CH 15 Practice Questions

In the context of a stakeholder view of a firm, which of the following views is supported by the free market advocates? a. A firm's first and foremost stakeholder group is the shareholders, and managers have a fiduciary duty to look after shareholder interests. b. Social goals, such as providing employment and social welfare, are in the best interest of a firm's overall development. c. Capitalistic organizations should be transformed into socialist organizations. d. A firm should not exercise privatization as it shifts the focus of the firm from being purely economic and reduces its efficiency.

a. A firm's first and foremost stakeholder group is the shareholders, and managers have a fiduciary duty to look after shareholder interests.

Which of the following is an example of tangible resources? a. Processes b. Informal relationships c. Attitudes d. Skills

a. Processes

A ______ is any group or individual who can affect or is affected by a firm's actions. a. Stakeholder b. Employee c. Firm citizen d. Home country citizen

a. Stakeholder

The increase in the income gap between the upper and lower echelons of society of developed economies acts as a driving force for _____. a. corporate social responsibility b. free market system c. privatization d. shareholder profit maximization

a. corporate social responsibility

In the context of the global diffusion of codes of conduct, the instrumental view suggests that: a. corporate social responsibility (CSR) activities simply represent a useful tool to make good profits. b. apparent interest in corporate social responsibility (CSR) indicates that firms are becoming more ethical. c. codes of conduct tangibly express values that organizational members view as central and enduring. d. codes of conduct intangibly express values that organizational members cannot quantify.

a. corporate social responsibility (CSR) activities simply represent a useful tool to make good profits.

According to a stakeholder view of a firm, all firms should pursue a more balanced triple bottom line consisting of economic, social, and _____ performances that simultaneously satisfy the demands of all stakeholder groups. a. environmental b. political c. international d. traditional

a. environmental

In the context of a stakeholder view of a firm, a key goal for corporate social responsibility (CSR) is _____. a. global sustainability b. global resonance c. global inertia d. global retreat

a. global sustainability

Copymart, a printer ink company, reacted to news that their ink cartridges are toxic to the environment by denying the claim. This is an example of a(n) _____. a. reactive strategy b. internalizing strategy c. accommodative strategy d. proactive strategy

a. reactive strategy

In the context of institutions and corporate social responsibility (CSR), a reactive strategy is indicated by: a. relatively no support by top management for CSR causes. b. piecemeal involvement of top management in CSR causes. c. some support from top managers, who view CSR as a worthwhile endeavor. d. top management anticipating CSR and endeavoring to do more than is required.

a. relatively no support by top management for CSR causes.

According to free market advocates, privatization: a. removes the social function of state-owned enterprises (SOEs). b. shifts the focus from the economic function through private ownership. c. reduces the chances of firms of becoming capitalistic organizations. d. shifts the focus from profit maximization to shareholder value minimization.

a. removes the social function of state-owned enterprises (SOEs).

The adoption of a code of conduct by a firm signifies that: a. the firm is willing to accept corporate social responsibility (CSR). b. the firm is willing to operate in a free market system. c. the firm is in favor of inequity among stakeholders. d. the firm is in favor of complete privatization, thereby maximizing profits.

a. the firm is willing to accept corporate social responsibility (CSR).

In the context of corporate social responsibility (CSR), which of the following actions should be taken by managers to attain global sustainability? a. Adopt a code of conduct but only as a "window dressing." b. Anticipate changes in the external and internal environments and seek to shape such changes. c. Imitate other firms' successful CSR activities without wasting time on assessments. d. Integrating CSR as a side branch of firm activities.

b. Anticipate changes in the external and internal environments and seek to shape such changes.

