Deck 7: The Pursuit of Profit

Question 1

Which of the following is NOT a component of Patagonia's Product Lifecycle Initiative?

A)Reduce
B)Repair
C)Restructure
D)Recycle

Answer 1

C

Question 2

Which of the following is true of Patagonia's Product Lifecycle Initiative?

A)It encourages and supports governmental regulation of the clothing industry.
B)It emphasizes the importance of shareholder oversight of manufacturing processes.
C)It places primary responsibility for environmental stewardship on the CEO.
D)It consists of a mutual contract between the company and its customers to act responsibly.

Answer 2

D

Question 3

One overall effect of the encroachment of the Internet and social media into every aspect of our lives is to cause companies to

A)lose control over the flow of information.
B)gain greater control over the flow of information.
C)establish significantly larger marketing budgets.
D)increase profit sharing among primary stakeholders.

Answer 3

A

Question 4

Cadbury's business model includes

A)expanding the company's presence in the confectionary market in India into the bottom of the pyramid by providing low-cost products.
B)focusing primariliy on wealthy,Western markets in which people can pay premium prices for Cadbury products.
C)marketing the company's candy and confectionary products to all age groups.
D)transitioning from confectionary products to basic hygiene products,such as soap and toothpaste,that are necessary in bottom of the pyramid countries.

Question 5

The bottom of the pyramid (BOP)refers to

A)the largest sector of the four-tier pyramid used to represent the world's population by income.
B)the section of the economy occupied by the wealthiest individuals.
C)the smallest sector of the four-tier pyramid used to represent the world's population by income.
D)the section of the economy that serves as the base for future economic development.

Question 6

The textbook author argues that there is no distinction between ________ and social problems.

A)economic problems
B)personal problems
C)stakeholder problems
D)shareholder problems

Question 7

People who are part of the 65% of the world's population at the bottom of the pyramid exist on less than ________ (USD)per year.

A)$500
B)$1,000
C)$2,000
D)$5,000

Question 8

________ is a more valuable focus than ________ in understanding value creation for stakeholders.

A)Profit maximization,profit optimization
B)Profit optimization,profit maximization
C)Profit optimization,profit sharing
D)Profit sharing,profit maximization

Question 9

By 2016,it is estimated that the richest 1% of the world's population will own more wealth than approximately ________ of the population.

A)25%
B)50%
C)75%
D)99%

Question 10

According to the textbook,economic value and social value are

A)completely separate constructs.
B)not completely separate constructs.
C)best understood as shareholder values.
D)changing most dramatically in bottom-of-the-pyramid (BOP)countries.

Question 11

Prior to the work of C.K.Prahalad,the main way in which Western countries provided aid to the Third World was to

A)provide educational opportunities to the middle class.
B)develop industrial manufacturing capabilities in large Third World cities.
C)give materials such as surplus food and medical equipment to poor people.
D)develop trading relationships with indigenous cultures.

Question 12

The textbook argues that ________ is the most effective means to ensure the firm's long-term viability.

A)ensuring strong capital reserves
B)corporate social responsibility
C)innovation
D)marketing

Question 13

According to the textbook,BP's (British Petroleum's)series of accidents might have been prevented if

A)the firm's stakeholders had enforced their oversight.
B)the firm had been appropriately managed.
C)shareholders had a greater voice at annual meetings.
D)the firm had hired an environmental management team.

Question 14

C.K.Prahalad argued that countries at the bottom of the pyramid

A)deserve restitution from the colonial powers that historically exploited these countries.
B)should work with the United Nations to develop health programs for their impoverished people.
C)will soon be more economically powerful than the United States,France,and Germany combined.
D)represent a huge and largely untapped market with many business opportunities.

Question 15

The role of ________ is a significant reason for the supremacy of market forces.

A)profit
B)social value
C)stakeholders
D)shareholders

Question 16

According to the textbook,the fact that one can buy a T-shirt for $5 in the United States is due primarily to

A)the accessibility of cheap cotton.
B)marketing strategies of large apparel companies.
C)consumer demand for $5 T-shirts.
D)lack of concern for the workers who make T-shirts.

