CH 5 IB CSR

Question 1

triple bottom line strategies

Answer 1

take economic, social and environmental performance into account

Question 2

Primary stakeholders

Answer 2

stakeholders on whom the firm relies for its continuous survival and prosperity.

Question 3

Secondary stakeholders

Answer 3

influence or are influenced by the firm but not engage in transactions with the firm and are not essential for its survival

Question 4

Example of secondary stakeholders

Answer 4

NGOs

Question 5

2+1 views why stakeholders are important for firms

Answer 5

instrumental view
normative view
shared value creation

Question 6

instrumental view

Answer 6

suggests that treating stakeholders well can indirectly help the financial performance of the firm

Question 7

normative view

Answer 7

firms should be self-motivated to do it right

Question 8

shared value creation

Answer 8

combines both views.

Shared value creation focuses on activities that are good for both the firm and the stakeholders

Question 9

Two important areas of CSR for MNEs

Answer 9

environmental standards

labor standards

Question 10

pollution havens

Answer 10

countries with lower environmental standards

Question 11

What might developing countries do to attract MNEs?

Answer 11

they could enter the race to the bottom

This means lowering the environmental regulations

Question 12

footloose plants

Answer 12

require little set-up costs and can easily be relocated.

They are labor intensive and can be relocated when regulations on environmental standards for example change.

Question 13

codes of conduct/standards of engagement/ standard of ethics

Answer 13

written policies and standards for corporate conduct and ethics. (Can be also imposed on suppliers)

Question 14

HSE

Answer 14

health, safety, and the environment

Question 15

compliance training

Answer 15

mandatory training to ensure that everyone within a firm knows the relevant codes of conduct

Question 16

compliance

Answer 16

Certification or confirmation that the doer of an action (such as the writer of an audit report), or the manufacturer or supplier of a product, meets the requirements of accepted practices, legislation, prescribed rules and regulations, specified standards, or the terms of a contract.

Question 17

explicit corporate social responsibility

Answer 17

voluntary assumed responsibility for social concerns.

In LMEs firms are induced to do so by the institutional context.

Question 18

LMEs

Answer 18

liberal market economies

Question 19

philanthropy (Love of humans) action example

Answer 19

donations for the purpose that benefit the wider society

Question 20

CME

Answer 20

coordinated market economy

Question 21

What sort of CSR do firms in CMEs engage in?

Answer 21

implicit CSR. Because there are a range of formal and informal constraints on firms and the state has a more active role voluntary actions are not quite that necessary.

Question 22

hyper norms

Answer 22

valid in any country

Question 23

3 strategies of companies to react to institutional pressure

Answer 23

defensive strategy
accommodative strategy
proactive strategy

Question 24

defensive strategy to institutional pressure

Answer 24

focuses on regulatory compliance with little top management commitment

Question 25

accommodative strategy

Answer 25

some support from top managers

Question 26

proactive strategy

Answer 26

involves doing more than required.

1. participate in regional, national and international policy discussions
2. firms often build alliances with stakeholder groups NGOs
3. engage in voluntary activities that go beyond what is required by law