Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Chapter 12: Sustainable Value Creation
Test Bank
Multiple Choice
1. Since the 1930s, the average life (in years) of a Fortune 500 company has ______.
A. increased slightly
B. fallen slightly
C. increased significantly
D. fallen significantly
2. To make better decisions while insulating themselves from potential threats, firms
should ______.
A. engage with stakeholders whenever possible and minimize the danger of stakeholder
disillusionment
B. focus on profit maximization over profit optimization
C. recognize that some stakeholders are much more important than others
D. establish a public relations crisis team
3. Companies need to understand the importance of a culture that is defined by ______.
A. profits
B. values
C. ethics
D. rules
4. What is the primary focus of business ethics?
A. macro perspectives of firm behavior
B. individual behavior and decision-making
C. both the macro and micro levels of behavior
D. a comprehensive management philosophy of the firm
5. When we teach children not to steal, we are teaching them ______.
A. ethics
B. individual ethical decision-making
C. morality
D. ethics and morality
6. Focusing on organizational goals, such as quarterly earnings, rather than individual
actions can lead to ______.
A. greater short-term profits
B. greater awareness of the ethical implications of actions
C. a loss of awareness of ethical implications
D. weaker short-term profits
7. The MBA Oath was written in ______ by a group of Harvard Business School
students who wanted to develop a professional vow similar to the Hippocratic Oath
taken by medical professionals.
A. 1909
B. 1939
C. 1979
D. 2009
8. Firms, like Enron, that ignore their ______, eventually are held accountable for their
actions.
A. CSR threshold
B. CSR reporting
C. primary stakeholders
D. executive accountability
9. ______ is the generation of a perceived benefit for an individual or a group, as
defined by that individual or group.
A. The CSR advantage
B. The shareholder advantage
C. The stakeholder advantage
D. Value creation
10. Values-based businesses view CSR as ______ rather than as ______.
A. an opportunity; a way of doing business
B. a cost; an opportunity
C. an opportunity; a cost
D. a way of doing business; an opportunity
11. “Why does the business exist?” is a question that illustrates what principle of
conscious capitalism?
A. higher purpose
B. stakeholder independence
C. conscious leadership
D. conscious culture
12. Which business leader developed the principles of “conscious capitalism?”
A. Lee Iacocca
B. Steve Jobs
C. Phil Knight
D. John Mackey
13. Creating products durable enough and timeless enough that people could replace
them less often, reflects the business philosophy of ______.
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
A. Howard Schultz
B. Yvon Chouínard
C. Bill Gates
D. John Mackey
14. Enron is an example of a firm that ______.
A. had a strong corporate social responsibility position that translated into ethical
practices
B. had a weak set of formal ethical positions but was an ethical firm nevertheless
C. a strong set of corporate social responsibility positions that were just greenwash
D. was the first firm to have a chief CSR officer
15. With their ice cream firm, Ben and Jerry sought to ______.
A. foster a culture of religious tolerance
B. be a concerned and responsive employer
C. pay top management and the owners many multiples of the lowest-level worker’s pay
D. support religious values by holding frequent prayer meetings
16. A ______ is a for-profit firm that is founded on a vision and mission defined by a
strategic CSR perspective.
A. social enterprise
B. stakeholder-based business
C. sharia-compliant business
D. values-based business
17. Who famously noted, “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?”
A. Peter Drucker
B. Milton Friedman
C. Charles Handy
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
D. Jack Welch
18. ______, a values-based business, states that its goal is to “find new measures of
success that do not depend on selling an ever increasing number of goods and
services.”
A. Ben & Jerry’s
B. Patagonia
C. The Body Shop
D. Zappo’s
19. Research indicates that values-based businesses ______.
A. are increasingly common
B. are much less profitable than other businesses
C. remain rare
D. are much more profitable than other businesses
20. What does “Ben & Jerry’s law” do?
A. It requires that the company’s ice cream use only non-GMO ingredients.
B. It gives the firm’s directors the legal protection to reject a takeover offer based only
on financial grounds.
C. It gives the firm’s directors the legal protection to accept a takeover offer based only
on financial grounds.
D. It requires that CEOs be paid no more than 20 times the average pay of all other
employees.
21. In 1989, Ben & Jerry’s was the first major corporation to ______.
A. allow an independent social audit of its business operations
B. use only fair trade goods in all of its products
C. be purchased through a hostile takeover for other than financial reasons
D. introduce the concept of a living wage for all its employees
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
22. As a values-based business, in 2008, Starbucks founder Howard Schultz resisted
the call of investors to ______.
A. reduce the number of Starbucks franchises
B. eliminate plans to expand globally
C. cut back substantially on health-care coverage for his workers
D. significantly downsize his workforce
23. To illustrate how doing good is good business, if you invested in Starbucks the day it
went public (June 26, 1992), your stock would be up ______.
A. 20%
B. 100%
C. 500%
D. 2,000%
24. Which of the following is NOT a principle on which conscious capitalism is based?
A. higher purpose
B. stakeholder independence
C. conscious leadership
D. conscious culture
25. John Mackey, founder and co-CEO of Whole Foods Market, is a leading proponent
of ______.
A. conscious capitalism
B. stakeholder activism
C. the gig economy
D. values-based business
26. The notion of businesses founded on values is not new. It is likely that the earliest
author to espouse this view was ______.
A. Milton Friedman
B. Adam Smith
C. Edward Freeman
D. Peter Drucker
1. The underlying principles of strategic CSR suggest that any problem with capitalism,
as currently practiced, is the pursuit of profit over nonfinancial considerations.
2. A stakeholder perspective is an integral part of a comprehensive, strategic approach
to corporate social responsibility.
3. The ethics and morals of an organization start with the ethics and morals of the group
of people in the organization.
1. One approach a firm may take is to pay employees as little as possible if
unemployment is high enough that if one employee leaves, another can be hired.
Another approach is to pay employees a living wage because it raises morale and
productivity while decreasing turnover and the hiring costs associated with replacing
workers. Which position do you take on this issue? Support your answer with specific
examples.
2. What does it mean for an organization to be ethical? What is the difference between
an unethical and an illegal act?
3. What are the principles of conscious capitalism and how do they affect how a firm
should operate?
4. In your view, what does a values-based business look like? Think of an example you
have seen or read about in the news: What makes you believe this firm is a values–
based business? What do you think would be different about working for a firm like that?