Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Chapter 4: Corporate Stakeholder Responsibility
Test Bank
Multiple Choice
1. The ______ argument for CSR assumes that firms act most effectively when they are
incentivized to do so.
A. economic
B. moral
C. rational
D. ethical
2. Staff at Google compelled the company to back away from a Pentagon contract using
Google’s artificial intelligence software. This action shows the influence of ______.
A. activist shareholders
B. activist self-regulators
C. activist social groups
D. activist stakeholders
3. When will firms generally see stakeholder reactions to the firm’s decisions?
A. within 1 month
B. within 1 year
C. within 5 years
D. There is no time limit on reactions.
4. When responding to stakeholder concerns, the ability of the firm to maximize
opportunity and minimize risk is known as the ______.
A. CSR target
B. CSR Threshold
C. optimum CSR
D. CSR sweet spot
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
5. Which publication published Milton Friedman’s article “The Responsibility of Business
to Increase Its Profits?”
A. The Wall Street Journal
B. The New York Times Magazine
C. The Economist
D. Forbes
6. What did Milton Friedman argue in his seminal 1970 article published in The New
York Times Magazine?
A. Profit, although important, should not be the primary focus of firms.
B. Firms have a duty to pay their employees a living wage.
C. Profit, as a result of the actions of the firm, is an end in itself.
D. Firms do not provide value to society unless they are acting in a socially responsible
manner.
7. Which of the following is an application of Milton Friedman’s ideas?
A. A large, multinational corporation tries to ensure that workers throughout the supply
chain earn a living wage.
B. A small business makes maximizing profits its top priority.
C. A firm decides to implement a recycling program to benefit the environment.
D. A medium business encourages its employees to volunteer in the community.
8. What did Charles Handy argue in his 2002 Harvard Business Review article?
A. A corporation should not waste time on CSR initiatives.
B. If businesses are not making large profits, they should not exist.
C. Firms should make satisfying shareholders their first priority.
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
D. A business has to have a motivation other than merely making a profit in order to
justify its existence.
9. According to the text, the range of firm behavior that generates value for both internal
and external stakeholders in sufficient quantities is termed ______.
A. the strategic CSR window of opportunity
B. the strategic CSR best practices
C. maximizing strategic CSR
D. strategic CSR expansion
10.Thomas Friedman wrote that we are in the era of ______.
A. Globalization 1.0
B. Globalization 2.0
C. Globalization 3.0
D. Globalization 4.0
11. What characterizes the current era of globalization?
A. Individuals are the main agents of globalization.
B. Countries have much more economic and military power than before.
C. Multinational companies look abroad for markets and labor
D. Markets are integrated globally.
12. Which of the following is an example of a firm implementing the moral argument for
CSR?
A. A manufacturing business uses eco-products to keep up with its competitors.
B. A large corporation pays its employees a living wage to end a consumer boycott
C. A small business buys hybrid cars because of the tax benefits.
D. A corporation ensures its products are made in fair labor conditions because it is the
right thing to do.
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
13. ______ occurs when stakeholders act to punish the firm for not meeting their
expectations in relation to that issue.
A. The CSR sweet spot
B. The CSR danger zone
C. The CSR threshold
D. CSR optimization
14. In order to be considered responsible, the firm has to be able to create ______.
A. equitable outcomes
B. maximum outcomes
C. fair outcomes
D. optimal outcomes
15. Which of the following is NOT an example of stakeholder retaliation?
A. governmental regulations related to cleaning products
B. boycotts by consumers of cleaning products that harm the environment
C. TV advertisements for a cleaning product that does not harm the environment
D. strikes by employees for higher wages
16. When a firm prioritizes stakeholder concerns in relation to a given issue, ______ is
maintained when the firm is able to stay where opportunity is maximized and risk
minimized.
A. the CSR sweet spot
B. the CSR danger zone
C. the CSR threshold
D. CSR optimization
17. The text argues that the CSR cause is best advanced when stakeholders are not
only caring and informed but also ______ and ______.
A. transparent; educated
B. transparent; powerful
C. educated; organized
D. action oriented; transparent
18. Today, stakeholders outside the firm have greater opportunities to mobilize their
efforts because of ______.
A. society’s elites
B. greater sophistication among government leaders
C. declining world trade
D. the revolution in communications technology
19. Demand for firms to be socially responsible may arise from ______.
A. special interest groups and suppliers
B. employees and customers
C. company leaders
D. all of these
20. Milton Friedman argued for which of the following ideas?
A. There should be more government intervention when CSR is lacking.
B. Firms should seek societal goals beyond making profits.
C. Market forces should not play a role in CSR.
D. CSR is not a proper concern of companies.
21. Charles Handy argued for which of the following ideas?
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
A. There should be more government intervention when CSR is lacking.
B. Firms should seek societal goals beyond making profits.
C. Market forces should not play a role in CSR.
D. CSR is not a proper concern of companies.
22. What percent of a survey of millennials say company’s commitment to the
community has an influence on their decision to work there?
A. 20%
B. 35%
C. 50%
D. 70%
23. Who is most likely the author of the following quote?
“It is salutary to ask about any organization, ‘If it did not exist, would we invent it?’
‘Only if it could do something better or more useful than anyone else’ would have
to be the answer, and profit would be the means to that larger end.”
A. Charles Handy
B. Milton Friedman
C. Barack Obama
D. Congressional Banking Oversight Committee
24. An unchecked, unbridled pursuit of economic value, without regard to the social
consequences (e.g., such as by manufacturing a product in a way that generates
excessive pollution), creates ______.
