Deck 12: Strategizing With Corporate Social Responsibility

Question 1

By employing the standards of CSR, the barriers to entry for the industry actually go down.

Answer 1

False

Question 2

Numerous protests around the world are indicative of resentment against globalization and a perceived lack of CSR in firms, particularly those that relocate offices (and jobs) to foreign countries.

Answer 2

True

Question 3

According to the text, one driver of CSR in the twenty-first century is the declining levels of population in some countries.

Answer 3

False

Question 4

Global sustainability is the number one goal of a firm.

Question 5

Companies have had their CSR policies certified by NGOs that might otherwise be hostile.

Question 6

Compared with the relatively expanded power of national governments in the wake of globalization, NGOs and other civil society stakeholders have lost the ability to affect firms and their management or to impact legislation.

Question 7

The driving forces of the CSR school are the widening of the gap between the haves and have-nots and the astonishing speed of technological development.

Question 8

Governments and communities whose laws and regulations must be obeyed are considered primary stakeholders.

Question 9

CSR advocates argue that a free market system that takes the pursuit of self-interest and profit as its guiding light may in practice fail to constrain itself, thus often breeding greed, excesses, and abuses.

Question 10

CSR standards are more difficult for firms in a concentrated and competitive industry.​

Question 11

The more concentrated an industry is, the more likely that competitors will recognize their mutual interdependence based on old ways of doing business that are not up to the higher CSR standards.

Question 12

Because each firm is different (a basic assumption of the resource-based view), not every firm's economic performance is likely to benefit from CSR.

Question 13

A stakeholder is "any group or individual who can affect or is affected by the achievement of the organization's objectives."

Question 14

Socially and environmentally conscious suppliers are not likely to have greater bargaining power than those that are not, regardless of how differentiated their products are.

Question 15

"Stakeholders" of the firm are the same thing as shareholders.

Question 16

Looking at the "big picture" enables managers to understand the drivers underpinning global sustainability as simple and straightforward.

Question 17

A key goal for CSR is global sustainability, which is defined as the ability "to meet the needs of the present without compromising the ability of future generations to meet their needs."

Question 18

With a stakeholder view, firms look at the triple bottom line of economic, social, and environmental performance.

Question 19

Firms pursuing a reactive CSR strategy actively participate in policy discussions, build alliances with stakeholder groups, and voluntarily go beyond what the regulations require.

Question 20

Nearly all CSR advocates argue for a revival of socialism in the world.

Question 21

Although framed in a domestic versus overseas context, the heart of this debate boils down to the foundational thorny point that frustrates CSR advocates: In a capitalist society, the shareholders-otherwise known as capitalists-are the ones who matter at the end of the day.

Question 22

Most MNEs reportedly outperform local firms in environmental management by voluntarily following "green practices."

Question 23

There is no conclusive evidence of a direct, positive link between CSR and economic performance, such as profits and shareholder returns.

Question 24

A firm with employees that hold strong convictions about being socially responsible in the way they carry out the firm's activities is a rare but highly imitable.

Question 25

Suppliers and customers are typically considered primary stakeholders.

Question 26

The idea that MNEs should not interfere in the domestic political affairs of the host country has been enshrined in a number of codes of MNE but CSR advocates have stressed the necessity for MNEs to engage in actions that often constitute political activity.

Question 27

Expanding overseas often comes at the expense of domestic employees and communities, who are primary stakeholders.

Question 28

Primary stakeholder groups are defined as "those who influence or affect, or are influenced or affected by, the corporation, but they are not engaged in transactions with the corporation and are not essential for its survival."

Question 29

When facing mounting pressures to be more socially responsible, most firms resist until some first-mover firms deviate from the norms in order to score competitive points with game-changing new products.

Question 30

Given the increased number of challenges to firms to improve their level of corporate responsibility, firms may want to proactively embrace CSR and partner with those groups doing the challenging in finding solutions.

Question 31

The five forces framework reinforces the important point that all industries are equal in terms of their exposure to CSR challenges.

Question 32

Managers who treat CSR as a nuisance, involving regulation, added costs, and liability are overestimating the potential business opportunities associated with CSR.

