Business Ethics Decision Making For Personal Integrity And Social Responsibility 4th Edition By Hartman – Test Bank

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Chapter 05 Corporate Social Responsibility

 

True / False Questions

 

 

  1. Legislators created a form of business called corporations to encourage people to engage in business activities.

 

True    False

 

  1. The economic model of corporate social responsibility (CSR) holds that businesses should integrate social goals and economic goals.

 

True    False

 

  1. Volunteering and charitable work are examples of the most demanding social responsibilities of a business.

 

True    False

 

  1. The philanthropic perspective of the economic model holds that business has no strict obligation to contribute to social causes.

 

True    False

 

  1. Within the philanthropic perspective of the economic model, socially responsible activities are never done for building the reputation of a firm.

 

True    False

 

  1. The stakeholder model of corporate social responsibility (CSR) views business as a citizen of the society in which it operates and, like all members of a society, business must conform to the normal range of ethical duties and obligations that all citizens face.

 

True    False

 

  1. Stakeholder theory recognizes the fact that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

 

True    False

 

  1. Philosopher Norman Bowie identifies his approach as a “Kantian” theory of business ethics.

 

True    False

 

  1. Philosopher Norman Bowie rejected the economic view that managers are the agents of stockholder-owners and thus they also have a duty to further the interests of stockholders.

 

True    False

 

  1. Stakeholder theory states that a firm should be managed for the sole benefit of stockholders.

 

True    False

 

  1. The sustainability version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

True    False

 

  1. A firm that is environmentally unsustainable is also a firm that is, in the long-term, financially unsustainable.

 

True    False

 

  1. Reputation management refers to the practice of caring for the “image” of a firm.

 

True    False

 

  1. Corporate social responsibility (CSR)-related activities can improve profitability by enhancing a company’s standing among its stakeholders, including consumers and employees.

 

True    False

 

  1. According to David Vogel, investing in corporate social responsibility (CSR) when consumers are not willing to pay higher prices to support that investment improves the profit levels of the firm.

 

True    False

Multiple Choice Questions

  1. Corporate social responsibility (CSR) refers to the:

 

  1. dedication that businesses show in expanding their market share.

 

  1. accountability that a manager has to his subordinates.

 

  1. ethical expectation that society has for business.

 

  1. actions that maximize the profit of an organization.

 

  1. Identify a true statement about social responsibility.

 

  1. It refers to what a business should or ought to do for the sake of the society, even if it comes with an economic cost.

 

  1. It refers to the responsibility of an organization to fulfill the terms of contract with its employees and lenders.

 

  1. It refers to the steps taken by an organization to avoid internal malpractices or misconduct.

 

  1. It refers to the responsibility that society has to ensure a business’s success.

 

  1. Which of the following is the most demanding social responsibility?

 

  1. A business should prevent harm even in those cases where it is not the cause.

 

  1. A business should volunteer for society or environment-friendly work.

 

  1. A business should engage in charitable work for the development of the society.

 

  1. A business should not sell a product that causes harm to consumers.

 

  1. Which of the following ethical requirements is the type of responsibility established by the precedents of tort law?

 

  1. Duty to not cause avoidable harm to the society

 

  1. Duty to find employment for employees injured at work

 

  1. Duty to engage in charitable work

 

  1. Duty to volunteer for causes related to the environment

 

  1. The form of business that limits the liability of individuals for the risks involved in business activities is known as _____.

 

  1. corporation

 

  1. partnership

 

  1. joint proprietorship

 

  1. sole proprietorship

 

  1. Legislators created a form of business called corporations because they thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if:

 

  1. multiple owners were involved in the strategic decision-making process of the firm.

 

  1. there was transparency among all stakeholders.

 

  1. firms had the obligation to justify bad decisions.

 

  1. investors were protected from undue personal risks.

 

  1. According to the economic model of corporate social responsibility (CSR), the sole social responsibility of a business is to:

 

  1. go beyond legal responsibilities to cater to the needs of the society.

 

  1. fulfill the economic functions that it was designed to serve.

 

  1. think beyond economic ends that have to be met to help society.

 

  1. analyze the defects in society and design products to overcome these defects.

 

  1. Identify a true statement about the economic model of corporate social responsibility (CSR).

 

  1. It shifts focus from pursuit of profit to environment sustainability.

 

  1. It has its roots in the Kantian tradition of ethics.

 

  1. It has direct implications for the proper role of business management.

 

  1. It holds that social goals should be at the heart of a firm’s mission.

 

  1. Matthew manages the sales team at an information technology (IT) firm. His focus is to conduct business in accordance with his firm’s mission and vision, while making as much money as possible for the firm and conforming to the basic rules of the society. He ensures that his actions embody ethical custom. In this scenario, Matthew’s view of corporate social responsibility is most likely rooted in the _____ tradition.

 

  1. consequential

 

  1. Keynesian

 

  1. utilitarian

 

  1. virtue

 

  1. Which of the following statements is true of the common view of corporate social responsibility (CSR)?

 

  1. It has its roots in the deontological tradition and Keynesian economics.

 

  1. It holds that the primary responsibility of managers is to serve shareholders.

 

  1. It holds that profit is independent of optimal allocation of resources.

 

  1. It states that business has a strict obligation to contribute to social causes.

 

  1. A feature of the economic model of corporate social responsibility (CSR) is that it:

 

  1. holds pursuit of profit as the sole duty of business.

 

  1. expects business to have a strict obligation to contribute to social causes.

 

  1. states that profit is independent of optimal allocation of resources.

 

  1. prevents shareholders from being at the center of a corporation.

 

  1. Which of the following statements is true about the economic model of corporate social responsibility (CSR)?

 

  1. It recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

  1. It holds that businesses should fully integrate economic and social goals by bringing social responsibilities into the core of their business model.

 

  1. It places shareholders at the center of the corporation and suggests that the ethical responsibility of management is to serve those shareholders.

 

  1. It holds that businesses have social responsibilities beyond the economic and legal ends for which they were created.

 

  1. The _____ of corporate social responsibility (CSR) holds that just as individuals have no ethical obligation to contribute to charity or to do volunteer work in their community, business has no strict ethical responsibility to serve wider social goods.

 

  1. philanthropic model

 

  1. legal model

 

  1. ethical model

 

  1. integrative model

 

  1. Identify a true statement about the philanthropic perspective of the economic model of corporate social responsibility.

 

  1. It argues that business has an ethical duty to respect the rights of consumers to such things as safe products and truthful advertising, even when not specified in law.

 

  1. This approach holds that as long as managers comply with the moral minimum and cause no harm, they have a responsibility to maximize profits.

 

  1. This approach is especially common with small, privately owned businesses where the owners also often play a prominent leadership role within their local community.

 

  1. It recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

  1. The _____ holds that just as charity is a good thing and something that should be encourage, business should be encouraged to contribute to society in ways that go beyond the narrow obligations of law and economics. Identify the model of corporate social responsibility (CSR) that reflects this line of thought.

