56) How did the Sarbanes-Oxley Act result in “internal housecleaning” within firms?
57) How are professionals defined? Describe the American Bar Association’s Model Rules of
Professional Responsibility.
58) Which of the following is not a recognized school of social responsibility?
A) profit-oriented
B) critical thinking
C) managerial
D) institutional
59) Which of the following is not a recognized school of social responsibility?
A) professional obligation
B) regulation
C) reputation
D) profit-oriented
60) Classical economists, who support the profit-oriented school of social responsibility,
recognize that there will be unintended effects of profit-seeking activities, called ________, that
affect society and cannot be incorporated into or passed on in the price of an output.
A) unforeseeable circumstances
B) concomitant consequences
C) externalities
D) internalities
61) Classical economists, who advocate the profit-oriented school of responsibility, would argue
that ________.
A) business entities have a responsibility to act in a manner that benefits all of society
B) the social costs of doing business are a collective responsibility of the government
C) a business is a legal entity in our society that must be held responsible for its activities
D) members of boards of directors should be certified as “professionals” before they are allowed
to assume managerial responsibility
62) A member of the board of directors of a large corporation who holds the belief that
businesses should be judged solely on criteria of economic efficiency and how well they
contribute to growth in productivity is a proponent of the ________ school of social
responsibility.
A) profit-oriented
B) managerial
C) institutional
D) professional obligation
63) A proponent of the ________ school of social responsibility would argue that efforts at
pollution control and bringing equality of payment to the workforce are tasks of the government
and not of the private sector, which is incapable of making such choices and is not elected in a
democratic society to do so.
A) managerial
B) regulation
C) profit-oriented
D) institutional
64) According to the institutional school of social responsibility, business entities have a
responsibility to act in a manner that benefits ________.
A) shareholders
B) suppliers
C) employees
D) all of society
65) The profit-oriented school of social responsibility argues that businesses should be judged
________.
A) on both their profit and non-profit activities
B) solely on the basis of economic efficiency and growth
C) solely on the unintended impact of their profit-making activities
D) on how they do business with their consumers
66) Proponents of the profit-oriented theory of social responsibility would argue that ________.
A) the social cost of doing business should be borne by the government
B) businesses should contribute money to charities
C) the profits in business should be reduced in order to cause lesser harm to the environment
D) firms have a responsibility to act in a manner that benefits all of society
67) Which of the following best describes the term “externalities”?
A) money that firms set aside to give away to society
B) taxes that firms pay
C) unintended consequences of profit-seeking activities
D) unexpected external causes that hinder successful business transactions
68) Sam believes that corporations should focus on business and that the government should pay
the associated social cost with the money generated as tax. Which of the following schools of
social responsibility is best associated with Sam’s beliefs?
A) profit-oriented
B) managerial
C) institutional
D) regulation
69) Which of the following statements is true of the managerial school of social responsibility?
A) It argues that a firm must have the trust of all groups, both internal and external.
B) It argues that the social costs of doing business are the collective responsibility of the
government.
C) It asserts that a business is a legal entity in our society that must be held responsible for its
activities.
D) It sees all business units as accountable to elected public officials.
70) A proponent of the managerial theory of social responsibility would argue that ________.
A) managers should maximize profits and leave social responsibility to the government
B) businesses should act carefully so as not to injure the fabric of society
C) firms should seek to maintain the trust of internal and external constituents and interest
groups, not just stockholders
D) business managers and members of the board of directors should seek professional
certification
71) With which of the following assertions does a managerial theorist agree?
A) Modern managers seldom need to balance conflicting claims on their time and their
company’s resources.
B) Firms cannot survive by ignoring the claims of important interest groups.
C) Firms do not have to deal with external constituents other than their customers and suppliers.
D) Government regulation is the key to ethical management.
72) Advocates of the ________ school of social responsibility for business argue that business
entities have a responsibility to act in a manner that benefits all of society.
A) regulation
B) professional obligation
C) managerial
D) institutional
73) Dorn Petrochemicals is found responsible for a large oil spill that resulted in widespread
environmental damage. A national debate followed, and a prominent social scientist argued that
the oil company should be prosecuted to the full extent of the law and that all sanctions that
apply to individuals and other business entities should also apply to Dorn. This social scientist is
most likely a proponent of the ________ theory of social responsibility.
A) institutional
B) managerial
C) regulation
D) professional obligation
74) An advocate of the institutional theory would argue in favor of businesses ________.
A) focusing solely on profit-making ventures
B) gaining the trust of constituent groups
C) emphasizing continuing professional education
D) acting in a manner that benefits all of society
75) Zoe believes that businesses should act in a manner that benefits all of society, just as courts,
universities, and governments do. Which of the following schools of social responsibility is
associated with Zoe’s beliefs?
