Business and Society: Ethics, Sustainability, and Stakeholder Management, 9th Edition solutions manual and test bank by Archie B. Carroll | Ann K. Buchholtz
1. A society more satisfied with corporate social responsiveness, performance, and citizenship will invariably have reduced criticism of business.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
False
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
2. The marketplace in the classical view of economics, while being a good allocator of goods and services, does not do a good job of ensuring that business always acts fairly and ethically.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
True
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
3. Philanthropy is the term by Adam Smith in Wealth of Nations to describe the operation of self interest resulting in the good of society.
a. True
b. False
ANSWER:
POINTS:
False
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
4. The company town, in which a major employer builds homes and commercial buildings, and provides the goods and services needed by its employees, is an example of paternalistic social responsibility.
a. True
b. False
ANSWER:
POINTS:
True
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
5. In Carroll's four-part defmition of corporate social responsibility, ethical responsibilities are required of business only by society, and not by businesses themselves.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
False
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
6. In practical terms, the socially responsible firm mw;t be involved in philanthropy, as society expects it.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
False
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
7. The CSR Pyramid is a stakeholder model--that is, each of its components addresses different stakeholders.
a. True
b. False
ANSWER:
POINTS:
True
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
8. Friedman never proposed that businesses had any obligation to act ethically.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
False
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
9. An argument for corporate social responsibility is that it helps business compete in the global economy.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
False
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
10. Proponents of the concept of corporate social responsiveness believe that the focus of corporate social responsibility on accountability or obligation is not dynamic enough to describe business's willingness and activity to respond to social demands.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
True
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
11. Corporate social responsiveness is focused on the action phase of management response to social demands.
a. True
b. False
ANSWER:
POINTS:
True
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
12. Carroll's Corporate Social Performance Model helps managers understand that social responsibility is separate and distinct from financial performance.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
False
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
13. Corporate social performance emphasizes the financial results of what the finn hopes to accomplish.
a. True
b. False
ANSWER:
POINTS:
False
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
14. The corporate social performance concept has not yet spread to the business community.
a. True
b. False
ANSWER:
POINTS:
False
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
15. A survey done by Walker Information shows that the public believes that CSR does not factor into a company's reputation at all.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
False
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
16. One of the biggest advances in corporate social performance is that all agree that performance criteria need only be responsive and not anticipatory.
a. True
b. False
ANSWER:
POINTS:
False
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
17. Research has indicated that improvements in corporate social performance are associated with improved fmancial results.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
True
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
18. In order to operate with a true stakeholder perspective, firms must accept the multiple bottom line view.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
True
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.02- 02.02
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
19. Social responsible investing is a very new concept, originating in the early 1990s.
a. True
b. False
ANSWER:
POINTS:
False
1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
20. Social screening is the mechanism by which socially conscious investors choose their investment advisors.
a. True
b. False
ANSWER: POINTS:
DIFFICULTY:
True
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
21. The early definition of corporate social responsibility was
a. seriously considering the impact of the company's actions on society. b. maximizing profits.
c. accomplishing the finn's social action goals.
d. that the corporation had not only economic and legal obligations, but also certain responsibilities to society which extended beyond those obligations.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
22. Corporate social responsibility emphasizes a. obligation and accountability.
b. action and activity.
c. outcomes and results.
d. socially responsible investing.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
23. Corporate social responsiveness emphasizes a. obligation and accountability.
b. action and activity.
c. outcomes and results.
d. socially responsible investing.
ANSWER: POINTS:
DIFFICULTY:
b
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Ethics
KEYWORDS: BLOOMS: COMPREHENSION
24. Corporate social performance emphasizes a. obligation and accountability.
b. action and activity.
c. outcomes and results.
d. socially responsible investing.
ANSWER: POINTS:
DIFFICULTY:
c
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
25. The classical view of economics holds that a society can best determine its needs and wants through a. a centrally planned economy.
b. govermnent owned factors of production. c. democracy.
d. the marketplace.