Which of the following is an indicator of growing anti-globalization sentiments around the world? a. Corporate greed is decreasing b. Repeated protests, chaos, and terrorist attacks c. Increasing population and poverty d. Decreasing inequity

b. Repeated protests, chaos, and terrorist attacks

Which of the following is a force that drives the corporate social responsibility (CSR) movement? a. The decrease in the income gap between the upper and lower echelons of society b. The occurrence of disasters and scandals c. The decrease in the importance of shareholders among other stakeholders d. The emergence of socialist organizations

b. The occurrence of disasters and scandals

In the context of a stakeholder view of a firm, which of the following statements best describes secondary stakeholder groups? a. These are the groups that simultaneously satisfy the demands of all stakeholder groups. b. These are the groups or individuals who can indirectly affect or are indirectly affected by the firm's actions. c. These are the groups on which the firm relies for its continuous survival and prosperity. d. These are the groups or individuals who support the functions of the primary stakeholder groups of the firm.

b. These are the groups or individuals who can indirectly affect or are indirectly affected by the firm's actions.

In the context of institutions and corporate social responsibility (CSR), which of the following is true of a defensive strategy? a. When a problem arises, firms often deny its occurrence. b. When a problem arises, firms admit responsibility but often fight it. c. When a problem arises, firms often modify their outlook to accommodate changes. d. When a problem arises, firms always take necessary actions to avoid such situations.

b. When a problem arises, firms admit responsibility but often fight it.

In the context of the global diffusion of codes of conduct, the negative view suggests that: a. corporate social responsibility (CSR) activities reduce the profits of firms. b. apparent interest in corporate social responsibility (CSR) activities may simply be window dressing. c. codes of conduct tangibly express values that organizational members view as central and enduring. d. codes of conduct intangibly express values that organizational members cannot quantify.

b. apparent interest in corporate social responsibility (CSR) activities may simply be window dressing.

In the context of institutions and corporate social responsibility (CSR), a defensive strategy is indicated by: a. relatively no support by top management for CSR causes. b. piecemeal involvement of top management in CSR causes. c. some support from top managers, who view CSR as a worthwhile endeavor. d. top management anticipating CSR and endeavoring to do more than is required.

b. piecemeal involvement of top management in CSR causes.

According to firms opposing corporate social responsibility (CSR), tough environmental regulation is likely to lead to: a. reduced quality of products and services of a firm. b. reduced competitiveness of a firm. c. increased demand and reduced supply of a firm's products and services. d. labor shortage.

b. reduced competitiveness of a firm.

Globally, the urgency of sustainability in the 21st century is driven by: a. the decrease in the influence of nongovernmental organizations (NGOs). b. some irreversible effects on the environment due to industrialization. c. some irreversible effects that exclusively impact the internal stakeholders of firms. d. the increase in relative power of national governments.

b. some irreversible effects on the environment due to industrialization.

Which of the following is the explanation for the corporate social responsibility (CSR)-economic performance puzzle provided by the resource-based view? a. As the number of CSR activities conducted by a firm increases, the economic performance of the firm increases. b. As the number of CSR activities conducted by a firm increases, the economic performance of the firm decreases. c. As all firms are different, there is no quantifiable relation between CSR and economic performance of a firm. d. As all firms are different, the economic performance increases with increase in the number of CSR activities up to a certain limit, and then it starts decreasing with increase in CSR activities.

c. As all firms are different, there is no quantifiable relation between CSR and economic performance of a firm.

Consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm to accomplish social benefits along with the traditional economic gains which the firm seeks is known as ______. a. Global sustainability b. Corporate global resonance c. Corporate social responsibility d. Collective societal reliance

c. Corporate social responsibility

The ability to meet the needs of the present without compromising the ability of future generations to meet their needs around the world is known as ______. a. Global sustainability b. Corporate global resonance c. Corporate social responsibility d. Collective societal reliance

c. Corporate social responsibility

In the context of corporate social responsibility (CSR), which of the following actions should be avoided by managers to attain global sustainability? a. Understanding the formal and informal rules of the game irrespective of its importance b. Anticipating changes in the external and internal environments and seeking to shape such changes c. Imitating other firms' successful CSR activities without wasting time on assessments d. Integrating CSR as part of the core activities and processes of a firm

c. Imitating other firms' successful CSR activities without wasting time on assessments

