IGNOU FREE MMPC-020 Business Ethics and CSR Solved Guess Paper 2025

✅ Q1. Explain the meaning, nature and importance of Business Ethics.

Business ethics refers to the moral principles, values and standards that guide the behaviour of individuals and organisations in the conduct of business activities. It deals with what is right and wrong, fair and unfair, just and unjust in business practices. Business ethics ensures that business decisions are not taken only on the basis of profits but also on the basis of moral responsibility toward society. The nature of business ethics is dynamic, normative, universal and social in character. It is dynamic because ethical standards change with time, culture and social expectations. It is normative because it prescribes what ought to be done. It is universal because it applies to all types of business organisations and all people involved in business. It is social because it is concerned with the impact of business on society. Business ethics covers issues such as honesty, transparency, fair competition, consumer protection, employee rights, environmental responsibility and corporate governance. The importance of business ethics is extremely high in modern business due to intense competition, growing public awareness and globalisation. Ethical business builds trust and credibility among customers, employees, investors and society. It improves corporate image and reputation. Ethical practices reduce legal risks, penalties and conflicts. Business ethics promotes long-term sustainability rather than short-term profit maximisation. It improves employee morale, loyalty and productivity. Ethical organisations attract better talent and loyal customers. In the long run, ethical behaviour leads to stable growth and competitive advantage. In contrast, unethical practices may result in scandals, legal action, loss of goodwill and even business failure. Therefore, business ethics is the foundation of responsible business and an essential requirement for sustainable success in today’s business environment.

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✅ Q2. Discuss the concept and evolution of Corporate Social Responsibility (CSR).

Corporate Social Responsibility (CSR) refers to the obligation of business organisations to protect and improve social welfare while pursuing their economic objectives. It means that companies should conduct their business in a socially responsible manner by contributing to economic development, improving the quality of life of employees and communities and protecting the environment. The concept of CSR is based on the idea that business is not only an economic institution but also a social institution. The evolution of CSR has taken place in several stages. In the early stage, CSR was limited to charity and philanthropy where business houses donated money for social causes. In the second stage, CSR focused on employee welfare and labour protection such as better wages, safety and working conditions. In the third stage, CSR expanded to include consumer protection, environmental protection and community development. In the modern stage, CSR has become strategic and integrated with corporate policy, sustainability and stakeholder management. Companies now focus on inclusive growth, sustainable development, ethical governance and triple bottom line approach of people, planet and profit. The importance of CSR has increased due to globalisation, environmental challenges, social inequality and public pressure. CSR helps in building positive corporate image and trust. It improves relations with stakeholders such as customers, government and society. It contributes to long-term business sustainability. CSR also helps companies manage social and environmental risks. Therefore, CSR has evolved from voluntary charity to a strategic responsibility and has become an integral part of modern corporate management.

✅ Q3. Explain Corporate Social Responsibility in India.

Corporate Social Responsibility in India refers to the legal and ethical responsibility of companies to contribute to social development, environmental protection and nation-building activities along with their profit-making objectives. In India, CSR has moved from voluntary philanthropy to a statutory obligation. Large Indian business houses have traditionally been involved in social welfare activities such as education, healthcare, rural development and relief work. With economic liberalisation and globalisation, CSR has gained greater importance. Indian companies are now expected to address issues such as poverty reduction, skill development, digital inclusion, healthcare, sanitation, environmental sustainability and women empowerment. CSR in India promotes inclusive growth by involving corporations in national development goals. Companies implement CSR through projects related to education, environment protection, health, clean energy, water conservation, rural development and livelihood promotion. CSR also improves corporate reputation, stakeholder trust and employee engagement. It helps in improving the quality of life of underprivileged sections of society. The importance of CSR in India lies in the fact that government alone cannot solve all social problems due to limited resources. Corporate participation is necessary to achieve sustainable development. CSR also helps companies ensure long-term sustainability by balancing economic growth with social and environmental responsibility. Thus, CSR in India is not only a legal duty but also a moral obligation toward society and future generations.

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✅ Q4. Discuss the process of CSR Implementation in Organisations.

