Question 1

Sinbad Cola, a soft drink manufacturer, opened a plant in Buron. The waste from the plant was released into the Buron Sea, which was situated a mile away from the plant. Releasing the wastes into the sea resulted in water pollution and groundwater contamination. The water pollution in turn negatively affected Buron's fishing business. Sinbad Cola compensated for this by bringing the contamination levels down with additional filters and paying for the damages to the local fisheries. Which theory of business social responsibility did Sinbad Cola comply with when it compensated for its harmful waste disposal methods?

Accepted Answer

The moral minimum theory of business social responsibility suggests that a company's duty is to avoid causing harm and to compensate for any harm it inadvertently causes. Sinbad Cola's actions of bringing contamination levels down and paying for damages align with this theory, as they took responsibility for the harm caused and made efforts to rectify it.

Question 2

Conch Corporation, a global oil and gas company, plans to open a subsidized postsecondary vocational school in the town of Cristen, where one of its offices is situated. The plan is put to vote and then approved despite some objection from shareholders. The school is being opened in collaboration with the local government. Its objective is to help the youth of the neighborhood, especially dropouts, learn a vocational skill. What social responsibility theory describes Conch Corporation's move to open the school?

Accepted Answer

Corporate citizenship theory is described by Conch Corporation's move to open the school, as it reflects the company's commitment to ethical behavior, social investment, and responsibility towards the community, beyond its economic and legal obligations.

Question 3

In the past, many business decisions were based solely on a cost-benefit analysis and how they affected the bottom line. However, the realization that such decisions made by businesses have far-reaching effects on society has led to the development of ________.

Accepted Answer

The theories of the social responsibility of business have developed in response to the understanding that business decisions have wide-ranging impacts on society, beyond just the financial bottom line. This concept emphasizes that businesses should also consider the social, environmental, and ethical implications of their decisions.

Question 4

Under the maximize profits theory of the social responsibility of business, businesses should be primarily concerned with the interests of ________.

Accepted Answer

Under the maximize profits theory, the primary concern of businesses is to increase the wealth of its shareholders. This theory posits that the main responsibility of a business is to its owners or shareholders, focusing on generating profit.

Question 5

The theory of corporate social responsibility that would hold that so long as a business avoids or corrects the social injury it causes, it has met its duty of social responsibility is the ________.

Accepted Answer

The moral minimum theory of corporate social responsibility posits that a company fulfills its duty by doing no harm or by rectifying any harm it causes. This approach emphasizes avoiding or correcting social injury as a baseline responsibility.

Question 6

The corporate social responsibility theory that argues that businesses have a responsibility to not just "do well," but also "do good"
Is the ________.

Accepted Answer

Corporate citizenship theory posits that businesses should act as responsible citizens of the societies in which they operate, going beyond profit maximization to contribute positively to societal well-being.

Question 7

The legislative and judicial branches of government have established laws that enforce the ________ of social responsibility for corporations.

Accepted Answer

The answer of The legislative and judicial branches of government...

Question 8

Describe the maximize profits theory of the social responsibility of business and identify the Nobel Prize-winning economist from the University of Chicago who advocated this theory.

Accepted Answer

The answer of Describe the maximize profits theory of the...

Question 9

Which of the following is a characteristic of a public benefit corporation?

Accepted Answer

Public benefit corporations are designed to balance profit-making with the pursuit of one or more public benefits. They are not solely focused on maximizing profit, nor are they not-for-profit or government-owned entities.

Question 10

Which of the following is NOT another term for a public benefit corporation?

Accepted Answer

PB&J corp. is not a recognized term for a public benefit corporation. Benefit corporations, B corps, and social purpose corporations are all terms related to entities that combine profit-making with social and environmental goals, but "PB&J corp." does not fit within this category.

Question 11

Which of these statements is true with regards to public benefit corporations?

Accepted Answer

Most states in the United States have enacted legislation that permits the formation of public benefit corporations, allowing businesses to pursue social and environmental goals alongside profit.

Question 12

Which of these would NOT be considered a typical specific public benefit purpose of a public benefit corporation?

Accepted Answer

Maximizing shareholder value is a primary goal of traditional corporations, not a specific public benefit purpose of a public benefit corporation, which focuses on positive impacts on society, the environment, or specific groups alongside profit.

Question 13

Which of these entities has chosen to conduct its business as a public benefit corporation?

Accepted Answer

The answer of Which of these entities has chosen to...

Question 14

By law, the directors and officers of a public benefit corporation may act differently than directors and officers of a traditional corporation. Describe this difference.

Accepted Answer

The answer of By law, the directors and officers of...

Quiz 2: Ethics and Social Responsibility of Business