BA 4060 CH 12

A key goal for CSR is global sustainability, which is defined as the ability "to meet the needs of the present without compromising the ability of future generations to meet their needs."

True

A stakeholder is "any group or individual who can affect or is affected by the achievement of the organization's objectives."

True

Although framed in a domestic versus overseas context, the heart of this debate boils down to the foundational thorny point that frustrates CSR advocates: In a capitalist society, the shareholders—otherwise known as capitalists—are the ones who matter at the end of the day.

True

Companies have had their CSR policies certified by NGOs that might otherwise be hostile.

True

Milton Friedman, a University of Chicago economist and Nobel laureate, suggested: "The business of business is business."

True

Reactive Strategy often involves an "out of sight, out of mind" mentality.

True

Since each firm is different (a basic assumption of the resource-based view), not every firm's economic performance is likely to benefit from CSR.

True

Suppliers and customers are typically considered primary stakeholders.

True

The anti-WTO protests in Seattle in 1999 are indicative of resentment against globalization and a perceived lack of CSR in firms, particularly those that relocate offices (and jobs) to foreign countries.

True

The idea that MNEs should not interfere in the domestic political affairs of the host country has been enshrined in a number of codes of MNE but CSR advocates have stressed the necessity for MNEs to engage in actions that often constitute political activity.

True

The more concentrated an industry is, the more likely that competitors will recognize their mutual interdependence based on old ways of doing business that are not up to the higher CSR standards.

True

There is no conclusive evidence of a direct, positive link between CSR and economic performance, such as profits and shareholder returns.

True

In regard to the extent of CSR challenges, the following is true except: a. All industries are equal in terms of their exposure to CSR challenges. b. Energy- and materials-intensive industries (such as chemicals) have been criticized. c. Firms that are major outsourcers in foreign countries have been criticized. d. Some firms have turned to NGO critics to have the NGOs certify their policies. e. None of the above.

a. All industries are equal in terms of their exposure to CSR challenges.

Those who advocate CSR: a. Conduct their debate within the constraints of capitalism. b. Argue that a humane capitalism is an oxymoron and unattainable. c. Argue that the concepts justice and fairness are simply matters of opinion. d. Argue that the most important stakeholder is the stockholder. e. None of the above.

a. Conduct their debate within the constraints of capitalism.

An example of a secondary stakeholder group is: a. Social and environmental groups. b. Suppliers. c. Customers. d. Governments. e. Communities.

a. Social and environmental groups.

The CSR debate centers on the question: a. Why does the firm exist? b. Why does private property exist? c. What laws are needed to control the firm's behavior? d. What can be done to prevent unreasonable profits? e. All of the above.

a. Why does the firm exist?

In regards to managers and CSR, the following is true except: a. All sides of the CSR debate agree that they have a unique and central role. b. All sides of the CSR debate agree as to how they should implement their role. c. As a stakeholder group they are unique in terms of potential coordination. d. They are positioned at the center of all the stakeholder relationships. e. They make decisions on behalf of the firm that affect other stakeholders.

b. All sides of the CSR debate agree as to how they should implement their role.

Free market advocates tend to do all of the following except: a. Argue that "the social responsibility of business is to increase its profits, which leads to efficient capital and product markets." b. Argue that all stakeholders have an equal right to bargain for a "fair deal." c. Believe that the first and foremost stakeholder group is shareholders. d. Argue that if firms attempt to attain social goals, managers will lose their focus on profit maximization. e. Fear that firms will become like SOEs.

b. Argue that all stakeholders have an equal right to bargain for a "fair deal."

CSR tends to be the least concerned with improving: a. Global sustainability. b. Shareholder wealth maximization. c. Rising levels of population. d. Inequity. e. High levels of poverty in some countries.

b. Shareholder wealth maximization.

Which is not true about CSR? a. Some CSR policies may reduce the firm's value. b. CSR policies may not pay off if common. c. CSR that is embedded in people is easier to imitate. d. Organization: a firm needs to tie together CSR activities. e. It is difficult to prove a link between CSR and economic performance.

c. CSR that is embedded in people is easier to imitate.

Which of the following is an accommodative CSR strategy? a. Neither for or against CSR. b. Resist imposition of what seems unreasonable. c. View CSR as worthwhile. d. Actively participate in CSR policy discussion. e. Voluntarily go beyond what the regulations require.

c. View CSR as worthwhile.

