Chapter 4

Chapter 004 Corporate Social Responsibility
True / False Questions
1. Corporate social responsibility refers to the actions of an organization that target the
achievement of a social benefit over and above maximizing profits for its shareholders and
meeting all of its legal obligations.
True False
2. Corporate conscience is an antonym for corporate social responsibility, implying that the
organization is not a citizen responsible for meeting all of its obligations.
True False
3. Corporate citizenship is an alternative term for corporate social responsibility, implying that
the organization is a citizen responsible for meeting all of its obligations.
True False
4. Today's thirsty public want much more than a cool, refreshing drink for a quarter, and
they're demanding said beverage be made of juice squeezed from lemons not sprayed with
insecticides toxic to the environment and achieving this above maximizing profits for its
shareholders. This is an example of corporate social responsibility.
True False
5. In an economic approach to corporate management a corporation's only obligation is to

maximize profits for its shareholders through the provision of goods and services that meet
the needs of its customers.
True False
6. Once CSR becomes part of its strategic plan, choices have to be made as to how the
company will address this new element of corporate management.
True False
4-1
7. From an ethical perspective, Friedman argues that it would be unethical for a corporation to
do anything other than deliver profits for which investors have entrusted it with their funds in
the purchase of shares in the corporation.
True False
8. From an ethical perspective, Friedman argues that it would be unethical for a corporation to
do anything other than deliver profits for which investors have entrusted it with their funds in
the purchase of shares in the corporation, regardless whether it stays within the rules of the
game.
True False
9. Friedman's view of the corporate world supports the rights of individuals to make money
with their investments.
True False
10. The instrumental approach argues that the only obligation of a corporation is to maximize
profits for its shareholders in providing goods and services that meet the needs of its
customers.
True False
11. The social contract approach is a very simplistic model that argues that the corporation
only has an obligation to itself.
True False
12. The modern social contract approach argues that since a corporation depends on society
for its existence and continued growth, there is an obligation for that corporation to meet the
demands of society rather than the demands of a targeted group of customers only.
True False
4-2
13. As far back as 1969, Henry Ford recognized that corporations operate in an isolated
environment.
True False
14. Management by inclusion refers to the belief that a corporation's actions impact their
customers, employees, suppliers, and the communities in which they produce and deliver their
goods and services and some of these groups will be positively affected and others will be
negatively affected.
True False
15. Organizations that demonstrate a "conscience" beyond profit generation inevitably attract
the same amount of attention as organizations that are bottom line-driven.
True False
16. Lay-offs reduce corporation costs and only affect the laid off employees.
True False
17. Joseph F. Keefe asserts that there are three major trends behind the CSR phenomenon.
True False
18. Transparency is a major trend behind the CSR phenomenon.

True False
19. The companies that support the policy of "doing well by doing good" believe that doing
what's best in the long-term interest of the customer is ultimately doing what's best for the
company.
True False
4-3
20. The policy of "doing well by doing good," refers to the belief that doing good for the
company is just good business.
True False
21. With the transition to an information based economy, consumers and investors have more
information at their disposal than at any time in history, which is one of the major trends of
the CSR phenomenon.
True False
22. Many organizations find it difficult to make the transition from CSR as a theoretical
concept to CSR as an operational policy.
True False
23. CSR initiatives have been shown to generate immediate financial gains to the organization
after implementation.
True False
24. Corporations merely experimenting with CSR initiatives run the risk of creating adverse
results and ending up worse than when they started.
True False
25. Corporations that choose to experiment with CSR initiatives run the risk of creating
adverse results and ending up worse off than when they started, as the public sees little more
than a token action concerned with publicity rather than community.
True False
26. Many corporations are now reporting a triple bottom line in their annual reports that
includes updates on their social and environmental activities in addition to their bottom line
financial performance.
True False
4-4
27. The challenge of 3BL is that it is difficult to say just how good is the reporting of an
organization's efforts, such as Wayne and MacDonald presenting the scenario of donating 1.2
percent of its profits, without knowing how large the firm is and what the averages are in its
industrial sector.
True False
28. It may be easy to make a public commitment to CSR, but actually delivering on that
commitment to the satisfaction of your customers can be much harder to achieve.
True False
29. There are four distinctive types of CSR: economic, ethical, altruistic, and strategic.
True False
30. Ethical CSR is the purest or most legitimate type of CSR in which organizations pursue a
clearly defined sense of social conscience in managing their financial responsibilities to
shareholders, their legal responsibilities to their local community and society as a whole, and
their ethical responsibilities to do the right thing for all their stakeholders.
True False
31. Ethical CSR is the purest or most legitimate type of CSR.

True False
32. Altruistic CSR is a philanthropic approach to CSR, in which organizations underwrite

specific initiatives to give back to the company's local community or to designated national or
international programs.
True False
33. Economic CSR is the purest or most legitimate type of CSR.

