Approaches to Social Responsibility (Scenario)

question 102

Multiple Choice

Approaches to Social Responsibility (Scenario)
Marco was confused. His management class was focusing on social responsibility, and his assignment was to find examples of businesses that used different approaches toward social responsibility. He had three good examples but was not sure which case was an example of which concept. The first business was a fishing company that had been subject to protests from environmentalists. In their efforts to balance the interests of shareholders and other stakeholders, the company decided to change their harvesting methods so that dolphins would no longer be caught with tuna. The second company was a fast-food restaurant whose primary objective was to maximize profits for its owners. Restaurant employees were paid minimum wages and benefits in accordance with local labour laws. The third business was a bank that spent millions of dollars a year on charitable causes. The bank's managers felt they had an ethical responsibility to do the right things and act in ways that are good for society.
-approach taken by managers at the fast-food restaurant is best described as social ________.

• A)obstruction
• B)obligation
• C)reaction
• D)responsibility

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Definitions:

Replacement Cost

The current cost of replacing an asset with a similar new asset at prevailing market prices.

Cost Flow Method

An accounting technique used to value inventory by determining how costs move through different accounts.

Gross Profit Method

An inventory valuation method estimating the cost of goods sold and ending inventory based on gross margin percentages.

Gross Profit Ratio

A metric that shows the proportion of money left over from revenues after accounting for the cost of goods sold.