BA 325 Test One Ch 1-6

Six Benefits of Social Audits

-Help businesses know what is happening within their firm. -understand what stakeholders think about and want from the business -tell stakeholders what the business has acheived. -strengthen the loyalty and commitment of stakeholders -enhance the organization's decision making. -improve the business's overall performance.

The percentage of global wealth concentrated at the base of the Pyramid is:

70 percent.

Which of the following statements accurately describe the practice of tax inversion:

A company shifts their headquarters to a foreign country; and a company increases debt in their home country

Which of the following companies is being the most socially responsible?

A company trying its best to operate in a way which will help local students get education and jobs.

The emergence of a public issue indicates that:

A gap has developed between what stakeholders expect and what an organization is actually doing.

According to the United Nations, a feature of democracy is:

A government with power balanced among executive, legislative, and judicial branches. An independent media Fair elections.

The meaning of corporate social responsibility

Act in a way that enhances society and its inhabitants and be held accountable. Acknowledge any harm to people and society and correct it if possible. May forgo some profits if its social impacts hurt its stakeholders or if its funds is usable for a positive social impact

Which statement is not correct about the business-society interdependence?

Actions by governments rarely affect business.

Ethics

An individual's system of moral principles

An emerging business model that attempts to strategically balance the interests of all stakeholders to solve social and environmental problems is called:

B Corporation

A stakeholder map is a useful tool because

Both of these answers are correct: It enables managers to quickly see how stakeholders feel about an issue, and it allows managers to evaluate what outcomes are likely regarding an issue.

Departments, or offices, within an organization that reach across the dividing line that separates the company from groups and people in society are:

Boundary-spanning departments

According to a 2017 survey, Americans hold a dim view of:

Business executives.

Proponents against corporate social responsibility feel that public officials, not business people, should solve societal problems because:

Business people do not have the skill set to solve societal problems. The private sector is not mandated to solve these issues.

Which of the following statements is true about corporate social responsibility?

Businesses should monitor and prevent social problems in advance of their becoming major issues; and corporations should be accountable for any actions that affect people, their communities, and the environment.

Some companies have created a department of corporate citizenship to:

Centralize under common leadership wide-ranging corporate citizenship functions.

Nonmarket stakeholders

Community, government, business support groups. People or groups who-although they do not engage in direct economic exchange with the firm- are affected by or can affects its actions.

The costs of corporate social responsibility may ultimately be passed on to the:

Consumer through high prices.

When working well, the issue management process:

Continuously cycles back to the beginning and repeats.

The explosive use of social media is an example of which environment?

Cusotmer

boundary-spanning departments

Departments or offices within an organization that reach across the dividing line that separates the company from groups and people in society.

Cross-cultural contradictions arise due to:

Differences between home and host countries' ethical standards.

Which of the following statements is (are) correct about stakeholders' power?

Different stakeholders have different types and degrees of power., Shareholders' voting power is limited to the percentage of share owned by the shareholder., It uses resources to achieve a desired decision or outcome.

Those in support of corporate social responsibility believe the practice:

Discourages government regulation.

What stakeholder group(s) can exercise legal power?

Employees, customers, and shareholders

The issue of reactive management policies occurs in which stage of global corporate citizenship?

Enaged

Performance-Expectations Gap

Failure to understand stakeholder concerns and to respond appropriately will: Permit the performance-expectations gap to grow. The larger the gap, the greater the risk of stakeholder backlash or of missing business opportunity.

Companies demonstrate global corporate citizenship by:

Finding business opportunities that serve society and integrating concern for both financial and social performance

This inter-American organization (North and South America) was created to unite organizations focusing on corporate social responsibility from Canada to Chile.

Forum Empresa

When a company puts its commitment to social and environmental responsibility into practice worldwide, not only locally or regionally, it is called:

Global Corporate Citizenship.

Under the Sarbanes-Oxley Act, corporations are required to:

Have executives vouch for the accuracy of a firm's financial reports.

Informational Power

Having access to valuable data, facts, or details

Iron Law Responsibility

In the long run, those who do not use power in ways that society considers responsible will tend to lose it.

