Deck 9: Accountability

Question 1

Which of the following was NOT a factor in the 2008 financial crisis?

A)Underpricing of risk
B)Fair value accounting
C)The housing market bubble
D)Failure of regulatory infrastructure

Answer 1

B

Question 2

Countrywide grew rapidly in its pursuit of profits,but this

A)happened without consideration for the societal implications.
B)was accompanied by progressive corporate social responsibility standards,which were undone by the collapse in housing prices,leading to numerous foreclosures.
C)was accompanied the due diligence of investors exercising oversight.
D)was undone by fraudulent loan applications.

Answer 2

A

Question 3

Which of the following attempts to capture all of the impacts of the production process,at each step in the supply chain,and assign a quantitative value to each step?

A)Circular pricing
B)Environmental impact regulation
C)Market optimization
D)Lifecycle pricing

Answer 3

D

Question 4

While ________ focuses on resource utilization and waste reduction,________ is an attempt to incorporate all the costs into the final price that is charged for a product.

A)the circular economy; lifecycle pricing
B)lifecycle pricing; the circular economy
C)the circular economy; externality marketing
D)externality marketing; lifecycle pricing

Question 5

Countrywide sought to promote homeownership widely.As the firm became more successful,however,particularly in the early 1990s,what happened?

A)External pressures to maintain that success mounted.
B)Changes in government rules caused Countrywide to fail.
C)Embezzlement was rampant.
D)Government regulation slowed the growth of homeownership.

Question 6

What does the market,if left to its own devices,tend toward?

A)Abusive practices
B)Inefficiency
C)Values-based businesses
D)The most efficient economic growth

Question 7

Nike's 2004 Corporate Responsibility report

A)clearly listed the environmental and social impact of the production process for each of its products.
B)identified its complete list of suppliers worldwide.
C)disclosed vendors' violations of the firm's code of conduct.
D)discussed social impacts and the triple bottom line.

Question 8

________ is the term for the societal costs associated with air pollution from diesel trucks that transport products from factories to stores.

A)Externalities
B)Internalities
C)Sustainability costs
D)Lifecycle costs

Question 9

The concept of ________ is defined by instituting a system of incentives in which rewards are privatized and risks are socialized.

A)financial privatization
B)moral hazard
C)invisible hand
D)global capitalism

Question 10

ISO (International Organization for Standardization)26000 was developed as

A)a mandatory corporate social responsibility standard applied in Europe.
B)a guide.
C)a mandatory standard in Europe and a voluntary standard for the rest of the world.
D)a corporate social responsibility standard that only applies in Scandinavian countries.

Question 11

In general,dichotomous measures of corporate social responsibliity are unhelpful to those who advocate for CSR because

A)such measures reflect the biases of the measuring organization.
B)CSR is more complicated than a simple yes or no.
C)all firms contain good and bad.
D)all of the above.

Question 12

Which of the following may be considered an example of corporate social responsibliity?

A)Sending out employees in matching T-shirts to paint a wall for 5 hours a year
B)Establishing a recycling program at work
C)Improving supply chain conditions
D)All of these examples may be considered CSR,depending on who is defining it.

Question 13

According to the textbook,definitions of corporate social responsibliity are currently

A)highly idiosyncratic.
B)coalescing around the concept of strategic CSR.
C)less confusing than they were 10 years ago.
D)differ more across countries and cultures than within countries and cultures.

Question 14

Timberland's 2006 Our Footprint labeling scheme

A)avoided mentioning the social impacts of its production process.
B)avoided mentioning environmental impacts.
C)discussed social impacts and the triple bottom line.
D)clearly listed the environmental and social impacts of the production process for each of its products.

Question 15

Externalities are costs that firms

A)push onto others.
B)account for when they purchase materials from third parties.
C)add to the final price of a product.
D)typically account for in the wholesale rather than the retail price of a product.

Question 16

The 18th-century economist,Adam Smith,believed in free markets but thought that ________ was required to make markets free.

A)the "invisible hand"
B)the sovereign state
C)regulation of the market price
D)regulation of the natural price

Question 17

According to the textbook,ecolabels are

A)primarily designed as marketing tools.
B)designed to measure environmental impact.
C)becoming consistent across all industries.
D)very useful to help consumers clearly understand the products they buy.

Question 18

According to the textbook,which of the following seems to be the universal standard in corporate social responsibliity audits?