 

  1. Integrative model

 

  1. Stakeholder theory

 

  1. Philanthropic model

 

  1. Legal model

 

  1. The _____ directs managers to maximize profit and shareholder wealth and recognizes only legal limitations on the pursuit of profit.

 

  1. economic model of corporate social responsibility (CSR)

 

  1. stakeholder theory of corporate social responsibility (CSR)

 

  1. integrative model of corporate social responsibility (CSR)

 

  1. sustainability theory of corporate social responsibility (CSR)

 

  1. The philanthropic perspective of the economic model in which business support for a social cause is done because it is the right thing to do differs from the reputational version only in terms of the:

 

  1. level of social good done.

 

  1. underlying motivation.

 

  1. reach of the social good done.

 

  1. medium used.

 

  1. Which of the following is true of philanthropy in accordance with the economic model of corporate social responsibility?

 

  1. Philanthropy done for reputational reasons is not fully ethical.

 

  1. Philanthropy done for solely financial benefits is not truly an act of social responsibility.

 

  1. Philanthropy done for reputational reasons and financial ends is ethically responsible.

 

  1. Philanthropy is considered a social contribution rather than an investment.

 

  1. Which of the following models of corporate social responsibility (CSR) considers business as a citizen of the society that it operates in?

 

  1. Philanthropic model

 

  1. Economic model

 

  1. Altruistic model

 

  1. Stakeholder model

 

  1. According to Norman Bowie, the “moral minimum” that we expect of every person—either acting as individuals or within corporate institutions—is:

 

  1. basic spirituality.

 

  1. respect for human rights.

 

  1. contribution to charity.

 

  1. accountability.

 

  1. According to philosopher Norman Bowie, managers have a responsibility to maximize profits as long as they:

 

  1. respect human rights and cause no harm.

 

  1. contribute to charitable organizations.

 

  1. are confident and do charitable work.

 

  1. adhere to rules and regulations.

 

  1. According to the philosopher Norman Bowie, the contractual duty that managers have to stockholder-owners:

 

  1. makes them focus on philanthropy.

 

  1. makes them feel obliged to perform social good and prevent harm to the society.

 

  1. overrides their responsibility to prevent harm or to do good.

 

  1. leads them to take environment-conscious managerial decisions.

 

  1. Which of the following statements is true about the stakeholder theory?

 

  1. It begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

 

  1. It argues that the narrow economic model successfully provides an accurate descriptive and a reasonable normative account of business management.

 

  1. It holds that business firms should fully integrate economic and social goals by bringing social responsibilities into the core of their business model.

 

  1. It suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

  1. _____ recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

  1. Integrative theory

 

  1. Stakeholder theory

 

  1. Keynesian theory

 

  1. Institutional theory

 

  1. The _____ asserts that neither a business nor the individuals who work for it are exempt from the ordinary ethical responsibilities that everyone has to cause no harm, to prevent harm, and to sometimes do good.

 

  1. philanthropic model of corporate social responsibility (CSR)

 

  1. stakeholder model of corporate social responsibility (CSR)

 

  1. integrative model of corporate social responsibility (CSR)

 

  1. economic model of corporate social responsibility (CSR)

 

  1. Identify a true statement about the stakeholder theory.

 

  1. It holds that a firm’s financial goals must be balanced against, and perhaps even overridden by, environmental considerations.

 

  1. It argues that the narrow economic model fails both as an accurate descriptive and as a reasonable normative account of business management.

 

  1. It suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

  1. It suggests that firms should fully integrate economic and social goals by bringing social responsibilities into the core of their business model.

 

  1. Which of the following is a similarity between utilitarianism and stakeholder theory?

 

  1. Both place organizational benefits above other considerations.

 

  1. Both consider the consequences of management decisions for the well-being of all affected groups.

 

  1. Both contribute to society in ways that go beyond the narrow obligations of law and economics.

 

  1. Both strive to focus only on consumers.

 

  1. Corporate managers who fail to give due consideration to the rights of employees and other concerned groups in the pursuit of profit are treating these groups as means to the ends of stockholders. This is unjust according to the _____.

 

  1. financial framework

 

  1. classical tradition

 

  1. rights-based ethical framework

 

  1. stockholder theory

 

  1. Identify a true statement about the integrative model of corporate social responsibility (CSR).

 

  1. It suggests that firms should fully combine economic and social goals by bringing social responsibilities into the core of their business model.

 

  1. It recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

  1. It recognizes that some stakeholders have different power and impact on decisions than others.

 

  1. It argues that every business should adopt the principles of benefit corporations and devote all their activities to service of social goals.

 

  1. The tension that prevails when an organization tries to meet both social and economic responsibilities is generally overcome by:

 

  1. utilizing a small percentage of profit on social causes.

 

  1. doing charitable work to build a good reputation within the community.

 

  1. pursuing social ends as the very core of an organization’s mission.

 

  1. emphasizing the importance of achieving the desired economic goals.

 

  1. The defenders of the sustainability approach toward corporate social responsibility (CSR) point out that _____.

 

  1. all economic activity exists within a biosphere that supports all life

 

  1. the success of a business must be judged only against profitability

 

  1. people have a strong ethical duty to cause no harm, and only a prima facie duty to prevent harm

 

  1. businesses’ sole social responsibility is to fulfill the economic functions they were designed to serve

 

  1. Sustainability holds that:

 

  1. a firm’s financial goals must be balanced against environmental considerations.

 

  1. a firm must place social considerations below tasks beneficial to its growth.

 

  1. a firm must not prioritize social goals at the expense of economic growth.

 

  1. a firm’s sustenance is affected by overemphasis on environmental considerations.

 

  1. Which of the following is an example of a firm that is failing its fundamental social responsibility?

 

  1. A firm that has its loss margins exceeding its profit margins

 

  1. A firm that uses resources at unsustainable rates

 

  1. A firm that is financially unstable

 

  1. A firm that prioritizes environmental sustainability

 

  1. Which of the following versions of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment?

 

  1. Stakeholder

 

  1. Philanthropic

 

  1. Social entrepreneurship

 

  1. Sustainability

 

  1. When a firm engages in socially responsible activities with a prime focus on reputation:

 

  1. social responsibility tends to become a form of social marketing.

 

  1. the measure of positive reputation gained is impossible to calculate.

 

  1. profits have to be sacrificed for social causes.

 

  1. it always loses employee loyalty.

 

  1. The practice of attending to the “image” of a firm is sometimes referred to as:

 

  1. reputation management.

 

  1. branding.

 

  1. crisis management.

 

  1. gentrification.

 

  1. Enlightened self-interest, an important justification offered for corporate social responsibility (CSR), presumes that:

 

  1. measurement of bottom-line impact of ethical decision making is unimportant.

 

  1. profits are independent of ethics.

 

  1. bottom-line impact of ethical decision making can be measured and compared.

 

  1. good ethics can also be good business.

 

  1. Which of the following is a challenge associated with ethical pay offs?

 

  1. It ruins the reputation that triggered it.

 

  1. It is very small in comparison to profits.

 

  1. It is very difficult to measure ethical pay offs.

 

  1. It can easily be duplicated by competitors.

 

  1. According to David Vogel, which of the following should a firm be most cautious about when engaging in corporate social responsibility (CSR) activities?

