END-OF-CHAPTER GUIDE
*Review Questions and Answers
*Critical Discussion Questions and Answers
*Global Action
*Closing Case
REVIEW QUESTIONS AND ANSWERS
1. How do you define global sustainability?
2. How do the concerns of a primary stakeholder differ from those of a secondary
stakeholder?
Primary stakeholder groups are constituents on which the firm relies for its continuous
survival and prosperity and their survival is dependent on the firm’s survival.
3. What does it mean for a corporation to have a triple bottom line?
4. Using Table 17.2, summarize the four types of strategies that can be used to make CSR
decisions.
Accommodative strategy is characterized by some support from top managers, who may
increasingly view CSR as a worthwhile endeavor.
Devise two examples: one in which a corporation’s participation in a social issue adds value to
the shareholders and one in which it decreases value in the eyes of the shareholders.
Social issue participation consists of actions not directly related to the management of
5. Using a resource-based view, explain why some firms improve their economic
performance by adopting a CSR strategy, whereas others achieve no results or damaging
results.
A resource-based explanation suggests that because of capability constraints, many firms
are not cut out for a CSR-intensive (differentiation) strategy. Since all studies have some
6. Do you think “green practices” should be voluntary or mandatory for businesses? Explain
your answer.
The important thing is not so much the answer as the extent to which the student
7. ON ETHICS: In your opinion, do you think an MNE should remain politically neutral
and adopt practices and laws of the host country?
The important thing is not so much the answer as the extent to which the student
demonstrates thought in providing the answer. There is a risk that when a host country
8. As a manager, what are some of the considerations you would take into account before
adopting any CSR-related policy?
The important thing is not so much the answer as the extent to which the student
10. How does the concept of “picking your battles carefully” apply to CSR?
Instead of blindly following what other firms are doing, a given firm needs to assess its
11. Using PengAtlasMap 4.2, which country, from a labor perspective, would present the
biggest CSR challenge if your firm had operations in that country?
12. Using PengAtlas Map 4.3, which country, from a profit perspective, would be at the
greatest risk if your firm aggressively pursued CSR values regarding human rights?
The important thing is not so much the answer as the extent to which the student
13. Compare PengAtlas Map. 4.4 with Map 1.1. Suppose your firm is located in a developed
economy that is considering curbing carbon emissions, which could create severe
problems for your firm and threaten its existence. Would you recommend relocating
operations to an emerging economy that still has many people in desperate need of
employment and where the government is defiantly resisting any restrictions to curb such
emissions because its scientists have different views of the risks than many in the United
States? What are the pros and cons of relocating?
The important thing is not so much the answer as the extent to which the student
demonstrates thought in providing the answer. Firms that might be endangered if they
stayed in such a developed economy might be inclined to relocate, especially if the firm’s
CRITICAL DISCUSSION QUESTIONS AND ANSWERS
1. ON ETHICS: In a landmark case in 1919, Dodge v. Ford, the Michigan State Supreme
Court determined whether or not Henry Ford could withhold dividends from the Dodge
brothers (and other shareholders of the Ford Motor Company) to engage in what today
would be called CSR activities. With a resounding “No,” the court opined “A business
organization is organized and carried on primarily for the profits of the stockholders.” If
the court in your country were to decide on this case this year (or in 2019), what do you
think would be the likely outcome?
This is a question in which the answer is not as important as the thought process and the
2. ON ETHICS: Your employer encourages you to contribute to CSR causes using your
personal time. Is your employer being ethical or unethical? Why?
3. ON ETHICS: Your CPA firm is organizing a one-day-long CSR activity using company
time, such as cleaning up a dirty road or picking up trash on the beach. A colleague tells
you: “This is so stupid! I already have so much unfinished work. Now to take a whole
day away from work? Come on! I don’t mind CSR. If the company is serious, why don’t
they donate one day of my earnings, which I am sure will be more than the value I can
generate by cleaning up the road or picking up trash for one day? With that money, they
can just hire someone to do a better job than I would.” What are you going to say to her?
(Your colleague makes US$73,000 a year and on a per-day basis she makes US$200.)
The important thing is not so much the answer as the extent to which the student
demonstrates thought in providing the answer. You might point out that the issue may not
4. ON ETHICS: Hypothetically, your MNE is the largest foreign investor in Vietnam where
dissidents and religious leaders are reportedly being persecuted. As the country manager
there, you understand that the MNE is being pressured by NGOs to help the oppressed
groups in Vietnam. But you also understand that the host government would be upset if
your firm were found to engage in local political activities deemed inappropriate. These
alleged activities, which you personally find distasteful, are not directly related to your
operations. How would you proceed?
This is a question in which the answer is not as important as the thought process and the
ability to clearly articulate. However, if the host nation would shut down the MNE’s
GLOBAL ACTION
1. China has been a recipient of considerable investment recently. However, little
research has been conducted by the green technologies company for which you
work concerning the exact nature of socially responsible technology investment.
Since your firm’s goal is to operate in China that promotes social responsibility,
you must identify the sectors of green technology that receive the most
investment. Develop a report that addresses this issue and adds to the development of
your company’s strategy in China. Based on your analysis, be sure to include possible
new products that may be introduced in the Chinese market.
Exercise 1 Answers
One resource which can be used is “Business for Social Responsibility”. This website can
be found by entering the search term “promotes social responsibility” at the
2. Microfinance is an emerging area of individualized financial investment in developing
countries that is based on social responsibility principles. However, since it involves the
investment of resources with the expectation that a profit will be made, microfinance
investors tend to search for regions and portfolios that have the highest profitability.
Analyze information in a global data set to determine which areas of the world seem to
have the most profitable microfinance activities. What conclusions can you draw from
this information?
Exercise 2 Answers
One resource which can be used is “The Mix: Microfinance Information Exchange”. This
website can be found by entering the search term “microfinance” at the globalEDGE™
CLOSING CASE DISCUSSION GUIDE AND ANSWERS
EMERGING MARKETS: The Ebola Challenge
1. ON ETHICS: Dr. Margaret Chan, Director-General of the WHO, criticized the
pharmaceutical industry for being “profit-driven” and for failing to invest in the
development of a vaccine or cure for Ebola. As CEO of a leading pharmaceutical firm,
how do you respond to these criticisms?
The important thing is not so much the answer as the extent to which the student
2. ON ETHICS: As a shareholder of a pharmaceutical firm that announced its new
investment to develop an Ebola vaccine and that as a result, your dividend would be
reduced, would you support or not support the firm’s decision to spend your money to
combat Ebola?
3. ON ETHICS: As a US government official, what would be your recommendations to
incentivize pharmaceutical firms to develop an Ebola vaccine?