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

1) A large sporting goods chain develops a listing of social activities of the firm. This social report
does not evaluate the effectiveness of these activities. This is an example of the ________ approach
to social auditing.
A) social indicators
B) program management
C) process
D) inventory
E) None of the answers.
Answer: D

2) A retail chain calculates the expenditures an enterprise makes on social objectives and then deducts
the negative costs for social objectives not addressed. This social report measures total social
impact, positive and negative. This is an example of the ________ approach to social auditing.
A) community
B) cost or outlay
C) social indicators
D) social responsibility accounting
E) inventory
Answer: B

3) NTS Corporation hopes that its accounting system used in social reporting will help it identify the
best social return for the social investment made. They tabulate social costs and benefits. This is an
example of the ________ approach to social auditing.
A) social responsibility accounting
B) cost or outlay
C) triple-E reporting
D) financial
E) inventory
Answer: A

4) ME2 Corporation develops a listing of the social activities of the firm. They, then outline the
resources utilized on each social program. A statement of each program's objectives and an outline
of how the programs developed and why they developed are particularly useful for this corporation
when coupled with a description of the accomplishments of the programs. This is best identified as
an example of the ________ approach to social auditing.
A) program management
B) strategic
C) inventory
D) social indicators
E) process
Answer: E

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5) The corporation has devoted considerable resources to the social audit process. The management
function that documents and communicates this information is:
A) social reporting
B) triple-E reporting
C) strategic reporting
D) CSR reporting
E) internal reporting
Answer: D

6) The ________ approach to social auditing describes program initiatives.

A) program management
B) outlay
C) social indicators
D) process
E) inventory
Answer: A

7) Social audits can be used for all of the following reasons, except:
A) Evaluating the performance of managers
B) Assessing existing performance
C) Meeting government requirements
D) Measuring future performance
E) Providing information for planning
Answer: C

8) CSR reporting is necessary for all the following reasons, except:

A) To meet the demands of stakeholders.
B) To meet legal requirements.
C) To maintain corporate reputation.
D) To sustain corporate profitability.
E) To lessen the focus on image.
Answer: B

9) A large manufacturer has developed a CSR program that uses corporate sponsorship to benefit both
the company and the non-profit organization partnered with. The company is seen, through this
program as well as because of its quality products, to be a credible and responsible business, worthy
of future trust. In this example, this manufacturer has developed its ________ as a result of
________.
A) social report; stakeholder impression
B) corporate reputation; corporate image
C) corporate reputation; CSR
D) corporate image; community initiatives
E) corporate image; CSR
Answer: C

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10) Stakeholders are increasingly demanding or expecting sustainability reporting from business. The
pressure for these reports comes from all of the following stakeholders, except:
A) competitors
B) shareholders
C) consumers
D) service professionals
E) employees
Answer: A

11) The ________ is a socially screened, common stock index modelled on the S&P/TSX 60 of 60
corporations that have passed a set of broadly based environmental, social, and governance rating
criteria.
A) S&P 500
B) TSX
C) Dow Jones
D) NASDAQ
E) JSI
Answer: E

12) Brandon is preparing a report for the CEO of his company. He is trying to encourage the company to
become more proactive in social issues in the community. In building his case for corporate social
responsibility, he does research on the relationship between CSR and firm profitability. He can
report the following:
A) Studies show no conclusions.
B) A definite link can be established through additional research.
C) Expenditures on social responsibility initiatives do not contribute to profit.
D) Expenditures on social responsibility initiatives might contribute to profit.
E) Expenditures on social responsibility initiatives do contribute to profit.
Answer: B

13) An alternative view on the relationship between CSR and profitability, taken by ________ is to
calculate the return of investment of CSR by thinking in terms of creating value.
A) Global Reporting Initiative
B) the Association of Sustainable Organizations
C) the Network for Business Sustainability
D) Imagine Canada
E) Global Reporting Index
Answer: C

