MGMT2140 PRACTICE EXAM 9 – ETHICS AND CORPORATE RESPONSIBILITY
EXAM PRACTICE QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)
PLUS RATIONALE 2026 Q&A| INSTANT DOWNLOAD PDF – QUESTIONS AND
ANSWERS | VERIFIED AND WELL DETAILED ANSWERS | PLUS RATIONALES |
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Core Domains
• Ethical Theories and Moral Reasoning
• Corporate Social Responsibility (CSR) and Stakeholder Theory
• Business Ethics and Professional Standards
• Corporate Governance and Accountability
• Regulatory Compliance and Legal Frameworks
• Sustainability and Environmental Responsibility
• Global Ethics and Cross-Cultural Business Practices
• Ethical Decision-Making Models
• Whistleblowing and Organizational Ethics Programs
Introduction
This practice examination assesses knowledge and application of ethics and
corporate responsibility concepts essential for professional management practice. It
evaluates understanding of ethical theories, CSR frameworks, governance structures,
regulatory compliance, and stakeholder management. Questions include
foundational theory, applied scenarios, and critical analysis requiring professional
judgment. The examination emphasizes real-world application, ethical decision-
making, and problem-solving within organizational contexts. Candidates must
demonstrate competency in identifying ethical issues, applying appropriate
frameworks, and recommending defensible courses of action consistent with
professional standards and legal requirements.
,SECTION ONE: QUESTIONS 1–50
Question 1
Which ethical theory emphasizes that the morality of an action depends solely on
its consequences?
A. Deontological ethics
B. Virtue ethics
C. Utilitarianism
D. Ethical egoism
🟢 Correct Answer: C. Utilitarianism
🔴 Rationale: Utilitarianism is a consequentialist theory that evaluates actions
based on their outcomes, specifically seeking to maximize overall happiness or
utility for the greatest number of people.
Question 2
A manager discovers that a supplier uses child labor in violation of company
policy. The manager's primary ethical obligation is to:
A. Ignore the issue to maintain the business relationship
B. Report the violation and take appropriate corrective action
C. Negotiate lower prices from the supplier
D. Delegate the matter to junior staff
🟢 Correct Answer: B. Report the violation and take appropriate corrective action
🔴 Rationale: Managers have a fiduciary and ethical duty to uphold company
policies and address violations, particularly those involving human rights abuses,
even at the cost of business relationships.
,Question 3
Which of the following best defines corporate social responsibility?
A. Maximizing shareholder wealth regardless of social impact
B. A company's commitment to contribute positively to society while minimizing
negative impacts
C. Compliance with tax regulations only
D. Philanthropic donations made for public relations purposes
🟢 Correct Answer: B. A company's commitment to contribute positively to
society while minimizing negative impacts
🔴 Rationale: CSR encompasses a company's ongoing commitment to ethical
behavior, economic development, and improving quality of life for stakeholders
beyond mere legal compliance.
Question 4
The stakeholder theory of corporate governance holds that:
A. Only shareholders have legitimate claims on the corporation
B. Managers should prioritize employee interests above all others
C. The corporation should serve the interests of all legitimate stakeholders
D. Government regulation is unnecessary
🟢 Correct Answer: C. The corporation should serve the interests of all legitimate
stakeholders
🔴 Rationale: Stakeholder theory, advanced by R. Edward Freeman, argues that
businesses have responsibilities to multiple constituencies including employees,
customers, suppliers, communities, and shareholders.
, Question 5
A company executive learns of an impending product recall that will significantly
impact stock prices. Before the public announcement, she sells her shares. This
action constitutes:
A. Legitimate risk management
B. Insider trading
C. Ethical divestment
D. Prudent financial planning
🟢 Correct Answer: B. Insider trading
🔴 Rationale: Insider trading involves trading securities based on material, non-
public information, which is illegal and violates fiduciary duties and securities
regulations.
Question 6
Which ethical decision-making framework involves asking whether one would be
comfortable if the decision were made public?
A. Utilitarian analysis
B. Rights analysis
C. The publicity test
D. Cost-benefit analysis
🟢 Correct Answer: C. The publicity test
🔴 Rationale: The publicity test, often associated with Kantian ethics, asks whether
a decision could withstand public scrutiny, serving as a practical tool for ethical
evaluation.