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
26. The traditional concept of business responsibility in the United States is based on a. democracy.
b. socialism.
c. the classical economic model.
d. the neoclassical economic model.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
27. The concept of business responsibility based on using laws to constrain business behavior is referred to as the a. neoclassical economic model.
b. socialist model. c. legal model.
d. stakeholder model.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
28. The concept of business responsibility that is based on concern for the various groups that are affected by a business is known as the
a. legal model.
b. classical economic model. c. ethical model.
d. stakeholder model.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
KEYWORDS: BLOOMS: KNOWLEDGE
29. Which of the following practices is not a modification of the classical economic model?
a. philanthropy
b. community obligations c. owner contra I
d. paternalism
ANSWER: POINTS:
DIFFICULTY:
c
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
30. The most efficient use of corporate wealth to benefit the public is though contributions to charity and other worthy causes which is called
a. taxation.
b. philanthropy. c. paternalism.
d. corporate welfare.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
31. The fact that business leaders in the late 19th century felt they had to show that large corporations were a force for social good is an example of
a. the iron cage of rationality. b. socialism.
c. paternalism.
d. the iron law of oligarchy.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
32. The modern era of corporate social responsibility (from the 1950s to today)
a. emphasizes general awareness of social and moral concerns. b. has seen decreased awareness of the issue.
c. emphasizes specific issues.
d. is marked by legislation requiring ethical business behavior.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
33. Which of the following is not one of the responsibilities in Carroll's four-part defrnition of corporate social responsibility?
a. economic
b. social c. legal
d. philanthropic
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
34. The part of corporate social responsibility that focuses on fair prices and profits is
a. economic.
b. legal.
c. ethical.
d. philanthropic.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Environmental Influence- Environmental Influence
BLOOMS: KNOWLEDGE
35. The part of corporate social responsibility that focuses on fulfilling the social contract by following the law is
a. economic.
b. legal.
c. ethical.
d. philanthropic.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: LEGAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
36. The part of corporate social responsibility that focuses on activities and practices that are expected by society, but not codified into law, is
a. economic.
b. legal.
c. ethical.
d. philanthropic.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
37. The part of corporate social responsibility that focuses on business's voluntary activities which are not normally expected of a firm is
a. economic.
b. legal.
c. ethical.
d. philanthropic.
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States -Georgia- DISC: Environmental Influence- Environmental Influence
United States - Georgia -DISC: ETHICAL RESPONSIBILITIES
KEYWORDS:
BLOOMS: KNOWLEDGE
38. The portrays the concurrent fulfilhnent of the firm's economic, legal, ethical and philanthropic responsibilities a. Pyramid of Corporate Social Responsibility
b. Corporate Citizenship concepts c. Social Response Cycle
d. None of these
ANSWER: POINTS:
DIFFICULTY:
a
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
39. The socially responsible frrm should strive to do all of the following EXCEPT
a. Make a profit
b. obey the preferred laws c. Be ethical
d. Be a good corporate citizen
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.02- 02.02
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
40. All of the following are arguments commonly made against corporate social responsibility except
a. social problems should be addressed first by the free-market economic system, and then, if necessary, by goverrnnent.
b. business is not equipped to handle social activities.
c. business already has enough power--it should not be given more.
d. business did not create today's social problems, so it should not be expected to solve them.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
41. The first and primary argument for corporate social responsibility is a. it is a way to gain more power.
b. business is best equipped to handle social problems.
c. it is in business's long range interest to be socially responsible.
d. the free-market economic system has proven to be ineffective in dealing with social problems.
ANSWER: POINTS:
DIFFICULTY:
c
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
42. Which of the following is not an argument commonly used in favor of corporate social responsibility?
a. Business is best equipped to handle social problems.
b. It is in the long range interest of business to be socially responsible.
c. Being socially responsible helps ward off goverrnnent intervention and regulation. d. Business has the resources to combat social problems.
ANSWER: POINTS:
DIFFICULTY:
a
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
43. The book, The Civil Corporation, identifies four ways in which business fmns respond to social pressures. Which of the following is not one of those?
a. defensive approach
b. cost-benefit approach c. strategic approach
d. stakeholder approach
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
44. According to the Business Case for CSR, a reason companies are becoming more socially responsible is all of the following except
a. Access to capital b. Increased revenue c. Cost savings
d. Customer demand
ANSWER: POINTS:
DIFFICULTY:
a
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
45. is depicted as an action- oriented variant of CSR
a. Corporate Social Responsiveness b. Corporate Social Responsibility
c. Corporate Societal Responsibility
d. Corporate Social Performance
ANSWER: POINTS:
DIFFICULTY:
a
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
46. The argument against CSR focuses on the consequence of the requirement that business must internalize costs that it formerly passed on to society in the form of dirty air and unsafe products, the costs of which might
necessitate raising prices.
