Question 1

The Corporate and Auditing Accountability, Responsibility and Transparency Act requires SEC reporting banks and bank holding companies to have a code of ethics.

Accepted Answer

The Corporate and Auditing Accountability, Responsibility and Transparency Act does not require SEC reporting banks and bank holding companies to have a code of ethics, but if an SEC reporting company does not have one, it must explain why.

Question 2

According to research studies, unethical companies financially outperform ethical companies, although ethical companies are more successful with recruiting.

Accepted Answer

Dov Seidman, a management guru who advocates corporate virtue to many companies believes that companies that "outbehave" their competitors ethically will generally outperform them financially. Further, the ethical-or unethical-behavior of an organization is a critical factor for new college graduates seeking jobs, according to the National Association of Colleges and Employers.

Question 3

Corporate social responsibility and corporate sustainability are unrelated terms.

Accepted Answer

Corporate sustainability has evolved from the more traditional view of corporate social responsibility.

Question 4

According to the World Commission on Environment and Sustainability, when a company creates wealth for its shareholders, society as a whole will also benefit.

Accepted Answer

In his book Capitalism and Freedom, Friedman argued that the only social responsibility of business was to increase its profits. He asserted that as a firm creates wealth for its shareholders, society as a whole will also be benefited.

Question 5

Many organizations today refer to the "triple bottom line" suggesting that attention is now being paid to social and environmental concerns as well as economic issues.

Accepted Answer

The "triple bottom line" refers to three factors of corporate social responsibility-society, environment, and economy. Firms that demonstrate the ability to manage all three factors represent the top five percent of socially responsible companies.

Question 6

A code of ethics establishes the rules by which the organization lives and becomes part of the organization's corporate culture.

Accepted Answer

The code of ethics is a statement of the values adopted by the company, its employees, and its directors, and sets the official tone of top management regarding expected behavior.

Question 7

Ethics training for global firms requires accurate translations as well as localization.

Accepted Answer

Ethics training for global organizations is more complicated than preparing the training for U.S. employees. Experts say that localization is as important as the accuracy of the translation process. Learners need to be able to connect in a way that is believable to them.

Question 8

Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves.

Accepted Answer

Corporate social responsibility (CSR) is the implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. When a corporation behaves as if it has a conscience, it is said to be socially responsible.

Question 9

An organization's middle managers usually initiate a corporation's approach to social responsibility.

Accepted Answer

Usually, top executives in a firm determine the organization's approach to CSR. Lower level managers are more active in implementing policies.

Question 10

A social audit is a systematic assessment of a company's activities in terms of its social impact.

Accepted Answer

To overcome the negative publicity of corporate misdeeds and to restore trust, businesses are now conducting audits of their social responsibility activities, not just financial audits. A social audit is a systematic assessment of a company's activities in terms of its social impact.

Question 11

Corporate social responsibility is the model in which the pursuit of profit is replaced by the pursuit of social and environmental goals.

Accepted Answer

Corporate social responsibility is the model in which economic, social, and environmental responsibilities are satisfied concurrently.

Question 12

Surveys indicate that most companies link employee bonuses to ethical performance.

Accepted Answer

A survey of 358 compliance and ethics professionals by the Society of Corporate Compliance and Ethics (SCCE) and the Health Care Compliance Association found that only a few companies have made ethics and compliance a process for determining how employees are compensated, and only about one company in six ties employee bonuses and incentives to ethical performance.

Question 13

According to the Nobel-Prize-winning economist, Milton Friedman, the only social responsibility of a business is to increase its profits.

Accepted Answer

In his book Capitalism and Freedom, Friedman argued that the only social responsibility of business was to increase its profits. He asserted that as a firm creates wealth for its shareholders, society as a whole will also be benefited.

Question 14

From a global perspective, it may be easier to be socially responsible in a prospering economy but more difficult when the economy is bad.

Accepted Answer

The global business world often judges management primarily on protecting the firm's bottom line. Therefore, it may be easy to be socially responsible in a prospering economy but more difficult when the economy is bad.

Question 15

The ideal social audit lists socially responsible activities and how much each one costs.

Accepted Answer

The ideal social audit would go well beyond a simple listing and involve determining the True benefits to society of any socially oriented business activity.

Question 16

According to the FSGO, firms must provide ethical training to employees.

Accepted Answer

The Federal Sentencing Guidelines for Organizations Act outlined an effective ethics training program and explained the seven minimum requirements for an effective program to prevent and detect violations. The fourth requirement stated, "Educate employees in the company's standards and procedures through publications and training."

Question 17

Procter & Gamble has served as a leader in corporate social responsibility by developing and implementing environment-protection technology and encouraging employees to participate in civic activities.

Accepted Answer

Procter & Gamble has long believed it has a responsibility for the long-term benefit of society as well as the company. Over the years, P&G has pursued programs to strengthen U.S. education, to encourage employment opportunities for minorities and women, to develop and implement environment-protection technology, and to encourage employee involvement in civic activities and the political process.

Question 18

In a narrow sense, the term "sustainability" can be defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Accepted Answer

According to the World Commission on Environment and Sustainability, the narrow definition of sustainability is "meeting the needs of the present without compromising the ability of future generations to meet their own needs."

Question 19

Before the 2010 oil spill in the Gulf of Mexico, British Petroleum promoted itself as being eco-friendly, stating that BP stood for "Beyond Petroleum."

Accepted Answer

Long before the enormous oil spill in 2010, BP promoted itself as being eco-friendly. Its literature stated that BP stood for "Beyond Petroleum." BP marketed itself as a producer of alternative energies, an image that was seriously damaged by the devastating oil spill in the Gulf of Mexico.

Question 20

A typical social audit in a business focuses on corporate revenues, cash flows, and retained earnings.

Accepted Answer

A typical business social audit focuses on core values such as social responsibility, open communication, treatment of employees, confidentiality, and leadership.

Quiz 2: Business Ethics and Corporate Social Responsibility