Certified Supply Chain Professional (CSCP) Practice Exam

What does the term "corporate social responsibility" refer to?

1. A focus solely on profitability

2. Respecting and supporting the needs and rights of employees and communities

3. Reducing employee wages

4. Outsourcing all labor

The correct answer is: Respecting and supporting the needs and rights of employees and communities

Corporate social responsibility (CSR) encompasses the idea that businesses should operate ethically and consider their impact on society and the environment. This term reflects a commitment to respecting and supporting the needs and rights of employees and communities, ensuring that corporate actions contribute positively to society. CSR includes practices such as sustainable sourcing, fair labor practices, and community engagement, demonstrating that companies can be profitable while also acting responsibly. Focusing solely on profitability neglects the broader impacts of business operations on society and the environment. Similarly, reducing employee wages and outsourcing all labor contradict the principles of CSR, as these practices often harm workers and communities rather than supporting them. Therefore, the correct understanding of CSR is firmly rooted in fostering positive relationships with stakeholders, including employees and the communities in which businesses operate.