and anything such as hobbies, any achievements etc.
• References.

Specimen of Job Application:
The Manager (HR)

18th April 2012

Development Bank
Madras Cross Road
Chennai – 256700
Dear Sir/ Madam,
IT Consultant
Your Advertisement ………………………………………………. Salutation …………………………………………………………………
…………………………………………………………………. Introduction ………………………………………………………………………………..
…………………………………………………………………… Body …………………………………………………………………………………………..
……………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………..Conclusion …………………………………………………………………….
……………………………………………
Yours Faithfully
XYZ
Ends Resume

Element of Curriculum Vitae or Sample Resume:

• Personal Data: Name, address, Telephone or contact number, DoB, Sex, Marital Status
• Objective: desired position
• Education: Include College/Universities, month & year of your graduation, list of your degree (without the use of abbreviations).
• Work experience: List your job titles, name of organisations you worked for and dates of your employment
• Honors/Activities/Achievements/Publications: If any
• Other Sections: Summary of qualification, Interests,
  Languages (computer or any specific)
  Professional Membership
  Volunteering
• Reference

Specimen of CV

Curriculum Vitae

Name: XYZ
Birth: DD/MM/YYYY
Nationality: Indian/NRI
Permanent address: ………………………………………………………………………………………………………………
Telephone: ……………………………………………………………………………………………………………………………..
E-mail: …………………………………………………………………………………………………………………………………….
Workplace: …………………………………………………………………………………………………………………………….
Education: ……………………………………………………………………………………………………………………………..
Language: ………………………………………………………………………………………………………………………………
Interest: ………………………………………………………………………………………………………………………………….
Reference: 1. …………………………………………………………………………………………………………………….
: 2. …………………………………………………………………………………………………………………….

Interview:
→Some companies conduct initial interviews telephonically and shortlist candidates for final interviews.
→ Interview letter should contain information about the position applied for, date, time and venue of the Interview.
→ Interview letter should give sufficient notice to the candidate to enable them to confirm their attendance in the interview with their original certificates.

Specimen of Interview letter

Letter Head of the Organisation

Date ………………………………

To
Name
(address)
Dear (Name),
Please refer to your application for the post manager in our company (salutation)
……………………………………………………………………………………. Body ………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………….
We regret to inform that we do not reimburse the travelling expenses of the local candidates.
Please confirm telephonically that this appointment suits you.
Yours Sincerely
Sd /-
Manager – Human
Resources

Short-listing Candidates:

• Companies may short-list candidates for absorption in near future if the company is unable to find suitable positions for candidates at the time of interview.
• Details are stored in the databank & a polite letter is addressed to them.
• A letter by company is written for informing candidates about his shortlisting for an offer of an appointment.

Letter of Appointment:

• Initial intimation to the candidate is given through a brief provisional letter.
• But the final document must be drafted carefully as the terms of employment are stated in the letter.

Provisional Letter of Appointment:
Dear (Name),
Please refer to your application and the subsequent interview for the post of Systems Manager in HCL Ltd.
We are pleased to inform that you have been selected for the position. A detailed letter to be mailed you soon.
Your Sincerely,
Manager – (HR)

Terms of Appointment:
Detailed offers of appointment normally mention terms of appointment and seek the acceptance of the selected candidate.
It is advisable to insert clauses which anticipate organisational changes & protect company’s interests.

Specimen

(Letterhead)

Ref No.:
Date:
To,
Mr. XYZ (address)
SUB: Appointment Letter
Dear ……………………………………. ,
Please refer to our earlier letter dated DD/MM/YYY.
As stated earlier, we will be pleased to hire your services as a (Post) if you accept the following terms and conditions.
1. Place of Operation: ……………………………………………………………………………………………………………………………………………………
2. Remuneration: ……………………………………………………………………………………………………………………………………………………………
3. Duties: …………………………………………………………………………………………………………………………………………………………………………..
4. Probation: ……………………………………………………………………………………………………………………………………………………………………
5. Confirmation: ……………………………………………………………………………………………………………………………………………………………..
6. Terms of Leave: ………………………………………………………………………………………………………………………………………………………….
7. Retirement: ………………………………………………………………………………………………………………………………………………………………..
Please sign a copy of this letter and fax it to 036-07834531 in acceptance of the terms and conditions and report to the Human Resource Manager on DD/MM/YYYY at HRS: MIN AM/PM We welcome you to HCL (India) and wish you a successful career. Your Sincerely,
Manager – Human Resources

Confirmation of an employee:

• After the completion of probation period, the employee is to be explicitly informed about his confirmation in the organisation.
• A letter is posted by company to the candidate

Specimen of letter calling candidate for written test

(Letter Head)

Date:
Ref No:
(Name)
(Address)
Dear Sir,
Subject
With reference …………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………….. ……………………………………Introduction ………………………………………………………
………………………………………………………………………………………………… Rules for examination ……………………………………
Thanking you
Sd/-
(R.F.)
Personnel Manager

Specimen of Regret Letters

(Letter Head)

(Name)
(Address)
Date: DD/MM/YYYY
Dear Sir,
Sub: Recruitment for post of Finance Manager We refer to your application dated 1st March 2012
…………………………………………………………………………………. (Body) ……………………………………………………………………….
……………………………………………………………………. (Conclusion) ………………………………………………………………………….

Yours Faithfully
Sd/-
(XYZ)
Personnel Manager

Goodwill Letters:
Goodwill letters are not mandatory but they are required to be written in order to enhance the relation and increase the goodwill of the organisation.

• These letters are not compulsory to be written
• Goodwill letter should be brief
• Goodwill letter must be sent promptly in order to be relevant and effective
• They are likely to be handwritten

Types of Goodwill Letter:
Every business letter should be a goodwill letter

• Thank you Letter
• Congratulatory Letter
• Letter of Sympathy
• Condolence Letter
• Obituary Notice

Thank you letters: There are several instances in our personal as well as professional lives when people do favours for us. Sometimes we take them for granted and do not thank them for their favours. To earn precious goodwill a thank you letter must be drafted.

Congratulatory letters: Friends, Colleagues and business associates may earn a promotion, recognition or an award for achievement in both the personal and professional area. A letter of facilitation should be sent to earn a goodwill in the process.

Letter of Sympathy: It is important to share the pains of our friends and associate. A letter of sympathy is drafted to share the feelings of our colleagues, friends and associates. There is a word of caution such letter are only sent when someone suffers a major loss or illness.

Condolence letter: These letters are the most difficult to draft since we are writing to people who have lost someone very dear to them. Strong sense of grief is to be shared in order to provide some relief. So a condolence letter is written to people who have lost someone very dear.

Obituary Notice: These notices provide news about the people who have recently passed away.

Obituary
XYZ Ltd. announces with deep grief the passing away of its Managing director Mr Ram in a car accident near Mathura high way on Monday. His mortal will be consigned to flames at (Name of place), Delhi on Wednesday 16th Jan 20xx at 10:30 AM

Note:

• Letters carrying positive news are called Direct Approach Letters.
• Letters conveying unwelcoming news (i.e. rejection or decline etc.) are called Indirect Approach Letters.’
• All kinds of letters whether long or short need careful planning

Purchase Correspondence:

• Most people believe that selling is the most challenging, important as well as toughest job.
• Purchasing is same as selling it is also a tough job to do.
• Selling and Purchasing are inter-dependant.

Enquiries:

• First as well as foremost step of commercial transaction is enquiries.
• Enquiry is the most common business communication
• Enquiry letter should be drafted clearly and the message to be conveyed should be complete.
• An enquiry should be compact, straight forward and courteous.
• An enquiry should be incorrect tone.

Essentials of Drafting an Enquiry:

• Clear Reporting: The kind and quantity of goods required should be mentioned clearly.
• Samples, specifications should be sent along with letter.
• Handling: Proper checking and handling of items should be there.
• Mode of Payment: Mode of payment should be clearly specified whether in cash, cheque etc.

Replies:

• Reply of each and every enquiry should be sent.
• Enquiries from big business deserve more attention hence a good reply should be sent to big business houses.
• Requests for only a catalogue or a price list may not need a covering letter.

Industrial Enquiries:

• These enquiries may use technical jargon.
• Receiver of the letter should be able to understand the enquiry referred.

Replies to Industrial Enquiry:

• Reply must be polite and expeditious.
• Reply of an enquiry should begin with an expression of gratitude and state at the outset that requested documents are being sent.
• Reply must not begin with refusal.
• Reasons for turning down business offer should be explained.

Estimates:

• Estimates are sought and provided where services rather than off-the-shelf goods are involved.
• If a customer ask for an estimate for the complete job an estimate should be provided to the customer with necessary details.

Tender Notice:
It is an invitation to submit “bids” to provide such goods/services on a large scale at a quoted price with respect to certain conditions.

Essentials for Preparation of Tender Notices:
→ It should be prepared in serial, tabular or paragraph form.
→ These tenders are open for all, often for purpose of pre-qualification or limited ones. The registered and eligible parties gets shortlisted on the basis of pre-qualification tenders.
→ Some job which involves huge amount of foreign loans/assistance may be offered through global tenders
→Tender notice also includes estimated value of work to be done and goods delivery details.

Tender Process:

• It should be submitted on the stated date as well as at time mentioned in sealed covers.
• Specified enclosure must also accompany them e.g. EMD Earnest Money deposit, normally 2% of estimated value.
• Party getting the contract has to replace it with performance guarantee of up to 10% of the estimated value.
• Usually the principle of “lowest bid gets the contract”.

Specimen Pre – Qualification Notice

(Letter Head)

Notice No:
Invitation for Pre-Qualification
1. ……………………………………………………………………………………………………………………………………………………………………………………………..
2. ……………………………………………………………………………………………………………………………………………………………………………………………..
3. ……………………………………………………………………………………………………………………………………………………………………………………………..
4. ……………………………………………………………………………………………………………………………………………………………………………………………..
5. ………………………………………………………………………………………………………………………………………………………………………………………………
6. ……………………………………………………………………………………………………………………………………………………………………………………………..
7. ……………………………………………………………………………………………………………………………………………………………………………………………..

AO.
DDA (Dwarka)

Date: DD/MM/YYYY
Limited Tender
Name of the Organisation
Notice Inviting Tender/Tender
Notice ……………………………………………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………………….. Body of the Tender …………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………..
Date:

Sd/-
Post

Placing Order:
These order forms are usually pre-numbered which helps buyer in placing an order.
Terms and conditions are printed overleaf. Attention must be paki to this tact.

Letter Order:
Essentials to place order through Letters:

• An authorization to the seller
• An accurate description of goods
• Catalogue number ¡f ordering out of it
• Quantity or number required
• Price per unit and total amount involved in the transaction
• Delivery details such as time and place
• Payment terms agreed I.e. whether on delivery or after availing credit.
• Polite closing, inviting a confirmation of acceptance

Specimen of Order Letter:

(Letter Head)

Order No.

  Date. ………………………

Address:
Dear Sir,
SUBJECT
………………………………………………………………………………………………………………………………………………………………………………….
………………………………………………………….. Body of the Letter …………………………………………………………………………………..
…………………………………………………………………………………………………………………………………………………………………………………..

Terms and Conditions:
1. Price
2. Discount
3. Excise Duty
4. Sales Tax
5. Despatch
……………………………………………………………………………… Conclusion …………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………….

Yours faithfully,
Sd/-
(Post)

Making Complaints:

• Essential points to be kept in mind while making complaints.
• Delay should not be there while making complaints because as the time passes the matter gets complicated.
• Both sides should be heard so as to find the person who is guilty.
• The complaint made by consumers should be based on factual information.

Sales Correspondence:
AIDAS plan is an effective sales correspondence which lists down the following essentials:
A → Attention
I → Interest
D → Desire
A → Action
S → Satisfaction
These are usually combined or blended so smoothly in a well-written persuasive message that it is difficult and unnecessary – to separate them.

Strategic Marketing:
It is a very good strategy to first define our buying motive and the segment we are trying to motivate and then, write according to the conclusions arrived.

Sales letter:
→ A sales letter is always written to an individual with his specific needs in mind.
→ Specimen of a sales letter

Dear (Name)

• Salutation
• Different Packages
• Comparison of different packages
• Conclusion ;

Yours sincerely,

Sales Circular:

• A difference between a sales letter & a sales circular is subtle.
• A sales circular is drafted keeping large number of people in mind.
• Large number of audience in this circular is addressed with single salutation for e.g:- Subscribers, Investor, client etc.
• By the help of Mail Merge facility every circular can be addressed by the names as well as addresses.
• A specimen of a sales circular is same as sales letter but a sales circular contains subtitle.

Sales circular can be formed for various purposes such as:

• Circular informing seasonal discount
• A circular letter to dealer announcing off-season discount scheme.
• A circular to stockists announcing special incentive scheme.
• Circular informing increase in price.
• Circular informing appointment of sole-selling agent.
• Circular informing price scheme.
• Circular informing special concession.
• Circular informing change of address.
• Circular announcing opening of New Regional Office.

Advertisement:

• Advertisement is the biggest example of paid communication.
• The purpose of advertisement is to impart information about the activities performed by the society.
• The other purpose of advertisement is to develop attitude and also to induce action beneficial to the advertiser.

Advertisement is used for following purposes:

• Building of strong public Image.
• Opening a new factory or sales office.
• Explanation by management on a strike by workmen.
• Informing the consumers and the public about malpractices prevailing in the market pertaining to company’s products, infringement of trade markets etc.
• Publication of various notices.
• Recruitment of personnel.
• Launch of an IPO (Initial public offering).
• Invitation of tenders.
• Appointment of distributors.
• Increase in prices.
• Hike in prices.

Advertisement Vs. Publicity:

• Sometimes the term “Publicity” is used synonymously with ‘Advertisement’.
• Publicity is a broader term than Advertisement.
• Advertisement is a form or a type of publicity.

Essentials of Advertisement:

• Exposure: Audience must be exposed to the communication
• Perceiverance: Audience must perceive correctly what action is desired by the communicator.
• Retention: Audience must retain the message sought to be communicated.
• Action: Audience must act on the advertisement.

Essential Components of Various Advertisements:
In the table given below, an attempt has been made to highlight the emphasize area’ of advertisement for different purposes:

Advertisement Today:
1. Handbills
2. Leaflets
3. Pamphlets
4. Brochures

Modern methods includes:
1. Newspapers.
2. Television

3. Internet

• 3/4,h of the Newspaper is devoted to Advertisements.
• It is essential that advertisement should serve it purpose.
• Advertisements should be prepared, printed or aired through the right media at the right time.

Classifieds:

• Classifieds are printed in a newspaper under heading such as matrimonial.’
• Classifieds are charged according to the no. of words present in the advertisement.
• Drafting of classified is similar to telegraphic message.
• The rest of grammar are relaxed in order to keep the matter brief.
• Specimen of a classified

Situation vacant/wanted/for sale /Business Offers

………………………………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………………..
Contact (Address/Box No) Ph …………………………………………………………………………………………………………………………………………..
Fax ………………………………………

Public Notices:
Sometimes it becomes essential to issue public notice because it is statutorily required or public has to be informed about the companies activities.

(Letter Head)
Public Notice

Notice is
hereby …………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………
sd/-
Company Secretary

Date: DD/MM/YYYY

Appointments:

• Senior-level positions are generally advertised in appointment pages or inbox. So are prized products & services.
• The space is measured in columns/cms.
• The charges vary according to circulation and goodwill of newspaper.
• Advertising agencies vie. for corporate advertising accounts, which may run in crores of rupees.

(Letter Head)

“Required ……………………………………………………………………………………………………………………………………………………………………….
…………………………………………………………………………………………………………………………………………………………………………………………..
Apply immediately to Box No.2345, HT, New De-101112

Accounts Correspondence:

• A commercial transaction is a complex process which start from the stage of ordering of goods to the delivery of finished goods to the customer.
• Most of the companies follow SCM (Supply Chain Management) which helps the company in making the transaction, cost-effective and efficient.

Invoice:

• It is the document which gives full information of the goods being shipped.
• Invoice is prepared by the exporter and sent to the importer.

Invoice serves the following purposes:
→ Invoice provides an accurate description of goods being sent and of prices to enable the buyer to verify them.
→ Invoice states the total amount payable by the buyer.
→ Regular customer is entered into the books of account who pays at the end of the credit period.
→ It transfers ownership of goods and helps in calculation of duties and taxes payable on them.
→ Invoice is a valid legal document. It can be used when dispute arises regarding payment.

Proforma Invoice:

• Proforma invoice is different from invoice for the sake of form only.
• Proforma is neither entered into books nor charged to the accounts of recipients.

Proforma invoice is used for following purposes :

• It is used as a quotation
• It is used as demand for payment from a new customer or to the person with whom the company does not have any credit facility.
• It gives detail of goods and amount of goods sent for approval.
• It helps or enable the company for calculation of duties and taxes payable.

Delivery Challan:

• It give details of the goods sent
• It is issued by stores department
• It includes sale value of goods and do not require covering letter.

Statement of Accounts:

• Regular buyer most of the times prefer acceptance of material on credit
• Regular buyer sometimes prefer to accept goods “on Approval”.
• Statement of Account shows the opening balance, details of transaction and closing balance.
• Whole accounting system is based on double-entry bookkeeping system. It was originated by Luca Pacioli, an Italian genius monk in his book names Summa de Arithmetic in the year 1494.
• Statement of accounts do not need covering letter.

