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1. A stakeholder is “any group or individual who can affect or is affected by the achievement of the
organization’s objectives.”
a. True
b. False
2. Nearly all CSR advocates argue for a revival of socialism in the world.
a. True
b. False
3. “Stakeholders” of the firm are the same thing as shareholders.
a. True
b. False
4. Global sustainability is the number one goal of a firm.
a. True
b. False
5. Looking at the “big picture” enables managers to understand the drivers underpinning global sustainability as
simple and straightforward.
a. True
6. Governments and communities whose laws and regulations must be obeyed are considered primary stakeholders.
a. True
b. False
7. With a stakeholder view, firms look at the triple bottom line of economic, social, and environmental performance.
a. True
b. False
8. CSR advocates argue that a free market system that takes the pursuit of self-interest and profit as its guiding
light may in practice fail to constrain itself, thus often breeding greed, excesses, and abuses.
a. True
b. False
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9. The driving forces of the CSR school are the widening of the gap between the haves and have-nots and the astonishing
speed of technological development.
a. True
b. False
10. The more concentrated an industry is, the more likely that competitors will recognize their mutual
interdependence based on old ways of doing business that are not up to the higher CSR standards.
a. True
b. False
11. Companies have had their CSR policies certified by NGOs that might otherwise be hostile.
a. True
12. Firms pursuing a reactive CSR strategy actively participate in policy discussions, build alliances with stakeholder
groups, and voluntarily go beyond what the regulations require.
a. True
13. Because each firm is different (a basic assumption of the resource-based view), not every firm’s economic
performance is likely to benefit from CSR.
a. True
14. A key goal for CSR is global sustainability, which is defined as the ability “to meet the needs of the present
without compromising the ability of future generations to meet their needs.”
a. True
b. False
15. According to the text, one driver of CSR in the twenty-first century is the declining levels of population in
some countries.
a. True
16. Numerous protests around the world are indicative of resentment against globalization and a perceived lack
of CSR in firms, particularly those that relocate offices (and jobs) to foreign countries.
a. True
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b. False
17. Compared with the relatively expanded power of national governments in the wake of globalization, NGOs
and other civil society stakeholders have lost the ability to affect firms and their management or to impact
legislation.
a. True
b. False
18. CSR standards are more difficult for firms in a concentrated and competitive industry.
a. True
b. False
19. By employing the standards of CSR, the barriers to entry for the industry actually go down.
a. True
20. Socially and environmentally conscious suppliers are not likely to have greater bargaining power than those that are
not, regardless of how differentiated their products are.
a. True
b. False
21. The bargaining power of buyers in influencing firms to be socially responsible may be even more powerful than the
bargaining power of suppliers.
a. True
b. False
22. Given the increased number of challenges to firms to improve their level of corporate responsibility, firms may want
to proactively embrace CSR and partner with those groups doing the challenging in finding solutions.
a. True
b. False
23. CSR-related resources are mostly in the form of tangible technologies.
a. True
b. False
24. CSR-related resources are valuable because they are almost always rare.
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a. True
25. A firm with employees that hold strong convictions about being socially responsible in the way they carry out the
firm’s activities is a rare but highly imitable.
a. True
26. Although costs of complying with tough environmental laws may be high, these “green” taxes simply force firms to
pay the “real” costs of their activities they were previously placing on others.
a. True
b. False
27. Suppliers and customers are typically considered primary stakeholders.
a. True
b. False
28. Primary stakeholder groups are defined as “those who influence or affect, or are influenced or affected by,
the corporation, but they are not engaged in transactions with the corporation and are not essential for its
survival.”
a. True
b. False
29. Milton Friedman, a University of Chicago economist and Nobel laureate, suggested: “The business of business is
business.”
a. True
30. Advocates of shareholder capitalism argue that if firms attempt to attain social goals, it will actually help
them focus on profit maximization (and its derivative, shareholder value maximization).
a. True
b. False
31. When facing mounting pressures to be more socially responsible, most firms resist until some first-mover firms
deviate from the norms in order to score competitive points with game-changing new products.
a. True
b. False
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32. The five forces framework reinforces the important point that all industries are equal in terms of their
exposure to CSR challenges.
a. True
b. False
33. There is no conclusive evidence of a direct, positive link between CSR and economic performance, such as
profits and shareholder returns.
a. True
b. False
34. Reactive strategy often involves an “out of sight, out of mind” mentality.
a. True
b. False
35. Although framed in a domestic versus overseas context, the heart of this debate boils down to the foundational thorny
point that frustrates CSR advocates: In a capitalist society, the shareholders—otherwise known as capitalists—are the
ones who matter at the end of the day.