a. Resources Available b. Business not equipped
c. Dilutes Business purpose
d. Global Competitiveness
ANSWER: POINTS:
DIFFICULTY:
d
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
47. Which of the following is not a dimension of Carroll's corporate social performance model?
a. social responsibility categories b. funding sources
c. philosophy of social responsiveness
d. issues
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
48. Carroll's corporate social performance model can be used in all of the ways listed below except
a. providing a conceptualization that could lead to better managed social performance. b. providing answers to specific social problems.
c. using it as a planning tool.
d. identifying categories within which the organization can be situated.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.15.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
49. Which entity publishes annual "World's Most Admired Companies" rankings?
a. The Conference Board b. Fortune Magazine
c. Wait Disney
d. The U.S. Chamber of Commerce
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: KNOWLEDGE
50. Which entity publishes "The 100 Best Companies to Work For"?
a. The Conference Board b. Fortune Magazine
c. Wait Disney
d. The U.S. Chamber of Commerce
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: KNOWLEDGE
51. Which of the following is not a characteristic of a socially responsible company?
a. makes products that are safe
b. makes above average financial returns c. does not pollute air or water
d. recycles within the company
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.02- 02.02
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
52. The view of corporate citizenship that embraces all that is implied in the concepts of social responsibility, responsiveness, and performance is the view.
a. unlimited
b. broad
c. narrow
d. limited
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
53. The narrow view of corporate citizenship focuses solely on a. ecological issues.
b. employee relations.
c. corporate community relations. d. stakeholder management.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
54. Benefits to companies of good corporate citizenship include all of the following except
a. improved employee relations. b. improved customer relations.
c. improved business performance.
d. fewer goverrnnent regulations.
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Ethics
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
55. The relationship between corporate social performance and financial performance is viewed from three different perspectives. The most popular view is based on the belief that
a. socially responsible firms are more fmancially profitable.
b. more profitable firms have the ability to be more socially responsible.
c. social responsibility and financial performance are inter-related and affect each other. d. there is no relationship between social responsibility and fmancial performance.
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
56. The relationship between corporate social performance and financial performance is viewed from three different perspectives. The perspective that views social responsibility as a "fair weather" concept
a. has been studied extensively.
b. views social responsibility as driven by the frrm's fmancial performance. c. is the most popular of the three perspectives.
d. sees an interactive relationship among social performance, financial performance, and corporate reputation.
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
57. The relationship between corporate social performance and financial performance is viewed from three different perspectives. The symbiotic view
a. states that fmancial performance determines social performance. b. high social performance leads to improved financial performance.
c. states that there is an interactive relationship among social performance, financial performance, and corporate reputation.
d. is synonymous with the contingency view of Husted.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: COMPREHENSION
58. The Triple Bottom Line concept focuses on economic, social, and envirornnental performance, the key elements of a. sustainability.
b. growth.
c. corporate social responsibility.
d. corporate social responsiveness.
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: COMPREHENSION
59. The Triple Bottom Line encompasses all of the following spheres of performance except
a. economic.
b. social.
c. envirornnental. d. philanthropic.
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOMS: KNOWLEDGE
60. Financial returns from socially conscious investment funds are a. competitive with returns from other investments.
b. higher than returns from other investments.
c. slightly lower than returns from other investments. d. much lower than returns from other investments.
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOMS: KNOWLEDGE
Provide a short answer to each of these questions. Be sure to fully explain your answer.
61. Explain why Business for Social Responsibility (BSR) was formed.
ANSWER:
POINTS: DIFFICULTY:
BSR was formed to fill an urgent need for a national business alliance that fosters socially responsible corporate policies. Identification of this need was aided by the close scrutiny that business has been receiving for the past three decades (as outlined in Chapter 1).
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
62. Explain why the emergence of large corporations in the late 19th century helped shift society's view away from the
classical economic view.
ANSWER:
POINTS: DIFFICULTY:
Adam Smith's description of the free market system assumes a large number of small, relatively equal and powerless suppliers of goods. As large corporations became more common, it became clear that they were accumulating a significant degree of power over the economy and other spheres of society. Thus, Smith's assumptions were no longer as valid as they had been when he published Wealth of Nations in 1776, and society began to look more closely at business's responsibilities to society.
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOM'S: ANALYSIS
63. In Carroll's four-part defmition of corporate social responsibility, he includes philanthropic responsibilities, yet he describes these as voluntary or discretionary. Explain this seeming contrast between a responsibility and a voluntary
activity.
ANSWER:
POINTS: DIFFICULTY:
Carroll says that philanthropy is a responsibility because it is expected of business by society. However, it is not required, as are the economic and legal responsibilities. Business can forego philanthropic activities without suffering sanctions from society, and it has discretion in what causes it supports and how it contributes to those causes.