Question 17

Unilever's rethinking of refrigeration technology allows it to deliver ice cream in India for just two cents per portion.This is an example of

A)a company serving neglected customers.
B)a company maximizing its profits.
C)a company that cares about its customers.
D)a company being socially responsible.

Question 18

The pursuit of ________ is characteristic of firms that are implementing strategic CSR.

A)short-term profits
B)medium-term profits only
C)medium- to long-term profits
D)long-term profits only

Question 19

From a strategic CSR perspective,the bottom of the pyramid (BOP)represents

A)a hugely untapped market segment.
B)victims of globalization and modernization.
C)an important source of cheap labor.
D)a growing source of mineral resources.

Question 20

________ is working to deliver products that are both in demand and essential to societal progress and human well-being.

A)Cadbury
B)Coca-Cola
C)Philip Morris
D)Unilever

Question 21

Research has shown that consumers at the bottom of the pyramid (BOP)have different aspirations than do other consumers.

Question 22

Assuming a company found a profitable niche in serving the fourth tier (the 4 billion people at the bottom of the economic pyramid),how might such a breakthrough help the firm sell to the developed world at the top of the economic pyramid?

Question 23

William Lever,one of the founders of Unilever,is known for

A)promoting women in management positions.
B)reducing the environmental impact of company products.
C)sourcing agricultural materials sustainably.
D)creating soap to encourage cleanliness and reduce infectious disease.

Question 24

Why is profit optimization a more useful focus for firms than profit maximization?

Question 25

________ is central to the concept of strategic CSR.

A)Compassion in organizations
B)Profit generation
C)Focus on social problems
D)All of these are central to strategic CSR.

Question 26

A significant reason for the supremacy of market forces is the pivotal role of profit.

Question 27

Which of the following describes strategic CSR?

A)A theoretical exercise
B)A passive doctrine
C)A highly empowering approach
D)All of the above

Question 28

Which of the following is not a component of Unilever's Sustainable Living Plan?

A)Halve the environmental impact of its products.
B)Source 100% of agricultural raw materials sustainably.
C)Hire women in 50% of executive positions within the company.
D)Help more than 1 billion people improve their health and well-being.

Question 29

According to the textbook,stakeholders do not have it in their collective power to shape which firms they want to populate the economy.

Question 30

According to the textbook,________ are becomingly increasingly important in developing countries for conducting business.

A)business school graduates
B)elements of technological infrastucture,such as fixed landlines
C)mobile phones
D)NGOs

Question 31

The existence of profit is a prima facie indication that the business has succeeded in producing something consumers want and value.

Question 32

The $5 T-shirt is readily available today,and its existence has profound implications for the type of society in which we live.Describe and analyze these implications.

Question 33

Prahalad argued that poor people in the developing world needed more educational and health services provided by Western democracies.

Question 34

________,rather than ________,offers the best means for rapid social progress in the developing world.

A)International aid; educational opportunity
B)Economic development; international aid
C)Healthcare; educational opportunity
D)Educational opportunity; technological infrastructure

Question 35

Unilever has committed itself to implementing ________ as a core component of strategy and operations.

A)profit sharing
B)corporate social responsibility
C)shareholder actvism
D)cause marketing

Question 36

In your opinion,what was the primary cause of the BP oil company's series of serious accidents? In your response,you should explain whether or not stakeholders have it in their collective power to shape the firms they that populate their economies.

Question 37

Is it OK for a for-profit company to profit from poverty? Why or why not?

Question 38

The idea of profit maximization is unhelpful because

A)it distorts decision making within the firm.
B)it deemphasizes shareholder value.
C)it distracts from profit optimization.
D)it does not consider the needs of all of the firm's stakeholders.

Question 39

________ are the best hope for social progress in developing countries.

A)Educational institutions
B)For-profit firms
C)Healthcare institutions
D)Transportation infrastructure improvements

Question 40

Recognizing that many Indians could not afford to buy a big bottle of shampoo,________ developed single-use packets that sell for a few cents,and now the company sells 4.5 billion of them per year.

A)Johnson & Johnson
B)Colgate-Palmolive
C)Proctor & Gamble
D)Unilever