Chapter 1—Social Responsibility Framework
MULTIPLE CHOICE
1. Which of the following best describes social responsibility?
a.
A corporation’s rights, such as due process in a court of law, freedom of speech, and
privacy
b.
Adoption by a business of a strategic focus for fulfilling the economic, legal, ethical, and
philanthropic responsibilities expected of it by its stakeholders
c.
A company’s attempt to maximize its profits in order to benefit stockholders
d.
All the policies of a company that promote ethical business practices
e.
All businesses except those with less than 50 employees
2. To which of the following forms of business can the concept of social responsibility be applied?
a.
Large, public corporations
b.
Small, privately held corporations
c.
All forms of corporations
d.
Any form of business, from a sole proprietorship to a large corporation
e.
All businesses except those with less than 50 employees
3. In order for any social responsibility initiative to have strategic significance in a company, it must be
fully supported and valued by
a.
top management.
b.
legislators who develop federal law and policy.
c.
government officials in the local area.
d.
the company’s stockholders.
e.
non-profit groups who benefit from a company’s philanthropic spending.
4. Companies with less than 100 employees account for about ____ percent of total employment in the
United States.
a.
40
b.
50
c.
60
d.
70
e.
10
5. Which of the following is not one of the four types of corporate social responsibility?
a.
Ethical
b.
Economic
c.
Environmental
d.
Legal
e.
Philanthropic
6. Many claimed that Microsoft’s dominance in the computer operating systems market violated which
corporate social responsibility?
a.
Ethical
b.
Economic
c.
Legal
d.
Environmental
e.
Philanthropic
7. Society’s primary method of enforcing its requirements regarding business behavior is through
a.
the legal system.
b.
boycotts and demonstrations.
c.
the media.
d.
buying foreign-made products.
e.
self-regulation.
8. Business ethics refers to
a.
regulations and laws that guide companies in their business decisions.
b.
companies refraining from forming monopolies or restricting competition in any way.
c.
principles and standards that guide behavior in the business world.
d.
unique industry and professional factors that influence employees.
e.
the percentage of after-tax profits given to non-profit and community groups.
9. Minimal responsibility primarily involves
a.
incorporating efforts in such a way as to benefit all stakeholders of the company.
b.
fulfilling social responsibilities including legal and ethical guidelines.
c.
addressing the compliance concerns of stakeholders in regards to legal and economic
matters.
d.
trying to maximize stockholder wealth.
e.
satisfying the primary stakeholders regardless of the possible legal implications.
10. Developing a code to aid employees in their decision making is an example of an activity for which
type of social responsibility?
a.
Economic
b.
Ethical
c.
Philanthropic
d.
Legal
e.
Governance
11. Making voluntary contributions of money, time, and other resources to improve the community most
closely resembles which type of social responsibility?
a.
Economic
b.
Legal
c.
Philanthropic
d.
Environmental
e.
Ethical
12. For a local beauty shop that is a privately owned business, which of the following is not likely to be a
stakeholder?
a.
Tax authorities
b.
Customers
c.
Suppliers of hair coloring solutions
d.
The New York Stock Exchange (NYSE)
e.
Other businesses in the same neighborhood and shopping center
13. Those groups to whom a company is responsible are collectively known as
a.
stockholders.
b.
society.
c.
employees and customers.
d.
stakeholders.
e.
very important people.
14. When Benetton used convicted felons awaiting death sentences in a new advertising campaign,
a.
dialogue about high rates of violence increased nationwide.
b.
sales increased because people responded favorably to a company strong enough to
address this controversial issue.
c.
Benetton received an award for its creative and socially aware ad campaign.
d.
there was very little impact on Benetton, its customers, or society in general.
e.
people were outraged and some companies responded by no longer carrying Benetton
products.
15. Shortly after World War II, corporate managers
a.
were closely scrutinized by their boards of directors.
b.
possessed nearly unlimited power.
c.
had little decision-making authority over daily matters.
d.
rarely used the company’s resources for reasons other than self-interest.
e.
were hired away from other firms on a regular basis.
