GBU 325 Corporate & Citizenship Module 5

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According to ____, rich people and dominant companies are morally superior.

Social Darwinism

enlightened self-interest

the view that holds it is in a company's self-interest in the long run to provide true value to its stakeholder

bottom of the pyramid

the world's poor; also refers to creative business actions to develop products and services that meet the needs of the world's poor

A _____ is the sequence of coordinated actions that add benefit to a product or service.

value chain

Which of the following is true regarding problems faced by cross-border corporate power? A. International law strongly addresses the social impacts of business. B. Transnational corporations are subject to uneven regulation in developing nations. C. Strict regulations ensure that corporations are made directly accountable for social harms. D. International law has strongly codified norms protecting commercial rights, human rights, and other social resources.

B. Transnational corporations are subject to uneven regulation in developing nations.

_____ is regulation by nonstate actors based on social norms or standards enforced by social or market sanctions.

Civil regulation

What is corporate social responsibility?

Corporate social responsibility is the duty of a corporation to create wealth in ways that avoid harm to, protect, or enhance societal assets. It is also known as corporate citizenship, stakeholder management, sustainability, and, in Japan, kyosei, a word that translates as "living and working together for the common good."

Which of the following are responses to competitive forces in markets? A. Private regulations B. Mandated actions C. Voluntary actions D. Market actions

D. Market actions

Which of the following correctly outlines the corporate social responsibility spectrum reading from left to right? A. Free market conservatives, mainstream corporate managers, progressive civil societies, and radical Progressives. B. Radical Progressives, mainstream corporate managers, progressive civil societies, and free market conservatives. C. Free market conservatives, progressive civil societies, and radical Progressives. D. Radical Progressives, progressive civil societies, mainstream corporate managers, and free market conservatives.

D. Radical Progressives, progressive civil societies, mainstream corporate managers, and free market conservatives.

All of the following statements were the interrelated themes of broader responsibility that emerged during the Progressive era EXCEPT: A. managers were trustees, whose corporate roles put them in positions of power. B. managers had an obligation to balance multiple interests. C. many managers subscribed to the service principle. D. managers concentrated more on promoting their self-interests.

D. managers concentrated more on promoting their self-interests.

Who were corporate trustees?

During the Progressive era, interrelated themes of broader responsibility emerged. One of them was, managers who were trustees, that is, agents whose corporate roles put them in positions of power over the fate of not just stockholders, but also of others such as workers, customers, and communities. This power implied a duty to promote the welfare of each group.

Companies that join the ____, a voluntary initiative, must reduce emissions, energy use, and waste beyond legal requirements.

EcoManagement and Audit Scheme

The _____ divide projects into high, medium, and low social and environmental risk and compel borrowers to meet standards for ecological protection and to consult with native peoples.

Equator Principles

According to the Committee for Economic Development, the intermediate circle of societal expectations outlines the newly emerging responsibilities that business should assume to improve the social environment, even if they are not directly related to specific business processes.

FALSE

According to the doctrine of neo-Darwinism, charity interferes with the natural evolutionary process in which society sheds its less fit to make way for the better adapted.

FALSE

Any large multinational corporation will follow only a single code.

FALSE

Civil regulation has fully compensated for lack of binding global regulation.

FALSE

Corporate social responsibility has a definite, universal meaning.

FALSE

Hard law refers to statements of philosophy, policy and principle found in nonbinding international conventions.

FALSE

International law found in treaties, conventions, and trade agreements strongly address the social impacts of businesses.

FALSE

Mandated actions go beyond those compelled by law or regulation.

FALSE

One of the advantages of sustainability reporting is that the reports are comparable from company to company.

FALSE

Soft law creates binding obligations for corporations.

FALSE

A company earns its "license to operate" through filing its proper legal documents.

False

As a response to the conflict between long- and short-term profit making, an enlightened self-interest point of view would be the least useful and practical approach.

False

Being socially responsible means that a company must abandon its other missions.

False

Companies whose citizenship profile best matches public expectations are least likely to benefit from strategic investments in corporate citizenship.

False

Corporate citizenship primarily focuses on a firm's social activities.

False

Corporate power says that in the long run, those who do not use power in ways that society considers responsible will tend to lose it.

False

Enlightened self-interest is the idea that the wealthiest members of society should be charitable toward those less fortunate.

False

Global corporate citizenship refers to putting an organization's commitment to social and environmental responsibility into practice locally.

False

If a company acknowledges the need to build more coherent initiatives, it is in the innovative stage of becoming a corporate citizen.

False

Reports have shown that 70 percent of consumers said they would buy a product even if they did not like the company's reputation behind the product.

False

Robert Civita, chairman and CEO of the Brazilian Abril Group, has defined global corporate citizenship as "socialism with a conscience."

False

Social audits look at what an organization does, not at the results of the actions.

False

The capability of corporations to influence government, the economy, and society, based on their organizational resources is called the big business principle.

