Midterm Business Ethics & Stakeholder Management CH 1-4
35. Which of the following is not a weakness of pluralism? a. prevention of concentrations of power b. pursuit of self-interest c. overlapping goals, causing confusion about which groups best serve particular interests d. emphasis on conflict
A
A community, nation, or broad grouping of people having common traditions, values, institutions, and collective activities and interests is a a. society. b. culture. c. population. d. network.
A
Strengths of pluralism include all of the following except a. pursuit of self-interest. b. prevention of concentrations of power. c. a built-in set of checks and balances. d. maximization of freedom of expression.
A
The demographics, lifestyles, and social values of a society determine the firm's a. social environment. b. economic environment. c. political environment. d. technological environment.
A
According to the Business Case for CSR, a reason companies are becoming more socially responsible is all of the following except
Access to capital
Gross national product, inflation, interest rates, and unemployment rates are included in a finn's a. social environment. b. economic environment. c. political environment. d. technological environment.
B
Segments of business's macroenvironment include all of the following except a. the social environment. b. the natural environment. c. the economic environment. d. the political environment.
B
Which of the following is not an argument commonly used in favor of corporate social responsibility?
Business is best equipped to handle social problems.
A purposeful aggregation of people who represent a common cause or share common beliefs is called a(n) a. special interest group. b. general interest group. c. interest group. d. clique.
C
Because of the sheer member, and specificity of special interest groups, the groups often a. collaborate with each other to achieve common goals. b. sabotage each other's efforts to attain their goals. c. work at cross-purposes. d. collude to see that their common interests are emphasized.
C
Carrying the idea of a pluralistic society to an extreme leads to a. anarchy. b. totalitarian government. c. a special-interest society. d. a free market economy.
C
Decentralization and diversity of power concentrations leads to a. anarchy. b. a totalitarian society. c. a pluralistic society. d. democracy.
C
is depicted as an action- oriented variant of CSR
Corporate Social Responsiveness
32. Technology-based advancements and progress in the applied sciences that help achieve a practical purpose is part of a ftnn's a. social environment. b. political environment. c. economic environment. d. technological environment.
D
The sheer numbers of relationships that business has with other segments of society indicate the of its social environment. a. simplicity b. size c. divisiveness d. complexity
D
Which of the following is not a factor in the social environment that has lead to the current climate of criticism of business? a. affluence and education b. the revolution of rising expectations c. an entitlement mentality d. all of these choices are factors leading to criticism of business
D
. The social contract is the set of rights and duties imposed on citizens by their goverrunent.
F
15. The Iron Law of Responsibility states that people who use power wisely will be rewarded with more power.
F
Business interacts with only a limited number of stakeholder groups.
F
News shows are the only type of programming on television that has contributed to criticism of business.
F
Power is only manifest when it is used purposefully.
F
Stakeholders are the owners of shares in a corporation.
F
The authors of the textbook lay the primary responsibility for business's problems on the media.
F
The common perception of business power is that there is too little of it to provide a balance with other social institutions.
F
The concept of sustainability is derived from the notion of management development.
F
The percentage of the U.S. population that has earned high school diplomas and college degrees has remained about the same over the last thirty years.
F
The principal internal stakeholders of a corporation are its customers and employees.
F
A survey done by Walker Information shows that the public believes that CSR does not factor into a company's reputation at all.
False
An argument for corporate social responsibility is that it helps business compete in the global economy.
False
Corporate social performance emphasizes the financial results of what the finn hopes to accomplish.
False
Which entity publishes "The 100 Best Companies to Work For"?
Fortune Magazine
Which entity publishes annual "World's Most Admired Companies" rankings?
Fortune Magazine
The portrays the concurrent fulfilhnent of the firm's economic, legal, ethical and philanthropic responsibilities
Pyramid of Corporate Social Responsibility
A child's assumption that he or she will have a higher standard ofliving than the previous generation is called the revolution of rising expectations.
T
Affiuence refers to the level of wealth, disposable income, and standard ofliving of a society.
T
Common Cause and the U.S. Chamber of Commerce are examples of general purpose interest groups.
T
Ethics refers to issues of right and wrong, fairness, and justice.
T
Movies depict corporate life as amoral and possibly deadly.
T
Spheres of power describe the arenas in which power may be utilized.
T
The social contract in the modern era is changing rapidly and dramatically.
T
Carroll's Corporate Social Performance Model helps managers understand that social responsibility is separate and distinct from financial performance.
True
Corporate social responsiveness is focused on the action phase of management response to social demands.
True
In order to operate with a true stakeholder perspective, firms must accept the multiple bottom line view.
True
Proponents of the concept of corporate social responsiveness believe that the focus of corporate social responsibility on accountability or obligation is not dynamic enough to describe business's willingness and activity to respond to social demands.