16. In the 1990s, employees turned to a more holistic approach to work and life, characterized by all of the
following, except
a.
an interest in human and intellectual capital.
b.
finding a balance between work and personal responsibilities and time.
c.
trust in the workplace.
d.
a decrease in dual-working parent families.
e.
employee volunteerism in the community.
17. The flatter organizational hierarchies brought about due to the economic instability of the 1980s and
early 1990s caused all of the following except
a.
workforce reduction.
b.
increasing empowerment of lower level employees.
c.
more opportunities for outstanding employees to move into management.
d.
restructuring of the firm to focus on core competencies.
e.
focus on efficiency and economies of scale.
18. Implementing social responsibility on a global level is complex because
a.
consumers in most countries do not care about social responsibility.
b.
of the need to balance economic responsibility with other responsibilities.
c.
employees speak many languages and some information is hard to translate.
d.
regional alliances, like NAFTA and APEC, have their own expectations and standards.
e.
global companies are rarely subject to local laws and regulations.
19. After poor service, the second top reason consumers gave for avoiding or refusing to buy from certain
companies was
a.
high prices.
b.
business conduct.
c.
negative word-of-mouth.
d.
poor branding.
e.
dislike of advertising theme.
20. What holds organizations together and allows them to focus on efficiency, productivity, and profits?
a.
Respect
b.
Diversity
c.
Trust
d.
Competence
e.
Reliable source of funds
21. In the long run, the success of a company is built on
a.
a company’s commitment to be on the leading edge of technology.
b.
its efficiency in operations.
c.
long-term relationships with customers built on mutual respect and cooperation that leads
to repeat purchasing.
d.
a company’s ability to negotiate with suppliers and vendors.
e.
innovative integrated marketing communications programs.
22. About how many consumers said they would be likely to switch to brands associated with a good
cause, if price and quality were not compromised?
a.
Less than 5 percent
b.
20 percent
c.
40 percent
d.
50 percent
e.
80 percent
23. Employee commitment develops from
a.
employees who believe their future is tied to that of the organization and are willing to
make personal sacrifices for the organization.
b.
paying the best wages in the industry.
c.
working in a team-based organization.
d.
the reality that unemployment is on the rise, and people are lucky to have good jobs
e.
offering child care to working mothers and fathers.
24. Which type of investor causes the most problems for CEOs when developing strategic plans?
a.
Shareholders seeking short-term gains
b.
Institutional investors
c.
Shareholders willing to sacrifice short-term gains for long-term income
d.
Employees who own stock
e.
Global investors who do not understand the business
25. Overall, evidence supports that social responsibility
a.
is unrelated to the performance of a business.
b.
is good for a firm’s reputation, but has little effect on performance.
c.
negatively affects a firm’s performance because it increases costs and reduces profits.
d.
is positively associated with return on investment, return on assets, and sales growth.
e.
works well in theory, but is hard to implement in business.
26. The framework to understand how businesses meet their economic, legal, ethical, and philanthropic
responsibilities is developed around the assumption that social responsibility is a
a.
process.
b.
specific set of rules and guidelines.
c.
result that does not need further attention.
d.
theory, with little relevance to business practice.
e.
requirement by federal law.
ESSAY
27. Define social responsibility, and then describe three other characterizations that exist within the
definition and meaning of social responsibility.
28. What are the four types of corporate social responsibility? Provide a brief explanation of each type,
including an example of how a business may fulfill each responsibility.
29. Describe the social responsibility continuum, including the two endpoints of the continuum and the
types of responsibilities and stakeholders considered at the endpoints.
30. Trace the recent history of social responsibility in the United States, including key events and trends
that led to current expectations of business.
31. What are the performance benefits of social responsibility? Outline the benefits to investors,
customers, and employees.
32. What impact do corruption and underdeveloped social institutions tend to have on a country‘s
economy?
33. What are the four major parts of the social responsibility model? Describe each element and how these
elements work together in the model.
34. For companies that operate in a number of locations, describe the relationship between social
responsibility expectations in the home market and social responsibility expectations in host markets.