BBA/B.Com Business Ethics & Corporate Governance APRIL 2025

Description

Business Ethics and Corporate Governance

April 2025 Examination

 

 

1. You are the marketing manager at a popular beverage company, SparkFizz Co. The company is about to launch a new energy drink targeted at young adults. During product testing, you discover that the drink contains high levels of sugar and caffeine, which could lead to potential health risks if consumed in large quantities. You are offered a significant bonus if the product achieves record-breaking sales in the first quarter. Promoting the drink as “healthy and energizing” would likely boost sales but would mislead customers. However, the company’s product launch depends on your marketing campaign. Highlighting the health risks transparently could lead to lower sales and damage the company’s reputation, potentially leading to layoffs. Identify whether the situation presents an ethical temptation, an ethical dilemma, or both. Justify your answer    with    the   key    differences    between    the    two    concepts. (10 Marks)

Ans 1.

Introduction

In today’s competitive business environment, ethical decision-making plays a crucial role in shaping the reputation and sustainability of organizations. Marketing professionals often face complex ethical challenges that require balancing corporate profitability with consumer well-being. The case of SparkFizz Co. presents a critical ethical issue: the promotion of an energy drink containing high sugar and caffeine levels, which may pose health risks to consumers. The dilemma arises because marketing

 

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2. Tech Pro Inc., a leading software development firm, is considering two options to increase profitability. The first option involves outsourcing its customer service operations to a country with lower labor costs, which will significantly reduce expenses but may lead to a slight decline in service quality. The second option requires investing in an advanced customer service training program, which will enhance service quality but will be expensive and yield slower returns.

After consulting the board of directors, the CEO decides to outsource customer service operations. This decision aligns with the shareholder model because it ensures higher immediate profits and better dividends for shareholders. However, the decision receives criticism from some employees and customers who feel it undermines service quality.

How does the decision to outsource customer service reflect the shareholder model of business ethics? What are the ethical implications in this case?  (10 Marks)

Ans 2.

Introduction

In the modern business landscape, companies constantly seek ways to enhance profitability and maintain competitive advantage. Tech Pro Inc., a leading software development firm, faces a strategic decision between two options: outsourcing customer service to reduce costs or investing in an advanced training program to improve service quality. The board of directors, prioritizing financial performance, decides to outsource customer service operations to a country with lower labor costs. While this decision aligns with the shareholder model by maximizing immediate profits

 

3. Aman Mathur is the CEO of Super Tech, a fast-growing technology firm. Recently, Aman noticed that some of his senior managers were not adhering to the company’s policy on expense reporting, approving inflated claims without proper checks. Although the amounts were small, Aman knew this could snowball into a larger issue if left unaddressed.

To set the tone at the top, Aman called a meeting with all managers. During the meeting, he emphasized the importance of integrity and transparency in all business operations, including expense reporting. He shared examples of how small ethical lapses can lead to larger scandals and harm the company’s reputation. Aman also voluntarily shared his own expense reports with the team, demonstrating full compliance with the rules. Additionally, he introduced stricter audit mechanisms and announced a rewards program for employees who demonstrate ethical behavior.

By addressing the issue openly and leading by example, Aman reinforced the importance of ethical conduct at all levels of the organization.

1. What does ‘tone at the top’ means? How did Aman’s actions demonstrate the concept of “Tone at the Top”? (5 Marks)

Ans 3a.

Introduction

“Tone at the top” is a critical concept in corporate ethics, referring to the ethical climate established by an organization’s leadership. When senior executives prioritize integrity, transparency, and accountability, they create a strong ethical culture that influences employees at all levels. In Super Tech, CEO Aman Mathur demonstrated a commitment to ethical leadership by addressing concerns about improper expense reporting. His actions, including open discussions,

 

1. What specific  steps  did  Aman  take  to  promote  ethical  behavior  in  Super  Tech? (5 Marks)

Ans 3b.

Introduction

Promoting ethical behavior within an organization requires a combination of leadership, policies, and cultural reinforcement. As the CEO of Super Tech, Aman Mathur took proactive steps to strengthen the company’s ethical framework after identifying minor lapses in expense reporting. Recognizing that unchecked violations could escalate, Aman introduced direct interventions,