Ch 5 Ethics CSR

Which of the following is true about the economic model of CSR?

According to this model, profit is a direct measure of how well a business firm is meeting society's expectations.

From the perspective of the narrow view of CSR, only philanthropy done for reputational reasons and financial ends is ethically responsible. Identify the correct justification for this perspective.

Business managers are the agents of owners; they have no right to use corporate resources except to earn owners greater returns on their investment.

CSR literature assumes a tension between the pursuit of profit and social responsibility. How can organizations overcome this tension?

By pursuing social ends as the very core of their mission.

According to philosopher Norman Bowie, managers have a responsibility to maximize profits as long as they:

Comply with the moral minimum and cause no harm

The law has created a form of business that limits the liability of individuals for the risks involved in business activities. Identify the form of business.

Corporation

In the classic 1970 New York Times article, "The Social Responsibility of Business Is to Increase Its Profits," Milton Friedman ignores ethical responsibilities and suggests that decision makers are fulfilling their responsibility if they follow their firm's self-interest in pursuing profit.

False

Integration theory begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

False

The positive impact on the bottom line of a firm stems from customer preference, and not employee preference.

False

The stakeholder theory argues that the firm should be managed for the sole benefit of stockholders. The economic model argues, on factual, legal, economic, and ethical grounds, that this is an inadequate understanding of business.

False

Volunteering and charitable work are examples of the most demanding responsibility, often called duty or obligation.

False

Identify the statement that best describes the philanthropic model of corporate social responsibility.

From this perspective, business has no strict obligation to contribute to social causes; but it can be a good thing when they do so.

One important justification offered for CSR, what is often called enlightened self-interest, presumes that:

Good ethics can also be good business

For-profit organizations that prioritize social entrepreneurship and sustainability as a central part of their strategic mission are pursuing the _____ model of CSR.

Integrative

The stakeholder theory argues that on the very same grounds that are used to justify the classical model, a wider "stakeholder" theory of corporate social responsibility is proven ethically superior.

True

The sustainability version of CSR suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

True

Milton Friedman explains that a corporate executive has a "responsibility to conduct business in accordance with [his or her employer's] desires, which generally will be to make as much money as possible while conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom." This view of corporate social responsibility has its roots in the _____ tradition and in neoclassical economics.

Utilitarian

According to the Economic Model of CSR, the pursuit of profit will continuously work towards the optimal satisfaction of consumer demand which, in the interpretation of _____ is the optimal social good.

Utilitarianism

According to the Economic Model of CSR, the social responsibility of business managers is to:

pursue profit within the law.

While we are all familiar with examples of unethical decisions leading to high profits, there is general agreement that, in the long run, ethics pays off. What is the challenge associated with ethical pay offs?

It is very difficult to measure the ethical pay off.

Corporate managers who fail to give due consideration to the rights of employees and other concerned groups in the pursuit of profit are treating these groups as means to the ends of stockholders. This is unjust according to the _____ tradition.

Kantian

Which of the following statements is correct about the Economic Model of CSR?

Milton Friedman's classic 1970 New York Times article, "The Social Responsibility of Business Is to Increase Its Profits," supported this perspective.

"Just as individuals have no ethical obligation to contribute to charity or to do volunteer work in their community, business has no ethical obligations to serve wider social goods. But, just as charity is a good thing and something that we all want to encourage, business should be encouraged to contribute to society in ways that go beyond the narrow obligations of law and economics." Identify the model of CSR that reflects this line of thought.

Philanthropic model

The practice of attending to the "image" of a firm is referred to as:

Reputation management

According to philosopher Norman Bowie, there is a "moral minimum" that we expect of every person, whether they are acting as individuals or within corporate institutions. Identify this "moral minimum."

Respect human rights

Which of the following ethical requirement, in practice, is the type of responsibility established by the precedents of tort law?

Responsibility not to cause harm

Identify the model of CSR that views business as a citizen of the society in which it operates, and like all members of a society, business must conform to the normal ethical duties and obligations that we all face.

Social Web Model

Which of the following can be a problem with CSR for reputation building?

Social responsibility is then merely social marketing

Identify the theory that begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

Stakeholder theory

Which of the following versions of CSR suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment?

Sustainability

An individual who points out that all economic activity exists within a biosphere that supports all life, and argues that the present model of economics is already running up against the limits of the biosphere's capacity to support life is a strong defender of the:

Sustainability version of CSR

In the philanthropic model of CSR, situations where a business supports a social cause for the purpose of receiving a business benefit in return is similar to:

The economic model of CSR

If a firm creates a good image for itself, consumers or other stakeholders seem to give it some slack if they hear something negative about the firm.

True

Legislators created a form of business called corporations to encourage people to engage in business activities.

True

Philosopher Norman Bowie identifies his approach as a "Kantian" theory of business ethics.

True

Reputation management refers to the practice of caring for the 'image' of a firm.

True

The Philanthropic model in which business support for a social cause is done simply because it is the right thing to do differs from the reputational version only in terms of the underlying motivation.

True

The Social Web model views business as a citizen of the society in which it operates and, like all members of a society, business must conform to the normal ethical duties and obligations that we all face.

True

The economic model appeals to two fundamental ethical norms for its justification: utilitarian considerations of social well-being and individual rights.

True

Charity work is done because it brings the firm good public relations, provides a helpful tax deduction, builds good-will and/or a good reputation within the community, is not included by the philanthropic model of CSR.

False

An individual who argues that firms should be managed for the sole benefit of stockholders is defending the:

Economic model of CSR

According to the Economic Model of CSR, the social responsibility of business managers is not only to pursue profit within the law, but also to share a small percentage of this profit for activities that would benefit the society.

False

Identify the requirement that is common to utilitarianism and stakeholder theory.

To consider the consequences of management decisions for the well-being of all affected groups.

According to the philanthropic model of CSR, business has no strict obligation to contribute to social causes; but it can be a good thing when they do so.

True

An important justification offered for CSR, what is often called enlightened self-interest, presumes that good ethics is also good business.

True

Legislatures created a form of business called corporations because they thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if:

individuals were protected by limiting the liability of individuals for these activities.