True
Research has indicated that improvements in corporate social performance are associated with improved fmancial results.
True
Social screening is the mechanism by which socially conscious investors choose their investment advisors.
True
The CSR Pyramid is a stakeholder model--that is, each of its components addresses different stakeholders.
True
The business environment in current times can best be described as turbulent.
True
When speaking of business in the collective sense, the textbook will most often be focusing on big business.
True
The concept of business responsibility based on using laws to constrain business behavior is referred to as the
legal model
The view of corporate citizenship that embraces all that is implied in the concepts of social responsibility, responsiveness, and performance is the view.
limited
Which of the following is not a characteristic of a socially responsible company?
makes above average financial returns
The textbook says that when power gets out of balance, other forces are brought to bear so that balance is restored. Name some of the other forces that are used to balance business power. Describe how effective each of those other forces is in combating business power.
John Kenneth Galbraith, one of the most influential economists of the 20th century, termed these other forces countervailing powers. Some of these include the power of unions, government regulation, religious tenets, and societal pressures. Students should describe, with some detail, how the countervailing powers could mitigate business power. However, they should also recognize that business power is, by far, the single strongest current in society today. Unions have been effectively neutralized, business heavily influences goverrnnent regulation, and religion has suffered a siguificant decline in its influence.
What are the stakeholders' *STAKES*?
Legitimacy? Power? Urgency? Figure 3-4
Which of the following is not a valid criticism of stakeholder management?
Managers are not trained in this type of management
Diagnostic Typology of Organizational Stakeholders *Stakeholder's Potential for Cooperation with Organization*: Low *Stakeholder's Potential for Threat to Organization*: Low *Stakeholder Type*: *Strategy*:
Marginal Monitor
Diagnostic Typology of Organizational Stakeholders *Stakeholder's Potential for Cooperation with Organization*: High *Stakeholder's Potential for Threat to Organization*: High *Stakeholder Type*: *Strategy*:
Mixed Blessing Collaborate
If "rights" are the entitlement to certain life chances and freedom from certain limitations that are accorded to persons simply because they have been born and are alive, what else does the existence of rights imply?
Most students will have difficulty answering this question, primarily because society's dominant paradigm focuses solely on rights. But with a little encouragement and direction, students will realize that for every right they possess, a duty or obligation is imposed on everyone else. Thus, if Mary has the right of free speech, Joe (and everyone else) necessarily has the duty not to impinge on Mary's right. A right to life creates a duty not to cause cessation of life. Rights create obligations. The problem comes when one's duty (alternatively, another's rights) interferes with one's rights.
Diagnostic Typology of Organizational Stakeholders *Stakeholder's Potential for Cooperation with Organization*: Low *Stakeholder's Potential for Threat to Organization*: High *Stakeholder Type*: *Strategy*:
Non-supportive Defend
No Power, Legitimacy, & Urgency
Nonstakeholder
Choose a particular corporation and describe the power it wields in different spheres.
Obviously, each student may pick a different corporation, so generalizing here is impossible. However, as an example, Microsoft has ahnost complete power in its portion of the technological sphere. With well over 90 percent of the operating system market, Microsoft virtually controls this aspect of computer technology. It also exerts siguificant political power through carnpaigu contributions and lobbying efforts. The favorable resolution of the anti-trust case against Microsoft after the Bush administration took office is an obvious example of this power. Another major sphere in which Microsoft exerts power (more specifically the Bill and Melinda Gates Foundation) is the health arena. This foundation donates siguificant amounts of money to research and treatment initiatives.
Information Asymmetry
Occurs when one party has information that the other party does not have
Shareholders
Own stock in the firm and, according to the shareholder-primacy model, this gives them ultimate control over the corporation as the firm's owners
what was Bernard L Madoff convicted of?
Ponzi scheme
What *OPPORTUNITIES* and *CHALLENGES* do our stakeholders present?
Potential for cooperation? Potential for threat? Figure 3-8
Proxy Access
Provides shareholders with the opportunity to propose nominees for the board of directors
Power
Refers to the ability or capacity of a stakeholder to produce an effect.
Urgency
Refers to the degree to which the stakeholder's claim demands immediate attention or response.
Legitimacy
Refers to the perceived validity or appropriateness of the stakeholder's claim to a stake.
Tax Gross-Up
Reimbursement received by employees on some part of their income
Pay-Ratio Disclosure Rule
Requires firms to reveal the difference in between executives and rank-and-file employees
Audit committee
Responsible for assessing the adequacy of internal control systems and the integrity of financial statements
Nominating Committee
Responsible for making sure competent, objective board members are chosen
The authors discuss the rights movement as a contributing factor in the climate that is critical of business. What are "rights?"
