Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Chapter 1: What Is CSR?
Test Bank
Multiple Choice
1. Which of the following exist to define the rules and structures of society within which
all organizations must operate?
A. for-profits
B. governments
C. nonprofits
D. religion
2. All those who in some way are related to a firm’s activities are known as ______.
A. shareholders
B. public
C. stakeholders
D. clients
3. Which of these is NOT a for-profit business?
A. Facebook
B. Nike
C. Red Cross
D. Uber
4. With the rise of agency theory, there has been a renewed focus on what group in
companies?
A. managers
B. employees
C. clients
D. shareholders
5. Which of the following is NOT part of Archie Carroll’s pyramid of corporate social
responsibility?
A. stakeholder responsibility
B. legal responsibility
C. discretionary responsibility
D. ethical responsibility
6. An application of Milton Friedman’s argument is ______.
A. providing workers time off to volunteer in their communities
B. establishing a recycling program
C. maximizing shareholder returns
D. clearly defining ethical concerns along a product’s supply chain
7. In the 1790s, consumer boycotts occurred in reactions to which of the following?
A. slave-harvested sugar
B. cheap cotton from the United States
C. the high price of fuel (lamp) oil
D. the use of the Royal Navy in England to transport slaves
8. A central part of the moral argument for corporate social responsibility comes from
the thinking that ______.
A. businesses have to pay taxes, so they should have to be responsible in other ways
as well
B. society cannot afford all its needs unless business is forced to go beyond just paying
taxes
C. business leaders and shareholders make money, so they should be morally
responsible to society, especially to the poor
D. a large part of business success comes as much from actions that are congruent
with societal values and norms as from factors internal to the company
9. The rational argument for corporate social responsibility is summarized by the Iron
Law of Social Responsibility, which states that ______.
A. ultimately it is government, not business, that is responsible for a satisfying society
B. responsibility for a just society is everyone’s responsibility
C. in a free society, discretionary abuse of societal responsibilities leads, eventually, to
mandated reprisals
D. concern for CSR must be the first priority of the courts
10. Strategic CSR expounds the ______ argument in favor of corporate social
responsibility.
A. financial
B. economic
C. political
D. social
11. Which of the following is an example of an economic argument for corporate social
responsibility?
A. A company invests in clean energy for its vehicles because it saves money on
transportation.
B. A company installs skylights in its stores to lower lighting costs.
C. A company provides gym memberships to its employees to lower health-care costs.
D. All of these are examples of economic arguments for CSR.
12. “In a democratic society, power is taken away from those who abuse it” is a
workable definition of ______.
A. Carroll’s CSR rule
B. the Iron Law of Social Responsibility
C. the Alien Tort Claims Act
D. an accommodative view of CSR
13. Energy companies and industrial manufacturers set up the United States Climate
Action Partnership (USCAP), which supports carbon limits and trading. This is an
illustration of which argument for corporate social responsibility?
A. ethical
B. moral
C. rational
D. economic
14. In contrast to Milton Friedman’s argument, David Packard argued that ______.
A. businesses exist not only to make money but also to contribute to society
B. the sole purpose of businesses is to make money
C. businesses need not consider all stakeholders
D. shareholders are responsible for the larger community within which a firm operates
15. Which of the following best describes nonprofit organizations?
A. They emerge to do social good when the political will or the profit motive is
insufficient to address society’s needs.
B. They emerge primarily to meet the religious or spiritual needs of a society
C. They emerge to supplement businesses that do not make profits.
D. They emerge to meet the needs of governments that do not have adequate financial
resources to address society’s needs.
16. If Facebook is seen to be dominating the social media market, what type of
corporate social responsibility would it be violating?
A. ethical
B. economic
C. legal
D. discretionary
17. According to Archie Carroll’s pyramid of corporate social responsibility, a firm’s
______ is to produce an acceptable return for investors.
A. economic responsibility
B. legal responsibility
C. ethical responsibility
D. discretionary responsibility
18. James Rogers (the CEO of Duke Energy) once stated: “If you are not at the table
when these negotiations are going on, you’re going to be on the menu.” This illustrates
what argument for CSR?
A. moral
B. economic
C. rational
D. ethical
19. According to Archie Carroll’s pyramid of corporate social responsibility, a firm’s
______ is to act within the framework of laws and regulations drawn up by the
government and judiciary.
A. economic responsibility
B. legal responsibility
C. ethical responsibility
D. discretionary responsibility
20. The rational argument for CSR rests on ______.
A. sanction avoidance
B. social norms
C. moral integrity
D. societal rules
21. According to Archie Carroll’s pyramid of corporate social responsibility, a firm’s
______ is to do no harm to its stakeholders within its operating environment.
A. economic responsibility
B. legal responsibility
C. ethical responsibility
D. discretionary responsibility
22. In terms of social activism, what book could be credited with being a catalyst for the
environmental movement?
A. The Perfect Storm
B. Prodigal Summer
C. The Water Knife
D. The Silent Spring
23. According to Archie Carroll’s pyramid of corporate social responsibility, a firm’s
______ is to take proactive, strategic behaviors that benefit both the firm and society.
A. economic responsibility
B. legal responsibility
C. ethical responsibility
D. discretionary responsibility
24. CSR refers to both ______.
A. an input and an output
B. ethics and outcomes
C. a process and an outcome
D. a theory and an application
25. Applying Archie Carroll’s pyramid of corporate social responsibility, when a firm
closes due to financial mismanagement and bankruptcy, it has not met its ______.