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14) Ahmed is developing a social report for his employer, a major airline company. He formulates the
report around a series of checklists focusing on community, employees, customers, suppliers,
environment, shareholders, and international operations. He is assessing such factors as transparency
and stakeholder involvement. Ahmed is probably using the ________ Guidelines for Corporate
Social Performance.
A) Global Reporting Initiative's
B) Conference Board of Canada's
C) Good Company
D) Sustainability Reporting
E) CICA
Answer: C

15) Itwas a long process, but Albert was delighted to finally have finished his social audit process. His
next step is to report the findings. He develops a report following the Global Reporting Initiative
(GRI) standards. This is the first time he conducted an audit with this process in mind. Which of the
following 'clusters' of his completed report are not required under the GRI?
A) Relevance
B) Responsibility
C) Timeliness
D) Neutrality
E) Auditability
Answer: B

16) Which of the following are among the recommendations made by Chatterji and Levine for
improving the reporting process?
A) Efforts should be made to reduce compliance costs by better designed forms and measures.
B) The data used should be improved with less reliance on information being supplied by
management and more being sought from stakeholders.
C) The measures should be better explained and the source of weightings justified.
D) The codes or standards should be more transparent.
E) All of the above
Answer: E

17) Employees may receive communication from their employers regarding performance measures and
social reporting through:
A) codes of conduct
B) public meetings
C) financial audits
D) Internet
E) staff meetings
Answer: E

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18) BNO Corporation has just promoted Ned to the role of Corporate Responsibility Officer. His new
job will include all of the following, except:
A) Government lobbying
B) Compliance management
C) Workforce diversity
D) Public relations
E) Information systems
Answer: E

19) Beyond Grey Pinstripes is a survey outlining MBA programs' engagement in social and
environmental stewardship. This program evaluates all of the following factors, except:
A) The number of courses with social and environmental content
B) The degree to which the course illustrates the value of integrating social and environmental
considerations into business decisions
C) The number of student groups or clubs focusing on social or environmental issues
D) The percentage of course time dedicated to considering social and environmental issues
E) The number of relevant articles published by faculty in leading peer-reviewed management
journals
Answer: C

20) Strandberg's survey of CSR thought leaders concluded that all of the following issues will dominate,
except:
A) Governance
B) Developing nations' economic growth
C) Accountability
D) Environment
E) Reduction of poverty
Answer: B

21) The majority ofexperts believe that in the future, business will likely see:
A) Greater stakeholder engagement
B) Corporations losing interest in CSR
C) CSR becoming more mainstream
D) Mandatory CSR reporting by governments
E) Increased standardization of measurement of CSR
Answer: C

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22) White believes that the future of CSR could follow different scenarios. If, in the future,
governmental regulations replaces the self-regulatory purpose of CSR a(n) ________ scenario likely
took place.
A) Embed-and-integrate
B) CSR integrated
C) CSR compliant
D) Fad-and-fade
E) Transition-and-transformation
Answer: D

23) Inthe future, incremental changes to CSR are insufficient and, with the pressure of NGOs,
businesses are forced to take a broader social role. This requires a major rethink in terms of
organizational design and the very structure of the business system. This is the ________ scenario
as identified by White.
A) Embed-and-integrate
B) CSR integrated
C) Fad-and-fade
D) CSR compliant
E) Transition-and-transformation
Answer: E

24) Social
auditing is a systematic assessment of the effects an enterprise has on society that are not
covered in the traditional financial reports.
A) True
B) False
Answer: A

25) The social

audit process is useful for evaluating past performance, but does not help with the
assessment of future performance.
A) True
B) False
Answer: B

26) Programmanagement is a sophisticated social auditing approach useful to respond to sustainability

performance.
A) True
B) False
Answer: B

27) Triple-E criteria and social objective reporting are quite often presented in internally prepared social
reports.
A) True
B) False
Answer: A

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28) Cost or outlay is an accounting approach to tabulate the social costs and benefits with the objective
of the best social return for the social investment made.
A) True
B) False
Answer: B

29) The resultsof the social auditing process become the basis for social reporting, a management
function that is also known as sustainability reporting.
A) True
B) False
Answer: A

30) NMO Corporation has a negative corporate image. This means that it also has a negative corporate
reputation.
A) True
B) False
Answer: B

31) The drivers

of corporate reputation include product quality, innovativeness, and environmental
stewardship.
A) True
B) False
Answer: A

32) There is little distinction between CSR and corporate reputation.