Format of Statement of Account:

Credit / Debit Note:

• Credit Note: A document sent by a seller to a buyer to rectify an error of overcharge in an invoice, or to allow credit for goods returned. It is entered in the books of account.
• DebIt Note: A note sent by a seller to buyer to rectify an undercharge in the original invoice. It s in the nature of a supplementary invoice.
• In the Credit / Debit Note the abbreviation E & 0E means error and omission excepted.
• Credit and Debit Note is exchanged between the parties to adjust the amount of differences.
• Credit / Debit Note is enclosed with the letter along with it.

The different types of letter endorsed aro:-

• Letter regarding details of error.
• Letter regarding returning of goods.
• Letter for refusing to issue credit note.

Specimen letter:
Dear Sir,
We regret to inform ……………………………………………………………………………………………………………………………………………………….
……………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………. Body of the letter ………………………………………………………………………………
We are enclosing a Debit Note of ₹ XXXX /- to cover the amount of difference. We regret the inconvenience caused to you Your faithfully,
R. K Singh

Collection Letters:

• Collection of amount is the most important job for the organisation.
• Good organisation understands the importance of making payment on time without any delay. It leads to creation of goodwill.
• It will be foolishness to write the first collection letter in an angry tone. If the party does not pay on time then, firmer tone should be adopted in subsequent letters.
• Collecting payment is most difficult part of business.
• Collection letter must be written cautiously.

Reminder Letter
Specimen :
Dear Sir,
Please refer to our statement for the period ending December, 20xx, which was mailed to you on xx January 20xx, and a telephonic reminder later. We regret to inform that we have still not received the payment.
We shall be grateful if you remit the outstanding amount on the receipt of this letter.
Yours faithfully,
R. K Singh

Defaulter:
To challenge the defaulter one must follow some steps

• Suspension of supplies
• Cancellation of credit
• A stricter tone and style may be justifiably used against them

Final reminder:
A letter in stricter tone and style is written for final reminder.

Explaining Delays:
In order to seek an extension of time from the supplier, customer writes a letter to explain the reasons for delay.

Banking Correspondence:
Business without banking is impossible/unimaginable.
Company starts its operations by opening a current A/c
Facilities provided by bank to the companies include

• Overdraft limit
• Term loan
• Credit References
• Depository services etc.

Company operates the account through one or more authorised signatories who may be changed by board of directors.

Change of Signatories:
A letter is written to change the no. of signatories or change the person holding the authorised signatory.

Insurance Correspondence:

• Insurance is a contract between the company, called the insurer and the client known as insured.
• Calculation of insurance is made on annual basis. Flexible payments plans are offered for the sake of convenience.
• Premium is calculated in percentage terms, e.g. 2 paise per hundred rupees for fire Insurance.

Various letters are drafted by policyholder and by insurance company such as:-

• A letter for policy renewal
• A letter for roll and void policies
• A letter for reporting loss

Specimen Letter by Insurance Company

[Letter Head]

(Name)
(Address)
Dear (Name)
Policy No.
Introduction ……………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………..
………………………………………………………………………………….. Body …………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………………………………………………………….
………………………………………………………………………………………………………………………………………………………………………………………….
………………………………………………………………………… Conclusion …………………………………………………………………………………………..
Yours faithfully
xxxx sd/-
(Past)

Provident Fund Correspondence:

• All business entities employing more than twenty persons are covered under the Employee Provident Fund and Miscellaneous Provisions Act, 1952.
• The employee contributes a total of 12% of Basic Salary + Dearness Allowances to the funds established under the schemes prescribed by the Central Government.
• A company failing to deposit the money may receive a show-cause notice from the provident fund commissioner’s office.
• A grace period of 5 days is allowed.

[Reply to Show Cause Notice]

To
The Regional PF Commission.
Employee’s Provident Fund,
60, Skylark Building,
Nehru Place,
New Delhi.
Dear Sir,
Return for Nov 2012 / Code No. DL/3523
……………………………………………………………………………………………………………………………………………………… Introduction
………………………………………………………………………………………………………………………………………………………………………….
Specimen letter for change of signatories :
Dear Sir,
The Board of Directors of our company decided at a meeting held on 6 February 2012 that our current account no. 6619 with you will be operated jointly by the Managing Director and Chief Account Officer with immediate effect.

A certified copy of the resolution of the Board and the specimen signatures of the authorised signatories are enclosed.
Please acknowledge the receipt of this instruction.
Yours faithfully,
R. K Singh

Stop Payment:

• During the business hours a company mails large number of cheques and other instruments.
• If the payee reports that he has not received the cheque yet, It is advisable to convey to bank promptly for the stop payments of cheque.

Overdraft:
Sometimes, companies faces the problem of insufficient cash. To cope up with this problem companies opt for overdraft facility.

Specimen :
Dear Sir,

Current Account No. 2332

We regret ……………………………………………………………………………………………………………………………………………………………………………..
……………………………………………………………………………………. Introduction …………………………………………………………………………………
…………………………………………………………………………………….. Body ……………………………………………………………………………………………..
Please arrange immediate credit to clear the overdraft. If you find working capital is inadequate, we advice you to negotiate a higher OD limit.
Yours faithfully,
R. K Singh

Term loan:
Fixed term loan are usually secured against any fixed asset. Sometimes fixed-term loan take time to sanction, so a letter is dispatched in the event of delay.

Specimen :
…………………………………………………………………………………………………………………………………………………………………………………………………….
……………………………………………………………………………………………………….. Body ………………………………………………………………………………..
……………………………………………………………………. Conclusion ………………………………………………………………………………………………………..
…………………………………………………………………………………………………………………………………………………………………………………………………….
Yours faithfully,
R. K Singh

Correspondence With Postal Activities:
Nowadays, correspondence with postal department has reduced due to the increased use of email and private courier services.
Facilities like Post Box number are continued to be used by large corporate houses.

Post Box Facility
The Post Master
Parliament Street Post Office
New Delhi -110001
DD/MM/YYYY
Dear Sir,
Sub: Request For Post Box Facility
……………………………………………………………………………… Introduction ………………………………………………………………………………..
………………………………………………………………………………. Body ……………………………………………………………………………………………
……………………………………………………………………………….. Conclusion ……………………………………………………………………………….
Please allow a Post Box number and oblige.
We thank you in anticipation
R. K Singh

Correspondence With it and Corporates:
Nowadays companies use various communication system to communicate such as fax, PBX, Answering Machines etc.
he old telephone one still remain indispensable and still used by large corporate houses.

An application for reconnection of phone
To
The SDO
Andheri (East Zone)
MTNL Mumbai Dear Sir,

Sub: Reconnection of Phone No. xxxxx

……………………………………………………………………… Body ……………………………………………………………………………………………………………..
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………………………….
You are requested to reconnect phone immediately as we are facing lots of inconveniences.
We thank you in anticipation
Yours faithfully,
R. K Singh

Nature of Management and its Process MCQ Questions

1. A job application is similar to
(a) Sales letter
(b) Purchase letter
(c) Letter of order
(d) None of the above
Answer:
(a) Sales letter.

2. A sales letter drafted for a large number of people is known as
(a) Sales Order
(b) Sales circular
(c) Sales manual
(d) Sales Enquiry
Answer:
(b) Sales circular

3. Which of the following is applicable in case of Telegram.
(a) The message must be detailed
(b) Normal grammar and punctuation must always be followed.
(c) Time should be written according to twenty-four-hour clock
(d) Block letter must not be used
Answer:
(c) Time should be written according to twenty-four-hour clock.

4. Office orders have a format similar to that of:
(a) Press Release
(b) Representation
(c) Advertisement
(d) Memorandum
Answer:
(d) Memorandum.

5. Which of the following is not a form of intra-organisational communication.
(a) Representation
(b) Memorandum
(c) Press release
(d) Office Notes
Answer:
(c) Press release.

6. Difference between a sales letter and sales circular is
(a) Subtitle
(b) Salutation
(c) Introduction
(d) Conclusion
Answer:
(a) Subtitle.

7. Which of the following features specifically does not relate to advertisement
(a) Inviting tender
(b) Hike in prices
(c) Placing an order
(d) Recruitment of personnel
Answer:
(c) Placing an order.

8. Which of the following is not the heading of a classified?
(a) Business offer
(b) Situation vacant
(c) Situation wanted
(d) Situation sale
Answer:
(d) Situation sale.

9. What does OEM stands for?
(a) Outstated Equipment Manufactures
(b) Original Equipment Manufactures
(c) Ordinary Equipment Manufactures
(d) None of the above
Answer:
(b) Original Equipment Manufactures.

10. Which type of letter is not goodwill letter.
(a) Thank you letter
(b) Condolence letter
(c) Letter of complaint
(d) Letter of sympathy
Answer:
(c) Letter of complaint

11. Which of these terms and conditions are not present in the letter appointment?
(a) Place of operation
(b) Remuneration
(c) Probation
(d) None of these
Answer:
(d) None of these

12. Obituary notice is written to provide a news of:
(a) Some body’s death
(b) Somebody’s promotion
(c) Somebody’s termination
(d) None of these
Answer:
(a) Somebody’s death

13. The first step of a commercial transaction is ……………………… .
(a) Making an order
(b) Making an enquiry
(c) Giving quotations
(d) None of these
Answer:
(b) Making an enquiry

14. In case of tender notices, EMD stands for:
(a) Electronic monetary deposit
(b) Earnest money department
(c) Earnest money division
(d) Earnest money deposit
Answer:
(d) Earnest money deposit.

15. Normally, in tender notices EMD is …………………… of estimated value.
(a) 2%
(b) 3%
(c) 4%
(d) 5%
Answer:
(a) 2%

16. In case of tenders, contracts s given based on the principle of:
(a) Lowest bid get the contract
(b) will get the contract
(c) Best bid wifl et the contract
(d) None of the above
Answer:
(a) Lowest bid get the contract

17. In case of order letters which of these is not placed under the head of terms and conditions:
(a) Price
(b) Discount
(c) Credit terms
(d) Despatch
Answer:
(c) Credit terms.

18. What does “D” stands for in ADIDAS plan?
(a) Despatch
(b) Discount
(c) Delivery
(d) Desire
Answer:
(d) Desire

19. …………………………………. is the biggest example of paid communication.
(a) Advertisement
(b) Publicity
(c) Letters
(d) All of these
Answer:
(a) Advertisement

20. Which of these is an essential feature required for advertisement?
(a) Exposure
(b) Perseverance
(c) Retention
(d) All of these
Answer:
(d) All of these

21. Which of these is not a traditional method of approaching customers?
(a) Handbills
(b) Leaflets
(c) Brochures
(d) Personal mails
Answer:
(d) Personal mails.

22. …………………………………… deals with all matters relating to staffing right from recruitment to retrenchment.
(a) Personnel department
(b) Marketing department
(c) Directing department
(d) Controlling department
Answer:
(a) Personnel department.

23. ………………………….. is a record of one’s personal and professional detail.
(a) Curriculum Vitae
(b) Bio-data
(c) Data Sheet
(d) All of the above.
Answer:
(d) All of the above.

24. …………………………………………… is based on emphasizing the skills and talents of the applicant
(a) Functional Experience
(b) Chronological Experience
(c) Both (a) & (b)
(d) None of the above.
Answer:
(a) Functional Experience

25. …………………………………… should contain information about the position applied for date, time and venue.
(a) Thank you letter
(b) Interview letter
(c) Congratulatory letter
(d) Condolence letter.
Answer:
(b) Interview letter

26. ………………………………………. is a combination of both
(a) Data Sheet
(b) Circulum vitae
(c) Both (a) & (b)
(d) None.
Answer:
(b) Circulum vitae

27. Initial intimation of appointment may be given through a brief ………………….. .
(a) Sympathy letter
(b) Congratulatory letter
(c) Provisional letter
(d) Thank you letter.
Answer:
(c) Provisional letter

28. Good News Letter are also called as ……………………… .
(a) Indirect approach letter
(b) Direct approach letter
(c) Both (a) & (b)
(d) None of the above
Answer:
(b) Direct approach letter

29. The first step of a commercial transaction is to make
(a) Replies
(b) Estimates
(c) Enquiries
(d) None of the above.
Answer:
(c) Enquiries

30. ………………………. may use technical jargon
(a) Replies
(b) Enquiry
(c) Both (a) & (b)
(d) Industrial Enquiry.
Answer:
(d) Industrial Enquiry.

31. What does CIF stands for –
(a) Cost Insurance & Free
(b) Call Insurance & Freight
(c) Cost Insurance & Freight
(d) None of the above.
Answer:
(c) Cost Insurance & Freight

32. ………………………………………. bid gets the contract
(a) Lowest
(b) Highest
(c) Both (a) & (b)
(d) None of the above.
Answer:
(a) Lowest

33. …………………….. is used to identify contractors who would be allowed to tender for certain contracts.
(a) Tender
(b) Estimate
(c) Pre-qualification
(d) Reply.
Answer:
(c) Pre-qualification

34. ……………………. letter saves time and effort.
(a) Ready-to-send
(b) Thank you
(c) Sympathy
(d) Condolence.
Answer:
(a) Ready-to-send.

35. Select which from the following is not a type of advertisement.
(a) Hike in price
(b) Inviting tenders
(c) Stunts performed by actors
(d) Recruitment of personnel
Answer:
(c) Stunts performed by actors

36. What does not affect sales demand?
(a) Attention
(b) Attraction
(c) Interest
(d) Desire.
Answer:
(b) Attraction

37. One word for a sentence “fail to fulfil a promise”.
(a) Burdensome
(b) Revenge
(c) Penury
(d) Tedious.
Answer:
(b) Revenge

38. In case of letter of enquiry …………………………… may also be given, especially in case the intention is to have credit and when it is the first transaction,
(a) Name of the company
(b) Credit reference
(c) Phone No
(d) None of the above.
Answer:
(b) Credit reference

39. What is the full form of CNC?
(a) Computerized and Numerically Counted
(b) Computerized and Numerically Claimed
(c) Computerized and Numerically Controlled
(d) None of the above.
Answer:
(c) Computerized and Numerically Controlled

40. The party getting the contract has to replace it with performance guarantees of up to …………………. of the estimated value and experience certificate.
(a) 20
(b) 25
(c) 30
(d) 10.
Answer:
(d) 10.

41. ……………………………… only mentions the quantity and type of goods.
(a) Invoice
(b) Performa Invoice
(c) Delivery Challan
(d) None of the above
Answer:
(c) Delivery Challan

42. A note sent by a seller to buyer to rectify an undercharge in the original invoice
(a) Credit note
(b) Debit Note
(c) Warrant
(d) None of the above
Answer:
(b) Debit Note.

43. Which of the following is not a banking service:
(a) Policy Renewal
(b) Overdraft limit
(c) Term loan
(d) Status Enquiries
Answer:
(a) Policy Renewal.

44. ……………………………….. connect the different Branches of an organisation in a Private, dedicated communication network.
(a) ISDN
(b) Post box of facility
(c) VSAT
(d) AAR
Answer:
(c) VSAT

45. The following is an example of which type of letter.
Dear Sir.
Please refer to our statement of a/c for the period ending Dec 2011, which was Mailed to you on 5 Jan , 2012 and the telephonic reminder letter. We regret to enforce that we have still not received that Payment.
We will agree that delayed payments may affect schedule and cause avoidable inconvenience to both the parties.
We shall be grateful if you remit the outstanding amount on the receipt of this letter.
(a) Collection Letter
(b) Reminder Letter
(c) Statement of Account
(d) Final Reminder
Answer:
(b) Reminder Letter

46. A commercial transaction is a ……………………………….. process.
(a) Simple
(b) Chain
(c) Complex
(d) None of the above
Answer:
(c) Complex

47. The Policy may be declared …………………………….. if the Insurer detects under insurance.
(a) Policy renewal
(b) Null and void Policies
(c) Overdraft limit
(d) None
Answer:
(b) Null and void Policies

48. Which of the following is a type of insurance correspondence letter?
(a) Reporting loss
(b) Overdraft limit
(c) Both (a) & (b)
(d) C Form
Answer:
(a) Reporting loss.

49. The first collection letter should be written in ………………….. manner
(a) Firm
(b) Polite
(c) Strict
(d) None of the above.
Answer:
(b) Polite.

50. The ………………………. is calculated in percentage term say 2 paise per hundred rupees for fire insurance.
(a) Restricted loss
(b) Sum Assured
(c) Maturity value
(d) Premium
Answer:
(d) Premium.

51. A company may not charge the full price of shares but recover in instalments that are known as “…………………………..”.
(a) First call
(b) Second call
(c) Final call
(d) Call
Answer:
(d) Call

52. “Enterprise are paid to create wealth not to control cost” is said by
(a) John Keats
(b) Peter F Drucker
(c) Charles Darwin
(d) AL Bowley
Answer:
(b) Peter F Drucker.

53. It is advisable to send a copy of ……………………… showing arrears of payment to the companies before sending the collection letter.
(a) Statement of Account
(b) Statement of Affair
(c) Statement showing Balance Sheet
(d) All of the above
Answer:
(a) Statement of Account.

54. Which feature of banking services should be used when the payee reports that he has not received the instrument.
(a) Change of signatories
(b) Overdraft limit
(c) Status Enquiries
(d) Stop payment
Answer:
(d) Stop payment.

