Avatto>>UGC NET Management>>PREVIOUS YEAR SOLVED PAPERS>>UGC NET Management January 2017

46. Statement–I: Ethical principles tend to be broader than legal principles.
Statement–II: Laws and ethics are closely related.

  • Option : C
  • Explanation : Ethics is a conception of right and wrong behaviour, defining for us when our actions are moral and when they are immoral. Business ethics, on the other hand, is the application of general ethical ideas to business behaviour. Ethical business behaviour is expected by the public, it facilitates and promotes good to society, improves profitability, fosters business relations and employee productivity, reduces criminal penalties from public authorities and regulators, protects a business against unscrupulous employees and competitors, protects employees from harmful actions by their employer, and allows people in business to act consistently with their personal ethical beliefs. Ethical problems occur in business for many reasons, including the selfishness of a few, competitive pressures on profits, the clash of personal values and business goals, and cross-cultural contradictions in global business operations. Ethical issues, such as bribery and corruption, are evident throughout the world, and many national governments and international agencies are actively attempting to minimize such actions through economic sanctions and international codes of ethical behaviour. Although laws and ethics are closely related, they are not the same: ethical principles tend to be broader than legal principles. Illegal behaviour by business and its employees imposes great costs on the business itself and the society at large.
    To be precise, ‘Business ethics is the art and discipline of applying ethical principles to examine and solve complex moral dilemmas’. Business ethics proves that business has been and can be ethical and still make profits. Until the last decade, business ethics was thought of as being a contradiction in terms. But things have changed; today more and more interest is being shown to the application of ethical practices in business dealings and the ethical implications of business. ‘Business ethics is that set of principles or reasons which should govern the conduct of business whether at the individual or collective level.
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48. Match the items of List–I with List-II and identify the code of correct matching:

List–I (CSR Models)List–II (Emphasis)
(a) Ethical Model1. Corporate responsibilities limited to private owners.
(b) Statist Model2. Voluntary commitment by companies to public welfare
(c) Liberal Model3. State ownership and legal requirements determine corporate responsibilities.
(d) Stakeholder Model4. Companies respond to the need of customers, communities, etc.

  • Option : A
  • Explanation : Table : Four Models of Corporate Social Responsibility
    EthicalVoluntary commitment by companies to public welfareMahatma Gandhi
    StalistState ownership and legal requirements determine corporate responsibilitiesJawaharlal Nehru
    LiberalCorporate responsibilities limited to private owners (shareholders)Milton Friedman
    StakeholderCompanies respond to the needs of stakeholders–customers, creditors, employees, communities, etc.R. Edward Freeman
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49. Which one among the following is not correct about J. J. Irani Committee’s recommendations on Company Law (2005) :

  • Option : A
  • Explanation : Dr. J.J. Irani Committee Report on Company Law, 2005 The Government of India constituted an Expert Committee on Company Law on 2nd December 2004 under the Chairmanship of Dr. J.J. Irani. Set up to structurally evaluate the views of several stakeholders in the development of company law in India in respect of the concept paper promulgated by the Union Ministry of Company Affairs, the J.J. Irani committee has made suggestions to reform and update the basic corporate legal framework essential for sustainable economic reform. The report has taken a pragmatic approach keeping in view the ground realities and has sought to address the concerns of all the stakeholders to enable the adoption of internationally accepted best practices.
    Recommendations of the J.J. Irani Committee: Some of the most significant recommendations of the Irani committee are: > One-third of the board of a listed company should comprise independent directors. > Allow pyramidal corporate structures, that is a company which is a subsidiary of a holding company could itself be a holding company. > Give full liberty to the shareholders and owners of the company to operate in a transparent manner. > The new company law should recognize principles such as ‘class actions’ and ‘derivative action’. There are proposals to devise an exit option for shareholders who have stayed with a company and not participated in a buy back scheme implemented earlier. > Introduce the concept of One Person Company (OPC) as against the current stipulation of at least two persons to form a company. > Allow corporations to self-regulate their affairs. > Mandate publication of information relating to convictions for criminal breaches of the Companies Act on the part of the company or its officers in the annual report. Provide stringent penalties to curb fraudulent behaviour of companies. > Disclose proper and accurate compilation of financial information of a corporation.
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50. A business should act ethically for which of the following reasons?
(a) To prevent harm to the general public
(b) To meet stakeholder expectations
(c) To protect their own employees
(d) To maximize the profit of the business

  • Option : A
  • Explanation : There are a number of reasons given below as to why businesses should act ethically:
    > Protect its own interest (prudence).
    > Protect the interests of the business community.
    > Keep its commitment to society to act ethically.
    > Meet stakeholder expectations.
    > Prevent harm to the general public.
    > Build trust with key stakeholder groups.
    > Protect themselves from abuse from unethical employees and competitors.
    > Protect their own reputations.
    > Protect their own employees.
    > Create an environment in which workers can act in ways consistent with their values.
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