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
64. One of the arguments that opponents of corporate social responsibility use is that business already has enough
power, so society should not grant it more power by relying on it to alleviate social problems. Evaluate this argument.
ANSWER:
POINTS: DIFFICULTY:
In many ways, the arguments for corporate social responsibility can be summarized by the old saying, "to whom much is given, much is expected." Business already has a high degree of power in our society, and so, according to this saying, it should be expected
to help solve social problems. Because business already has this power, it does not
seem that society would be losing anything by requiring business to use it to solve social problems, rather than focus solely on gaining further fmancial rewards for itself.
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
65. One of the arguments against corporate social responsibility is that by requiring more ofU.S. corporations, they may be put at a disadvantage relative to foreign competitors. Evaluate this argument.
ANSWER:
POINTS: DIFFICULTY:
This argument is fallacious on its face. Corporate social responsibility is rapidly becoming a global concern, and many other countries require more from their corporations than the U.S. requires.
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Environmental Influence- Environmental Influence
BLOOM'S: ANALYSIS
66. In the 1890s, the Robber Barons began to use their personal wealth and the wealth accumulated by their corporations to enhance the social good. Their philanthropic activities were encouraged, in part, because public opinion was demanding that the government do something to limit their power. Is this type of activity still occurring in
the United States? Why or why not?
ANSWER:
POINTS: DIFFICULTY:
Philanthropic activity to help ward off government intervention is still a central reason business uses to justify the corporate social responsibility concept. In fact, this is a central argument in support of CSR today.
1
Moderate
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States - Georgia- DISC: Environmental Influence -Environmental Influence
BLOOM'S: ANALYSIS
67. Summarize the argumeut used to explain why the concept of corporate social responsiveness is an improvement over corporate social responsibility.
ANSWER:
POINTS: DIFFICULTY:
Corporate social responsibility's emphasis on obligations and accountability implied that business should do only the minimum that would satisfY the duties imposed on it by society. Corporate social responsiveuess, on the other hand, emphasizes a proactive, dynamic, and action orieutation. In this paradigm, business should actively seek to meet social needs before they become a duty imposed by society. Using this approach both eucourages social performance by business and allows it more latitude in what actions
it will take.
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
68. Discuss the methods used by Fortune magazine to determine how fmns are ranked as to Social Responsibility. Do you think the ranking is fair? Why or why not?
ANSWER: Fortune's rankings are the result of a poll of more than 12,600 senior executives, outside directors and fmancial analysts. Such a method seems eminently fair, in that peers evaluate each other. In addition, getting feedback from seuior executives within a fmn, and outside directors, objective as to the fmn as well as fmancial analysts, eusures
that views both inside and outside the company are considered.
POINTS:
DIFFICULTY:
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornneutal Influeuce
BLOOM'S: ANALYSIS
69. Explain the concept of "multiple bottom lines." Why do advocates of this approach prefer it over the traditional method of measuring the finn's fmancial performance?
ANSWER:
POINTS: DIFFICULTY:
Advocates of the multiple bottom line approach argue that there is more to a firm's overall performance than simply its fmancial results of operations. Using the defmitions of dual-entry bookkeeping, benefits provided to any constituent other than owners (e.g., compensation to workers, payments to suppliers, costs to reduce pollution) are
regarded as "evils" to be kept at a minimum. The multiple bottom line approach
recognizes that a firm has many stakeholders, and that not all stakeholders share common objectives. By reporting on several aspects of the firm's performance, including fmancial, proponents say that enhanced information is provided and the frrm can better assess its impact on society.
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.04- 02.04
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
70. Describe socially responsible investing.
ANSWER: The basic concept underlying socially responsible investing is that some investors seek to place their money in companies that behave in socially responsible ways. Looking at
it from the opposite perspective, these investors do not want to invest in frrms that act in
socially irresponsible ways, such as damaging the envirornnent of neglecting workers' rights. A whole methodology has grown to support socially responsible investing, including social and envirornnental screens, shareholder activism, and community investment. More than $2 trillion is invested in this manner in the United States, and returns are competitive with other investment vehicles.
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it.
71. Distinguish between the concepts of corporate social responsibility, corporate social responsiveness, corporate social
performance, and corporate citizenship. How are these ideas different from each other? How are they similar?
