55) When companies formulate and implement a strategy of corporate social responsibility, they
generally do NOT
A) devote efforts to employ an ethical strategy and observe ethical principles in operating the
business
B) make charitable contributions, donate money and the time of company personnel to
community service endeavors, supporting various worthy organizational causes
C) take steps to provide suppliers, distributors, and other value chain partners with handsome
profit margins
D) initiate actions to build a workforce that is diverse with respect to gender, race, national
origin, and other aspects that different people bring to the workplace
E) pursue actions to protect the environment and, in particular, to minimize or eliminate any
adverse impact on the environment stemming from the company’s own business activities
56) Which actions would Blair Kellison, CEO of Traditional Medicinals Inc., a California-based
manufacturer of herbal medicines and teas, NOT typically consider in crafting his company’s
strategy of social responsibility?
A) actions to benefit Traditional Medicinals’ shareholders such as raising the dividend or
boosting the stock price
B) making charitable contributions, supporting community service endeavors by Traditional
Medicinals’ employees, and reaching out to make a difference in the lives of the disadvantaged
C) actions to ensure that Traditional Medicinals has an ethical strategy and operates honorably
and ethically
D) actions that promote good stewardship (by protecting and enhancing) the environment
E) actions to enhance Traditional Medicinals’ workforce diversity
57) Good corporate citizens
A) create a democratic workplace whereby the voices of lower-level employees are heard
through representation on the board of directors.
B) go beyond meeting society’s expectations for ethical strategies and business behavior by
fostering social benefit and balancing the interests of all.
C) provide work-from-home options to working mothers residing in distant locations.
D) develop and market only products that are “environmentally friendly.”
E) identify up-and-coming managers who have a future in local- or state-level politics.
58) A company’s social responsibility strategy typically comprises all of the following EXCEPT
A) actions to enhance workforce diversity and make the company a great place to work.
B) making charitable contributions and donating money and the time of company personnel to
community service endeavors.
C) actions to protect or enhance the environment.
D) conscious efforts to ensure that all elements of the company’s strategy are ethical and that its
actions protect or enhance the environment (beyond what is legally required).
E) actions to keep the company’s profits at a reasonable and acceptable level to ensure the
company’s products/pricing will not be viewed by the general public as obscenely high or
exorbitant.
59) Unilever’s goal is to double the size of the business while halving its environmental footprint
by 2020. What actions has it NOT taken in pursuit of this goal?
A) Unilever set up a central corporate team dedicated to spreading best sustainability practices
from one factory or business unit to the rest of the company.
B) Unilever created a “small actions, big differences” fund to invest in innovative ideas that help
the company achieve its sustainability goal.
C) Unilever dedicated significant resources and time to pursuing profit maximization strategies
in order to boost its sustainability scores.
D) Unilever worked with its suppliers to source sustainable agricultural products to reduce
emissions from the overall footprint of its products and extend its sustainability efforts to its
entire supply chain.
E) Unilever enabled over 716,000 small farmers to improve their agricultural practices and/or
their incomes.
60) How do good corporate citizens function?
A) They pursue discretionary activities that contribute to the betterment of society, especially in
areas where government has chosen not to focus its efforts or has fallen short.
B) They are active participants in the political processes.
C) They identify up-and-coming managers who have a future in local- or state-level politics.
D) They create a democratic workplace where the voices of lower-level employees are heard
through representation on the board of directors.
E) They seek to replace government functions with more efficient, market-driven solutions.
61) The “triple bottom line” refers to what three performance metrics a company should
simultaneously succeed in?
A) economic, social, and environmental
B) pay, power, and performance
C) planning, execution, and results
D) legal, social, and economical
E) legal, social, and environmental
62) The three dimensions of performance are often referred to in terms of the “three pillars” and
include all of the following EXCEPT
A) a company’s efforts to improve the lives of its internal and external stakeholders.
B) the various social initiatives that make up the CSR strategies.
C) a firm’s ecological impact and environmental practices.
D) the economic impact (value and costs) that the company has on society.
E) a company’s efforts to reduce research and development funding to boost profits.
63) Triple-bottom-line (TBL) reporting is emerging as an important way for companies to
A) conceal their initiatives and accomplishments in the areas of diversity, environment,
community, and ethics to increase profitability.
B) make the results of their CSR strategies apparent to stakeholders and for stakeholders to hold
companies accountable for their impact on society.
C) minimize transparency and facilitate benchmarking CSR efforts across firms and industries.
D) minimize the use of standard reporting frameworks and metrics.
E) attract profit-oriented investors.
64) A company’s environmental sustainability strategy consists of its deliberate actions to
A) shelter the environmental impacts from the company’s resources and competitive capabilities.
B) provide for the defense of natural resources usage within cross-border commitments.
C) moderate assurance for ecological support systems for future generations.