Rights are the entitlement to certain life chances and freedom from certain limitations that are accorded to persons simply because they have been born and are alive. Rights are not earned by the individual, nor are they given by other parties. There is an ongoing debate about what rights people have (e.g., is access to adequate health care a right or a privilege that one must pay for?), and some rights are more widely recoguized than others. For example, the right to freedom of speech is recognized by the government, but the same right may not be recoguized in Russia or Iran.
Regulation FD (fair disclosure)
Set limits on the common company practice of selective disclosure
Tipper
Someone who provides insider information
Tippee
Someone who receives insider information
Shareholder Democracy
Sparked from the fact that shareholder votes were largely ignored
Society -- as
Stakeholder Groups
The Stakeholder Corporation The central element:
Stakeholder inclusiveness
Using the managerial approach discussed in the textbook, discuss the topic of ecological damage and sustainability as they relate to business.
Students' level of knowledge regarding environmental issues will vary widely. At a minimum, they should recognize that business plays a large role in the creation of the pollution that degrades the envirornnent. With this in mind, they should explore potential conflicts between profits and pollution control efforts, the effects that ecological damage has on various stakeholders, and the implications for future quality oflife. Students will disagree on the short-term urgency of the envirornnental question, but most should recognize that there are long-term sustainability issues that must be dealt with at some point. If they are not, the future of the world is in grave peril.
Production View of the Firm
Suppliers -> Firm -> Customers
Managerial View of the Firm
Suppliers <-> Corporation&Mangt <-> Customers & Owners <->Corporation&Mangt <-> Employees
Diagnostic Typology of Organizational Stakeholders *Stakeholder's Potential for Cooperation with Organization*: High *Stakeholder's Potential for Threat to Organization*: Low *Stakeholder Type*: *Strategy*:
Supportive Involve
Explain the role that television plays in creating a climate critical of business.
Television is, by far, the most pervasive medium through which information is conveyed in our society. Thus, the content of television programming outweighs information provided by all other media. Specifically, television has spotlighted business failings on news programs, it depicts business and executives in a predominantly negative light on prime-time programs, and commercials (purchased by business) tend to exaggerate the benefits of the featured products and services. I
Explain the rationale that is the foundation of The Iron Law of Responsibility.
The Iron Law of Responsibility states, "In the long run, those who do not use power in a manner which society considers responsible will tend to lose it." This concept is based on the idea of legitimacy, or the proper use of power. If society does not see the use of power as legitimate, the party holding the power will eventually lose that power. An excellent example is the history of Nazi Germany. Nazis rose to power in Germany, but as German society (as well as other countries) saw the abuses of power wielded by Hitler, their legitimacy waned. World War II is ample evidence of the lengths that parties will go to wrest power from those who abuse it. Numerous assassination plots against Hitler also show the internal opposition he engendered.
The traditional concept of business responsibility in the United States is based on
The classical economic model
Explain what is meant by spheres of power.
The concept of spheres of power recognizes that a person or organization may have different levels of influence in different areas of society. For example, the Pope is widely recognized to have authority and power relative to matters of organized religion. However, his power in the technological environment is largely non-existent. Similarly, the National Collegiate Athletic Association (NCAA) is extremely powerful in the field of intercollegiate athletics, but is not a factor in the ecological concerns.
Shareholder Resolutions
The filing of these are one of the major vehicles by which shareholder activists communicate their concerns to management
Spring-loading
The granting of a stock option at today's price but with the inside knowledge that something good is about to happen that will increase the value of the stock
Fragile Mandate
The idea that a company's legitimacy is constantly subject to ratification, and it must realize that it has no inherent right to exist
unlike other ethical principles, virtue ethics focuses on
The individual becoming virtuous
What is the difference between internal and external stakeholders?
The primary difference between internal and external stakeholders is their relationship to the frrm. Internal stakeholders are considered to be "insiders"--that is, they have a direct impact on the decisions and operations of the firm. Owners and employees are the most widely recognized internal stakeholders. External stakeholders are those parties "outside" the frrm--those who may be able to influence the decisions and actions taken inside the organization, but cannot directly implement them. The goverrnnent, consumers, and community members are primary external stakeholders. For those familiar with the concept of line and staff functions within an organization, internal stakeholders can be thought of as analogous to the line, and external stakeholders as similar to staff functions.
The authors state, "the philosophy of victimization is intimately related to and sometimes inseparable from the rights movement and the entitlement mentality." Explain how these three concepts are related.
The rights movement generally seeks to identify and obtain more and more rights for people (or at least a particular group of people). As the general level of affluence and education has risen, people in general have felt entitled to be more free and gain more opportunities. When there is a shortfall between the rights that people expect and what they have, they may feel victimized by others. Key to this process is the general expectation that a person is entitled to more simply because he/she exists, not because he/she has earned it.
