Ch 15: Managing Corporate Social Responsibility Globally

During one of the routine inspections, Harlose Motors, an automobile manufacturing company, found that a few of its new practices were detrimental to the environment. Immediately, it replaced them with environmentally friendly practices though it involved additional costs. In this scenario, which of the following strategies is followed by Harlose Motors?

A proactive strategy In this scenario, Harlose Motors has followed a proactive strategy. From a corporate social responsibility (CSR) perspective, the best firms embrace a proactive strategy, constantly anticipating responsibility and endeavoring to do more than is required. See 15-2: Institutions, Resources, and Corporate Social Responsibility

In the text, you learned about the strategic responses of firms to the CSR movement. Which of the following terms best characterizes the strategic response exhibited by the food industry, as described by Kakabadse?

Accommodative

Richard, Kate, Ryan, and Alexis are managers of four subsidiaries of a restaurant chain. In a discussion for adopting a suitable code of conduct, they share different views. In this scenario, who among the following has an instrumental view toward the adoption of codes of conduct?

Alexis believes that firms should use corporate social responsibility (CSR) activities only as a tool to make good profits. In this scenario, Alexis portrays an instrumental view toward the adoption of codes of conduct. An instrumental view suggests that corporate social responsibility (CSR) activities simply represent a useful instrument to make good profits. Firms are not necessarily becoming more ethical. See 15-2: Institutions, Resources, and Corporate Social Responsibility

If the food company focused on its operations relative to its CSR policy, how might it explore other ways to keep costs down instead of simply lowering the payments to the African workers or moving operations to India?

Both a study of methods and technology might show how each worker could become more productive with a resulting increased output, and small African holdings could be encouraged to duplicate the more efficient land situation in India by forming cooperatives.

In the food company example, to what extent was lack of penalties and incentives for CSR compliance causing a CSR problem?

Both to a great extent: If those whose job it was to report on finances had no legal or principal compunction to have CSR reporting, too and, To a great extent: Top management would have become aware of CSR problems if penalties or incentives were implemented and affected their bottom line.

In the context of corporate social responsibility (CSR) and the VRIO (Value, Rarity, Imitability, and Organization) framework, which of the following is true of organization?

Complementary assets, when combined with valuable, rare, and hard-to-imitate capabilities, may enable a firm to fully utilize its corporate social responsibility (CSR) potential. Complementary assets, by themselves, typically do not generate advantage. However, complementary assets, when combined with valuable, rare, and hard-to-imitate capabilities, may enable a firm to fully utilize its corporate social responsibility (CSR) potential. See 15-2: Institutions, Resources, and Corporate Social Responsibility

After watching this video, which of the following would you say best summarizes Kakabadse's belief about CSR?

Firms should have a responsibility of practice in their communities that improves peoples' standard of living.

To which aspect of CSR does Kakabadse apply the following description? "[It] is a discipline... it's bringing detailed numbers and realities to the surface so that top management can get a picture of what happens day by day."

Follow through

Michael is a manager at a tannery. In the wake of numerous protests from animal activists, he suggested adopting corporate social responsibility (CSR) values. In this case, which of the following will be true if he has a positive view toward CSR values?

He will be self-motivated to do it right regardless of social pressures.

In the context of corporate social responsibility (CSR), which of the following actions should be taken by managers to attain global sustainability?

Integrating corporate social responsibility as part of the core activities and processes of a firm Given the increasingly inescapable responsibility to be good corporate citizens, managers may want to integrate corporate social responsibility (CSR) as part of the core activities of the firm instead of faking it and making only cosmetic changes. For example, instead of treating nongovernmental organizations (NGOs) as threats, Home Depot, Lowe's, and Unilever have their sourcing policies certified by NGOs. See 15-3: Management Savvy

Which of the following is true of corporate social responsibility (CSR)?

It emerged as a movement against free market system. Overall, the free market school has provided much of the intellectual underpinning for globalization spearheaded by multinational enterprises (MNEs). It is against such a formidable and influential school of thought that the CSR movement has emerged. See 15-1: A Stakeholder View of the Firm

Rues and West is a pharmaceutical firm based in Belwick. It was recently condemned by many social organizations for the harmful after-effects triggered by its new painkiller. In this scenario, which of the following will be true if Rues and West adopted a reactive strategy?

It would, at first, deny the severity of the harmful effects caused. In this scenario, Rues and West would, at first, deny the severity of the harmful effects caused. According to a reactive strategy, firms do not feel compelled to act in the absence of disasters and outcries. Even when problems arise, denial is usually the first line of defense. See 15-2: Institutions, Resources, and Corporate Social Responsibility

Which of the following is an example of primary stakeholder groups?