True False
4-5
34. Altruistic CSR takes a philanthropic approach by giving back to the local community or to
designated national or international programs.
True False
35. When Home Depot announced a direct cash donation of $1.5 million to support the relief
and rebuilding efforts in areas devastated by Hurricane Katrina, this is an example of
Economic CSR.
True False
36. When an organization uses strategic CSR, it faces the smallest risk of being perceived as
using self-serving behavior.
True False
37. Strategic CSR targets programs that will generate the most positive publicity or goodwill
for the organization.
True False
38. In contrast to the alleged immorality of altruistic CSR, critics argue that strategic CSR is
ethically commendable since these initiatives benefit stakeholders while meeting fiduciary
obligations to the company's shareholders.
True False
39. The question with strategic CSR remains: without a win-win payoff, would such CSR
initiatives be authorized?
True False
40. One of the newest and increasingly questionable practices in the world of CSR is the
notion of making your operations "carbon neutral."
True False
4-6
41. The practices of making a company's operations "carbon neutral" to off set damage to the
environment through your greenhouse gas emissions was initially developed as a solution for
those industries that face significant challenges in reducing their emissions, such as airlines or
automobile companies.
True False
42. You can learn what your carbon footprint is at www.carbonfootprint.com/calculator.aspx, where
you can calculate the carbon dioxide emissions from your home and car and then calculate the
total emissions on an annual basis.
True False
43. The Greenhouse Gas Association (GHGA) promotes the standardization of carbon trading
on a global scale.
True False
Multiple Choice Questions
44. ______ implies that the organization is a citizen, responsible for meeting all of its
obligations.
A. Corporate ethics
B. Ethical obligation
C. Corporate conscience
D. Corporate citizenship
45. ______ are the actions of an organization that target achieving a social benefit over and
above maximizing profits for its shareholders and meeting all legal obligations.
A. Corporate social responsibility
B. Corporate social obligation
4-7
46. ______ implies that an organization operates with an awareness of its obligation to
society.
47. The definition of corporate social responsibility assumes the corporation ______.
A. is operating in a competitive environment
B. is committed to a retrenchment strategy
C. complies with federal and state legal obligations
D. is committed to a moderate growth strategy
48. The _____approach to corporate management states that the only obligation of a
corporation is to maximize profits for its shareholders.
A. Shareholder approach
B. Social contract approach
C. Economic approach
D. Instrumental approach
49. Many companies adopted a policy of _______ only after the surprising public response to
issues companies did not previously consider to be part of their business responsibilities.
A. social conscience
B. instrumental citizenship
C. corporate social responsibility
D. social contracts
50. ____ said that it would be unethical for a corporation to do anything other than deliver
profits for its investors.
A. Henry Ford II
B. Milton Friedman
C. Steve Jobs
D. Allen Greenspan
4-8
51. In a _______, a corporate executive is an employee of the owners of the business.

A. capitalist, public property system
B. socialist, state-owned system
C. laissez-faire, public property system
D. free-enterprise, private property system
52. The ______ approach to corporate management is considered simplistic because it

assumes that there are no external consequences to the actions of the corporation.
A. Shareholder
B. Social contract
C. Economic
D. Instrumental
53. By recognizing ______ rather than ______, corporations must maintain a long-term
perspective rather than simply delivering quarterly earnings numbers.
A. stakeholders; shareholders
B. customers; investors
C. community partners; shareholders
D. shareholders; stakeholders
54. As early as 1969, it was recognized that corporations ______.

A. actions do not impact their external environment
B. do not operate in an isolated environment
C. can actually increase their profits by being socially responsible
D. have a responsibility to shareholders before stakeholders
55. As early as 1969, _____ recognized that corporations do not operate in an isolated
environment.
A. Henry Ford II
B. Milton Friedman
C. Steve Jobs
D. Allen Greenspan
4-9
56. In the last 30 years alone, we have consumed ______ of the planet's resources.
A. 1/4
B. 1/3
C. 1/2
D. 4/5
57. The policy of _______ is the corporate social responsibility of doing what's in the best in
the long-term interest of the customer is ultimately is doing what's best for the company.
A. sustainability
B. doing well by doing good
C. social contract
D. doing well by responsibility
58. All of the following are major trends behind the CSR phenomenon except:
A. sustainability
B. globalization
C. the failure of the private sector
D. knowledge
59. The greatest period of reform in the U.S. produced all of the following, except:
A. Unemployment laws
B. The minimum wage
C. Child labor laws
D. Sexual harassment laws
60. Many, if not most, developing countries are governed by ______ regimes.
A. dysfunctional
B. effective
C. efficient
D. controlling
4-10
61. Many CSR initiatives ______.

A. generate immediate financial gains to the organization
B. do not generate long-term financial gains to the organization
C. do not generate immediate financial gains to the organization
D. generate enough financial gains for the organization to break even
62. Corporations that experiment with CSR initiatives run the risk of creating all of the
following results, except:
A. employees feel that they are working for an insincere organization
B. the public sees the initiative as little more than a token action
C. shareholders feel that their organization will deliver bigger profits with their initiatives
D. the organization does not see much benefit of CSR and therefore sees no need to develop
the concept
63. Many corporations are now reporting ______ in their annual reports that includes updates
on their social and environmental activities in addition to their bottom line financial
performance.
A. consumerism
B. a double bottom line
C. economic CSR
D. a triple bottom line
64. _____ CSR is the most legitimate type of CSR.

A. Altruistic
B. Ethical
C. Economic
D. Strategic
4-11
65. Organizations pursuing a clearly defined sense of social conscience in managing their
financial responsibilities to shareholders, their legal responsibilities to their local community
and society as a whole, and their ethical responsibilities to "do the right thing" for all their
stakeholders follow a(n) _______ initiative.
A. altruistic CSR
B. strategic CSR
C. ethical CSR
D. economic CSR
66. _____ is a philanthropic approach to CSR, in which organizations underwrite specific

