Strategic Corporate Social Responsibility Sustainable Value Creation 4th Edition – Test Bank
Chapter 5: Corporate Stakeholder Responsibility
Test Bank
Multiple Choice
1. The ________ argument for CSR assumes that firms act most effectively when they are incentivized to do so.
a. economic
b. moral
c. rational
d. ethical
Ans: A
Cognitive Domain: Knowledge
Answer Location: Corporate Stakeholder Responsibility
Difficulty Level: Easy
2. When will firms generally see stakeholder reactions to the firm’s decisions?
a. Within 1 month
b. Within 1 year
c. Within 5 years
d. There is no time limit on reactions.
Ans: D
Cognitive Domain: Comprehension
Answer Location: Corporate Stakeholder Responsibility
Difficulty Level: Medium
3. Which publication published Milton Friedman’s article “The Responsibility of Business to Increase Its Profits?”
a. The Wall Street Journal
b. The New York Times Magazine
c. The Economist
d. Forbes
Ans: B
Cognitive Domain: Knowledge
Answer Location: CSR: A Corporate Responsibility?—Milton Friedman Versus Charles Handy
Difficulty Level: Medium
4. What did Milton Friedman argue in his seminal 1970 article published in The Wall Street Journal?
a. Profit, although important, should not be the primary focus of firms.
b. Firms have a duty to pay their employees a living wage.
c. Profit, as a result of the actions of the firm, is an end in itself.
d. Firms do not provide value to society unless they are acting in a socially responsible manner.
Ans: C
Cognitive Domain: Knowledge
Answer Location: CSR: A Corporate Responsibility?—Milton Friedman Versus Charles Handy
Difficulty Level: Medium
5. Which of the following is an application of Milton Friedman’s ideas?
a. A large, multinational corporation tries to ensure that workers throughout the supply chain earn a living wage.
b. A small business makes maximizing profits its top priority.
c. A firm decides to implement a recycling program to benefit the environment.
d. A medium business encourages its employees to volunteer in the community.
Ans: B
Cognitive Domain: Application
Answer Location: CSR: A Corporate Responsibility?—Milton Friedman Versus Charles Handy
Difficulty Level: Medium
6. What did Charles Handy argue in his 2002 Harvard Business Review article?
a. A corporation should not waste time on CSR initiatives.
b. If businesses are not making large profits, they should not exist.
c. Firms should make satisfying shareholders their first priority.
d. A business has to have a motivation other than merely making a profit in order to justify its existence.
Ans: D
Cognitive Domain: Knowledge
Answer Location: CSR: A Corporate Responsibility?—Milton Friedman Versus Charles Handy
Difficulty Level: Easy
7. According to the text, the range of firm behavior that generates value for both internal and external stakeholders in sufficient quantities is termed ________.
a. the strategic CSR window of opportunity
b. the strategic CSR best practices
c. maximizing strategic CSR
d. strategic CSR expansion
Ans: A
Cognitive Domain: Knowledge
Answer Location: CSR: A Stakeholder Responsibility?—Caring Stakeholders
Difficulty Level: Medium
8.Thomas Friedman wrote that we are in the era of ________.
a. Globalization 1.0
b. Globalization 2.0
c. Globalization 3.0
d. Globalization 4.0
Ans: C
Cognitive Domain: Knowledge
Answer Location: CSR: A Stakeholder Responsibility?—Informed Stakeholders
Difficulty Level: Hard
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