ANSWER: Students should recognize that responsibility focuses on accountability and obligations imposed on business by society. This is the most passive of the four concepts, which is its primary shortcoming. Responsiveness implies proaction and activity by business in anticipating social needs before they become duties imposed by society. This concept is an improvement over responsibility, but it still does not incorporate the results of its activities. This shortcoming is addressed by performance, with its focus on outcomes. Corporate citizenship encompasses all three of the other concepts, but does not really
add much new to the discussion.
POINTS: DIFFICULTY:
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.03- 02.03
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
72. The Generous Corporation argues that corporations began their philanthropic activities primarily out of self interest. By doing so, they are able to keep govermnent from intervening in their business activities and imposing more regulations on them. Assuming that this argument is valid, and the firms' motives are primarily self interested, evaluate whether or not the motives are important. That is, are fmns' philanthropic activities less valuable because
they are motivated by self interest? Explain your answer.
ANSWER:
POINTS: DIFFICULTY:
Students will probably be nearly evenly split on their answers to this question. Many will take a pragmatic view and say that the causes that need help are getting it, regardless of the companies' reason for giving it. Others will be offended that fmns are not giving for the "right" reason, and view the activity as simply another form of self promotion and advertising. The primary focus should be on their reasoning to support their answer. If the class discusses this question, the instructor may want to compare this to the popular ethical dilemma of the hospital patient. If you were a patient in the hospital, would you want a utilitarian, a deontologist, or a virtue ethicist to visit you?
The utilitarian would be there because he/she determined that overall happiness would
be improved by visiting you, not necessarily because she or he wanted to see you. The deontologist would be there because s/he felt that it was her/his duty--what others would agree should be done--rather than because of a desire to see you. The virtue ethicist, on the other hand, would be visiting because it is what friends should do in that situation. This dilemma can be applied to the essay question, substituting the cause for the hospital patient and the fmn for the visiting friend.
1
Moderate
LEARNING OBJECTIVES: ETHC.CARR.15.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: United States- Georgia- DISC: ETHICAL RESPONSIBILITIES
KEYWORDS: BLOOM'S: ANALYSIS
73. The primary argument for corporate social responsibility states that for business to have a healthy climate in which to operate in the future, it must take current action to assure its long-term viability. Is this long-range self-interest
argument valid? Does it encompass all that society wants from business?
ANSWER:
POINTS: DIFFICULTY:
Students should recoguize that the argument is certainly valid. Survival is a central motive for all organisms/organizations. Therefore, taking action to improve one's chances for survival is a valid and appropriate response. This is true whether one is talking about eating the right foods and exercising for humans, or socially responsible activities for corporations. The debate should take place over the question of whether it encompasses all that society wants from business. Stated in another way, is survival
the only motive we expect from each other and from our business institutions? Some students will be convinced that self interest is all that we can realistically expect from business, while others will argue that business is part of a larger society, and thus should be expected to contribute to society in ways that benefit others, for reasons beyond survival. This debate should mirror the continuing discussion between individualistic political philosophers and communitarians.
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOM'S: ANALYSIS
74. Are the awards described in the textbook effective ways of promoting the idea of corporate social performance?
Why or why not?
ANSWER:
POINTS: DIFFICULTY:
The awards are just one way in which CSP is promoted. Are they sufficient, by themselves, to bring about widespread acceptance of the CSP concept? Probably not. But, if viewed as one part of an ongoing campaigu, they do help promote the idea. Firms thrive on positive publicity and recoguition, and this is one way to achieve that. Figure 2-5 shows that the top reason for and benefit of corporate social responsibility is an enhanced reputation and better public image. Although this figure relates to corporate social responsibility, it is safe to assume that the same can be said for CSP.
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOM'S: ANALYSIS
75. Which of the three bottom lines encompassed by the Triple Bottom Line do you consider most important? Explain
your answer.
ANSWER:
POINTS: DIFFICULTY:
Students should recognize that this is "trick" question. The whole point of the Triple Bottom Line is to move away from the idea that one area is more important than the others. Using the Triple Bottom Line points out the importance and inter-relation of all three, and the effects they have on various stakeholders.
I
Moderate
LEARNING OBJECTIVES: ETHC.CARR.l5.02.01- 02.01
NATIONAL STANDARDS: United States- BUSPROG: Analytic
STATE STANDARDS: KEYWORDS:
United States -Georgia- DISC: Envirornnental Influence- Envirornnental Influence
BLOOM'S: ANALYSIS
Chapter 2
Corporate Citizenship: Social Responsibility, Performance, Sustainability
LEARNING OUTCOMES
After studying this chapter, you should be able to:
1. Explain how corporate social responsibility (CSR) evolved and encompasses economic, legal, ethical, and philanthropic components.