 

  1. Investing in corporate social responsibility (CSR) when consumers are not willing to pay higher prices to support that investment.

 

  1. Employees may become over-indulgent in activities related to social causes.

 

  1. Attrition levels may rise because of indifference among employees engaging in activities related to social responsibility.

 

  1. The easily measurable ethical payoff can turn out to be lower than the anticipated levels.

Fill in the Blank Questions

 

  1. _____ is generally referred to as the responsibilities that a business has to the society in which it operates.

 

  1. According to the _____ model of corporate social responsibility (CSR), the social responsibility of business managers is simply to pursue profit within the law.

 

  1. According to the economic model of corporate social responsibility (CSR), _____ is a direct measure of how well a business firm is meeting society’s expectations.

 

  1. The philanthropic perspective of the economic model in which business support for a social cause is done simply because it is the right thing to do differs from the reputational version of the philanthropic model only in terms of the underlying _____.

 

  1. Philosopher Norman Bowie identifies his approach as a _____ theory of business ethics.

 

  1. According to philosopher Norman Bowie, _____ is the “moral minimum” that is expected of every person.

 

  1. The _____ understands that business exists within a web of social and ethical relationships.

 

  1. The _____ model of corporate social responsibility (CSR) holds that the firm should be managed for the sole benefit of stockholders.

 

  1. In the _____ model of corporate social responsibility (CSR), social goals are brought into the core of a firm’s business model, and economic goals are balanced against social goals.

 

  1. The _____ version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

  1. The practice of attending to the _____ of a firm is referred to as reputation management.

Essay Questions

  1. Philosophers distinguish between three different types of responsibilities on a scale from more to less demanding or binding. Explain these responsibilities.

 

  1. How can corporations encourage people to engage in business activities?

 

  1. “The social responsibility of business managers is simply to pursue profit within the law.” How does the economic model of corporate social responsibility (CSR) justify this statement?

 

  1. The economic model is a narrow view of corporate social responsibility (CSR). What are the alternative broader models of CSR?

 

  1. Discuss the philanthropic perspective of the economic model of corporate social responsibility (CSR).

 

  1. According to the narrow view of economic model of corporate social responsibility (CSR), only philanthropy done for reputational reasons and financial ends is ethically responsible. What is the justification for this statement?

 

  1. How does the stakeholder model of corporate social responsibility (CSR) view businesses?

 

  1. How does philosopher Norman Bowie defend the version of corporate social responsibility (CSR) that would fall within the social web model?

 

  1. “People have a strong ethical duty to cause no harm, and only a prima facie duty to prevent harm or to do good.” Discuss Norman Bowie’s view on this statement.

 

  1. What is stakeholder theory?

 

  1. Discuss the arguments between the economic model and stakeholder theory.

 

  1. Can non-profit organizations be categorized under the integrative model of corporate social responsibility (CSR)? Elaborate.

 

  1. What are the implications of sustainability in the integrative model of corporate social responsibility (CSR)?

 

  1. Explain the concept of reputation management and discuss the controversies associated with publicizing corporate good deeds.

 

  1. What are some of the precautions that a firm must take when investing in corporate social responsibility (CSR)?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter 05 Corporate Social Responsibility Key

True / False Questions

  1. Legislators created a form of business called corporations to encourage people to engage in business activities.

 

TRUE

 

The law has created a form of business called corporations, which limits the liability of individuals for the risks involved in business activities. Legislatures thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if investors were protected from undue personal risks.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The economic model of corporate social responsibility (CSR) holds that businesses should integrate social goals and economic goals.

 

FALSE

 

The economic model of corporate social responsibility (CSR) holds that businesses’ sole duty is to fulfill the economic functions businesses were designed to serve. On this narrow view, the social responsibility of business managers is simply to pursue profit within the law.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Volunteering and charitable work are examples of the most demanding social responsibilities of a business.

 

FALSE

 

Volunteering and charitable work are typical examples of responsibilities to do good.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Distinguish key components of the term responsibility.
Topic: Ethics and Social Responsibility

 

 

 

 

 

 

 

  1. The philanthropic perspective of the economic model holds that business has no strict obligation to contribute to social causes.

 

TRUE

 

The philanthropic perspective of the economic model holds that, like individuals, business is free to contribute to social causes as a matter of philanthropy. From this perspective, business has no strict obligation to contribute to social causes, but it can be a good thing when it does so.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Within the philanthropic perspective of the economic model, socially responsible activities are never done for building the reputation of a firm.

 

FALSE

 

In the philanthropic perspective of the economic model, there are occasions in which charity work is done because it brings the firm good public relations, provides a helpful tax deduction, builds goodwill and/or a good reputation within the community.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The stakeholder model of corporate social responsibility (CSR) views business as a citizen of the society in which it operates and, like all members of a society, business must conform to the normal range of ethical duties and obligations that all citizens face.

 

TRUE

 

The stakeholder model of corporate social responsibility (CSR) views business as a citizen of the society in which it operates and, like all members of a society, business must conform to the normal range of ethical duties and obligations that all citizens face.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

 

 

 

 

 

  1. Stakeholder theory recognizes the fact that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

 

TRUE

 

Stakeholder theory begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Philosopher Norman Bowie identifies his approach as a “Kantian” theory of business ethics.

 

TRUE

 

Philosopher Norman Bowie identifies his approach as a “Kantian” theory of business ethics.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Philosopher Norman Bowie rejected the economic view that managers are the agents of stockholder-owners and thus they also have a duty to further the interests of stockholders

 

.FALSE

 

Norman Bowie accepts the economic view that managers are the agents of stockholder-owners and thus they also have a duty (derived from the contract between them) to further the interests of stockholders. Bowie would argue that business has a social responsibility to respect the rights of its employees, even when not specified or required by law.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Stakeholder theory states that a firm should be managed for the sole benefit of stockholders.

 

FALSE

 

The economic model argues that a firm should be managed for the sole benefit of stockholders. The stakeholder theory argues, on factual, legal, economic, and ethical grounds, that this is an inadequate understanding of business.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. The sustainability version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

TRUE

 

The sustainability version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. A firm that is environmentally unsustainable is also a firm that is, in the long-term, financially unsustainable.

 

TRUE

 

A firm that is environmentally unsustainable is also a firm that is, in the long-term, financially unsustainable.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. Reputation management refers to the practice of caring for the “image” of a firm.

 

TRUE

 

The practice of caring for the “image” of a firm is sometimes referred to as reputation management.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-07 Explain the role of reputation management as motivation behind CSR.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

  1. Corporate social responsibility (CSR)-related activities can improve profitability by enhancing a company’s standing among its stakeholders, including consumers and employees.

 

TRUE

 

Activities related to corporate social responsibility can improve profitability by enhancing a company’s standing among its stakeholders, including consumers and employees. For example, some evidence suggests that employees who are well treated in their work environments may prove more loyal, more effective, and more productive in their work.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-08 Evaluate the claims that CSR is “good” for business.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

  1. According to David Vogel, investing in corporate social responsibility (CSR) when consumers are not willing to pay higher prices to support that investment improves the profit levels of the firm.