The iron law of responsibility says that:

In the long run, those who do not use power responsibly will lose it

Stages in the Business-Stakeholder Relationship

Inactive- companies ignore stakeholder concerns. reactive- companies act only when forced to do so, and then in a defensive manner. Proactive- companies try to anticipate stakeholder concerns Interactive- companies actively enage stakeholders in an ongoing relationship of mutual repect, opennes and trust.

Companies that believe they can make decisions unilaterally, without taking into consideration their impact on others, are:

Inactive.

Stakeholder Analysis

Includes the identification of relevant stakeholders and an analysis of their interests and power.

With the explosive growth of technologies that facilitate the sharing of information, this kind of stakeholder power has become increasingly important:

Informational Power

The main drawback to utilitarian reasoning is that:

It is difficulty to accurately measure both costs and benefits.

Legal Power

Lawsuits filed against the focal company for harm caused by the firm.

When a community group sues a company for health effects caused by the unsafe disposal of toxic chemicals, this is an exercise of a stakeholder's:

Legal Power

In the case Insuring Uber's App-On Gap, which type of power do Uber customers have?

Legal and economic.

The primary goal of a "vulture fund" is to

Make a profit.

External stakeholders

May have important transactions with the firm, but are not on its payroll.

Aristotle argued:

Moral virtue is a mean between two virtues.

The term "race to the bottom" refers to:

Moving production jobs to the country with the lowest labor cost.

The B Corportation

Must met rigorous, independent social and environmental performance standards. Focuses on social responsibility and citizenship by blending their social obectives with finanical goals.

Stakeholders

Persons or groups that affect, or are affected by, a firm's decisions, policies, and operations.

Philanthropic funding and public relations are two examples of corporate social responsibility:

Policy instruments of the Corporate Social Stewardship phase.

An analysis of the stability or instability of a government is an example of scanning which environment?

Political.

The tremendous power of the world's leading corporations has both positive and negative effects

Positive: More resource, lower cost production, new products, technologies. Negative: disproportionate politicla system, dominant public course, divide markets, squash competition.

The theory of comparative advantage states that:

Productivity rises more quickly when countries produce goods and services for which they have a natural talent.

World Bank

Provides economic development loans to its member nations.

Purpose of the Firm

Purpose of the firm is to maximize its long-term market value and money for its shareholders.

Firms that generally act only when forced to do so, and then in a defensive manner, are:

Reactive.

Under the U.S. Corporate Sentencing Guidelines, if a firm has developed a strong ethics program, corporate executives found guilty of criminal activity may have their sentence:

Reduced.

Stakeholder engagement is, at its core, a:

Relationship.

At the core of rights reasoning is the belief that:

Respecting others is the essence of human rights.

People everywhere depend on ethical systems to tell them whether their actions are

Right or wrong.

Once an organization has implemented the issue management program, it must:

Study the results and make necessary adjustments

The issue management process is a:

Systematic process companies use when responding to public issues that are of greatest importance to the business.

The most important agreement which codifies human rights is:

The Universal Declaration of Human Rights.

A conception of right and wrong is:

The definition of ethics.

Voting Power

The legal right to cast a shareholder vote.

Social Ventures

The organizations founded by social entreprenuers.

Stakeholder engagement is:

The process of ongoing relationship building between a business and its stakeholders.

Global market channels involve a firm producing goods in:

Their home country and exporting them to other countries.

People's ethical beliefs come from:

Their religious background, family, and education.

When the benefits of an action outweigh its costs, the action is considered ethically preferred according to:

Utilitarian reasoning.

Organizations founded with a core mission to create and sustain social value are called social:

Ventures

The five types of stakeholders' power recognized by most experts are:

Voting, economic, political, and informational power.

A critic of globalization might argue that companies decide to manufacture in China mainly because of China's:

Weak health and safety regulations.

Assets that a person accumulates and owns at a certain point in time are called:

Wealth.

Transparency

When companies clearly and openly report their performance-financial, social, and environmental.

Internal Stakeholders

Work inside the firm and contribute their effort and skill to everyday operations

Good corporate citizens:

Work to protect the environment. Make a concerted effort to balance the needs of all stakeholders. Strive to conduct all business dealings in an ethical manner.

