Wrong Answers

Question 1

Public profile

Answer 1

How significant an issue is but does not tell what to do

Question 2

The role of special interest group is an important element in acquiring intelligence from the:

Answer 2

Competitor environment

Question 3

Competitive intelligence

Answer 3

Systematic and continuous process of gathering, analyzing and managing external information about the competitors that can affect the organisation’s plans, decisions and operations.

Question 4

Stages in business-stakeholders relationship

Answer 4

1. Inactive - ignore stakeholders concern and believe they can make decisions unilaterally
2. Reactive - act when forced to do so, in a defensive manner
3. Proactive - actively anticipate stakeholders concern using the environmental scanning practise, they are unlikely to be blindsided but still see it as a problem instead of competitive advantage
4. Interactive - actively engage with stakeholders in an ongoing relationship of mutual trust, openness and respect.

Question 5

Benefits of engagement.

Answer 5

Bring about a number of distinct strengths, alert companies of emerging issues

Learn about society’s expectations

Draw on outside expertise

Generate creative solutions

Win stakeholders’ support for implementing them

Neutralize critics

Increase reputation for constructive actions

Question 6

Stakeholder theory of the firm; 3 arguments

Answer 6

1. Descriptive - a more realistic description of how companies really work.
   - concerned with producing high quality and innovative products for customers
   - attract and retain talented employees
   - comply with government regulations
   - direct energies to stakeholders not just shareholders
2. Instrumental - more effective as a corporate strategy
   - behave responsibly towards multiple stakeholders perform better financially
   - good relationship is a form of value
   - helps with bottom line
3. Normative - is simply the right thing to do
   - great power and control over resources
   - privilege carry a duty toward those affected by
   - any stakeholder makes a contribution or took a risk
   - has moral right to claim on corporation’s rewards

Question 7

Compare and contrast the relationship a firm may have with market and nonmarket stakeholders

Answer 7

Market stakeholders are those that engage in economic transactions with the company as it carries out its purpose of providing society with goods and services.

• stockholder invest in the firm and receive dividends or capital gains
• creditors loan money and collect payment of interests
• suppliers provide raw materials in return for payment

Non-market stakeholders are those not engaged in direct economic transactions but nonetheless affected by its actions

• community
• various levels of government
• competitors
• public

Question 8

Phases of CSR

Answer 8

1. Corporate social stewardship
2. Corporate Social Responsiveness
3. Corporate/Business ethics
4. Corporate/Global citizenship

Question 9

CSR Drivers

Answer 9

1. Corporate social stewardship
   - executive conscience
   - company image
2. Corporate Social Responsiveness
   - social unrest
   - repeated corporate misbehavior
   - public policy/ regulation
   - stakeholder pressure
   - think tank policy papers
3. Corporate/Business ethics
   - religious /ethnic belief
   - technology-driven value change
   - human rights pressure
   - code of ethics
   - ethics committee, training
   - stakeholder negotiations
4. Corporate/Global citizenship
   - global economic trade/investments
   - high-tech communication networks
   - geopolitical shift/competition
   - NGO pressures
   - ecological awareness/concern

Question 10

CSR Policy instruments

Answer 10

1. Corporate social stewardship
   - philanthropic funding
   - public relations
2. Corporate Social Responsiveness
   - stakeholder strategy
   - regulatory compliance
   - social audits
   - public affairs function
   - governance reform
3. Corporate/Business ethics
   - mission/vision/values
   - statements
   - CEO leadership ethics
4. Corporate/Global citizenship
   - interngovernmental compacts
   - global audit standards
   - NGO dialogue
   - sustainability audits/reports

Question 11

As a response to the conflict between long- and short-term profit making, an enlightened self-interest
point of view would be the least useful and practical approach.

Answer 11

False

Question 12

Corporations have a role in establishing their community’s

Answer 12

Economic growth

Question 13

Iron law of responsibility

Answer 13

In the long run, those who do not use power in a manner that society considers responsible will tend to lose it.

Question 14

Under the World Trade Organization’s most favored nation rule, member countries may not discriminate
against foreign products for any reason.

Answer 14

True

Question 15

A firm that would like to develop a global supply chain would:

Answer 15

Purchase raw materials, components, or supplies from sellers in other countries.

Question 16

The three strategies of globalization can be summarized using what three words?

Answer 16

Sell, make, and buy

Question 17

Technological innovation has aided the spread of globalization by:

Answer 17

Leveling the playing field and allowing all to participate on an equal footing in global commerce

Question 18

The loan policies of the World Bank:

Answer 18

Impose strict restrictions on debtor countries which can sometimes lead to hardship

Question 19

Single-party rule by communist parties still remains in:

Answer 19

Vietnam

Question 20

The richest 1 percent of the people in the world receives as much income annually as:

Answer 20

The poorest 57 percent.

Question 21

The basis for corporate citizenship does not rely on the generosity of a firm’s senior management or their
awareness of their role as trustees of the public’s interests.

Answer 21

True

Question 22

Robert Civita, chairman and CEO of the Brazilian Abril Group, has defined global corporate citizenship
as “socialism with a conscience.”

Answer 22

False

Question 23

Social audits look at what an organization does, not at the results of the actions.

Answer 23

False

Question 24

Some companies have created a department of corporate citizenship to:

Answer 24

Centralize under common leadership wide-ranging corporate citizenship functions

Question 25

Once a company enters the innovative stage of corporate citizenship, it will:

Answer 25

Begin reporting its efforts to stakeholders.

Question 26

Companies see the need to build more coherent initiatives as they move into the:

Answer 26

Integrated stage

Question 27

Managers responding to the needs of the local education system as a normal or routine aspect of its
operations is an example of an organization in the:

Answer 27

Transformative stage

Question 28

Which of the following organizations have developed standards to judge corporate performance?

Answer 28

International Organisation for Standards

Question 29

Which of the following is true about corporate boards?

Answer 29

Corporate boards average 12 members.

Question 30

Which of the following is not a function of board committees?

Answer 30

The finance committee works closely with the human resources department to fund employee salaries

Question 31

The main reason that American executives are paid so much is:

Answer 31

Pay is set by the compensation committees of the board, largely comprised of other CEOs who have an
interest in pushing compensation up.

Question 32

Government and business together establish the regulatory rules under which business operates in society.

Answer 32

False

Question 33

In Europe, unions are prohibited by law to be on businesses’ administrative boards.

Answer 33

False

Question 34

To help reduce national deficits, President George W. Bush proposed cutting regulatory agencies’ budgets

Answer 34

False

Question 35

Unilateral regulation occurs when a country seeks to regulate business by firms from its country in another
country.

Answer 35

True

Question 36

The World Trade Organization supported President Bush’s tariff plans to protect U.S. steel firms from
unfair steel dumping.

Answer 36

False

Question 37

Regulation can be argued as justified based on

Answer 37

Utilitarian and justice grounds.

Question 38

An example of a regulatory agency charged with enforcing social regulation is:

Answer 38

FTC

Question 39

Total social regulation costs are:

Answer 39

Significantly higher than total economic regulation costs.

Question 40

Since the 1970s, staffing for economic regulation has:

Answer 40

Been about the same.

Question 41

Deregulation is often:

Answer 41

A politically popular idea.

Question 42

Deregulation has occurred in the following industries

Answer 42

Commercial airlines, railroads and financial institutions.

Question 43

Unilateral regulation applies when:

Answer 43

All companies from a single country are regulated in how they conduct business abroad.