 

FALSE

 

David Vogel, a political science professor at Berkeley, cautions against investing in corporate social responsibility (CSR) when consumers are not willing to pay higher prices to support that investment.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-08 Evaluate the claims that CSR is “good” for business.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

Multiple Choice Questions

  1. Corporate social responsibility (CSR) refers to the:

 

  1. dedication that businesses show in expanding their market share.

 

  1. accountability that a manager has to his subordinates.

 

  1. ethical expectation that society has for business.

 

  1. actions that maximize the profit of an organization.

 

Corporate social responsibility (CSR) refers to the ethical expectations that society has for business. Social responsibility is what a business should or ought to do for the sake of the society, even if this comes with an economic cost.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Distinguish key components of the term responsibility.
Topic: Ethics and Social Responsibility

 

  1. Identify a true statement about social responsibility.

 

  1. It refers to what a business should or ought to do for the sake of the society, even if it comes with an economic cost.

 

  1. It refers to the responsibility of an organization to fulfill the terms of contract with its employees and lenders.

 

  1. It refers to the steps taken by an organization to avoid internal malpractices or misconduct.

 

  1. It refers to the responsibility that society has to ensure a business’s success.

 

Social responsibility is what a business should or ought to do for the sake of the society, even if this comes with an economic cost. Corporate social responsibility (CSR) refers the ethical expectations that society has for business.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Distinguish key components of the term responsibility.
Topic: Ethics and Social Responsibility

 

 

 

 

 

  1. Which of the following is the most demanding social responsibility?

 

  1. A business should prevent harm even in those cases where it is not the cause.

 

  1. A business should volunteer for society or environment-friendly work.

 

  1. A business should engage in charitable work for the development of the society.

 

  1. A business should not sell a product that causes harm to consumers.

 

The most demanding sense of responsibility is the responsibility not to cause harm to others. Often called a duty or an obligation to indicate that they oblige us in the strictest sense, responsibilities in this sense bind, or compel, or require us to act in certain ways.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Distinguish key components of the term responsibility.
Topic: Ethics and Social Responsibility

 

  1. Which of the following ethical requirements is the type of responsibility established by the precedents of tort law?

 

  1. Duty to not cause avoidable harm to the society

 

  1. Duty to find employment for employees injured at work

 

  1. Duty to engage in charitable work

 

  1. Duty to volunteer for causes related to the environment

 

The strongest sense of responsibility is the duty not to cause harm. Even when not explicitly prohibited by law, ethics would demand that we not cause avoidable harm. If a business causes harm to someone and, if that harm could have been avoided by exercising due care or proper planning, then both the law and ethics would say that business should be held liable for violating its responsibilities. In practice, this ethical requirement is the type of responsibility established by the precedents of tort law.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Distinguish key components of the term responsibility.
Topic: Ethics and Social Responsibility

 

  1. The form of business that limits the liability of individuals for the risks involved in business activities is known as _____.

 

  1. corporation

 

  1. partnership

 

  1. joint proprietorship

 

  1. sole proprietorship

 

The law has created a form of business called corporations, which limits the liability of individuals for the risks involved in business activities.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Legislators created a form of business called corporations because they thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if:

 

  1. multiple owners were involved in the strategic decision-making process of the firm.

 

  1. there was transparency among all stakeholders.

 

  1. firms had the obligation to justify bad decisions.

 

  1. investors were protected from undue personal risks.

 

The law has created a form of business called corporations, which limits the liability of individuals for the risks involved in these activities. Legislators thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if investors were protected from undue personal risks.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. According to the economic model of corporate social responsibility (CSR), the sole social responsibility of a business is to:

 

  1. go beyond legal responsibilities to cater to the needs of the society.

 

  1. fulfill the economic functions that it was designed to serve.

 

  1. think beyond economic ends that have to be met to help society.

 

  1. analyze the defects in society and design products to overcome these defects.

 

The economic model of corporate social responsibility (CSR) holds that businesses’ sole social responsibility is to fulfill the economic functions they were designed to serve. On this narrow view, the social responsibility of business managers is simply to pursue profit within the law.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Identify a true statement about the economic model of corporate social responsibility (CSR).

 

  1. It shifts focus from pursuit of profit to environment sustainability.

 

  1. It has its roots in the Kantian tradition of ethics.

 

  1. It has direct implications for the proper role of business management.

 

  1. It holds that social goals should be at the heart of a firm’s mission.

 

The economic model of corporate social responsibility (CSR) holds that businesses’ sole social responsibility is to fulfill the economic functions they were designed to serve. This general model has direct implications for the proper role of business management.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Matthew manages the sales team at an information technology (IT) firm. His focus is to conduct business in accordance with his firm’s mission and vision, while making as much money as possible for the firm and conforming to the basic rules of the society. He ensures that his actions embody ethical custom. In this scenario, Matthew’s view of corporate social responsibility is most likely rooted in the _____ tradition.

 

  1. consequential

 

  1. Keynesian

 

  1. utilitarian

 

  1. virtue

 

Milton Friedman explains that a corporate executive has a “responsibility to conduct business in accordance with [his or her employer’s] desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” This common view of corporate social responsibility (CSR) has its roots in the utilitarian tradition and in neoclassical economics.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Which of the following statements is true of the common view of corporate social responsibility (CSR)?

 

  1. It has its roots in the deontological tradition and Keynesian economics.

 

  1. It holds that the primary responsibility of managers is to serve shareholders.

 

  1. It holds that profit is independent of optimal allocation of resources.

 

  1. It states that business has a strict obligation to contribute to social causes.

 

The common view of corporate social responsibility (CSR) has its roots in the utilitarian tradition and in neoclassical economics. As agents of business owners, the contention is that managers do have social responsibilities, but their primary responsibility is to serve shareholders.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. A feature of the economic model of corporate social responsibility (CSR) is that it:

 

  1. holds pursuit of profit as the sole duty of business.

 

  1. expects business to have a strict obligation to contribute to social causes.

 

  1. states that profit is independent of optimal allocation of resources.

 

  1. prevents shareholders from being at the center of a corporation.

 

The economic model of corporate social responsibility (CSR) holds that businesses’ sole duty is to fulfill the economic functions businesses were designed to serve. On this narrow view, the social responsibility of business managers is simply to pursue profit within the law.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Which of the following statements is true about the economic model of corporate social responsibility (CSR)?

 

  1. It recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

  1. It holds that businesses should fully integrate economic and social goals by bringing social responsibilities into the core of their business model.

 

  1. It places shareholders at the center of the corporation and suggests that the ethical responsibility of management is to serve those shareholders.

 

  1. It holds that businesses have social responsibilities beyond the economic and legal ends for which they were created.

 

The economic model of corporate social responsibility (CSR) places shareholders at the center of the corporation and, from this point of view, the ethical responsibility of management is to serve those shareholders. Specifically, managers have a primary responsibility to pursue profit within the law.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The _____ of corporate social responsibility (CSR) holds that just as individuals have no ethical obligation to contribute to charity or to do volunteer work in their community, business has no strict ethical responsibility to serve wider social goods.