initiatives to give back to the company's local community or to designated national or
A. altruistic CSR
B. strategic CSR
C. ethical CSR
D. economic CSR
67. Which approach to CSR argues that philanthropic initiatives are authorized without
concern for the corporation's overall profitability?
A. Altruistic
B. Ethical
C. Economic
D. Strategic
68. Southwest Airlines supports the Ronald McDonald Houses with donations of both dollars
and employee-donated volunteer hours. This is an example of _______ CSR.
A. Strategic
B. Economic
C. Altruistic
D. Ethical
4-12
69. ______ CSR encompasses philanthropic activities targeted toward programs that generate
the most positive publicity or goodwill for the organization.
A. Altruistic
B. Ethical
C. Economic
D. Strategic
70. ________ is one of the newest and increasingly questionable practices in the world of
CSR.
A. Risk management and emergency preparedness
B. Water conservation
C. Greenhouse gas conscience
D. "Carbon neutral" operations
71. The practices of making a company's operations _______, to off set damage to the
environment through their greenhouse gas emissions, was initially developed as a solution for
those industries that face significant challenges in reducing their emissions.
A. focused on consumerism
B. focused on water conservation
C. "greenhouse gas neutral"
D. "carbon neutral"
72. In November 2006, the Deutsche Bank teamed up with more than a dozen investment
banks and five carbon-trading organizations in Europe to create the __________.
A. Carbon Counter Association (CCA)
B. Greenhouse Gas Association (GHGA)
C. European Carbon Investors and Services Association (ECIS)
D. Clean Air Association (CAA)
4-13
Fill in the Blank Questions
73. Corporate ________________________ implies that the organization is responsible for

meeting all of its obligations.
________________________________________
74. Corporate _______________________ are the actions of an organization that target

achieving a social benefit over and above maximizing profits for its shareholders and meeting
all legal obligations.
________________________________________
75. Corporate ______________________ implies that an organization operates with an

awareness of its obligation to society.
________________________________________
76. The __________________ approach to corporate management states that the only
obligation of a corporation is to maximize profits for its shareholders.
________________________________________
77. Many companies adopt a policy of corporate __________________________ only after

being surprised by public responses to issues they had not previously thought were part of
their business responsibilities.
________________________________________
78. ___________________________ said that it would be unethical for a corporation to do

anything other than deliver profits for its investors.
________________________________________
79. The ______________________ approach to corporate management is considered

simplistic because it assumes that there are no external consequences to the actions of the
corporation.
________________________________________
4-14
80. By recognizing ___________________ rather than ___________________, corporations

must maintain a long-term perspective rather than simply delivering quarterly earnings
numbers.
________________________________________
81. As early as 1969, Mr. _________________________ recognized that corporations do not

operate in an isolated environment.
________________________________________
82. Those companies that support the policy of doing ___________ by doing __________,
believe that doing what's best in the long-term interest of the customer is ultimately doing
what's best for the company.
________________________________________
83. Many, if not most, developing countries are governed by _____________________

regimes.
________________________________________
84. Many ___________________ initiatives do not generate immediate financial gains to the
organization.
________________________________________
85. Many corporations are now reporting a ________________________ in their annual

reports that includes updates on their social and environmental activities in addition to their
bottom line financial performance.
________________________________________
86. ______________________ CSR is the most legitimate type of CSR.

________________________________________
4-15
87. When organizations pursue a clearly defined sense of social conscience in managing their
stakeholders, they are following a _____________________ CSR initiative.
________________________________________
88. ___________________ CSR is a philanthropic approach to CSR, in which organizations

underwrite specific initiatives to give back to the company's local community or to designated
national or international programs.
________________________________________
89. The ___________________ approach to CSR argues that philanthropic initiatives are
authorized without concern for the corporation's overall profitability.
________________________________________
90. Southwest Airlines supports the Ronald McDonald Houses with donations of both dollars
and employee-donated volunteer hours. This is an example of __________________ CSR.
________________________________________
91. _________________ CSR encompasses philanthropic activities targeted toward programs

that generate the most positive publicity or goodwill for the organization.
________________________________________
92. _________________________ operations are one of the newest and increasingly

questionable practices in the world of CSR.
________________________________________
4-16
93. The practices of making a company's operations ___________________________ to off

set damage to the environment through their greenhouse gas emissions was initially
developed as a solution for those industries that face significant challenges in reducing their
emissions.
________________________________________
94. The European _________________________________________ was created in

November 2006, when the Deutsche Bank teamed up with more than a dozen investment
banks and five carbon-trading organizations in Europe.
________________________________________
Essay Questions
95. Describe and explain corporate social responsibility.
96. Discuss the difference between the instrumental approach and social contract approach.
4-17
97. Explain the business argument for "doing well by doing good."
98. Name and briefly describe each of the five major trends behind the CSR phenomenon.
99. Discuss the major trend: transparency.
100. Discuss the major trend: knowledge.
4-18
101. Discuss the major trend: sustainability.
102. Discuss the major trend: globalization.
103. Discuss the major trend: failure of the public sector.
104. Discuss the benefits of an organization having a triple bottom line that is included in
their annual reports?
4-19
105. Discuss the difference between ethical, altruistic, and strategic types of CSR.
106. Discuss the practices of making a company's operations "carbon neutral."
4-20
Chapter 004 Corporate Social Responsibility Key
True / False Questions
1. (p. 66) Corporate social responsibility refers to the actions of an organization that target the
achievement of a social benefit over and above maximizing profits for its shareholders and
meeting all of its legal obligations.
TRUE
Bloom's: Remembering
Difficulty: Easy
Learning Outcome: 4.1
2. (p. 66) Corporate conscience is an antonym for corporate social responsibility, implying that
the organization is not a citizen responsible for meeting all of its obligations.
FALSE
Corporate social responsibility (CSR) is also referred to as corporate citizenship or corporate