Question 33

Although costs of complying with tough environmental laws may be high, these "green" taxes simply force firms to pay the "real" costs of their activities they were previously placing on others.​

Question 34

A narrow focus on CSR sees it as integral to profit maximization, rather than separate from profit maximization.

Question 35

CSR-related resources are valuable because they are almost always rare.

Question 36

Milton Friedman, a University of Chicago economist and Nobel laureate, suggested: "The business of business is business."

Question 37

Advocates of shareholder capitalism argue that if firms attempt to attain social goals, it will actually help them focus on profit maximization (and its derivative, shareholder value maximization).

Question 38

CSR-related resources are mostly in the form of tangible technologies.

Question 39

The bargaining power of buyers in influencing firms to be socially responsible may be even more powerful than the bargaining power of suppliers.

Question 40

Reactive strategy often involves an "out of sight, out of mind" mentality.

Question 41

Which of the following statements sums up Michael Porter's view on the importance of creating shared value?

A)​Creating shared value involve creating economic value in a way that also creates value for society by addressing its needs and challenges.
B)​A free market system that takes the pursuit of self-interest and profits as its guiding light may fail public interest completely.
C) ​Shareholders are more important that stakeholders.
D) ​The thorny issue is whether all stakeholders other than shareholders have an equal right to bargain for a "fair deal."

Question 42

Which of the following statements comes closest to expressing the idea of CSR?

A)​The business of business is business.
B)​The social responsibility of business is to increase its profits.
C) ​The purpose of a firm is to serve as a vehicle for coordinating stakeholder interests.
D) ​If social welfare rather than profit maximization is the focus of firms, they will become socialist organizations.

Question 43

Because the operations of multinational enterprises can be bewilderingly complex, even before the goals of CSR are thrown in, firms looking for global sustainability must first:

A)​Identify primary and secondary stakeholders.
B)​Focus on the details rather than the big picture.
C) ​Drill down to make CSR drivers simple.
D) ​Prioritize its goals.

Question 44

CSR tends to be the least concerned with improving:

A)Global sustainability.
B)Shareholder wealth maximization.
C) Rising levels of population.
D) Inequity.

Question 45

The CSR debate centers on the question:

A)Why does the firm exist?
B)Why is resource management important?
C) What laws are needed to control the firm's behavior?
D) What can be done to prevent unreasonable profits?

Question 46

Buyers are best able to extract concessions from a firm in all of the following situations EXCEPT:

A)​Organizing protests against the firm's behavior that causes a drop in sales.
B)​Using the threat of going to another source for the product.
C) ​When the buyer is in great difficulty such as an epidemic.
D) ​Supporting beneficial social programs.

Question 47

When it comes to CSR issues, managers have historically:

A)​Viewed CSR as the answer to integrating strategic issues.
B)​Put CSR on the back burner.
C) ​Argued in favor of strict environmental regulations.
D) ​Felt their efforts in promoting the interests all stakeholders was imperative.

Question 48

Using the five forces model, which will likely result in a higher level of CSR?

A)A highly concentrated industry.
B)Substitutes that are superior to existing products and costs are reasonable.
C) Socially and environmentally conscious suppliers with standardized products that have multiple substitutes.
D) No monitoring program for all supplier factories.

Question 49

Which of the following is NOT considered a driving force in the CSR school?

A)​The gap between the haves and have-nots has widened.
B)​Waves of disasters and scandals have characterized the business world.
C) ​What CSR critics describe as "greed" is often translated as "incentive" in the vocabulary of free market advocates.
D) ​Managers are unique among stakeholders in that they are the only group positioned at the center of these relationships.

Question 50

If socially and environmentally conscious Firm A provides a unique differentiated products with few or no substitutes:

A)​It may be able to extract substantial concessions from its managers.
B)Its bargaining power is likely to be substantial.​
C) ​Its bargaining power will not change.
D) ​It lowers barriers to entry for other firms.

Question 51

According to the textbook, the key goal for CSR is:

A)​Customer support.
B)​Global sustainability.
C) ​Community involvement.
D) ​Profitability.