 

  1. philanthropic model

 

  1. legal model

 

  1. ethical model

 

  1. integrative model

 

The philanthropic perspective of the economic model holds that, like individuals, business is free to contribute to social causes as a matter of philanthropy. From this perspective, business has no strict obligation to contribute to social causes, but it can be a good thing when they do so.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Identify a true statement about the philanthropic perspective of the economic model of corporate social responsibility.

 

  1. It argues that business has an ethical duty to respect the rights of consumers to such things as safe products and truthful advertising, even when not specified in law.

 

  1. This approach holds that as long as managers comply with the moral minimum and cause no harm, they have a responsibility to maximize profits.

 

  1. This approach is especially common with small, privately owned businesses where the owners also often play a prominent leadership role within their local community.

 

  1. It recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

The philanthropic perspective of the economic model of corporate social responsibility holds that, like individuals, business is free to contribute to social causes as a matter of philanthropy. This approach is especially common with small, privately owned businesses where the owners also often play a prominent leadership role within their local community.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The _____ holds that just as charity is a good thing and something that should be encourage, business should be encouraged to contribute to society in ways that go beyond the narrow obligations of law and economics. Identify the model of corporate social responsibility (CSR) that reflects this line of thought.

 

  1. Integrative model

 

  1. Stakeholder theory

 

  1. Philanthropic model

 

  1. Legal model

 

The philanthropic perspective of the economic model holds that just as charity is a good thing and something that we should be encouraged, business should be encouraged to contribute to society in ways that go beyond the narrow obligations of law and economics. Just as individuals have no ethical obligation to contribute to charity or to do volunteer work in their community, business has no ethical obligations to serve wider social goods.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The _____ directs managers to maximize profit and shareholder wealth and recognizes only legal limitations on the pursuit of profit.

 

  1. economic model of corporate social responsibility (CSR)

 

  1. stakeholder theory of corporate social responsibility (CSR)

 

  1. integrative model of corporate social responsibility (CSR)

 

  1. sustainability theory of corporate social responsibility (CSR)

 

The narrow economic model of corporate social responsibility (CSR) directs managers to maximize profit and shareholder wealth and recognizes only legal limitations on the pursuit of profit. A variation of this model acknowledges that philanthropy is an ethically good thing that can indirectly contribute to profit by improving reputation and brand recognition.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The philanthropic perspective of the economic model in which business support for a social cause is done because it is the right thing to do differs from the reputational version only in terms of the:

 

  1. level of social good done.

 

  1. underlying motivation.

 

  1. reach of the social good done.

 

  1. medium used.

 

The philanthropic perspective of the economic model in which business support for a social cause is done simply because it is the right thing to do differs from the reputational version only in terms of the underlying motivation.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Which of the following is true of philanthropy in accordance with the economic model of corporate social responsibility?

 

  1. Philanthropy done for reputational reasons is not fully ethical.

 

  1. Philanthropy done for solely financial benefits is not truly an act of social responsibility.

 

  1. Philanthropy done for reputational reasons and financial ends is ethically responsible.

 

  1. Philanthropy is considered a social contribution rather than an investment.

 

From the perspective of the narrow view of economic model of corporate social responsibility (CSR), only philanthropy done for reputational reasons and financial ends is ethically responsible. Because business managers are the agents of owners, they have no right to use corporate resources except to earn owners greater returns on their investment.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Which of the following models of corporate social responsibility (CSR) considers business as a citizen of the society that it operates in?

 

  1. Philanthropic model

 

  1. Economic model

 

  1. Altruistic model

 

  1. Stakeholder model

 

The stakeholder model views business as a citizen of the society in which it operates and, like all members of a society, business must conform to the normal range of ethical duties and obligations that all citizens face. The stakeholder model holds that businesses exist to create value for a range of stakeholders, including employees, customers, suppliers, and local communities as well as investors and stockholders.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. According to Norman Bowie, the “moral minimum” that we expect of every person—either acting as individuals or within corporate institutions—is:

 

  1. basic spirituality.

 

  1. respect for human rights.

 

  1. contribution to charity.

 

  1. accountability.

 

Philosopher Norman Bowie argues that, beyond the economic view’s duty to obey the law, business has an equally important ethical duty to respect human rights. Respecting human rights is the “moral minimum” that we expect of every person, whether they are acting as individuals or within corporate institutions.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. According to philosopher Norman Bowie, managers have a responsibility to maximize profits as long as they:

 

  1. respect human rights and cause no harm.

 

  1. contribute to charitable organizations.

 

  1. are confident and do charitable work.

 

  1. adhere to rules and regulations.

 

According to philosopher Norman Bowie, as long as managers comply with the moral minimum and cause no harm, they have a responsibility to maximize profits.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. According to the philosopher Norman Bowie, the contractual duty that managers have to stockholder-owners:

 

  1. makes them focus on philanthropy.

 

  1. makes them feel obliged to perform social good and prevent harm to the society.

 

  1. overrides their responsibility to prevent harm or to do good.

 

  1. leads them to take environment-conscious managerial decisions.

 

According to the philosopher Norman Bowie, the contractual duty that managers have to stockholder-owners overrides the responsibility to prevent harm or to do (philanthropic) good.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Which of the following statements is true about the stakeholder theory?

 

  1. It begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

 

  1. It argues that the narrow economic model successfully provides an accurate descriptive and a reasonable normative account of business management.

 

  1. It holds that business firms should fully integrate economic and social goals by bringing social responsibilities into the core of their business model.

 

  1. It suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

Stakeholder theory begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others. Stakeholder theory recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

 

  1. _____ recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

  1. Integrative theory

 

  1. Stakeholder theory

 

  1. Keynesian theory

 

  1. Institutional theory

 

Stakeholder theory recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged. A manager who seeks to maximize profit is imposing costs on employees, consumers, and suppliers.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. The _____ asserts that neither a business nor the individuals who work for it are exempt from the ordinary ethical responsibilities that everyone has to cause no harm, to prevent harm, and to sometimes do good.

 

  1. philanthropic model of corporate social responsibility (CSR)

 

  1. stakeholder model of corporate social responsibility (CSR)

 

  1. integrative model of corporate social responsibility (CSR)

 

  1. economic model of corporate social responsibility (CSR)

 

The stakeholder model asserts that neither a business nor the individuals who work for it are exempt from the ordinary ethical responsibilities that everyone has to cause no harm, to prevent harm, and to sometimes do good. It recognizes that there is a wide range of ethical responsibilities and duties that are owed to others and that management must balance these responsibilities against the responsibility to shareholders.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Identify a true statement about the stakeholder theory.

 

  1. It holds that a firm’s financial goals must be balanced against, and perhaps even overridden by, environmental considerations.

 

  1. It argues that the narrow economic model fails both as an accurate descriptive and as a reasonable normative account of business management.

