Test Bank For Foundations of Sustainable Business Theory Function and Strategy 1st Edition by Sanders

Foundations of Sustainable Business Test Bank
Chapter 1
Multiple Choice Questions
1) Sustainability requires today’s generation to steward __________ for the benefit of future
generations.
a. Success
b. Entrepreneurship
c. Natural resources
d. Products and services
Correct answer: c
Difficulty Level: easy
Reference: 1.1.1, definition of key term “principle of stewardship”
Bloom’s Taxonomy Code: Comprehension
Learning Objective: 1.1 Define sustainability and explain its relevance to business.
2) The triple bottom line consists of ______, _______, and _______ metrics of organizational
success.
a. Competition, innovation, risk
b. Risk, reward, opportunity
c. Management, operations, marketing
d. Social, economic, environmental
Correct answer: d
Reference: 1.1.1, definition of key term “triple bottom line”
Bloom’s Taxonomy Code: Knowledge
3) Sustainable business is characterized by the trend of measuring and managing success in

terms of _____, ______, and ______ performance.
a. Risk, marketing, financial
b. Social, economic, environmental
c. Operations, supply chain, leadership
d. Employee, supplier, managerial
Correct answer: b
Difficulty Level: medium
Reference: 1.1.1, definition of key term “sustainable business”
4) Small and Mid-sized Enterprises (SMEs) are responsible for _____ of global industrial
pollution.
a. 60-70%
b. Very little
c. Disposal
d. Outsourcing
Copyright ©2015 John Wiley & Sons, Inc. 1-1

Correct answer: a
Reference: 1.1.1, Global Insight: Sustainability at Small and Mid-sized Enterprises
5) Global human population and per capita consumption levels are _______.
a. Optimistic
b. Decreasing
c. Uncertain
d. Increasing
Correct answer: d
Reference: 1.1.2, Figure 1.1
Bloom’s Taxonomy Code: Application
6) Developed economies are responsible for substantially greater levels of ______ than
developing economies.
a. Income equality
b. Inequality
c. Aggregate consumption
d. Insider trading
Correct answer: c
7) Natural capital is the ______ of natural resources upon which human life and economic
activities depend.
a. Deficit
b. Available stock
c. Management
d. Stewardship
Correct answer: b
Reference: 1.1.2, definition of key term “natural capital”
8) A negative externality is created when an organization’s activities generate a risk that is

shifted to a third-party without that party’s _______ or _______.
a. Forethought, intention
b. Consent, compensation
c. Disapproval, regret
d. Knowledge, injury
Correct answer: b


Reference: 1.1.4, definition of key term “negative externality”
9) Ray Anderson founded one of the world’s largest carpet manufacturing companies, and
launched “Mission Zero,” a campaign to ______ the company’s environmental impacts.
a. Monitor
b. Partially reduce
c. Completely eliminate
d. Market
Correct answer: c
Reference: 1.1.2, Leadership call-out box
10) According to the 2012 WWF Living Planet Report, humanity’s projected resource
consumption levels “______ our planet’s capacity to sustain us.”
a. Underscore
b. Provide
c. Exceed
d. Are less than
Correct answer: c
Reference: 1.1.2, text accompanying Figure 1.2
Learning Objective: 1.2 Articulate how global trends drive sustainability in the private sector.
11) The human population’s ______ now surpasses the available biocapacity of the planet.
a. Productivity
b. Resilience
c. Genius
d. Ecological footprint
Correct answer: d
Reference: 1.1.2, Figure 1.3 and Figure 1.4
12) Global primary production and processing sectors generate $7.3 trillion in ______ annually.
a. Profit
b. Revenue
c. Shareholder dividends
d. Externalities
Correct answer: d
Difficulty Level: hard
Reference: 1.2.1, Ethical Decisions call-out box


13) The Global Living Planet Index is a(n) ______ assessment of the vitality of the planet given
the impact of _____.
a. Financial, the economic recession
b. Invalid, climate change
c. Science-based, human activity
d. Economics-based, natural events
Correct answer: c
Reference: 1.1.2, definition of key term “Global Living Planet Index”
14) Sustainability is a global megatrend, driven by ______ forces.

a. Technological
b. Social and political
c. Economic and environmental
d. All of the above
Correct answer: d
Reference: 1.1.3, first paragraph
15) The general trend in sustainable business practices is to ________.

a. Do less bad and more good
b. Increase managerial control
c. Leverage assets
d. Externalize risk
Correct answer: a
Reference: 1.1.3
16) Overconsumption of natural resources occurs when ______ exceeds ______.