55. The term …………………. is used for the introduction of new technologies like CAM in manufacturing of existing products.
(a) Overdraft
(b) Loan
(c) Money order
(d) None
Answer:
(b) Loan.

56. Sanction letter is required in which type of loan?
(a) Term loan
(b) Overdraft
(c) Cash credit
(d) All of the above
Answer:
(d) All of the above.

57. ………………….. facility shall be used by corporate houses relating to postal department
(a) Letter posting
(b) Post Box facility
(c) Money order
(d) None of the above
Answer:
(b) Post Box facility

58. To challenge defaulter some steps should be followed like
(a) Suspension of supplies
(b) Cancellation of credit
(c) A stricter tone and style
(d) All of the above
Answer:
(d) All of the above.

59. Full form of AAR
(a) Against all risk
(b) All Against risk
(c) All against refund
(d) All Against recovery
Answer:
(a) Against all risk.

60. Full form of E & OE
(a) Error and Omission Eluded
(b) Error and Omission Excepted
(c) Error and Omission Eradicated
(d) Error and Omission Established
Answer:
(b) Error and Omission Excepted.

61. ……………………….. is the document which gives full information of the goods being Shipped and sent to the importer.
(a) Proforma invoice
(b) Delivery Challan
(c) Invoice
(d) Debit Note
Answer:
(c) Invoice

62. In which Legal Condition, a person or business has liabilities exceeding the assets and the debtor is unable to pay the amount.
(a) Winding up process
(b) Incorporation
(c) Bankruptcy
(d) None
Answer:
(c) Bankruptcy.

63. Proforma Invoice is used for which purposes:
(a) Helps the company for calculation of duties and taxes Payable
(b) Used as quotation
(c) Both (a) & (b)
(d) None of the above.
Answer:
(c) Both (a) & (b)

64. Accounting System is based on double-entry bookkeeping system. It was originated by in the year .
(a) John keats, 1496
(b) A. L. Bowley,1542
(c) Luca Pacioli, 1494
(d) Charles Darwin 1690
Answer:
(c) Luca Pacioli, 1494

65. Full form of SCM
(a) Sales Cost Management
(b) Supply Chain Management
(c) Supply Cost Management
(d) None of the above.
Answer:
(b) Supply Chain Management

66. A letter in stricter tone and style is written for ……………….. .
(a) Suspension
(b) Reminder Letter
(c) Cancellation
(d) Final Reminder.
Answer:
(d) Final Reminder.

67. Insurance is a contract between the company, called the & the client known as ……………………………… .
(a) Contractor contractee
(b) Insurer, Insured
(c) Insured, Insurer
(d) None of the above.
Answer:
(b) Insurer, Insured.

68. Investors are expected to open to get their share certificate in the electronic forms.
(a) Current A/c
(b) Demat A/c
(c) Saving A/c
(d) Fixed A/c
Answer:
(b) Demat A/c.

69. Banking require letter writing for following service.
(a) Overdraft limit
(b) Dividend
(c) Postal authorities
(d) Policy renewal
Answer:
(a) Overdraft limit

70. The abbreviation ISDN stands for ………………………. .
(a) Integrated small digital network.
(b) International small display network.
(c) Integrated system digital network
(d) Integrated system display network.
Answer:
(c) Integrated system digital network

71. The word ‘resume’ is a …………………….. word.
(a) Latin
(b) Greek
(c) French
(d) None of these
Answer:
(c) French
The word ‘resume’ is a french word which is pronounced as rezoom-ay. It is a record of one’s professional as well as personal detail. A good resume should not be very long. One should not let it go beyond three pages. It may be enclosed with job application.

72. ‘Letter of sympathy’ is a part of –
(a) Inter – departmental communication
(b) Press Release
(c) Goodwill Letters
(d) None of the above
Answer:
(c) Goodwill Letters
Letter of Sympathy: It is important to share the pains of our friends and associate. A letter of sympathy is drafted to share the feeling of our colleagues, friends and associates. Therefore, letter of Sympathy is a part of goodwill letter.

73. Which one of the following is not purchase correspondence?
(a) Request for quote
(b) Tender Notice
(c) Purchase Order
(d) Goodwill Letter
Answer:
(d) Goodwill Letter:
Purchase Correspondence: Most of them think selling is a toughest job to do but purchase is also a tough job to do. Selling and purchase are interdependent.

Different types of Purchase correspondence are:

• Enquiries
• Replies
• Industrial Enquiries
• Replies to Industrial Enquiry
• Request for quote/Tender Notice
• Purchase order
• Tender Process

Therefore, Goodwill letter is not a part of purchase Correspondence.

74. Which one of the following documents is issued by the seller when goods are returned by the customer?
(a) Invoice
(b) Supplementary Invoice
(c) Proforma Invoice
(d) Credit Note
Answer:
(d) Credit Note:
Credit Note: A Document by a seller to a buyer to rectify an error of over change in an invoice; or to allow credit for goods returned. It is entered in the books of account.
Thus, credit note is a document issued by a seller when goods are returned by the customer.

75. Which one of the following methods is used frequently by an organisation to decide its strategic goals? ‘
(a) Group discussion
(b) Brainstorming
(c) Interview
(d) None of the above.
Answer:
(a) Group discussion:
Group Discussion is used frequently by an organisation to divide its strategic goal. Various Ideas by each level are brought up by the employees for the betterment of organisation.

76. Which one of the following is not true about a job interview?
(a) In a job interview, one needs to study about the job, the company and industry
(b) Memorise and rehearse the answers to the probable questions in the interview
(c) Reach at the interview venue about 10-15 minutes early
(d) Bring an extra copy of resume at the time of interview.
Answer:
(d) Bring an extra copy of resume at the time of interview:
It is not necessary for the candidate to bring the second copy of the resume as it is not required in job interview.

77. Organisations publish ……………………. when they have to procure goods and services on a large scale or get projects executed.
(a) Purchase requisition
(b) Tender Notice
(c) Purchase Order
(d) None of the above.
Answer:
(b) Tender Notice:
Organisations publish tender notices when they have to procure goods and services on a larger scale or get projects executed. They may be defined as invitations to submit bids to provide such goods/services at quoted prices and subject to stated conditions.

78. When goods are returned by the customer, which one of the following is issued to the customer for the value of goods returned?
(a) Debit Note
(b) Performa Invoice
(c) Invoice
(d) Credit Note.
Answer:
(d) Credit Note:
Credit Note is a document sent by seller to a buyer to rectify an error of overcharge in an invoice or to allow credit for goods returned. Thus, when goods are returned by the customer, credit note is issued to the customer for the value of goods returned.

79. A company operates its bank account only through –
(a) Shareholder
(b) Investors
(c) Persons authorized by the Board of Directors
(d) Company Secretary.
Answer:
(c) Persons authorized by the Board of Directors:
A company operates its bank A/c only through the persons authorized by the Board of Directors and who may even be changed by the Board of Directors.

80. ……………………… is neither entered into books of account nor charged to the account of the recipients.
(a) Delivery Challan
(b) Invoice
(c) Credit/Debit Note
(d) Proforma Invoice.
Answer:
(d) Proforma Invoice:
A proforma invoice is different in so far as it is for form’s sake only. It is neither entered into books nor charged to the account of the recipients.

81. Which of the following is a goodwill letter?
(a) Sympathy letter
(b) Obituary letter
(c) Thank you letter
(d) All of the above.
Answer:
(d) All of the above:
Types of Goodwill letters:

• Thank you letter
• Letters of Sympathy
• Obituary Notice
• Condolence letter

Thus, Option (d) i.e. all of the above is correct.

82. A job application does not contain which of the following?
(a) Your personal quality
(b) Your reason of removal from last job
(c) Your achievements
(d) None of the above.
Answer:
(d) None of the above:
Job application contains :

• Personal Quality
• Academic Qualification
• Additional Qualification
• References
• Experience or Achievement

Thus, option (d) is correct i.e. none of the above.

83. “We are pleased to inform you that you are shortlisted for an appointment in our company as soon as we can find a position in keeping with your qualifications and experience.” Which type of letter is this?
(a) Letter of appointment
(b) Short-listed candidate
(c) Letter of confirmation
(d) Goodwill letter.
Answer:
(b) Short-listed candidate:
Companies may shortlist candidates for absorption at a later date if they are unable to find a suitable position for them at the time of interview. In such cases, their details are stored in the data bank and a polite letter addressed to them. Thus, the give example is of short-listed candidate.

84. Which of the following is not a guideline for writing minutes?
(a) Record full text of motion
(b) Ensure each item has been recorded
(c) Ensure separate paragraph for each item
(d) Reorganisation of work
Answer:
(d) Reorganisation of work:
General Guidelines for writing minutes are as follows :

• Use separate paragraphs for each item.
• Record full text of motions.
• Language of minutes should be simple and precise.
• Ensuring that each item discussed in the meeting has been recorded.
• The secretary should go on taking notes during the meeting.
• Defamatory language, irrelevant point should not be recorded. Thus, Re-organisation of work is not a guideline for writing minutes.

85. A reply to enquiry letter must take care of:
(a) A reference to the date and number o’ the letter of enquiry
(b) All relevant information about goods, prices, discounts etc.
(c) Assurance of best service to the sender of the enquiry
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
A reply to enquiry letter must include:

• Clear reporting of kind & quantity of goods.
• Assurance of best service.
• Reply must not begin with refusal.
• Reply must be polite & expeditious.
• All relevant information must be stated clearly.

Hence, option (d) is correct.

86. A Company Secretary:
(a) Has nothing to do with the directors of the company
(b) Is never in touch with any government department
(c) Occupies an important place in a corporate set-up
(d) Does not have to correspond with the investors.
Answer:
(c) Occupies an important place in a corporate set-up:
A company secretary occupies an important place in a corporate setup. It is defined as per definition of key managerial personnel in Companies Act, 2013.

87. Which of the following statement about Goodwill letters is incorrect?
(a) It should not contain stereotyped phrases
(b) It may contain one’s sincere feelings
(c) It should be brief
(d) It should not be handwritten.
Answer:
(d) It should not be handwritten:
Goodwill letters features are as follows:
→Goodwill letter should be brief
→ No compulsion to write them
→ They should preferably be handwritten.
→ Should And contain stereotyped phases.
→Should be brief.

88. The abbreviation VSAT stands for:
(a) Video Shot Aperture Transmission
(b) Very Small Aperture Terminals
(c) Voice Sites Applicable Transmission
(d) Voice Server Applied Terminals.
Answer:
(b) The abbreviation VSAT stands for Very Small Aperture Terminals which connect the different branches of an organisation in a private, dedicated communication network

89. A correct statement about advertising is:
(a) It is a paid communication to the masses
(b) It is meant to impart information, develop attitudes and create needs
(c) It induces action beneficial to the advertiser
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
Advertising is mass paid communication, the ultimate purpose of which is to impart information, develop attitudes and induce action beneficial to the advertiser.

90. Which of the following statement is incorrect?
(a) An enquiry letter should be compact, straight forward and courteous
(b) An enquiry letter can be lengthy with repetitions
(c) A properly drafted enquiry letter can originate big business deals
(d) An enquiry letter should be drafted clearly.
Answer:
(b) An enquiry letter can be lengthy with repetitions:
While writing we should avoid lengthy and unnecessary statements and representations.

91. Thank you letters, congratulatory letters, letters of sympathy and condolence letter are the type of ………….. letters.
(a) Regret
(b) Order
(c) Goodwill
(d) Sales.
Answer:
(c) Goodwill:
Thank you letters, congratulatory letters, letters of sympathy and condolence letters are the type of Goodwill letters.

92. A true statement about Telegrams is:
(a) It cannot be sent to remote places
(b) It is a recent development in communication technology
(c) It is coded language to communicate
(d) It is very expensive.
Answer:
(b) It is a recent development in communication technology:
Words are changed into signals (codes) with the help of the More’s key and sent across countries and continents in a short time.

93. Choose the incorrect statement about securities:
(a) In order to use dematerialising facilities one has to open a demat account
(b) Change from electronic format to physical form is called re-materialisation
(c) Once you dematerialise your securities you cannot rematerialise
(d) Change from physical form to electronic format is called dematerialisation.
Answer:
(c) Once you dematerialise your securities you cannot rematerialise
Securities are being used in electronic or dematerialised form, however, re-conversion to physical form or rematerialisation is also possible.

94. Telex is used only for student text and are used for graphics, text etc:
(a) Partly true
(b) Partly false
(c) True
(d) False
Answer:
(c) True:
Telex machine only allow exchange of text and for graphics etc.

95. Goodwill letter is written in which tone?
(a) Formal tone
(b) Informal tone
(c) Both (a) and (b)
(d) None of the above
Answer:
(c) Both (a) and (b):
Goodwill letters are not mandatory but they are written in order to enhance the relation and increase the goodwill of the organisation. It should be brief and in informal tone.

96. We write a congratulatory letter, when:
(a) A friend, colleague or a business associate earns a promotion, recognition
(b) We want to send a message of felicitation
(c) Somebody has made us proud
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
We write a congratulatory letter when a friend colleague or a business earn a promotion, recognition, honour or an award. The achievement may be in the personal or professional arena we may send a message of felicitation and earn some precious goodwill in the process.

97. When reviewing resumes, all of the following are important to keep in mind except:
(a) Focus on the font and format
(b) Identify what the educational background of the candidate is in order to determine qualifications
(c) Do not make assumption based just on what is written
(d) Look for long unexplained gaps in between jobs.
Answer:
(c) Do not make assumption based just on what is written:
While reviewing resume, the things which are required to be kept in mind are focus on font/format, educational background, qualifications, unexplained gaps in between jobs except; making assumptions based just on what is written as there are many professional agencies which are just involved in these works as well as sometimes hiding factual informations.

98. Which of the following is a traditional method of advertising?
(a) SMS
(b) Internet
(c) Radio
(d) E-mails
Answer:
(c) Radio:
Radio is a traditional method of advertising. Advertising is frightfully expensive. Therefore, it is essential that the advertisement should serve its purpose. This method help the advertisement to be aired at the right time and at low cost.

99. Which of the following statement is incorrect?
(a) An enquiry letter should be compact, straight forward and courteous
(b) An enquiry letter should be drafted clearly
(c) An enquiry letter can be lengthy with repetitions
(d) A properly drafted enquiry letter can be big business deals.
Answer:
(c) An enquiry letter can be lengthy with repetitions:
An enquiry letter should be straightforward, compact and courteous. It should be brief and to the point, complete and correct. It should avoid lengthy and unnecessary statements and repetitions.

100. An incorrect statement about an invoice is:
(a) It is not a valid legal document
(b) It is sent to the importer
(c) It is entered in the accounts book of the importer
(d) It is prepared by the exporter.
Answer:
(a) It is not a valid legal document:
Invoice is a document which gives accurate description of the goods being sent and their prices to enable the buyer to check them. It is a valid legal document in case of a dispute regarding payment.

101. Choose the incorrect statement about the agenda of a meeting:
(a) Agenda is always circulated after the meeting
(b) When the Chairperson or Secretary want to keep the agenda secret, they do not circulate it
(c) Agenda should be sent to all members entitled to receive it
(d) An agenda is a document that outlines the discussion points of a forthcoming meeting.
Answer:
(a) Agenda is always circulated after the meeting:
Agenda is a document that outlines the contents of a forthcoming meeting. It is usually sent along with the notice of the meeting. Sometimes agenda is prepared after the circulation of a notice in order to enable the members to get any item included to discuss at the meeting.

102. In which of the following letters, a direct approach is recommended?
(a) Condolence letter
(b) Letter of sympathy
(c) Appointment letters
(d) Letter of rejection.
Answer:
(c) Appointment letters:
There are 2 types of letters:

1. Direct Approach
2. Indirect Approach

Direct Approach: Letters carrying positive news. Eg: Appointment letter, Promotion letter
Indirect Approach: Letters carrying unwelcomed news. Eg: Letters of Rejection.

103. Very often a sales letter does not have the following enclosed with it
(a) An advance draft
(b) Literature about the product
(c) Self-addressed reply envelop
(d) Forms seeking information about the customer.
Answer:
(a) An advance draft
Sales letter contains the following:

• Literature about the product
• Self-addressed reply envelop
• Forms seeking information about the customers.

104. A Company Secretary:
(a) Is never in touch with any government department
(b) Has nothing to do with the directors of the company
(c) Occupies an important place in a corporate set-up
(d) Does not have to correspond with the investors.
Answer:
(c) Occupies an important place in a corporate set-up
A company secretary occupies an important place in a corporate setup.

105. Choose the incorrect statement related to invoice:
(a) An invoice helps the regular customer to pay at the end of the credit period.
(b) An invoice helps a customer to enter the amount in his account book.
(c) It does not transfer the ownership.
(d) An invoice states the total amount payable.
Answer:
(c) It does not transfer the ownership.
Invoice may serve following purposes:

• Gives an accurate description of goods being sent and their prices enable the buyer to check them.
• States the total amount payable for the convenience of buyer
• Regular customers enter it in their account books and pay at the end of credit period
• Transfers ownership of goods and helps in calculation of taxes payable on them.

106. A telephone screening interview would be most suitable if you were recruiting for:
(a) An assembly worker
(b) A data entry clerk
(c) A receptionist
(d) A dental assistant.
Answer:
(c) A receptionist:
An assembly worker, a data entry clerk and a dental assistant are all engaged in practical skill-based employment. However, for a receptionist, the way of speaking, fluency and tone is to be specifically judged. Thus, telephone screening interview would suit.

