HRM 159 Chapt. 1

The Corporate Social Responsibility Hierarchy (Bottom to Top)

1. Economic Responsibilities 2. Legal Responsibilities 3. Ethical Responsibilities 4. Discretionary Responsibilities

The moral argument for corporate social responsibility focuses on adopting the path of least resistance with regard to issues of concern that make common and business sense. T or F

False

There is widespread agreement among corporate executives about the necessity of corporate social responsibility T or F

False

By adopting a rational argument for corporate social responsibility, firms seek to interpret evolving societal values and stakeholder expectations, and they act to avoid future sanctions. T or F

True

One definition of corporate social responsibility is "a responsibility among firms to meet the needs of their stakeholders and a responsibility among stakeholders to hold firms to account for their actions T or F

True

Which of the following is NOT a characteristic of corporate social responsibility? a. It is a static target that does not change. b. It is an evolving concept. c. It varies across countries and cultures. d. It is both critical and controversial.

a. It is a static target that does not change.

In the 1790s, consumer boycotts occurred in reactions to which of the following? a. Slave-harvested sugar b. Cheap cotton from the United States c. The high price of fuel (lamp) oil d. The use of the Royal Navy in England to transport slaves

a. Slave-harvested sugar

Which of the following is NOT part of Archie Carroll's pyramid of corporate social responsibility? a. Stakeholder responsibility b. Legal responsibility c. Discretionary responsibility d. Ethical responsibility

a. Stakeholder responsibility

Which of the following best describes nonprofit organizations? a. They emerge to do social good when the political will or the profit motive is insufficient to address society's needs. b. They emerge primarily to meet the religious or spiritual needs of a society. c. They emerge to supplement businesses that do not make profits. d. They emerge to meet the needs of governments that do not have adequate financial resources to address society's needs.

a. They emerge to do social good when the political will or the profit motive is insufficient to address society's needs.

According to the textbook, corporate social responsibility is strongest when a. business leaders view their role as stewards of resources owned by others. b. lower-level employees take the lead in developing socially responsible practices in the workplace. c. consumers demand higher levels of social responsibility. d. government requires specific business practices.

a. business leaders view their role as stewards of resources owned by others.

In contrast to Milton Friedman's argument, David Packard argued that a. businesses exist not only to make money but also to contribute to society. b. the sole purpose of businesses is to make money. c. businesses need not consider all stakeholders. d. shareholders are responsible for the larger community within which a firm operates.

a. businesses exist not only to make money but also to contribute to society.

According to Archie Carroll's pyramid of corporate social responsibility, a firm's ________ is to produce an acceptable return for investors. a. economic responsibility b. legal responsibility c. ethical responsibility d. discretionary responsibility

a. economic responsibility

Applying Archie Carroll's pyramid of corporate social responsibility, when a firm closes due to financial mismanagement and bankruptcy, it has not met its ________. a. economic responsibility b. legal responsibility c. ethical responsibility d. discretionary responsibility

a. economic responsibility

From a corporate social responsibility perspective, a firm's success is primarily related to its ability to a. incorporate stakeholder concerns into its business model. b. maximize the use of all its internal and external resources. c. minimize its tax liabilities. d. create more energy-efficient manufacturing processes.

a. incorporate stakeholder concerns into its business model.

Strategic CSR expounds the ________ argument in favor of corporate social responsibility. a. Financial b. Economic c. Political d. Social

b. Economic

Which of the following exists to define the rules and structures of society within which all organizations must operate? a. For-profits b. Governments c. Nonprofits d. Religion

b. Governments

"In a democratic society, power is taken away from those who abuse it" is a workable definition of: a. Carroll's CSR rule b. The Iron Law of Social Responsibility c. The Alien Tort Claims Act d. An accommodative view of CSR

b. The Iron Law of Social Responsibility

What is corporate social responsibility (CSR)?

A responsibility among firms to meet the needs of their stakeholders and a responsibility among stakeholders to hold firms to account for their actions

Peter Drucker stated, "Profit for a company is like oxygen for a person. If you don't have enough of it, you're out of the game. But if you think your life is about breathing, you're really missing something." This statement reflects the ________ argument for corporate social responsibility. a. ethical b. moral c. rational d. economic

B. Moral

Consequentialist (or utilitarian) reasoning justifies action in terms of the outcomes generated (e.g., the greatest good for the greatest number of people). Such reasoning is part of which argument for corporate social responsibility? a. Ethical b. Moral c. Rational d. Economic

C. Rational

What is a rational argument for CSR?

CSR is a rational argument that focuses on the benefits to performance of avoiding external constraints. Adopting the path of least resistance with regard to issues of concern makes common and business sense. In today's globalized world, where individuals and organizations are empowered to enact change, CSR represents a means of anticipating and reflecting societal concerns to minimize operational and financial sanctions.

What is an economic argument for CSR?

CSR is an argument of economic self-interest for business. CSR adds value because it allows companies to reflect the needs and concerns of their various stakeholder groups. By doing so, the firm is more likely to create greater value and, as a result, retain the loyalty and custom of those stakeholders. Simply put, CSR is a way of matching corporate operations with stakeholder values and expectations that are constantly evolving.

What is a moral argument for CSR?

CSR is an argument of moral reasoning that reflects the relationship between a company and the society within which it operates. It assumes businesses recognize that for-profit entities do not exist in a vacuum and that their ability to operate and achieve ongoing success comes as much from societal resources (e.g., infrastructure, rule of law) and consent (e.g., social contract) as from factors that are internal to the firm.