False

The theory that the sole responsibility of a corporation is to optimize profits while obeying the law is known as:

Friedmanism

Define Friedmanism.

Friedmanism is the theory that the sole responsibility of a corporation is to optimize profits while obeying the law.

The standard used by the International Organization for Standardization to determine the environmental impact of a product or service is the:.

ISO 14000

The International Organization for Standardization is developing the _____ which is intended to set forth underlying principles, core subjects, and methods for integrating social performance in the plans, systems, and processes of organizations.

ISO 2600

The standard used by the International Organization for Standardization to determine the quality of a product or service is the:

ISO 9000

_____ actions are initiatives required either by government regulation or civil regulation.

Mandated

According to ____, corporate social responsibility is an insufficient doctrine that substitutes poorly for tougher laws and regulations, allowing corporations to form a smoke screen of virtue behind which their "inviolable core" of profit seeking behavior is untouched.

Radical Progressives

Define the service principle.

Service principle was a near-spiritual belief that individual managers served society by making each business successful and if they all prospered, the aggregate effect would eradicate social injustice, poverty, and other ills.

_____ was a philosophy of the late 1800s and early 1900s that used evolution to explain the dynamics of human society and institutions.

Social Darwinism

Define social Darwinism in the context of corporate social responsibility.

Social Darwinism is a philosophy of the late 1800s and early 1900s that used evolution to explain the dynamics of human society and institutions. The idea of "survival of the fittest" in the social realm implied that rich people and dominant companies were morally superior. According to this philosophy, charity interfered with the natural evolutionary process in which society shed its less fit to make way for the better adapted.

According to Herbert Spencer, charity is right only when it raises the character and superiority of the giver.

TRUE

According to the radical Progressives, corporate social responsibility is an insufficient doctrine.

TRUE

Corporations should try to internalize adverse costs of production borne by society.

TRUE

During the Progressive era in U.S. history, business managers were considered to be trustees of their local communities.

TRUE

Governments advance corporate responsibility mainly with binding national regulation.

TRUE

Milton Friedman believes that the sole objective of managers should be maximization of profit.

TRUE

No matter what the source of a code of conduct, the target is the corporation.

TRUE

The Tripartite Declaration came in response to the rising power of multinational corporations in the 1960s.

TRUE

The application of one nation's laws within the borders of another nation is known as extraterritoriality.

TRUE

The duty of a company to create wealth in ways that avoid harm to, protect, or enhance societal assets is called corporate social responsibility.

TRUE

Discuss the three elements of social responsibility.

The three elements of social responsibility are market actions, externally mandated actions, and voluntary actions. Market actions are responses to competitive forces in markets. Such actions have always dominated and this will continue. When a corporation responds to markets, it fulfills its first and most important social responsibility. All else pales before its economic impact. Mandated actions are those required either by government regulation or civil regulation. Government, or public, regulation is rooted in the authority of the state and its mandates are enforceable by law. Government mandates have multiplied rapidly in developed countries over the last 75 years. Civil regulation is regulation by nonstate actors based on social norms or standards enforced by social or market sanctions. Civil regulation has many faces. It is imposed when activists, consumers, investors, lenders, shareholders, or employees make demands on a company and failure to comply will lead to reputational or financial damage. Such mandates are enforced by the power of the market, not the power of law. Mandates based on civil regulation are now expanding rapidly in the global economy. The third element is voluntary actions that go beyond those compelled by law or regulation. Some voluntary actions can be called "legal plus" because they exceed required mandates. Other actions are unrelated to mandates, but respond to public consensus. Still other actions may be strategic initiatives where the firm seeks to profit from solving a social problem.

According to The Economist, corporate citizenship is becoming increasingly important for the long-term health of companies.

True

An argument against corporate social responsibility is that it imposes unequal costs among competitors.

True

An emerging trend in corporate reporting is the integration of legally required financial information with social and environmental information into a single report.

True

Businesses that comply with laws and public policies are meeting a minimum level of social responsibility expected by the public.

True

Corporate citizenship partnerships can exist between companies and stakeholders in other countries.

True

Corporate social responsibility is the idea that businesses interact with the organization's stakeholders for social good while they pursue economic goals.

True

Given the immeasurable power in the hands of the leaders of large, global corporations, social responsibility has become a worldwide expectation.

True

Global corporate citizenship activities help companies create legitimacy, reputation, and competitive advantage.

True

Huge businesses can disproportionately influence politics, shape tastes, and dominate public discourse.

True

In the United States, the idea of corporate social responsibility appeared around the start of the 20th century.

True

In the first stage of corporate citizenship, the elementary stage, managers are uninterested and uninvolved with social issues.

True

Laws and regulations help create a level playing field for businesses that compete against one another.

True

One of the most appealing arguments in favor of corporate social responsibility for business supporters is that voluntary social acts may head off increased government regulation.

True

The basis for corporate citizenship does not rely on the generosity of a firm's senior management or their awareness of their role as trustees of the public's interests.