A firm's participation in social causes not directly related to the management of its primary stakeholders is known as _____. a. Shareholder CSR b. Issue focus c. Social issue participation d. Social values directionality

c. Social issue participation

In the context of a stakeholder view of a firm, which of the following views is supported by the corporate social responsibility (CSR) advocates? a. A firm's first and foremost stakeholder group is the shareholders, and managers have a fiduciary duty to look after shareholder interests. b. Privatization should be exercised to transform socialist firms to capitalist firms. c. The free market system may fail to constrain itself while pursuing profits, thus often breeding greed, excesses, and abuses. d. Managers will lose their focus on profit maximization if firms attempt to attain social goals such as providing employment and social welfare.

c. The free market system may fail to constrain itself while pursuing profits, thus often breeding greed, excesses, and abuses.

In the context of a stakeholder view of a firm, which of the following statements best describes primary stakeholder groups? a. These are the groups that simultaneously satisfy the demands of all stakeholder groups. b. These are the groups or individuals who can indirectly affect the firm's actions. c. These are the groups on which the firm relies for its continuous survival and prosperity. d. These are the groups or individuals who are indirectly affected by the firm's actions.

c. These are the groups on which the firm relies for its continuous survival and prosperity.

In the context of corporate social responsibility (CSR), which of the following statements is true of managers adopting an accommodative strategy? a. They do not feel compelled to act in the absence of disasters and scandals. b. They admit responsibility but often fight it. c. They accept responsibility as a matter of social obligation. d. They constantly anticipate responsibility and endeavor to do more than is required.

c. They accept responsibility as a matter of social obligation.

VegFarms Inc. was pressured by water safety environmental groups to mitigate the amount of fertilizer runoff going into streams. After enough pressure, VegFarms Inc. acquiesced to the demands and installed a natural filtration zone between their farms and the waterways. This is an example of a(n) _____. a. reactive strategy b. internalizing strategy c. accommodative strategy d. proactive strategy

c. accommodative strategy

In the context of the global diffusion of codes of conduct, the positive view suggests that: a. corporate social responsibility (CSR) activities simply represent a useful tool to make good profits. b. apparent interest in corporate social responsibility (CSR) activities may simply be window dressing. c. codes of conduct tangibly express values that organizational members view as central and enduring. d. codes of conduct intangibly express values that organizational members cannot quantify.

c. codes of conduct tangibly express values that organizational members view as central and enduring.

According to free market advocates, activities pertaining to social welfare: a. are in the best interest of a firm's overall development. b. decrease the support from secondary stakeholder groups. c. decrease shareholder value. d. are steps toward global sustainability.

c. decrease shareholder value.

Which of the following firms is most likely to view corporate social responsibility (CSR) as a source of differentiation that permeates throughout the corporate DNA? a. A reactive firm b. A defensive firm c. An accommodative firm d. A proactive firm

d. A proactive firm

The urgency towards sustainability is driven by which of the following global concerns? a. The relative power of national governments has eroded. b. Irreversible effects on the environment. c. Increasing population, poverty, and inequity d. All of the above

d. All of the above

The corporate social responsibility (CSR) advocates argue that: a. shareholders, being the most important stakeholders, deserve maximum profits. b. privatization increases the long-term profitability of a firm. c. free market system is a step toward global sustainability. d. all stakeholders have an equal right to bargain for a fair deal.

d. all stakeholders have an equal right to bargain for a fair deal.

From a corporate social responsibility (CSR) perspective, the best firms embrace a(n) _____. a. reactive strategy b. defensive strategy c. accommodative strategy d. proactive strategy

d. proactive strategy

When Whole Foods co-founder John Mackey said "happy team members result in happy customers. Happy customers do more business with you. They become advocates for your enterprise, which results in happy investors. That is a win, win, win, win strategy", which CSR strategy was he referring to? a. reactive strategy b. internalizing strategy c. accommodative strategy d. proactive strategy

d. proactive strategy