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Chapter 12
Corporate Social Responsibility
CHAPTER SUMMARY
The meaning of corporate social responsibility (C S R ) and the arguments for it, as
well as the
attitudes of business toward it, have changed dramatically over the past 50
years. The
vigorous debate over the normative case for CSR gave way eventually to a wary
acceptance
and then an enthusiastic embrace of the business case. Somewhere along the
way, the
question about CSR changed from whether to how. However, whether the
meaning of CSR
also shifted to fit with what business was willing and able to do is an open
question. What is
undeniable is that, in the words of the
Economist
magazine, “CSR is
12.1: Recognize the significance and implications of corporate social responsibility for
businesses, how CSR is commonly demonstrated, and its related concepts
12.2: Describe the dominant moral arguments against the concept of CSR and the
counterarguments and justifications for CSR as a requirement of companies
12.3: Analyze the arguments that a market for virtue makes CSR a profitable strategy
and a source of competitive advantage
12.4: Summarize the important aspects of successful CSR programs, the difficulties with
measuring the social performance of companies, and various attempts at measurement
12.5: Compare how nonprofit and for-profit social enterprises operate and can compete
successfully in the marketplace
SUGGESTED DISCUSSION PROMPTS
2.
To what extent do you think companies are motivated to be socially responsible
3.
In what ways would a company that only does what the law requires not be living
4.
What is corporate citizenship, and how does it relate to corporate social
ASSESSMENT FOR IN-CLASS USE
Multiple Choice Questions
Choose the BEST possible answer for each of the following.
1.
CSR as a worldwide movement has over the years been .
A.
mainly manifested among medium-sized companies
B.
mostly confined to the United States
C.
increasingly under criticism
D.
gaining increased acceptance
12.1: Recognize the significance and implications of corporate social responsibility for
businesses, how CSR is commonly demonstrated, and its related concepts
Difficulty Level: Easy
Skill Level: Understanding
2.
Milton Friedman argued that CSR ____.
A.
is harmful to the community
B.
fails to serve the interests of company’s stockholders
C.
is acceptable if carried out by the government
D.
would be a passing fad
Difficulty Level: Easy
Skill Level: Understanding
3.
A company’s ethical responsibilities .
A.
bring it in line with social norms
B.
are a subset of its legal responsibilities
C.
always directly advance its profit making
D.
are the same as its economic responsibilities
Difficulty Level: Easy
Skill Level: Understanding
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4.
CSR as exercised toward a company’s employees may include ___ ___.
A.
providing safe working facilities
B.
providing paid time off
C.
improving employees’ quality of life
D.
abiding by minimum-wage laws
Difficulty Level: Easy
Skill Level: Understanding
5.
Corporate citizenship is an area of CSR that always involves _________.
A.
specific ways a company treats its employees
B.
a company’s awareness of its broader social context
C.
a company’s products that it produces
D.
a company’s involvement in the government
Difficulty Level: Easy
Skill Level: Understanding
6.
In addition to accurately measuring CSR results, a company must also ensure that
the data are _________.
A.
interpreted using well-respected guidelines
B.
reflected in a positive manner
C.
controlled by the company
D.
selectively released
Difficulty Level: Easy
Skill Level: Understanding
7.
According to the “classical view,” companies ________.
A.
have a responsibility to their environment
B.
can promote CSR without sacrificing profitability
C.
are not essentially different from other types of organizations
D.
exist for reasons other than promoting social responsibility
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Difficulty Level: Easy
Skill Level: Understanding
8.
Friedman supported socially responsible corporate decisions as long as they
___
.
A.
are recognized as philanthropic activities
B.
benefit society at large
C.
further a company’s self-interest
D.
do not break the law
Difficulty Level: Easy
Skill Level: Understanding
9.
Friedman argued that social spending by corporations is a form of taxation on
___
.
A.
the public
B.
the employees
C.
the shareholders
D.
the board of directors
Difficulty Level: Easy
Skill Level: Understanding
10.
Companies that pursue CSR are most likely to gain a competitive advantage if its
CSR efforts ___.
A.
target popular special-interest groups
B.
are integrated into a corporate strategy
C.
are pursued as frugally as possible
D.
involve as many employees as possible
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Correct Answer: B
12.3: Analyze the arguments that a market for virtue makes CSR a profitable strategy
and a source of competitive advantage
Topic/Concept: Business Case for CSR
Difficulty Level: Moderate
Skill Level: Analyze
Essay Questions
1.
Describe the current status of corporate social responsibility as an expectation for
12.3: Analyze the arguments that a market for virtue makes CSR a profitable strategy
and a source of competitive advantage
Difficulty Level: Easy
Skill Level: Understanding
2.
Compare and contrast the different ways in which companies are motivated to be