Managers and employees of an organization Primary stakeholder groups are constituents on which the firm relies for its continuous survival and prosperity. They typically refer to shareholders, managers, employees, suppliers, customers, and governments and communities whose laws and regulations must be obeyed and to whom taxes and other obligations may be due. See 15-1: A Stakeholder View of the Firm

Which of the following is an example of secondary stakeholder groups?

Members of an environmental group Members of an environmental group are considered as a secondary stakeholder group. Secondary stakeholder groups are groups or individuals who can indirectly affect or are indirectly affected by a firm's actions. See 15-1: A Stakeholder View of the Firm

Which of the following is an informal institution that affects corporate social responsibility?

Normative pressures The institution-based view sheds considerable light on the gradual diffusion of the corporate social responsibility (CSR) movement and the strategic responses of firms. At the most fundamental level, regulatory pressures underpin formal institutions, whereas normative and cognitive pressures support informal institutions. See 15-2: Institutions, Resources, and Corporate Social Responsibility

In the text, you learned about the strategic responses of firms to the CSR movement. Kakabadse describes the prime strategy of community heads and politicians in Africa was to keep the company happy at any cost. Which term best describes this response?

Reactive strategy

Which of the following is a formal institution that affects corporate social responsibility?

Regulatory pressures The institution-based view sheds considerable light on the gradual diffusion of the corporate social responsibility (CSR) movement and the strategic responses of firms. At the most fundamental level, regulatory pressures underpin formal institutions, whereas normative and cognitive pressures support informal institutions. See 15-2: Institutions, Resources, and Corporate Social Responsibility

In the context of corporate social responsibility (CSR), which of the following statements is true of the VRIO (Value, Rarity, Imitability, and Organization) framework?

Resources that are hard to imitate give firms a sustainable competitive advantage. Although valuable and rare resources may provide some advantage, the advantage will only be temporary if competitors can imitate it. Resources must be not only valuable and rare, but also hard to imitate in order to give firms a sustainable (not merely temporary) competitive advantage. See 15-2: Institutions, Resources, and Corporate Social Responsibility

In the food company example, to what extent was cost competition causing a CSR problem?

The company's focus on cost resulted in child labor, yet if it tried to prohibit child labor it would have caused even greater poverty.

One of the cost-cutting ideas Kakabadse mentioned was to shift vanilla production from Africa to India. What would be the benefit to the food company to make that shift?

The large land holdings in India create greater efficiency than the small holdings in Africa, so costs would be better controlled.

Which of the following is true of the activities engaged by proactive firms?

They build alliances with stakeholder groups for short-term, manageable projects of mutual interests. Proactive firms often build alliances with stakeholder groups. For example, many firms collaborate with nongovernmental organizations (NGOs). See 15-2: Institutions, Resources, and Corporate Social Responsibility

In the context of institutions and corporate social responsibility (CSR), which of the following is true of the firms that adopt reactive strategy?

They do not feel compelled to act in the absence of disasters and outcries. A reactive strategy is indicated by relatively little or no support by top management for corporate social responsibility (CSR) causes. Firms do not feel compelled to act in the absence of disasters and outcries. See 15-2: Institutions, Resources, and Corporate Social Responsibility

In the context of institutions and corporate social responsibility (CSR), which of the following is true of the firms that adopt a proactive strategy?

They view corporate social responsibility (CSR) as a source of differentiation that permeates throughout the corporate DNA. A proactive strategy refers to a strategy that anticipates corporate social responsibility (CSR) and endeavors to do more than is required. Top management at a proactive firm not only supports and champions CSR activities, but also views CSR as a source of differentiation that permeates throughout the corporate DNA. See 15-2: Institutions, Resources, and Corporate Social Responsibility

In Kakabadse's food company example, which of the following best describes the problem with the company's CSR policies?

They were less and less understood as one went down the chain of command.