What are the two ethical arguments for CSR?

Consequentialist (utilitarian) and Categorical (Kantian)

What is the the consequential (utilitarian) ethical argument for CSR?

Consequentialist reasoning justifies action in terms of the outcomes generated (the greatest good for the greatest number of people)

Since the early 19th century, managers have consistently paid attention to the interests of all stakeholders. T or F

False

What is the Strategic CSR Debate Motion:

There are no absolute ethical and moral standards; all values, norms, and laws in society are socially constructed and evolve over time.

According to Archie Carroll's pyramid of corporate social responsibility, a firm's ________ is to act within the framework of laws and regulations drawn up by the government and judiciary. a. economic responsibility b. legal responsibility c. ethical responsibility d. discretionary responsibility

b. legal responsibility

By adopting a rational argument for corporate social responsibility, firms seek to a. do the right thing from an ethical perspective. b. to interpret evolving societal values and stakeholder expectations. c. make larger societal contributions than simply creating profit. d. go above and beyond the basic ethical and moral expectations of a society.

b. to interpret evolving societal values and stakeholder expectations.

The call for social responsibility among businesses is generally recognized as a concept that began in which time period? a. The early late 20th century, after the impact of the Industrial Revolution b. The late 20th century and early 21st century, after numerous widespread financial scandals c. Ancient times, as early as the writings of Socrates d. The 17th century, after concerns about the excesses of the East India Company were publicized

c. Ancient times, as early as the writings of Socrates

Financial scandals around the turn of this century at Enron, WorldCom, Adelphia, HealthSouth, and others led to which of the following? a. Greater reliance on nonstandard accounting practices b. Less reliance on nonstandard accounting practices c. New laws and governmental rulings that limit business's discretionary actions d. Revocation of laws and rulings that limit business's discretionary actions

c. New laws and governmental rulings that limit business's discretionary actions

Energy companies and industrial manufacturers set up the United States Climate Action Partnership (USCAP), which supports carbon limits and trading. This is an illustration of which argument for corporate social responsibility? a. Ethical b. Moral c. Rational d. Economic

c. Rational

According to Archie Carroll's pyramid of corporate social responsibility, a firm's ________ is to do no harm to its stakeholders within its operating environment. a. economic responsibility b. legal responsibility c. ethical responsibility d. discretionary responsibility

c. ethical responsibility

The rational argument for corporate social responsibility is summarized by the Iron Law of Social Responsibility, which states that a. ultimately it is government, not business, that is responsible for a satisfying society. b. responsibility for a just society is everyone's responsibility. c. in a free society, discretionary abuse of societal responsibilities leads, eventually, to mandated reprisals. d. concern for CSR must be the first priority of the courts.

c. in a free society, discretionary abuse of societal responsibilities leads, eventually, to mandated reprisals.

The Malden Mills textile plant is an important case study in CSR because a. it moved its operations to Asia to save production costs, but eliminated local jobs. b. it moved its operations to Asia while also maintaining local jobs. c. it remained open, continuing to pay its employees, after a fire destroyed the factory. d. it closed after a fire destroyed the factory.

c. it remained open, continuing to pay its employees, after a fire destroyed the factory.

An application of Milton Friedman's argument is a. providing workers time off to volunteer in their communities. b. establishing a recycling program. c. maximizing shareholder returns. d. clearly defining ethical concerns along a product's supply chain.

c. maximizing shareholder returns.

What is the the categorical ethical argument for CSR?

categorical reasoning justifies action in terms of the principles by which that action is carried out (the application of core ethical principles, regardless of the outcomes they generate).

Which of the following is an example of an economic argument for corporate social responsibility? a. A company invests in clean energy for its vehicles because it saves money on transportation. b. A company installs skylights in its stores to lower lighting costs. c. A company provides gym memberships to its employees to lower healthcare costs. d. All of the above are examples of economic arguments for CSR.

d. All of the above are examples of economic arguments for CSR

Corporate social responsibility adds value because it allows companies to reflect the needs and concerns of their various stakeholder groups. This statement reflects the ________ argument for CSR. a. ethical b. moral c. rational d. economic

d. Economic

Society benefits most when firms focus purely on their own financial success. This statement best reflects the ideas of ________. a. Charles Handy b. Adam Smith c. David Packard d. Milton Friedman

d. Milton Friedman

A central part of the moral argument for corporate social responsibility comes from the thinking that a. businesses have to pay taxes, so they should have to be responsible in other ways as well. b. society cannot afford all its needs unless business is forced to go beyond just paying taxes. c. business leaders and shareholders make money, so they should be morally responsible to society, especially to the poor. d. a large part of business success comes as much from actions that are congruent with societal values and norms as from factors internal to the company.

d. a large part of business success comes as much from actions that are congruent with societal values and norms as from factors internal to the company.

A firm sponsors a 5k race, contributing the race fees to a local charity. According to Archie Carroll's pyramid of corporate social responsibility, the firm is meetings its ________. a. economic responsibility b. legal responsibility c. ethical responsibility d. discretionary responsibility

d. discretionary responsibility

According to Archie Carroll's pyramid of corporate social responsibility, a firm's ________ is to take proactive, strategic behaviors that benefit both the firm and society. a. economic responsibility b. legal responsibility c. ethical responsibility d. discretionary responsibility

d. discretionary responsibility