107. A correct statement about advertising is:
(a) It is a paid communication to masses.
(b) It is meant to impart information, develop attitudes and create needs.
(c) It includes action beneficial to the advertiser.
(d) All the stated options are correct.
Answer:
(d) All the stated options are correct:
It is difficult to imagine today’s world without advertising. Three-fourths of a newspaper is devoted to advertisements of various kinds. Television programs are interrupted at frequent intervals to telecast commercials. On the internet, one finds goods and services being advertised on home pages of different search engines and websites. Thus, Advertising is a paid communication, for the masses. Its ultimate purpose is to impart information, develop attitudes, create needs and induce action beneficial to the advertiser.

108. …………………………… can act as liaison between the community on one hand and government on the other.
(a) Consumers association
(b) Employee association
(c) Trade unions
(d) None of the above.
Answer:
(d) None of the above:
A liaison officer is a person who liaises between two organizations to communicate and coordinate their activities. Generally, liaison officers are used to achieve the best utilization of resources or employment of services of one organization by another. Liaison officers often provide technical or subject matter expertise of their parent organization. Usually, an organization embeds a liaison officer into another organization to provide face-to-face coordination. Thus, none of the above liaisons between community and the government.

109. Which of the following statements should be kept in mind while preparing a resume:
(a) Do not include the skills you can offer
(b) Include the job title you are seeking and the skills you can offer
(c) Be general in your career objectives
(d) Include information about your family.
Answer:
(c) Be general in your career objectives:
While resume contains most of factual information about the applicant, the application or the covering letter reveals the profile of the applicant. If it is cleverly drafted, it may increase the chances of crossing the first hurdle. Thus, your resume should mention career goals and specific job objectives.

110. Choose the correct option:
(a) A debenture is an interest yielding loan.
(b) A debenture cannot be converted into equity shares.
(c) The right shares can be allotted to anyone.
(d) A company sometimes allots bonus shares to its shareholders even if it runs into losses.
Answer:
(a) A debenture is an interest yielding loan:
Public investment in a company is generally in the form of shares, debentures and deposits. Anyone can participate in the capital of a company through equity shares. The return on shares depends on the profitability of the company and is in the form of dividend. A debenture is an interest-yielding loan but may be partly or fully convertible into equity shares. The Rights Shares are allotted only to the existing shareholders of the company but they have to be paid for. The company may also part with profits in the form of Bonus shares to the existing shareholders.

111. Reputed associate of a leading foreign bank requires smart graduates with good communication skills for hard-core marking. Walk-in-interview is between 12 noon to 5 pm on February 5th at Hotel Hilton, Connaught Circus, New Delhi. This is an example of:
(a) Business Offers
(b) Situations Vacant
(c) Situation wanted
(d) Public Notice
Answer:
(b) Situations Vacant
The given classified advertisement is the example of situation vacant.

112. Which of the following statement about complaint letters is incorrect?
(a) A bona fjde complaint can be made after a passage of time
(b) A complaint should be based on factual information
(c) A dissatisfied customer has a right to lodge a complaint
(d) It is inappropriate to assume at the beginning that the seller alone is art fault.
Answer:
(a) The Statement a is incorrect- A Bonafide complaint should be made without delay since the passage of time complicates the matter.

113. Which of the following is not an essential part of a job resume?
(a) Address
(b) Education
(c) Work experience
(d) Food habits
Answer:
(d) Food habit is not an essential part of Resume.

114. Which one of the following is not true about a job interview?
(a) In a job interview, one needs to study about the job, the company and industry
(b) Memorise and rehearse the answers to the probable questions in the interview
(c) Reach at the interview venue about 10-15 minutes early
(d) Bring an extra copy of resume at the time of interview.
Answer:
(b) Memorise and rehearse the answers to the probable questions in the interview.

115. Which of the following is correct about office notes?
(i) Office notes are a form of internal communication between two different departments
(ii) Office notes are put up by sections or departments to higher authorities
(iii) The actual layout of the office note is same for all the companies. The Correct option is:
(a) (i) and (ii) only
(b) (ii) and (iii) only
(c) (i) and (iii) only
(d) All of the above.
Answer:
(a) (i) and (ii) only
Office notes are a form of internal communication. It is a communication between two different departments.

116. Which one of the following general rules is not applicable when composing a telegram?
(a) Block letters must be used as for as possible
(b) Sentences are to be divided by the word ‘STOP’
(c) The message must be brief and clear
(d) Normal grammar and punctuation must not be ignored.
Answer:
(d) Normal grammar and punctuation must not be ignored:
Block letters must be used as for as possible, is not applicable when composing a telegram.

117. Which one of the following is a type of goodwill letter?
(a) Letter of sympathy
(b) Office Order
(c) Thank you Order
(d) None of these
Answer:
(c) Thank you Order
Types of Goodwill letter:

• Thank you letters
• Congratulatory letters
• Letter of Sympathy
• Condolence letters
• Obituary Notices.

118. Resume for job should be:
(a) Career goals and job objective;
(b) Your adequate knowledge about the company being approached
(c) Both (a) and (b)
(d) None of these.
Answer:
(d) None of these:
Resume: contain following details:

1. Personal Particulars
2. Academic Particulars
3. Additional Qualification
4. Experience
5. Reference.

119. Organisations publish ………………….. when they have to procure goods and services an a large scale or get projects executed.
(a) Purchase requisition
(b) Tender notice
(c) Purchase order
(d) None of the above.
Answer:
(b) Tender notice:
Organisations publish ‘Tender Notice’ when they have to procure goods and services on a large scale or get projects executed.

120. …………………… is neither entered into books of account nor charged to the account of the recipients.
(a) Delivery Challan
(b) Invoice
(c) Credit / Debit Note
(d) Proforma Invoice
Answer:
(d) Proforma Invoice:
‘Proforma Invoice’ is the invoice or a type of papers note which is signed by consigner to the consignee and is neither entered into books of account nor changed to the account of the recipients.

121. …………………… are made in order to voice a grievance and to secure a relief.
(a) Business Communication
(b) Invoice
(c) Public Notices
(d) Representations.
Answer:
(d) Representations:
Representations are made in order to voice a grievance and to secure a relief.

122. When an organisation needs to share Important Information with members of general public, it drafts a –
(a) Public Notice
(b) Office Memorandum
(c) Agreement
(d) Representation.
Answer:
(a) Public Notice:
Public notice is the medium which is used by the organisation when an information is needed to be shared to a large no. of members within the general public.

123. A good press release should not be –
(a) Factual
(b) Lengthy
(c) News value
(d) Format based.
Answer:
(b) Lengthy:
A good press release should not be lengthy.
It should be –
– Brief
– Factual
– News value
– Format based.

124. When goods are returned by the customer, which one of the following is issued to the customer for the value of goods returned?
(a) Debit note
(b) Performa Invoice
(c) Invoice
(d) Credit note
Answer:
(d) Credit note:
When goods are returned by the customer credit note is issued to the customer for the value of goods returned.

125. AIDAS is a abbreviation of:
(a) Attention, Interest, Desire, Action, Satisfaction.
(b) Active, Interest, Desire, Ambition, Satisfaction.
(c) Both of above
(d) None of above.
Answer:
(a) Attention, Interest, Desire, Action, Satisfaction:
Effective sales writing demands following what Is known as the ‘AIDAS’ plan which stands for Attention, Interest, Desire, Action, and Satisfaction.

126. Types of goodwill letters
(a) Letter of sympathy
(b) Condolence letter
(c) Obituary letter
(d) All of above.
Answer:
(d) All of above.
Every business letter should be a goodwill letter.
They are classified as under –
– Thank you letters
– Congratulatory letters
– Letter of sympathy
– Condolence letters
– Obituary Notices.

127. It is neither entered into books nor charged to the account of recipient?
(a) Invoice
(b) Performa invoice
(c) Proforma Invoice
(d) Statement of Accounts.
Answer:
(c) Proforma Invoice:
A proforma invoice is different insofar as II is for the sake of form only. It is neither entered into books nor charged to the account of the recipients.

CS Foundation Business Management Ethics and Entrepreneurship Notes

Business Ethics – Business Management Ethics and Entrepreneurship Notes

1. Business Ethics:
It refers to application of ethics in business.

• It facilitates and promotes:
• good to society,
• improves profitability,
• fosters business relations and
• employee productivity.
• Generally, it means, coming to know what is right or wrong in the workplace and doing what’s right.
• Unethical practices are creating problems to businessmen and business units.
• Life and growth of business depends upon business ethics.
• Business ethics are developed by the passage of time and custom.
• If a custom is adopted and accepted by businessman and public, that custom will become an ethic.
• It is applicable to every type of business.
• It means the behaviour of a businessman while conducting a business, by observing morality in his business activities.
• According to Wheeler,
  “Business Ethics is an art and science for maintaining harmonious relationship with society, its various groups and institutions as well as recognizing the moral responsibility for the rightness and wrongness of business conduct.”
• According to Rogene A. Buchholz,
  “Business Ethics refers to right or wrong behaviour in business decisions.”
• Business Ethics or Ethical Standards are the principles, practices and philosophies that guide the business people.
• It can be said to begin where the law ends.

It is primarily concerned with those issues that are not covered by law, or where there is no definite consensus on whether something is right or wrong.

2. importance of Business Ethics:

• Good business ethics promote good business and retains it for a long period of time.
• It helps to understand why power and influence of business in society is increasing, what are its implications and how this issues are to be addressed.
• It provides a major contribution to our societies like:
• producing the products
•  providing services
• providing employment
• paying taxes and acting as an engine for economic development and increases goodwill.
• It helps to create mutual trust and confidence in relationships by helping us understand various causes and consequences of business malpractices.
• It provides means to appreciate and understand the stakeholders demand more clearly through which they are able to meet ethical expectations more effectively.
• It helps to improve ethical decision making by providing managers with appropriate knowledge and tools that allows them to diagnose and analyse ethical dilemma and problems.
• It helps the business to prosper by following good ethical standards.
• It provides us with the ability to assess the benefits and problems associated with different ways of managing ethics.
• Good ethical standards helps the business to face challenges.

3. Characteristics of Business Ethics:

• They are the principles, which govern and guide business people to perform business functions and in that sense, it is a discipline.
• It is both a science and an art.
• It continuously test the rules and moral standards.
• It is dynamic in nature.
• It is based on theological principles like humarf welfare, good behaviour sincerity, service etc.
• It is based on reality and social customs prevailing in business environment.
• It studies activities, decisions and behaviour which are related to human beings.
• It has a universal application because business exists all over the world.
• Many of the ethical principles develop personal dignity.
• It keeps harmony between different roles of businessman, with every citizen, customer, owner and investors. ’

4. Principles of Business Ethics:

• Various principles are developed by Cantt, J.S. Mill, Herbert Spencer, Plato, Thomas Garret, Woodrad, Wilson etc. are as follows:
• Not to do any evil: Doing evil to oneself or to another, either as a means or an end, is unethical.
• Co-operation with others: Business should help others only if, other deserves for help.
• Equivalent price: As per W. Wilson,
  “People are entitled to get goods equivalent to value of money one pays”.
• Human dignity: Man should not be treated as a factor of production. Human dignity should be maintained.
• Sacredness of means and ends: Means and techniques adopted to serve the business ends must be sacred and pure. Thus, good end can not be attained with wrong means even if beneficial to society.
• Principle of proportionality: One should make a proper judgement before doing anything so that others do not suffer from any loss or risk of evil.
• Publicity: As per W. Wilson,
  “Anything that is being done or to be done should be brought to the knowledge of everyone”. This way no unethical act can be done.
• Universal value: Business should be conducted on the basis of universal values.
• Non-co-operation in evils: Business should not co-operate with anyone in any evil acts.
• Non-violence: If businessman hurts the interest or rights of the ,, society or exploits its consumers by overlooking their interests, it is equivalent to violence and unethical act.

5. Elements of Business Ethics:
Key elements:

1. Formal code of conduct
2. Ethics committee
3. Ethical communication
4. An ethic office with ethical officers
5. Ethics Training Programme
6. A disciplinary system
7. Establishing an ombuds person
8. Monitoring.

Code of Conduct:
It refers to the statements of organisational values.
It comprises of three elements:

1. Code of Ethics
2. Code of Conduct
3. Statement of Values.

• It is a written document, inspirational in contents and specifies clearly what is acceptable or unacceptable behaviour at workplace and beyond, when the employees represent their organisations outside.
• Code should reflect the managements desire to incorporate the values and policies of the organisation. It is a statement of organizational values.

Code of Ethics:

• For small businesses, the code is usually unwritten.
• Larger businesses often have written codes of ethics and employees are twined in them and required to adhere to the code.
• It is a buzzword to employees to observe ethical norms and forms the basis for rules of conduct.
• It is comprehensive enough to cover the entire scheme of organisational ethics expected to be followed by everyone in the company.
• It usually specifies methods for:
• reporting violations,
• disciplinary action for violations,
• structure of the due process to.be followed.
• It must summarize the beliefs and values of the organisation.
• Owners that are regularly engaged in unethical practices, pass those values and principles to other people working in the business.
• Small business suffer more because unethical behaviour and actions are easier for customers to take notice of.
• It vary among businesses.
• All employees must be treated equally, and any issues of inequality must be dealt quickly, fairly and in manner satisfactory to all.
• Now, consumers pay a great deal of attention to corporate governance and proper behaviour of businesses and their owners.
• Where code of ethics is unarticulated or formally documented – is vital to ensure that a business will succeed.

Ethics Committee:
These committees are wholly devoted at work places.

They perform following functions:

1. can rise concerns of ethical nature
2. prepare or update code of conduct
3. resolve ethical dilemma
4. formulate ethical policies
5. develop ethical standards
6. evaluates the compliance with those ethical norms.

• Members must be selected from these persons having knowledge in their industry, their code of ethics and community standards.
• Members are also conscious about the corporate culture and ethical concise of the organisation.

Two committees are to be formed
1. At the Board Level:
This committee is in charge of oversee development and operation of the ethics management programme.

2. Ethics Management Committee:

• This committee is charged with implementing and administrating an ethics management programme.
• This involves administrating and training about policies and procedures, and resolving ethical dilemmas.
• It comprises of senior officers.

Ethical Communication System:
It plays an important role in making Ethics Programme successful.
To be effective, it should allow the employees to make enquiries, gel advice if needed or report the wrong doing.
it is necessary to educate employees about the organisations ethica standard and policies.

It has the following objectives:

1. To communicate organisations values and standards of ethica conduct or business to employees.
2. To help employees to get guidance and resolve questions regarding compliance with firm’s standards of conduct and values.
3. To provide information to employees on company’s policies anc procedure regarding ethical code and conduct of business,
4. To set up means of enquiry such as telephone hotlines, suggestior boxes and email facilities for employees to contact and get advice from competent authorities.

Other means of communication:

• Top management can communicate to lower level managers whc can communicate it to operational levels.
• Publishes newsletters.
• Values can be communicated in company’s briefing and management meetings.
• Using attractive multi-coloured posters being placed in most visible places of organisation premises.
  These means are used to expose company’s code or ethics.

Ethics Office and Officers:
These offices are to be established to communicate and implement ethics policies among employees.
Ethics officer is appointed for this purpose.
Such officers should develop a reputation for credibility, integrity, honesty and responsibility.

Functions of ethics officer:

1. They are responsible for assessing the needs and risks that an ethics programme must address.
2. To conduct ethical training programme for employees.
3. To monitor and audit ethical conduct.
4. To review and update code in time.
5. To develop and distribute a code of conduct or ethics.
6. To ensure that organisation is in compliance with governmental regulations.
7. To take action on possible violations of company’s code.
8. To establish and maintain a confidential service to answer employees questions about ethical issues.

Ethics Training Programme:

• The main objective of this is to offer assistance to employees to understand the ethical issues that are likely to arise in their work place.
• Induction training should be arranged when new employees are recruited.
• Importance of abiding code should be dealt at the induction meeting.
• A well developed and training programme will help the employees to understand the organisation’s policies and expectations, relevant rules, bye-laws and regulations which are to be complied with.
• Moreover for its success, the senior executive from every department must be fully involved in it.

Disciplinary System:

• This system should be established to deal with ethical violations promptly and severely.
• If unethical behaviour is not dealt properly, it will threaten the entire social system.
• Companies should be consistent while enforcing disciplines i.e. the company should adopt a fair attitude towards everyone without any discrimination or bias.

Establishing an Ombuds person:
He is responsible for-
1. coordinating development of the policies and procedures to institutionalize moral values in workplace.
2. resolving ethical dilemmas by interpreting policies and procedures.

Monitoring:

• An Effective monitoring committee it to be formed.
• It must consist of ethics officer, internal audits, investigations surveys and supporting systems.
• Monitoring is done by internal audits, surveys, investigations, supporting systems etc.

Ethics in Compliance:

• Compliance is about obeying and adhering to rules and authority.
• Motivation for being compliant could be to do the right thing out of fear of being caught rather than a desire to be abiding by the law.
• Organisations that value high ethics comply with the laws not only in letter but go beyond what is stipulated or expected of them.