A. the strategic CSR window of opportunity
B. a CSR deficit for the society in which the firm operates
C. the CSR perspective
D. the Iron Law of Social Responsibility
25. According to the Gallup “Annual Honesty and Ethics poll,” the percentage of the
U.S. public surveyed who rated business executives’ ethics as “high” or “very high” is
______.
A. rising dramatically, with over 50% responding that business leaders are ethical
B. dropping dramatically, from over 75% in 1990 to approximately 50% in 2014
responding that business leaders are ethical
C. remaining consistently high, with approximately 75% responding that business
leaders are ethical
D. remaining consistently low, with never more than 25% responding that business
leaders are ethical
26. As awareness of socially responsible business practices has increased, consumers
have generally responded by ______.
A. paying significant price premiums for socially responsible products
B. continuing to focus primarily on the price and/or quality of products
C. refusing to purchase products if they are not “green certified”
D. paying more for “green” products but not for other socially responsible products
27. Over the last 20 years, one attribute that more and more defines millennials is their
______.
A. altruism
B. creativity
C. narcissism
D. dogmatism
28. The United Nations’ Principles of Responsible Management Education (PRME)
include which of the following?
A. to develop the capabilities of students to work for an inclusive and sustainable
economy
B. to interact with managers of business corporations to extend our knowledge of their
challenges in meeting social and environmental responsibilities
C. to facilitate and support dialog with multiple stakeholders on critical issues related to
global social responsibility and sustainability
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
D. all of these
29. The text argues that CSR is not only a corporate responsibility but also a(n) ______
responsibility.
A. shareholder
B. stakeholder
C. management
D. industry
30. According to the text, “untrammeled consumption” has damaging consequences in
all but which of the following domains?
A. economic
B. environmental
C. psychological
D. sociological
31. Which of the following is true in relation to CSR and many other aspects of
business?
A. It does not pay firms to be too far ahead of the curve.
B. Firms that take the lead on CSR issues are almost always rewarded by consumers
C. It pays firms to be way ahead the curve.
D. Firms that take the lead on CSR issues are never rewarded by consumers.
32. Because a $15-per-hr minimum wage might create economic suicide for
McDonald’s as it would force them to raise prices for customers who like low prices,
what action is least likely to result in a $15–per-hr minimum wage?
A. the government increasing the minimum wage
B. employees refusing to work at that wage rate
C. customers refusing to shop at McDonald’s because they are unhappy with the wages
the company is paying its employees
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
D. the government initiating right to work legislation
33. Recent research has indicated that ______.
A. people are more honest in the morning than in the afternoon
B. people are more honest in the afternoon than in the morning
C. people are equally honest in the morning and the afternoon
D. time of day does not impact ethical decision-making
34. The United Nations’ Principles of Responsible Management Education (PRME) are
important because ______.
A. they set a standard baseline for the teaching of ethical decision-making in all
business schools
B. a growing awareness and acceptance of CSR is a necessary component of
meaningful change
C. business educators can best determine morally acceptable business practices
D. business education will shape the future of what is considered socially responsible
corporate behavior
35. The definition of what is and is not socially responsible is ______.
A. universally understood across cultures
B. established in the United Nations’ Principles of Responsible Management Education
(PRME)
C. primarily determined by laws and government regulations
D. changing all the time and up to stakeholders to determine
36. 60 Minutes exposed the mislabeling of products by the flooring company Lumber
Liquidators, and the EPA threatened to withhold approval for selling Volkswagen and
Audi diesel models. These are both examples of ______.
A. corporate social responsibility
B. corporate stakeholder responsibility
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
C. bureaucratic overstepping that negatively impacts business
D. Milton Friedman’s concept of the social responsibility of business
1. If stakeholders do not express dissatisfaction with a firm’s actions, it means they are
satisfied.
2. Firms who do not act responsibly always face negative consequences.
3. Milton Friedman and Charles Handy had very similar ideas about businesses and
their purpose.
4. All stakeholders have an obligation to help design the society in which they want to
live and work.
5. Corporate social responsibility can be defined as the responsibility of firms to act in
accordance with stakeholder needs.
6. For long-term success, a firm should focus on its organizational stakeholders.
7. Companies are more likely to continue to act socially responsible if it is the right thing
to do.
8. Social responsibility is more than a set of abstract standards.
1. The CSR debate is often characterized as a battle between supporters of Milton
Friedman on one side and the supporters of Charles Handy on the other. Describe this
“battle” and analyze the adequacy of this metaphor as a characterization of current CSR
debates.
2. The textbook’s author states, “We do not need more responsible companies; we
need more responsible stakeholders.” Analyze this statement, providing examples to
support or refute it.
3. Current growth in activist organizations can be attributed to the adoption of the six
Principles of Responsible Management Education (PRME) by many business schools.
Select three of the six principles and, in your own words, describe how the selected
principles can lead to greater social responsibility by corporations and stakeholders.
Ans: Varies.
Cognitive Domain: Analysis
Answer Location: Educated Stakeholders
Difficulty Level: Medium
4. Arguments can be made that firms are primarily responsible for CSR practices, and
other arguments can be made that stakeholders are primarily responsible for CSR.
Describe the two sides to this debate and analyze which argument you support more.
Ans: Varies.
Cognitive Domain: Analysis.
Answer Location: Throughout Chapter
Difficulty Level: Hard
5. What should the firm do if customers want to purchase a product that is not only bad
for them (e.g., tobacco, alcohol, or fast food) but is also bad for society (e.g., higher
health-care costs)?
6. The textbook argues that the CSR cause would be advanced considerably if
stakeholders are caring, informed, transparent, and educated. Describe what that
statement means, citing examples to support your response.
Ans: Varies.
Cognitive Domain: Comprehension
Answer Location: CSR: A Stakeholder Responsibility?
Difficulty Level: Medium