The authors of the textbook say that, at a general level, they will be discussing the role of business in society. What do they mean by "the role of business in society?"
The role of business in society refers to the purpose(s) that business has as an integral part of the overall society. The concept of "role" encompasses both the function(s) that business has, such as the production and distribution of goods and service, and the emphasis or power that business has relative to other parts of society, such as government or religion.
Which of the following is not a valid definition of technology
The science of replacing human effort with mechanical power
Proximity
The spatial distance between the organization and its stakeholders.
Employees
Those hired by the company to perform the actual operational work
T/F: Although the marketplace has done a fairly good job in deciding what goods and services should be produced, it has not fared quite as well in ensuring that businesses has always acted fairly and ethically.
True
The company town, in which a major employer builds homes and commercial buildings, and provides the goods and services needed by its employees, is an example of paternalistic social responsibility.
True
The marketplace in the classical view of economics, while being a good allocator of goods and services, does not do a good job of ensuring that business always acts fairly and ethically.
True
T/F: When Milton Freidman's entire statement is considered, it appears that he accepts three of the four categories of the four-part model, which excludes philanthropy.
True - Freidman's statement includes economic, legal, and ethic.
The Dodd-Frank Wall Street Reform and Consumer Protection Act
Was Passed in the wake of the global financial crisis and signed into law on July 21, 2010.
CEO Duality
When the CEO is on the board as well, which protects him
Backdating
When the recipient is given the option of buying stock at yesterday's price, granting them an immediate profit
. Why does discussion of the institution of business tend to focus on big business?
When we think of business, we tend to think of the highly visible products and services that are made available by large corporations. They advertise more than do local companies, so people all over the country (or world) are familiar with Coca-Cola, while relatively few have heard of the hair styling salon where you get your hair cut. In addition, people tend to equate size with power, and we pay closer attention to the powerful than we do to those without power (just think of the attention a student pays to the professor or dean, compared to the lack of attention given to a janitor or groundskeeper).
The key elements of a pluralistic society are decentralization and diversity of power. Using what you know about American society, do you consider it to be a pluralistic society? Why or why not?
Whether students say American society is pluralistic, not pluralistic, or somewhere in between, is oflittle consequence. The important part of the answer will be in the defense of the position taken. Students who say it is pluralistic should be emphasizing the dispersion of power among various social institutions (e.g., religion, business, education, govermnent, etc.) and specific interest groups such as the National Rifle Association or Common Cause. Students who say American society is not pluralistic should recognize significant concentrations of power among certain groups like the oil industry, the military-industrial complex, or Microsoft. A more sophisticated answer will recognize that there are arguments to be made on both sides of the question, and will cite examples of both in support of their stance.
Legitimation
a dynamic process by which business seeks to perpetuate its acceptance
Council of Institutional Investors (CII)
a nonprofit association of corporate, public and union employee benefit funds
The ultimate form the stakeholder approach or stakeholder management might take is to be called
a stakeholder corporation
The early definition of corporate social responsibility was
a. seriously considering the impact of the company's actions on society.
according to the business case for CSR, a reason companies are becoming more socially responsible is all of the following except:
access to capital
Corporate Social Responsiveness emphasizes
action and activity
The minimum standard of ethical behavior can be thought of as
adhering to the law
Clean Capitalism
an economic system in which prices fully incorporate social, economic, and ecological costs and benefits, and actors are clearly aware of the consequences of their marketplace actions
*Stakeholder* is a variant of the concept of *stockholder*
an investor/owner of businesses.
Which of the following is not an argument commonly used in favor of corporate social responsibility?
being socially responsible helps ward off government intervention and regulation.
All of the following are arguments commonly made against corporate social responsibility except
business did not create today's social problems, so it should not be expected to solve them.
Which of the following is not an undesirable side effect of technology
clash of cultural and religious forces
The traditional concept of business responsibility in the United States is based on
classical economic model
Clawback Provisions
compensation recovery mechanisms that enable a company to recoup compensation funds, typically in the event of a financial restatement or executive's misbehavior
Financial returns from socially conscious investment funds are
competitive with returns from other investments
The narrow view of corporate citizenship focuses solely on
corporate community relations
an action-oriented variant of CSR is called...
corporate social responsiveness
A quality, characteristic, or state in which activities, processes, practices, and decisions in companies become open or visible to the outside world is called
corporate transparency
according to research done by David Callahan, all of the following are reasons why cheating is on the rise except
declining wages
A ladder of stakeholder engagement
depicts a continuum from low engagement to high engagement.
