Deck 12: Strategizing With Corporate Social Responsibility

Question 1

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.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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."

Answer 3

True

Question 4

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

Question 5

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 6

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

Question 7

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

Question 8

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 9

The anti-WTO protests in Seattle in 1999 are indicative of resentment against globalization and a perceived lack of CSR in firms, particularly those that relocate offices and jobs) to foreign countries.

Question 10

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

Question 11

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

Question 12

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 13

Since 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 14

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 15

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

Question 16

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

Question 17

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 18

Suppliers and customers are typically considered primary stakeholders.

Question 19

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

Question 20

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 21

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. Organization: a firm needs to tie together CSR activities.
e. It is difficult to prove a link between CSR and economic performance.

Question 22

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.
e. Fear that firms will become like SOEs.

Question 23

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."
e. A quest for better profits.

Question 24

Secondary stakeholder groups are:
a. Constituents on whom the firm relies for its continuous survival and prosperity.
b. Those who do not influence or affect the corporation.
c. Not influenced or affected by the corporation.
d. Not engaged in transactions with the corporation and are not essential for its survival.
e. B through D above.

Question 25

NGOs have the ability to:
a. Affect firms'practices.
b. Influence firms' management.
c. Impact legislation.
d. All of the above.
e. None of the above

Question 26

An example of a secondary stakeholder group is:
a. Social and environmental groups.
b. Suppliers.
c. Customers.
d. Governments.
e. Communities.

Question 27

In regards to the link between CSR and economic performance:
a. There is no conclusive evidence of a direct, positive link between CSR and economic performance.
b. Some studies report a positive relationship.
c. Some studies find a negative relationship or no relationship.
d. It appears some firms are not cut out for a CSR-intensive strategy.
e. All of the above.

Question 28

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.
e. None of the above.

Question 29

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.
e. All of the above.

Question 30

There is agreement throughout society that:
a. Overseas expansion is good because it helps improve standards of living around the world.
b. Overseas expansion is bad because it causes 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.
e. None of the above.

Question 31

An example of a primary stakeholder group is:
a. Media.
b. Social activists.
c. Environmental groups.
d. Employees.
e. Fair labor practice groups.

Question 32

Using the five forces model, which will likely result in a higher level of CSR?
a. A highly concentrated industry.
b. Existence of incumbents.
c. Socially and environmentally conscious suppliers with standardized products that have multiple substitutes.
d. No monitoring program for all supplier factories.
e. Substitutes that are superior to existing products and costs are reasonable.

Question 33

Those who feel that firms that expand into emerging economies are failing their CSR responsibilities are most likely to claim that it:
a. Potentially hurts corporate profits.
b. Reduces shareholder returns.
c. Fails to provide employment to host countries.
d. Reduces the standard of living in host countries.
e. Domestic employees and communities pay the price for the overseas expansion.

Question 34

The instrumental view of CSR advocates who are skeptical of CSR compliance claims:
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."
e. All of the above

Question 35

In regard to the extent of CSR challenges, the following is 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.
e. None of the above.

Question 36

CSR tends to be the least concerned with improving:
a. Global sustainability.
b. Shareholder wealth maximization.
c. Rising levels of population.
d. Inequity.
e. High levels of poverty in some countries.

Question 37

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.
e. None of the above.

Question 38

Which of the following is an accommodative CSR strategy?
a. Neither for or against CSR.
b. Resist imposition of what seems unreasonable.
c. View CSR as worthwhile.
d. Actively participate in CSR policy discussion.
e. Voluntarily go beyond what the regulations require.

Question 39

In regards to managers and CSR, the following is true except:
a. All sides of the CSR debate agree that they have a unique and central role.
b. All sides of the CSR debate agree as to how they should implement their role.
c. As a stakeholder group they are unique in terms of potential coordination.
d. They are positioned at the center of all the stakeholder relationships.
e. They make decisions on behalf of the firm that affect other stakeholders.

Question 40

The CSR debate centers on the question:
a. Why does the firm exist?
b. Why does private property exist?
c. What laws are needed to control the firm's behavior?
d. What can be done to prevent unreasonable profits?
e. All of the above.

Question 41

Your firm has sought to be a responsible part of the community and has sought out ways to implement CSR within your capabilities. However, a news organization that has been trying to boost its ratings has done a series on your organization that suggests that your product is harming consumers and the community's environment. You believe the reports are totally false but protests have recently been directed toward your facilities and a politician who seeking an issue has been loudly condemning your organization? Some of your shareholders are suggesting that the company takes its losses on the product by discontinuing it rather than risk further damage to the company and its reputation. What should you do?

Question 42

Your company has been active in CSR. It has even avoided shutting down its local factory and moving its production overseas where its labor costs could be significantly less because it recognizes the harm that would do the employees and the community. However, the CSR has resulted in a lower level of profitability and now a corporate raider appears to be ready to launch a takeover bid for your company. In the past, when that raider has taken over a company, payrolls have been slashed, all CSR has been discontinued, and nearly all stakeholders other than some investors have been harmed. What should you?

Question 43

Last week you attended a series of lectures at the local university in which the speakers were discussing the role of corporations such as yours) overseas. The first lecturer discussed the role of MNEs over the years as instruments of national power for the country in which they were based and discussed instances in which the firms became involved in local politics. The speaker condemned such companies as imperialists for attempting to impose U.S. values on foreign nations. The last speaker in the series argued that MNEs have a responsibility to identify injustice and violation of human rights in the nations where they operate and to use either persuasion or economic pressure to bring about change. Whose advice will you follow?

Question 44

Your competitors have been praised for their CSR while some have compared your efforts to theirs unfavorably. However, you view their efforts as not just window dressing but as manipulation of public option. In one case, you noted that the company spent $50,000 on a community project to help the homeless and over a million dollars advertising to the world what it had done. You are under pressure to follow their examples. What should you do?

Question 45

A representative of an NGO that has a very significant influence on some your key stakeholders especially your customers) has met with you. The person has indicated that they are considering conducting a campaign against one of your policies. You feel the policy is totally justified but you have seen how the organization has smeared and destroyed others that it has targeted. The person seems to be hinting that perhaps they might launch a campaign against some other target if you demonstrated CSR by making a big contribution to the NGO. You feel that you are a victim of extortion but the cost of buying them off might be less than the damage that they could do to you. What should you do?