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7/26/2019 Ethics business TBChap009
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Chapter 09 – Business and Environmental Sustainability
Chapter 09Business and Environmental Sustainability
Multiple Choice Questions
16. The Triple Bottom Line approach involves measurin business success o! sustainable businesses and sustainable economic development in terms o!"
a. economic# leal# and environmental sustainability.
b. economic# ethical# and environmental sustainability.c. economic# leal# and competitive sustainability.
d. leal# competitive# and environmental sustainability.
$ns%er" b
&i!!iculty" Easy
Learnin 'b(ective" 09)01Topic" *ntroduction
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /
2eedbac3" Sustainable business and sustainable economic development see3 to create ne%%ays o! doin business in %hich business success is measured in terms o! economic# ethical#
and environmental sustainability# o!ten called the Triple Bottom Line approach.
1. 4no%in %hat the !uture must be# creative businesses then loo3 bac3%ards to the present
and determine %hat must be done to arrive at that !uture. This process is 3no%n as"
a. bac3%ard interation. b. !orecastin.c. !or%ard interation.
d. bac3castin.
$ns%er" d&i!!iculty" Easy
Learnin 'b(ective" 09)01
Topic" *ntroductionBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /9
2eedbac3" Bac3castin e,amines %hat the !uture %ill be %hen %e emere throuh the !unnel.4no%in %hat the !uture must be# creative businesses then loo3 bac3%ards to the present and
determine %hat must be done to arrive at that !uture.
1. 5hich o! the !ollo%in is true o! the conservation movement
a. *t advocated that the natural %orld should not be used as a capital resource.
b. *t rearded natural resources as bein able to provide an ine,haustible supply o! material.c. *t recommended a more restrained and prudent approach to the natural %orld.
9)17 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
d. *t arued aainst the natural %orld bein used to provide indirect bene!its.
$ns%er" c
&i!!iculty" EasyLearnin 'b(ective" 09)08
Topic" Business Ethics and Environmental >alues
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /1
2eedbac3" The conservation movement# the !irst phase o! modern environmentalism#advocated a restrained and prudent approach to the natural %orld.
19. The conservation movement"
a. rearded natural resources as bein able to provide an ine,haustible supply o! material. b. advocated that the natural %orld should not be used as a capital resource.
c. arued that the natural %orld %as valued as a resource# providin humans %ith both direct
bene!its and indirect bene!its.
d. believed that business does not ood reasons !or conservin natural resources.$ns%er" c
&i!!iculty" ediumLearnin 'b(ective" 09)08
Topic" Business Ethics and Environmental >alues
Bloom+s Ta,onomy" -emember $$CSB" $nalytic? Ethics
ae" /1
2eedbac3" The conservation movement arued that the natural %orld %as valued as a
resource# providin humans %ith both direct bene!its and indirect bene!its.
80. -eminiscent o! the @@@@@ tradition# it is suested that some animals have the conitive
capacity to possess a conscious li!e o! their o%n and people have a duty not to treat theseanimals as mere ob(ects and means to their o%n ends.
a. 4antian
b. virtue ethicc. neoclassical
d. social %eb
$ns%er" a
&i!!iculty" ediumLearnin 'b(ective" 09)08
Topic" Business Ethics and Environmental >alues
Bloom+s Ta,onomy" -emember $$CSB" $nalytic? Ethics
ae" /A
2eedbac3" $ second approach arues that at least some animals have the conitive capacity to possess a conscious li!e o! their o%n. -eminiscent o! the 4antian ethical tradition# this vie%
asserts that %e have a duty not to treat these animals as mere ob(ects and means to our o%n
ends.
9)87 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
81. 5hich o! the !ollo%in is true o! a mar3et)based approach to resolvin environmental
challenes
a. *t is critical o! the narro%# philanthropic vie% o! corporate social responsibility CS-. b. *t asserts that limited resources should not be distributed in the mar3et.
c. *t suests that environmental problems deserve economic solutions.
d. *t conveys that resources are in!inite and !unible.$ns%er" c
&i!!iculty" Easy
Learnin 'b(ective" 09)0ATopic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" //2eedbac3" &e!enders o! the mar3et approach contend that environmental problems are
economic problems that deserve economic solutions.
88. 5hich o! the !ollo%in is involved in environmental problems accordin to the mar3et) based approach to resolvin environmental challenes
a. Lac3 o! 3no%lede o! producin rene%able resources b. *nability o! businesses to produce and sell limited resources
c. Lac3 o! use o! appropriate substitutes !or limited resources
d. $llocation and distribution o! limited resources$ns%er" d
&i!!iculty" edium
Learnin 'b(ective" 09)0A
Topic" Business+ Environmental -esponsibility" The ar3et $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" //2eedbac3" &e!enders o! the mar3et)based approach contend that environmental problems are
economic problems that deserve economic solutions. 2undamentally# environmental problems
involve the allocation and distribution o! limited resources.
