TRUE/FALSE.Write 'T' if the statement is true and 'F' if the statement is false.

1)

Apart from achieving a social benefit over and above maximizing profits for its shareholders, corporate social responsibility also requires an organization to meet all its legal obligations.

2)

Corporate citizenship is an element of corporate social responsibility (CSR).

3)

Extabet Enterprises donates a certain percentage of their profit to local charities, but it does not comply with all the legal industry standards of operating in a safe working environment. This depicts corporate social responsibility (CSR).

4)

The stakeholders of a company include its customers, its vendor partners, state and local entities, and the community in which it conducts its business operations.

5)

The board members of a company are not accountable to the company and its shareholders.

6)

The main responsibility of the auditing committee of an organization is to set the compensation for all the employees of the organization, including its outside contractors.

7)

The Foreign Corrupt Practices Act was introduced to more effectively control bribery and other less obvious forms of payment to foreign officials and politicians by American publicly traded companies as they pursued international growth.

8)

The processing of governmental papers, such as visas, is an example of a routine governmental action.

9)

Internal whistle-blowing occurs when an employee discovers corporate misconduct within his or her organization and brings it to the attention of law enforcement agencies and/or the media.

10)

It is argued that the actions of whistle-blowers are not always motivated by their integrity, but by money or by their egos.

MULTIPLE CHOICE.Choose the one alternative that best completes the statement or answers the question.

11)

Which of the following is an example of corporate social responsibility (CSR)?

A)

Infinite Corp. promotes team building activities for employees.

B)

Brenner Enterprises gives its employees greater freedom in choosing projects.

C)

Dawson Inc. uses a clean-fuel technology shuttle for employee conveyance.

D)

Larsen Inc. provides free lunch coupons to its employees.

12)

Happy Times (HT) is an alcohol manufacturing brand that deals with several types of alcoholic beverages. HT uses social media for promoting the message of responsible drinking. It sponsors the FreeTaxi program for customers with HT membership on Christmas and New Year's Eve. It has also initiated several community welfare projects where a percentage of the profits go to the Hunger Relief Fund for Children. In the given scenario, which of the following is best illustrated?

A)

Universal ethics

B)

Corporate citizenship

C)

Ethical ambiguity

D)

Emotional contagion

13)

Which of the following illustrates that a company has failed at implementing corporate social responsibility (CSR)?

A)

It does not pay all taxes related to the profitable business operations.

B)

It does not provide stock options for its employees.

C)

It does not provide flexible working hours to its employees.

D)

It does not operate in hazardous working environments.

14)

Which of the following statements is true of corporate social responsibility (CSR)?

A)

The instrumental approach to CSR states that a corporation has an obligation to society over and above the expectations of its shareholders.

B)

The ideology of CSR speaks about doing no harm, fostering trust, and improving "customer confidence in the integrity of the marketing exchange system."

C)

The awakening to CSR for most companies happened only after being surprised by public responses to issues that had not previously been a part of their business responsibilities.

D)

The social contract approach to CSR states that the only obligation of a corporation is to maximize profits for its shareholders.

15)

Which of the following is an example of an organization's instrumental approach to corporate social responsibility (CSR)?

A)

Anderson Inc. provides employees with cab services or gives them full fuel allowance.

B)

GreenSpin Inc. uses biodegradable plastic containers in its office cafeteria.

C)

Anonymous Minds, an advertising firm, provides employees with healthy meals and has a gymnasium at their workplace.

D)

Larsen's Corp., an investment company, uses different mechanisms to increase profits and has performance incentives for its employees.

16)

Hoffmann Enterprises (HE), a manufacturer of industrial goods, primarily focuses on meeting the demands of the market with quality products. It also undertakes environmental protection endeavors that promote the use of renewable sources of energy. HE illustrates the ________ approach to corporate management.

A)

instrumental

B)

free-enterprise

C)

shareholder

D)

social contract

17)

The policy of corporate social responsibility (CSR), where doing what's best for the customers translates into what's best for the company in the long run, exemplifies the ________.

A)

concept of doing well by doing good

B)

concept of the unity of opposites

C)

effective altruism theory

D)

social contagion theory

18)

Which of the following, according to Joseph F. Keefe, is a driving force behind the phenomenon of corporate social responsibility (CSR)?

A)

Increased transparency of companies

B)

Failure of the private sector

C)

Increased nationalization

D)

Failure of globalization in corporations

19)

The approach that considers a company's social, financial, and environmental impact rather than focusing solely on its financial impact is the ________ approach.

A)

double bottom-line

B)

ethical governance

C)

corporate governance

D)

triple bottom-line

20)

Organizations pursuing a clearly defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to do the right thing for all their stakeholders follow a(n) ________ corporate social responsibility (CSR) initiative.

A)

ethical

B)

economic

C)

strategic

D)

altruistic

21)

If the corporate governance in an organization is poor, it ________.

