Business and Society Chapter 9

The ________ reason for corporate social responsibility argues that businesses, as part of society, have a responsibility to behave in the right way.

Ethical

______________, such as environmental damage, are costs to society that are produced by companies but not reflected in the company's cost structure.

Externalities

An organization that does not fulfill its philanthropic responsibilities is acting unethically.

False

Over the long run, to be successful, firms with excellent socially responsible strategies need to worry less about their business strategies.

False

Since the passage of Sarbanes-Oxley few firms have been prosecuted and fewer high level executives have received jail terms proving convincingly that the legislation is flawed.

False

The pragmatic approach is more proactive and affirmative than the strategic approach because it asks companies to identify and acknowledge company activities that can do harm and encourages firms to scrutinize their practices and address potential harms by focusing on their own value-chain activities.

False

Which of the items listed is NOT a product of a "favorable corporate reputation."

Ignore the Foreign Corrupt Practices Act

The late economist ________ _____ said that management should "make as much money as possible while conforming to the basic rules of society, both those embodied in the law and those embodied in ethical custom."

Milton Friedman

Interface Carpets, a stellar example of sustainability in action, lists seven fronts of Mount Sustainability. Which is NOT one of the firm's goals to meet its total sustainability status?

None of the above

The _________ reason that corporations should care about social responsibility stands for the proposition that corporations must anticipate stakeholder concerns and act defensively to protect their reputation and viability.

Pragmatic

______ ______ _________ (3 words) are those shareholders who clearly care about the financial and the social bottom line of a business.

Socially responsible investors

The __________ reason for CSR offers managers a stronger basis for making decisions about which stakeholders and social responsibility issues should garner their attention and resources given the multitude of options available.

Strategic

The term __________ is sometimes used to represent harmony among three dimensions of economic, social and environmental impacts.

Sustainability

A firm's financial responsibility is primary and the bedrock of corporate social responsibility because without financial viability, the other responsibilities become moot issues.

True

Constructive engagement of stakeholders, including critics, is replacing the "just trust us" plea of yesteryear as executives conclude that the plea rarely works in a world of regular corporate scandals.

True

Even if social responsible business practices are costly, firms must perform them anyway.

True

Failure to be socially responsible is costly.

True

Section 404 of the Sarbanes-Oxley Act (SOX) is credited with improving internal financial control systems in public companies even if the cost of doing so is thought to be exorbitant by small firms.

True

Some analysts argue that the more stringent regulatory environment resulting in the post Sarbanes-Oxley period increases shareholder confidence in financial reporting.

True

The Social Investment Forum reported that socially responsible investing grew from $40 billion in 1984 to nearly $3 trillion in 2007 (out of $25 trillion in the US marketplace).

True

The economic responsibilities of a firm involve its primary function of producing goods and services that consumers need and want, while making an acceptable profit.

True

The most strategic CSR initiatives are those that add a social dimension to the firm's overall competitive strategy

True

The strategic reason for having CSR play a prominent role in a firm advanced by Harvard Professor Michael Porter argues that in evaluating the firm's CSR, executives should begin by scrutinizing the social impacts of the company's value chain.

True

The three reasons that corporations should care about social responsibility are ___________, ________________ and _____________.

pragmatic reason, ethical reason, strategic reason

Typical Codes of Conduct cover conduct described below. In the aftermath of Bhopal, the chemical industry wishing to demonstrate responsible corporate citizenship has added which additional behaviors set out below.

Continuous improvement, communication with external stakeholders and training of suppliers on the standards

In the __________ perspective, social responsibility is seen as appropriate because it is "the right thing to do."

Duty-based

According to the Corporate Social Responsibilities (CSR) pyramid, the __________ responsibility is considered to be of primary importance to organizations.

Economic

Corporate social responsibility (CSR) consists of which four kinds of responsibilities:

Economic, legal, ethical, and philanthropic

According to the Corporate Social Responsibilities (CSR) pyramid, the __________ responsibility is a societal expectation that is not necessarily codified into law.

Ethical

CalPERS, the California Public Employees' Retirement System pressures the companies it invests in to engage in good corporate governance and socially responsible practices in areas such as __________________ and _________________.

human rights and environmental responsibility

Organizations are finding that in the area of Corporate Social Responsibility (CSR), it is becoming increasingly difficult to separate ____________ organizational ethics from___________ social responsibility.

internal; external