At Write White Publishing Corp., a paper manufacturing company, the managers have changed their traditional outlook of profit maximization. They are increasingly aware of their social responsibility and are passionate toward corporate social responsibility (CSR) causes. In this case, Write White Publishing Corp. follows a(n) _____.

accommodative strategy In this case, Write White Publishing Corp. follows an accommodative strategy. An accommodative strategy is characterized by some support from top managers, who may increasingly view corporate social responsibility (CSR) as a worthwhile endeavor. New managers who are passionate about or sympathetic toward CSR causes may join the organization, or some traditional managers may change their outlook, leading to increasingly strong cognitive beliefs that CSR is the right thing to do. See 15-2: Institutions, Resources, and Corporate Social Responsibility

Jason manages a chain of restaurants. He thinks along the lines of corporate social responsibility (CSR). As a CSR advocate, he will believe that:

all stakeholders have an equal right to bargain for a fair deal. As a corporate social responsibility (CSR) advocate, Jason will believe that all stakeholders have an equal right to bargain for a fair deal. While not denying that shareholders are important stakeholders, CSR advocates argue that all stakeholders have an equal right to bargain for a fair deal. Given stakeholders' often conflicting demands, a very thorny issue in the debate is whether all stakeholders indeed have an equal right and how to manage their (sometimes inevitable) conflicts. See 15-1: A Stakeholder View of the Firm

Allfoods Corp. is a firm that mainly produces various artificial food coloring agents. When it was found out that it marketed untested and unsafe food coloring agents, Allfoods Corp. admitted responsibility for it. But the management of the company thinks that corporate social values is just a nuisance. In this scenario, Allfoods Corp. has adopted a _____.

defensive strategy In this scenario, Allfoods Corp. has adopted a defensive strategy. A defensive strategy focuses on regulatory compliance. Firms admit responsibility but often fight it. See 15-2: Institutions, Resources, and Corporate Social Responsibility

According to a stakeholder view of the firm, a balanced triple bottom line focuses on:

economic, social, and environmental performances. Firms should pursue a balanced triple bottom line, consisting of economic, social, and environmental performances that simultaneously satisfy the demands of all stakeholder groups. To the extent that some competing demands obviously exist, it seems evident that the corporate social responsibility proposition represents a dilemma. See 15-1: A Stakeholder View of the Firm

Free market advocates argue firms may lose their character as capitalistic enterprises when they:

focus on social welfare. Free market advocates argue that if firms attempt to attain social goals such as providing employment and social welfare, managers will lose their focus on profit maximization. Consequently, firms may lose their character as capitalistic enterprises and become socialist organizations. See 15-1: A Stakeholder View of the Firm

The urgency of global sustainability in the 21st century is due to the:

increase in population and poverty. Globally, the urgency of sustainability in the 21st century is driven by increasing population, poverty, and inequity. The repeated protests, chaos, and terrorist attacks around the world are but the tip of the iceberg of anti-globalization sentiments. See 15-1: A Stakeholder View of the Firm

A(n) _____ refers to a strategy that anticipates corporate social responsibility (CSR) and endeavors to do more than is required.

proactive strategy A proactive strategy refers to a strategy that anticipates corporate social responsibility (CSR) and endeavors to do more than is required. Top management at a proactive firm not only supports and champions CSR activities, but also views CSR as a source of differentiation that permeates throughout the corporate DNA. See 15-2: Institutions, Resources, and Corporate Social Responsibility

A _____ is indicated by relatively little or no support by top management for corporate social responsibility (CSR) causes.

reactive strategy A reactive strategy is indicated by relatively little or no support by top management for corporate social responsibility (CSR) causes. Firms do not feel compelled to act in the absence of disasters and outcries. See 15-2: Institutions, Resources, and Corporate Social Responsibility

Unlike firms embracing a proactive strategy, firms embracing a reactive strategy:

use denial as the first line of defense to problems. Reactive strategy is indicated by relatively little or no support by top management for corporate social responsibility (CSR) causes. Even when problems arise, denial is usually the first line of defense, whereas a proactive strategy involves constantly anticipating responsibility and endeavoring to do more than is required. See 15-2: Institutions, Resources, and Corporate Social Responsibility

Which of the following is an example of the free market school of thought?

​Jason, a manager, focuses on profit maximization and its derivative, shareholder value maximization. Focusing on profit maximization and its derivative, shareholder value maximization is an example of free market school of thought. Free market advocates argue that if firms attempt to attain social goals such as providing employment and social welfare, managers will lose their focus on profit maximization (and its derivative, shareholder value maximization). See 15-1: A Stakeholder View of the Firm

In the context of institutions and corporate social responsibility (CSR), firms adopting defensive strategy:

​initially admit responsibility but often fight it. A defensive strategy focuses on regulatory compliance. Top management involvement is piecemeal at best, and the general attitude is that corporate social responsibility (CSR) is an added cost or nuisance. Firms admit responsibility but often fight it. See 15-2: Institutions, Resources, and Corporate Social Responsibility

At the heart of corporate social responsibility (CSR), the concept of _____ refers to any group or individual who can affect or is affected by a firm's actions.

​stakeholder