A)

forces the board of directors to be accountable to the senior executives against their will

B)

leads to employees taking control of their own decisions without consulting their managers

C)

weakens the company's potential and makes it less attractive to investors

D)

results in underpinning the integrity and efficiency of financial markets

22)

The inside members of a company's board of directors:

A)

comprise the company's creditors and suppliers.

B)

include the external consultants used by the company.

C)

typically have no direct connection with the company.

D)

hold managerial positions within the company.

23)

Identify a feature of the outside members of an organization's board of directors.

A)

They have less importance than the inside members in the decision-making process.

B)

They may comprise the company's creditors, suppliers, or consultants.

C)

They are the ones who make all the major organizational decisions without consulting the inside members.

D)

They are not permitted to have financial connections to the organization.

24)

The ________ of a company is an operating committee responsible for determining the salaries, bonuses, and perks for the CEO and other senior executives.

A)

quality assurance unit

B)

credit committee

C)

business sales unit

D)

compensation committee

25)

One of the primary responsibilities of an organization's ________ is to ensure compliance with the company's internal code of ethics.

A)

corporate governance committee

B)

quality assurance unit

C)

proposal committee

D)

business sales unit

26)

The main focus of the Cadbury report, established by Sir Adrian Cadbury in 1992 to address financial aspects of corporate governance, was on ________.

A)

external governance

B)

internal governance

C)

recruiting policy

D)

corporate social responsibility

27)

A feature of the King I report on corporate governance, established by Mervyn King in 1994, is that ________.

A)

it limited its scope to internal corporate governance

B)

it considered the impact of corporations' on the larger community

C)

it was inclusive of the recruiting policies of an organization

D)

it limited its scope to financial and regulatory accountability

28)

The King II report, released by the committee formed by Mervyn King, on corporate governance:

A)

formally recognized the economic, environmental, and social aspects of a company's activities.

B)

strongly advocated that companies follow the traditional, single bottom line of profitability.

C)

did not recognize the involvement of a corporation's stakeholders in the efficient operation of an organization.

D)

did not look beyond companies or take their impact upon the larger community into account.

29)

Which of the following is true of the "comply or explain" approach to corporate governance?

A)

It was extremely explicit when it came to defining what would be acceptable explanations for noncompliance.

B)

It set stiff financial penalties for companies that refused to abide by the operational standards.

C)

It proved to be an effective deterrent to financial scandals and reduced the incidence of unethical behavior in corporations.

D)

It gave companies the flexibility to comply with the governance standards or justify why they didn't in their corporate documents.

30)

The ________ of 2002 incorporates the "comply or else" approach to corporate governance.

A)

Comstock Act

B)

Sarbanes-Oxley Act

C)

Multi-divisional Form Act

D)

Trade Act

31)

Which of the following is an effect of merging the roles of the chief executive officer and the chairperson of the board?

A)

The power of the stockholders is maximized.

B)

The independence of the board is compromised.

C)

The oversight provided by the board is increased.

D)

The influence of the CEO is minimized.

32)

Why was the Foreign Corrupt Practices Act criticized?

A)

The act formally recognizes the facilitation payments, which would otherwise be acknowledged as bribes.

B)

The act requires corporations to fully disclose all transactions conducted with foreign officials in line with the SEC provisions.

C)

The act does not address the illegality of using the U.S. mail or wire communications to transact a fraudulent scheme.

D)

The act does not require full disclosure of funds that were taken out of or brought into the United States.

33)

Brendon Inc. required a permit to open its business in a foreign country. Although it had met all the requirements for the permit, the officials delayed providing Brendon Inc. with the permit. To expedite the process, the company made a payment to a high-ranking official who has the authority to grant the permit. Which of the following types of payment does this scenario exemplify?

A)

Facilitation payment

B)

Explicit payment

C)

Implicit payment

D)

Accentuation payment

34)

Which of the following is true of the penalties under the Federal Sentencing Guidelines for Organizations (FSGO)?

A)

They are levied only on foreign corporations.

B)

They do not include monetary fines.

C)

They are not levied on small businesses.

D)

They include organizational probation.

35)

The formula used to calculate the total fine sentenced by the Federal Sentencing Guidelines for Organizations (FSGO) is:

A)

the base fine multiplied by the culpability score.

B)

the base fine divided by the culpability score.

C)

the base fine plus the culpability score.

D)

the base fine minus the culpability score.

36)

The ________ is a legislative response to the corporate accounting scandals of the early 2000s that cover the financial management of businesses.

A)

Glass-Steagall Act

B)

Bland-Allison Act

C)

Sarbanes-Oxley Act

D)

Taft-Harley Act

37)

Which of the following is true of the Sarbanes-Oxley Act (SOX)?

A)

It protects employees of companies who provide evidence of fraud.

