Question 1 What is TRUE about state corporate constituency statutes?
A.They allow the board of directors to take into consideration the values of other stakeholders in addition to the shareholders in making business decisions.
B.They forbid the board of directors to take into consideration the values of other stakeholders since the shareholders, as the owners of the corporation, must be the board's sole and exclusive focus.
C.They mandate that the boards of directors must consider the values of other stakeholders in making corporate decisions.
D.They require that companies incorporated in the state must donate 3-5% of their pre-tax profits for socially responsible activities.
Question 2 Nobel Prize winner Professor Emeritus Milton Friedman would favor a corporate code of conduct that would:
Maximize profits at all costs.
Maximize profits based on open and free competition.
Maximize profits as long as the corporation "plays within the rules" without fraud, deception, or other illegality.
B and C only.
Question 3 When Ruby, the president of Interrelated Systems Corporation, is deciding what business action to take, an initial question is, like it is for most major companies today, whether the action
Ethical
Legal
Socially responsible
Likely to result in executive bonuses.
Question 4 What is a TRUE statement about state social benefit or B-corporations?
A.They must consider the values and interests of other stakeholders beyond the shareholders of the corporation.
B.They are not allowed to make any profits or pay any dividends to shareholders.
C.They cannot have a public purpose since corporations are incorporated to do business and make money and not engage in socially responsible activities.
D.They are now governed by detailed rules promulgated by federal regulatory agencies.
Question 5 Social responsibility theories:
Are generally classified as modern ethical versions of Utilitarianism
Determine the moral worth of an action regardless of their consequences
Are largely precise legalistic formulations
Classify corporate social responsibility as typically the corporation engaging in community and civic affairs in a prudent manner.
Question 6 Which of the following is a correct statement regarding the definition of the term "social responsibility" in a business context?
A socially responsible business person believes that the formal legal law is inferior to universal moral and ethical principles that can be determined by intuition.
Social responsibility is the branch of philosophy that focuses on morally right and wrong behavior.
Social responsibility is based on current societal views as to how and the extent a business should contribute to charities and civic organizations and be involved in helping the community.
A business cannot adhere to social responsibility principles and the doctrine of ethical egoism since both are always mutually exclusive.