 

  1. It suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

  1. It suggests that firms should fully integrate economic and social goals by bringing social responsibilities into the core of their business model.

 

Stakeholder theory argues that the narrow economic model fails both as an accurate descriptive and as a reasonable normative account of business management. While it might have been true over a century ago that management had an overriding obligation to stockholders, the law now recognizes a wide range of managerial obligations to such stakeholders as consumers, employees, competitors, the environment, and individuals with disabilities.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Which of the following is a similarity between utilitarianism and stakeholder theory?

 

  1. Both place organizational benefits above other considerations.

 

  1. Both consider the consequences of management decisions for the well-being of all affected groups.

 

  1. Both contribute to society in ways that go beyond the narrow obligations of law and economics.

 

  1. Both strive to focus only on consumers.

 

Utilitarianism requires management to consider the consequences of its decisions for the well-being of all affected groups. Stakeholder theory requires the same.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Corporate managers who fail to give due consideration to the rights of employees and other concerned groups in the pursuit of profit are treating these groups as means to the ends of stockholders. This is unjust according to the _____.

 

  1. financial framework

 

  1. classical tradition

 

  1. rights-based ethical framework

 

  1. stockholder theory

 

Corporate managers who fail to give due consideration to the rights of employees and other concerned groups in the pursuit of profit are treating these groups as means to the ends of stockholders. This, in the rights-based ethical framework, is unjust.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Identify a true statement about the integrative model of corporate social responsibility (CSR).

 

  1. It suggests that firms should fully combine economic and social goals by bringing social responsibilities into the core of their business model.

 

  1. It recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

 

  1. It recognizes that some stakeholders have different power and impact on decisions than others.

 

  1. It argues that every business should adopt the principles of benefit corporations and devote all their activities to service of social goals.

 

Firms that fully integrate economic and social goals by bringing social responsibilities into the core of their business model follow the integrative model of corporate social responsibility (CSR). At first glance, firms that adopt the integrative model raise no particular ethical issues.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

 

  1. The tension that prevails when an organization tries to meet both social and economic responsibilities is generally overcome by:

 

  1. utilizing a small percentage of profit on social causes.

 

  1. doing charitable work to build a good reputation within the community.

 

  1. pursuing social ends as the very core of an organization’s mission.

 

  1. emphasizing the importance of achieving the desired economic goals.

 

Much of the corporate social responsibility (CSR) literature assumes a tension between the pursuit of profit and social responsibility. But, of course, there have always been organizations that turn this tension around, organizations that pursue social ends as the very core of their mission.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. The defenders of the sustainability approach toward corporate social responsibility (CSR) point out that _____.

 

  1. all economic activity exists within a biosphere that supports all life

 

  1. the success of a business must be judged only against profitability

 

  1. people have a strong ethical duty to cause no harm, and only a prima facie duty to prevent harm

 

  1. businesses’ sole social responsibility is to fulfill the economic functions they were designed to serve

 

Defenders of the sustainability approach toward corporate social responsibility (CSR) point out that all economic activity exists within a biosphere that supports all life. They argue that the present model of economics, and especially the macroeconomic goal of economic growth, is already running up against the limits of the biosphere’s capacity to sustain life.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. Sustainability holds that:

 

  1. a firm’s financial goals must be balanced against environmental considerations.

 

  1. a firm must place social considerations below tasks beneficial to its growth.

 

  1. a firm must not prioritize social goals at the expense of economic growth.

 

  1. a firm’s sustenance is affected by overemphasis on environmental considerations.

 

Sustainability holds that a firm’s financial goals must be balanced against, and perhaps even overridden by, environmental considerations.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

 

 

  1. Which of the following is an example of a firm that is failing its fundamental social responsibility?

 

  1. A firm that has its loss margins exceeding its profit margins

 

  1. A firm that uses resources at unsustainable rates

 

  1. A firm that is financially unstable

 

  1. A firm that prioritizes environmental sustainability

 

A business or industry that is financially profitable, but that uses resources (e.g., fossil fuels) at unsustainable rates and that creates wastes (e.g., carbon dioxide) at rates that exceed the earth’s capacity to absorb them, is a business or industry that is failing its fundamental social responsibility.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. Which of the following versions of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment?

 

  1. Stakeholder

 

  1. Philanthropic

 

  1. Social entrepreneurship

 

  1. Sustainability

 

The sustainability version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. When a firm engages in socially responsible activities with a prime focus on reputation:

 

  1. social responsibility tends to become a form of social marketing.

 

  1. the measure of positive reputation gained is impossible to calculate.

 

  1. profits have to be sacrificed for social causes.

 

  1. it always loses employee loyalty.

 

The problem with a focus on reputation is that social responsibility then can become merely social marketing. That is, a firm may use the image of social responsibility to garner customer support or employee loyalty while the facts do not evidence a true commitment.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-07 Explain the role of reputation management as motivation behind CSR.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

 

 

 

  1. The practice of attending to the “image” of a firm is sometimes referred to as:

 

  1. reputation management.

 

  1. branding.

 

  1. crisis management.

 

  1. gentrification.

 

The practice of attending to the “image” of a firm is sometimes referred to as reputation management.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-07 Explain the role of reputation management as motivation behind CSR.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

  1. Enlightened self-interest, an important justification offered for corporate social responsibility (CSR), presumes that:

 

  1. measurement of bottom-line impact of ethical decision making is unimportant.

 

  1. profits are independent of ethics.

 

  1. bottom-line impact of ethical decision making can be measured and compared.

 

  1. good ethics can also be good business.

 

A big question in corporate social responsibility (CSR) involves the possible correlation between profits and ethics. Is good ethics also good business? One important justification offered for corporate social responsibility (CSR), what is often called enlightened self-interest, presumes that it is, or at least it can be.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-08 Evaluate the claims that CSR is “good” for business.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

  1. Which of the following is a challenge associated with ethical pay offs?

 

  1. It ruins the reputation that triggered it.

 

  1. It is very small in comparison to profits.

 

  1. It is very difficult to measure ethical pay offs.

 

  1. It can easily be duplicated by competitors.

 

There is general agreement that, in the long run, ethics pays off. However, it is the measurement of that payoff that is the challenge.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-08 Evaluate the claims that CSR is “good” for business.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

 

 

 

  1. According to David Vogel, which of the following should a firm be most cautious about when engaging in corporate social responsibility (CSR) activities?

 

  1. Investing in corporate social responsibility (CSR) when consumers are not willing to pay higher prices to support that investment.

 

  1. Employees may become over-indulgent in activities related to social causes.

 

  1. Attrition levels may rise because of indifference among employees engaging in activities related to social responsibility.

 

  1. The easily measurable ethical payoff can turn out to be lower than the anticipated levels.

 

David Vogel, a political science professor at Berkeley, cautions against investing in corporate social responsibility (CSR) when consumers are not willing to pay higher prices to support that investment.

 

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-08 Evaluate the claims that CSR is “good” for business.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

Fill in the Blank Questions

  1. _____ is generally referred to as the responsibilities that a business has to the society in which it operates.

