Question 1

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.

Accepted Answer

The statement accurately reflects the fundamental challenge that CSR advocates face, which is the prioritization of shareholder interests in capitalist societies.

Question 2

Most MNEs reportedly outperform local firms in environmental management by voluntarily following "green practices."

Accepted Answer

According to research, many MNEs have implemented green practices and outperform local firms in environmental management.

Question 3

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

Accepted Answer

While companies engaging in CSR may see benefits such as improved reputation and employee morale, there is no consistent evidence that CSR directly translates to increased profits and shareholder returns.

Question 4

A firm with employees that hold strong convictions about being socially responsible in the way they carry out the firm's activities is a rare but highly imitable.

Accepted Answer

A firm with employees who have strong convictions about social responsibility is not highly imitable because such convictions are often deeply ingrained in the company culture and values, making them difficult for other firms to replicate.

Question 5

Suppliers and customers are typically considered primary stakeholders.

Accepted Answer

Suppliers and customers are considered primary stakeholders because they directly affect the success and sustainability of a business. Suppliers provide the goods and services necessary for a business to operate, while customers consume those goods and services and provide revenue for the business. As a result, their needs and satisfaction are crucial to the success of the business.

Question 6

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.

Accepted Answer

The statement accurately captures the tension between the traditional notion of non-interference in domestic politics and the growing pressure on MNEs to engage in social and political issues as part of their corporate social responsibility.

Question 7

Expanding overseas often comes at the expense of domestic employees and communities, who are primary stakeholders.

Accepted Answer

Expanding overseas can lead to job losses or reduced investment in domestic operations, affecting employees and communities who rely on these businesses.

Question 8

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."

Accepted Answer

Primary stakeholder groups are those who have a direct relationship with the corporation and are essential for its survival, such as customers, employees, shareholders, and suppliers. The statement describes secondary stakeholder groups.

Question 9

When facing mounting pressures to be more socially responsible, most firms resist until some first-mover firms deviate from the norms in order to score competitive points with game-changing new products.

Accepted Answer

This is because firms often feel that being socially responsible may come at a cost or may not be immediately beneficial to their bottom line. It is only when they see other firms benefiting from social responsibility, either through financial gain or improved reputation, that they may be more willing to adopt similar practices. First-mover firms can set the precedent for what is expected in terms of social responsibility and encourage others to follow suit.

Question 10

Given the increased number of challenges to firms to improve their level of corporate responsibility, firms may want to proactively embrace CSR and partner with those groups doing the challenging in finding solutions.

Accepted Answer

Proactively embracing CSR and partnering with groups challenging firms can help in finding solutions and improving corporate responsibility.

Question 11

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

Accepted Answer

The five forces framework does not address CSR challenges specifically, but rather analyzes the competitive forces within an industry. Therefore, it does not reinforce the idea that all industries are equal in terms of their exposure to CSR challenges.

Question 12

Managers who treat CSR as a nuisance, involving regulation, added costs, and liability are overestimating the potential business opportunities associated with CSR.

Accepted Answer

The statement argues that managers who view CSR as a nuisance are underestimating its potential business opportunities, not overestimating them.

Question 13

Although costs of complying with tough environmental laws may be high, these "green" taxes simply force firms to pay the "real" costs of their activities they were previously placing on others.​

Accepted Answer

Green taxes aim to internalize the external costs that firms previously placed on society and the environment. By making firms pay for these costs, they are being forced to bear the true costs of their activities, which is a fairer and more sustainable approach.

Question 14

A narrow focus on CSR sees it as integral to profit maximization, rather than separate from profit maximization.

Accepted Answer

The answer of A narrow focus on CSR sees it...

Question 15

CSR-related resources are valuable because they are almost always rare.

Accepted Answer

CSR-related resources are becoming more common as companies recognize the importance of corporate social responsibility and invest in programs and initiatives. While some specific resources may be rare or unique to a particular company or industry, overall, CSR-related resources are becoming more widely available.

Question 16

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

Accepted Answer

Milton Friedman did indeed suggest that "The business of business is business," a quote that has become famous in the world of business and economics. He argued that the primary responsibility of a business is to its shareholders, and that any actions taken by the business should be in the interest of maximizing profits and shareholder value. This philosophy is often associated with the idea of "shareholder capitalism."

Question 17

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).

Accepted Answer

Advocates of shareholder capitalism typically argue that firms should focus primarily on profit maximization and shareholder value, rather than social goals, as they believe this focus will naturally lead to the best outcomes for shareholders.

Question 18

CSR-related resources are mostly in the form of tangible technologies.

Accepted Answer

CSR-related resources can also come in the form of intangible assets such as company culture, reputation, and social networks.

Question 19

The bargaining power of buyers in influencing firms to be socially responsible may be even more powerful than the bargaining power of suppliers.

Accepted Answer

Buyers have the power to choose to purchase products or services from socially responsible companies, which can have a significant impact on a firm's profitability. This can incentivize firms to adopt socially responsible practices in order to attract and retain customers. On the other hand, while suppliers can also influence firms to be socially responsible, their bargaining power may be limited if the firm can easily switch to another supplier.

Question 20

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

Accepted Answer

Reactive strategy involves waiting for a problem to arise before taking action, and therefore, it can often lead to ignoring or neglecting potential issues that are not immediately apparent. This can result in an "out of sight, out of mind" approach where problems are not addressed until they become more significant and potentially damaging.

Quiz 12: Strategizing With Corporate Social Responsibility