Chapter 3 Corporate Social Responsibility

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1.

1. Corporate social responsibility implies that harm

to people and society should be acknowledged and
corrected if possible.
A) True
B) False

True

13.

13. Laws and regulations help create an

unleveled playing field for businesses
that compete against one another.
A) True
B) False

False

2.

2. Pfizer pledged approximately $1.4 million for

earthquake relief in China.
A) True
B) False

True

14.

True

3.

3. Through the Microsoft Unlimited Potential

Program, people living in developing countries can
receive a stripped down version of Windows for free.
A) True
B) False

True

14. Putting all the emphasis on short-run

maximum profits for stockholders can
lead to policies that overlook the
interests and needs of other
stakeholders.
A) True
B) False

15.

True

4. Walmart had more profits in 2009 than any other

company
A) True
B) False

False

15. The Center for Corporate

Responsibility is based at Boston College
A) True
B) False

16.

5.

5. The charity principle is a relatively new notion.

A) True
B) False

False

Business has
become most
powerful entity
on the planet.

6.

6. According to the stewardship principle,

professional managers are supposed to, but are not
obliged to, see that everyone benefits from the
company's action.
A) True
B) False

False

16. According to David Korten:

A) Business has become most powerful
entity on the planet.
B) Businesses should need to secure
stockholder approval to engage in
philanthropic practices.
C) The iron law of responsibility is not
valid.
D) Coca-cola has failed to protect the
environment of Brazil.

17.

7.

7. According to the stewardship principle,

businesses act as trustees and should consider the
interests of all who are affected by business
decisions and policies.
A) True
B) False

True

17. Which of the following is true of

General Motors in 2009.
A) They were not a top 10 company with
regard to revenue.
B) They were a top 10 in profits.
C) They were a top 10 company in
revenue even though they lost money.
D) None of the above

They were a top

10 company in
revenue even
though they lost
money.

8.

8. A positive reputation allows a firm to attract a

loyal customer base.
A) True
B) False

True

18.

Venezuela

9.

9. A primary benefit of enlightened self interest is an

enhanced reputation.
A) True
B) False

True

18. The revenues of Toyota Motors in

2009 was roughly equal to the entire
economic output of:
A) Venezuela
B) Peru
C) Spain
D) Colorado

19.

85%

10.

10. One reason for a corporation to behave

responsible is to discourage government regulation.
A) True
B) False

True

11.

11. Enlightened self-interest means that companies

are socially aware without giving up their own
economic self-interest.
A) True
B) False

True

19. According to a Harris Interactive poll

of people think business has too much
power.
A) 55%
B) 65%
C) 75%.
D) 85%

20.

economic growth

12. Accompanying a firm's economic responsibility

to its stakeholders are its legal obligations.
A) True
B) False

True

20. Corporations have a role in

establishing their community's:
A) Tax base.
B) Safety.
C) Economic growth.
D) All of the above.

4.

12.

21.

21. Modern corporations

should be socially responsible
because:
A) They are responsible to the
stockholders of the company.
B) They create jobs,
influencing the lives of
employees.
C) They are highly profitable.
D) All of the above.

They create jobs, influencing

the lives of employees.

25.

25. Examples of modern day

stewardship do not include:
A) A stakeholder approach to
strategic corporate planning.
B) An attitude of enlightened
self-interest.
C) Developing social
partnerships with needy
groups.
D) Both A. and B., but not C.

Both A. and B., but not C.

22.

22. The iron law of

responsibility says that:
A) In the long run, those who
do not use power responsibly
will lose it.
B) In the short run, sacrifice
social goals for economic
goals.
C) Law is most important,
more than social or economic
responsibility.
D) In the long run, economic
responsibility leads to social
responsibility.

In the long run, those who

do not use power
responsibly will lose it.

26.

26. Which of the following is

not an example of the charity
principle?
A) Endowing public libraries.
B) Supporting settlement
houses for the poor.
C) Supporting a governmental
protection agency.
D) Donating money to a familycounseling center.

Supporting a governmental
protection agency.

27.

Tax provision

23. A modern day expression

of the charity principle does
not include:
A) Balancing the interests and
needs of many diverse groups
in society.
B) Expressions of corporate
philanthropy.
C) Voluntary actions to
promote the social good.
D) Taking a paternalistic
approach to community
affairs.

Taking a paternalistic
approach to community
affairs.

27. Which of the following was

not a reason for the wealthy to
be philanthropic in the early
20th century:
A) Good publicity.
B) Serving as "my brother's
keepers".
C) Tax provision.
D) Well publicized contest
between the super wealthy.