A) True
B) False
Answer: A

33) Service professionals, such as accounting associations, are influential stakeholders that recommend
that firms engage in elaborate CSR and sustainability reporting.
A) True
B) False
Answer: A

34) In
Canada, the Dow Jones Sustainability Index is used to guide investors demanding CSR
accountability.
A) True
B) False
Answer: B

35) The Jantzi Social Index (JSI) is a socially screened, common stock index modelled on the S&P/TSX
60.
A) True
B) False
Answer: A

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36) The Jantzi
Social Index (JSI) provides a process against which institutional investorsfor example,
pension and mutual fundscan measure the performance of their socially screened stock portfolios.
A) True
B) False
Answer: A

37) The blind pursuit of maximum profits is generally accepted to be socially irresponsible.
A) True
B) False
Answer: A

38) Empirical
studies show definitively that there is a positive effect on profitability as a result of CSR
engagement.
A) True
B) False
Answer: B

39) The Networkfor Business Sustainability (NBS) suggests calculating the return of investment of
CSR by thinking in terms of creating value.
A) True
B) False
Answer: A

40) NBS has identified three categories of metrics that business should use to capture value: economic,
social, and ethical.
A) True
B) False
Answer: B

41) The guidelinesdeveloped by the Canadian Business for Social Responsibility, a non-profit CSR
consultancy, are not useful for small businesses.
A) True
B) False
Answer: B

42) The Global Reporting Initiative is a long-term, multi-stakeholder, international process which
includes principles guiding the framework of social reports, inform decisions about what to report,
ensure quality and reliability of the reports, and inform decisions regarding accessibility of the
reports.
A) True
B) False
Answer: A

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43) Corporationsfollowing the GRI guidelines are expected to report certain standard disclosures such
as: economic, environmental, social and governance performance and impacts.
A) True
B) False
Answer: A

44) CSR reporting in Canada is no longer voluntary for companies with public ownership.
A) True
B) False
Answer: B

45) Maclean'sMagazine publishes Top 50 Socially Responsible Corporations report in cooperation with
Jantzi Research, and selection is based on social, environmental, and governance indicators.
A) True
B) False
Answer: A

46) Preparation
of brochures summarizing the content of a CSR report is not an adequate approach to
communicating CSR performance to key stakeholders.
A) True
B) False
Answer: B

47) A specific manager or department should not be responsible for the communication of CSR reports.
If everyone in the corporation is equally responsible for communication of results, dissemination
will be broader.
A) True
B) False
Answer: B

48) CSR reports are a form of corporate communication which will enhance reputation.
A) True
B) False
Answer: A

49) Because of the emphasis on teaching CSR, most business schools are now preparing their own CSR
reports.
A) True
B) False
Answer: B

50) The Association

to Advance Collegiate Schools of Business (AACSB) is a global, non-profit
membership organization of educational institutions, businesses, and other entities devoted to the
advancement of management education.
A) True
B) False
Answer: A

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 51) Despiteall efforts, a comprehensive ethics program for a business school has failed to create a more
favourable public imagewithin universities, the business community, and society.
A) True
B) False
Answer: B

52) The Strandberg reporton the future of CSR stated that ethical consumerism will become a more
powerful influence on corporation decision-making.
A) True
B) False
Answer: A

53) The Strandberg model outlines a continuum of future commitment to CSR. The middle of the
continuum is CSR Strategic. Corporations will become compliant with standards and then create
niches in areas more strategic to the corporation.
A) True
B) False
Answer: A

54) In
the Strandberg continuum of future commitment to CSR, "Deep CSR" is a business model with a
mission to circumvent government CSR requirements and focus on responsiveness to complaints.
A) True
B) False
Answer: B

55) Considering White's scenarios of the future of CSR, if firms follow the fad-and-fade scenario, there
will be a multiplicity of new, complex standards and guidelines which will be problematic for the
corporation.
A) True
B) False
Answer: B

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

56) Describe theJantzi Social Index (JSI).

