Business Ethics and Corporate Governance MCQs 2026

Regarding ethical dilemma, the accurate statement is

1. A a routine decision with one clearly lawful and fair solution ✓
2. B a technical calculation with a single mathematically correct answer ✓
3. C a scheduling problem solved by standard project software automatically ✓
4. D a situation requiring choice between conflicting moral principles where no option is free of ethical compromise ✓

In management practice, stakeholder engagement primarily involves

1. A ignoring community feedback when siting industrial facilities ✓
2. B systematic interaction with affected parties to understand concerns and incorporate them into decisions ✓
3. C communicating only with shareholders while excluding employees ✓
4. D making secret decisions without consulting any affected group ✓

Regarding moral hazard, the accurate statement is

1. A the certainty that all insured parties always act more responsibly ✓
2. B a physical danger in factory machinery without behavioral link ✓
3. C the risk that a party insulated from consequences behaves less carefully or more recklessly ✓
4. D a marketing risk from competitor pricing moves only ✓

Regarding UN Global Compact, the accurate statement is

1. A a military alliance treaty among NATO member states only ✓
2. B a domestic tax code section on depreciation allowances only ✓
3. C a voluntary initiative encouraging businesses to adopt ten principles in human rights, labor, environment and anti-corruption ✓
4. D a software licensing agreement for operating systems only ✓

In management practice, agency theory and ethics primarily involves

1. A a theory explaining perfect alignment of manager and owner goals always ✓
2. B a model of inventory reorder points in supply chain only ✓
3. C a framework for scheduling project activities on critical path only ✓
4. D examining conflicts when agents (managers) may pursue self-interest contrary to principals (owners) interests ✓

Regarding ethical leadership, the accurate statement is

1. A demanding unethical shortcuts while punishing honest dissent ✓
2. B leading by example through integrity, fairness, transparency and commitment to moral standards ✓
3. C concealing misconduct to protect personal career advancement ✓
4. D applying rules selectively to favor close allies only ✓

In management practice, insider trading (ethics) primarily involves

1. A trading based on publicly released annual report data ✓
2. B buying or selling securities using material nonpublic information in breach of duty or fairness ✓
3. C investing after widely disseminated market news announcements ✓
4. D following published analyst reports available to all investors ✓

In management practice, bribery in business ethics primarily involves

1. A paying lawful customs duties on imported equipment ✓
2. B offering or accepting improper payments or favors to influence business decisions unlawfully ✓
3. C offering published trade discounts within approved policy ✓
4. D providing factual product information to prospective buyers ✓

sustainability in business is best defined as

1. A maximizing extraction of nonrenewable resources without replenishment ✓
2. B ignoring long-term ecological damage for immediate profit only ✓
3. C disposing hazardous waste illegally to reduce operating cost ✓
4. D meeting present needs without compromising the ability of future generations to meet theirs through responsible resource use ✓

Regarding triple bottom line, the accurate statement is

1. A reporting only net profit after tax without social or environmental data ✓
2. B tracking machine downtime without any sustainability metrics ✓
3. C focusing exclusively on shareholder dividends each quarter ✓
4. D measuring organizational performance on social, environmental and economic dimensions, often called people, planet and profit ✓

greenwashing is best defined as

1. A misleading marketing that exaggerates or falsifies environmental benefits of products or company practices ✓
2. B verified third-party certification of genuine sustainability improvements ✓
3. C transparent publication of audited carbon footprint reductions ✓
4. D substantive investment in renewable energy with measurable results ✓

corporate governance is best defined as

1. A the daily scheduling of factory production shifts only ✓
2. B the graphic design of consumer product packaging only ✓
3. C the warehouse layout for storing finished goods only ✓
4. D systems and processes by which companies are directed and controlled, balancing board, management and shareholder interests ✓

In management practice, conflict of interest primarily involves

1. A routine disagreement over technical methods among engineers ✓
2. B healthy competition between sales teams for legitimate bonuses ✓
3. C a situation where personal or financial interests could improperly influence professional judgment or duty ✓
4. D standard negotiation with suppliers at arm's-length terms ✓

whistleblowing is best defined as

1. A spreading unverified rumors to damage colleague reputations ✓
2. B reporting organizational wrongdoing, illegal acts or serious ethical violations to authorities or responsible parties ✓
3. C leaking trade secrets to competitors for personal gain ✓
4. D publicizing confidential customer data without legitimate cause ✓

code of ethics is best defined as

1. A the annual financial audit report filed with regulators only ✓
2. B a technical manual for operating production machinery only ✓
3. C a formal statement of principles and standards guiding employee conduct and organizational decisions ✓
4. D a marketing brochure describing product features only ✓

Regarding Friedman shareholder view, the accurate statement is

1. A the argument that the sole social responsibility of business is to increase profits within the rules of the game ✓
2. B the view that firms must solve all societal problems regardless of profit ✓
3. C the belief that corporations are identical to welfare agencies ✓
4. D the doctrine that managers should ignore owner interests entirely ✓

virtue ethics is best defined as

1. A applying rigid formulas without regard to personal integrity ✓
2. B measuring ethics only by quarterly earnings per share ✓
3. C focusing on moral character, integrity and virtues such as honesty, courage and compassion ✓
4. D defining morality exclusively by legal minimum compliance ✓

deontological ethics (Kant) is best defined as

1. A selecting options solely by calculating net financial gain ✓
2. B basing decisions only on majority vote without moral limits ✓
3. C treating honesty as optional whenever profit increases ✓
4. D judging actions by adherence to moral duties and rules rather than by consequences alone ✓

In management practice, justice approach to ethics primarily involves

1. A treating people fairly and equitably according to agreed rules and impartial standards ✓
2. B favoring relatives in hiring without merit consideration ✓
3. C punishing whistleblowers who report genuine misconduct ✓
4. D allocating rewards based solely on personal friendships ✓

Regarding rights-based ethical approach, the accurate statement is

1. A respecting fundamental human rights and dignity regardless of utilitarian calculations ✓
2. B maximizing profit even when basic rights of workers are violated ✓
3. C treating people as mere means to organizational ends always ✓
4. D ignoring privacy and consent when collecting customer data ✓

utilitarian ethical approach is best defined as

1. A following rules regardless of consequences in every situation ✓
2. B acting only on personal emotion without analyzing outcomes ✓
3. C choosing actions that produce the greatest good for the greatest number of people ✓
4. D obeying orders without considering harm to affected parties ✓

Carroll CSR pyramid is best defined as

1. A a hierarchy of factory machine maintenance schedules only ✓
2. B a model layering economic, legal, ethical and philanthropic responsibilities as foundations of corporate citizenship ✓
3. C a ranking of product features by engineering complexity only ✓
4. D a chart of organizational levels from CEO to supervisor only ✓

In management practice, stakeholder theory (Freeman) primarily involves

1. A the view that firms should create value for all stakeholders including employees, customers, suppliers, community and shareholders ✓
2. B the doctrine that only shareholders matter and all other groups are irrelevant ✓
3. C the belief that managers owe duty solely to government regulators ✓
4. D the idea that ethical duties apply only to nonprofit organizations ✓

Regarding Corporate Social Responsibility (CSR), the accurate statement is

1. A maximizing short-term profit by any means including fraud ✓
2. B business commitment to operate ethically and contribute to economic development while improving quality of life for workforce, community and society ✓
3. C ignoring environmental impact as long as sales rise ✓
4. D treating legal compliance as the ceiling rather than a minimum standard ✓