A)Ceres Principles
B)Global Impact Investing Rating System (GIIRS)
C)Global Reporting Initiative (GRI)
D)Sustainability Accounting Standards Board (SASB)

Question 19

Lifecycle pricing involves the incorporation of ________ in the final price of a product.

A)externalities
B)indirect costs
C)internalities
D)circular pricing

Question 20

According to the textbook,how to measure corporate social responsibliity is

A)becoming widely understood with the implementation of ISO 26000.
B)becoming widely understood as more business schools teach principles of CSR in required courses.
C)one of the most pressing and contentious areas of the CSR debate today.
D)a non-issue when taking the perspective of strategic CSR.

Question 21

The real cost of a gallon of gasoline,after accounting for all costs and removing all existing subsidies,is estimated to be less than $1.

Question 22

The intellectual driving force behind the Occupy Wall Street movement challenged

A)the taxpayer bailout of big banks.
B)the concept of "too big to fail."
C)the legitimacy of the efficient market.
D)creative capitalism.

Question 23

Since the late 1990s,the measurement of corporate social responsibility has become increasingly uniform and widely accepted across all industries.

Question 24

Which of the following is NOT a condition for a truly free market?

A)Multiple actors on both the demand and supply sides of the market
B)The absence of externalities
C)Perfect information held by all parties
D)Increased government intervention

Question 25

Is a tobacco firm that employs tens of thousands of people and pays significant taxes a better or worse firm (in terms of corporate social responsibliity performance)than a supermarket that sells food but pays its employees low wages?

Question 26

In the financial crisis of 2008,what was Washington Mutual known for?

A)Responsible lending practices
B)Bailing out Countrywide by purchasing its troubled assets
C)Its refusal to accept taxpayer bailout funds
D)Brazenly lax lending practices

Question 27

Instead of valuing natural capital,current financial and accounting models treat essential natural components such as water and air quality as ________ when accounting for profits and losses.

A)free
B)long-term depreciation
C)short-term depreciation
D)contingent valuation

Question 28

Why is the measurement of corporate social responsibliity such a pressing and contentious area within the overall CSR debate?

Question 29

Countrywide is a good example of how good things had become in terms of corporate responsibility within the financial industry before the financial crisis that began in 2008.

Question 30

The financial crisis of 2008 was inherently a development arising from

A)US financial markets and regulators.
B)a relatively few large Wall Street banks.
C)the complex and interconnected global economy.
D)US government regulators,who did not properly oversee financial institutions to the extent allowed by the laws that were in place at the time.

Question 31

What reforms would you recommend to a mortgage lender in terms of employee incentives to ensure it avoids Countrywide's mistakes? In general,how do you motivate salespeople who work on commission (as many mortgage brokers did in the run-up to the 2008 financial crisis)to sell products that are in their customers',rather than their own,interests?

Question 32

Corporate social responsibliity reporting suffers from the potential for greenwash.

Question 33

According to the textbook,the combination of reduced government intervention (i.,e.,removal of subsidies,tax breaks,etc.)and internalization of all externalities in pricing allows

A)true stakeholder equity.
B)a truly free market to emerge.
C)strategic CSR to flourish.
D)true accountability to exist.

Question 34

In terms of strategic CSR,it is essential to think of firm performance as a dichotomy rather than a continuum.

Question 35

Which of the following describes Fannie Mae and Freddie Mac?

A)For-profit super banks
B)Government-sponsored enterprises
C)Financial institutions under the supervision of the World Bank
D)All of the above

Question 36

Why is it important to think of firm performance with respect to corporate social responsibliity on a continuum rather than a dichotomy?

Question 37

In your view,what were the main causes of the financial crisis that started in 2008? What are the main solutions? What form of global economic system should we be striving to create?

Question 38

Bank of America's purchase of Countrywide

A)may go down as one of the worst deals in corporate history.
B)averted what would have been a larger financial crisis that could have cascaded into a global depression.
C)saved Countrywide CEO Angelo Mozilo from being charged with wrongdoing.
D)turned out to be a great business decision after the federal government bailed out big banks.

Question 39

The dominant feature of the US economic model prior to the 2008 financial crisis was an inherently unstable combination of ________ and ________.

A)excessively low savings; excessively high borrowing
B)extreme financial deregulation; high government subsidies
C)extreme financial regulation; excessively high borrowing
D)excessively high borrowing; a housing market bubble

Question 40

Countrywide and Merrill Lynch have disappeared due to

A)a lack of government regulation.
B)a focus on profit maximization rather than profit optimization.
C)the irresponsible manner in which they were run.
D)the market needing a scapegoat for the financial crisis.