BRL 113 Solved Guess Paper 2026 Business Ethics for BBA and BBARIL

Concept. Business ethics is the study of professional practices, encompassing the exploration of the content, development, enforcement and effectiveness of codes of conduct guiding individuals engaged in business activities.

The word ethics comes from the Greek word ethos, which means character. Ethics is a branch of philosophy that studies human character and behaviour and asks questions of good and bad, moral duty and obligation. Business ethics looks at the link between business goals, business methods and human needs, and checks how business actions affect people, firms, the business community and society.

According to Andrew Crane it studies business situations, activities and decisions where issues of right and wrong are addressed. Raymond C. Baumhart calls business ethics the ethics of responsibility and says businessmen must not knowingly cause harm.

Features of Business Ethics

      
1. Code of Conduct: A code of conduct shows business ethics in action. It tells what behaviour is allowed and what is not.
      
2. Moral and Social Values as Foundation: Business ethics grows out of moral and social values, which give firms a set of guiding rules.
      
3. Safeguarding Stakeholders: It protects customers, employees, suppliers, vendors, shareholders, investors and government bodies.
      
4. Establishing a Fundamental Framework: It sets the limits inside which a company works and defines the social, cultural, economic, legal and ecological setting.
      
5. Voluntary Nature: Ethics is taken up willingly by companies and is not forced on them.
      
6. Education and Training Requirements: Firms need proper education, awareness and training to put ethics into practice.
      
7. Relative in Nature: Ethics differs from business to business and country to country. Rules in the European Union may differ from those in America.
    

Principles of Business Ethics

      
1. Integrity: Keep the highest standards of honesty and truth in all business dealings.
      
2. Trustworthiness: Be dependable and consistent in deeds and promises.
      
3. Accountability: Take responsibility for all actions, decisions and their results.
      
4. Transparency: Give complete and correct information to all stakeholders.
      
5. Fairness: Treat employees, customers and other firms equally, without any discrimination.
      
6. Respect: Treat all people with equal dignity, inside and outside the company.
      
7. Caring: Show concern for the welfare of people and society, and protect ecology.
      
8. Citizenship: Act as a responsible member of society and advance the common good.
      
9. Sustainability: Promote long term sustainability in practices and strategic decisions.
      
10. Compliance: Follow all laws, rules, regulations and industry norms.
      
11. Conflict of Interest Management: Avoid situations where personal interest can spoil fair decision making.
      
12. Whistleblower Protection: Support and defend workers who report unethical activity.
    

Conclusion. Business ethics is the study of right and wrong in business life. Its features make it a voluntary, value based framework that protects stakeholders, and its twelve principles turn those values into daily working rules.

Meaning. Fair trade practices can be defined as the measures that ensure minimum wages to the workers, sustainable environment, safe working conditions, no forced or child labour, fair premium to the producers, and appropriate contribution to the development funds.

Significance of Fair Trade

      
1. Empowering Producers: Fair payment reaches small farmers, artisans and workers, who can then spend on education, healthcare and basic facilities in their area.
      
2. Poverty Alleviation: Fair prices give producers a steady income, so living conditions improve and children are educated. This cuts poverty.
      
3. Environmental Sustainability: It supports organic farming, lower pesticide use and careful use of resources, protecting nature for future generations.
      
4. Ethical Consumption: Fair Trade certification has become a trusted mark for buyers, so every purchase acts like a vote for a fairer economy.
      
5. Community Development: Cooperatives give local people a voice and earnings are put back into education, healthcare and infrastructure.
      
6. Challenging the Status Quo: It asks governments and companies to review old practices and builds fairer ties between developed and developing nations.
    

Principles of Fair Trade

      
1. Fair Prices: Producers get a fair and stable price that covers the cost of production and gives a reasonable profit margin.
      
2. Fair Labour Conditions: Working conditions must be safe and must meet international labour standards. Child labour and forced labour are banned.
      
3. Direct Trade: Extra middlemen are removed so producers deal directly with buyers, bringing transparency and better communication.
      
4. Environmental Sustainability: Organic farming methods, lower pesticide use and responsible use of limited resources are supported.
      
5. Community Development: Earnings are reinvested in education, healthcare and basic infrastructure projects of the whole community.
      
6. Gender Equality: Women get equal access to opportunity, training and decision making, and are empowered as leaders within producer bodies.
    

How Fair Trade Helps Society with Examples

      
1. Consumer Awareness: Fair Trade coffee brands run campaigns showing how each purchase supports coffee farmers in developing nations.
      
2. Product Quality: Fair Trade chocolate must meet strict quality standards such as the flavour profile and purity of cocoa beans.
      
3. Labelling: The Fair Trade Certified logo appears on clothing, coffee and bananas and tells buyers at once that the product is ethical.
      
4. Packaging: Fair Trade tea companies use packaging made from recycled material or biodegradable solutions.
      
5. Pricing: Fair Trade coffee producers are assured a minimum price per pound of beans, giving them a predictable income.
      
6. Distribution: Fair Trade handicrafts move through direct channels, so artisans get a large share of the final sale price.
      
7. Promotion: Fair Trade chocolate brands run campaigns on removing child labour from cocoa production.
    

Conclusion. Fair trade turns ordinary buying and selling into a tool for justice. It lifts producers, protects nature and lets consumers support a fairer global economy.

Product obsolescence. Product obsolescence happens when a product becomes outdated and less functional due to multiple factors, such as technological advancements or change in consumer behaviour or improvement in design or look and feel of the product.

It is a natural process in the market and there is no intention to remove the product. After smartphones came, older mobile phones became obsolete. When mobile phones were launched, pagers went out of the market. When Windows 11 was launched, Windows 10 slowly became obsolete.