Question 52

Secondary stakeholder groups are:

A)Constituents on whom the firm relies for its continuous survival and prosperity.
B)Those who influence or affect the corporation.
C) Influenced or affected by the corporation.
D) Not engaged in transactions with the corporation and are not essential for its survival.

Question 53

NGOs have the ability to:

A)Affect firms' practices.
B)Influence firms' management.
C) Impact legislation.
D) All of the above.

Question 54

When looking at CSR as a threat or opportunity, which of the following is NOT true?

A)​Energy-intensive and materials-intensive industries are more vulnerable to environmental scrutiny.
B)​Labor-intensive industries are more likely to be challenged on fair labor practice grounds.
C) ​Some industries are immune from CSR.
D) ​Not all industries are equal in terms of their exposure to CSR challenges.

Question 55

Which of the following is an accommodative CSR strategy?

A)Voluntarily go beyond what the regulations require.
B)Resist imposition of what seems unreasonable.
C) View CSR as worthwhile.
D) Actively participate in CSR policy discussion.

Question 56

Free market advocates tend to do all of the following EXCEPT:

A)Argue that "the social responsibility of business is to increase its profits, which leads to efficient capital and product markets."
B)Argue that all stakeholders have an equal right to bargain for a "fair deal."
C) Believe that the first and foremost stakeholder group is shareholders.
D) Argue that if firms attempt to attain social goals, managers will lose their focus on profit maximization.

Question 57

Which is NOT true about CSR?

A)Some CSR policies may reduce the firm's value.
B)CSR policies may not pay off if common.
C) CSR that is embedded in people is easier to imitate.
D) It is difficult to prove a link between CSR and economic performance.

Question 58

When faced with growing demands for greater CSR, firms in more concentrated industries initially will:

A)​Make first-move game-changing new products.
B)​Collaborate with each other to find solutions.
C) ​Resist pressures to change.
D) ​None of the above.

Question 59

Those who advocate CSR:

A)Conduct their debate within the constraints of capitalism.
B)Argue that a humane capitalism is an oxymoron and unattainable.
C) Argue that the concepts justice and fairness are simply matters of opinion.
D) Argue that the most important stakeholder is the stockholder.

Question 60

A firm that strives to meet the needs of the present without compromising the ability of future generations to meet their needs is focused on the goal of:

A)​Managing to something other than the bottom line.
B)​Primary stakeholders.
C) ​Community involvement.
D) ​Global sustainability.

Question 61

From an institutional perspective, proactive activities are indicative of all the following EXCEPT:

A)Normative beliefs.
B)Cognitive beliefs.
C) The desire to do the right thing.
D) An absence of "window dressing."

Question 62

In regard to managers and CSR, the following are true EXCEPT:

A)All sides of the CSR debate agree that managers have a unique and central role.
B)All sides of the CSR debate agree as to how managers should implement their role.​
C) As a stakeholder group, managers are unique in terms of potential coordination.
D) Managers are positioned at the center of all the stakeholder relationships.

Question 63

All firms have a different combination of resources; therefore, from a resource-based perspective:

A)​Studies that over-sample firms ready for CSR will find a negative relationship with economic performance.
B)​Not every firm's economic performance is likely to benefit from CSR.
C) ​A firm's striving toward a high level of CSR will be economically beneficial to the firm.
D) ​Complementary assets will have no effect on the ability to fully utilize a firm's CSR potential.

Question 64

Those who are opposed to strong efforts toward CSR would use which of the following arguments?

A)​"Green taxes" simply force firms to pay real costs that they otherwise place on others.
B)​CSR externalizes an internality.
C) ​Tough environmental regulation leads to higher costs and reduced competitiveness.
D) ​Stringent environmental regulation will motivate firms to innovate.

Question 65

Numerous components within a firm, such as formal management control systems and informal relationships between managers and employees that may be especially relevant to CSR are often called:

A)​Complementary assets.
B)​Accommodative strategy.
C) ​Global sustainability.
D) ​Social issue participation.