Ethics in Finance:

• Window dressing, misleading financial analysis.
• Related party transactions not at arm’s length.
• Executive compensation.
• Fake reimbursements.
• Insider trading, securities fraud leading to manipulation of the financial markets.
• Bribery, kickbacks, over billing of expenses, facilitation payments.
• Ethics in Human Resources

Ethics of Production:

• This area of bus;ness ethics deals with the duties of a company to ensure that products and production processes do not causes harm.
• It is difficult to define a degree of permissibility, or the degree of permissibility may depend on the changing state of preventive technologies or changing social perceptions of acceptable risks.

It includes:

1. Product testing ethics.
2. Problems arising out of new technologies like genetically modified food etc.
3. Ethidal relations between the company and the environment, include pollution, environmental ethics, carbon emission trading.
4. Defective, Addictive, Hazardous and inherent dangerous products.

Ethical Dilemma:

• It refers to a situation where ,one is in conflict between moral imperatives.
• Also known as ethical paradox or moral dilemma.
• It refers to any situation in which guiding moral principles cannot determine which course of action is right or wrong.
• To obey one action, would result in transgressing another.

Dimensions of Ethical Dilemma:

• Choice between equally undesirable alternatives.
• There s no nght” and ‘wrong.
• Different courses of action possible.
• Can be resolved, not solved.
• Involves value judgements about actions or consequences.
• Resources which must be allocated are fine or limited.
• Date will not help resolve issue.
• Choices have far reaching effects on persons, relationships and society.
• Different sources (Psychology, theology) offer resolutions.
• Unfavourable outcomes will result.
• Business Ethics Principles followed by Indian Companies:
• Sacrifice: A person who is willing to sacrifice part of his bread or the process effort commands a superior place. An individual is trained by principle of ‘sacrifice’ through “give and take” policy.
• Reward: Individual’s activities should be monitored and encouraged by rewarding them. This may cultivate the spirit of higher productivity among groups.
• Polygamy: It refers to wedding of two different cultures by absorption or takeover.
• Taxation: Individuals who are hardworking and productive are taxed more which encourages them to stay fit for a longer period by proper appreciation and encouragement.
• Harmony: To avoid conflicts and friction, one is guided by certain set of moral conducts and principles.
• Justice: It means that one who works hard should be rewarded and one who fails should be punished.
• Integrity: Groups working together are encouraged to stay united in order to reap benefits of division of labour.
• Non-violence: It protects the organisation from strikes and lockouts and unnecessary avoidable conflicts.

Nature of Management and its Process MCQ Questions

1. The term ‘Business Ethics’ came into common use in the year:
(a) 1950
(b) 1960
(c) 1970
(d) 1980
Answer:
(c) 1970

2. The society of Business Ethics was started in:
(a) 1950
(b) 1960
(c) 1970
(d) 1980
Answer:
(d) 1980

3. When was EBEN commenced:
(a) 1952
(b) 1962
(c) 1982
(d) 1992
Answer:
(c) 1982

4. The idea of business ethics caught the attention of academics, media and business firms by the end of the:
(a) First World War
(b) Second World War
(c) Cold War
(d) None of the above
Answer:
(c) Cold War

5. The legitimate criticism of business practices was attacked for indulging the “………………… ” of entrepreneurs.
(a) Honesty
(b) Integrity
(c) Freedom
(d) Reputation
Answer:
(c) Freedom

6. The fields which settled the discourse of business ethics:
(a) Media
(b) Business firms
(c) Academics
(d) Both (a) & (c)
Answer:
(d) Both (a) & (c)

7. Business Ethics has a ………………………. application:
(a) Universal
(b) Natural
(c) Practical
(d) None of the above
Answer:
(a) Universal

8. ………………….. is not a natural science but a creation of human mind.
(a) Ethical Standard
(b) Business Ethics
(c) Ethics
(d) None of the above
Answer:
(c) Ethics

9. …………………………… is a set of principle and expectations that are considered binding on any person who is the member of a particular group.
(a) Code of ‘ethics’
(b) Code of ‘conduct’
(c) Code of ‘practice’
(d) All of the above.
Answer:
(d) All of the above.

10. The alternative names for code of conduct are ………………… .
(a) Code of ethics
(b) Code of practice
(c) Both (a) & (b)
(d) None of the above
Answer:
(c) Both (a) & (b).

11. Corporate entities are legally considered as persons in:
(a) USA
(b) Japan
(c) China
(d) None of the above
Answer:
(a) USA

12. Business ethics is based on well accepted –
(a) Moral and social values
(b) Social values only
(c) Moral values only
(d) None of the above
Answer:
(a) Moral and social values.

13. Which of the following is not a ‘code of conduct’:
(a) Code of ethics
(b) Code of practices
(c) Code of Behaviour
(d) Code of Management
Answer:
(d) Code of Management.

14. Which of the following Act made code of ethics mandatory for all organisations:
(a) The Companies Act, 2013
(b) The Sarbanes-Oxley Act, 2002
(c) The Partnership Act, 1932
(d) None of the above
Answer:
(b) The Sarbanes-Oxley Act, 2002.

15. The Sarbanes Oxley Act of 2002 made it important for business to have an:
(a) Ethics Code
(b) Code of Conduct
(c) Code of Practice
(d) Business ethics
Answer:
(a) Ethics Code.

16. Sarbanes Oxley Act of 2002 is named alter which of the following experts.
(a) Aristotle
(b) Smator Paul Sarbanes
(c) Michael Oxley
(d) Both (b) and (c)
Answer:
(d) Both (b) and (c).

17. Key Elements of Business Ethics are:
(a) A strong code of Ethics
(b) Ethics coach
(c) System for confidential Reporting
(d) All of the above
Answer:
(d) All of the above.

18. Which are not the key elements of Business Ethics:
(a) Investor loyalty
(b) Ethics Training
(c) Ethics coach
(d) both (b) & (c)
Answer:
(a) Investor loyalty.

19. What are not the features of Business Ethics:
(a) Relativity
(b) Far reaching concept
(c) Practical application
(d) Protection to consumer
Answer:
(c) Practical application.

20. The key features which a person should prevail while teaching ethics to the employees are:
(a) Employing Ethical Concept
(b) Analytical Skills
(c) Decision making
(d) All of the above
Answer:
(d) All of the above.

21. ……………………….. provides the legal, social, moral, economical and cultural limits within which business has to be conducted.
(a) Ethics
(b) Ethical Standards.
(c) Ethics code
(d) Business Ethics
Answer:
(d) Business Ethics.

22. Business Ethics is a ……………….. norm.
(a) Pervasive
(b) Continuous
(c) Relative
(d) None of the above.
Answer:
(c) Relative.

23. Which one of the following is not the advantage of Business Ethics.?
(a) High turnover of staff
(b) Customer Satisfaction
(c) Investor’s loyalty
(d) Attracting and Retaining Talent
Answer:
(a) High turnover of staff.

24. What are the ethical issues faced by ‘Ethics in Finance’ ?
(a) Affirmative Action
(b) Executive compensation
(c) Insider Trading
(d) Both (b) & (c)
Answer:
(d) Both (b) & (c).

25. What are not the ethical issues faced by ‘Ethics in ‘finance’?
(a) Affirmative Action
(b) Occupational Safety and health
(c) Overbilling of expense
(d) both (a) & (b)
Answer:
(d) both (a) & (b).

26. Which one of the features relates to ‘Ethics in Human Resource’?
(a) Insider Trading
(b) Price discrimination
(c) Discrimination Issues
(d) Black market, grey market.
Answer:
(c) Discrimination Issues.

27. Which one of the feature does not relate to ‘Ethics in Human Resource’?
(a) Sexual harassment
(b) Discrimination issue
(c) Affirmative Action
(d) Product testing Ethics
Answer:
(d) Product testing Ethics.

28. Which one of the feature relates to ‘Ethics in Marketing’?
(a) Defective dangerous product
(b) Sexual harassment
(c) Insider Trading
(d) Black market, grey market
Answer:
(d) Black market, grey market.

29. Which one of the features does not relate to ‘Ethics in Marketing?
(a) Black Market, grey market
(b) Misleading Advertisement
(c) Price Skimming
(d) Carbon emission trading
Answer:
(d) Carbon emission trading.

30. Which one of the features relate to ‘Ethics in Production’?
(a) Affirmative Action
(b) Executive compensation
(c) Inherently dangerous product
(d) Price fixing
Answer:
(c) Inherently dangerous product.

31. WhIch one of the feature does not relate to Ethics in Production’?
(a) Addictive dangerous product
(b) Product testing ethics
(c) Environmental ethics
(d) Whistle blowing
Answer:
(d) Whistleblowing.

32. What are the Reasons for unethical business practices?
(a) Greed for Quick money
(b) Administrative Corruption
(c) Cultural and Social Reason
(d) All of the above
Answer:
(d) All of the above.

33. Administrative corruption include ‘gifts’ to the:
(a) Factory Inspector
(b) Boiler Inspector
(c) Pollution Control Board Inspector
(d) All of the above
Answer:
(d) All of the above.

34. Measures to improve ethical behaviour of business are framed at which level:
(a) Societal level
(b) Government level
(c) Institutional level
(d) All of the above
Answer:
(d) All of the above.

35. Compliance is about obeying and adhering to:
(a) Rules and Authority
(b) Law
(c) Discipline
(d) All of the above
Answer:
(a) Rules and Authority.

36. The term ethics is derived from …………………………. word:
(a) French
(b) German
(c) Greek
(d) Russian.
Answer:
(c) Greek

37. ………….. School adopteii business ethics after …………………………..
(a) American Business /1980
(b) Indian Business / 1990
(c) European Busiriess/ 1987
(d) China Business /1986
Answer:
(c) European Business/ 1987.

38. Which Act is important for business organisation having an ethics code?
(a) Law of Contract, 2002
(b) Sarbanes Oxley Act, 2002
(c) The EnContract, 2002
(d) None of the above
Answer:
(b) Sarbanes Oxley Act, 2002.

39. Practice of gives protection to customers.
(a) Business Ethics
(b) Social ethics
(c) Moral ethics
(d) Economy ethics
Answer:
(a) Business Ethics.

40. ……………………………….. is the vital factor in successful Lusiness strategy.
(a) Investor Loyalty
(b) Attraction and Talent
(c) Customer Satisfaction
(d) All of these
Answer:
(c) Customer Satisfaction.

41. ………………………. plaecisive role in introducing and implementing ethics.
(a) Ethics in compliance
(b) Ethics in finance
(c) Ethics in marketing
(d) Ethics in Human resources.
Answer:
(d) Ethics in Human resources.

42. …………………………… deals with moral principles behind the operation and regulation of marketing.
(a) Ethics of moral principal
(b) Ethics of marketing
(c) Ethics of finance
(d) All of these
Answer:
(b) Ethics of marketing.

43. Employer should behave ethically while dealing with others, i.e. employees suppliers, customers etc. In this sense, what view does Business ethics concept represent?
(a) Narrow
(b) Limited
(c) Conservative
(d) Universal
Answer:
(d) Business ethics refers to a ‘code of conduct’ which businessman are expected to follow while dealing with others. Employer should behave ethically while dealing with other i.e. employee, suppliers, customers etc. In this sense, business ethics concept represent universal application.

44. Which one of the following statements about business ethics is false?
(a) Business ethics goes beyond legal issues
(b) Ethical conflicts lead to ethical dilemma
(c) Ethical conduct builds trust among individuals and in business relationships
(d) Application of business ethics is limited to the profitable organisations.
Answer:
(d) Elements of Business Ethics: These are the traits which are important and influential to success of a company such as:

• Ethical conflict lead to ethical dilemmas.
• Business ethics goes beyond legal issues.
• Ethical conduct builds trust among individuals and in business relationship.

But application of business ethics is not only limited to the profitable organisation.

45. Which one of the following is the quality of an ethics coach?
(a) He should have strong knowledge of ethical practices
(b) He should have strong analytical skills
(c) He should have knowledge of decision making tools
(d) All of the above.
Answer:
(d) Ethics in house or outsourced expert, who will be available as a friendly and confidential resource for employees facing complicated, ethical dilemmas should be arranged in every company. This person needs to have sufficient expertise in employing ethical concepts, analytical skills and decision making tool to facilitate an ethical resolution to the problem.

Also essential in an ethics coach is the assurance of confidentiality and also a friendly and up standing coach who protects confidentiality and speaks with everyone in the office at various time. Thus, answer is all of the above.

46. Business ethics and financial performance are linked together and hence are advantageous to –
(a) Company
(b) Investors loyalty
(c) Employees
(d) All of the above.
Answer:
(d) Business Ethics is advantageous in following ways when financial performance and business ethics are linked together:

• Company: Companies displaying a clear commitment to ethical conduct out performs the companies that do not display any ethical conduct.
• Investors loyalty: Doing business ethically creates investors loyalty towards business.
• Employees: Good companies are able to attract the best talent.

Ethical company that is dedicated to taking care of its employees are rewarded with employees being equally dedicated in taking care of the organisation. Thus, answer is all of the above.

47. Ethics is considered as –
(a) Normative Science
(b) Exact Science
(c) Natural Science
(d) None of the above.
Answer:
(d) Normative science means that the subject involves value judgements and is concerned with welfare propositions. Since, ethics is also concerned with values and welfare, it is considered as a normative science.

48. Which of the following works as a motivation for an employee to work in an organisation?
(a) Monetary benefits
(b) Career progression
(c) Learning opportunities
(d) All ot the above.
Answer:
(d) Motivation for an employee to work in an organisation are monetary benefits, career progressive, learning opportunities etc. As employee who provides their time, skills and energy to an organisation want salary, bonus, arrears progression, learning etc. in return.

49. The Minimum Wages Act, 1948 was enacted for safeguarding the interests of –
(a) Employees
(b) Management
(c) Consumers
(d) Government.
Answer:
(a) The government has enacted various legislations such as the Minimum Wages Act, 1948 for the benefit of employees.

50. A written document of policies and principles that guides the behaviour of all employees is known as –
(a) Ethical dilemma
(b) Code of ethics
(c) Financial delegation document
(d) None of the above.
Answer:
(b) Code of ethics refers to a written code of conduct which every business is required to form in order to inform the employees as to what one ought is to do and what to strive for. Thus, it is the written documents of policies and principles that guides the behaviour of all employees.

51. Which one of the following means ethical dilemma?
(a) A situation requiring a choice between ethical and unethical behaviour
(b) A situation of ethical behaviour
(c) A situation of unethical behaviour
(d) A written statement of policies and principles that guides the behaviour of all employees.
Answer:
(a) Ethical dilemmas is a situation requiring a choice between ethical and unethical behaviour. It is a situation requiring a choice between equally desirable alternatives.

52. In what way society can ensure ethical practices to be followed by business houses?
(a) Establishing social groups to pressurise the business organisations for adopting ethical practices.
(b) Boycotting the organisations following unethical practices.
(c) Arranging ethical awareness programme for business houses.
(d) All nf the above.
Answer:
(d) Various measures are suggested for improving the ethical behaviour of business houses:

• Every organisation should lay down its code of conduct.
• Records must be more transparent.
• People adhering to code of conduct must be rewarded.
• An ethical committee must be formed.
• Consumer awareness programmes must be propagated.
• Social groups can pressurize the organizations.
• Organisations following unethical practices can be boycotted. Thus, answer is all of the above.

53. Whistle Blowing is a/an ………………….. practice
(a) Ethical Practice
(b) Illegal Practice
(c) Unethical Practice
(d) Social Practice.
Answer:
(c) Whistle blowing is an unethical practice. It is a process where a person informs on another or make public disclosure of corruption or wrong doing.

54. ‘Compliance’ refers to obeying and adhering to –
(a) Rules and authority
(b) Policies and discipline
(c) Laws
(d) None of the above
Answer:
(a) ‘Compliance’ refers to obeying and adhering to rules and authority. An organisation’s ethical climate ensure compliance with law.

55. An expert who is available to solve ethical dilemmas confidentially is known as –
(a) Ethics coach
(b) Ethics Philosopher
(c) Ethics manager
(d) None of the above.
Answer:
(a) An expert who is available to solve ethical dilemmas confidentially is known as Ethics coach. He is a person who is available either in house or is out -sourced. He should have sufficient expertise in employing ethical concepts, analytical skills, and decision making tool so to facilitate an ethical solution to the problem.

56. The primary responsibility of a business is towards –
(a) Employees
(b) Owner
(c) Banker
(d) Employer
Answer:
(a) The primary responsibility of a business is towards its employees. Ethical organisation creates an environment that is trust worthy making employees willing to rely, take decisions and act on the decisions and action of the co-employees.

57. Which one of the following is not an unethical business practice?
(a) Collusion
(b) Insider Trading
(c) Kickback
(d) Whistle blowing
Answer:
(c) Reasons for unethical business practices are:

• No Government support ,
• Collusion
• Inside Trading
• Whistle Blowing

Therefore, Kick back is not the reason for unethical business practices.

58. Which one of the following is correct about business ethics?
(a) Business ethics has absolute norms
(b) Business ethics is enforced by law
(c) Following business ethics practices is mandatory for all organisations
(d) Business ethics has a universal application.
Answer:
(d) Following are the features of business ethics:

• It is a code of conduct which businessman should follow while conducting their activities.
• It is universally applicable and is a relative norm.
• It is a far reaching concept.
• Social values and morals are its important elements.
• It gives protections to customers.
• No law is applicable to it.
• It has to be conducted within limits.

59. Which of the following acts made code of ethics mandatory for companies listed on the stock exchange?
(a) Companies Act, 2013
(b) Sarbanes – Oxley Act, 2002
(c) Limited Liability Partnership Act, 2008
(d) None of the above.
Answer:
(b) Sarbanes-Oxley Act, 2002 made it important and mandatory in writing about what one ought to be and what to strive for.