a. Yield, harvest
b. supply, demand
c. Ecological footprint, biocapacity
d. Carbon emissions, regulatory limits
Correct answer: c

17) The world’s food supply depends upon productive fisheries, about half of which are _____.
a. Abundant
b. Fully exploited
c. Unknown
d. Over-regulated
Correct answer: b
Reference: 1.1.4, statistic from the Food and Agricultural Organization of the United Nations
18) Environmental, social, and governance issues have become ______ to investors.
a. Enablers
b. Irrelevant
c. Material
d. Opaque
Correct answer: c
Reference: 1.2.2, text accompanying Figure 1.5
19) Shareholder resolutions concerning environmental, social, and governance issues ______
from 1999 to 2009.
a. Plateaued
b. Increased
c. Decreased
d. Ceased
Correct answer: b
20) Business representatives attending the Rio+20 Summit on Sustainability voted to _______
certain statements of principle and action related to sustainable business.
a. Oppose
b. Repeal
c. Amend
d. Support
Correct answer: d
Reference: 1.2.4

21) Five stages of sustainable business maturation, from basic to advanced, are defined by the
following motives: profit, philanthropy, _______, _______, and _______.
a. Management, innovation, strategy
b. Media, projects, investments
c. Investment, risk, profit
d. Marketing, control, responsibility
Correct answer: d
Reference: 1.3.2, Table 1.2
Learning Objective: 1.3 Distinguish between the levels of commitment to sustainable business.
22) Internalizing a risk means that the party who creates a risk ultimately _____ for it.
a. Gets compensated
b. Gets insurance benefits
c. Takes responsibility
d. Gets sued
Correct answer: c
Reference: 1.2.1, definition of key term “internalize”
23) The “gearing up” metaphor represents these four successive attitudes toward the business
case for sustainability:
a. Complying, benchmarking, partnering, integrating
b. Opposing, accepting, complying, exceeding
c. Discussing, planning, implementing, reviewing
d. None of the above
Correct answer: a
24) As organizational commitment to sustainability matures, old priorities such as legal

compliance are ______ while new priorities are added.
a. Abandoned
b. Included
c. Ignored
d. Controlling
Correct answer: b
Reference: 1.3.3, paragraph following Table 1.3

25) Sustainability initiatives were initially challenged because they were perceived as ______ to
core business activities, they proceeded _______ in fits and starts, and existing incentive
structures made these initiatives appear _______.
a. Senior, wholesale, strategic
b. Peripheral, incrementally, uneconomical
c. Prior, rapidly, lucrative
d. Detrimental, long term, outdated
Correct answer: b
Reference: 1.3.1, first paragraph
26) The “gearing up” metaphor describes organizational _______.

a. Stasis
b. Acceleration
c. Culture
d. Transformation
Correct answer: d
Reference: 1.3.3, second paragraph
27) Even the most advanced level of private sector commitment to public health and
environmental protection is driven by the traditional ______ motive.
a. Ethical
b. Defense
c. Profit
d. Competition
Correct answer: c
Reference: 1.3.2, Table 1.2 and accompanying text; IV.A., first paragraph
Learning Objective: 1.4 Make the business case for sustainability.
28) When compared to traditional product market share, sustainable product market share
growth is ______ in food production and construction market sectors.
a. Dominating
b. Diminishing
c. Losing
d. Slowly Growing
Correct answer: a

29) According to the Rio+20 Summit on Sustainability, businesses should focus less on ______
and more on ______.
a. Philanthropy, Profit
b. Short-term competitiveness, long-term performance
c. Water issues, climate change
d. Fisheries, Rainforest conservation
Correct answer: b
Reference: 1.2.4, definition of key term “Rio+20 Summit on Sustainability” and accompanying
discussion
30) In the energy sector between 2002 and 2011, consumption of renewable energy grew by
over _____, while non-renewable energy consumption ________.
a. 50%, slightly increased
b. 10%, increased
c. 400%, decreased
d. 30%, greatly decreased
Correct answer: c
Reference: 1.4.1, Table 1.4 and accompanying text.
31) Between 2005 and 2011, ______ building construction grew by 1700% despite a 17%
contraction in the overall construction market.
a. Traditional
b. International
c. Domestic
d. Sustainable
Correct answer: d
32) Between 2002 and 2011, sales of ______ vehicles grew by 646%, while the overall vehicle
market ______ by 15%.
a. Hybrid, decreased
b. Imported, decreased
c. Luxury, decreased
d. Hybrid, increased
Correct answer: a