2. Provide business examples of CSR and corporate citizenship.
3. Differentiate between and among corporate citizenship, social responsibility, social responsiveness, social performance, and sustainability.
4. Elaborate on the concept of corporate social performance (CSP).
5. Explain how corporate citizenship develops in stages in companies.
6. Describe the triple bottom line and its relevance to sustainability.
7. Describe the socially responsible investing movement’s characteristics.
TEACHING SUGGESTIONS
INTRODUCTION – This chapter explores several different aspects of the CSR topic and provides some insights into what CSR means and how businesses are carrying it out. An entire chapter is devoted to CSR concepts because it is a core idea that underlies most of the material in the textbook. This chapter also focuses on the concept of corporate citizenship.
KEY TALKING POINTS – In some ways this may be a difficult chapter to teach, since the instructor will be laying the foundation for future discussions that will more directly involve analyzing and evaluating corporate social performance. The current chapter focuses on the analytical tools we will be using rather than actually using those tools. In some ways this distinction can be likened to a teenager learning how the steering wheel, brake, and accelerator work in a car, rather than actually getting behind the wheel and driving. Of course, everyone would want a new driver to understand what the steering wheel does and which pedal to use when she needs to slow down. But that fact alone does not mean that the new driver doesn’t want to skip the lesson on how to use the tools and just go drive. This is compounded by the fact that many students may have heard of or discussed the terms introduced in this chapter in other business courses, specifically corporate social responsibility, but they may not grasp that CSR requires the simultaneous execution of economic, legal, ethical and philanthropic responsibilities. Many students may struggle with the concept that these responsibilities need to be addressed concurrently by firms, since previous exposure to the concept may have focused on the idea that CSR is the culmination of the ethical and/or philanthropic activities of firms rather than the culmination of all four responsibilities. Consequently, students in your class may not be as anxious to delve into the intricacies of corporate citizenship, including corporate social responsibility, corporate social responsiveness and corporate social performance when they could be discussing a juicy corporate scandal. But it is important that students have better tools to help them dissect corporate citizenship than just their gut feelings as they will encounter business colleagues who will argue against and resist implementation of activities that emphasize corporate citizenship.
This chapter also is a good starting point for students to begin to focus on what they, as citizens, want from the business sector. Do they want corporations to simply recognize their various responsibilities to society, do they want them to make improvements, do they demand evidence that corporations are making improvements, or do they have more general concerns about the role business plays in society (corporate citizenship)? As they begin to contemplate the implications of their expectations of business, they also should begin to see why this topic has evolved and how the different models can inform their understanding of business’s impact on society.
PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of:
Cases:
1-Wal-Mart- The Main Street Merchant of Doom
2-The Body Shop (A) - Pursuing Social and Environmental Change
3-The Body Shop (B) - Reputation is Tarnished
4-The Body Shop (C) - Into the New Millennium
7-Using Ex-Cons to Teach Business Ethics
12-Banned if You Do, Banned if You Don’t
19-Should Directors Shine Light on Dark Money?
23-McDonald’s Coffee Spill
24-The Betaseron Decision (A)
25-The Hudson River Cleanup and GE
26-Cloud Computing – Earth’s Friend or Foe
27-New Belgium Brewing, Defining a Business on Sustainability
29-Felony Franks (2), Home of the Misdemeanor Wiener
31-Moral Dilemma - Head vs. Heart
39-To Take or Not to Take
Ethics in Practice Cases:
The Socially Responsible Shoe Company
Burgers with a Soul: Fresh, Local, Sustainable
Spotlight on Sustainability:
Sustainability’s Stock is Rising
Myths About Sustainability
Power Point slides:
Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters.