60. Which one of the following is a measure to improve ethical behaviour of business at societal level?
(a) Indira Gandhi Paryavaran Puraskar
(b) Mumbai Grahak Panchayat
(c) Ethical Committee comprising BOD
(d) All of the above.
Answer:
(b) Various organisations like Mumbai Grahak Panchayat, Consumer Society of India etc. have been started by consumer groups to protect the interest of consumers at societal level.

61. Ethics violation has got negative impact on –
(a) Morale
(b) Job
(c) Trust
(d) Remuneration.
Answer:
(a) Ethical executives seek to protect and build the company’s goods reputation and the morale of its employees by engaging in no conduct that might undermine respect and by taking whatever actions are necessary to correct and prevent in appropriate conduct of others. Thus, Ethics violation has got negative impact on Morale.

62. When an employee exposes his employer’s wrongdoings to others, it is termed as:—
(a) Fraud
(b) Misrepresentation
(c) Mistake
(d) Whistle Blowing
Answer:
(d) Whistle Blowing: It refers to a process where a person informs another or makes public disclosure of corruption or wrong doing.

63. The idea of business ethics caught the attention of academics, media and business firms by the end of:
(a) First World War
(b) Second World War
(c) Cold war
(d) None of the above.
Answer:
(c) The idea of business ethics caught the attention of academics, media and business firm by the end of cold war. However, legitimate criticism of business practices was attacked for infringing the “freedom” of entrepreneurs and critics were accused of supporting communists.

64. Providing information to law enforcement or regulatory agencies about a business’ illegal or improper activities by its employees’ is known as:
(a) Ethical wrong
(b) Whistle blowing
(c) Ethical dilemma
(d) Ethical wonder.
Answer:
(b) Providing information to law enforcement or regulatory agencies about a business’ illegal or improper activities by its employees is known as whistle Blowing. The process where a person informs on another or makes public disclosure of corruption or wrong doing.

65. Which one of the following is not correct about business ethics?
(a) Business ethics is a universal and absolute concept
(b) Business ethics is based on well accepted moral and social values
(c) Business ethics is a code of conduct which businessmen should follow while conducting their normal activities
(d) Business ethics give protection to customers and other social groups related to a firm.
Answer:
(a) Features of Business ethics:

• Business ethics is based on well accepted moral and social values.
• Business ethics is a code of conduct which businessman should follow while conducting their normal activities.
• Business ethics gives protection to customers and other social groups related to a firm.
• It cannot be enforced by law. It has to be accepted as self discipline by businessman.
• Business ethics is not a universal and absolute concept.

Thus, the given option (A) is not correct.

66. To be successful, business ethics and training program need to:
(a) Be focused on personal opinion of employees
(b) Be limited to higher management
(c) Educate employees.on formal ethical frameworks and models of ethical decision-making
(d) Promote the use of emotions in making tough ethical decisions.
Answer:
(a) Various measures have been suggested at institutional level to improve the ethical behaviour of business, one of which includes- The organisations should conduct training and provide continuous guidance to its employees regarding the importance of ethical behaviour. Thus, to be successful, business ethics and trairring program need to educate employees or formal ethical frameworks and models of ethical decision-making.

67. When a firm charges different prices from different groups of customers, it may be accused of:
(a) Cultural relativism
(b) Money laundering
(c) Facilitating payments
(d) Price discrimination.
Answer:
(d) Price discrimination is a process in which a firm charges different prices from different groups of customers. It is one of the ethical issues confronted in the area of marketing. It can be carried out by a monopolist as he has an inelastic supply of his goods.

68. Codes of conduct and codes of ethics: .
(a) Are formal statements that describe what an organisation expects of its employees
(b) Become necessary only after a company has been in legal trouble
(c) Are designed for top executives and managers and not for regular employees
(d) Rarely become an effective component of the ethics and compliance program.
Answer:
(c) Primary elements of a strong organisational compliance program are:

• A written code of conduct
• Ethics training
• Ethics coach
• System of confidential Reporting

Thus, significant financial expenditure is not the key element of business ethics.

69. Which one of the following is not the primary elements of a strong organisational compliance program?
(a) A written code of conduct
(b) An ethics officer
(c) Significant financial expenditures
(d) A formal ethics training program.
Answer:
(c) The Sarbanes-Oxley Act, 2002 was enacted and passed in USA to help laid off employees get their job back. This also helps new employees learn important aspect of how to carry out their action at work, and provides veteran employees with something to fall back on, both as a reminder and as something to cite if they are being pressed to do something that they believe to be wrong.

70. Businesses must first be responsible to:
(a) Employees
(b) Customers
(c) Owners
(d) Bankers.
Answer:
(a) Code of conduct also known as code of ethics or code of practice is a set of principles and expectations that are considered binding on any person who is a member of a particular group.
Thus, a strong code of ethics serves to inform employees of the vision that the company’s executives have for the company’s image and goals.

71. The Sarbanes-Oxley Act, 2002 was enacted and passed in USA to:
(a) Punish those who committed accounting frauds in the late 1990s
(b) Improve corporate profits
(c) Help laid-off employees get their jobs back
(d) Help restore confidence in corporate America.
Answer:
(b) Customer satisfaction is a vital factor in successful business strategy. An organisation with.a strong ethical environment places its customer’s interest as foremost. Ethical conduct towards customers builds a strong competitive position. Thus, businesses must first be responsible to its customers.

72. Most companies begin the process of establishing organisational ethics programs by developing:
(a) Ethics training programmes
(b) Codes of conduct
(c) Ethics enforcement mechanisms .
(d) Hidden agendas.
Answer:
(b) Code of conduct informs the employees of the vision that company’s executives have for achieving company’s objectives. It helps the new employees to learn important aspects of how to carry out their , actions at work. After establishing a proper code of conduct, company’s require to have a formal education program, training guidance in order to motivate the businessmen to follow ethical practices.
Thus, most companies begin the process of establishing organisational ethics programs by developing codes of conduct.

73. …………………… also serves to inform employees of the vision that the company’s executives have for the company’s image and goals.
(a) Customer Feedback
(b) Code of Ethics
(c) Ethics Coach
(d) Mission.
Answer:
(b) Code of Ethics serves to inform employees pf the vision that (he company’s executives have for the company’s image and goals. This help new employees learn important aspects of how to carry out their actions at work, and provides veteran employees with something to fall back on, both as a reminder and as something to cite if they are being pressed to do something that they believe to be wrong.

74. Investors are concerned about of the company in which they invest.
(a) Ethics, social responsibility and reputation
(b) Employees
(c) Executive compensation
(d) Only profitability.
Answer:
(a) Investors are concerned about ethics, social responsibility and reputation of the company in which they invest. Investors are becoming more and more aware that an ethical climate provides a foundation for efficiency, productivity and profits. Relationship with any stakeholder, including investors, based on dependability, trust and commitment results in sustained loyalty.

75. The ethics in human resource management cover those ethical issues arising around the –
(a) Society-employer relationship
(b) Customer-employees relationship
(c) Employer-State relationship
(d) Employer-employees relationship.
Answer:
(d) The ethics of human resource management cover those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee.

76. Price skimming is an ethical issue covered under –
(a) Ethics in Compliance
(b) Ethics in Marketing
(c) Ethics in Finance
(d) Ethics in Production.
Answer:
(b) Ethics, in Marketing deals with the moral principles behind the operation and regulation of marketing. The ethical issues confronted in this area include pricing i.e. price fixing, price discrimination, price skimming, black markets, misleading advertisements, etc.

77. Anti-competitive practices include –
(a) Insider trading
(b) Grey markets
(c) Employment of child labour in production activities
(d) Tie-in arrangements.
Answer:
(d) Anti-competitive practices are ethical issues under ethics in marketing which includes manipulation of supply, inclusive dealing arrangements, tying arrangements etc.

78. A situation requiring a choice between equally undesirable alternatives; any difficult or perplexing situation or problem is known as –
(a) Trivial
(b) Pivotal
(c) Dilemma
(d) Veteran.
Answer:
(c) A situation requiring a choice between equally undesirable alternatives, any difficult or per-planing situation or problem is known as dilemma.

79. Spending money on restoring the environment, affected out of products of inherently dangerous nature are known as –
(a) Business Ethics
(b) Corporate Philanthropy
(c) Whistle Blowing
(d) Corporate Leadership.
Answer:
(a) Spending money on restoring the environment, affected out of products of inherently dangerous nature are known as Business Ethics.

80. Mohan joined a company as Chief Finance Officer (CFO). He observed that the company is involved in concealing tax and engaged in other malpractices. He brought this fact to the notice of the Incqme Tax Authorities. This action of Mohan would be termed as –
(a) Cartelisation
(b) Misconduct
(c) Ethical wrong
(d) Whistle blowing.
Answer:
(d) The process where a person informs on another or makes public disclosures of corruption or wrong doing is known as whistle blowing. So, the action of Mohan would be termed as whistle blowing.

81. The rules or principles that define right or wrong conduct are known as-
(a) Ethics
(b) Customer satisfaction
(c) Ethical conflict
(d) Norte of the above.
Answer:
(a) By using ethical standards, a person or a group of person or an organisation regulate their behaviour to distinguish between what is right and what is wrong as perceived by others. So, the rules or principles that define right or wrong conduct are known as Ethics.

82. An activity is probably ethical if –
(a) It is approved by most individuals in the ‘organisation and is custpmary in the industry
(b) It is Approved by most individuals in the organisation
(c) It is customary in the industry
(d) It is legal.
Answer:
(c) Business ethics have following features –

• Universally applicable and is a relative norm.
• Far- reaching concept which goes beyond the idea of money creation and creates long – lasting relationship.
• Social values and morals are its important concepts.
• It gives protection to customers and other social groups.
• It cannot be enforced by law.
• It is a code of conduct which businessmen should follow while conducting their normal activities i.e. it is customary in nature. Thus, an activity is probably ethical if it Is customary in the industry.

83. “Adhering to Rules and Authority” comes under which Scope of Ethics?
(a) Ethics in marketing
(b) Ethics in compliance
(c) Ethics in finance
(d) Ethics in production.
Answer:
(b) Compliance is about obeying and adhering to rules and authority. Hence, this comes under the scope of ethics in compliance.

84. Business Ethics is required at which level of management?
(a) Top level
(b) Middle level
(c) Lower level
(d) All level.
Answer:
(d) Business Ethics is required at all level of management i.e. top level management, middle level management, lower level management. It covers companies, their employees etc. Ethics are code of conduct which businessmen should follow while conducting normal activities of business.

85. Idea of Business Ethics caught the attention of Academics, Media and Business Firms at the end of …………. .
(a) First world war
(b) Second world war
(c) Cold war
(d) None of the above.
Answer:
(c) The idea of business ethics caught the attention of academics, media and business firms by the end of cold war.

86. Following are the principles of business ethics –
(a) Under advantage
(b) Disrespect
(c) Honesty
(d) All of the above.
Answer:
(c) Principles of Business Ethics are as follows:

• Honesty.
• Integrity.
• Promise Keeping.
• Loyalty.
• Fairness.
• Concern for Others.
• Respect for Others.
• Law Abiding.
• Commitment to Excellence. .
• Leadership.
• Reputation and Morale.
• Accountability.

So, Honesty is one of the principle of Business Ethics.

87. Sarbanes Oxley Act of 2002 is named after which of the following experts?
(a) Aristotle
(b) Srnator Paul Sarbanes
(c) Michael Oxley
(d) Both (b) and (c)
Answer:
(d) The Sarbanes – Oxley Act came into force in 2002 and was named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architect. Thus, option (d) is correct that is both (b) & (c).

88. Business ethics is a ……………….. norm.
(a) Pervasive
(b) Continuous
(c) Relative
(d) None of the above.
Answer:
(c) Business Ethics is a relative norm. It differs from business to business.

89. Which of the following is not an unethical business practice …………………. .
(a) Collusion
(b) Insider trading
(c) Kickback
(d) Whistle Blowing
Answer:
(c) Collusion, Insider Trading, Whistle Blowing are the reasons for an unethical practice but Kick back is not an unethical practice.

90. Which one of the following is a measure to improve ethical behaviour of business at societal level —
(a) Indira Gandhi Paryavaran Puraskar
(b) Mumbai Grahak Panchayat
(c) Ethical committee comprising of BOD.
(d) All of the above.
Answer:
(b) Various organizations like Mumbai Grahak Panchayat Consumer Society of India etc. have been started by consumer groups to protect the interest of consumers and make them aware.

91. Which among the following is the vital factors in successful business strategy –
(a) Attracting and Retaining Talent
(b) Investor loyalty
(c) Customer satisfaction
(d) None of above.
Answer:
(c) Customer satisfaction is a vital factor in successful business strategy. Repeat purchases/orders and enduring relationship of mutual respect is essential for the success of the company. This is achieved by a company that adopts ethical practices.

92. When an employee exposes his employer’s wrong goings to others it is termed as
(a) Fraud
(b) Misrepresentation
(c) Mistake
(d) Whistle Blowing.
Answer:
(d) When an employee exposes his employer’s wrong doings to others, it is termed as whistle blowing, it is the process where a person informs on another or makes public disclosure of corruption or wrong doing.

93. Which one of the following is the recent case of unethical practice ?
(a) Satyam
(b) Auditing fraud
(c) Insider Trading
(d) All of the above.
Answer:
(a) Auditing practices and insider trading are types of ethics in business. Satyam is the recent case of unethical practice.

93. Write the expanded form of “EBEN” ?
(a) European Business Ethics Network
(b) European Behaviour Ethics Network
(c) Exact Business Ethics Network
(d) None.
Answer:
(a) European Business schools adopted business ethics after 1987 commencing with Europe Business Ethics Network (EBEN) in 1982.

94 The term ‘Business Ethics’ came into common use in the year.
(a) 1950
(b) 1960
(c) 1970
(d) 1980
Answer:
(c) The term “business ethics” came into common “use in the early 1970’s.

95. …………………. refers to the ‘code of conduct’.
(a) Code of practice
(b) Code of ethics
(c) Business ethics
(d) All of the above.
Answer:
(c) Business ethics refers to the ‘code of conduct’. Code of conduct is a set of principles and expectations that are considered binding on any person who is a member of a particular group.

96. Which amongst the following ethical issue is not related with ethics in finance.
(a) Fraudulent asset valuation
(b) Insider Trading
(c) Executive compensation
(d) Price fixing
Answer:
(d) Following are the ethical issues related with ethics in finance

• Fraudulent asset valuations.
• Insider trading, securities frauds leading to the manipulation of financial market
• Executive compensation.
• Over billing of expenses, facilitation payments.

Thus, Price fining is not an ethical issue related with ethics in finance.

97. What are the reasons for unethical business practices ?
(a) Greed for quick money
(b) Administrative corruption
(c) Cultural and social reason
(d) All of the above.
Answer:
(d) Following are the reasons for unethical business practices

• Greed for quick money.
• Absence of well organised consumer movement.
• No Government support.
• Administrative corruption.
• Cultural and social reason.

Thus, the answer is all of the above.

98. Measures to improve ethical behaviour of business are framed at which level ?
(a) Societal level
(b) Governmental level
(c) Institutional level
(d) All of the above.
Answer:
(d) Measures to improve ethical behaviour of business are framed at

• Institutional level
• Government level
• Societal level

Thus, the answer is all of the above.

99. The word ethics is derived from the word ‘ethos’ which means …………….. .
(a) way of living
(b) way of looking
(c) way of hearing
(d) way of speaking.
Answer:
(a) The term ethics is derived from the Greek word “ethos” which means “way of living”.

100. Ethics has application………………….. .
(a) Universal
(b) Continuous
(c) Rigid
(d) Limited.
Answer:
(a) Ethics is a code of conduct which businessmen should follow while conducting their normal activities or function. It is universally applicable and is a relative norm.

101. Which of the following is not related to ethics in marketing ?
(a) Price fixing
(b) Price discrimination
(c) Price skimming
(d) Over billing of expenses
Answer:
(d) Following are the ethical issues related to ethics in marketing

• Pricing
• Various anti-competitive practices
• Various misleading advertisements
• Black markets, grey markets.

Thus; Over billing of expenses is not an ethical issue related to ethics in marketing.

102. Which of the following action is an ethical practice?
(a) Harassment
(b) Refuse to grant leave, recording genuine reason in writing by the employer
(c) Corruption
(d) Discrimination by employer in treatment while dealing with employees.
Answer:
(b) Unethical practices include:

• Harassment
• Cultural and Social Reason
• Greed for Quick Money
• Administrative Corruption
• Discrimination by employer in treatment while dealing with employees.

But refuse to grant leave, recording genuine reason in writing by the employer is an ethical practice.

103. Which of the following is/are correct statements ?
(a) Business ethics is not applicable is small business and industry
(b) Business ethics is not applicable to Government departments
(c) Business ethics is applicable to all types of businesses
(d) Business ethics is applicable to only few specified business by GOI.
Answer:
(c) Business ethics are code of conduct which businessman should follow while conducting their normal activities or function. It is universally applicable and is a relative norm.
Thus, it is correct to say that Business ethics is applicable to all types of business.