B)

It helped disband the Public Company Accounting Oversight Board.

C)

It considers whistle-blowing a white collar crime.

D)

It prohibits a CEO from signing the company's federal income tax return.

38)

In September and October 2008, financial markets around the world suffered a severe crash as:

A)

the assets of American overseas companies were seized by the Federal Sentencing Guidelines for Organizations.

B)

all publicly traded firms only used the services of auditors affiliated with the Public Company Accounting Oversight Board.

C)

the Public Company Accounting Oversight Board (PCAOB) was disbanded, allowing auditors to work unregulated.

D)

there was aggressive lending to subprime borrowers in a deregulated environment.

39)

The ________ refers to the legislation that was promoted as the "fix" for the extreme mismanagement of risk in the financial sector that led to a global financial crisis in 2008-2010.

A)

Sarbanes-Oxley Act

B)

Dodd-Frank Wall Street Reform and Consumer Protection Act

C)

Gramm-Leach-Bliley Financial Services Moderation Act

D)

Glass-Steagall Act

40)

The ________ is a government agency within the Federal Reserve that oversees financial products and services.

A)

Department of Commerce

B)

Consumer Financial Protection Bureau

C)

Public Company Accounting Oversight Board

D)

Ministry of Internal Affairs

41)

The ________ is a government agency established to prevent banks from failing and otherwise threatening the stability of the U.S. economy.

A)

Financial Stability Oversight Council

B)

Office of Financial Research

C)

Consumer Financial Protection Bureau

D)

U.S. Congress Office of Compliance

42)

A ________ is a lawsuit brought on behalf of the federal government by a whistle-blower under the False Claims Act of 1863.

A)

qui tam lawsuit

B)

per curiam lawsuit

C)

quo warranto lawsuit

D)

pro tanto lawsuit

43)

Sandra, an executive officer of a company, has collected reports which prove that the CEO has been misappropriating company and investor funds. She takes the matter public and issues a statement against the CEO. Sandra is an ________ whistle-blower.

A)

external

B)

internal

C)

expiate

D)

indexed

44)

In internal whistle-blowing, an employee who discovers corporate misconduct brings it to the attention of:

A)

his or her manager or supervisor.

B)

the media.

C)

his or her relatives.

D)

the government.

45)

It is difficult to track the history of internal whistle-blowing because:

A)

corporate wrongdoing is a rare phenomenon.

B)

it is illegal under the Sarbanes-Oxley Act.

C)

corporate whistle-blowing is usually ignored.

D)

it rarely receives attention from the media.

46)

The ________ first addressed the issue of retaliation against federal employees who bring accusations of unethical behavior.

A)

False Claims Act of 1863

B)

Sarbanes-Oxley Act of 2002

C)

Whistleblower Protection Act of 1989

D)

Rehabilitation Act of 1973

47)

Which of the following statements is true of the Sarbanes-Oxley Act?

A)

It does not protect employees from retaliatory behavior aimed at them.

B)

It prohibits retaliation against whistleblowers and encourages the act of whistle-blowing itself.

C)

It does not offer protection to federal employees for the act of whistle-blowing.

D)

It discouraged the act of corporate whistle-blowing.

48)

The ________ introduced a reward program for whistle-blowers who report securities law violations to the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

A)

Corporate and Criminal Fraud Accountability Act

B)

Dodd-Frank Wall Street Reform and Protection Act

C)

Employee Protection and Care Act

D)

Comprehensive Crime Control Act

49)

A(n) ________ is a telephone line where employees can leave messages to alert a company of suspected corporate misconduct without revealing their identity.

A)

whistle-blower hotline

B)

employee assistance helpline

C)

internal corporate helpline

D)

criminal informant hotline

50)

Which of the following is a major risk faced by whistle-blowers by speaking out about an organization's misconduct?

A)

They risk losing their career and financial stability.

B)

They risk being penalized under the Whistleblower Prevention Act.

C)

They risk imprisonment under the False Claims Act.

D)

They risk being ignored by both the company and media.

Short paragraph essay.

51)

Differentiate between the instrumental approach and the social contract approach to corporate management.

52)

Discuss the difference between ethical, altruistic, and strategic types of corporate social responsibility (CSR).

53)

What roles do the audit committee, the compensation committee and the corporate governance committee of an organization play in ensuring good governance?

54)

Does a commitment to good corporate governance affect a company's profitability?

55)

List the pros and cons of merging the CEO and chair of the board positions

56)

Differentiate between bribes and grease payments.

57)

How did the Foreign Corrupt Practices Act (FCPA) encompass all the secondary measures that were in use prior to the passing of the act?

58)

Describe the major provisions and penalties of the Federal Sentencing Guidelines for Organizations.

59)

Define the term whistle-blower. Describe the two types of whistle-blowers.

60)

Why should whistle-blowing be the last resort, for both the company and the employee?