EXAM PRACTICE QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)
PLUS RATIONALE 2026 Q&A| INSTANT DOWNLOAD PDF – QUESTIONS AND
ANSWERS | VERIFIED AND WELL DETAILED ANSWERS | PLUS RATIONALES |
GUARANTEED PASS | LATEST EXAM UPDATE
Core Domains
• Ethical Theories and Moral Reasoning
• Corporate Social Responsibility (CSR) and Stakeholder Theory
• Business Ethics and Professional Standards
• Corporate Governance and Accountability
• Regulatory Compliance and Legal Frameworks
• Sustainability and Environmental Responsibility
• Global Ethics and Cross-Cultural Business Practices
• Ethical Decision-Making Models
• Whistleblowing and Organizational Ethics Programs
Introduction
This practice examination assesses knowledge and application of ethics and
corporate responsibility concepts essential for professional management practice. It
evaluates understanding of ethical theories, CSR frameworks, governance structures,
regulatory compliance, and stakeholder management. Questions include
foundational theory, applied scenarios, and critical analysis requiring professional
judgment. The examination emphasizes real-world application, ethical decision-
making, and problem-solving within organizational contexts. Candidates must
demonstrate competency in identifying ethical issues, applying appropriate
frameworks, and recommending defensible courses of action consistent with
professional standards and legal requirements.
,SECTION ONE: QUESTIONS 1–50
Question 1
Which ethical theory emphasizes that the morality of an action depends solely on
its consequences?
A. Deontological ethics
B. Virtue ethics
C. Utilitarianism
D. Ethical egoism
🟢 Correct Answer: C. Utilitarianism
🔴 Rationale: Utilitarianism is a consequentialist theory that evaluates actions
based on their outcomes, specifically seeking to maximize overall happiness or
utility for the greatest number of people.
Question 2
A manager discovers that a supplier uses child labor in violation of company
policy. The manager's primary ethical obligation is to:
A. Ignore the issue to maintain the business relationship
B. Report the violation and take appropriate corrective action
C. Negotiate lower prices from the supplier
D. Delegate the matter to junior staff
🟢 Correct Answer: B. Report the violation and take appropriate corrective action
🔴 Rationale: Managers have a fiduciary and ethical duty to uphold company
policies and address violations, particularly those involving human rights abuses,
even at the cost of business relationships.
,Question 3
Which of the following best defines corporate social responsibility?
A. Maximizing shareholder wealth regardless of social impact
B. A company's commitment to contribute positively to society while minimizing
negative impacts
C. Compliance with tax regulations only
D. Philanthropic donations made for public relations purposes
🟢 Correct Answer: B. A company's commitment to contribute positively to
society while minimizing negative impacts
🔴 Rationale: CSR encompasses a company's ongoing commitment to ethical
behavior, economic development, and improving quality of life for stakeholders
beyond mere legal compliance.
Question 4
The stakeholder theory of corporate governance holds that:
A. Only shareholders have legitimate claims on the corporation
B. Managers should prioritize employee interests above all others
C. The corporation should serve the interests of all legitimate stakeholders
D. Government regulation is unnecessary
🟢 Correct Answer: C. The corporation should serve the interests of all legitimate
stakeholders
🔴 Rationale: Stakeholder theory, advanced by R. Edward Freeman, argues that
businesses have responsibilities to multiple constituencies including employees,
customers, suppliers, communities, and shareholders.
, Question 5
A company executive learns of an impending product recall that will significantly
impact stock prices. Before the public announcement, she sells her shares. This
action constitutes:
A. Legitimate risk management
B. Insider trading
C. Ethical divestment
D. Prudent financial planning
🟢 Correct Answer: B. Insider trading
🔴 Rationale: Insider trading involves trading securities based on material, non-
public information, which is illegal and violates fiduciary duties and securities
regulations.
Question 6
Which ethical decision-making framework involves asking whether one would be
comfortable if the decision were made public?
A. Utilitarian analysis
B. Rights analysis
C. The publicity test
D. Cost-benefit analysis
🟢 Correct Answer: C. The publicity test
🔴 Rationale: The publicity test, often associated with Kantian ethics, asks whether
a decision could withstand public scrutiny, serving as a practical tool for ethical
evaluation.
