SBI SCHOOL OF BUSINESS INTELLEGENCE

PRE-REQUISITES COMPETENCY STAGE EXAMINATION

Chapter 1 & 6 Total Marks: 50*1=50
Tutor: Sir Osama Waheed Time Allowed: 60 Minutes
Name of the examinee: ……………... CEN:……………..
PRC-5
Multiple Choice Questions:
1.The profitability of a business can be measured through 8. Non-Executive directors are usually full-time employees of
key variables such: the company whereas executive directors
(a) Profit are not full-time employees.
(b) Revenue (a) True
(c) Cost (b) False
(d) All of the above
9.Entrepreneurs are the people who are hired and paid to
2. How many factors of production are there in a business? combine the inputs of natural resources, labor,
(a) 3 and capital to produce goods or services.
(b) 4 (a) True
(c) 5 (b) False
(d) 6
10. Because money itself produces nothing, it is not one of
3. Which of the following is not an internal stakeholder? the basic inputs. Instead, it is a means of
(a) Board of directors acquiring the inputs. Therefore, in this context, capital does
not include money.
(b) Shareholders
(a) True
(c) Non-executive directors
(b) False
(d) Employees

11. When an entity states its mission in a mission statement,

4. A well-written vision statement should be short, simple,
the statement is issued by the leaders of the
specific to the business, leave nothing open to
interpretation. entity, generally by its board of directors.
(a) True (a) True
(b) False (b) False

5. Appointing independent non-executive directors to the 12. Fundamental difference between Vision and Mission is
board of directors of a company is good corporate that Vision is the purpose of existence of
governance practice, because independent NEDs can help business while Mission is future-based.
to prevent a company from being dominated by the (a) True
personal interests of the executive directors. (b) False
(a) True
(b) False 13. An organizational structure describes how a company,
division, team, or other organization is built;
6. Customer buys a product/service because he/she how all of its various components fit together.
believes to receive value against the money. (a) True
(a) True (b) False
(b) False
14. The investors who purchase stock are called ________.
7. Creditors will lend funds to a firm only if they believe (a) stockholders
the firm will perform well enough to pay the (b) shareholders
interest on the loans and the principal (amount borrowed) (c) bondholders
in the future.
(d) both stockholders or shareholders
(a) True
(b) False
15. As per Mendelow's "power-interest matrix", the 22. Connected stakeholder means a stakeholder who:
stakeholders who have low power but high interest (a) is not a decision-maker
in business, should be: (b) is not a part of the permanent (full-time) infrastructure
(a) Monitored only of the organization
(b) Keep informed (c) is nevertheless very influential in shaping the future of
(c) Managed closely the organization and the decisions of its
(d) Ignored leaders
(d) All options
16. What kind of plans deal with day-to-day activities and
targets? 23. ________ is the money a company receives by providing
(a) Strategic services or selling goods to customers.
(b) Tactical (a) Profit
(c) Operational (b) Revenue
(d) Visionary (c) Asset
(d) Cost
17.Labor unions have power to influence the business
because they have: 24.To earn a profit, a person or organization needs ________
(a) Huge funds skills to plan, organize, and control the activities of the
(b) Foreign investments business and to find and develop employees so that it can
make products consumers
(c) Claim on human resources
will buy
(d) CEO in their pockets
(a) Management
(b) Fighting
18. Buying power is an external source of power for the
following stakeholders: (c) Decision making
(a) Customers (d) None
(b) Suppliers
(c) Governments 25. Company’s goals are an example of.
(d) Senior management (a) Overall purpose
(b) General overall aim
19. Which one of the following is not the purpose of (c) Future outlook
mission statement? (d) Specific overall aim
(a) to provide a basis for consistent strategic planning
decisions 26. Taking care of sensitive information of clients is an
(b) to provide a common purpose for all groups and example of:
individuals within the organization (a) Professional competence
(c) to establish goals and ethics for the organization (b) Integrity
(d) to let the employees work for their personal agendas (c) Confidentiality
(d) None of these
20. Which one of the followings is not a connected
stakeholder? 27. Sending junior to a client to perform tasks that should be
(a) Non-executive directors performed by a senior, is an example of lack
(b) Major supplier of:
(c) CEO (a) Professional competence
(d) Major customer (b) Integrity
(c) Confidentiality
21. Objectives should be: (d) Leadership
(a) Efficient
(b) SMART 28. Being honest with customer regarding quality of product
(c) Effective is ________.
(d) Understandable (a) Ethics
(b) Business ethics
(c) Effective leadership
(d) Confidentiality
29. Ethics issues may arise in all of the following situations, 36. Reprimanding employees in front of customers is example
except ________. of ________.
(a) Fair and honest dealing with customers and suppliers (a) Abuse of power
(b) Developing production schedule for next week (b) Ineffective leadership
(c) Showing respect to communities and public (c) Taking unfair advantage
(d) Showing respect to environment (d) None of these