conscience.
Difficulty: Easy
3. (p. 66) Corporate citizenship is an alternative term for corporate social responsibility,
implying that the organization is a citizen responsible for meeting all of its obligations.
TRUE
Difficulty: Easy
4-21
4. (p. 66) Today's thirsty public want much more than a cool, refreshing drink for a quarter, and
they're demanding said beverage be made of juice squeezed from lemons not sprayed with
insecticides toxic to the environment and achieving this above maximizing profits for its
shareholders. This is an example of corporate social responsibility.
TRUE
Difficulty: Easy
5. (p. 66) In an economic approach to corporate management a corporation's only obligation is

to maximize profits for its shareholders through the provision of goods and services that meet
the needs of its customers.
FALSE
The corporation is operating in a competitive environment and that the managers of the
corporation are committed to an aggressive growth strategy while complying with all federal,
state, and local legal obligations. These obligations include payment of all taxes related to the
profitable operation of the business, payment of all employer contributions for its workforce,
and compliance with all legal industry standards in operating a safe working environment for
its employees and delivering safe products to its customers.
Bloom's: Understanding
Difficulty: Medium
6. (p. 66) Once CSR becomes part of its strategic plan, choices have to be made as to how the
company will address this new element of corporate management.
TRUE
Difficulty: Easy
4-22
7. (p. 67) From an ethical perspective, Friedman argues that it would be unethical for a
corporation to do anything other than deliver profits for which investors have entrusted it with
their funds in the purchase of shares in the corporation.
TRUE
Difficulty: Easy
8. (p. 67) From an ethical perspective, Friedman argues that it would be unethical for a
corporation to do anything other than deliver profits for which investors have entrusted it with
their funds in the purchase of shares in the corporation, regardless whether it stays within the
rules of the game.
FALSE
Friedman argues that it would be unethical for a corporation to do anything other than deliver
profits for which investors have entrusted it with their funds in the purchase of shares in the
corporation, so long as it stays within the rules of the game.
Difficulty: Medium
9. (p. 67) Friedman's view of the corporate world supports the rights of individuals to make
money with their investments.
TRUE
Difficulty: Easy
10. (p. 67) The instrumental approach argues that the only obligation of a corporation is to
maximize profits for its shareholders in providing goods and services that meet the needs of
its customers.
TRUE
Difficulty: Easy
4-23
11. (p. 68) The social contract approach is a very simplistic model that argues that the
corporation only has an obligation to itself.
FALSE
Social contract approach argues that a corporation has an obligation to society over and above
the expectations of its shareholders.
Difficulty: Medium
12. (p. 68) The modern social contract approach argues that since a corporation depends on
society for its existence and continued growth, there is an obligation for that corporation to
meet the demands of society rather than the demands of a targeted group of customers only.
TRUE
Difficulty: Easy
13. (p. 68) As far back as 1969, Henry Ford recognized that corporations operate in an isolated
environment.
FALSE
As far back as 1969, Henry Ford II recognized that corporations do not operate in an isolated
environment.
Difficulty: Easy
4-24
14. (p. 68) Management by inclusion refers to the belief that a corporation's actions impact their
customers, employees, suppliers, and the communities in which they produce and deliver their
goods and services and some of these groups will be positively affected and others will be
negatively affected.
TRUE
Difficulty: Easy
15. (p. 68) Organizations that demonstrate a "conscience" beyond profit generation inevitably
attract the same amount of attention as organizations that are bottom line-driven.
FALSE
Organizations that demonstrate a "conscience" beyond profit generation inevitably attract a