An example of an international financial and trade institution is:

World Bank, International Monetary Fund, World Trade Organization

Stakeholder engagement is, at its core

a relationship

Reputation Index

measures a company's social reputation

Corporate citizenship

the actions they take to put their commitments to corporate social responsibility into practice.

Concerns for CSR

•Lowers economic efficiency and profit. •Imposes unequal costs among competitors. •Imposes hidden costs passed on to •stakeholders. •Requires skills business may lack. •Places responsibility on business rather than individuals.

Environmental Analysis

A method managers use to gather information about external issues and trends (to develop an organizational strategy that minimizes threats and takes advatage of new opportunities.)

Stakeholder Expectations

A mixture of people's opinions, attitudes, and beliefs about what constitutes reasonable business behavior.

Inversion

A strategy of acuqiring or merging with a foreign firm in order to reduce corporate tax obligations at home.

According to general systems theory, boundary exchanges are exemplified by which of the following?

An industrial company installs new equipment in its plant to comply with environmental regulations. A software company develops an application for a client. A purchasing department employee negotiates a price on parts with a supplier.

Stake

An interest in-or claim- on a business

Once an issue has been identified, its implications must be:

Analyzed

Public Issue

Any issue that is of mutual concern to an organization and one or more of its stakeholders.

In the case Corporate Social Responsibility at Gravity Payments, which view in support of corporate social responsibility is relevant according to Figure 3.3?

Balances corporate power with responsibility.

Support for CSR

Balances corporate power with responsibility. •Discourages government regulation. •Promotes long-term profits for business. •Improves stakeholder relationships. Enhances business reputation

All of the following values are present in most ethical decisions except:

Be kind.

Which of the following is the result of the inseparable relationship between business and society?

Both of these answers are correct: All business decisions have a social impact and the vitality of business depends on society's actions and attitudes.

How did Intel eliminate conflict minerals from their supply chain?

By collaborating with most suppliers in the chain including smelters, processors, and traders.

Corporate Power

Capability to influence government, the economy and society, based on their organizational resources

Six dynamic forces powerfully shape the business and society relationship:

Changing societal expectations. Growing emphasis on ethical reasoning and actions. Globalization Evolving government regulations and business response. Dynamic natural environment Explosion of new technology and innovation

As an additional employee benefit to promote spirituality, companies have begun to provide employees with the services of:

Chaplains.

The capability of corporations to influence government, the economy, and society, based on their organizational resources is called:

Corporate Power

Three arguments in support of the stakeholder theory of the firm

Descriptive: realistic description of how companies really work. Normative: Stakeholder management is the right thing to do. Instrumental: Stakeholder consideration key for effective corporate strategy.

BSR (formerly Business for Social Responsibility) helps its 300 member companies:

Develop sustainable business strategies.

Social Entrepreneurs

Driven by a core mission to create and sustain social rather than economic value.

According to management scholar Karl Albrecht, scanning to acquire environmental intelligence should focus on:

Eight strategic radar screens.

The purpose of the World Trade Organization is to:

Eliminate barriers to free trade among nations.

The most significant motivator of corporate social reporting is:

Ethical concerns.

Overtime, the nature of the business's relationship with its stakeholders often:

Evolves through a series of stages

An issue's public profile indicates to managers:

How significant an issue is for the organization, but it does not tell them what to do.

The components of a typical issues management process include:

Identify issue, take action, scan for new issues. Generate options, predict the firm's profitability, evaluate results. Identify issue, analyze issue, allow the government to take action.

Which one of the following is considered to be a non-market stakeholder of business

Nongovernmental organizations

The Heritage Foundation scored which nation of the world among the most repressed in 2018?

North Korea.

Scholars found that spirituality affects employee and organizational performance in what way?

Positively.

The deep anti-Americanism that exists in some parts of the world is thought to be caused by:

Resentment of cultural penetration from U.S.-based multinational enterprises.

Why should business be ethical, according to Figure 5.1?