LECTURE OUTLINE
I. CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A CONCEPT
A. Historical Perspective on CSR
B. Modification of the Economic Model
C. Evolving Meanings of CSR
D. A Four-Part Definition of CSR
1. Economic Responsibilities
2. Legal Responsibilities
3. Ethical Responsibilities
4. Philanthropic Responsibilities
5. The Pyramid of Corporate Social Responsibility
a. Pyramid as a Unified Whole
b. CSR Definition and Pyramid are Sustainable Stakeholder Models
6. CSR in Practice in Business
II. TRADITIONAL ARGUMENTS AGAINST AND FOR CSR
A. Arguments Against CSR
B. Arguments for CSR
C. The Business Case for CSR
III. CORPORATE SOCIAL RESPONSIVENESS
IV. CORPORATE SOCIAL PERFORMANCE
A. Carroll’s CSP Model
V. CORPORATE CITIZENSHIP
A. Broad Views
B. Narrow Views
C. Drivers of Corporate Citizenship
D. Benefits of Corporate Citizenship to Business Itself
E. Stages of Corporate Citizenship
F. Global Corporate Citizenship
G. Corporate Citizenship Awards by Business Press
VI. SOCIAL PERFORMANCE AND FINANCIAL PERFORMANCE RELATIONSHIP
A. Three Perspectives on the Social-Financial-Reputation Relationship
1. Perspective 1: socially responsible firms are more financially profitable
2. Perspective 2: a firm’s financial performance is a driver of its social performance
3. Perspective 3: there is an interactive relationship between and among social performance, financial performance, and corporate reputation
B. A Stakeholder Bottom-Line Perspective
VII. SUSTAINABILITY – PROFITS, PEOPLE, PLANET
A. The Triple Bottom Line
VIII. SOCIALLY RESPONSIBLE, SUSTAINABLE, ETHICAL INVESTING
IX. SUMMARY
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
Students should recognize that their answers to these discussion questions should be well reasoned and supported with evidence. Although some answers will be more correct than others, students should be aware that simplistic answers to complex questions, problems, or issues such as these will never be “good” answers.
1. Question: Explain the Pyramid of Corporate Social Responsibility> Provide several examples of each “layer” of the pyramid. Identify and discuss some of the tensions among the layers or components. How do the different layers of the pyramid “overlap” with each other?
Answer: The Pyramid of Corporate Social Responsibility is a graphic representation of Carroll’s four-part definition of CSR. According to Carroll, society has four expectations of a corporation—economic, legal, ethical, and philanthropic. The pyramid shows the economic responsibility at the bottom, because it is the foundation upon which all others rest. Society’s first expectation of a corporation is that it will be profitable. This is consistent with classical economic thought, which provides that management must maximize the profits of its owners. Companies that repeatedly do not show a profit will see falling stock prices and eventual bankruptcy and may find it more difficult (if not impossible) to meet their legal, ethical and philanthropic responsibilities. Several companies in both the automotive and airline industries struggled to meet their economic responsibilities and landed in bankruptcy as a result. The second level is legal, because society requires corporations to follow the law, just as they are required to make a profit. Companies can receive stiff penalties for breaking the law. In the last decade, hundreds of publicly-traded companies were investigated by federal regulatory agencies for abusive practices related to stock option grants and were subjected to penalties due to faulty accounting and public disclosures. The third level is the ethical responsibility—society expects ethical behavior of companies. The corporate scandals that shaped the beginning of this century pointed out that society expects honest and fair reporting of financial operations by executives. If this expectation is violated, the executives can face criminal charges, as Martha Stewart and several Enron officials discovered. More recently, executives in financial services firms have found themselves subject to public scrutiny for arguably unethical practices related to aggressive lending practices. On the other hand, companies may find themselves recognized for their ethical activities. Starbucks and the Timberland Company are often recognized for their ethical practices. At the top is the philanthropic responsibility. Society desires this of corporations, but the company has discretion in whether it performs at this level or not. Walmart and AT&T are two firms that are widely praised for their philanthropic endeavors, especially their charitable cash contributions. While the economic responsibility is the base of the pyramid, a CSR or stakeholder perspective would focus on the pyramid as a unified whole. Companies are expected to fulfill their economic, legal, ethical and philanthropic responsibilities simultaneously, meaning that companies need to concurrently (1) make a profit, (2) obey the law, (3) be ethical and (4) be a good corporate citizen. While the simultaneous fulfillment of all four responsibilities can be challenging, the best moral managers will use moral imagination to develop solutions to corporate dilemmas that meet all four responsibilities at the same time.
2. Question: In your view, what is the single strongest argument against the idea of corporate social responsibility? What is the single strongest argument for corporate social responsibility? Briefly explain.