33) When compared to traditional products, sustainable products and services are _______ in
market share of food, consumer products, construction, finance, energy, and transportation
sectors.
a. Socially responsible
b. Relinquishing
c. About the same
d. Taking over
Correct answer: d
Reference: 1.4.1, Table 1.4 and accompanying text
34) During the global economic recession of 2007-2010, Socially Responsible Investing
portfolios experienced ______.
a. Contraction
b. Asset growth
c. Stability
d. Instability
Correct answer: b
35) The growing threat of natural resource shortage means businesses may face increased
_______.
a. Marketing costs
b. Bids for supply contracts
c. Operating costs
d. Employee turnover
Correct answer: c
36) Blue ocean strategy is the simultaneous pursuit of both ______ and ______.
a. Control, profit
b. Growth, direct competition
c. Water conservation, profit
d. Differentiation, low cost
Correct answer: d
Reference: 1.4.3, definition of key term “blue ocean strategy”
Learning Objective: 1.5 Explain the role of entrepreneurialism and innovation in sustainability.

37) The aim of blue ocean strategy is _____ to out-perform the competition in the existing
industry.
a. Always
b. More often than not
c. Not
d. Sometimes
Correct answer: c
Reference: 1.4.3, definition of key term “blue ocean strategy”
38) In construction, resource extraction, health care, IT, and tourism sectors, environmental
changes and limitations will create risks as well as ______ of economic growth.
a. Contraction
b. Green shoots
c. Stagnation
d. Discounts
Correct answer: b
39) Addressing the business implications of environmental limits will require private sector
commitment to _______, _______, and _______.
a. Innovation, transparency, stewardship
b. Conservative values, foreign-investment, cost
c. Liberal values, employee retention, philanthropy
d. Growth, decision-making, quarterly earnings
Correct answer: a
Reference: 1.4.2, paragraph following Table 1.5
40) Water resources are _______ because of pressure from ______ and ______.
a. Threatened, environmental activists, regulators
b. Growing, competition, emerging markets
c. Threatened, overconsumption, pollution
d. Growing, shareholders, regulators
Correct Answer: c

41) There are opportunities for sustainable business leadership in most sectors of the economy,
except for the ______ sector.
a. Chemicals
b. Finance
c. Tourism
d. None of the above
Correct answer: d
42) This environmental issue has substantial implications for the private sector in the coming
years.
a. Greenhouse gas emissions
b. Water shortage
c. Habitat loss
d. All of the above
Correct answer: d
43) In the coming decade, global average surface temperatures, flooding, water consumption,
habitat loss, chemical exposure, and electronic waste are expected to ______.
a. Decline
b. Increase
c. Stabilize
d. Improve
Correct answer: b
Fill-in-the-Blank Questions
1) The triple-_______ perspective means that companies should measure success in terms of
profits and losses, the organization’s impact on people, and the extent of pollution and
resource depletion.
Correct answer: bottom-line

Reference: 1.1.1, definition of key term “triple-bottom-line”

2) Natural capital is the ______ of natural resources upon which human life and economic
activity depends.
Correct answer: available stock

Reference: 1.1.2, definition of key term “natural capital”
3) When a company’s actions, such as polluting a river, shift costs onto local communities
without consent or compensation, this is called a(n) ______.
Correct answer: negative externality

Reference: 1.1.4, definition of key term “negative externality”
4) Sustainable development is economic activity that meets the needs of ______ without
compromising the ability of ______ to meet their own needs.
Correct answer: current generations, future generations

Reference: 1.1.1, definition of key term “sustainable development”
5) According to the Global Living Planet Index, the available biocapacity of Earth is ______, and
at the same time, humanity’s ecological footprint is ______.
Correct answer: decreasing, increasing

Reference: 1.1.2, Figure 1.2, Figure 1.3, Figure 1.4
6) The ______ for sustainability applies to small and mid-sized enterprises as well as larger
companies.
Correct answer: business case

Reference: 1.1.1, Global Insights call-out box
7) Globally, human population levels and aggregate consumption levels are ______.
Correct answer: increasing