Society's stakeholders expect it from businesses. Ethical behavior protects business firms from abuse by unethical employees and competitors. Most people want to act in ways that are consistent with their own sense of right and wrong.

One factor in determining the moral intensity of an ethical issue is how quickly the consequences take effect, a factor that is known as:

Temporal immediacy.

Economic Power

The ability to grant or withhold transactions with the focal company.

Environmental Intelligence

The acquisition of information gained from analyzing the multiple environments affecting organizations

Which of the following statements is not true about the interactive social system?

The boundary between business and society is clear and distinct.

Which of the following is not true about justice reasoning?

The reasoner is interested in the net value of benefits.

Competitive Intelligence

The systematic and continous process of gathering, analyzing, and managing external information about the organization's competitors that can affect the organization's plans, decisions, and operations.

Concerns about corporate social responsibility are exemplified by which of these statements?

Requires skills businesses may lack.

When something stands out from a background, is seen as important, or draws attention it is:

Salient

The reason(s) behind the uncertainty of an ethical or unethical decision is (are) that different people and groups:

May not share the same meaning of justice. May rank various rights in different ways. May honestly and genuinely use different sources of information.

Which statement characterizes the moral reasoning typically found in a child?

"I'll let you play with my toy if I play with yours."

As business becomes increasingly global:

Cross-cultural contradictions will increase.

Customer environmental intelligence includes

Demographic factors.

World Trade Organization

Founded in 1995, successor to General Agreement on Tariffs and Trade (GATT). International body that establishes the ground rules for trade among nations. Its major objective is to promote free trade; attempts to eliminate barriers to trade (e.g. quotas, duties and tariffs). Conducts "rounds" of negotiations on various topics. "Most favored nation" rule means members countries cannot discriminate against foreign products for any reason.

Mature adults typically base their ethical reasoning on broad principles and relationships such as:

Human rights and constitutional guarantees of human dignity; and universal principles of justice.

A stakeholder analysis

Involves understanding the nature of stakeholder interests.

Single-party rule by communist parties still remains in:

Vietnam.

Modern corporations should be socially responsible because they:

Create jobs, influencing the lives of employees

A market stakeholder is exemplified by which of the following?

Creditors

responsibilities of business include

Economic , social, and legal responsibilities

A free enterprise system refers to:

Economic assets that are privately owned and exchanged in an open market.

What is one advantage of operating as a B corporation?

Government certifications are frequently conferred.

Experts attribute the growth of nongovernmental organizations to:

Greater openness in many societies.

The Heritage Foundtion

Has scored the nations of the world according to an Index of Economic Freedom: the fundamental rights of every human being to control his or her own labor and property.

Society

Human beings and the social strictures they collectively create

Which statement(s) below are true about global income?

Income is how much one earns in a day or a year; and income at the bottom of the pyramid varies from place to place

Foreign Direct Investment (FDI)

Investment made by a foreign company in the economy of another country.

A firm subscribing to the shareholder theory of the firm would mainly be concerned with providing value for its:

Investors

Microfinance refers to banks:

Lending money to low-income businesses.

All of the following are external stakeholders of the firm except:

Managers

When undertaking social initiatives, a company:

May sacrifice short-term profits.

According to an annual Gallup poll, which occupation was consistently ranked the highest for honesty and ethics?

Nurses.

Successful firm

One which finds ways to meet each of its critical responsibilties and develops strategies to enable the obligations to help each other

What kind of power might a local community use to influence a company's decisions?

Publicizing an issue, Lobbying government policy makers for regulations, Challenging whether a specific business activity should continue

A recent study found that, compared to the 1980s, managers today place what importance on moral values, such as honesty and forgiveness?

Slightly more important.

Public issues are also sometimes referred to as:

Social issues and sociopolitical issues

Businesses for Social Responsibility (BSR) survey:

The goal of a gloval citzenship management system is to integrate corporate responsibility and citizenship concerns into a company's value, culture, operations, and decisions at all organizational levels.

Globalization

The increasing movement of goods, services, and capital across national borders

International Monetary Fund

To stabilize the system of currency exchange rates and international payments to enable member countries to participate in global trade

Managers responding to the needs of the local education system as a normal or routine aspect of its operations is an example of an organization in the:

Transforming stage.