28.

Corporate Social
Stewardship.

24. According to a modern day

expression of the stewardship
principle:
A) Corporate managers should
acknowledge business and
society interdependence.
B) Corporate managers should
balance the interests and
needs of many diverse groups
in society.
C) Voluntary actions should be
taken to promote the social
good.
D) Both A. and B., but not C.

Corporate managers should

balance the interests and
needs of many diverse
groups in society.

28. Which phrase of corporate

responsibility occurred in the
1950-1960s?
A) Corporate Social
Stewardship.
B) Corporate Social
Responsiveness.
C) Corporate/Business Ethics.
D) A, B and C are all false.

29.

29. HP Brazil, a subsidiary of

Hewlett-Packard, developed
the Digital Garage project to:
A) Promote the sale of PCs
and notebook computers in the
Brazilian consumer market.
B) Assist with natural
resource conservation and
recycling programs in their
plant.
C) Empower less privileged
Brazilian youth with
leadership, teamwork, IT and
other skills to participate in
the growing technological
society.
D) All of the above.

Empower less privileged

Brazilian youth with
leadership, teamwork, IT and
other skills to participate in
the growing technological
society.

23.

24.

30.

30. Which of the following is

not an argument in favor of
corporate social
responsibility?
A) Discourages governmental
regulation.
B) It balances businesses'
power with their responsibility
to act.
C) Improves Business value.
D) Promotes short-term
profitability for businesses.

Promotes short-term
profitability for businesses.

31.

31. According to Barlow v.

A.P. Smith Manufacturing:
A) The law prohibited
charitable contributions, at
that time.
B) Socially responsible
actions are an investment in
the future, thus an allowable
expense.
C) Socially responsible
actions must be approved by a
majority of the firm's
stockholders.
D) Charitable contributions
were bad corporate
investments for the short
term.

Socially responsible actions

are an investment in the
future, thus an allowable
expense.

32.

32. Positive reputation can be

valued as an intangible
corporate:
A) Asset.
B) Liability.
C) Charity.
D) Expense.

Asset.

33.

33. Which of the following is

not an argument in favor of
corporate social
responsibility?
A) Imposes unequal costs
among competitors.
B) Responds to changing
stakeholders' demands.
C) Corrects social problems
caused by business.
D) Discourages government
regulation.

Imposes unequal costs

among competitors.

34.

34. Which of the following are

arguments against corporate social
responsibility?
A) Lowers economic efficiency and
profits.
B) Imposes unequal costs among
competitors.
C) Requires social skills business may
lack.
D) All of the above are arguments
against corporate social responsibility.

All of the above

are arguments
against corporate
social
responsibility.

35.

35. The costs of corporate social

responsibility may ultimately be passed
on to the:
A) Employees through fewer health
benefits.
B) Consumer through high prices.
C) Investor through lower dividends.
D) All of the above.

All of the above.

36.

36. Proponents against corporate social

responsibility feel that public officials,
not business people, should solve
societal problems because:
A) Business people do not have the skillset to solve societal problems.
B) The private sector is not mandated to
solve these issues.
C) Both A. and B.
D) None of the above.

Business people
do not have the
skill-set to solve
societal problems.

37.

37. Which company was not recognized

as a best corporate citizen in every year
since 2009.
A) Starbucks.
B) Whole Foods.
C) Intel.
D) Cisco Systems.

Whole Foods

38.

38. Johnson and Johnson's response to

the Tylenol incident in the 1980s is an
example of:
A) Maximizing short term profits.
B) Taking a short term loss for a long
run benefit.
C) Poor uses of charitable resources.
D) Poor crisis management.

Taking a short
term loss for a
long run benefit.

39.

39. What company took responsibility to

dredge the New York Harbor in 2002?
A) General Electric.
B) Merck.
C) Pfizer.
D) New York Power.

General Electric.

40.

40. Odwalla began pasteurizing juices in order to:

A) Prevent the need for governmental regulation
B) Build good will through advertising
C) Comply with disputed United Nations mandates
D) Prevent Minute Maid for consolidating an important issue

Prevent the need for governmental regulation

41.

41. What was Fortune Magazine's 2009 America's Most Admired company?
A) Whole Foods.
B) Pfizer.
C) Apple.
D) Sun Microsystems.

Apple

42.

42. What company installed a wind turbine in the Dominican Republic?

A) LaPlata.
B) Timberland.
C) Microsoft.
D) Constellation Energy.

Timberland.