CSR implementation refers to the systematic execution of CSR policies, programmes and projects by organisations to fulfil their social and environmental responsibilities. The process of CSR implementation starts with identifying the CSR vision and objectives aligned with the company’s values and stakeholder expectations. The next step is need assessment, where social problems and development needs of target communities are identified. This is followed by selection of CSR activities such as education, health, environment, skill development or rural development. After that, a detailed action plan is prepared including budget allocation, time schedule, implementation partners and monitoring mechanisms. The next step is execution of CSR projects either directly by the company or through NGOs and implementing agencies. Continuous monitoring and evaluation of CSR activities is essential to measure performance and impact. The final step is reporting and disclosure of CSR activities to ensure transparency and accountability. Effective CSR implementation requires strong leadership commitment, employee participation, community involvement and proper governance structure. The importance of CSR implementation lies in translating CSR policy into actual social impact. Proper implementation ensures that resources are used effectively and socially beneficial results are achieved. It also strengthens stakeholder relationships and improves public trust. Poor CSR implementation leads to wastage of funds and loss of credibility. Therefore, systematic CSR implementation is essential for achieving sustainable development and responsible corporate behaviour.

✅ Q5. Explain the role of CSR in Sustainable Development.

Sustainable development refers to development that meets the needs of the present without compromising the ability of future generations to meet their own needs. CSR plays a crucial role in achieving sustainable development by integrating economic growth with social equity and environmental protection. Through CSR, companies contribute to education, healthcare, skill development and poverty alleviation, thereby supporting social sustainability. Environmental CSR initiatives such as pollution control, waste management, renewable energy, water conservation and afforestation promote ecological balance and environmental sustainability. Economic sustainability is achieved when CSR helps in inclusive growth, employment generation and community development. CSR encourages responsible production and consumption practices. It promotes ethical business behaviour and corporate transparency. CSR also helps companies manage social and environmental risks that may affect long-term business performance. The importance of CSR in sustainable development is extremely high because unchecked industrial growth has led to environmental degradation, climate change and social inequality. CSR helps in reducing these negative impacts and ensures that business growth benefits society as a whole. It also supports achievement of national and global sustainable development goals. Companies that adopt sustainability-oriented CSR gain competitive advantage, investor confidence and long-term stability. Therefore, CSR acts as a bridge between business growth and sustainable development and ensures that corporate progress goes hand in hand with social welfare and environmental protection.

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✅ Q6. Explain the concept and importance of Ethical Decision-Making in Business.

Ethical decision-making in business refers to the process of choosing actions that are morally right, socially responsible and fair while achieving organisational goals. It involves evaluating decisions not only on the basis of profitability and legality but also on the basis of values, justice, honesty, transparency and stakeholder impact. In modern business, managers face ethical dilemmas such as misleading advertising, bribery, insider trading, price manipulation, exploitation of labour, misuse of customer data and environmental damage, where legal compliance alone is not sufficient to ensure ethical behaviour. Ethical decision-making requires managers to identify ethical issues, evaluate alternative courses of action, assess their impact on stakeholders and choose the most morally acceptable option. The importance of ethical decision-making in business is extremely high because every major business decision affects multiple stakeholders such as employees, customers, investors, suppliers, government and society. Ethical decisions build trust, credibility and long-term reputation. They reduce legal risks, penalties and conflicts. Ethical decision-making promotes fairness, accountability and transparency within the organisation. It improves employee morale and commitment because employees prefer to work in organisations that follow ethical values. Ethical behaviour also improves customer loyalty and brand image. In contrast, unethical decisions may bring short-term profits but lead to long-term losses, corporate scandals, loss of goodwill and business failure. In today’s globalised and digital business environment, where public scrutiny is very high, ethical decision-making has become a strategic necessity rather than a moral option. Therefore, ethical decision-making is a core foundation of responsible business conduct and sustainable organisational success.

✅ Q7. Discuss the concept and importance of Corporate Governance in Business Ethics.