a. True
36. The idea that MNEs should not interfere in the domestic political affairs of the host country has been
enshrined in a number of codes of MNE but CSR advocates have stressed the necessity for MNEs to engage in
actions that often constitute political activity.
a. True
b. False
37. Expanding overseas often comes at the expense of domestic employees and communities, who are primary
stakeholders.
a. True
b. False
38. Most MNEs reportedly outperform local firms in environmental management by voluntarily following “green
practices.”
a. True
b. False
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39. Managers who treat CSR as a nuisance, involving regulation, added costs, and liability are overestimating the
potential business opportunities associated with CSR.
a. True
40. A narrow focus on CSR sees it as integral to profit maximization, rather than separate from profit maximization.
a. True
41. CSR tends to be the least concerned with improving:
a. Global sustainability.
b. Shareholder wealth maximization.
c. Rising levels of population.
d. Inequity.
42. NGOs have the ability to:
a. Affect firms’ practices.
b. Influence firms’ management.
c. Impact legislation.
43. Secondary stakeholder groups are:
a. Constituents on whom the firm relies for its continuous survival and prosperity.
b. Those who influence or affect the corporation.
c. Influenced or affected by the corporation.
d. Not engaged in transactions with the corporation and are not essential for its survival.
44. The CSR debate centers on the question:
a. Why does the firm exist?
b. Why is resource management important?
c. What laws are needed to control the firm’s behavior?
d. What can be done to prevent unreasonable profits?
45. Free market advocates tend to do all of the following EXCEPT:
a. Argue that “the social responsibility of business is to increase its profits, which leads to efficient capital and
product markets.”
b. Argue that all stakeholders have an equal right to bargain for a “fair deal.”
c. Believe that the first and foremost stakeholder group is shareholders.
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46. Those who advocate CSR:
a. Conduct their debate within the constraints of capitalism.
b. Argue that a humane capitalism is an oxymoron and unattainable.
c. Argue that the concepts justice and fairness are simply matters of opinion.
d. Argue that the most important stakeholder is the stockholder.
47. When it comes to CSR issues, managers have historically:
a. Viewed CSR as the answer to integrating strategic issues.
b. Put CSR on the back burner.
c. Argued in favor of strict environmental regulations.
48. According to the textbook, the key goal for CSR is:
a. Customer support.
b. Global sustainability.
c. Community involvement.
49. A firm that strives to meet the needs of the present without compromising the ability of future generations to meet
their needs is focused on the goal of:
a. Managing to something other than the bottom line.
b. Primary stakeholders.
c. Community involvement.
50. Because the operations of multinational enterprises can be bewilderingly complex, even before the goals of CSR are
thrown in, firms looking for global sustainability must first:
a. Identify primary and secondary stakeholders.
b. Focus on the details rather than the big picture.
c. Drill down to make CSR drivers simple.
d. Prioritize its goals.
51. Which of the following statements comes closest to expressing the idea of CSR?
a. The business of business is business.
b. The social responsibility of business is to increase its profits.
c. The purpose of a firm is to serve as a vehicle for coordinating stakeholder interests.
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d. If social welfare rather than profit maximization is the focus of firms, they will become socialist
52. Which of the following statements sums up Michael Porter’s view on the importance of creating shared value?
a. Creating shared value involve creating economic value in a way that also creates value for society by addressing
its needs and challenges.
b. A free market system that takes the pursuit of self-interest and profits as its guiding light may fail public interest
completely.
c. Shareholders are more important that stakeholders.
d. The thorny issue is whether all stakeholders other than shareholders have an equal right to bargain for a
“fair deal.”
53. Which of the following is NOT considered a driving force in the CSR school?
a. The gap between the haves and have-nots has widened.
b. Waves of disasters and scandals have characterized the business world.
c. What CSR critics describe as “greed” is often translated as “incentive” in the vocabulary of free market advocates.
d. Managers are unique among stakeholders in that they are the only group positioned at the center of these
54. When faced with growing demands for greater CSR, firms in more concentrated industries initially will:
a. Make first-move game-changing new products.
b. Collaborate with each other to find solutions.
c. Resist pressures to change.
55. Using the five forces model, which will likely result in a higher level of CSR?
a. A highly concentrated industry.
b. Substitutes that are superior to existing products and costs are reasonable.
c. Socially and environmentally conscious suppliers with standardized products that have multiple
substitutes.
d. No monitoring program for all supplier factories.
56. Which is NOT true about CSR?
a. Some CSR policies may reduce the firm’s value.
b. CSR policies may not pay off if common.
c. CSR that is embedded in people is easier to imitate.
d. It is difficult to prove a link between CSR and economic performance.