104. A/An …………………. is a moral situation in which a choice has to be made between two equally undesirable alternatives.
(a) Moral Problem
(b) Moral Obligation
(c) Ethical Confusion
(d) Ethical Dilemma.
Answer:
(d) An ethical Dilemma is a moral situation requiring a choice between equally undesirable alternatives, any difficult or perplexing situation or problem.

105. Which of the following ethical issue is related to finance?
(a) Abusing Co-workers
(b) Black Mailing
(c) Insider Trading
(d) Using of power and abusive language.
Answer:
(c) Ethical issue in finance that companies & employees are confronted with include:

• fraudulent asset valuations
• insider trading
• executive compensation
• over billing of expenses, facilitation payments.

106. The element which serves to provide employees with a means for reporting observed misconduct or violations without fear of reprisal is known as:
(a) Ethics Training
(b) Ethics Coach
(c) Strong Code of Ethics
(d) Systems for confidential reporting.
Answer:
(d) Key elements of business ethics includes system for confidential reporting: element which serves to provide employees with a means for reporting observed misconduct or violations without fear of reprisal.
This serves to further discourage ethical violations, while getting ‘ everyone involved.

107. Which of the following can be related as the benefits of behaving ethically by the businesses?
(a) Long term sustainability
(b) Goodwill lost
(c) Societal resistance
(d) High attrition rate.
Answer:
(a) Benefits of Behaving ethically by business are as follows:

• Ethics works a great, deal in making long term, long last relationships.
• Investor loyalty
• Customer satisfaction
• Far reaching concept

Hence, long term sustainability is correct answer.

108. Which ethical principle in business advocates equal treatment of all irrespective of caste, creed, gender or any other differences’?
(a) Justice and Fairness
(b) Ethics of Care
(c) Utilitarianism
(d) Rights and Duties.
Answer:
(a) Ethical principle in business, accordingly states fairness as, ethical persons are fair & just in all dealings, they manifest a.commitment to justice, the equal treatment of individuals, tolerance for and acceptance of diversity (such as, cast, creed, gender etc.)

109. A supplier of a component part has offered Karan’s family a free two- week cruise if his firm gets a very large order from karan’s company. The most ethical course of action for Karan to take would be to:
(a) Call the police
(b) Accept it if the part in question meets quality standards
(c) Politely turn it down and discuss the offer with his boss
(d) Ask around and see how his boss handled such offers previously.
Answer:
(c) In the business practices, greed for quick money is an unethical / behaviour for exploiting its consumer. In this case, Karan should politely turn the offer down and discuss the offer with his boss which shows his honesty, integrity, loyalty etc. towards his firm \which are the ethical principles in business and the most ethical course of action for Karan.

110. The records and operation of the organisations have to be made more transparent. The shareholders, employees and creditors of the firm should be aware of each and every financial decision taken by the firm. This statement can be attributed to which type of measure to improve ethical behaviour of business?
(a) Government level
(b) Global level
(c) Institutional level
(d) Societal level.
Answer:
(c) Some of the measures to improve ethical behaviour of business at institutional levels are:

• The organisation should lay down code of conduct.
• The records & operations of the organisation have to be made more transparent. The shareholders, employees and creditors of the firm should be aware of each & every financial decision taken by the firm.
• The business units should reward those people vyho adhere to the code of conduct.
• The organisation should set up machinery for continuous appraisal of ethical behaviour of employees etc.

111.  Activity to improve ethical behaviour by enacting various legislation is not taken at:
(a) Government level
(b) Institutional level
(c) Industrial level
(d) Societal level.
Answer:
(c) The other three levels i.e. Government level, institutional level, Societal level have laid down code of conduct and various , legislations to improve ethical behaviour.

112. Business ethics may be defined as a set of moral rules and principles to / protect the interest of:
(a) Industry as a whole
(b) Business unit ,
(c) Both Business unit & industry
(d) Employer.
Answer:
(c) Business ethics may be defined as a set of moral rules and principles to protect the interest of customer’s, employers, society, business unit and the industry as a whole.

113. ……………………………….. is doing the right thing even is nobody is watching.
(a) Promise keeping
(b) Effectiveness
(c) Efficiency
(d) Integrity.
Answer:
(d) Integrity is doing the right thing even if nobody is watching.

114. Which of the following’action indicate ethical practice on part of business?
(a) To promote harmful products
(b) To promote corruption
(c) To promote harmless products
(d) To promote aicohol.
Answer:
(c) Ethical practices includes actions and practices which are morally right and do not harm the welfare of society. For example promote products which are harmless etc.

115. Which of the following statements is not correct?
(a) Ethics pays in long term
(b) Codes of ethics foster ethical, ethical behavior because they expand the opportunity to behave ethically
(c) Ethics is good for company
(d) Without a code of ethics or formal policy on ethics employees are likely to base their decisions on how their peers and superiors behave.
Answer:
(b) Code of ethics foster ethical behaviour because they expand the opportunity to behave ethically.

116. Aspiration of Indians to build a strong nation in a short time coupled with their Colonial legacy has led to two divergent strands of values. This can be attributed to which category of reasons for unethical behaviour?
(a) Cultural and Social reason
(b) Sanctions and Discriminations
(c) Greed for quick money
(d) Absence of well organised consumer movement.
Answer:
(a) The reason for unethical practices in India:-
Cultural and Social Reason:-
Indian people aspire to build a strong nation in a short time coupled with our colonial legacy has lead to two divergent stand of values: Traditionally idealized value and operative values.

117. Ethical executives …………………………. .
(a) Never delegate their authority
(b) Never use power
(c) Abuse power
(d) Do not exercise power arbitrarily.
Answer:
(d) Ethical executives are fair and just in all dealings, they do not exercise power arbitrarily.

118. Which of the following ethical issue is related to production?
(a) Black market
(b) Grey market
(c) Price discrimination
(d) None is applicable.
Answer:
(d) The ethical issues related to production are:

• Defective, addictive and dangerous products
• Ethical issues relating pollution and environmental ethics
• Ethical problems arising out of new technology
• Product testing ethics.

119. Which of the following can be related as the benefits of behaving ethically by the business?
(a) Societal resistance
(b) Goodwill lost
(c) High attrition rate
(d) Long term sustainability of business.
Answer:
(d) A business can prosper on the basis of ethical standards and it help to retain the business for long years:

120. Choose the Correct option:
(a) Regular’buyers generally accept material on credit
(b) Regular buyers generally do not accept material on credit
(c) Regular buyers generally do not maintain good relations with the seller company
(d) Regular buyers are generally avoided by the seller company.
Answer:
(a) Regular buyers generally accept material on credit.

121. Which of the following action indicate unethical practice on part of business?
(a) To reduce price of product
(b) To pay bonus
(c) To reduce cost of product
(d) To reduce safety standards in factory premises.
Answer:
(d) To reduce safety standards in factory premises indicate unethical practice on part of business as it will lead to decrease the trust of the employees in the organisation.

122. Which among the following is an example of unethical behaviour in an organisation?
(a) Bullying Employees
(b) Forcing them to work long hours
(c) Both (a) and (b)
(d) None of the above.
Answer:
(c) Bullying employees and forcing them to work long hours is an example of unethical behaviour. Ethics is an attempt to guide human conduct and it is also an attempt to help man in leading good life by applying moral principles. But bullying the employees, forcing them to work is not right, this is against the principles and rules of ethics.

123. Which one of the following is the ethical activity:
(a) Loosing talks
(b) Employees using phones during their lunch break for appointment of doctor
(c) Both (a) and (b)
(d) None of the above.
Answer:
(b) Ethics refers to well based standards of right and wrong that prescribe what human ought to do, usually in terms of rights, obligations, benefits to society, fairness or specific virtue. ‘What is right’ is ‘ethical’ and ‘what is wrong’ is ‘unethical’. Using phone during lunch break is not unethical, it is ethical. Employees can use their phone during their lunch, because it is a break for employee and they are free to use their break.

124. Which of the following is the example of unethical practice in ethics in finance:
(a) Misleading financial analysis :
(b) Over billing
(c) Bribery
(d) All are applicable
Answer:
(d) Following are unethical practices in finance:

• Misleading financial analysis
• Insider trading
• Executive Compensation
• Bribery, kickbacks, over billing of expenses
• Fake reimbursements

Thus, all are unethical practices in finance.

125. Which of the following is unethical practice:
(a) Harassment
(b) Misuse of minutes
(c) Theft of stock
(d) All are applicable.
Answer:
(d) Unethical Practices includes:

• Harassment
• Cultural and Social reason
• Greed for Quick Money
• Administrative Corruption
• Discrimination by Employer in treatment while dealing with employees.

All these are unethical practices. Thus, the answer is option (d).

126. Code of conduct is followed by:
(a) Code of ethics
(b) Only (a)
(c) Code of unethical practice
(d) Both (a) and (c).
Answer:
(d) Code of Conduct is also called code of ethics. It comprises of three elements:

• Code of Ethics
• Code of Conduct
• Statement of Values.

It is a written document, inspirational in contents and specifies clearly what is acceptable or unacceptable behaviour in workplace. Thus, it is followed by both code of ethics and code of unethical practices.

127. Which of the following ethics is concerned with meaning of philosophical language and moral proposing:
(a) Virtue ethics
(b) Political ethics
(c) Normative ethics
(d) Meta ethics
Answer:
(a) Virtue Ethics is often viewed as a separate branch in itself. Although it is clearly normative as well, virtue ethics is distinguished from other forms of normative ethics because it is concerned with possessing moral traits, living a good, philosophical language and moral proposing.

128. What is the meaning of “Whistle Blowing”: .
(a) Disclosure Corruption
(b) Brevity
(c) Both (a) and (b)
(d) None of the above.
Answer:
(a) The Process where a person informs about another misdoing or make a public disclosure of corruption or wrong doing, is called whistleblowing.

129. Which of the following is /are the elements of ethics:
(a) Formal code of conduct
(b) Ethics Communication
(c) Ethics Committee
(d) All are applicable.
Answer:
(d) Elements of Ethics:

• Formal Code of Conduct
• Ethics Committee
• Ethical Communication
• An Ethics office with ethical officers
• Ethics Training Programme
• A Disciplinary System
• Establishing an Ombuds Person
• Monitoring

Thus, all are the elements of ethics. The answer is option (d).

130. Why business should behave ethically?
(a) To exist in a competitive environment
(b) To keep its commitments
(c) To protect their employee
(d) All are applicable.
Answer:
(d) Business should behave ethically:

• To exist in a competitive market
• To keep its commitments made to society
• To meet the stakeholders expectation
• To build the trust with key-stakeholder group
• To protect their employees and their reputation
• To protect its own interest as well as of the business community as a whole

131. Ethics is derived from:
(a) Ethos
(b) Mores
(c) Both (a) and (b)
(d) None of the above
Answer:
(c) The word ‘ethics’ is derived from Greek word ethds (character) and from latin word ‘mores’ (customs).

132. Which of the following can be reLated as the benefits of behaving ethically by the businesses?
(a) High attention rate
(b) Societal resistance
(c) Goodwill lost
(d) Long term sustainability of business.
Answer:
(d) Long term sustainablilty of business can be related as the benefits ot behaving ethicaily by the businesses. It is generally viewed that good business ethics piomote good business and thereby it helps to retain the business f0r long years.

133. Which of the following can be cited as incidents of unethical business activity?
(a) Unfair competitive practices In the computer Industry
(b) Deceptive advertising of medicines and toys
(c) Error and fraud
(d) All are applicable.
Answer:
(d) Unfair competiting practices, deceptive advertising of medicines and toys, errors and fraud these all are cited as incidents of unethical business activity as it hurts the interest and rights of society and – exploits the consumer.

134. Ethical executives …………… .
(a) harass subordinates
(b) are not carried away with undue influence
(c) bribe official
(d) invite any conflict of interest.
Answer:
(b) Ethical executives are not carried away with undue influence as it is an unethical act and a good end cannot be attained with wrong means, even if it is beneficial.

135. Which of the following action indicate ethical practice on part of business?
(a) Using imported raw material, when there is no need
(b) Using recycled raw material
(c) Using raw material which create environmental pollution
(d) Using raw material of substandard quality.
Answer:
(b) Using recycled raw material indicate ethical practice on part of business being an ethical decision making which allow to correctly provide solutions to any of the objective confronted with.

136. Which of the following action indicate ethical practice on part of busness?
(a) To promote harmful poeducts
(b) To promote alcohol
(c) To promote corruption
(d) To promote harmless products.
Answer:
(d) To promote harmless products indicate ethical practice on part of business as it provide an ability to assess the benefits and problems associated in different ways.

137. The reason for a business to behave unethically could be:
(a) Sustainability
(b) Long term commitments with customers
(c) Tax evasions
(d) Administrative reforms.
Answer:
(c) The reason for a business to behave unethically could be tax evasions as these malpractices have a potential to inflict enormous harm on individuals, on communities and economic development.

138. The process where a person makes public disclosure of corruption or wrong doing is known as:
(a) Whistle blowing
(b) Presa release
(c) Shouting
(d) Ethical surveillance.
Answer:
(a) The process where a person makes public disclosure of corruption or wrong doings is known as whistle blowing. According to W. Wilson, anything that is being done or to be done, should be brought to the knowledge of everyone. If everyone knows, none gets opportunity to do an unethical act.

139. Business Ethics is based on well accepted ………………… values.
(a) Legal and moral
(b) Moral and social
(c) Social and legal
(d) Social and cultural.
Answer:
(b) Business ethics is based on well accepted moral and social values. It studies what is morally right or wrong, just or unjust and on the other side it aims at individual good as well as social good, the good of the mankind as a whole.

140. Business ethics is a set of:
(a) Moral rules
(b) Principles
(c) Values
(d) All are applicable.
Answer:
(d) Business ethics is a set of moral values, principles and values. Thus, it is also regarded as science of the highest good. It determines rightness or wrongness of actions.

141. Which of the following ethical issues is related to marketing?
(a) Issues affecting the privacy of the employer-whistle blowing
(b) Accounting fraud
(c) Issues affecting the privacy of the employee-worlplace surveillance, drug testing .
(d) Misleading advertising.
Answer:
(d) Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. One of the ethical issues confronted in this area is misleading advertisement.

142. Which of the following economies tends to have a moie effective capital market than the rest?
(a) Developed
(b) Emerging
(c) Expensive
(d) Developing.
Answer:
(a) Developed economies tends to have a more effective capital market than the rest i.e. emerging, developing economies as such because of practices of managing business operation in economic and political environment which makes rooms to actively trade and invest.

143. One of the most critical ethical issues faced in human resources is:
(a) Insider Trading
(b) Affirmative action
(c) Fraudulent asset valuations
(d) Product testing ethics.
Answer:
(b) The issues of ethics faced by HRM are:

• Discrimination issues
• Sexual Harassment
• Affirmative Action
• Issues surrounding the representation of employees and democratization of the workplace, Tradestation.
• Issues affecting Privacy of Employee, Workplace Surveillance, Drug testing.
• Issues affecting privacy of the employer: Whistle blowing
• Issues relating to fairness of employment contract and balance of power between employer and employee.
• Occupational safety and health.

144. The reason for a business to behave unethically could be:
(a) Long term commitments with customers
(b) Sustainability
(c) Tax Evasions
(d) Administrative reforms.
Answer:
(c) Reasons for business to behave unethically:

• Greed for Quick Money
• No Government Support
• Administrative Corruption
• Cultural and Social Reason
• Tax Evasion
• Other fears (fear of retrenchment, sanctions and government policies)

145. You work as a manager of camp that runs adventure holidays for children. During their holidays, children take part in activities such as rock climbing under the direction of instructors who are employed by you. Observing strict safety standards is of paramount importance, since the lives of children and instructors are potentially at risk. Which of the following action will be considered as ethical?
(a) To scold the instructor publically
(b) To check instructors qualification and skill at the time of joining
(c) To change the instructors once in a month so that they can work without emotional attachment
(d) To introduce fandom drug and alcohol testing for instructorto ensure that their ability to fulfill their role is not impaired.
Answer:
(b) Scolding the instructor publicly, Changing the instructor on regular basis or without prior information
Introducing random drug tests for instructor All of the above are unethical practices.

146. In general, ethics are related to:
(a) Business only
(b) Few aspects of life only
(c) Every aspect of life
(d) Few categories of business only.
Answer:
(c) Business ethics reflects the philosophy of business, one of whose aim is to determine the fundamental purpose of a company ethics is related to every aspect of our life. In today’s world of scams, frauds, corruptions due to cut-throat competition, it is essential for new entrants to ensure that they adhere to the basic ethical standards.

147. Which of the following can be related to as the benefits of behaving ethically by the businesses?
(a) Societal resistance
(b) Goodwill lost
(c) High attention rate
(d) Long term sustainability of business.
Answer:
(d) A business can prosper on the basis of good ethical standards and it helps to retain the business for long years.

148. Activity to improve ethical behaviour by giving rewards is taken at:
(a) Industry level
(b) Institutional level
(c) Government level
(d) Societal level.
Answer:
(b) Ethical behaviour at institutional level includes:

• The organisations should lay down code of conduct
• The business units should reward people
• Should set up machinery for continuous appraisal
• The operations should have to be made more transparent.

149. Thelollowing behaviour is an example of ethical consideration within business relationships.
(a) Avoiding obligations
(b) Shirking responsibilities
(c) Setting a poor example for others
(d) Keeping company secrets.
Answer:
(d) Business ethics also recognised that the world of business raised new and unprecedented moral problems not covered by personal systems of morality.
Common-sense morality is sufficient to govern judgements about stealing from your employer, cheating customers and tax fraud.

