Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Chapter 5: Corporate Rights and Responsibilities
Test Bank
Multiple Choice
1. Which of the following exemplifies what the descriptive approach to corporate social
responsibility is most concerned with?
A. A large retail chain pays its employees a living wage.
B. A small business implements a recycling program.
C. A firm focuses on the fluid process by which value is created for multiple
stakeholders.
D. A manufacturing company requires its suppliers to use fair labor practices.
2. Which of the following is NOT an objective outcome of corporate social
responsibility?
A. A large retail chain pays its employees a living wage.
B. A small business implements a recycling program.
C. A firm focuses on the fluid process by which value is created for multiple
stakeholders.
D. A manufacturing company requires its suppliers to use fair labor practices.
3. A ______ approach to corporate social responsibility starts with a predetermined
outcome and then works out how to achieve it.
A. normative
B. descriptive
C. conservative
D. critical
4. A ______ approach to corporate social responsibility allows the outcome to emerge,
rather than imposing a fixed view about what should or should not happen.
A. normative
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
B. descriptive
C. conservative
D. critical
5. If we are going to argue that a corporation has ______ we would like it to fulfill, we
also need to grant ______ that protect its ability to exist and do what it is designed to
do.
A. responsibilities; rights
B. rights; responsibilities
C. purposes; rights
D. responsibilities; immunities
6. The law allowed the boards of directors of Vermont firms to consider factors in
addition to shareholder value when deciding whether to accept a takeover offer is
known as the ______.
A. Vermont Maple Suger Growers Law
B. Ben & Jerry’s Law
C. Mount Snow Association Law
D. St. Johnsbury Transport Law
7. Buckley v. Valeo extended what right to a corporation?
A. protection from unionization
B. ability to donate to political campaigns
C. ability to sue states
D. right to privacy
8. A corporation CANNOT do which of the following?
A. sue and be sued
B. be criminally prosecuted
C. own property
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
D. create law
9. Which Supreme Court case initially developed the idea of corporate personhood?
A. Santa Clara County v. Southern Pacific Railroad
B. Trustees of Dartmouth College v. Woodward
C. Buckley v. Valeo
D. First National Bank of Boston v. Bellotti
10. What did the Citizens United case decide?
A. Corporations enjoy the same First Amendment rights to free speech as individuals.
B. The Bill of Rights applies to corporations.
C. Corporations may vote.
D. Corporations have a duty to protect their employees from discrimination.
11. A corporation’s ______ is its responsibilities and obligations as determined by
corporate law and founding corporate charters.
A. direction
B. general goal
C. public purpose
D. main objective
12. Why is Dartmouth College v. Woodward an important case in CSR?
A. It illustrates the important relationship between education and other societal
institutions.
B. It sets the legal precedent that corporations are understood to be legal individuals.
C. It establishes legal autonomy for educational institutions to teach controversial
subjects such as the theory of evolution.
D. It sets the legal precedent of requiring state funding for public education.
13. In Buckley v. Valeo, the U.S. Supreme Court ruled explicitly that ______.
A. corporations have different tax liabilities than individuals
B. corporations and individuals have common tax liabilities
C. religious institutions cannot make political donations
D. political donations are free speech
14. Dodge v. Ford stands for the legal principle that ______.
A. managers and directors have a legal duty to put shareholders’ interests above all
others
B. managers, not shareholders, have the legal authority to determine workers’ wages
C. the interests of multiple stakeholders must be considered in business practices
D. corporations have a legal duty to act in socially responsible ways
15. Corporate governance is regulated by ______.
A. the federal government
B. the states
C. the cities in which corporations reside
D. the corporations themselves
16. The ______ is typically recognized as the earliest modern business corporation.
A. East India Company
B. Ford Motor Company
C. Lorillard Tobacco Company
D. Southern Pacific Railroad
17. In terms of oversight, liability, responsibility, and regulation, ______ is considered
the friendliest place to do business in the United States.
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
A. California
B. Delaware
C. Florida
D. Texas
18. In 2012, ______ became the first company in California to become a benefit
corporation.
A. Lululemon
B. Google
C. Apple
D. Patagonia
19. In the United States, the idea of the benefit corporation was established in which
year?
