Management Notes

Reference Notes for Management

Today many companies are using managerial techniques that are designed to encourage ______________.

Today many companies are using managerial techniques that are designed to encourage ______________.


A. Ehical behaviour
B. legal compliances
C. increasing profits
D. shareholders value

The Correct Answer Is:

  • A. Ehical behaviour

The correct answer is A. Ethical behavior. This managerial technique is designed to encourage ethical behavior within a company. Let’s explore in detail why this answer is correct and why the other options are not:

A. Ethical behavior:

Encouraging ethical behavior is a fundamental aspect of modern corporate management. Companies are increasingly recognizing the importance of ethics in their operations for various reasons, including reputation management, long-term sustainability, and stakeholder trust. Ethical behavior encompasses a wide range of principles, such as honesty, integrity, transparency, and fairness.

Managers can implement various strategies and practices to promote ethical behavior within their organizations, including the development of a strong code of ethics, employee training on ethical standards, and establishing mechanisms for reporting unethical conduct.

Encouraging ethical behavior not only contributes to a positive corporate culture but also helps mitigate risks associated with unethical conduct, such as legal and financial repercussions.

B. Legal compliance:

While legal compliance is essential for businesses to operate within the boundaries of the law, it is a separate concept from encouraging ethical behavior. Legal compliance primarily pertains to following the laws and regulations relevant to a specific industry or jurisdiction. It is a baseline requirement for all companies, and adherence to laws is non-negotiable.

However, merely complying with the law does not necessarily imply ethical behavior. Some companies may focus solely on legal compliance while engaging in behavior that is technically legal but ethically questionable. Therefore, legal compliance, though vital, does not encompass the broader scope of ethical behavior.

C. Increasing profits:

Maximizing profits is undoubtedly a common objective for many companies, but it is not a managerial technique designed to encourage ethical behavior. Profit maximization is typically a financial goal that guides business strategies and decisions.

While there are ethical ways to pursue profit, such as through fair competition and responsible resource management, profit maximization alone does not directly encourage ethical behavior.

In fact, unethical practices, such as cutting corners or exploiting employees, can sometimes lead to short-term profit gains, but these approaches are inconsistent with ethical behavior.

D. Shareholder value:

Enhancing shareholder value is another financial goal for companies. It involves increasing the value of a company’s shares, which is a key metric for many investors. Like profit maximization, this objective is financial in nature and does not directly encourage ethical behavior.

While ethical behavior can contribute to long-term shareholder value by promoting trust and reducing risks, the focus on shareholder value can sometimes lead to short-term thinking and decisions that prioritize immediate financial gains over ethical considerations.

In summary, the correct answer is A. Ethical behavior because it represents a managerial technique focused on cultivating a corporate culture that values and promotes ethical conduct. While legal compliance, increasing profits, and enhancing shareholder value are important objectives for businesses, they are distinct from the broader goal of encouraging ethical behavior.

Ethical behavior encompasses principles that go beyond legal requirements and financial objectives, making it an essential component of responsible and sustainable corporate management. By prioritizing ethical behavior, companies can build trust, enhance their reputation, and contribute to a more ethical and sustainable business environment.

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