A) profit-oriented
B) managerial
C) institutional
D) regulation
76) The primary argument of the regulation school of social responsibility is that since managers
are responsible ________.
A) to the government, a corporation cannot be trusted due to corrupt government officials
B) only to a board of directors that represents shareholders, the corporation cannot be trusted to
act in a socially responsible manner
C) to the government, they can seldom be trusted to ensure public interest
D) only to a board of directors that represents shareholders, a corporation can be trusted to act in
a way that ensures consumer sovereignty
77) Max, a student of political science, believes that there should be government representatives
on the board of directors of every major corporation. He also believes that the government
should set up codes of socially responsible behavior for every industry. Which of the following
schools of social responsibility does Max advocate?
A) profit-oriented
B) managerial
C) institutional
D) regulation
78) Proponents of the ________ school of social responsibility argue for government
representatives on boards of directors.
A) institutional
B) professional obligation
C) regulation
D) managerial
79) A country’s governing body has passed a new law that requires all companies to set aside a
certain budget for social initiatives. These organizations are also required to provide an annual
report to the government detailing all expenditure and policy information. These initiatives are
consistent with the ________ school of social responsibility.
A) profit-oriented
B) professional obligation
C) managerial
D) regulation
80) The professional obligation school of social responsibility holds that ________.
A) business directors and managers should be licensed by meeting university requirements and
passing a state or a national test
B) government should set up standards of socially responsible conduct for each industry
C) businesses should be judged solely on the criteria of economic efficiency and how well they
contribute to growth in productivity and technology
D) business entities are distinct organizations in our society and that their sole purpose is to
increase profits for shareholders
81) The regulation school of social responsibility sees all business units as accountable to
________.
A) elected public officials
B) the board of directors
C) shareholders
D) employees
82) Proponents of the ________ school of social responsibility argue that because business
managers are responsible only to a board of directors that represents shareholders, the
corporation cannot be trusted to act in a socially responsible manner.
A) profit-oriented
B) managerial
C) institutional
D) regulation
83) Which of the following is not an objective of the United Nations effort to prevent misconduct
by transnational corporations?
A) respect for national sovereignty in countries where such companies operate
B) adherence to the profit-oriented school of social responsibility
C) adherence to sociocultural values
D) respect for human rights
84) Which of the following is not an objective of the United Nations effort to prevent misconduct
by transnational corporations?
A) respect for human rights
B) abstention from corrupt practices
C) support for the deregulation school of social responsibility
D) respect for national sovereignty in countries where such companies operate
85) A regulation school of social responsibility sees all business units as accountable to elected
public officials.
86) The profit-seeking school of social responsibility argues that the social costs of doing
business are a responsibility of individual businesses.
87) Advocates of the institutional theory of social responsibility argue that a firm must have the
trust of all groups, both internal and external.
88) According to the profit-seeking school of social responsibility, a firm must have clear ethical
standards and a sense of social responsibility for its unintended acts in order to maximize profits
and to survive in both the short and long runs.
89) Advocates of the profit-seeking school of social responsibility argue that business entities
have a responsibility to act in a manner that benefits all of society.
90) Advocates of the professional obligation school of social responsibility argue that business
managers have a responsibility to the public beyond merely making profits.
91) According to the institutional theory of social responsibility, if society is to be protected from
the unintended effects of profit-making business activities, it is necessary for government to be
involved.
92) Professionals are defined, in part, as persons who are subject to codes of conduct that are
enforced.
93) Describe the arguments articulated by proponents of the managerial school of social
responsibility.
94) Compare and contrast the institutional and regulation schools of social responsibility.
95) Describe the professional obligation school of social responsibility.
96) The purpose of “adherence to sociocultural values” under the United Nations code of conduct
is to ________.
A) ensure that if the host country discriminates on the basis of race, sex, or religion, the
corporation does the same
B) prevent transnational companies from imposing value systems that are detrimental to those of
the host country
C) promote the presence of U.S. companies in foreign countries
D) prevent governments from regulating multinational organizations
97) Objectives of the League of Nations effort to prevent misconduct by transnational
corporations include respect for national sovereignty in countries where such companies operate,
adherence to sociocultural values, respect for human rights, and abstention from corrupt
practices.
98) According to the United Nations code of conduct for transnational corporations, companies
are free to give gifts or payments to ensure the business transaction occurs.
99) According to the United Nations code of conduct for transnational corporations, if the host
country discriminates on the basis of race, sex, or religion, it is ethical for the corporation to do
the same.
100) Explain the objectives of the United Nations code of conduct for transnational companies.