Question 1

Economist Milton Friedman has argued that a business's only responsibility is to

Accepted Answer

Milton Friedman believed that the sole responsibility of a business is to maximize profits within legal and ethical boundaries. He argued that companies should create value for their shareholders, as this is the primary goal of the business. This means that companies must operate within the law and engage in fair competition, but beyond that, they have no obligation to promote the welfare of society or satisfy other stakeholders like employees or customers. While some may argue that businesses should consider the impact on society, Friedman believed that this should be the role of government and not businesses.

Question 2

The term "social responsibility," according to Archie Carroll,can be viewed as a combination of an

Accepted Answer

Archie Carroll's model of corporate social responsibility includes four components: economic, legal, ethical, and discretionary (or philanthropic) responsibilities. The term "social responsibility" often refers to the combination of ethical and discretionary responsibilities, which go beyond mere compliance with laws and focus on doing what is right and beneficial for society.

Question 3

As societal values evolve,it is likely that the ________ responsibilities of today may become the ________ responsibilities to tomorrow.

Accepted Answer

Societal values shape the expectations and obligations of business firms. Discretionary responsibilities, which are not required by law but are expected by society, are most likely to evolve as societal values change. Today's discretionary responsibilities may become tomorrow's ethical responsibilities. Economic and legal responsibilities are more stable and less susceptible to societal changes.

Question 4

According to Archie Carroll,the responsibilities defined by government in laws for management to obey are

Accepted Answer

According to Archie Carroll, the responsibilities that are defined by government in laws for management to obey are referred to as legal responsibilities. These include complying with all applicable laws and regulations, such as labor laws, environmental regulations, and tax laws.

Question 5

Friedman referred to the social responsibility of business as a "fundamentally subversive doctrine."

Accepted Answer

According to Friedman, the social responsibility of business is fundamentally subversive because it diverts the primary focus of business from maximizing profits to fulfilling a broader social responsibility. This goes against the traditional view that the only social responsibility of business is to increase profits for shareholders.

Question 6

Archie Carroll's four responsibilities listed in order of priority are

Accepted Answer

Carroll's pyramid of CSR places economic responsibilities as the foundation, followed by legal, ethical, and finally discretionary (philanthropic) responsibilities at the top, indicating a prioritization from basic to aspirational levels of corporate social responsibility.

Question 7

Archie Carroll proposes that managers in companies have four responsibilities: economic,legal,ethical,and discretionary.

Accepted Answer

Archie Carroll's four responsibilities framework proposes that managers in companies have economic, legal, ethical, and discretionary responsibilities towards society.

Question 8

A 2012 survey of 169 CFOs at publicly traded companies in the United States found what percent intentionally misrepresented their economic performance primarily to influence stock price?

Accepted Answer

According to the survey, 20% of CFOs intentionally misrepresented their economic performance primarily to influence stock price.

Question 9

Who said that the social responsibility of business is a "fundamentally subversive doctrine" and that the one social responsibility of business is "to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game..."?

Accepted Answer

Milton Friedman, a Nobel Prize-winning economist, famously stated that the social responsibility of business is a "fundamentally subversive doctrine" and that the only social responsibility of business is "to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game." This view is often referred to as the "shareholder theory" of corporate social responsibility, which prioritizes maximizing shareholder value above all else.

Question 10

According to Archie Carroll,the responsibilities that management of a business organization assumes which are purely voluntary obligations are

Accepted Answer

Discretionary responsibilities, also known as philanthropic responsibilities, refer to voluntary actions and activities that a business organization undertakes beyond its legal, ethical, financial, and economic responsibilities. These activities may include charitable contributions, community involvement, environmental sustainability, and other similar initiatives. Therefore, the best choice is E.

Question 11

Archie Carroll contends that the primary goal of business is profit maximization.