A. 1810
B. 1910
C. 1970
D. 2010
20. Benefit corporations and certified B Corps are ______.
A. legal entities in all states of the United States
B. primarily located in European countries
C. different names for the same types of companies
D. different entities, one a legal entity and the other a certification process
21. The decision in ______ allowed corporations greater freedom to finance political
ads/campaigns.
A. Buckley v. Valeo
B. Citizens United
C. Dartmouth College v. Woodward
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
D. Dodge v. Ford
22. The incorporation process (corporate governance) in the United States is currently
regulated ______.
A. under state, rather than federal, law
B. under federal, rather than state, law
C. under both federal and state law
D. under local, state, and federal law
23. Compared to European firms, U.S. firms are ______.
A. more likely to take a multiconstituency approach to CSR
B. less likely to take a multiconstituency approach to CSR
C. equally likely to take a multiconstituency approach to CSR
D. much more socially responsible
24. The concept of “corporate personhood” in the United States recognizes that ______.
A. corporations are primarily made up of groups of persons
B. physical resources of corporations (buildings, machines, etc.) are secondary to
human resources
C. humans have a natural tendency to anthropomorphize inanimate objects such as
buildings
D. a corporation is a fictitious legal person that is endowed with many of the rights and
responsibilities of a human being
25. Laws establishing benefit corporations impose legal requirements for firms to
______.
A. implement a stakeholder model
B. implement a shareholder model
C. pay a living wage to all employees
D. use only environmentally sustainable manufacturing processes
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
26. Firms will survive in the long run to the extent that managers consistently create
______ for the firm’s broad range of stakeholders.
A. profits
B. goodwill
C. value
D. harmony
27. The “Stop BEZOS” Act proposed by Senators Bernie Sanders and Elizabeth Warren
sought to force companies to ______.
A. unionize
B. provide a livable wage
C. ensure companies paid their fair share of taxes
D. mandated companies not outsource
28. According to Yvon Chouinard, founder of the Patagonia company, one of the
primary benefits of becoming a benefit corporation is that ______.
A. it makes it harder for a new owner to abandon the firm’s social mission
B. it makes employees more dedicated to the social mission of the firm
C. it makes the company’s products much more desirable to socially conscious
customers
D. it makes it more difficult for a company to pollute the natural environment
29. The “Ben & Jerry’s law” passed by the Vermont legislature ______.
A. requires ice cream to be provided to all schoolchildren at least once per year
B. requires the use of only non-GMO ingredients in food products
C. allows firms to set maximum pay for CEOs at 20 times the average pay in the firm
D. allows firms to consider factors other than shareholder value when deciding whether
to accept a takeover offer
30. The textbook author argues that ______ offers the most efficient tools to deliver
social progress.
A. government
B. for-profit firms
C. not-for-profit firms
D. families
1. Value creation is the same for every business and every stakeholder.
2. A corporation is a fictitious legal person that is endowed with many of the
characteristics of a human being.
3. The U.S. Supreme Court has held that corporations have the right to donate to
political campaigns.
4. Limited liability means that no one can sue a corporation.
1. What is corporate personhood, and how does it relate to corporate social
responsibility?
2. Describe the difference between traditional approaches to corporate social
responsibility, which focus on objective outcomes, and strategic CSR, which focuses on
value creation.
3. One survey revealed that nearly 80% of executives admit they would “take actions to
improve quarterly earnings at the expense of long-term value creation.” Why are they
wrong?
4. Describe the differences between Benefit Corporations and B Corps. Do you think
either of these designations is necessary? Why or why not?
Ans: Varies, but should correctly describe each entity.
Cognitive Domain: Application
Answer Location: Corporate Responsibilities | Benefit Corporations
Difficulty Level: Hard
5. Delaware is considered to be the friendliest place to do business in the United States.
Describe the reasons why this is so as well as the positive and negative implications of
the reasons.
Ans: Varies, but should include a description of the legal environment in Delaware that
makes it a popular place to incorporate.
Cognitive Domain: Analysis
Answer Location: Corporate Responsibilities
Difficulty Level: Medium
6. The U.S. Supreme Court has made several landmark rulings on “corporate
personhood.” Some argue that the Court’s decisions have used inconsistent logic.
Describe why the Court’s logic has or has not been inconsistent.
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Ans: Varies, but should touch on each of the major decisions in this area, including
Citizens United.
Cognitive Domain: Analysis
Answer Location: Corporate Responsibilities
Difficulty Level: Hard