lot of attention.
Difficulty: Easy
16. (p. 68) Lay-offs reduce corporation costs and only affect the laid off employees.
FALSE
The employees are obviously hardest hit by this decision; it also has other far- reaching
consequences. The communities in which those employees reside have now lost the spending
power of those employees.
Difficulty: Medium
4-25
17. (p. 69-71) Joseph F. Keefe asserts that there are three major trends behind the CSR
phenomenon.
FALSE
Joseph F. Keefe asserts that there are five major trends behind the CSR phenomenon.
Difficulty: Medium
18. (p. 69) Transparency is a major trend behind the CSR phenomenon.
TRUE
Difficulty: Easy
19. (p. 69) The companies that support the policy of "doing well by doing good" believe that
doing what's best in the long-term interest of the customer is ultimately doing what's best for
the company.
TRUE
Difficulty: Easy
20. (p. 69) The policy of "doing well by doing good," refers to the belief that doing good for the
company is just good business.
FALSE
"Doing well by doing good," refers to the belief that doing good for the customer is just good
business.
Difficulty: Easy
4-26
21. (p. 71) With the transition to an information based economy, consumers and investors have
more information at their disposal than at any time in history, which is one of the major trends
of the CSR phenomenon.
TRUE
Difficulty: Medium
22. (p. 71) Many organizations find it difficult to make the transition from CSR as a theoretical
concept to CSR as an operational policy.
TRUE
Difficulty: Medium
23. (p. 71) CSR initiatives have been shown to generate immediate financial gains to the
organization after implementation.
FALSE
CSR initiatives do not generate immediate financial gains to the organization.
Difficulty: Medium
24. (p. 71) Corporations merely experimenting with CSR initiatives run the risk of creating
adverse results and ending up worse than when they started.
TRUE
Difficulty: Medium
4-27
25. (p. 71) Corporations that choose to experiment with CSR initiatives run the risk of creating
adverse results and ending up worse off than when they started, as the public sees little more
than a token action concerned with publicity rather than community.
TRUE
Difficulty: Medium
26. (p. 73) Many corporations are now reporting a triple bottom line in their annual reports that
includes updates on their social and environmental activities in addition to their bottom line
financial performance.
TRUE
Difficulty: Easy
27. (p. 73) The challenge of 3BL is that it is difficult to say just how good is the reporting of an
organization's efforts, such as Wayne and MacDonald presenting the scenario of donating 1.2
percent of its profits, without knowing how large the firm is and what the averages are in its
industrial sector.
TRUE
Difficulty: Medium
28. (p. 74) It may be easy to make a public commitment to CSR, but actually delivering on that
commitment to the satisfaction of your customers can be much harder to achieve.
TRUE
Difficulty: Easy
4-28
29. (p. 74) There are four distinctive types of CSR: economic, ethical, altruistic, and strategic.
FALSE
There are three distinct types of CSR: ethical, altruistic, and strategic.
Difficulty: Easy
30. (p. 74) Ethical CSR is the purest or most legitimate type of CSR in which organizations
pursue a clearly defined sense of social conscience in managing their financial responsibilities
to shareholders, their legal responsibilities to their local community and society as a whole,
and their ethical responsibilities to do the right thing for all their stakeholders.
TRUE
Difficulty: Medium
31. (p. 74) Ethical CSR is the purest or most legitimate type of CSR.
TRUE
Difficulty: Easy
32. (p. 74) Altruistic CSR is a philanthropic approach to CSR, in which organizations
underwrite specific initiatives to give back to the company's local community or to designated
national or international programs.
TRUE
Difficulty: Medium
4-29
33. (p. 74) Economic CSR is the purest or most legitimate type of CSR.
FALSE
Ethical CSR is the purest or most legitimate type of CSR
Difficulty: Easy
34. (p. 74) Altruistic CSR takes a philanthropic approach by giving back to the local community
or to designated national or international programs.
TRUE
Difficulty: Easy
35. (p. 74) When Home Depot announced a direct cash donation of $1.5 million to support the
relief and rebuilding efforts in areas devastated by Hurricane Katrina, this is an example of
Economic CSR.
FALSE
This is an example of altruistic CSR.
Difficulty: Easy
36. (p. 75) When an organization uses strategic CSR, it faces the smallest risk of being perceived
as using self-serving behavior.
FALSE
An organization runs the greatest risk of being perceived as using self-serving behavior when
it uses strategic CSR.
Difficulty: Medium
4-30
37. (p. 75) Strategic CSR targets programs that will generate the most positive publicity or
goodwill for the organization.
TRUE
Difficulty: Easy
38. (p. 75) In contrast to the alleged immorality of altruistic CSR, critics argue that strategic
CSR is ethically commendable since these initiatives benefit stakeholders while meeting
fiduciary obligations to the company's shareholders.
TRUE
Difficulty: Medium
39. (p. 75) The question with strategic CSR remains: without a win-win payoff, would such CSR
initiatives be authorized?
TRUE
Difficulty: Easy
40. (p. 75) One of the newest and increasingly questionable practices in the world of CSR is the
notion of making your operations "carbon neutral."
TRUE
Difficulty: Easy
4-31
41. (p. 75) The practices of making a company's operations "carbon neutral" to off set damage to
the environment through your greenhouse gas emissions was initially developed as a solution
for those industries that face significant challenges in reducing their emissions, such as
airlines or automobile companies.
TRUE
Difficulty: Medium
42. (p. 76) You can learn what your carbon footprint is at www.carbonfootprint.com/calculator.aspx,
where you can calculate the carbon dioxide emissions from your home and car and then
calculate the total emissions on an annual basis.
TRUE
Difficulty: Difficult
43. (p. 77) The Greenhouse Gas Association (GHGA) promotes the standardization of carbon
trading on a global scale.
FALSE
The European Carbon Investors and Services Association (ECIS) promotes the
standardization of carbon trading on a global scale.
Difficulty: Medium
4-32
Multiple Choice Questions
44. (p. 66) ______ implies that the organization is a citizen, responsible for meeting all of its
obligations.
A. Corporate ethics
B. Ethical obligation
Difficulty: Easy
45. (p. 66) ______ are the actions of an organization that target achieving a social benefit over
and above maximizing profits for its shareholders and meeting all legal obligations.
Difficulty: Easy
46. (p. 66) ______ implies that an organization operates with an awareness of its obligation to
society.
Difficulty: Easy
4-33
47. (p. 66) The definition of corporate social responsibility assumes the corporation ______.
A. is operating in a competitive environment
B. is committed to a retrenchment strategy
C. complies with federal and state legal obligations
D. is committed to a moderate growth strategy
Difficulty: Easy
48. (p. 67) The _____approach to corporate management states that the only obligation of a
corporation is to maximize profits for its shareholders.
A. Shareholder approach
B. Social contract approach
C. Economic approach
D. Instrumental approach
Difficulty: Medium
49. (p. 67) Many companies adopted a policy of _______ only after the surprising public
response to issues companies did not previously consider to be part of their business
responsibilities.
A. social conscience
B. instrumental citizenship
C. corporate social responsibility
D. social contracts
Difficulty: Medium
4-34
50. (p. 67) ____ said that it would be unethical for a corporation to do anything other than
deliver profits for its investors.
A. Henry Ford II
B. Milton Friedman
C. Steve Jobs
D. Allen Greenspan
Difficulty: Easy
51. (p. 67) In a _______, a corporate executive is an employee of the owners of the business.
A. capitalist, public property system
B. socialist, state-owned system
C. laissez-faire, public property system
D. free-enterprise, private property system
Difficulty: Easy
52. (p. 67-68) The ______ approach to corporate management is considered simplistic because it
assumes that there are no external consequences to the actions of the corporation.
A. Shareholder
B. Social contract
C. Economic
D. Instrumental
Difficulty: Easy
4-35
53. (p. 68) By recognizing ______ rather than ______, corporations must maintain a long-term
perspective rather than simply delivering quarterly earnings numbers.
A. stakeholders; just shareholders
B. customers; investors
C. community partners; shareholders
D. shareholders; stakeholders
Difficulty: Medium
54. (p. 68) As early as 1969, it was recognized that corporations ______.
A. actions do not impact their external environment
B. do not operate in an isolated environment
C. can actually increase their profits by being socially responsible
D. have a responsibility to shareholders before stakeholders
Difficulty: Medium
55. (p. 67) As early as 1969, _____ recognized that corporations do not operate in an isolated
environment.
A. Henry Ford II
B. Milton Friedman
C. Steve Jobs
D. Allen Greenspan
Difficulty: Medium
4-36
56. (p. 67) In the last 30 years alone, we have consumed ______ of the planet's resources.
A. 1/4
B. 1/3
C. 1/2
D. 4/5
Difficulty: Easy
57. (p. 69) The policy of _______ is the corporate social responsibility of doing what's in the
best in the long-term interest of the customer is ultimately is doing what's best for the
company.
A. sustainability
B. doing well by doing good
C. social contract
D. doing well by responsibility
Difficulty: Medium
58. (p. 69-71) All of the following are major trends behind the CSR phenomenon except:
A. sustainability
B. globalization
C. the failure of the private sector
D. knowledge
Difficulty: Medium
4-37
59. (p. 71) The greatest period of reform in the U.S. produced all of the following, except:
A. Unemployment laws
B. The minimum wage
C. Child labor laws
D. Sexual harassment laws
Difficulty: Medium
60. (p. 71) Many, if not most, developing countries are governed by ______ regimes.
A. dysfunctional
B. effective
C. efficient
D. controlling
Difficulty: Easy
61. (p. 71) Many CSR initiatives ______.