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57. Which of the following is an accommodative CSR strategy?
a. Voluntarily go beyond what the regulations require.
b. Resist imposition of what seems unreasonable.
c. View CSR as worthwhile.
d. Actively participate in CSR policy discussion.
58. If socially and environmentally conscious Firm A provides a unique differentiated products with few or no substitutes:
a. It may be able to extract substantial concessions from its managers.
b. Its bargaining power is likely to be substantial.
c. Its bargaining power will not change.
59. Buyers are best able to extract concessions from a firm in all of the following situations EXCEPT:
a. Organizing protests against the firm’s behavior that causes a drop in sales.
b. Using the threat of going to another source for the product.
c. When the buyer is in great difficulty such as an epidemic.
60. When looking at CSR as a threat or opportunity, which of the following is NOT true?
a. Energy-intensive and materials-intensive industries are more vulnerable to environmental scrutiny.
b. Labor-intensive industries are more likely to be challenged on fair labor practice grounds.
c. Some industries are immune from CSR.
d. Not all industries are equal in terms of their exposure to CSR challenges.
61. A firm that participates in social causes not directly related to the management of its primary stakeholders is engaged
in:
a. Secondary stakeholder groups.
b. Defensive strategy.
c. Social issue participation.
d. Global sustainability.
62. Numerous components within a firm, such as formal management control systems and informal relationships
between managers and employees that may be especially relevant to CSR are often called:
a. Complementary assets.
b. Accommodative strategy.
c. Global sustainability.
63. All firms have a different combination of resources; therefore, from a resource-based perspective:
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a. Studies that over-sample firms ready for CSR will find a negative relationship with economic performance.
b. Not every firm’s economic performance is likely to benefit from CSR.
c. A firm’s striving toward a high level of CSR will be economically beneficial to the firm.
d. Complementary assets will have no effect on the ability to fully utilize a firm’s CSR potential.
64. Those who are opposed to strong efforts toward CSR would use which of the following arguments?
a. “Green taxes” simply force firms to pay real costs that they otherwise place on others.
b. CSR externalizes an internality.
c. Tough environmental regulation leads to higher costs and reduced competitiveness.
d. Stringent environmental regulation will motivate firms to innovate.
65. The participation of which of the following groups is essential in an accommodative strategy?
a. NGOs.
b. Managers.
c. Consumers.
d. Suppliers.
66. Although a code of conduct tangibly expresses values of an organization, seeing it as window dressing is the
assessment of the:
a. Negative view.
b. Positive view.
c. Institutional view.
d. Instrumental view.
67. Those who feel that firms that expand into emerging economies are failing their CSR responsibilities are
most likely to claim that:
a. It potentially hurts corporate profits.
b. Shareholder returns are reduced.
c. Fails to provide employment to host countries.
68. There is agreement throughout society that:
a. Overseas expansion is good because it helps improve standards of living around the world.
b. A negative possibility of overseas expansion is that it may cause loss of jobs in the home country.
c. Firms should stick strictly to business within a country and not seek to impose their views of human
rights on other countries that have different views.
d. Firms have a responsibility to do whatever is necessary to assure that the human rights that are respected
in the home country are implemented in host countries.
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69. From a corporate governance perspective, MNEs are:
a. Doing nothing wrong by maximizing shareholder returns.
b. Shirking their domestic CSR when they devote resources overseas.
c. Foolish to focus on CSR.
70. Which of the following would NOT be considered an underlying motivation behind MNEs’ voluntary “green
practices”?
a. Worldwide CSR pressures in general.
b. Requirements of MNE headquarters for worldwide compliance of higher CSR standards.
c. Host country laws and norms.
d. CSR demands made by customers in developed economies.
71. An example of a primary stakeholder group is:
a. Media.
b. Social activists.
c. Environmental groups.
d. Employees.
72. An example of a secondary stakeholder group is:
a. Social and environmental groups.
b. Suppliers.
c. Customers.
d. Governments.
73. In regard to managers and CSR, the following are true EXCEPT:
a. All sides of the CSR debate agree that managers have a unique and central role.
b. All sides of the CSR debate agree as to how managers should implement their role.
c. As a stakeholder group, managers are unique in terms of potential coordination.
74. In regard to the extent of CSR challenges, the following are true EXCEPT:
a. All industries are equal in terms of their exposure to CSR challenges.
b. Energy- and materials-intensive industries (such as chemicals) have been criticized.
c. Firms that are major outsourcers in foreign countries have been criticized.
d. Some firms have turned to NGO critics to have the NGOs certify their policies.