 

Ans: Corporate social responsibility (CSR)

 

Most involved in business would accept the general definition of the term corporate social responsibility (CSR) as referring to the responsibilities that a business has to the society in which it operates.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. According to the _____ model of corporate social responsibility (CSR), the social responsibility of business managers is simply to pursue profit within the law.

 

Ans: economic

 

The economic model of corporate social responsibility (CSR) holds that businesses’ sole duty is to fulfill the economic functions businesses were designed to serve. On this narrow view, the social responsibility of business managers is simply to pursue profit within the law.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. According to the economic model of corporate social responsibility (CSR), _____ is a direct measure of how well a business firm is meeting society’s expectations.

 

Ans: profit

 

According to the economic model of corporate social responsibility (CSR), profit is an indication that business is efficiently and successfully producing the goods and services that society demands; profit is a direct measure of how well a business firm is meeting society’s expectations.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The philanthropic perspective of the economic model in which business support for a social cause is done simply because it is the right thing to do differs from the reputational version of the philanthropic model only in terms of the underlying _____.

 

Ans: motivation

 

The philanthropic perspective of the economic model in which business support for a social cause is done simply because it is the right thing to do differs from the reputational version only in terms of the underlying motivation.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. Philosopher Norman Bowie identifies his approach as a _____ theory of business ethics.

 

Ans: Kantian

 

Bowie identifies his approach as a “Kantian” theory of business ethics.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. According to philosopher Norman Bowie, _____ is the “moral minimum” that is expected of every person.

 

Ans: respecting human rights

 

According to Norman Bowie, respecting human rights is the “moral minimum” that we expect of every person, whether they are acting as individuals or within corporate institutions.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. The _____ understands that business exists within a web of social and ethical relationships.

 

Ans: stakeholder model

 

The stakeholder model understands that business exists within a web of social and ethical relationships. The stakeholder model holds that businesses exist to create value for a range of stakeholders, including employees, customers, suppliers, and local communities as well as investors and stockholders.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. The _____ model of corporate social responsibility (CSR) holds that the firm should be managed for the sole benefit of stockholders.

 

Ans: economic

 

The economic model argues that the firm should be managed for the sole benefit of stockholders.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. In the _____ model of corporate social responsibility (CSR), social goals are brought into the core of a firm’s business model, and economic goals are balanced against social goals.

 

Ans: integrative

 

Because some for-profit firms bring social goals into the core of their business model, and fully integrate economic and social goals, we refer to this as the integrative model of corporate social responsibility (CSR).

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. The _____ version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

 

Ans: sustainability

 

The sustainability version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. The practice of attending to the _____ of a firm is referred to as reputation management.

 

Ans: image

 

The practice of attending to the “image” of a firm is referred to as reputation management.

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-07 Explain the role of reputation management as motivation behind CSR.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

Essay Questions

  1. Philosophers distinguish between three different types of responsibilities on a scale from more to less demanding or binding.

 

Explain these responsibilities.

First, the most demanding responsibility, often called duty or obligation in order to indicate that they oblige us in the strictest sense, is the responsibility not to cause harm to others. Thus, a business ought not to sell a product that causes harm to consumers, even if there would be a profit in doing so.

A second, less binding, responsibility is to prevent harm even in those cases where one is not the cause. The so-called “Good Samaritan” cases are examples of people acting to prevent harm, even though they have no strict duty or obligation to do so.
Finally, there might be responsibilities to do good. Volunteering and charitable work are typical examples of responsibilities in this sense. To call an act volunteer work is precisely to suggest that it is optional; one does not have a duty to do it, but it is still a good thing to do.

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Distinguish key components of the term responsibility.
Topic: Ethics and Social Responsibility

 

  1. How can corporations encourage people to engage in business activities?

 

Corporations are a form of business that limits the liability of individuals for the risks involved in business activities. Legislatures thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if individuals were protected from undue personal risks.

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. “The social responsibility of business managers is simply to pursue profit within the law.” How does the economic model of corporate social responsibility (CSR) justify this statement?

 

According to the economic model of corporate social responsibility (CSR), profit is an indication that business is efficiently and successfully producing the goods and services that society demands. Profit is, therefore, a direct measure of how well a business firm is meeting society’s expectations.

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. The economic model is a narrow view of corporate social responsibility (CSR). What are the alternative broader models of CSR?

 

The alternative models to the economic model of corporate social responsibility (CSR) include the philanthropic perspective of the economic model of CSR, the stakeholder model of CSR, and the integrative model of CSR.
The philanthropic perspective of the economic model holds that, like individuals, business is free to contribute to social causes as a matter of philanthropy. From this perspective, business has no strict obligation to contribute to social causes, but it can be a good thing when it does so. Just as individuals have no ethical obligation to contribute to charity or to do volunteer work in their community, business has no strict ethical responsibility to serve wider social goods.

The stakeholder model of CSR understands that business exists within a web of social and ethical relationships. The stakeholder model holds that businesses exist to create value for a range of stakeholders, including employees, customers, suppliers, and local communities as well as investors and stockholders. Business managers have responsibilities to all those who have a stake in the success or failure of the company, not only to those who have invested financially.

The integrative model of CSR holds that firms should fully integrate economic and social goals by bringing social responsibilities into the core of their business model. At first glance, firms that adopt the integrative model raise no particular ethical issues. Even advocates of the narrow economic model of CSR such as Milton Friedman would agree that owners of a firm are free to make the pursuit of social goals a part of their business model. They would just disagree that these social goals should be part of every business’s mission.

 

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Economic Model of CSR
Topic: Integrative Model of CSR
Topic: Stakeholder Model of CSR

 

 

 

 

  1. Discuss the philanthropic perspective of the economic model of corporate social responsibility (CSR).

 

The philanthropic perspective of the economic model holds that, like individuals, business is free to contribute to social causes as a matter of philanthropy. From this perspective, business has no strict obligation to contribute to social causes, but it can be a good thing when they do so. Just as individuals have no ethical obligation to contribute to charity or to do volunteer work in their community, business has no ethical obligations to serve wider social goods. But, just as charity is a good thing and something that we all want to encourage, business should be encouraged to contribute to society in ways that go beyond the narrow obligations of law and economics. This approach is especially common in small, locally-owned businesses where the owners also often play a prominent leadership role within their local community.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. According to the narrow view of economic model of corporate social responsibility (CSR), only philanthropy done for reputational reasons and financial ends is ethically responsible. What is the justification for this statement?

 

According to the narrow view of economic model of corporate social responsibility (CSR), only philanthropy done for reputational reasons and financial ends is ethically responsible because business managers are the agents of owners. They have no right to use corporate resources except to earn owners greater returns on their investment.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Topic: Economic Model of CSR

 

  1. How does the stakeholder model of corporate social responsibility (CSR) view businesses?

 

The stakeholder model of corporate social responsibility (CSR) views business as a citizen of the society in which it operates and, like all members of a society, business must conform to the normal ethical duties and obligations that all citizens face.

 

 

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. How does philosopher Norman Bowie defend the version of corporate social responsibility (CSR) that would fall within the social web model?