Answer: There are few, if any, legitimate arguments against CSR. The closest one could come to making a logical argument is that corporations should not be required to “fill the gaps” in social policy. That is, corporations should not be held responsible for providing funds and services for things that governments should be doing (e.g., school funding or social safety nets). The primary argument for CSR is that corporations are recognized as “persons” and receive as many, if not more, rights and privileges than do actual persons. If corporations are to benefit from such “citizenship,” they should be expected to contribute to society, just like actual persons are. The Wall Street Journal recently reexamined this debate in an August 2010 story entitled “The Case Against Corporate Social Responsibility.” In this article, Dr. Aneel Karnani, a Professor of Strategy at the University of Michigan's Stephen M. Ross School of Business, argues that “in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare. In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests.” This article certainly has prompted many in the pro-CSR camp to respond. In a BusinessEthics.com article entitled “Opinion: The Case Against the Case Against CSR,” Tim Mohin, the director of corporate responsibility at AMD, contends that CSR is a win-win situation for companies and that smart companies take a long view and build brand value and investment with CSR.
3. Question: Differentiate between corporate social responsibility and corporate social responsiveness. Give an example of each. How does corporate social performance relate to these terms? Where do corporate citizenship and sustainability fit in?
Answer: Carroll’s four-part definition of corporate social responsibility is “The social responsibility of business encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given point in time.” The concept of corporate social responsibility has been criticized because its focus is on accountability or obligation to meet certain minimum duties. Corporate social responsiveness is a more proactive and action oriented concept, wherein business firms anticipate social expectations and meet them before they are imposed as a new responsibility on the company. A corporation that obeys existing laws is displaying corporate social responsibility. An example of corporate social responsiveness would be a firm providing child care benefits to its working parents, thus responding to the reality of issues faced by working families. Corporate social performance focuses on what firms are actually able to accomplish – specifically, the outcomes or results of their acceptance of corporate social responsibility and implementation of corporate social responsiveness. Corporate social performance includes a recognition of the four corporate responsibilities identified by Carroll and measures the success of the firm’s responsiveness to these responsibilities.
4. Question: Analyze how the triple bottom line and the Pyramid of CSR are similar and different. Draw a schematic that shows how the two concepts relate to one another.
Answer: The Triple Bottom Line provides results of operations in three inter-related fields—economic, social, and environmental. The overriding theme in the Triple Bottom Line is sustainability of the firm’s operations, its stakeholders’ lives, and the environment. The CSR Pyramid recognizes four levels of responsibility—economic, legal, ethical, and philanthropic. Both models recognize the economic sphere. The Triple Bottom Line’s social and environmental concepts could include elements of the legal, ethical, and philanthropic levels of responsibility in the CSR Pyramid.
5. Question: Research two different companies and try to identify at which stage of corporate citizenship these companies reside. What are the best examples you can find of companies in Stage 5 of corporate citizenship?
Answer: This question is left to the class instructor as time and events will have altered the facts available at the time this is being written. At the time of this writing, the author would suggest that students review the corporate social responsibility reports of Microsoft, Google, and the Walt Disney Company.
6. Question: Does socially responsible, sustainable, or ethical investing seem to you to be a legitimate way in which the averge citizen might demonstrate her or his concern for CSR? Discuss.
Answer: On the one hand, socially responsible investing seems to send the message that the investor is concerned about the firm’s CSP. However, the fact that returns on ethical investing approximate market returns seems to downplay this view. If the investor is truly concerned with the firm’s CSP, he or she should be willing to accept a lower rate of return on the investment. In addition, the vast majority of investments never reach the firm. Unless the firm is offering a new issue of stock, the proceeds of the sale go to the previous owner of the securities, not to the firm.
GROUP ACTIVITY
Have students establish the parameters for a social screen for investments. Specifically, ask students to identify the criteria for socially responsible investments. Once the class establishes the “social screen” as a group, divide the students into groups of four to five students.
Each group will be given a theoretical account with $500 to invest in firms that meet the criteria established by the entire class. Each group should be given a week to research firms for potential investment. Each group should provide a summary sheet to the instructor allocating the $500 among socially responsible investments that meet the class criteria. Each group should track the return on their investments through the end of the semester and report the value of their portfolio at that time. Opportunity should be given to discuss why certain investments were made.
Instructors may want to provide some type of reward for the group with the greatest return on investment. Groups that select companies that do not meet the class social screen should be disqualified.
INDIVIDUAL ASSIGNMENT
Have students read the June 14, 2012 Wall Street Journal article entitled “The Case Against Corporate Social Responsibility,” by Dr. Aneel Karnani (see http://online.wsj.com/article/SB10001424052748703338004575230112664504890.html). Ask students to independently research academic and business responses to this article. Students should summarize the arguments for and against Corporate Social Responsibility based upon their review of Dr. Karnani’s article and their own independent research. Students then should state which argument that they find most persuasive and why.
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