Corporate governance refers to the system of rules, practices and processes by which a company is directed, controlled and held accountable in the interest of its stakeholders. It defines the roles and responsibilities of board of directors, management, shareholders and other stakeholders and ensures that business is conducted in a transparent, fair and ethical manner. Corporate governance is closely linked to business ethics because it ensures ethical leadership, accountability, integrity and transparency in corporate functioning. The importance of corporate governance in business ethics is very high because it prevents misuse of power by top management and promotes responsible decision-making. Good corporate governance protects the rights of shareholders and minority investors. It ensures accuracy and reliability of financial reporting and disclosure. It prevents fraud, corruption, insider trading and financial manipulation. Corporate governance also strengthens risk management and compliance with laws and regulations. It improves corporate reputation and investor confidence. Companies with strong corporate governance enjoy easier access to capital and lower cost of finance. Poor corporate governance leads to corporate scandals, financial collapse and loss of public trust. In modern business, where companies handle public money and affect large sections of society, ethical corporate governance becomes essential for sustainable growth. Therefore, corporate governance acts as the ethical backbone of business organisations and a vital pillar of business ethics and corporate accountability.

✅ Q8. Explain the role of Stakeholders in Business Ethics and CSR.

Stakeholders are individuals or groups that have an interest or stake in the activities and performance of a business organisation. They include shareholders, employees, customers, suppliers, creditors, government, community and society at large. The stakeholder approach to business ethics and CSR recognises that business exists not only for profit maximisation but also to fulfil its responsibilities toward all stakeholders. The role of stakeholders in business ethics is extremely significant because their expectations and interests influence ethical standards and business conduct. Employees demand fair wages, safe working conditions and respectful treatment. Customers expect quality products, fair prices and honest communication. Shareholders expect transparency, accountability and reasonable returns. Communities expect environmental protection, employment opportunities and social development. Government expects legal compliance and tax payment. In CSR, stakeholders play both participative and beneficiary roles. Companies design CSR programmes based on stakeholder needs such as education, healthcare, livelihood and environment protection. Stakeholder engagement helps firms identify social expectations and measure social impact. The importance of stakeholder approach lies in building trust, long-term relationships and social legitimacy. It reduces conflict and enhances cooperation between business and society. Firms that ignore stakeholder interests face social opposition, legal problems and reputational damage. Therefore, stakeholders play a central role in shaping business ethics and CSR practices and in ensuring responsible and sustainable business operations.

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✅ Q9. Discuss the challenges faced in CSR Implementation in India.

CSR implementation in India faces several challenges despite strong legal framework and growing corporate awareness. One of the major challenges is lack of proper awareness and understanding of CSR among small and medium enterprises. Many companies treat CSR as a charity activity rather than a strategic responsibility. Another major challenge is lack of proper planning, monitoring and impact assessment of CSR projects. Many CSR programmes are implemented without proper needs assessment, leading to ineffective utilisation of resources. Lack of transparency and accountability in some CSR projects creates mistrust among stakeholders. Inadequate availability of trained CSR professionals is another major constraint. Companies often face difficulties in selecting reliable NGOs and implementation partners. Regional imbalance in CSR spending is also a serious issue as most funds are concentrated in industrially developed states while backward regions remain neglected. Bureaucratic delays, complex regulations and lack of community participation further slow down CSR implementation. Measurement of social impact is difficult because outcomes are long-term and qualitative. Economic slowdown and profit pressure also affect CSR budgets. These challenges reduce the effectiveness of CSR in achieving inclusive and sustainable development. Therefore, to strengthen CSR implementation in India, there is a need for better awareness, professional management, transparency, stakeholder participation and impact-oriented approach.

✅ Q10. Explain the future scope of Business Ethics and CSR in India.

The future scope of business ethics and CSR in India is extremely wide and promising due to rising public awareness, stricter regulations, global business integration and sustainability challenges. In the coming years, business ethics will play a more strategic role in shaping corporate policies, leadership practices and governance systems. Ethical compliance, transparency, data protection, environmental responsibility and fair competition will become mandatory expectations rather than optional values. CSR will increasingly shift from charity-based activities to impact-driven and sustainability-oriented projects. Future CSR will focus more on climate action, renewable energy, water conservation, digital inclusion, skill development, healthcare access and rural development. Technology will play a major role in CSR through digital platforms for monitoring, reporting and impact measurement. Stakeholder engagement will become more structured and participative. Investors will increasingly prefer ethically responsible and socially sustainable businesses. CSR will be integrated with business strategy and national development goals. Young consumers and employees will demand ethical brands and socially responsible organisations. Global supply chains will also force Indian companies to follow international ethical and sustainability standards. Therefore, the future of business ethics and CSR in India lies in deeper integration with business strategy, stronger accountability, greater social impact and long-term sustainable development.

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