Interactions between business and society occur:

Within a finite natural ecosystem.

An ethics issue based on cross-cultural contradictions is best illustrated by which example?

Legally marketing a pesticide abroad that has been banned in the U.S.

Proactive companies are:

Much less likely to be blindsided by crises and negative surprises

Business

Organizations engaged in making a product or providing a service for profit

social entrepreneurship

Process of identifying a social need and using their entreprenurial skills to address this need.

Shareholder Theory of the Firm

Sees the firm as property of owners (shareholders). Owners' interests take precedence over interests of others.

The three strategies of globalization can be summarized using what three words?

Sell, make, and buy.

The role of special interest groups is an important element in acquiring intelligence from which environment?

Social.

Salient

Stands out from a background, is seen as important, or draws attention. Stakehodlers stand out (Salient) to managers when they have power, legitimacy, and urgency

A leadership role in addressing emerging management issues is often taken by:

The public affairs department The government relations department The department of sustainability or environmental, health and safety

Which of the following is not an example of stakeholders' economic power?

A social group protest a government's decision to raise taxes.

A just or fair ethical decision occurs when:

Benefits and burdens are distributed in fair proportions.

Social Audit Standards

1. Companies can develop standards designed to set expectations of performance for themselves or their suppliers or partners 2. Companies within an industry can agree on a common industry-wide standard 3. Can be developed by global nongovernmental organizations or standard-setting organizations

Social audit

A systematic evaluation of an organizations social, ethical, and environmental performance.

Because of the risks and opportunities public issues present, organizations need:

A systematic way of identifying, monitoring, and selecting public issues.

Stakeholder Map

A visual representation of the relationships among stakeholder interests, power, and coalitions with respect to a particular issue. A stakeholder map is a useful tool, because it enable managers to quickly see how stakeholders feel about an issue, hoe coalitions are likely to form, how powerful these coalitions are, and what outcomes are likeyl.

Political Power

Actions taken through legislation, regulations, or lawsuits.

Stakeholder Networks

Addressing public issues by: working collaboratively with other businesses, concerned persons and organizations in stakeholder networks

Under the World Trade Organization's most-favored nation rule:

All import restrictions are illegal unless proven scientifically.

Customers can exercise stakeholder power by

Boycotting products if they believe the goods are too expensive.

The use of social media to conduct stakeholder engagement has:

Increased the ability to share information amongst employees and partners.

Global social audit standards concentrate on:

Internally focused economic benefits for the firm. Externally focused social benefits for the environment. Externally focused social benefits for key stakeholders.

Contemporary issue management:

Is an interactive, forward thinking process.

The primary purpose of the International Monetary Fund is to:

Lend foreign currency to member countries.

General Systems Theory (GST)

Organisms do not exist in isolation but can only be understood in relationship to their surroundings. Businesses are embedded in a broader social environment with which they constantly interact.

The phenomenon of a person or group holding multiple stakeholder duties is referred to as:

Role sets

What is the public issue in the case Businesses Respond to the Movement for School Safety?

Second amendment rights and the safety of students in schools.

The relevance and importance of stakeholders and their issues is known as:

Stakeholder materiality

An example of a Global Action Network, or GAN, is:

The Kimberley Process.

Reputation

The desirable or undesirable qualities associated with an organization or its actors that may influence the organization's relationships with its stakeholders.

Stakeholder groups can include:

Shareholders, Business support groups, environmental activists

The fiduciary duty of managers benefits a firm's:

Shareholders, Customers, and Employees

Market Stakeholders

Shareholders, suppliers, employees. They engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services.

A firm that has global operations has:

Some or all of their manufacturing or service operations abroad.

The Issue Management Process

1. Identify Issue: anticipating emerging concerns 2. Analyze Issue: Organziations must understand how the issue is likely to evolve and how its going to affect them. 3. Generate Options: Requires complex judgement that incorporate ethical considerations lie the company image. 4. Take action: Once an option is hcosen, the organization must design and implement a plan of action. 5. Evaluate Results: Must assess results of the program and make adjustments if needed.