Chapter 8: Corporate Responsibility and Capstone Project Quiz
Test your understanding of corporate responsibility frameworks, ESG metrics, and capstone project components.
1. What is "shareholder primacy" in corporate governance?
- Shareholders are the first to be notified of corporate decisions
- The belief that corporations exist primarily to maximize shareholder returns
- Shareholders have priority access to company products
- Shareholders must approve all corporate decisions
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The correct answer is B. Shareholder primacy is the traditional view that corporations exist primarily to maximize returns for shareholders. Milton Friedman famously stated that "the social responsibility of business is to increase its profits." This creates structural pressure to externalize costs onto society.
Concept Tested: Shareholder Primacy
2. What does ESG stand for in corporate responsibility?
- Economic, Social, and Growth
- Environmental, Social, and Governance
- Ethical Standards for Growth
- Executive Salary Guidelines
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The correct answer is B. ESG stands for Environmental, Social, and Governance—the three categories of metrics used to evaluate corporate responsibility. Environmental factors include emissions and resource use; Social factors include labor practices and community relations; Governance factors include board composition and executive compensation.
Concept Tested: ESG Metrics
3. What is the Triple Bottom Line framework?
- Three different ways to calculate net profit
- Expanding corporate accounting to include Profit, People, and Planet
- Three financial statements required for public companies
- A method for tripling company revenue
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The correct answer is B. John Elkington's Triple Bottom Line framework expands corporate accounting beyond financial profit to include three dimensions: Profit (traditional financial performance), People (social impact on employees and communities), and Planet (environmental stewardship and ecological health).
Concept Tested: Triple Bottom Line
4. What is stakeholder capitalism?
- A system where only stakeholders can own company stock
- The emerging view that corporations should balance interests of all stakeholders, not just shareholders
- A communist approach to corporate governance
- A strategy for increasing stakeholder meetings
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The correct answer is B. Stakeholder capitalism is the emerging view that corporations should balance the interests of all stakeholders—employees, customers, communities, environment, and shareholders—rather than prioritizing shareholders alone. In 2019, 181 CEOs signed the Business Roundtable's commitment to stakeholder value.
Concept Tested: Stakeholder Capitalism
5. What is impact investing?
- Investing in companies that have large market impact
- Investment strategies that seek both financial returns and measurable social/environmental outcomes
- Investing only in non-profit organizations
- A type of high-frequency trading
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The correct answer is B. Impact investing seeks both financial returns and measurable positive social or environmental outcomes. It exists on a spectrum from "responsible" (avoiding worst harm) through "sustainable" (integrating ESG) to "impact first" (prioritizing outcomes over returns) to philanthropic (accepting below-market returns).
Concept Tested: Impact Investing
6. What are the six deliverables required in the capstone project?
- Business plan, budget, timeline, team roster, risk assessment, funding proposal
- Industry Profile, Harm Scorecard, Systems Map, Leverage Strategy, Campaign Strategy, Executive Summary
- Research paper, presentation, poster, video, website, social media campaign
- Literature review, hypothesis, methodology, results, discussion, conclusion
Show Answer
The correct answer is B. The capstone project requires six deliverables: (1) Industry Profile Report, (2) Harm Scorecard and Data Report, (3) Systems Map and Root Cause Analysis, (4) Leverage Point Strategy Report, (5) Campaign Strategy Document, and (6) Executive Summary and Presentation.
Concept Tested: Capstone Project Structure
See: Project Overview
7. According to the data credibility pyramid, which sources are considered highest credibility?
- Corporate sustainability reports and press releases
- Peer-reviewed academic research, government regulatory data, and court documents
- Social media posts and anonymous tips
- Industry association claims and marketing materials
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The correct answer is B. The highest credibility sources are peer-reviewed academic research, government regulatory data, and court documents/sworn testimony. These have rigorous methodology, transparency, and accountability. Corporate self-reports and marketing materials are lower on the credibility hierarchy and should be verified with other sources.
Concept Tested: Source Credibility
8. What is a "theory of change" in advocacy planning?
- A philosophical theory about social change
- A logical framework connecting inputs, activities, outputs, outcomes, and ultimate impact
- A budget for advocacy activities
- A timeline for implementing changes
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The correct answer is B. A theory of change is a logical framework that articulates how your intervention will lead to your desired impact. It connects: Inputs (resources needed) → Activities (actions taken) → Outputs (direct results) → Outcomes (behavior/attitude changes) → Impact (systemic transformation).
Concept Tested: Theory of Change
9. What is "true cost accounting"?
- Accurate bookkeeping that follows accounting standards
- Including all externalized costs (environmental, social) in a product's price calculation
- The true cost of hiring an accountant
- Calculating costs without any markup
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The correct answer is B. True cost accounting attempts to include all externalized costs in financial calculations: True Profit = Revenue - Costs - Social Costs - Environmental Costs. When all costs are counted, many profitable industries become net destroyers of value rather than creators.
Concept Tested: True Cost Accounting
10. What distinguishes CSR 3.0 (Regenerative Business) from earlier CSR approaches?
- CSR 3.0 eliminates all corporate responsibility requirements
- CSR 3.0 moves beyond "doing less harm" to actively healing and restoring social and environmental systems
- CSR 3.0 focuses only on shareholder returns
- CSR 3.0 applies only to technology companies
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The correct answer is B. CSR 3.0 (Regenerative Business) goes beyond CSR 1.0 (philanthropy separate from business) and CSR 2.0 (sustainability as competitive advantage) to fundamentally transform business models. It moves from "do less harm" to actively healing and restoring—using biomimicry and circular economy principles.
Concept Tested: Corporate Social Responsibility Evolution
11. Why is narrowing your capstone project focus important?
- Narrow topics are easier to present
- A specific focus enables deeper, more substantive analysis than a broad overview
- Instructors prefer shorter papers
- Data is only available for narrow topics
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The correct answer is B. Narrowing your focus allows deeper, more substantive analysis. "Fast fashion" is too broad; "Labor conditions in Bangladesh garment factories supplying major US brands" is specific enough to analyze deeply, gather meaningful data, and develop concrete recommendations.
Concept Tested: Project Scoping
12. What is the recommended structure for a capstone presentation?
- Read directly from the written report
- Hook, Problem Overview, Data Insights, Systems Analysis, Solution Strategy, Call to Action
- Introduction, Body, Conclusion
- Methodology, Results, Discussion
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The correct answer is B. The recommended 20-minute presentation structure includes: Hook (1 min, compelling story/statistic), Problem Overview (3 min), Data Insights (5 min with visualizations), Systems Analysis (4 min on root causes and leverage), Solution Strategy (5 min), and Call to Action (2 min).
Concept Tested: Presentation Skills