Podcast
Questions and Answers
What are the four broad areas corporations have responsibilities in?
What are the four broad areas corporations have responsibilities in?
- The economy, global markets, social responsibility, and environmental sustainability
- The economy, workplace ethics, natural resources, and community engagement
- The economy, technology, social environment, and natural resources
- The economy, the workplace, the social environment, and the natural environment (correct)
Which of the following is a required national or international standard for corporate responsibility?
Which of the following is a required national or international standard for corporate responsibility?
- Environmental Protection Agency Regulations
- Global Compact (correct)
- World Trade Organization Agreements
- International Federation of Accountants Guidelines
Which of the following would NOT be considered a mandatory responsibility corporations face from society?
Which of the following would NOT be considered a mandatory responsibility corporations face from society?
- Voluntary charity contributions (correct)
- Compliance with insider trading regulations
- Adhering to anti-competition laws
- Meeting stock exchange requirements
What term is used to describe the acceptance companies need from society to be considered legitimate?
What term is used to describe the acceptance companies need from society to be considered legitimate?
What term is increasingly preferred in place of ‘Corporate social responsibility (CSR)?
What term is increasingly preferred in place of ‘Corporate social responsibility (CSR)?
What is the primary reason a company must be financially sustainable?
What is the primary reason a company must be financially sustainable?
Which of the following best describes mandatory responsibilities for a business?
Which of the following best describes mandatory responsibilities for a business?
Why do companies need to respond to societal expectations?
Why do companies need to respond to societal expectations?
Which of the following is NOT a reason for discretionary contributions by corporations?
Which of the following is NOT a reason for discretionary contributions by corporations?
What does the broad sense of corporate citizenship encompass?
What does the broad sense of corporate citizenship encompass?
Which is a potential criticism of corporations' involvement in areas where government fails?
Which is a potential criticism of corporations' involvement in areas where government fails?
What is one reason companies engage in corporate social investment?
What is one reason companies engage in corporate social investment?
Which of the following best describes societal expectations of corporations?
Which of the following best describes societal expectations of corporations?
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Study Notes
Corporate Social Responsibility
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Corporations have responsibilities across four key areas: the economy, the workplace, the social environment, and the natural environment.
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A financially sustainable company contributes to societal well-being by creating value for stakeholders (employees, suppliers, customers).
Dimensions of Corporate Responsibility
- Economic responsibility: Financial sustainability is crucial for a company's contribution to society.
- Mandatory responsibilities: Compliance with laws (e.g., anti-competition, labor, environmental) and standards set by regulatory bodies is essential.
- Societal expectations: Companies must respond to both formalized (voluntary codes) and informal societal norms. Reasons for this include gaining legitimacy, enhancing strategic interests, and fulfilling ethical duties.
- Discretionary contributions: These are philanthropic or social investments driven by factors such as sympathy, community support, reputational benefit, and brand exposure.
Corporate Citizenship
- Encompasses all corporate responsibilities in society, including sometimes filling gaps in government provision. However, this can lead to accusations of corporate overreach and influence.
Key Standards and Responsibilities
- Examples of national/international standards emphasizing corporate responsibility include the UN Global Compact, the Global Reporting Initiative’s guidelines, ISO 26000, King IV, and the Companies Act 2008.
- Mandatory responsibilities include adhering to legislation (e.g., anti-competition laws), regulations (e.g., against insider trading), stock exchange requirements, and professional association standards.
- A company's "licence to operate" refers to the societal approval needed for legitimacy.
- "Corporate citizenship" is increasingly used instead of "Corporate Social Responsibility (CSR)".
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