Short Answer Questions
1) Compare and contrast how sustainability applies in practice between a small enterprise and a
large multinational company.
Correct answer: The business case for sustainability applies to companies both small and large,
in terms of cost saving, risk reduction, and value creation. However, when compared to a
larger company, a small company has relatively smaller scale of operations, flexibility in
setting company mission, intimate engagement with local community, greater vulnerability to
external risk, and smaller operating budget. Because of these differences, smaller
companies are more sensitive to upside benefits such as operational cost savings, and
downside aspects of sustainability issues such as supply chain disruption.
Reference: 1.1.1, Global Insights
Difficulty: Medium
Bloom’s Taxonomy Code: Analysis
2) Evaluate Ray Anderson’s “Mission Zero” plan for Interface, Inc. Provide specific examples of
the success and/or failure of the Mission Zero plan.
Correct answer: The Mission Zero plan was both ambitious and successful. The goal of the plan
was to reduce the total environmental impacts of the carpet company to zero by the year
2020. Between 1994 and 2009, Interface reduced material waste, pollutant emissions, and
energy consumption. Specifically, the company accomplished an impressive 24% reduction
in greenhouse gas emissions, 60% reduction in fossil fuel consumption, 82% reduction in
waste being sent to landfills, and over 80% reduction in the amount of water used. The
financial effects of these pioneering innovations in sustainability were an avoided $450 million
in costs, an increase in sales by 63%, and the doubling of corporate earnings.
Reference: 1.1.2, Leadership
Difficulty: Hard
Bloom’s Taxonomy Code: Evaluation
3) To what extent do primary production and processing sectors create externalities? In what
ways do these externalities threaten natural resources?
Correct answer: Primary production and processing, such as in agriculture, forestry, fisheries,
mining, oil and gas exploration, and utility sectors, are highly resource intensive. These
sectors generated environmental costs in the amount of 13% of the global economic output,
which is a sign of inefficient natural resource use. In 2009, these sectors generated $7.3
trillion in externalities measured in terms of water use, greenhouse gas emissions, waste, air
pollution, land and water pollution, and land use.
Reference: 1.2.1, Ethical Decisions
Difficulty: Hard

4) Do you think the international oil company, Statoil ASA, deserves to be called a sustainable
business leader? Why or why not?
Correct answer: Yes. The company’s mission is to meet energy needs worldwide in a
sustainable manner. The company has taken proactive steps, going beyond what
governments require, to address climate change, environmental health and safety, and clean
air. Statoil ASA has been ranked the top oil company in the world multiple times on the Dow
Jones Sustainability Index.
Reference: 1.3.1, Leadership
Difficulty: Easy
Bloom’s Taxonomy Code: Evaluation
5) Are the principles of balance and stewardship compatible with the pursuit of corporate profit?
Correct answer: Yes. The creation of value for all stakeholders, including share owners, over the
long haul, presupposes a stable, healthy society in which to do business. Only in such an
environment can a company’s profitable growth be sustained over time. Pursuing the
principle of balancing social, economic, and environmental factors, and the principle of
stewarding natural resources for future generations, is a logical corollary of a company’s
essential responsibility to the long-term interests of its share owners.
Reference: 1.4.1, Managerial Insight
Difficulty: Easy

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Foundations of Sustainable Business Test Bank

Multiple Choice Questions

3) Sustainable business is characterized by the trend of measuring and managing success in

Copyright ©2015 John Wiley & Sons, Inc. 1-1

8) A negative externality is created when an organization’s activities generate a risk that is

Copyright ©2015 John Wiley & Sons, Inc. 1-2

Difficulty Level: medium

Copyright ©2015 John Wiley & Sons, Inc. 1-3

Bloom’s Taxonomy Code: Knowledge

14) Sustainability is a global megatrend, driven by ______ forces.

15) The general trend in sustainable business practices is to ________.

16) Overconsumption of natural resources occurs when ______ exceeds ______.

Copyright ©2015 John Wiley & Sons, Inc. 1-4

Copyright ©2015 John Wiley & Sons, Inc. 1-5

24) As organizational commitment to sustainability matures, old priorities such as legal

Copyright ©2015 John Wiley & Sons, Inc. 1-6

26) The “gearing up” metaphor describes organizational _______.

Copyright ©2015 John Wiley & Sons, Inc. 1-7

Copyright ©2015 John Wiley & Sons, Inc. 1-8

Copyright ©2015 John Wiley & Sons, Inc. 1-9

Copyright ©2015 John Wiley & Sons, Inc. 1-10

Correct answer: bottom-line

Copyright ©2015 John Wiley & Sons, Inc. 1-11

Correct answer: available stock

Correct answer: negative externality

Correct answer: current generations, future generations

Correct answer: decreasing, increasing

Correct answer: business case

Correct answer: increasing

Copyright ©2015 John Wiley & Sons, Inc. 1-12

Bloom’s Taxonomy Code: Comprehension

Short Answer Questions

Copyright ©2015 John Wiley & Sons, Inc. 1-13

Copyright ©2015 John Wiley & Sons, Inc. 1-14

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16) Overconsumption of natural resources occurs when exceeds .