Answer: The Jantzi Social Index (JSI) is a socially screened common stock index modelled on the
S&P/TSX 60 of 60 corporations that have passed a set of broadly based environmental, social,
and governance rating criteria. The index measures how a market for the selected corporations
has changed over time. A benchmark is also established against which the success of the
process is measured. Thus, the JSI provides a process against which institutional investors, for
example, pension and mutual funds, can measure the performance of their socially screened
stock portfolios. Also, Jantzi-Sustainalytics Canadian Social Investment Database™ provides
a comprehensive analysis of approximately 300 companies and income trusts, including all
constituents of the S&P/TSX Composite Index.

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57) Is
there a definitive relationship between CSR and profitability?
Answer: The answer is no. Not a clear definitive relationship. A variety of studies have mixed results.
The relationship between profitability and CSR has been extensively studied, with mixed
conclusions that can be summarized as follows:
expenditures on social responsibility initiatives do not contribute to profits.
expenditures on social responsibility initiatives do contribute to profits.
expenditures on social responsibility initiatives might contribute to profits.

58) Describe theGlobal Reporting Initiative (GRI).

Answer: The Global Reporting Initiative (GRI) is a non-profit organization that works towards a
sustainable global economy by providing sustainability reporting guidance. Its vision is a
sustainable global economy where organizations manage their economic, environmental,
social and governance performance impacts responsibly and reports it transparently.

59) Whatare the recommendations made by Chatterji and Levine for improving the reporting process?
Answer: Chatterji and Levine make several recommendations for improving the process:

The codes or standards should be more transparent.

The measures should be better explained and the source of weightings justified.

Efforts should be made to reduce compliance costs by better designed forms and measures.

The data used should be improved with less reliance on information being supplied by
management and more being sought from stakeholders.

Financial performance measurement uses sophisticated methodology which should be

incorporated into the measurement of social indicators.

60) What are some of the various ways that a corporation may communicate CSR and sustainability
results?
Answer: There are various communications activities that will inform employees: articles in
newsletters, information on the employee intranet, agenda items at regular meetings, and
corporate reputation committees.

61) What are some of the best known surveys evaluating the social and environmental performance of
business schools?
Answer: The best known surveys evaluating the social and environmental performance of business
schools are the American "Beyond Grey Pinstripes" and a Canadian survey "Knight Schools:
The Annual Knight School Guide to Business Education," both described in Responsibility for
Ethics 9.6.

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62) Compare Strandberg'sCSR Lite to Deep CSR in the continuum of future commitment to CSR.
Answer: CSR Lite: Superficial and marginal, may be required by law, concerned mainly about
responsiveness to complaints, may use indicators such as GRI and think they are in compliance

Deep CSR: Business model where mission is to improve social or environmental conditions,
move to addressing trade-offs between different elements of triple bottom line.

See Table 9.1 in text.

63) Discuss the fad-and-fade scenario developed by White.

Answer: Fad-and-fade scenarioAwareness and practice of CSR will decline significantly. This is the
result of external trends or events beyond the control of the corporation. Government
regulation emerges, replacing the self-regulatory purpose of CSR. The failure to address
social, ethical, and governance challenges is also blamed.

64) Discuss the transition-and-transformation scenario developed by White.

Answer: Transition-and-transformationIncremental changes to CSR are insufficient and stakeholders
demand a redesign of the corporation. This will alter the nature and purpose of the corporation
and broaden its social function. There is a challenge to the prevailing wisdom relating to the
rights and obligations of the corporation. This became necessary as the public lost confidence
in the corporation.

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