Business Ethics & Sustainability
Final Exam Review
Questions & Solutions
2025
©2025
, Question 1: The Triple Bottom Line
Scenario: A multinational corporation is redesigning its strategic plan to
incorporate economic, social, and environmental performance. Which
framework best captures this integrated approach?
- A. Shareholder Theory
- B. Triple Bottom Line
- C. Capital Asset Pricing Model
- D. Porter's Five Forces
ANS: B
Rationale: The Triple Bottom Line framework emphasizes three
dimensions—profit, people, and planet—requiring organizations to
balance economic performance, social responsibility, and environmental
stewardship.
---
Question 2: Stakeholder Theory Application
Scenario: A company is revisiting its corporate governance structure to
include not only shareholder interests but also those of employees,
suppliers, customers, and communities. Which ethical theory does this
approach most closely align with?
- A. Utilitarianism
- B. Deontological Ethics
- C. Stakeholder Theory
- D. Egoism
ANS: C
Rationale: Stakeholder theory argues that organizations have ethical
obligations to all parties affected by their actions, rather than focusing
solely on maximizing shareholder value.
---
©2025
, Question 3: Ethical Leadership and Sustainability
Scenario: A CEO introduces a code of ethics that emphasizes
transparency, long‑term environmental stewardship, and fair labor
practices, and communicates these values across the organization. Which
leadership model is evident here?
- A. Transactional Leadership
- B. Transformational Leadership
- C. Autocratic Leadership
- D. Laissez‑faire Leadership
ANS: B
Rationale: Transformational leadership involves inspiring and
motivating employees to exceed short‑term goals by embedding ethical
values and a long‑term sustainable vision across the organization.
---
Question 4: Sustainability Reporting Standards
Scenario: A company wants to enhance its sustainability communication
and decides to report its environmental and social performance
alongside financial results. Which reporting framework is most commonly
used for this purpose?
- A. Generally Accepted Accounting Principles (GAAP)
- B. Global Reporting Initiative (GRI)
- C. International Financial Reporting Standards (IFRS)
- D. Balanced Scorecard
ANS: B
Rationale: The Global Reporting Initiative (GRI) provides
comprehensive guidelines for sustainability reporting, enabling
companies to disclose their environmental, social, and economic impacts
in a consistent manner.
---
©2025
, Question 5: Greenwashing Critique
Scenario: An apparel brand advertises that its clothing is “eco‑friendly”
based solely on minor packaging improvements, while its manufacturing
processes remain highly polluting. This practice is best described as:
- A. Authentic Sustainability
- B. Greenwashing
- C. Corporate Social Responsibility (CSR)
- D. Ethical Marketing
ANS: B
Rationale: Greenwashing occurs when a company misleadingly
promotes itself as environmentally friendly without substantial actions or
improvements in its core operations.
---
Question 6: Circular Economy in Practice
Scenario: A technology firm implements a program to take back used
products, refurbish them, and then sell them at a discount. Which
sustainable economic model does this practice represent?
- A. Linear Economy
- B. Circular Economy
- C. Command Economy
- D. Sharing Economy
ANS: B
Rationale: A circular economy focuses on minimizing waste by reusing,
refurbishing, and recycling products, as opposed to the traditional linear
model of "take, make, dispose."
---
Question 7: Extended Producer Responsibility
Scenario: A beverage company is required by law to take back its
©2025
Final Exam Review
Questions & Solutions
2025
©2025
, Question 1: The Triple Bottom Line
Scenario: A multinational corporation is redesigning its strategic plan to
incorporate economic, social, and environmental performance. Which
framework best captures this integrated approach?
- A. Shareholder Theory
- B. Triple Bottom Line
- C. Capital Asset Pricing Model
- D. Porter's Five Forces
ANS: B
Rationale: The Triple Bottom Line framework emphasizes three
dimensions—profit, people, and planet—requiring organizations to
balance economic performance, social responsibility, and environmental
stewardship.
---
Question 2: Stakeholder Theory Application
Scenario: A company is revisiting its corporate governance structure to
include not only shareholder interests but also those of employees,
suppliers, customers, and communities. Which ethical theory does this
approach most closely align with?
- A. Utilitarianism
- B. Deontological Ethics
- C. Stakeholder Theory
- D. Egoism
ANS: C
Rationale: Stakeholder theory argues that organizations have ethical
obligations to all parties affected by their actions, rather than focusing
solely on maximizing shareholder value.
---
©2025
, Question 3: Ethical Leadership and Sustainability
Scenario: A CEO introduces a code of ethics that emphasizes
transparency, long‑term environmental stewardship, and fair labor
practices, and communicates these values across the organization. Which
leadership model is evident here?
- A. Transactional Leadership
- B. Transformational Leadership
- C. Autocratic Leadership
- D. Laissez‑faire Leadership
ANS: B
Rationale: Transformational leadership involves inspiring and
motivating employees to exceed short‑term goals by embedding ethical
values and a long‑term sustainable vision across the organization.
---
Question 4: Sustainability Reporting Standards
Scenario: A company wants to enhance its sustainability communication
and decides to report its environmental and social performance
alongside financial results. Which reporting framework is most commonly
used for this purpose?
- A. Generally Accepted Accounting Principles (GAAP)
- B. Global Reporting Initiative (GRI)
- C. International Financial Reporting Standards (IFRS)
- D. Balanced Scorecard
ANS: B
Rationale: The Global Reporting Initiative (GRI) provides
comprehensive guidelines for sustainability reporting, enabling
companies to disclose their environmental, social, and economic impacts
in a consistent manner.
---
©2025
, Question 5: Greenwashing Critique
Scenario: An apparel brand advertises that its clothing is “eco‑friendly”
based solely on minor packaging improvements, while its manufacturing
processes remain highly polluting. This practice is best described as:
- A. Authentic Sustainability
- B. Greenwashing
- C. Corporate Social Responsibility (CSR)
- D. Ethical Marketing
ANS: B
Rationale: Greenwashing occurs when a company misleadingly
promotes itself as environmentally friendly without substantial actions or
improvements in its core operations.
---
Question 6: Circular Economy in Practice
Scenario: A technology firm implements a program to take back used
products, refurbish them, and then sell them at a discount. Which
sustainable economic model does this practice represent?
- A. Linear Economy
- B. Circular Economy
- C. Command Economy
- D. Sharing Economy
ANS: B
Rationale: A circular economy focuses on minimizing waste by reusing,
refurbishing, and recycling products, as opposed to the traditional linear
model of "take, make, dispose."
---
Question 7: Extended Producer Responsibility
Scenario: A beverage company is required by law to take back its
©2025
