WGU D072 Fundamentals for Success in
Business Exam Questions with Answers &
Explanations.
Section 1: Ethics & Corporate Social Responsibility
1. In an effort to cut costs, an apparel factory is moving operations to another
country where labor is cheap and employment laws are less stringent. Costs can
only be kept low if the factory operates like a sweatshop. Which type of problem is
this company facing?
A) Illegal-unethical
B) Legal-unethical
C) Legal-ethical
D) Illegal-ethical
Answer: B
Explanation: This is a legal-unethical problem. The actions are legal in the host country
but violate ethical standards regarding fair treatment of workers, safe working conditions,
and human dignity. Legal does not always mean ethical.
2. Which of the following best defines "ethics" in a business context?
A) Laws that govern business transactions
B) Principles that serve as a compass about how to behave
C) Profit-maximization strategies
D) Marketing techniques
Answer: B
Explanation: Ethics refers to the moral principles and values that guide individual and
organizational behavior, serving as a moral compass for decision-making.
3. A company decides to pay employees a fair wage, show a good profit margin,
and produce a reliable product. Even after a year, there is not much change in how
,the community perceives the company. Which action will provide the
improvement this CEO is seeking?
A) Increasing executive bonuses
B) Investing in social and environmental causes
C) Reducing employee benefits
D) Outsourcing production overseas
Answer: B
Explanation: To improve community perception, the company should invest in social and
environmental causes. This demonstrates genuine commitment to corporate social
responsibility beyond basic fair practices.
4. What is Corporate Social Responsibility (CSR)?
A) A legal requirement for all public companies
B) A philosophy in which a company voluntarily engages in actions that benefit society
economically, socially, politically, or environmentally
C) A marketing strategy to increase sales
D) A government regulation for environmental compliance
Answer: B
Explanation: CSR is a voluntary philosophy where companies take actions that benefit
society across multiple dimensions—economic, social, political, and environmental. It goes
beyond legal requirements.
5. A manufacturing cosmetics company currently avoids testing its products on
animals, but the new CEO decides to begin that practice since it will help cut
company costs. Which impact will this have on the organization?
A) It will be viewed as being more profitable
B) It will be viewed as being unethical
C) It will improve customer satisfaction
D) It will reduce legal liability
Answer: B
Explanation: Animal testing, while legal in many jurisdictions, is widely viewed as
unethical by consumers and advocacy groups. Reversing a humane policy for cost-cutting
will damage the company's ethical reputation.
,6. During a meeting, a senior manager became upset over an issue and used
profanity when responding to lower-level managers. The behavior disrupted the
whole company. Which organizational element of ethics did this manager violate?
A) Policy
B) Law
C) Culture
D) Structure
Answer: C
Explanation: The manager violated the organizational culture—the shared attitudes,
values, and standards of behavior that distinguish an organization. Profanity and
disrespectful behavior contradict a healthy ethical culture.
7. What is the purpose of the Sarbanes-Oxley Act (SOX)?
A) To increase corporate profits
B) To protect whistleblowers and prevent corporate fraud
C) To regulate international trade
D) To establish minimum wage laws
Answer: B
Explanation: The Sarbanes-Oxley Act was passed in response to major corporate fraud
cases (Enron, WorldCom) to protect whistleblowers from retaliation and establish stricter
financial reporting requirements.
8. A junior accountant discovered fraud in the recording of accounts receivable
and plans to report this information to the local media. Which law protects this
junior accountant from retaliation by management?
A) Civil Rights Act
B) Sarbanes-Oxley Act
C) Fair Labor Standards Act
D) Occupational Safety and Health Act
Answer: B
Explanation: The Sarbanes-Oxley Act includes whistleblower protection provisions that
shield employees who report corporate fraud from retaliation by their employers.
9. Which term describes an employee who reports misconduct within an
organization to authorities or the public?
, A) Mediator
B) Ombudsman
C) Whistleblower
D) Arbitrator
Answer: C
Explanation: A whistleblower is someone who reports alleged misconduct in a government
department, private company, or organization to authorities or the public.
10. A company employee notices that a member of upper management is
harassing a newly hired employee. The employee reports this behavior to the local
authorities. Which term describes the action taken by the employee who reported
the incident?
A) Mediation
B) Whistleblowing
C) Arbitration
D) Negotiation
Answer: B
Explanation: This is whistleblowing because the employee reported misconduct
(harassment) to external authorities. Whistleblowing involves exposing wrongdoing within
an organization.
11. What is the aim of Corporate Social Responsibility (CSR)?
A) To maximize short-term profits
B) To increase profits and trust in the long-term while promoting positive community
relations
C) To avoid government regulation
D) To reduce product quality
Answer: B
Explanation: The aim of CSR is to increase long-term profits and trust while promoting
positive community relations. It recognizes that social responsibility and profitability are
not mutually exclusive.