Planned obsolescence. Here companies plan the life of the product deliberately and design it for a limited time. The intention is to keep selling the product over a period to earn more sales and profit. Many consumer electronics are made impossible to repair, the carcass cannot be opened without breaking it, and the pieces are welded together to stop replacement. The products are built to fail after some time.

Forms of planned obsolescence

      
1. Functional Impact: The product stops working after a certain period or usage. Television sets stop working and repair is impossible, and certain printer models stop working after a fixed usage.
      
2. Technology Impact: The product becomes obsolete because technology advances. Firms adopt new technology products and stop making the previous ones.
      
3. Change in Styles: Products are designed to go out of fashion quickly. Trends push consumers to replace items for aesthetic reasons.
      
4. Product Incompatibility: Firms make products intentionally incompatible with new accessories, parts or software, for example proprietary connectors or operating systems.
    

Why planned obsolescence is controversial

      
1. Environmental Concerns: Discarded products add to electronic waste and to depletion of resources.
      
2. Demand for Transparency: Consumers and governments have asked for greater transparency and regulations to combat planned obsolescence.
      
3. Forced Usage: It leads to forced usage of the product due to company policies, which is a problem area for any government.
      
4. Higher Carbon Emissions: Emission levels go up when a similar or advanced product is manufactured again.
    

Conclusion. Product obsolescence happens naturally while planned obsolescence is deliberately built in. It is controversial because it creates e waste, raises emissions and forces customers to keep buying.

Concept. Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair.

A retailer raises the price of his product to an unfair extent to cash in on a business opportunity created by an emergency such as a natural disaster, national emergency or pandemic. This is mostly seen in essential commodities. In many countries the strategy is illegal, with strict law against it, and retailers who practise it are penalised.

Suppose there is a flood in Bihar and a shortage of drinking water. A packaged water company was selling quantity Q1 at price P1 in normal time, and due to short supply it now sells one unit at a much higher price P2. That extra price is price gouging.

Treatment differs by country. Countries in the European Union allow retailers to practise price gouging, while India and China have made it an illegal pricing strategy. Libertarian economists such as Thomas Sowell and Walter E. Williams have argued that price gouging serves a useful purpose for allocating resources during a disaster.

Arguments in favour

      
1. Encourage Hoarding: The chance to charge a higher price may push firms to hold stocks for a crisis, so availability is greater when the crisis comes.
      
2. Limit the Allocation: Higher prices restrict essential goods to those who need them most, which ensures best use and cuts wastage during panic buying.
      
3. Encourage Supply: By the economic theory of supply, suppliers increase supply when price goes up, so a higher price acts as an incentive to send more goods.
    

Arguments against

      
1. Encourages Black Marketers: A crisis pushes black marketers to buy scarce goods at a subsidised price, pile up stocks and sell them higher.
      
2. Encourages Unequal Distribution: Gouging puts essential commodities beyond the reach of the poor, as seen with life saving drugs.
      
3. Disrupts the Social Connect: People become self centred, which gives rise to panic buying and hoarding and sends a message of survival of the fittest.
      
4. Hard to Predict: During Covid 19 nobody could have predicted the shortage of hand sanitisers, face masks and ventilators, so gouging cannot justify stockpiling.
    

Conclusion. Price gouging is an unfair price rise during an emergency. Supporters say it rations scarce goods and pulls in supply, while critics say it feeds black marketing, hurts the poor and breaks social bonds.

Meaning. A self regulating business concept known as Corporate Social Responsibility assists an organization in being held socially responsible by the public, its stakeholders, and itself.

Through CSR, also known as corporate citizenship, firms become aware of their impact on the social, economic and environmental sides of society. In India, CSR is governed by Section 135 of the Companies Act 2013, Schedule VII of the Act, and the Companies (CSR Policy) Rules 2014. These give the criteria for assessing CSR eligibility, implementation and reporting. India is the only country which has regulated and mandated CSR for some select categories of registered companies.

Types of Corporate Social Responsibility

      
1. Environmental Responsibility: The cornerstone of CSR. A firm can cut emissions, waste, pollution and use of natural resources, recycle materials, and counteract harm by restoring natural resources. A manufacturer who deforests may promise to plant an equal or greater amount, and a firm selling gas lawnmowers may create an electric version.
      
2. Ethical Responsibility: Behaving morally and fairly. It means equitable treatment for all clients irrespective of age, ethnicity, culture or gender preference, treating every employee well with pay above the legal minimum, using suppliers of varied backgrounds, and disclosing operational concerns to investors honestly.
      
3. Philanthropic Responsibility: The use of company resources to improve the world. It includes giving profits to worthy organisations, doing business only with vendors who share its values, offering paid time off or matching employee donations, and sponsoring fundraising activities.
      
4. Financial Responsibility: This unites the other three. Spending includes research and development for sustainable items, hiring varied talent, staff education programmes on environmental issues and DEI, and timely transparent financial reporting including external audits.
    

Benefits of CSR

      
1. Brand Recognition: Consumers increasingly base buying decisions on a firm's CSR record.
      
2. Investor Relations: CSR raises investor perception of a firm's worth and gives a competitive advantage.
      
3. Employee Engagement: Loyalty is higher in a firm that inspires staff, which lowers hiring cost and turnover.
      
4. Risk Mitigation: CSR policies avoid prejudice, environmental disrespect and unethical use of company finances, all of which invite litigation.
    

Conclusion. CSR is a self regulating idea that makes a firm answerable to society. Its four types, environmental, ethical, philanthropic and financial, turn that duty into concrete action.