D) guard against ultimate endangerment of the business.
E) operate the business in a manner that promotes the longevity of sustainability effects.
65) An environmental sustainability strategy consists of a company’s deliberate actions to
A) operate in an honorable manner, provide good working conditions for employees, and
actively work to enhance the quality of life in the local communities where it operates and in
society at large.
B) meet the current needs of customers, suppliers, shareholders, employees, and other
stakeholders in a manner that protects the environment, provides for the longevity of natural
resources, maintains ecological support systems for future generations, and guards against
ultimate endangerment of the planet.
C) protect and enhance natural resources and ecological support systems, taking into account the
current consumption for the current generation.
D) apply universal norms regarding the protection of the environment to its everyday operations
and to function below the levels required by prevailing environmental regulations.
E) balance commonly held views about what constitutes environmentally appropriate actions
against its ability to make a profit.
66) Which company is NOT listed on the 2017 Dow Jones Sustainability Index recognizing
triple-bottom-line performance?
A) Westpac Banking Group (Australia)
B) Intercontinental Hotel Group (Great Britain)
C) LG Electronics Group (South Korea)
D) Nike Inc. (USA)
E) Peugeot SA (France)
67) What is the function of the Global Reporting Initiative?
A) It promotes greater transparency and facilitates benchmarking CSR efforts across firms and
industries.
B) It promotes and establishes mutual funds investment opportunities comprised of companies
that excel on the basis of the triple bottom line.
C) It promotes greater awareness of the Dow Jones World Index, which comprises companies
that are engaged in environment sustainability.
D) It promotes corporate governance, climate change, and labor practices.
E) It is a nonprofit reporting organization that ranks companies on habitat protection.
68) A company’s CSR and sustainability strategies is NOT characterized by
A) the company’s demonstration of an adequate degree of social responsibility or efforts to be a
model corporate citizen unless it spends 5 percent (or more) of pretax profits on social
responsibility initiatives.
B) corporate social agendas that address generic social issues that may help boost a company’s
reputation but are unlikely to improve its competitive strength in the marketplace.
C) cost savings and improved profitability that can be drivers of corporate sustainability
strategies.
D) social responsibility strategies linked to a company’s customer value proposition or key value
chain activities that may help build competitive advantage.
E) the strategies and actions of all socially responsible companies that have sameness in the
sense of drawing on the same categories of socially responsible behavior, with each company’s
version of being socially responsible being unique.
69) Sourcing a supply from a small, women-owned business is an example of a corporate social
responsibility action to
A) enhance employee well-being.
B) support philanthropy.
C) protect and sustain the environment.
D) ensure honorable and ethical action.
E) promote workforce diversity.
70) When a company’s social responsibility initiatives become part of the way it operates its
business every day, these initiatives are
A) likely to be fully effective in creating a competitive advantage.
B) normally based on a corporate social agenda.
C) ambiguous and rarely make a difference in the way the company does business.
D) implausible to advance a positive, high-energy workplace environment.
E) heavily dependent on encouraging employee morality.
71) The moral case for why a company should actively promote the betterment of society and act
in a manner benefiting all its stakeholders
A) is based on the principle of treating people fairly and with respect.
B) is based on the conviction that improving the well-being of society ranks higher in priority
and is certainly nobler than making a profit and serving the interests of shareholders.
C) boils down to “it’s the right thing to do.”
D) rests on the principle that a business is duty bound to fulfill its social contract to serve the
interests of all stakeholders in a business enterprise.
E) is based on the principle that business activities lack real legitimacy and have few socially
redeeming qualities unless and until a company exerts a significant and sincere effort to give
something back to the community.
72) The rationale for businesses to act in a socially responsible manner include all of the
following reasons, with the EXCEPTION of
A) every action a company takes can be interpreted as a statement of what it stands for.
B) most business leaders can be expected to acknowledge that socially responsible actions and
environmental sustainability are important and that businesses have a duty to be good corporate
citizens.
C) in return for society granting a business a “license to operate” and not be unreasonably
restrained in its pursuit of a fair profit, a business is obligated to act as a responsible citizen and
do its fair share to promote the general welfare.
D) acting in a socially responsible manner is in the best financial interest of shareholders.
E) every business has a duty to do what’s best for shareholders while operating honorably,
provide good working conditions to employees, and be a good environmental steward.
73) The business case for why companies should act in a socially responsible manner includes
such reasons as it
A) generates internal operating benefits (as concerns employee recruiting, workforce retention,
employee morale, and training costs).
B) increases the risk of reputation-damaging incidents.
C) is not in the best interest of shareholders.
D) can lead to decreased buyer patronage.
E) can increase costs and reduce employee retention.
74) Marianne has opened a jewelry shop in your community and sources precious gems and
metals only from Canada rather than Africa. Her rationale for her CSR and environmentally
sustainable business practices includes all of the following EXCEPT
A) increasing buyer patronage.