Accepted Answer

While profit maximization is important for a business, Archie Carroll argues that businesses have four responsibilities, known as the "CSR pyramid": economic, legal, ethical, and philanthropic. Profit maximization falls under the economic responsibility, but businesses also have responsibilities to follow laws, conduct their operations ethically, and contribute to the betterment of society through philanthropic initiatives.

Question 12

Which one of the following is not one of the arguments against social responsibility as used by economist Milton Friedman?

Accepted Answer

One of the arguments against social responsibility, according to Milton Friedman, is that businesses can actually do very little in terms of social responsibility. The other arguments include the idea that spending money on social responsibility is spending the stockholder's money for a general social interest (A), spending money on social responsibility is acting from non-economic motives and may, in the long run, cause harm to society (C), the only social responsibility of business is to increase profits within the rules of the game (D), and taking on the burden of social costs can make the organization less efficient and lead to price increases or postponed growth (E).

Question 13

According to Archie Carroll,the responsibility that management of a business organization has to produce goods and services of value to society so that the firm may repay its creditors and stockholders is called

Accepted Answer

Economic responsibilities refer to the obligation of a business to produce goods/services that are valuable to society in order to generate profits that will enable the business to repay its creditors and stockholders. Legal responsibilities refer to the obligation of businesses to follow the laws and regulations set by the government, while ethical responsibilities refer to the moral obligations of businesses to behave in a socially responsible way. Financial responsibilities refer to the responsibility of businesses to manage their finances appropriately, and discretionary responsibilities refer to the voluntary actions that a business can take to have a positive impact on society.

Question 14

The concept that proposes private corporations have responsibilities to society that extend beyond making a profit is known as

Accepted Answer

The concept described in the question is commonly known as "social responsibility," which proposes that private corporations have obligations to society that go beyond their profit-making activities.

Question 15

Being socially responsible

Accepted Answer

Being socially responsible can open doors in local communities by building trust and goodwill. This can help the company establish a positive reputation and enhance consumers' perceptions of the firm. It may also contribute to long-term financial success by attracting socially conscious customers and investors. While there may be costs associated with implementing socially responsible practices, it is possible to balance these with profit maximization. Therefore, options A, C, D, and E are incorrect.

Question 16

Milton Friedman's position on social responsibility

Accepted Answer

Milton Friedman famously argued that the primary responsibility of business executives is to their shareholders, suggesting that businesses should focus on profit maximization within the bounds of the law and ethical custom. Over time, the emphasis on corporate social responsibility (CSR) has grown, and many business leaders now see value in broader social and environmental considerations, indicating a shift away from Friedman's narrower view.

Question 17

Society generally expects firms to work with employees and the company to plan for layoffs.This is an example of which of Archie Carroll's responsibilities?

Accepted Answer

This is an example of ethical responsibility, as it goes beyond legal requirements and involves doing what is right and fair in terms of respecting the rights and dignity of employees during layoffs.

Question 18

Which of the following is not one of the examples provided as an organizational benefit received from being socially responsible?

Accepted Answer

The statement "They are guaranteed to maximize resource productivity and reduce the average payback period of investment" is not a commonly cited organizational benefit received from being socially responsible. The other options listed are commonly cited benefits of being socially responsible, such as attracting desirable employees, gaining brand loyalty, and attracting investment.

Question 19

The concept of social responsibility proposes that a corporation has responsibilities to society that extend beyond making a profit.

Accepted Answer

The concept of social responsibility requires corporations to consider the impact of their actions on society and the environment, as well as their financial bottom line. This includes but is not limited to issues such as sustainability, ethical business practices, and philanthropy.

Question 20

Providing daycare centers to employees is an example of which of Archie Carroll's responsibilities?

Accepted Answer

Providing daycare centers to employees falls under the category of discretionary responsibility. This means that it is not required by law or economic constraints, but rather it is a voluntary action that a company can take to improve the well-being of its employees.

Quiz 3: Social Responsibility and Ethics in Strategic Management