Chapter 04
Corporate Social Responsibility
True / False Questions
1. Corporate ethics refers to the actions of an organization that are targeted toward
achieving a social benefit over and above maximizing profits for its shareholders and meeting all
its legal obligations.
2. Corporate citizenship is an element of corporate social responsibility (CSR).
3. Apart from achieving a social benefit over and above maximizing profits for its
shareholders, corporate social responsibility also requires an organization to meet all its legal
obligations.
4. The employees of Brennerz Inc. are encouraged to cycle to work every day to reduce
environmental pollution. The given scenario exemplifies corporate ethics.
5. Extabet Enterprises donates a certain percentage of their profit to local charities, but it
does not comply with all the legal industry standards of operating in a safe working environment.
This depicts corporate social responsibility (CSR).
6. Instrumental approach to corporate management is the perspective that a corporation
has an obligation to society over and above the expectations of its shareholders.
7. Friedman’s view of the corporate world supports the rights of individuals to make money
with their investments.
8. The instrumental approach to corporate management is the perspective that a corporation
has an obligation to society over and above the expectations of its shareholders.
9. The social contract approach is a very simplistic model that argues that the corporation
only has an obligation to itself.
10. The social contract approach to corporate management is the perspective that the only
obligation of a corporation is to maximize profits for its shareholders in providing goods and
services that meet the needs of its customers.
11. Henry Ford II recognized the fact that corporations operate in an isolated environment.
12. Layoffs reduce corporation costs and only affect the laid-off employees.
13. Doing what is in the best long-term interest of a customer invariably fails to achieve what
is best for a company.
14. The policy of “doing well by doing good” refers to the belief that doing good for the
company is just good business.
15. Milton Friedman asserted that there are five major trends behind the corporate social
responsibility (CSR) phenomenon.
16. Transparency is a major trend behind the corporate social responsibility (CSR)
phenomenon.
17. With the transition to an information-based economy, it has become impossible for
consumers and investors to have any information at their disposal than at any time in history.
18. Globalization represents a new stage of capitalist development, this time with public
institutions in place to protect society by balancing private corporate interests against broader
public interests.
19. U.S. citizens consider the public sector as the most appropriate venue for addressing a
growing list of social problems.
20. Organizations find it easy to make the transition from corporate social responsibility
(CSR) as a theoretical concept to CSR as an operational policy due to the major trends driving it.
21. All CSR initiatives invariably generate immediate financial gains to the organization after
implementation.
22. Corporations merely experimenting with corporate social responsibility initiatives run the
risk of creating adverse results as the public sees little more than a token action that is
concerned with publicity rather than community.
23. There are several standard ways to measure the achievements of the triple bottom–line
approach.
24. Anderson Enterprises (AE) issues free meal coupons to its employees and also provides
them with travel allowances. This illustrates that AE pursues the triple bottom-line approach.
25. There are four distinctive types of corporate social responsibility (CSR)—economic,
ethical, altruistic, and strategic.
26. Ethical CSR is the purest or most legitimate form of CSR.
27. Ethical corporate social responsibility (CSR) is a philanthropic approach to corporate
social responsibility in which organizations underwrite specific initiatives to give back to the
company’s local community or to designated national or international programs.
28. Altruistic corporate social responsibility (CSR) represents a type of CSR in which
organizations pursue a clearly defined sense of social conscience in managing their financial
responsibilities to shareholders, their legal responsibilities, and their ethical responsibilities to do
the right thing for all their stakeholders.
29. Critics have argued that, from an ethical perspective, altruistic corporate social
responsibility (CSR) is immoral since it represents a violation of shareholder rights if they are not
given the opportunity to vote on the initiatives launched in the name of corporate social
responsibility.
30. The country of Cadmia was hit by a hurricane. Singerz Corporation responded to the
devastation caused by the hurricane by donating fuel for transportation supplying relief aid. In
addition, it announced a direct cash donation of $1 million to support the relief and rebuilding
efforts. This is an example of strategic corporate social responsibility (CSR).
31. Altruistic corporate social responsibility (CSR) targets programs that will generate the
most positive publicity or goodwill for the organization.
32. Strategic corporate social responsibility (CSR) runs the greatest risk of being perceived as
self-serving behavior on the part of the organization.
33. Strategic corporate social responsibility (CSR) targets programs that will generate the
most positive publicity or goodwill for the organization.
34. In contrast to the alleged immorality of altruistic corporate social responsibility (CSR),
critics argue that strategic CSR is ethically commendable since these initiatives benefit
stakeholders while meeting fiduciary obligations to the company’s shareholders.
35. One of the newest and increasingly questionable practices in the world of corporate social
responsibility (CSR) is the notion of making operations “carbon neutral.”
36. The practices of making a company’s operations “carbon neutral” was initially developed
as a solution for those industries, such as airlines or automobile companies, that face significant
challenges in reducing their emissions.
37. Emissions credits are fixed for every market, and they cannot be bought or sold.
38. The practice of making operations “carbon neutral” is a way to offset whatever damage is
being done to the environment due to greenhouse gas emissions by purchasing credits from
“carbon-positive” projects to balance out emissions.
39. The Kyoto Protocol requires developed nations to reduce their greenhouse gas emissions
only by modifying their domestic industries.
40. The Chicago Climate Futures Exchange (CCFE) promotes the standardization of carbon
trading on a global scale.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-06 Discuss the relative merits of carbon-offset credits.
Multiple Choice Questions
41. The term “_____” is best defined as the actions of an organization that are targeted
toward achieving a social benefit over and above maximizing profits for its shareholders and
meeting all its legal obligations.
42. Which of the following is an example of corporate social responsibility (CSR)?
43. Happy Times (HT) is an alcohol manufacturing brand that deals with several types of
alcoholic beverages. HT uses social media for promoting the message of responsible drinking. It
sponsors the FreeTaxi program for customers with HT membership on Christmas and New Year’s
Eve. It has also initiated several community welfare projects where a percentage of the profits go
to the Hunger Relief Fund for Children. In the given scenario, which of the following is best
illustrated?
44. In addition to achieving social benefits, which of the following best illustrates an example
of a company effectively implementing corporate social responsibility (CSR)?
45. Which of the following illustrates that a company has failed at implementing corporate
social responsibility (CSR)?
46. Corporate social responsibility (CSR) always assumes that a corporation is:
47. Which of the following statements is true of corporate social responsibility (CSR)?
confidence in the integrity of the marketing exchange system.”
48. The instrumental approach to corporate social responsibility (CSR) states that:
49. Which of the following is an example of an organization’s instrumental approach to
corporate social responsibility (CSR)?
50. Spark Inc. (SI), a multinational corporation, had reported large losses in the previous
financial year. To overcome these losses, the company planned to take the instrumental
approach to corporate management. Which of the following best illustrates this approach?
51. Which of the following companies implements Milton Friedman’s view of the corporate
world?
52. Which of the following statements is true of Milton Friedman’s view of the corporate
world?