Deck 3: Governance,Ethics & Corporate Social Responsibility in Strategy

Question 1

Executive compensation is considered an external corporate governance mechanism because it is determined in part by market forces.

Answer 1

False

Question 2

Ethically responsible companies design and use governance mechanisms that serve all stakeholders' interests.

Answer 2

True

Question 3

Awareness of and compliance with the attitudes of society can help an organization avoid problems associated with a bad ethical reputation.

Answer 3

True

Question 4

A stakeholder is "any group or individual who can affect or is affected by the achievement of the organization's objectives."

Question 5

A board comprised primarily of outside directors will have better insights as to the firms intended strategic initiatives,the reasons for the initiatives,and the outcomes expected from them than will inside directors.

Question 6

Organizational stakeholders are the firm's internal resources,capabilities,and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment.

Question 7

Ethics are universal. What is unethical in one country will be viewed as unethical in other countries.

Question 8

Relative power is the most critical criteria for prioritizing the demands of stakeholders.

Question 9

Foreign investors are playing a relatively minor role in the governance of firms in many countries.

Question 10

Overall,governance practices need to fit with the nature of the industry in which firms are competing. This cautions against prescribing universal "best" practices.

Question 11

Convergence advocates argue that a "survival-of-the-fittest" process will force firms globally to accept the best practices exemplified by Anglo-American practices.

Question 12

The degree to which the firm is dependent on a stakeholder group gives that stakeholder less influence.

Question 13

Both top executives and owners of the firm wish to diversify the firm to reduce risk.

Question 14

The needs and desires of organizational stakeholders are inherently contradictory.

Question 15

If a stakeholder is dissatisfied with a firm,it will withdraw its support and give it to another firm.

Question 16

An organization's willingness to tolerate or encourage unethical behaviour is a reflection of its core values.

Question 17

Corporate governance is the set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of an organization.

Question 18

Stakeholders are individuals and groups who receive or have the potential to receive direct payments from an organization.

Question 19

In general,when governance mechanisms are strong,managers have free rein in their decisions.

Question 20

Corporate governance mechanisms are designed to ensure that top managers make strategic decisions that best serve the interests of the entire group of stakeholders.

Question 21

Issues such as advertising to children,manufacturing in offshore locations where sweatshops are prevalent,and how "green" a firm should be in its business practices illustrate the:

A) Multidimensional nature of ethics in strategic decision-making
B) Need for business leaders to be wary of fads and fashion when making strategic decisions
C) Differences between tactical and strategic decisions
D) Types of decisions more likely to be encountered by manufacturers than service providers

Question 22

Organizations can encourage ethical behavior by:

A) Establishing systems and programs to ensure ethical compliance
B) Having a CEO that reinforces ethical behavior
C) Creating an "integrity program" to communicate and reinforce values
D) All of the above

Question 23

The intent of a vision or mission statement is made clearer if managers:

A) Ask employees to paraphrase and restate each in their own words
B) Translate the general direction of a vision and mission into specific, short-term objectives
C) Write essays on what the vision and mission statements mean to them
D) Examine the founding conditions surrounding the organization

Question 24

Which of the following is not an element of stakeholder analysis?

A) Identifying stakeholders
B) Financially motivating stakeholders
C) Prioritizing stakeholders
D) Assessing stakeholder needs and collecting ideas from stakeholders

Question 25

A key goal for CSR is global sustainability,which is defined as the ability "to meet the needs of the present without compromising the ability of future generations to meet their needs."

Question 26

Ethical dilemmas:

A) Are, by definition, completely unrelated to legal issues
B) Only occur in companies that lack codes of ethics
C) Occur when the values of different stakeholders of the organization are in conflict over a particular issue
D) Are rare

Question 27

Nearly all CSR advocates argue for a revival of socialism in the world.

Question 28

Firms pursuing a reactive CSR strategy actively participate in policy discussions,build alliances with stakeholder groups,and voluntarily go beyond what the regulations require.

Question 29

Ethical imperialism is best expressed by which of the following:

A) "There is only one set of Ethics, and we have it!"
B) "Respect for human dignity and basic rights should be the absolute, minimal ethical threshold for ALL operations around the world."
C) "The abuse of public power for private benefit."
D) "Ignore corruption."

Question 30

All the following are ethical sources of data for external analysis except:

A) Trade shows
B) Competitor's annual reports
C) Competitor's help wanted advertisements
D) A competitor's confidential memos

Question 31

Sustainable development can be defined in terms of an organization's practices with regard to all of the following except:

A) Financial management
B) Technology advancement
C) Environmental protection
D) Advancement of society

Question 32

Vision and mission statements help to answer which question(s)for every employee in an organization?

A) What am I expected to be doing today?
B) Why are my co-workers and I expected to act this way?
C) What are the specific responsibilities of my job classification?
D) Both A and B above are questions that vision and mission statements help answer

Question 33

Companies have had their CSR policies certified by MGOs that might otherwise be hostile.