A. economic responsibility
B. legal responsibility
C. ethical responsibility
D. discretionary responsibility
26. A firm sponsors a 5k race, contributing the race fees to a local charity. According to
Archie Carroll’s pyramid of corporate social responsibility, the firm is meetings its
______.
A. economic responsibility
B. legal responsibility
C. ethical responsibility
D. discretionary responsibility
27. The Malden Mills textile plant is an important case study in CSR because ______.
A. it showed that some things are more important than profit
B. it demonstrated the futility of the textile industry in New England
C. it illustrated that no firm, whatever the motivation, can or should indefinitely spend
money it does not have
D. it showed the downsides of outsourcing
28. Consequentialist (or utilitarian) reasoning justifies action in terms of the outcomes
generated (e.g., the greatest good for the greatest number of people). Such reasoning
is part of which argument for corporate social responsibility?
A. ethical
B. moral
C. rational
D. economic
29. Financial scandals around the turn of this century at Enron, WorldCom, Adelphia,
HealthSouth, and others led to which of the following?
A. greater reliance on nonstandard accounting practices
B. less reliance on nonstandard accounting practices
C. new laws and governmental rulings that limit business’s discretionary actions
D. revocation of laws and rulings that limit business’s discretionary actions
30. By adopting a rational argument for corporate social responsibility, firms seek to
______.
A. do the right thing from an ethical perspective
B. to interpret evolving societal values and stakeholder expectations
C. make larger societal contributions than simply creating profit
D. go above and beyond the basic ethical and moral expectations of a society
31. Peter Drucker stated, “Profit for a company is like oxygen for a person. If you don’t
have enough of it, you’re out of the game. But if you think your life is about breathing,
you’re really missing something.” This statement reflects the ______ argument for
corporate social responsibility.
A. ethical
B. moral
C. rational
D. economic
32. Corporate social responsibility adds value because it allows companies to reflect the
needs and concerns of their various stakeholder groups. This statement reflects the
______ argument for CSR.
A. ethical
B. moral
C. rational
D. economic
33. Society benefits most when firms focus purely on their own financial success. This
statement best reflects the ideas of ______.
A. Charles Handy
B. Adam Smith
C. David Packard
D. Milton Friedman
34. From a corporate social responsibility perspective, a firm’s success is primarily
related to its ability to ______.
A. incorporate stakeholder concerns into its business model
B. maximize the use of all its internal and external resources
C. minimize its tax liabilities
D. create more energy-efficient manufacturing processes
35. The call for social responsibility among businesses is generally recognized as a
concept that began in which time period?
A. the early late 20th century, after the impact of the Industrial Revolution
B. the late 20th century and early 21st century, after numerous widespread financial
scandals
C. ancient times, as early as the writings of Socrates
D. the 17th century, after concerns about the excesses of the East India Company were
publicized
36. According to the textbook, corporate social responsibility is strongest when ______.
A. business leaders view their role as stewards of resources owned by others
B. lower-level employees take the lead in developing socially responsible practices in
the workplace
C. consumers demand higher levels of social responsibility
D. government requires specific business practices
37. For a hair care salon shop that is a privately owned business, which of the following
is NOT likely to be a stakeholder?
A. tax authorities
B. customers
C. suppliers of hair dryers
D. the New York Stock Exchange (NYSE)
38. Which of the following is NOT a characteristic of corporate social responsibility?
A. It is a static target that does not change.
B. It is an evolving concept.
C. It varies across countries and cultures.
D. It is both critical and controversial.
1. Since the early 19th century, managers have consistently paid attention to the
interests of all stakeholders.
2. There is widespread agreement among corporate executives about the necessity of
corporate social responsibility.
3. One definition of corporate social responsibility is “a responsibility among firms to
meet the needs of their stakeholders and a responsibility among stakeholders to hold
firms to account for their actions.”
4. By adopting a rational argument for corporate social responsibility, firms seek to
interpret evolving societal values and stakeholder expectations, and they act to avoid
future sanctions.
5. The moral argument for corporate social responsibility focuses on adopting the path
of least resistance with regard to issues of concern that make common and business
sense.
1. Define corporate social responsibility. What arguments in favor of CSR seem most
important to you? How is CSR different from strategic CSR?
2. Describe the famous example of the Malden Mills fire and discuss Aaron Feuerstein’s
response to the fire. Was his response an example of corporate social responsibility?
Why or why not? What are some other approaches the company could have taken?
3. Define and discuss briefly the ethical, moral, rational, and economic arguments for
corporate social responsibility. Of the four components, which one is more relevant to
you and why?
4. The textbook states that corporate social responsibility “is a fluid concept.” What does
this mean?
5. The book argues that the strongest of the four (ethical, moral, rational, and economic)
arguments supporting CSR is the economic one. Why does it argue that to be true?
6. The textbook states that corporate social responsibility is both a process and an
outcome. What does this mean?