A. generate immediate financial gains to the organization
B. do not generate long-term financial gains to the organization
C. do not generate immediate financial gains to the organization
D. generate enough financial gains for the organization to break even
Difficulty: Easy
4-38
62. (p. 71) Corporations that experiment with CSR initiatives run the risk of creating all of the
following results, except:
A. employees feel that they are working for an insincere organization
B. the public sees the initiative as little more than a token action
C. shareholders feel that their organization will deliver bigger profits with their initiatives
D. the organization does not see much benefit of CSR and therefore sees no need to develop
the concept
Difficulty: Medium
63. (p. 73) Many corporations are now reporting ______ in their annual reports that includes
updates on their social and environmental activities in addition to their bottom line financial
performance.
A. consumerism
B. a double bottom line
C. economic CSR
D. a triple bottom line
Difficulty: Medium
64. (p. 74) _____ CSR is the most legitimate type of CSR.
A. Altruistic
B. Ethical
C. Economic
D. Strategic
Difficulty: Easy
4-39
65. (p. 74) Organizations pursuing a clearly defined sense of social conscience in managing their
stakeholders follow a(n) _______ initiative.
A. altruistic CSR
B. strategic CSR
C. ethical CSR
D. economic CSR
Difficulty: Easy
66. (p. 74) _____ is a philanthropic approach to CSR, in which organizations underwrite specific
initiatives to give back to the company's local community or to designated national or
A. altruistic CSR
B. strategic CSR
C. ethical CSR
D. economic CSR
Difficulty: Easy
67. (p. 74) Which approach to CSR argues that philanthropic initiatives are authorized without
concern for the corporation's overall profitability?
A. Altruistic
B. Ethical
C. Economic
D. Strategic
Difficulty: Medium
4-40
68. (p. 74) Southwest Airlines supports the Ronald McDonald Houses with donations of both
dollars and employee-donated volunteer hours. This is an example of _______ CSR.
A. Strategic
B. Economic
C. Altruistic
D. Ethical
Difficulty: Medium
69. (p. 75) ______ CSR encompasses philanthropic activities targeted toward programs that
generate the most positive publicity or goodwill for the organization.
A. Altruistic
B. Ethical
C. Economic
D. Strategic
Difficulty: Easy
70. (p. 75) ________ is one of the newest and increasingly questionable practices in the world of
CSR.
A. Risk management and emergency preparedness
B. Water conservation
C. Greenhouse gas conscience
D. "Carbon neutral" operations
Difficulty: Easy
4-41
71. (p. 75) The practices of making a company's operations _______, to off set damage to the
environment through their greenhouse gas emissions, was initially developed as a solution for
those industries that face significant challenges in reducing their emissions.
A. focused on consumerism
B. focused on water conservation
C. "greenhouse gas neutral"
D. "carbon neutral"
Difficulty: Medium
72. (p. 77) In November 2006, the Deutsche Bank teamed up with more than a dozen investment
banks and five carbon-trading organizations in Europe to create the __________.
A. Carbon Counter Association (CCA)
B. Greenhouse Gas Association (GHGA)
C. European Carbon Investors and Services Association (ECIS)
D. Clean Air Association (CAA)
Difficulty: Easy
Fill in the Blank Questions
73. (p. 66) Corporate ________________________ implies that the organization is responsible
for meeting all of its obligations.
citizenship
Difficulty: Easy
4-42
74. (p. 66) Corporate _______________________ are the actions of an organization that target
achieving a social benefit over and above maximizing profits for its shareholders and meeting
all legal obligations.
social responsibility
Difficulty: Easy
75. (p. 66) Corporate ______________________ implies that an organization operates with an
awareness of its obligation to society.
conscience
Difficulty: Easy
76. (p. 67) The __________________ approach to corporate management states that the only
obligation of a corporation is to maximize profits for its shareholders.
instrumental
Difficulty: Medium
77. (p. 67) Many companies adopt a policy of corporate __________________________ only
after being surprised by public responses to issues they had not previously thought were part
of their business responsibilities.
social responsibility
Difficulty: Medium
4-43
78. (p. 67) ___________________________ said that it would be unethical for a corporation to
do anything other than deliver profits for its investors.
Milton Friedman
Difficulty: Easy
79. (p. 67-68) The ______________________ approach to corporate management is considered