NGOs have the ability to: a. Affect firms'practices. b. Influence firms' management. c. Impact legislation. d. All of the above. e. None of the above

d. All of the above.

Some CSR advocates who question motives of firms implementing CSR are pleased that: a. Firms are embarking on some tangible CSR journey. b. CSR's legitimacy is rising on the organizational agenda. c. By adopting codes of conduct (even if only for "window dressing" purposes), they create a set of criteria against which they can be judged. d. All of the above. e. None of the above.

d. All of the above.

From an institutional perspective, proactive activities are indicative of all the following except: a. Normative beliefs. b. Cognitive beliefs. c. The desire to do the right thing. d. An absence of "window dressing." e. A quest for better profits.

d. An absence of "window dressing."

An example of a primary stakeholder group is: a. Media. b. Social activists. c. Environmental groups. d. Employees. e. Fair labor practice groups.

d. Employees.

Secondary stakeholder groups are: a. Constituents on whom the firm relies for its continuous survival and prosperity. b. Those who do not influence or affect the corporation. c. Not influenced or affected by the corporation. d. Not engaged in transactions with the corporation and are not essential for its survival. e. B through D above.

d. Not engaged in transactions with the corporation and are not essential for its survival

Reactive firms: a. Actively participate in regional, national, and international policy discussions. b. Often build alliances with stakeholder groups. c. Engage in voluntary activities that go beyond what the regulations require. d. React negatively to aspects of CSR that may increase costs. e. All of the above.

d. React negatively to aspects of CSR that may increase costs.

The instrumental view of CSR advocates who are skeptical of CSR compliance claims: a. That firms may not necessarily be sincere. b. That firms may be compelled to appear to be sensitive to CSR by impression management—in other words, "window dressing." c. That many firms may chase fads by following what others are doing, while not having truly internalized the need for CSR. d. That CSR activities simply represent a useful means to help make good profits. Firms are not necessarily becoming more "ethical." e. All of the above

d. That CSR activities simply represent a useful means to help make good profits. Firms are not necessarily becoming more "ethical."

In regards to the link between CSR and economic performance: a. There is no conclusive evidence of a direct, positive link between CSR and economic performance. b. Some studies report a positive relationship. c. Some studies find a negative relationship or no relationship. d. It appears some firms are not cut out for a CSR-intensive strategy. e. All of the above.

e. All of the above.

Those who feel that firms that expand into emerging economies are failing their CSR responsibilities are most likely to claim that it: a. Potentially hurts corporate profits. b. Reduces shareholder returns. c. Fails to provide employment to host countries. d. Reduces the standard of living in host countries. e. Domestic employees and communities pay the price for the overseas expansion.

e. Domestic employees and communities pay the price for the overseas expansion.

There is agreement throughout society that: a. Overseas expansion is good because it helps improve standards of living around the world. b. Overseas expansion is bad because it causes loss of jobs in the home country. c. Firms should stick strictly to business within a country and not seek to impose their views of human rights on other countries that have different views. d. Firms have a responsibility to do whatever is necessary to assure that the human rights that are respected in the home country are implemented in host countries. e. None of the above.

e. None of the above.

Using the five forces model, which will likely result in a higher level of CSR? a. A highly concentrated industry. b. Existence of incumbents. c. Socially and environmentally conscious suppliers with standardized products that have multiple substitutes. d. No monitoring program for all supplier factories. e. Substitutes that are superior to existing products and costs are reasonable.

e. Substitutes that are superior to existing products and costs are reasonable.

According to the text, one driver of CSR in the twenty-first century is the declining levels of population in some countries.

False

Advocates of shareholder capitalism argue that if firms attempt to attain social goals, it will actually help them focus on profit maximization (and its derivative, shareholder value maximization).

False

Compared with the relatively expanded power of national governments in the wake of globalization, NGOs and other civil society stakeholders have lost the ability to affect firms and their management or to impact legislation.

False

Firms pursuing a reactive CSR strategy actively participate in policy discussions, build alliances with stakeholder groups, and voluntarily go beyond what the regulations require.

False

Nearly all CSR advocates argue for a revival of socialism in the world.

False

Primary stakeholder groups are defined as "those who influence or affect, or are influenced or affected by, the corporation, but they are not engaged in transactions with the corporation and are not essential for its survival."

False

The five forces framework reinforces the important point that all industries are equal in terms of their exposure to CSR challenges.

False