12. Which of the following is considered a company stakeholder?
A) Only shareholders
B) Only customers
Business Exam Questions with Answers &
Explanations.
Section 1: Ethics & Corporate Social Responsibility
1. In an effort to cut costs, an apparel factory is moving operations to another
country where labor is cheap and employment laws are less stringent. Costs can
only be kept low if the factory operates like a sweatshop. Which type of problem is
this company facing?
A) Illegal-unethical
B) Legal-unethical
C) Legal-ethical
D) Illegal-ethical
Answer: B
Explanation: This is a legal-unethical problem. The actions are legal in the host country
but violate ethical standards regarding fair treatment of workers, safe working conditions,
and human dignity. Legal does not always mean ethical.
2. Which of the following best defines "ethics" in a business context?
A) Laws that govern business transactions
B) Principles that serve as a compass about how to behave
C) Profit-maximization strategies
D) Marketing techniques
Answer: B
Explanation: Ethics refers to the moral principles and values that guide individual and
organizational behavior, serving as a moral compass for decision-making.
3. A company decides to pay employees a fair wage, show a good profit margin,
and produce a reliable product. Even after a year, there is not much change in how
,the community perceives the company. Which action will provide the
improvement this CEO is seeking?
A) Increasing executive bonuses
B) Investing in social and environmental causes
C) Reducing employee benefits
D) Outsourcing production overseas
Answer: B
Explanation: To improve community perception, the company should invest in social and
environmental causes. This demonstrates genuine commitment to corporate social
responsibility beyond basic fair practices.
4. What is Corporate Social Responsibility (CSR)?
A) A legal requirement for all public companies
B) A philosophy in which a company voluntarily engages in actions that benefit society
economically, socially, politically, or environmentally
C) A marketing strategy to increase sales
D) A government regulation for environmental compliance
Answer: B
Explanation: CSR is a voluntary philosophy where companies take actions that benefit
society across multiple dimensions—economic, social, political, and environmental. It goes
beyond legal requirements.
5. A manufacturing cosmetics company currently avoids testing its products on
animals, but the new CEO decides to begin that practice since it will help cut
company costs. Which impact will this have on the organization?
A) It will be viewed as being more profitable
B) It will be viewed as being unethical
C) It will improve customer satisfaction
D) It will reduce legal liability
Answer: B
Explanation: Animal testing, while legal in many jurisdictions, is widely viewed as
unethical by consumers and advocacy groups. Reversing a humane policy for cost-cutting
will damage the company's ethical reputation.
,6. During a meeting, a senior manager became upset over an issue and used
profanity when responding to lower-level managers. The behavior disrupted the
whole company. Which organizational element of ethics did this manager violate?
A) Policy
B) Law
C) Culture
D) Structure
Answer: C
Explanation: The manager violated the organizational culture—the shared attitudes,
values, and standards of behavior that distinguish an organization. Profanity and
disrespectful behavior contradict a healthy ethical culture.
7. What is the purpose of the Sarbanes-Oxley Act (SOX)?
A) To increase corporate profits
B) To protect whistleblowers and prevent corporate fraud
C) To regulate international trade
D) To establish minimum wage laws
Answer: B
Explanation: The Sarbanes-Oxley Act was passed in response to major corporate fraud
cases (Enron, WorldCom) to protect whistleblowers from retaliation and establish stricter
financial reporting requirements.
8. A junior accountant discovered fraud in the recording of accounts receivable
and plans to report this information to the local media. Which law protects this
junior accountant from retaliation by management?
A) Civil Rights Act
B) Sarbanes-Oxley Act
C) Fair Labor Standards Act
D) Occupational Safety and Health Act
Answer: B
Explanation: The Sarbanes-Oxley Act includes whistleblower protection provisions that
shield employees who report corporate fraud from retaliation by their employers.
9. Which term describes an employee who reports misconduct within an
organization to authorities or the public?
, A) Mediator
B) Ombudsman
C) Whistleblower
D) Arbitrator
Answer: C
Explanation: A whistleblower is someone who reports alleged misconduct in a government
department, private company, or organization to authorities or the public.
10. A company employee notices that a member of upper management is
harassing a newly hired employee. The employee reports this behavior to the local
authorities. Which term describes the action taken by the employee who reported
the incident?
A) Mediation
B) Whistleblowing
C) Arbitration
D) Negotiation
Answer: B
Explanation: This is whistleblowing because the employee reported misconduct
(harassment) to external authorities. Whistleblowing involves exposing wrongdoing within
an organization.
11. What is the aim of Corporate Social Responsibility (CSR)?
A) To maximize short-term profits
B) To increase profits and trust in the long-term while promoting positive community
relations
C) To avoid government regulation
D) To reduce product quality
Answer: B
Explanation: The aim of CSR is to increase long-term profits and trust while promoting
positive community relations. It recognizes that social responsibility and profitability are
not mutually exclusive.
12. Which of the following is considered a company stakeholder?
A) Only shareholders
B) Only customers