B) shortening the supply chain.
C) lowering costs and enhancing employee recruiting and workforce retention.
D) creating opportunities for revenue enhancement and best long-term profits for shareholders.
E) reducing her exposure to the risk of reputation-damaging incidents.
75) A strategic objective that is NOT considered a part of the business case for why companies
should act in a socially responsible manner can be stated as,
A) “Every business has a moral duty to be a good corporate citizen.”
B) “Acting in a socially responsible manner reduces the risk of reputation-damaging incidents.”
C) “Acting in a socially responsible manner is in the overall best interest of shareholders.”
D) “To the extent that a company’s socially responsible behavior wins applause from consumers
and fortifies its reputation, a company may win additional patronage.”
E) “Acting in a socially responsible manner can generate internal benefits (as concerns employee
recruiting, workforce retention, employee morale, and training costs).”
76) The outcomes of why acting in a socially responsible manner is good business, do NOT
include
A) the higher the public profile of a company or brand, the greater the scrutiny of its activities
and the higher the potential for it to become a target for pressure group action.
B) acting in a socially responsible manner nearly always results in higher profits and a higher
stock price for shareholders.
C) to the extent that a company’s socially responsible behavior wins applause from consumers
and fortifies its reputation, a company may win additional patronage.
D) some employees feel better about working for a company committed to improving society—a
condition that can contribute to lower turnover and better worker productivity.
E) companies with deservedly good reputations for contributing time and money to the
betterment of society are better able to attract and retain employees compared to companies with
tarnished reputations.
77) Studies done on the correlation between good corporate behavior and good financial
performance have generally found
A) no correlation.
B) a small positive correlation.
C) a small negative correlation.
D) a large positive correlation.
E) a large negative correlation.
78) A multinational automobile manufacturer issues a public statement that the company’s
vehicle emissions tests had been falsified to meet environmental compliance standards over
recent years using software specifically designed for that purpose. Following the news, the CEO
is replaced, vehicle sales plummet, and the company’s stock price sharply declines. Which of the
following has the company incurred?
A) only visible and internal administrative costs
B) visible but not intangible costs
C) visible and intangible costs
D) internal administrative costs but not visible costs
E) internal administrative costs but not intangible costs
79) A manufacturer and marketer of prescription pharmaceuticals decided to raise the price of its
anti-malaria drug from $15.00 per dose to $750.00 per dose, a price increase of 5,000 percent.
Following a public outcry, the CEO was forced to resign, the company was forced to retract the
price hike, and the company’s stock price sharply declined. Which of the following has the
company incurred?
A) only visible and internal administrative costs
B) visible but not intangible costs
C) internal administrative costs but not intangible costs
D) internal administrative costs but not visible costs
E) visible and intangible costs
80) Which companies unethical practices will tend to incur mainly internal administrative costs?
A) Company U must retrain its employees who are working in a toxic culture due to widespread
reports of sexual harassment.
B) Company V’s tax evasion practices are revealed, leading to a dramatic drop in its stock price
and simultaneously rising costs of debt.
C) Company W incurs penalties of $1.0 billion for auto and mortgage loan abuses.
D) Company X pays its male employees higher wages than female employees even though it has
been propagating messages of workplace equality and fair play.
E) Company Y experiences massive customer defections when it is made public that it is
engaging in price gouging, or selling low cost products at high prices.
81) A company that sets aside 2 percent of its pre-tax profits to build and then fund a cancer–
recovery facility for teens is an example of a corporate social responsibility action to
A) enhance employee well-being.
B) support philanthropy.
C) protect and sustain the environment.
D) ensure honorable and ethical action.
E) promote workforce diversity.
82) A company that promotes carpooling among its employees, has cut its printer-paper usage in
half, and has installed solar panels on its roof is an example of a corporate social responsibility
action to
A) promote workforce diversity.
B) ensure the company operates honorably and ethically.
C) support philanthropy and participate in community service.
D) protect and sustain the environment.
E) enhance workplace amenities and employee well-being.
83) How can a company enhance the quality of life for its employees to support its attempt to
uphold its reputation as a socially responsible business?
A) It can discontinue relying on those suppliers that manufacture products using child labor.
B) It can provide work-at-home opportunities.
C) It can donate a percentage of its profits to a national charity.
D) It can pay to have litter removed from a state highway.
E) It can sell its products at a discounted price in underdeveloped countries.
84) From the ethical relativism perspective, which action is most likely to be considered morally
valid?
A) bribing a government official to allow you to transfer gambling winnings to a tax haven
B) performing genital mutilations on non-consenting female teens
C) employing as laborers children under the age of nine
D) agreeing to a country’s policy of prohibiting the education of females
E) bribing a government official in an underdeveloped country to obtain a permit to build a
hospital