Question 34

Monitoring by shareholders is usually accomplished through:

A) Management consultants
B) Government auditors
C) The firm's top managers
D) The board of directors

Question 35

Which of the following is not one of the critical questions to be considered in the process of generating a compelling vision?

A) What does it mean to work in this organization?
B) What will computer and networking technologies look like in several years?
C) At the core, what are we particularly good at doing?
D) Where should our company be in ten years?

Question 36

Which of the following is not a major component of social responsibility?

A) Economic responsibilities
B) Legal responsibilities
C) Political obligations
D) Moral obligations

Question 37

Suppliers and customers are typically considered primary stakeholders.

Question 38

When strategic management principles are applied in non-profit and governmental organizations there is a need for ________ measures of performance.

A) Human resource-based
B) Non-financial
C) Public accounting
D) Few, if any

Question 39

A mission statement that is company-specific has the following characteristic(s).

A) It shows strategic focus
B) It allows employees at all levels to exercise judgment and be confident that their decisions would be the same ones made by managers above them
C) It describes the organization's unique and enduring purpose
D) All of the above

Question 40

________ of the world's largest corporations have no written statement at all that would serve to guide their organizations.

A) Twenty-five percent
B) Five percent
C) Sixty-seven percent
D) Eighty-five percent

Question 41

Free market advocates tend to do all of the following except:

A) Argue that "the social responsibility of business is to increase its profits, which leads to efficient capital and product markets."
B) Argue that all stakeholders have an equal right to bargain for a "fair deal."
C) Believe that the first and foremost stakeholder group is shareholders.
D) Argue that if firms attempt to attain social goals, managers will lose their focus on profit maximization.

Question 42

Explain the relationship of the strategic management process to organizational ethics.

Question 43

What is the potential relationship between concern about a board dominated by insiders and concern about excess executive pay?

Question 44

The essential role of governance is oversight,identify the five key activities this involves.

Question 45

What are the characteristics of an effective mission statement?

Question 46

CSR tends to be the least concerned with improving:

A) Global sustainability.
B) Shareholder wealth maximization.
C) Inequity.
D) High levels of poverty in some countries.

Question 47

Some CSR advocates who question the motives of firms implementing CSR are pleased that:

A) Firms are embarking on some tangible CSR journey
B) CSR's legitimacy is rising on the organizational agenda
C) By adopting codes of conduct (even if only for "window dressing" purposes), they create a set of criteria against which they can be judged
D) All of the above

Question 48

With regards to the link between CSR and economic performance:

A) There is no conclusive evidence of a direct, positive link between CSR and economic performance
B) Some studies report a positive relationship
C) Some studies find a negative relationship or no relationship
D) All of the above

Question 49

Those who advocate CSR:

A) Conduct their debate within the constraints of capitalism.
B) Argue that the concepts justice and fairness are simply matters of opinion.
C) Argue that the most important stakeholder is the stockholder.
D) None of the above.

Question 50

Briefly compare and contrast mission and vision.

Question 51

Discuss the components of social responsibility and consider why you would expect a trustworthy firm to have higher profits over the long term?

Question 52

What parts do vision,ethics,and leadership play in the strategic management process?

Question 53

How can interlocking directorates lead to unfair market advantages and investor exploitation?

Question 54

In regards to global convergence:

A) Advocates argue that globalization will unleash a "survival-of the-fittest" process
B) Advocates claim firms will be forced to adopt globally the best practices
C) Others contend that governance practices will continue to diverge throughout the world
D) All of the above

Question 55

Which of the following make up a governance package?

A) Internal and external mechanisms.
B) Carrots to motivate managers such as stock options.
C) Sticks that may result in CEO and top management team turnover.
D) The market for corporate control.

Question 56

Those who feel that firms that expand into emerging economies are failing their CSR responsibilities are most likely to claim that (it):

A) Potentially hurts corporate profits
B) Fails to provide employment to host countries
C) Reduces the standard of living in host countries
D) Domestic employees and communities pay the price for the overseas expansion

Question 57

What is corporate governance and what are the functions of a board of directors?

Question 58

The CSR debate centres on the question:

A) Why does the firm exist?
B) What laws are needed to control the firm's behavior?
C) What can be done to prevent unreasonable profits?
D) All of the above.

Question 59

Identify the Reidenbach and Robin (1995)categorization of company's ethical/unethical response to ethical concerns.

Question 60

Reactive firms:

A) Actively participate in regional, national, and international policy discussions.
B) Often build alliances with stakeholder groups
C) React negatively to aspects of CSR that may increase costs
D) Engage in voluntary activities that go beyond what the regulations require

Question 61

What are the characteristics of an effective vision statement?

Question 62

Briefly compare and contrast corporate governance in the U.S.,Germany,and Japan,and China.