simplistic because it assumes that there are no external consequences to the actions of the
corporation.
social contract
Difficulty: Easy
80. (p. 68) By recognizing ___________________ rather than ___________________,

corporations must maintain a long-term perspective rather than simply delivering quarterly
earnings numbers.
stakeholders; shareholders
Difficulty: Medium
81. (p. 67) As early as 1969, Mr. _________________________ recognized that corporations do
not operate in an isolated environment.
Henry Ford II
Difficulty: Medium
4-44
82. (p. 69) Those companies that support the policy of doing ___________ by doing
__________, believe that doing what's best in the long-term interest of the customer is
ultimately doing what's best for the company.
well, good
Difficulty: Medium
83. (p. 71) Many, if not most, developing countries are governed by _____________________
regimes.
dysfunctional
Difficulty: Easy
84. (p. 71) Many ___________________ initiatives do not generate immediate financial gains to
the organization.
CSR
Difficulty: Easy
85. (p. 73) Many corporations are now reporting a ________________________ in their annual
reports that includes updates on their social and environmental activities in addition to their
bottom line financial performance.
triple bottom line
Difficulty: Medium
4-45
86. (p. 74) ______________________ CSR is the most legitimate type of CSR.
Ethical
Difficulty: Easy
87. (p. 74) When organizations pursue a clearly defined sense of social conscience in managing
their financial responsibilities to shareholders, their legal responsibilities to their local
community and society as a whole, and their ethical responsibilities to "do the right thing" for
all their stakeholders, they are following a _____________________ CSR initiative.
ethical
Difficulty: Easy
88. (p. 74) ___________________ CSR is a philanthropic approach to CSR, in which

organizations underwrite specific initiatives to give back to the company's local community or
to designated national or international programs.
Altruistic
Difficulty: Easy
89. (p. 74) The ___________________ approach to CSR argues that philanthropic initiatives are
authorized without concern for the corporation's overall profitability.
altruistic
Difficulty: Medium
4-46
90. (p. 74) Southwest Airlines supports the Ronald McDonald Houses with donations of both
dollars and employee-donated volunteer hours. This is an example of __________________
CSR.
altruistic
Difficulty: Medium
91. (p. 75) _________________ CSR encompasses philanthropic activities targeted toward
programs that generate the most positive publicity or goodwill for the organization.
Strategic
Difficulty: Easy
92. (p. 75) _________________________ operations are one of the newest and increasingly
questionable practices in the world of CSR.
Carbon neutral
Difficulty: Easy
93. (p. 75) The practices of making a company's operations ___________________________ to

off set damage to the environment through their greenhouse gas emissions was initially
developed as a solution for those industries that face significant challenges in reducing their
emissions.
carbon neutral
Difficulty: Medium
4-47
94. (p. 77) The European _________________________________________ was created in

November 2006, when the Deutsche Bank teamed up with more than a dozen investment
banks and five carbon-trading organizations in Europe.
Carbon Investors and Services Association
Difficulty: Medium
Essay Questions
95. (p. 66) Describe and explain corporate social responsibility.
Corporate social responsibility are the actions of an organization that target achieving a social
benefit over and above maximizing profits for its shareholders and meeting all legal
obligations.
Difficulty: Medium
96. (p. 67-68) Discuss the difference between the instrumental approach and social contract
approach.
The instrumental approach argues that a corporation's only obligation is to maximize profits
for its shareholders through the provision of goods and services that meet the needs of its
customers. The social contract approach, on the other hand, argues that a corporation has an
obligation to society over and above the expectations of its shareholders. In today's business
world, many businesses are adopting the social contract approach over the instrumental
approach.
Difficulty: Medium
4-48
97. (p. 69) Explain the business argument for "doing well by doing good."
Doing what's in the best long-term interest of the customer is ultimately doing what's best for
the company. Doing good for the customer is just good business.
Difficulty: Medium
98. (p. 69-71) Name and briefly describe each of the five major trends behind the CSR
phenomenon.
1) Transparency We live in an information-driven economy where business practices have

become increasingly transparent. 2) Knowledge The transition to an information-based
economy means that consumers and investors have more information at their disposal now
than at any time in history. 3) Sustainability The earth's natural systems are in serious and
accelerating decline, while the global population is rising precipitously. 4) Globalization
The greatest periods of reform in U.S. history; it produced child labor laws, the minimum
wage, the eight-hour day, workers' compensation laws, unemployment insurance, antitrust and
securities regulations, social security, etc. 5) The Failure of the Public Sector Many, if not
most developing, countries are governed by dysfunctional regimes ranging from unfortunate
and disorganized to brutal and corrupt.
99. (p. 69) Discuss the major trend: transparency.
We live in an information-driven economy where business practices have become