The part of corporate social responsibility that focuses on fair prices and profits is
economic
The modern era of corporate social responsibility (from the 1950s to today)
emphasizes specific issues
The part of corporate social responsibility that focuses on activities and practices that are expected by society, but not codified into law, is
ethical
an ethical concept or rule that helps the decision maker take an ethical course is called a(n)
ethical principle
The discipline that deals with what is good and bad and with moral duty and obligation is
ethics
Say on Pay Movement
evolved from concerns over excessive executive compensation and failures to link CEO pay to performance
A society more satisfied with corporate social responsiveness, performance, and citizenship will invariably have reduced criticism of business.
false
T/F: The categorial imperative is closely associated with the principle of utilitarianism
false
T/F: The conceptual model of clCorporate Social plPerformance can assist managers and understanding that social responsibility is separate and distinct from economic performance
false
T/F: The majority of Americans think that the need for ethics is about the same as it was 50 years ago
false
T/F: The primary elements in the concept of the stakeholder corporation is that stakeholders should be granted ownership positions in the firm relative to their power over the farm
false
T/F: The principles approach is considered a more pragmatic approach than the ethical tests approach to ethics
false
T/F: The use of generic groups to answer the question 'Who are our stakeholders? ' Is generally sufficient for business.
false
T/F: individual managers, through ethical leadership, can have a direct effect on business ethics at the social and global levels
false
Benefits to companies of good corporate citizenship include all of the following except
fewer government regulations
Which of the following is not a dimension of Carroll's corporate social performance model?
funding sources
The argument against CSR focuses on the consequence of the requirement that business must internalize costs that it formerly passed on to society in the form of dirty air and unsafe products, the costs of which might necessitate raising prices.
global competitiveness
technology has benefited society and all of the following ways except
improving the sustainability of life on Earth
Sustainability
is the latest emphasis on engaging stakeholders.
The first and primary argument for corporate social responsibility is
it is in business's long range interest to be socially responsible.
The part of corporate social responsibility that focuses on fulfilling the social contract by following the law is
legal
The perceived validity or appropriateness of a stakeholders claim is referred to as
legitimacy
Which of the following is not a characteristic of a socially responsible company?
makes above average financial returns.
The view of stakeholders that sees them as more than just people or groups who can wield economic or legal powers is the
multi-fidiciary approach
Interaction with stakeholders
must be integrated into every level of decision-making in the organization.
The area of ethics that is concerned with supplying and justifying a coherent moral system of thinking and judging is called
normative ethics
The socially responsible frrm should strive to do all of the following EXCEPT
obey the preferred laws
Corporate social responsibility emphasizes
obligation and accountability
corporate social performance emphasizes
outcomes and results
Which of the following practices is not a modification of the classical economic model?
owner control
The fact that business leaders in the late 19th century felt they had to show that large corporations were a force for social good is an example of
paternalism
Which of the following is the most basic assumption we make in discussing personal and managerial ethics?
people want to behave ethically
The Triple Bottom Line encompasses all of the following spheres of performance except
philanthropic
The part of corporate social responsibility that focuses on business's voluntary activities which are not normally expected of a firm is
philanthropic
The most efficient use of corporate wealth to benefit the public is though contributions to charity and other worthy causes which is called
philanthropy
a technique that lures prey into revealing passwords and other private data by providing a convincing offer is called
phishing
The number one ethical issue in doing business over the internet is
possible invasion of privacy
The view of the firm that recognizes just suppliers and customers as stakeholders is the
production view
Carroll's corporate social performance model can be used in all of the ways listed below except
providing answers to specific social problems
Kant's categorical imperative argues that one's sense of duty is derived from
reason
There is no doubt that the media are
reporting ethical problems more frequently and feverently
any type of steak can be viewed as a (n)
right
Which of the following is not a source from which a manager derives values
scientific knowledge
a group of people who represents the interest of a non-human species (such as the natural environment) and does not have a direct stake in the firm is known as a
secondary non-social stakeholder
The people for ethical treatment of animals (PETA) belongs to the category of...
secondary social stakeholder
Which of the following is not a model of ethical management provided in the textbook
semi-moral management
Which of the following is not a level at which ethics issues arise?
small group
Which of the following is not one of the responsibilities in Carroll's four-part defrnition of corporate social responsibility?
social
responsibilities for stakeholder management include all of the following except
social
The relationship between corporate social performance and financial performance is viewed from three different perspectives. The most popular view is based on the belief that...
social responsibility and financial performance are inter-related and affect each other.
The relationship between corporate social performance and financial performance is viewed from three different perspectives. The most popular view is based on the belief that
socially responsible firms are more fmancially profitable
an individual or group who can affect or be affected by an organization is a(n)
stakeholder
for sustainable development to become a reality, which approach offers the best opportunity for this to happen
stakeholder
The book, The Civil Corporation, identifies four ways in which business fmns respond to social pressures. Which of the following is not one of those?
stakeholder approach
The concept of business responsibility that is based on concern for the various groups that are affected by a business is known as the
stakeholder model
The relationship between corporate social performance and financial performance is viewed from three different perspectives. The symbiotic view
states that there is an interactive relationship among social performance, financial performance, and corporate reputation.