Question 66

Those who feel that firms that expand into emerging economies are failing their CSR responsibilities are most likely to claim that:

A)It potentially hurts corporate profits.
B)Shareholder returns are reduced.​
C) Fails to provide employment to host countries.
D) Domestic employees and communities pay the price for the overseas expansion.

Question 67

Although a code of conduct tangibly expresses values of an organization, seeing it as window dressing is the assessment of the:​

A)​Negative view.
B)​Positive view.
C) ​Institutional view.
D) ​Instrumental view.

Question 68

In regard to the link between CSR and economic performance:

A)There is conclusive evidence of a direct, positive link between CSR and economic performance
B)No studies report a definitive positive relationship.
C) Almost all studies find a negative relationship or no relationship.
D) It appears some firms are not cut out for a CSR-intensive strategy.

Question 69

A firm that participates in social causes not directly related to the management of its primary stakeholders is engaged in: ​

A)​Secondary stakeholder groups.
B)​Defensive strategy.
C) ​Social issue participation.
D) ​Global sustainability.

Question 70

An example of a secondary stakeholder group is:

A)Social and environmental groups.
B)Suppliers.
C) Customers.
D) Governments.

Question 71

Which of the following would NOT be considered an underlying motivation behind MNEs' voluntary "green practices"?

A)​Worldwide CSR pressures in general.
B)​Requirements of MNE headquarters for worldwide compliance of higher CSR standards.
C) ​Host country laws and norms.
D) ​CSR demands made by customers in developed economies.

Question 72

An example of a primary stakeholder group is:

A)Media.
B)Social activists.
C) Environmental groups.
D) Employees.

Question 73

From a corporate governance perspective, MNEs are: ​

A)​Doing nothing wrong by maximizing shareholder returns.
B)​Shirking their domestic CSR when they devote resources overseas.
C) ​Foolish to focus on CSR.
D) ​None of the above.

Question 74

In the post-Great Recession environment, the responsibility of managers means:​

A)​Relegating CSR to the "back burner."
B)​Responding to changing societal expectations of the social and environmental roles of firms.
C) ​Remembering that the business of business is business.
D) ​Following only those CSR standards that are globally unambiguous.

Question 75

Reactive firms:

A)Actively participate in regional, national, and international policy discussions.
B)Often build alliances with stakeholder groups.
C) Engage in voluntary activities that go beyond what the regulations require.
D) React negatively to aspects of CSR that may increase costs.

Question 76

Some CSR advocates who question motives of firms implementing CSR are pleased that:

A)Firms are embarking on some tangible CSR journey.
B)CSR's legitimacy is rising on the organizational agenda.
C) By adopting codes of conduct (even if only for "window dressing" purposes), they create a set of criteria against which they can be judged.
D) All of the above.

Question 77

In regard to the extent of CSR challenges, the following are true EXCEPT:

A)All industries are equal in terms of their exposure to CSR challenges.
B)Energy- and materials-intensive industries (such as chemicals) have been criticized.
C) Firms that are major outsourcers in foreign countries have been criticized.
D) Some firms have turned to NGO critics to have the NGOs certify their policies.

Question 78

The participation of which of the following groups is essential in an accommodative strategy? ​

A)​NGOs.
B)​Managers.
C) ​Consumers.
D) ​Suppliers.

Question 79

As seen through the instrumental view of CSR, those who are skeptical of CSR compliance claim:

A)That firms may not necessarily be sincere.
B)That firms may be compelled to appear to be sensitive to CSR by impression management-in other words, "window dressing."
C) That many firms may chase fads by following what others are doing, while not having truly internalized the need for CSR.
D) That CSR activities simply represent a useful means to help make good profits; firms are not necessarily becoming more "ethical."

Question 80

There is agreement throughout society that:

A)Overseas expansion is good because it helps improve standards of living around the world.
B)A negative possibility of overseas expansion is that it may cause loss of jobs in the home country.
C) Firms should stick strictly to business within a country and not seek to impose their views of human rights on other countries that have different views.
D) Firms have a responsibility to do whatever is necessary to assure that the human rights that are respected in the home country are implemented in host countries.