increasingly transparent. Companies can no longer sweep things under the rugwhatever
they do (for good or ill) will be known, almost immediately, around the world.
Difficulty: Medium
4-49
100. (p. 71) Discuss the major trend: knowledge.
The transition to an information-based economy means that consumers and investors have
more information at their disposal now than at any time in history. They can be more
discerning, and can wield more influence.
Difficulty: Medium
101. (p. 71) Discuss the major trend: sustainability.
The earth's natural systems are in serious and accelerating decline, while the global population
is rising precipitously. In the last 30 years alone, one-third of the planet's resources, the earth's
"natural wealth" have been consumed.
Difficulty: Medium
102. (p. 71) Discuss the major trend: globalization.
The greatest periods of reform in U.S. history; it produced child labor laws, the minimum
wage, the eight-hour day, workers' compensation laws, unemployment insurance, antitrust and
securities regulations, social security, etc. All of these reforms constituted governmental
efforts to intervene in the economy in order to improve the worst excesses of market
capitalism.
Difficulty: Medium
4-50
103. (p. 71) Discuss the major trend: failure of the public sector.
Many, if not most, developing countries are governed by dysfunctional regimes. Developing
countries alone do not suffer from public sectors. In the United States and in other developed
countries, citizens expect less of government than they used to, having lost confidence in the
public sector as the best or appropriate venue for addressing growing lists of social problems.
Difficulty: Medium
104. (p. 73-74) Discuss the benefits of an organization having a triple bottom line that is included
in their annual reports?
As a testament to how seriously companies take CSR, many have now adapted their annual
reports to reflect a triple bottom- line approach, where they provide social and environmental
updates alongside their primary bottom line financial performance. This approach reinforces a
company's commitment to CSR initiatives, which then improves consumers' perception of the
company. Positive company perception can persuade customers to purchase their products
over the competitions'.
Difficulty: Medium
105. (p. 74-75) Discuss the difference between ethical, altruistic, and strategic types of CSR.
Ethical CSR pursues a clearly defined sense of social conscience in managing a company's
financial responsibilities to shareholders, its legal responsibilities to its local community and
society as a whole, and its ethical responsibilities to do the right thing for all of its
stakeholders. Altruistic CSR takes a philanthropic approach underwriting specific initiatives
to give back to the company's local community or to designated national or international
programs. Strategic CSR include philanthropic activities targeted toward programs that
generate the most positive publicity or goodwill for the organization.
4-51
106. (p. 75-76) Discuss the practices of making a company's operations "carbon neutral."
The practices of making a company's operations "carbon neutral" is to off set damage to the
environment through their greenhouse gas emissions was initially developed as a solution for
those industries that face significant challenges in reducing their emissions, such as airlines or
automobile companies.
4-52

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Chapter 004 Corporate Social Responsibility

True / False Questions

5. In an economic approach to corporate management a corporation's only obligation is to

18. Transparency is a major trend behind the CSR phenomenon.

31. Ethical CSR is the purest or most legitimate type of CSR.

32. Altruistic CSR is a philanthropic approach to CSR, in which organizations underwrite

33. Economic CSR is the purest or most legitimate type of CSR.

Multiple Choice Questions

51. In a _______, a corporate executive is an employee of the owners of the business.

52. The ______ approach to corporate management is considered simplistic because it

54. As early as 1969, it was recognized that corporations ______.

61. Many CSR initiatives ______.

64. _____ CSR is the most legitimate type of CSR.

66. _____ is a philanthropic approach to CSR, in which organizations underwrite specific

Fill in the Blank Questions

73. Corporate ________________________ implies that the organization is responsible for

74. Corporate _______________________ are the actions of an organization that target

75. Corporate ______________________ implies that an organization operates with an

77. Many companies adopt a policy of corporate __________________________ only after

78. ___________________________ said that it would be unethical for a corporation to do

79. The ______________________ approach to corporate management is considered

80. By recognizing ___________________ rather than ___________________, corporations

81. As early as 1969, Mr. _________________________ recognized that corporations do not

83. Many, if not most, developing countries are governed by _____________________

85. Many corporations are now reporting a ________________________ in their annual

86. ______________________ CSR is the most legitimate type of CSR.

88. ___________________ CSR is a philanthropic approach to CSR, in which organizations

91. _________________ CSR encompasses philanthropic activities targeted toward programs

92. _________________________ operations are one of the newest and increasingly

93. The practices of making a company's operations ___________________________ to off

94. The European _________________________________________ was created in

95. Describe and explain corporate social responsibility.

99. Discuss the major trend: transparency.

100. Discuss the major trend: knowledge.

101. Discuss the major trend: sustainability.

102. Discuss the major trend: globalization.

103. Discuss the major trend: failure of the public sector.

106. Discuss the practices of making a company's operations "carbon neutral."

True / False Questions

Corporate social responsibility (CSR) is also referred to as corporate citizenship or corporate

5. (p. 66) In an economic approach to corporate management a corporation's only obligation is

Organizations that demonstrate a "conscience" beyond profit generation inevitably attract a

CSR initiatives do not generate immediate financial gains to the organization.

Ethical CSR is the purest or most legitimate type of CSR

This is an example of altruistic CSR.

Multiple Choice Questions

61. (p. 71) Many CSR initiatives ______.

Fill in the Blank Questions

79. (p. 67-68) The ______________________ approach to corporate management is considered

80. (p. 68) By recognizing ___________________ rather than ___________________,

88. (p. 74) ___________________ CSR is a philanthropic approach to CSR, in which

93. (p. 75) The practices of making a company's operations ___________________________ to

94. (p. 77) The European _________________________________________ was created in

95. (p. 66) Describe and explain corporate social responsibility.

1) Transparency We live in an information-driven economy where business practices have

99. (p. 69) Discuss the major trend: transparency.

We live in an information-driven economy where business practices have become

100. (p. 71) Discuss the major trend: knowledge.

101. (p. 71) Discuss the major trend: sustainability.

102. (p. 71) Discuss the major trend: globalization.

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80. By recognizing _ rather than _, corporations

80. (p. 68) By recognizing _ rather than _,