The relationship between corporate social performance and financial performance is viewed from three different perspectives. The symbiotic view...
states that there is an interactive relationship among social performance, financial performance, in corporate reputation.
stakeholders who have a high potential for cooperation and a low potential for threat to the firm are known as
supportive stakeholders
The Triple Bottom Line concept focuses on economic, social, and envirornnental performance, the key elements of
sustainability
The triple bottom line concept focuses on economic, social, and environmental performance, the key elements...
sustainability
Bullet-dodging
the delaying of a stock option grant until right after bad news
Legitimacy
the extent that a company's activities are congruent with the goals and values of the social system within which they function
Management
the group of individuals hired by the board to run the company and manage it on a daily basis
The classical view of economics holds that a society can best determine its needs and wants through
the marketplace
Corporate Governance
the method by which a firm is being governed, directed, administered, or controlled and to the goals for which it is being governed
Insider Trading
the practice of buying or selling a security by someone who has access to material information that is not available to the public
Classified boards (Staggered boards)
those that elect their members in staggered terms
Some businesses are socially responsible; other businesses do just about anything they want.
true
T/F: Data breaches at businesses are on the rise
true
T/F: In understanding the four components of CSR, ethical responsibility is expected of business by society
true
T/F: The assumption underlying the instrumental value of the stakeholder model is that effective stakeholder management should lead to achievement of traditional business goals such as profits and growth.
true
T/F: The assumption underlying the instrumental value of the stakeholder model is that effective stakeholder management should leave to achievement of traditional business goals such as profit and growth
true
T/F: The key to effective stakeholder management is in its implementation.
true
T/F: The primary factor behind the transition from a relatively simple business model to the highly complex state we now have is public recognition that the business organization is no longer the sole property or interest of its owners
true
T/F: The public perception of the acceptability of embryonic stem cell research is evolving, with more people believing it is ethical
true
T/F: a moral management relies primarily on a compliant strategy that focuses on obedience to the law
true
T/F: an early argument to that generated considerable discussion in CSR's development holds that the term 'responsibility' is to suggestive of efforts to pinpoint accountability or obligation
true
T/F: companies use technology through the use of cookies and spam to invade consumer privacy
true
T/F: ethical behavior is typically thought to reside above behavior by the law
true
T/F: plaintiffs who have been injured by drivers talking on cell phones are holding the drivers' employers responsible as well
true
The relationship between corporate social performance and financial performance is viewed from three different perspectives. The perspective that views social responsibility as a "fair weather" concept
views social responsibility as driven by the frrm's fmancial performance.
Transparency
working toward the open corporation.
Stake Can be categorized as:
-An Intrest -A Right; legal and moral right -Ownership
What Responsibilities Does a Firm Have to its Stakeholders? Apply Corporate Social Responsibility Pyramid Responsibilities are:
-Economic -Legal -Ethical -Philanthropic
Secondary nonsocial stakeholders examples:
-Environmental intrest groups -Animal welfare organizations
Secondary social stakeholders examples:
-Government regulators -Civic institutions -Social pressure groups -Media and academic commentators -Trade bodies -Competitors
A Typology of Stakeholder Attributes
-Legitimacy -Power -Urgency -Proximity
Primary nonsocial stakeholders examples:
-Natural environment -Future generations -Nonhuman species
Three Views of the Firm
-Production View -Managerial View -Stakeholder View
Primary social stakeholders examples:
-Shareholders and investors -Employees and managers -Customers -Local Communities -Suppliers and other business partners
Stakeholder Management Capability
1. *Identify* stakeholders 2. *Develop* processes, approaches, procedures, policies and practices by which the firm can scan the environment and gather pertinent information about stakeholders 3. *Engage* in relationships with stakeholders
Five Key Questions
1. Who are the firm's *STAKEHOLDERS*? 2. What are the stakeholders' *STAKES*? 3. What *OPPORTUNITIES* and *CHALLENGES* do our stakeholders present? 4. What *RESPONSIBILITIES* does the firm have toward its stakeholders? 5. What *STRATEGIES* or *ACTIONS* should the firm take to best address stakeholders?
A gap between society's expectations of social conditions and the current social realities is recognized as a. a social problem. b. distributive justice. c. the revolution of rising expectations. d. inevitable reality.
A
Sustainability, at a simple level, is about business's: a. ability to survive and thrive over the long term b. approach to only the natural environment c. preservation of the environment in the present generation d. ability to meet the needs of the present while compromising future generations
A
The average level of formal education in the United States is a. nsrng. b. dropping. c. staying about the same. d. unknown.