True

The concept of corporate social responsibility is rooted in the meaning "to pledge back," creating a commitment to give back to society and the organization's stakeholders.

True

There is no single universally accepted method for designing a CSR management structure.

True

Triple bottom line reporting requires that a firm report financial data.

True

social enterprise

a business that adopts social benefit as its core mission and uses its resources to improve human and environmental well-being

B corporation

a business that is certified by an external organization to verify the blending of its social objectives with its financial goals

department of corporate citizenship

a department created in a business to centralize under common leadership wide-ranging corporate citizenship functions

social audit

a systematic evaluation of an organization's social, ethical, and environmental performace

social entrepreneur

an individual driven to create and sustain social value rather than solely economic value in business

According to conservative economists:

business is most responsible when it makes money efficiently.

According to the doctrine of social Darwinism:

charity interferes with the natural evolutionary process in which society shed its less fit to make way for the better adapted.

citizenship profile

choosing a configuration of citizenship activities that fits the setting in which the company is working

According to the _____ view of economics, a business is socially responsible if it maximizes profits while operating within the law.

classical

transparency

clear public reporting of an organization's performance to various stakeholders

Formal statements of aspirations, principles, guidelines and rules, for corporate behavior are known as:

codes of conduct.

According to ____, corporate social responsibility creates administrative expenses, distracts executives, confuses economic goals with other goals, and subtracts from social welfare when the corporation is less efficient.

conservative economists

The duty of a corporation to avoid harm to the assets of a community is called:

corporate social responsibility

The fundamental idea behind _____ is that corporations have duties that go beyond lawful execution of their economic function.

corporate social responsibility

social equity

determined by assessing the company's social benefits and costs, as revealed by a social performance audit

A(n) _____ cost is a production cost not paid by a firm or its customers, but by members of society.

external

When a factory dumps toxic waste into a stream, it results in a(n) _____ cost for society.

external

The application of one nation's laws within the borders of another nation is known as:

extraterritoriality.

The idea that ethical consumers will pay a premium for commodities from producers in developing nations who use sustainable methods is known as:

fair trade

In the realm of international law, _____ are found mainly in treaties, creates binding rights, prohibitions, and duties.

hard laws

According to the Committee for Economic Development, the _____ circle of social responsibility aims at efficient execution of economic functions so that the society can achieve economic growth.

inner

Classical ideology focused solely on the _____ circle of social responsibility.

inner

The concentric circle of social responsibility that encompasses responsibility to exercise the economic function with a sensitive awareness of changing social values and priorities is the:

intermediate circle.

Advocates of social responsibility feel that:

it is an ethical duty of corporations to promote social justice.

A/an _____ is a model of the methods an organization can use to achieve certain goals.

management standard

According to Howard R. Bowen:

mangers have an ethical duty to consider the broad social impact of their decisions.

The three elements of social responsibility are:

market actions, externally mandated actions, and voluntary actions

A(n) _____ is a standard that arises over time and as agreement on it becomes widespread, is enforced by social sanction or law.

norm

microfinance

occurs when financial organizations provide loans to low-income clients or a community of borrowers who traditionally lack access to banking or related services

The concentric circle of responsibility that outlines newly emerging and still amorphous responsibilities that business should assume to improve the social environment, even if they are not directly related to specific business processes is the:

outer circle.

Civil regulation is also known as:

private regulation

global corporate citizenship

refers to putting an organization's commitment to social and environmental responsibility into practice worldwide

The near-spiritual belief that individual managers served society by making each business successful is called the:

service principle.

The practice of a corporation publishing information about its economic, social, and environmental performance is known as:

sustainability reporting.

auditing process

systems used by a business to ensure compliance with an industry or global set of standards

iron law of responsibility

the belief that those who do not use their power in ways that society considers responsible will tend to lose their power in the long run

reputation

the desirable or undesirable qualities associated with an organization or its actors that may influence the organization's relationships with its stakeholders

corporate social responsibility

the idea that businesses should act in a way that enhances society and their stakeholders and be held accountable for any of its actions that affect people, their communities, and their environment

social entrepreneurship

the identification of a social need and using entrepreneurial skills to address this need

triple bottom line

the measurement of an organization on the basis of its economic results, environmental impact, and contribution to social well-being

corporate social reporting

the public reporting of information collected by the organization or another party during a social audit

corporate power

the strength and capability of corporations to influence government, the economy, and society, based on their organizational resources

A _____ is an agent of a company whose corporate role puts him/her in a position of power over the fate of not just stockholders, but also of others such as customers, employees, and communities.

trustee

At one point of time, courts consistently held charitable gifts to be ____, that is, "beyond the law," because the charters prevalent during that time did not expressly permit them.

ultra vires

When a company indulges in charity, it is said to be undertaking a:

voluntary action

When a worthwhile action of a company goes above and beyond what is required by government regulations, it is called a:

voluntary action

Strategic initiatives where the firm seeks to profit from solving a social problem are an example of:

voluntary actions


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