75. In regard to the link between CSR and economic performance:
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a. There is conclusive evidence of a direct, positive link between CSR and economic performance
b. No studies report a definitive positive relationship.
c. Almost all studies find a negative relationship or no relationship.
d. It appears some firms are not cut out for a CSR-intensive strategy.
76. As seen through the instrumental view of CSR, those who are skeptical of CSR compliance claim:
a. That firms may not necessarily be sincere.
b. That firms may be compelled to appear to be sensitive to CSR by impression management—in other words,
“window dressing.”
c. That many firms may chase fads by following what others are doing, while not having truly internalized the need
for CSR.
d. That CSR activities simply represent a useful means to help make good profits; firms are not necessarily
becoming more “ethical.”
77. Some CSR advocates who question motives of firms implementing CSR are pleased that:
a. Firms are embarking on some tangible CSR journey.
b. CSR’s legitimacy is rising on the organizational agenda.
c. By adopting codes of conduct (even if only for “window dressing” purposes), they create a set of criteria against
which they can be judged.
d. All of the above.
78. Reactive firms:
a. Actively participate in regional, national, and international policy discussions.
b. Often build alliances with stakeholder groups.
c. Engage in voluntary activities that go beyond what the regulations require.
d. React negatively to aspects of CSR that may increase costs.
79. From an institutional perspective, proactive activities are indicative of all the following EXCEPT:
a. Normative beliefs.
b. Cognitive beliefs.
c. The desire to do the right thing.
d. An absence of “window dressing.”
80. In the post–Great Recession environment, the responsibility of managers means:
a. Relegating CSR to the “back burner.”
b. Responding to changing societal expectations of the social and environmental roles of firms.
c. Remembering that the business of business is business.
d. Following only those CSR standards that are globally unambiguous.
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81. If a key goal for CSR is global sustainability, how can a manager best go about incorporating it into
managerial decisions?
82. Using an MNE you are familiar with, list some of its primary and secondary stakeholders and describe how
it uses CSR to address the needs of one of its stakeholder groups.
83. Your firm has sought to be a responsible part of the community and has sought out ways to implement CSR
within your capabilities. However, a news organization that has been trying to boost its ratings has done a series
on your organization that suggests that your product is harming consumers and the community’s environment.
You believe the reports are totally false but protests have recently been directed toward your facilities and a
politician who seeking an issue has been loudly condemning your organization? Some of your shareholders are
suggesting that the company takes its losses on the product by discontinuing it rather than risk further damage to
the company and its reputation. What should you do?
84. Not all firms are in a position to engage in high levels of CSR. What questions do managers need to consider
when making decisions about engaging in CSR?
85. Last week you attended a series of lectures at the local university in which the speakers were discussing the
role of corporations (such as yours) overseas. The first lecturer discussed the role of MNEs over the years as
instruments of national power for the country in which they were based and discussed instances in which the
firms became involved in local politics. The speaker condemned such companies as imperialists for attempting
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to impose U.S. values on foreign nations. The last speaker in the series argued that MNEs have a responsibility
to identify injustice and violation of human rights in the nations where they operate and to use either persuasion
or economic pressure to bring about change. Whose advice will you follow?
86. What is “the race to the bottom” discussed in the text? Give an example that shows it is a real phenomenon,
and another example that refutes MNEs’ contribution to the problem.
87. A representative of an NGO that has a significant influence on some your key stakeholders (especially your
customers) has met with you. The person has indicated that the NGO are considering conducting a campaign
against one of your policies. You feel the policy is totally justified but you have seen how the organization has
smeared and destroyed others it has targeted. The person seems to be hinting that perhaps they might launch a
campaign against some other target if you demonstrated CSR by making a big contribution to the NGO. You
feel that you are a victim of extortion but the cost of buying them off might be less than the damage that they
could do to you. What should you do?
88. Describe in your own words the difference between corporate social responsibility and the idea of creating
social value.
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89. Your company has been active in CSR. It has even avoided shutting down its local factory and moving its
production overseas where its labor costs could be significantly less because it recognizes the harm that would
do the employees and the community. However, the CSR has resulted in a lower level of profitability and now a
corporate raider appears to be ready to launch a takeover bid for your company. In the past, when that raider has
taken over a company, payrolls have been slashed, all CSR has been discontinued, and nearly all stakeholders
other than some investors have been harmed. What should you?
90. Your competitors have been praised for their CSR while some have compared your efforts to theirs
unfavorably. However, you view their efforts as not just window dressing but as manipulation of public
opinion. In one case, you noted that the company spent $50,000 on a community project to help the homeless
and over $1 million advertising to the world what it had done. You are under pressure to follow their examples.
What should you do?