A
The belief that each succeeding generation should have a higher standard of living than its predecessor and that major institutions should continually improve is known as a. the revolution of rising expectations. b. the iron cage of rationality. c. the iron law of oligarchy. d. the soft bigotry of low expectations.
A
The examination of business and its relationship to society typically focuses on a. big business and highly visible industries. b. all business and all industries. c. small business and highly visible industries. d. none of these.
A
Golden Parachute
A provision in an employment contract which a corporation agrees to make payments to key officers in the even of a change in the control of the corporation
Board of Directors
A small group that governs and oversees the management of the business
Corporate Gadflies
Activist Shareholders are also called....
Restricted Stock
Always have value even when the market is down. Used to incentivize CEO's, managers, and directors and align them with owners
Sarbox
Amended the securities laws to provide better protection to investors in public companies by improving the financial reporting of companies
Stakeholder Engagement
An approach by which companies successfully implement the *transactional level* of strategic management capability -Interaction with stakeholders -A ladder of stakeholder engagement -Transparency -Sustainability
Stake
An interest or a share in an undertaking
Stakeholder
Any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization. -
Shareholder-Primacy Model
Asserts that maximizing share value is the ultimate firm goal and that improving corporate governance entailed reducing board power, maximizing shareholder power, and trying to share price
The macro level of business power resides in a. the Federal goverrnnent. b. the overall corporate system. c. corporate CEOs. d. particular industries.
B
Which oftbe following is not an element oftbe social contract? a. laws b. employment contracts c. regulations d. shared understandings
B
The view of corporate citizenship that embraces all that is implied in the concepts of social responsibility, responsiveness, and performance is the...
Broad view
All of the following our arguments commonly made against corporate social responsibility except...
Business did not create today's social problems, so it should not be expected to solve them
Describe what the authors mean by the managerial approach taken in the textbook.
Business managers are judged ahnost exclusively on their ability to accomplish the goals of the organization. For this reason, managers excel at the practical--they are accustomed to dealing with situations in rational and systematic ways. This approach carries over into ethical and social matters as well. In addition, managers must focus on both short-term and long-term implications of their decisions and actions. The textbook will likewise approach issues of business and society from this perspective.
"In the long run, those who do not use power in a manner which society considers responsible will tend to lose it" is the description of a. The Iron Law of Oligarchy. b. The Iron Cage of Rationality. c. The Iron Law of Responsibility. d. The Peter Principle.
C
. Television raises our level of awareness about business in all of the following ways except a. news programs. b. prime-time programs. c. pay-per-v1ew programs. d. commercials.
C
CEOs such as Virginia Rometty ofiBM or Tim Cook of Apple hold which level of power? a. macro b. micro c. individual d. intermediate
C
Major institutions in a pluralistic, special-interest society will inevitably receive a. pra1se. b. special favors. c. scmtiny and criticism. d. tax advantages.
C
The ability to produce an effect or influence a situation is known as a. authority. b. abuse. c. power. d. dictatorship.
C
The business power wielded by an individual finn is known as a. macro level power. b. intermediate level power. c. micro level power. d. individual level power.
C
The collection of private, commercially oriented organizations, ranging in size from sole proprietorships to large corporations is referred to as a. the third sector. b. goverrnnent. c. business. d. the free market economy.
C
The government, consumers, and members of the community are examples of a. stockholders. b. the technological envirornnent. c. external stakeholders. d. primary stakeholders.
C
The intermediate level of business power is found in a. corporate headquarters. b. the boards of individual corporations. c. groups of corporations acting in concert. d. medium-sized corporations.
C
The levels of power include all of the following except a. the macro level. b. the micro level. c. the institutional level. d. the individual level.
C
The most important stakeholders of a business are typically its a. employees. b. government. c. consumers. d. owners.
C
The processes by which laws are enacted and government officials are elected are part of the a. social environment. b. economic environment. c. political environment. d. technological environment.
C
The set of two-way understandings that characterize the relationships between major social institutions is called the a. implied contract. b. unilateral binding accord. c. social contract. d. procedural justice agreement.
C
Which of the following characteristics of an industry does not add to the creation of visible and controversial social problems? a. intense advertising b. creation of pollution c. geographic location d. products that affect health
C
Director-Primacy Model
Challenges the status quo and asks whether the balance of power in corporate governance should favor shareholders or board members
Anglo-American Model
Characterized as having outside directors, following common law, with market-oriented and share-holder centered governance
developing internet policies, helping their companies avoid consumer litigation, and handling consumer complaints are all functions of a
Chief privacy officer (CPO)
An entitlement mentality is a. a necessary outgrowth of the welfare system. b. an outgrowth of the revolution of rising expectations. c. the idea that one has to work for what one gets. d. the idea that each citizen owes something to society.