150. Which of the following action indicate ethical practice on part of business?
(a) Expecting worker to work for specified hours in pleasant conditions
(b) Expecting worker to work for any duration any time the employer wants
(c) Expecting worker to work for more than specified hours even if it is not so desired
(d) Expecting worker to work for very long hours in unpleasant conditions.
Answer:
(a) Managing interests of employees in business is covered under ethics of HRM. It includes ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee.
Thus, expecting worker to work for specified hours in pleasant conditions is the ethical behavior expected on behalf of business.

151. Which of the following is/are correct statement(s)?
(a) Business ethics is not applicable to small business and industry
(b) Business ethics is applicable to only few specified business by GOI
(c) Business ethics is applicable to all types of business
(d) Business ethics is not applicable to Government departments.
Answer:
(c) Business ethics is concerned with the behaviour of a businessman in doing a business. Unethical practices create problems to businessmen as well as business units. Business ethics is applicable to all types of business.

152. ………………………. is doing the right thing, even if nobody is watching.
(a) Promise keeping
(b) Effectiveness
(c) Integrity
(d) Efficiency.
Answer:
(c) Integrity is doing the right thing even if nobody is watching.

153. Which of the following is/are correct statements?
(a) Ethics leads to business sustainability
(b) Ethics are enforceable
(c) Ethics is useless
(d) Business ethics are the same as legal issues.
Answer:
(a) Business ethics is concerned with the behavior of a businessman in doing a business. Business ethics may be defined as a set of moral rules and principles to protect the interest of customers, employers, society, business unit itself and the industry as a whole.

154. Which of the following can be related as the benefits of behaving ethically by the businesses from the stakeholders perspective?
(a) High attention rate
(b) Societal welfare
(c) Un-sustainability of business
(d) Goodwill lost.
Answer:
(b) Business ethics is nothing but the application of ethics in business. Business ethics is the application of general ethical ideas to business behaviour. Ethical business behaviour facilitates and promotes good to society, improves profitability, fosters business relations and employee productivity.

The social responsibility of a business requires the observing of business ethics. A business man should not ignore the business ethics while assuming social responsibility. Thus, from the stakeholders point of view the societal welfare is related as the benefits of behaving ethically.

155. A/An …………………………. is a moral situation in which a choice has to be made between two equally undesirable alternatives.
(a) Ethical dilemma
(b) Moral problems
(c) Moral obligation
(d) Ethical confusion.
Answer:
(a) An ethical dilemma is a situation where one is in conflict between moral imperatives. Often rejecting either solution has major consequences. It is also known as ethical paradox or moral dilemma. Ethical dilemma is any situation in which guiding moral principles cannot determine which course of action is right or wrong. To obey one action, would result in transgressing another. Thus, option a is correct.

156. Which of the following action is an ethical practice?
(a) Unauthorised disclosure of confidential information and intellectual property of company by employee to competitors
(b) Unauthorised disclosure of confidential information and intellectual property of company by ex-employee to competitor
(c) Bribing
(d) None is ethical.
Answer:
(d) Business Ethics or Ethical standards are the principles, practices and philosophies that guide the business people in the day to day business decisions. Business ethics are the principles, which govern and guide business people to perform business functions and in that sense business ethics is a discipline. Thus, option d is correct.

157. Which of the following action indicate ethical practice on part of a business organisation?
(a) Treating people roughiy
(b) Behaving in an erratic manner
(c) Treating fairly and behaving honestly
(d) None is ethical.
Answer:
(c) Business ethics may be defined as a set of moral rules and principles to protect the interest of customers, employers, society, business unit itself and the industry as a whole. Thus, option c is correct.

158. One of the most critical ethical issues faced in human resource is:
(a) Fraudulent asset valuations
(b) Insider trading
(c) Product testing ethics
(d) Affirmative action.
Answer:
(d) Human Resource Management (HRM) plays a decisive role in introducing and implementing ethics. Ethics should be a pivotal issue for HR specialists. The ethics of human resource management (HRM) covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee. The issues of ethics faced by HRM therefore, include affirmative action.

159. Which of the following action indicate unethical practice on part of a business organisation?
(a) Engage worker to-work in factory without hygiene condition
(b) Engage worker to work in factory without safety standards
(c) Engage worker to work in factory on Sunday without compensatory holiday
(d) All are applicable.
Answer:
(d) The concept of business ethics has come to mean various things to various people, but generally it’s coming to know what it right or , wrong in the workplace and doing what’s right – this is in regard to effects of products/ services and in relationships with stakeholders.
Business ethics is concerned with the behavior of a businessman in doing a business. Unethical practices are creating problems to businessman and business units. Thus, option d is correct.

160. What can be underlying principles of ethical decision making?
(a) Leadership
(b) Esteem
(c) Honesty and integrity
(d) All are applicable.
Answer:
(c) Business ethics can help to improve ethical decision making by providing managers with the appropriate knowledge and tools that ‘ allow them to correctly identify, diagnose, analyse, and provide solutions to the ethical problems and dilemmas they are confronted with. In a nutshell, the principle of ethical decision making is the honesty and integrity.

161. The intent of Business or Corporate Ethics is to:
(a) Balance the desire of businesses to maximise profits against the needs of all stakeholders.
(b) Guide the business to earn profits without harming individuals or society or natural environment as a whole.
(c) Promote a ‘code of conduct’ which everyone in an organisation are expected to follow while dealing with others.
(d) All are applicable.
Answer:
(d) Business ethics provides an ethical framework for evaluating business and the corporate world. Business ethics is nothing but the application of ethics in business. Business ethics is the application of general ethical ideas to business behavior. Ethical business j behavior facilitates and promotes good to society, improves profitability, fosters business relations and employee productivity.

162. Ethical executives ………….. .
(a) Adapt value based approach
(b) Do not take undue advantage of other’s mistake
(c) Stop others from committing mistake
(d) All the Stated options are correct.
Answer:
(d) Ethical Executive adapt:

• a value based approach
• Do not take undue Advantage
• Stop others from committing mistake.

163. Ethics is a set of principles or standards of human conduct that govern the behaviour of:
(a) Individuals
(b) Organizations
(c) Both individuals and organizations
(d) Neither individuals nor organizations.
Answer:
(c) Ethics is a set of principles or standards of human conduct that Governs the behaviour of Individual and Organisation Both.

164. The measures to improve ethical behaviour of business does not include:
(a) Monitoring
(b) Formal code of conduct
(c) Avoidance
(d) Ethics committee.
Answer:
(c) Measures to improve ethics:

• Formal code of conduct.
• Ethics committee
• Ethics communication
• Ethics office
• Ethics training programme
• A Disciplinary programme.
• Establishing an Ombuds person.
• Monitoring

165. Which of the following action indicates ethical practice on part of business?
(a) To promote corruption
(b) To promote alcohol
(c) To promote harmless products
(d) To promote harmful products.
Answer:
(c) Promotion of harmless product is an ethical practice on the part of business.

166. The intent of business or corporate ethics is to:
(a) Balance the desire of businesses to maximize profits against the needs of all the stakeholders.
(b) Guide the business to earn profits without harming individuals or society and natural environment as a whole
(c) Promote a code of conduct which everyone in an organisation are expected to follow while dealing with others
(d) All are applicable.
Answer:
(d) The object of business or corporate ethics.

• Balance the desire of business people to maximise profit against the needs of stakeholder.
• Guide the business to earn profit without, harming.
• Promote a code of conduct.

167. Business Ethics is based on well accepted values
(a) moral and social
(b) legal and moral
(c) social and legal
(d) social and cultural
Answer:
(a) Business ethics is based on well accepted Moral and Social Values.

168. “A company’s reputation for ethical behavior can help it create a more positive image in the market place, which can bring in new customers through word – of – month referrai’s. Commonly, a reputation for unethical dealings, hurt’s the company’s chances to obtain new customers, particularly in this age of social networking when dissatisfied customers can quickly disseminate information about the negative experience they had.” Which of the following point is most relevant topic of ethics for paragraph subject matter?
(a) Business ethics is market gimmicks
(b) Ethical behavior tends to market failure
(c) Customer loyalty as advantage of business ethics
(d) Build customer loyalty is disadvantage of ethics.
Answer:
(c) Advantages of Business Ethics include customer satisfaction and investor loyalty.
In today’s world, Ethical Business practice may increase the prospective customer by the referral by satisfied customer whereas unethical practice may hurt such chances.

169. Which of the following action is an unethical practice?
(a) Use of unethical or illegal practices to collect any competitive information.
(b) Offering or taking bribe or illegal payment
(c) Harassment
(d) All are unethical.
Answer:
(d) Unethical Practical include-

• Offering and Taking Bribe
• Harassment
• Wrong practice to collect information.

170. Which of the fallowing ethical issue is related to marketing?
(a) Manipulation of financial market
(b) Issues relating to the fairness of the employment contract and the balance of power between employer and employee
(c) Accounting Fraud
(d) None is applicable.
Answer:
(d) Ethical issue in marketing-

• Pricing
• Anti Competitive Practice
• Misleading Advertisement
• Children and Marketing
• Black or Grey Market.

171. The main reason why business behave i nethically can be majority stated as follows:
(a) Sustainability
(b) Greed for quick money
(c) Tax regulations
(d) Administrative Reforms
Answer:
(b) Greed for quick money is one of the reasons due to which business use unethical practice.

172. The Idea of business caught the attention of academics, Media and business firms by the end of:
(a) First world war
(b) Second world war
(c) Cold war
(d) None of the above
Answer:
(c) Business grown rapidly at the end of cold war as the idea of business caught the attention of academics, media and business firms by end of cold war.

173. Providing Information about the law enforcement to regulatory agencies of a business is illegal or improper activity by its employees’ is …………………. .
(a) Ethical wrong
(b) Whistle blowing
(c) Ethical dilemma
(d) Ethical wonder.
Answer:
(a) Information related to illegal or improper activities by its employee’s provide to the enforcement of regulatory agencies is known, as whistle blowing.

174. Which of the following is not correct about business ethics?
(a) Business ethics is a universal and absolute concept
(b) Business ethics is based on will accepted moral and social values
(c) Business ethics is a Code of Conduct which businessman should follow while conducting their normal activities ‘
(d) Business ethics give protection to customers and other social groups related to a Firm.
Answer:
(a) Business ethics is based on well accepted Social Values and also Moral Values, these are Code of Conduct and give protection to customers and other groups related to firms but they are not followed in whole world and it is not an absolute concept.

175. To be successful business ethics and training program need to:
(a) Be focused on personal opinion of employees
(b) Be limited to higher management
(c) Educate employees on formal ethical frameworks and modals of ethical decision making
(d) Promote the use of emotions in making tough ethical decisions.
Answer:
(c) Business ethics and training programmes need to educate employees on general ethical frameworks and Models of ethical decision nominating if they want to be successful.

176. When a firm charges different prices from different groups of customers, it may be accused of:
(a) Cultural Relativism
(b) Money laundering
(c) Facilitating payments
(d) Price discrimination.
Answer:
(d) Price Discrimination means different prices from different customers charges by firms and price discrimination exists in monopoly market mainly.

177. Codes of Conduct and Codes of ethics :
(a) Are formal statement that describe what an organisation expects of its employees
(b) Become necessary only after a company has been in legal trouble
(c) Are designed for top executives and managers and not for regular employers
(d) Rarely become an effective component at the ethics and compliance program.
Answer:
(a) There are formal statements i.e. Codes of Conduct and ethics which describe what will be expected from employees by its organisation.

178. Ethics is:
(a) Positive in nature
(b) Normative in nature
(c) Subjective in nature
(d) None of these.
Answer:
(b) Normative is referred to what is ought to be, that is also implemented while performing Ethics, hence Ethics is normative in nature.

179. Which ethics has a choice to choose good or bad?
(a) Ethics of dilemma
(b) Ethics of code of conduct
(c) Both (a) and (b)
(d) Neither (a) nor (b).
Answer:
(a) Ethics of dilemma: It is a situation when one is in conflict between moral imperatives (that what is good and what is bad).

180. “Ethics” is derived from Greek word:
(a) Ethinic
(b) Ethical
(c) Ethicos/Ethos
(d) Both (a) & (b)
Answer:
(c) Ethics is derived from the greek word Ethikos or Ethos meaning Customs or character.

181. The rules or principle that define right or wrong conduct are known as …………………. .
(a) Ethics
(b) Customer Satisfaction
(c) Ethical conflict
(d) None of the above
Answer:
(a) The rules or principles that define right or wrong conduct are known as ‘Ethics’.

182. An activity is probably ethical if –
(a) It is approved of by most individuals in the organisation and is customary in the Industry.
(b) It is approved by most individuals in the organisation.
(c) It is customary in the Industry.
(d) It is legal.
Answer:
(d) An activity is probably ethical if it is a legal act not an illegal act. Therefore, a legal activity is an ethical activity.

183. ……………………………. also serves to inform employees of the vision that the company’s executives have for the company’s image and goals.
(a) Customer Feedback
(b) Code of Ethics
(c) Ethics coach
(d) Mission
Answer:
(b) ‘Code of Ethics’, also serves to inform employees of the vision that company’s executive have for the company’s image and goals.

184. Investors are concerned about of the company in which they invest.
(a) Ethics, Social responsibility and reputation
(b) Employees
(c) Executive compensation
(d) Only profitability
Answer:
(a) Investors are concerned about – ‘Ethics, Social Responsibility and reputation’ of the company in which they invest.

185. The ethics in human resource management cover those ethical issues arising around the –
(a) Society-employer relationship
(b) Customer – employees relationship
(c) Employer – State relationship
(d) Employer – employees relationship.
Answer:
(d) The ethics in Human Resource Management covers those ethical issues arising around the employer – employees relationship.

186. Price Skimming is an ethical issue covered under …………………………. .
(a) Ethics in Compliance
(b) Ethics in Marketing
(c) Ethics in Finance
(d) Ethics in Production.
Answer:
(b) Price Skimming is an ethical issues covered under ethics in marketing.

187. Anti-Competitive practices include –
(a) Insider trading
(b) Grey markets
(c) Employment of child labour in production activities
(d) Tie-in arrangements
Answer:
(d) Anti competitive practices include Tie-in arrangements.

188. A situation requiring a choice between equally undesirable alternatives; any difficult or perplexing situation or problem is known as –
(a) Trivial
(b) Cognition
(c) Dilemma
(d) Veteran
Answer:
(c) Dilemma is a situation requiring a choice between equally undesirable alternatives; any difficult or perplexing situation or problem.

189. Spending money on restoring the environment, affected out of products of inherently dangerous nature are known as –
(a) Business Ethics
(b) Corporate Philanthropy
(c) Whistle Blowing
(d) Corporate Leadership
Answer:
(a) ‘Business Ethics’ are known as where money is spend on restoring the environment, affected out of products of inherently dangerous nature.

190. Mohan joined a company as Chief Finance Officer (CFO). He observed that the company is involved in concealing tax and engaged in other malpractices. He brought this fact to the notice of the Income Tax Authorities. This action of Mohan would be termed as –
(a) Cartelisation
(b) Misconduct
(c) Ethical wrong
(d) Whistle blowing.
Answer:
(d) This action of Mohan will be whistle blowing because he did not consult the situation as case to the board and directly hit it to the income tax authority.

191. Getting things done through with people:
(a) Koontz O Donnel
(b) Henry Fayol
(c) Hick
(d) Haiman
Answer:
(a) Koontz and O’ Donnell’ state that management means, “Getting things done through and with people”.

192. Which condition creates the Ethical Dilemma?
(a) Is all the stakeholders interest getting protected
(b) Is the company’s profit increasing
(c) Is the company’s business activities increasing
(d) None of above.
Answer:
(a) An ethical dilemma is a situation where one is in conflict between moral imperatives.
Dimensions of Ethical Dilemmas are –

• Choice between equally undesirable alternatives
• Different courses of action possible
• Can be resolved not solved
• There is no ‘right’ of ‘wrong’ etc „

So that all the stakeholders interest are protected.

193. Ethics is derived from which word?
(a) French
(b) German
(c) Greek
(d) Latin
Answer:
(c) The term ethics is derived from the Greek word ‘ethos’ which itself is derived from the Greek word ethos, meaning custom or characters.

194. Ethical executives are:
(a) Real In business
(b) Worthy
(c) Worthy of trust
(d) None of above.
Answer:
(c) Ethics offices are to be established to communicate and implement ethics policies among employees of the organization. The ethics officer should develop a reputation for credibility, integrity, honesty and worthy of trust etc.

195. ……………………….. is a person which informs about another misdoings or public disclosure of corruption or wrong doing.
(a) Ombuds person
(b) Whistle blowing
(c) Ethical person
(d) Company Secretary
Answer:
(b) A whistle blower is a person who exposes secretive information or activity that is deemed illegal, unethical, or not correct within a private or public organization. Two other classifications of whistle blowing are private and public.

196. ………………. are established to communicate and implement ethics policies among employees of organisation.
(a) Ethic officer
(b) Ethic committee
(c) Both (a) and (b)
(d) None of above.
Answer:
(a) Ethics officers are to be established to communicate and implement ethics policies among employees of the organization. For this purpose ethics officers is to be appointed.

CS Foundation Business Management Ethics and Entrepreneurship Notes