30. An organization is in a process of awarding a contract. 37. Billing more than actual travelling expense is example of
Son of CEO of same organization has also applied ________.
for the award of contract. This is example of ________. (a) Taking something that does not belong to you
(a) Confidentiality (b) Misrepresentation of information
(b) Conflict of interest (c) Dishonesty
(c) Ethics (d) None of these
(d) Integrity
38.While purchasing a fabric, the customer is concerned that
31. An ethical issue may not arise when an employee fabric might bleed color when washed.
________. However, shopkeeper assures him that it won’t, even though
(a) Takes something that does not belong to him shopkeeper has received such complaints
(b) Divulges information from other customers. This is an example of ________.
(c) Has behavioral issues with others (a) Taking something that does not belong to you
(d) Is incompetent in performing the assigned tasks (b) Misrepresentation of information
(c) Dishonesty
32.Employees of ABC Limited often spends office time in (d) Giving or allowing false impressions
cafeteria having coffee and discussing different
business operations. This is an example of ________. 39. Every legal thing is also ethical.
(a) Violating rules (a) True
(b) Conflict of interest (b) False
(c) Misuse of organization time
(d) All of these 40. Every unethical thing is also illegal.
(a) True
33. If you see a colleague forging signature on cheque (b) False
book, what course of action will you take?
(a) Ignore him 41. Somethings can be legal but unethical at same time
(b) Discuss the ethical issue with him (a) True
(c) Report him immediately to seniors (b) False
(d) Demand a share from the theft amount
42. Selling a product at abnormal profit margin is ________.
34. Coming late to office on regular basis is example of (a) Legal & ethical
________. (b) Illegal but ethical
(a) Violating rules (c) Legal but unethical
(b) Taking unfair advantage (d) Illegal & unethical
(c) Misuse of organization time
(d) None of these 43. Thinking about consequences of an unethical decision is
________.
35. As a procurement manager, you call quotation from a (a) Mirror test
supplier and ask him to add 10% more than what (b) Consequence test
he is going to quote. You offer him to pay 5% of that extra (c) Legal test
amount and keep 5% for yourself. This is an
(d) Unethical test
example of ________.
(a) Dishonest
(b) Taking unfair advantage
(c) Abuse of power
(d) All of these
44. Which of the following refers to the obligations to take 50. Ethical issues in business are associated with showing
decisions and perform actions which are ________ for the communities in which the
desirable in terms of objectives and values of the society? business entity operates.
(a) Ethical conduct (a) Respect
(b) Social responsibility (b) Respect and concern
(c) Social welfare (c) Concern
(d) Business responsibility (d) None of the above

45.Which of the following is defined as the discipline

dealing with what is good and bad and with moral
duty and obligation?
(a) Philosophy
(b) Logic
(c) Management
(d) Ethics

46. Ethical ________ can take on many forms within the

business environment including deceptive business
practices and the withholding of important information
from investors or consumers.
(a) Fraud
(b) Misconduct
(c) Risk
(d) All of the above

47. Which of the following are set of moral principles

which guide organizations what is right wrong and
appropriate within the workplace?
(a) Moral ethics
(b) Business ethics
(c) Social ethics
(d) Ethics

48. In business while choosing the right action the person

often weighs the ________ against what a person
considers appropriate conduct.
(a) Religious obligations
(b) Monetary profit
(c) Benefit
(d) None of the above

49.In view of business ethics proper governance process

must be put in place to achieve key goals and
objectives of an organization through ________ decision
making and socially responsible management?
(a) Profitable
(b) Good
(c) Ethical
(d) None of the above