D
An internal stakeholder is a person or group who a. exist outside the boundaries of the finn. b. is located in the same country in which the firm in located. c. is defmed as an "insider" in laws regulating fmancial markets. d. is "inside" the company, such as employees and owners.
D
Stakeholders include all of the following groups except a. owners. b. employees. c. customers. d. all of these are stakeholder groups.
D
The is a result of the growing numbers of individuals and groups who see themselves as having been victimized by society. a. Rights Movement b. Entitlement Mentality c. Revolution of Rising Expectations d. Victimization philosophy
D
When a business affects the life of a member of the surrounding community without meaning to, the company has wielded a. coerc1ve power. b. deliberate power. c. hidden power. d. unintentional power.
D
Which of the following is not a sphere of power indicated in the text? a. economic b. technological c. political d. intermediate
D
Which of the following is not listed as a general issue involving social or ethical ramifications within the relationship between business and society? a. downsizing pension programs b. toxic waste disposal c. insider trading d. death penalties
D
Power & Demanding
Dangerous Stakeholder
What *STRATEGIES* or *ACTIONS* should the firm take to best address stakeholders?
Deal directly? Indirectly? Take offense? Defense? Accommodate? Negotiate? Manipulate? Resist? Combination of Strategies?
Corporate Responsibility Committee (Corporate Sustainability Committee)
Deal with equality/moral aspects of the company
Power, Legitimacy, & Urgency
Definitive Stakeholder
Just Urgency
Demanding Stakeholder
Legitimacy & Urgency
Dependent Stakeholder
Stock Options
Designed to motivate the recipient to improve the value of the firm's stock. If the stock option rises after someone receives a stock option, they make money
Agency Problems
Develop when the interests of the shareholders were not aligned with the interests
Just Legitimacy
Discretionary Stakeholder
Power & Legitmacy
Dominant Stakeholder
Just Power
Dormant Stakeholder
What *RESPONSIBILITIES* does the firm have toward its stakeholders?
Economic? Legal? Ethical? Philanthropic?/ Discretionary? Figure 3-7
Friedman never proposed that businesses had any obligation to act ethically.
False
In Carroll's four-part defmition of corporate social responsibility, ethical responsibilities are required of business only by society, and not by businesses themselves.
False
In practical terms, the socially responsible firm mw;t be involved in philanthropy, as society expects it.
False
One of the biggest advances in corporate social performance is that all agree that performance criteria need only be responsive and not anticipatory.
False
Philanthropy is the term by Adam Smith in Wealth of Nations to describe the operation of self interest resulting in the good of society.
False
Pluralism is a condition in which there is a concentration of power among society's groups and organizations.
False
Social responsible investing is a very new concept, originating in the early 1990s.
False
T/F: An argument for corporate social responsibility is that it helps business compete in the global economy.
False
The corporate social performance concept has not yet spread to the business community
False
Describe the virtues of a pluralistic society.
Figure 1-1 lists five virtues of a pluralistic societ y. These include I) prevention of concentrations of power, 2) maximization of freedom of expression and action, while striking a balance between monism and anarchy, 3) allegiance of individuals to groups is dispersed, 4) creation of widely diversified set ofloyalties to many organizations, and 5) provides a built-in set of checks and balances.
Shareholder-Direction Exchange (SDX)
Formed to develop protocols for director-shareholder engagement for U.S. public companies
Which entity publishes the 100 Best Companies to Work For?
Fortune Magazine
Which entity publishes annual World's Most Admired companies rankings?
Fortune magazine
Who are the firm's *STAKEHOLDERS*?
Generic categories? Specific categories? pp. 67-68 (Primary & Secondary)
Compensation Committee
Has the responsibility of evaluating executive performance and recommending terms and conditions of employment
Primary social stakeholders
Have a direct stake in the organization and its success.
Secondary social stakeholders
Have a public or special interest stake in the organization that is more indirect.
Inside Directors
Have ties of some sort to the firm
Poison Pill
Helps prevent hostile take-overs. When an investor acquires a certain percentage of a company's stock, the poison pill allows for other shareholders to buy more shareholders
Business Judgement Rule
Holds that courts should not challenge board members who act in good faith, putting the company interests first over personal interests
The Stakeholder Corporation
In the future, development of loyal relationships with customers, employees, shareholders, and other stakeholders will become one of the most important determinants of success.
Outside Directors
Independent from the firm and its top managers
Material Information
Info that an investor would want because it can change a company's stock price.
Continental-European Model
Inside directors and civil law dominate, as well as block ownership, a bank-orientation and stakeholder-coordinated governance
The Private Securities Litigation Act of 1995
Intended to rein in excessive levels of private securities litigation
The text discusses three values of the stakeholder model. Which of the following is seen as a value of the stakeholder model of the firm?
It is normative