 

Philosopher Norman Bowie argues that, beyond the economic view’s duty to obey the law, business has an equally important ethical duty to respect human rights. Respecting human rights is the “moral minimum” that we expect of every person, whether they are acting as individuals or within corporate institutions. To explain this notion of a “moral minimum,” Bowie appeals to the framework for distinguishing responsibilities that was described earlier and that is derived from the principle-based traditional ethics.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. “People have a strong ethical duty to cause no harm, and only a prima facie duty to prevent harm or to do good.” Discuss Norman Bowie’s view on this statement.

 

Norman Bowie distinguishes between the ethical imperatives to cause no harm, to prevent harm, and to do good. The obligation to cause no harm, in Bowie’s view, overrides other ethical considerations. The pursuit of profit legitimately can be constrained by this ethical duty. On the other hand, Bowie accepts the economic view that managers are the agents of stockholder-owners and thus they also have a duty to further the interests of stockholders. Thus, while it is ethically good for managers to prevent harm or to do good, their duty to stockholders overrides these concerns. As long as managers comply with the moral minimum and cause no harm, they have a responsibility to maximize profits.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. What is stakeholder theory?

 

Stakeholder theory begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others. It recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged. In other words, any theory of corporate social responsibility (CSR) must then explain and defend answers to the questions: for whose benefit and at whose costs should the business be managed?

 

AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Stakeholder Model of CSR

 

  1. Discuss the arguments between the economic model and stakeholder theory.

 

The economic model argues that the firm should be managed for the sole benefit of stockholders. This view is justified by appeal to the rights of owners, the fiduciary duty of managers, and the social benefits that follow from this arrangement. Stakeholder theory argues, on factual, legal, economic, and ethical grounds, that this is an inadequate understanding of business.

Stakeholder theory argues that the narrow economic model fails both as an accurate descriptive and as a reasonable normative account of business management. As a descriptive account of business, the classical model ignores over a century of legal precedent arising from both case law and legislative enactments. While it might have been true over a century ago that management had an overriding obligation to stockholders, the law now recognizes a wide range of managerial obligations to such stakeholders as consumers, employees, competitors, the environment, and the disabled. Thus, as a matter of law, it is simply false to claim that management can ignore duties to everyone but stockholders.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility.
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility.
Topic: Economic Model of CSR
Topic: Stakeholder Model of CSR

 

  1. Can non-profit organizations be categorized under the integrative model of corporate social responsibility (CSR)? Elaborate.

 

Much of the corporate social responsibility (CSR) literature assumes a tension between the pursuit of profit and social responsibility. But there have always been organizations that turn this tension around, organizations that pursue social ends as the very core of their mission. Non-profits, such as hospitals, NGOs, foundations, professional organizations, schools, colleges, and government agencies, have social goals at the center of their operations. Because these firms bring social goals into the core of their business model, and fully integrate economic and social goals, they are referred to as the integrative model of CSR.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. What are the implications of sustainability in the integrative model of corporate social responsibility (CSR)?

 

Sustainability holds that a firm’s financial goals must be balanced against, and perhaps even overridden by, environmental considerations. Defenders of this approach point out that all economic activity exists within a biosphere that supports all life. They argue that the present model of economics, and especially the macroeconomic goal of economic growth, is already running up against the limits of the biosphere’s capacity to sustain life. Fundamental human needs for goods such as clean air, water, nutritious food, and a moderate climate are threatened by the present dominant model of economic activity.

From this perspective, the success of a business must be judged not only against the financial bottom line of profitability, but also against the ecological and social bottoms lines of sustainability. A business or industry that is financially profitable, but that uses resources (for example, fossil fuels) at unsustainable rates and that creates wastes (for example, carbon dioxide) at rates that exceed the earth’s capacity to absorb them, is a business or industry that is failing its fundamental social responsibility. Importantly, a firm that is environmentally unsustainable is also a firm that is, in the long-term, financially unsustainable.

The sustainability version of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment. A business model that ignores the biophysical and ecological context of its activities is a business model doomed to failure.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility.
Topic: Integrative Model of CSR

 

  1. Explain the concept of reputation management and discuss the controversies associated with publicizing corporate good deeds.

 

The practice of attending to the “image” of a firm is sometimes referred to as reputation management. There is nothing inherently wrong with managing a firm’s reputation, and in fact the failure to do so might be a poor business decision, but observers might challenge firms for engaging in corporate social responsibility (CSR) activities solely for the purpose of affecting their reputations. The challenge is based on the fact that reputation management often works!

If a firm creates a good self-image, it builds a type of trust bank—consumers or other stakeholders seem to give it some slack if they then hear something negative about the firm. Similarly, if a firm has a negative image, that image may stick, regardless of what good the corporation may do. Plato explored this issue when he asked whether one would rather be an unethical person with a good reputation or an ethical person with a reputation for injustice. One may find that, if given the choice between the two, companies are far more likely to survive under the first conception than under the second.

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-07 Explain the role of reputation management as motivation behind CSR.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

  1. What are some of the precautions that a firm must take when investing in corporate social responsibility (CSR)?

 

David Vogel, a political science professor at Berkeley, contends that while there is a market for firms with strong corporate social responsibility (CSR) missions, it is a niche market and one that therefore caters to only a small group of consumers or investors. He argues that, contrary to a global shift in the business environment, CSR instead should be perceived as just one option for a business strategy that might be appropriate for certain types of firms under certain conditions, such as those with well-known brand names and reputations that are subject to threats by activists. He warns of the exposure a firm might suffer if it then does not live up to its CSR promises. He also cautions against investing in CSR when consumers are not willing to pay higher prices to support that investment.

 

 

AACSB: Analytical Thinking
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-08 Evaluate the claims that CSR is “good” for business.
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”?

 

 

 

Chapter 05 Corporate Social Responsibility Summary

Category # of Questions
AACSB: Analytical Thinking 74
AACSB: Ethics 6
Accessibility: Keyboard Navigation 54
Blooms: Apply 1
Blooms: Remember 47
Blooms: Understand 32
Difficulty: 1 Easy 47
Difficulty: 2 Medium 32
Difficulty: 3 Hard 1
Learning Objective: 05-01 Describe and evaluate the economic model of corporate social responsibility. 2
Learning Objective: 05-03 Distinguish key components of the term responsibility. 6
Learning Objective: 05-04 Describe and evaluate the economic model of corporate social responsibility. 26
Learning Objective: 05-05 Describe and evaluate the stakeholder model of corporate social responsibility. 25
Learning Objective: 05-06 Describe and evaluate the integrative model of corporate social responsibility. 13
Learning Objective: 05-07 Explain the role of reputation management as motivation behind CSR. 5
Learning Objective: 05-08 Evaluate the claims that CSR is “good” for business. 6
Topic: Economic Model of CSR 28
Topic: Ethics and Social Responsibility 6
Topic: Exploring Enlightened Self-Interest: Does “Good Ethics” Mean “Good Business”? 11
Topic: Integrative Model of CSR 13
Topic: Stakeholder Model of CSR 25

 

 

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