8A. 5hich o! the !ollo%in %as suested by 5illiam Ba,ter
a. $n optimal level o! pollution can be achieved throuh competitive mar3ets.
b. Society can strive !or pure air and %ater at a very lo% cost.c. 2rom a strict mar3et economic perspective# resources are in!inite.
d. $ll resources can be replaced by substitutes.
$ns%er" a&i!!iculty" edium
Learnin 'b(ective" 09)0/
Topic" Business+ Environmental -esponsibility" The ar3et $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" //
2eedbac3" 5illiam Ba,ter arued that there is an optimal level o! pollution that %ould best
9)A7 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
serve society+s interests. This optimal level is best attained# accordin to Ba,ter# by leavin it
to a competitive mar3et.
8/. *n economic terms# all resources"
a. are in!inite because they can be replaced by substitutes.
b. are distributed !airly by the overnment.c. can be made available every%here.
d. are distributed e!!iciently in the mar3et.
$ns%er" a&i!!iculty" edium
Learnin 'b(ective" 09)0/
Topic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" Dnderstand$$CSB" $nalytic
ae" //
2eedbac3" *n economic terms# all resources can be replaced by substitutes# and in this sense
resources are in!inite.
8. 5hich o! the !ollo%in e,plains the statement F$ll resources are !unibleGa. *t means that all resources can be reulated by the overnment.
b. *t means that all resources can be replaced by substitutes.
c. *t means that all resources cannot be duplicated.d. *t means that all resources cannot be recycled and reused.
$ns%er" b
&i!!iculty" Easy
Learnin 'b(ective" 09)0/Topic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" //
2eedbac3" *n economic terms# all resources are F!unible.G They can be replaced by
substitutes# and in this sense resources are in!inite.
86. 5hich o! the !ollo%in is true about the mar3et)based approach to environmental
responsibility
a. ar3et !ailure occurs %hen no mar3ets e,ist to create a price !or important social oods. b. 2ree mar3et e,chanes can uarantee optimal results !or addressin issues related to
e,ternalities.
c. The mar3et)based approach al%ays ensures that %hat is ood and rational !or a collectiono! individuals is also ood and rational !or a society.
d. ar3ets can be very success!ul i! important ethical and policy Huestions and policy
decisions are le!t solely to the outcome o! individual decisions.$ns%er" a
&i!!iculty" edium
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibility" The ar3et $pproach
9)/7 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalytic
ae" /2eedbac3" ar3et !ailure occurs %hen no mar3ets e,ist to create a price !or important social
oods.
8. 5hich o! the !ollo%in %ays can lead mar3et !ailure to serious environmental harm
a. Creatin abundant mar3ets to create a price !or important social oods
b. a3in no distinction bet%een individual decisions and roup conseHuencesc. *ne,istence o! e,ternalities in the economic e,chane system
d. $ssinin property rihts to uno%ned oods
$ns%er" b
&i!!iculty" ediumLearnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalyticae" /
2eedbac3" ar3et !ailures can lead to serious environmental harm i! no distinction is made bet%een individual decisions and roup conseHuences.
8. 5hich o! the !ollo%in causes inadeHuacy in ad hoc attemptsIinternali<in e,ternalcosts and assinin property rihts to uno%ned oods such as %ild speciesIto repair mar3et
!ailures
a. The bac3castin problem
b. The !unibility problemc. The biomimicry problem
d. The !irst)eneration problem
$ns%er" d&i!!iculty" edium
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibility" The ar3et $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /6
2eedbac3" *nternali<in e,ternal costs and assinin property rihts to uno%ned oods suchas %ild species are t%o responses to mar3et !ailures. But there are ood reasons !or thin3in
that such ad hoc attempts to repair mar3et !ailures are environmentally inadeHuate. 'ne
important reason is %hat has been called the !irst)eneration problem. That is# %e learnabout mar3et !ailures and thereby prevent harms in the !uture only by sacri!icin the F!irst
enerationG as a means o! ainin this in!ormation.
89. ar3ets can %or3 to prevent harm only throuh in!ormation supplied by the e,istence o!
mar3et !ailures. This is better 3no%n as the"
a. biomimicry e!!ect.
b. bac3castin problem.
9)7 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
c. !irst)eneration problem.
d. primary mar3et e!!ect.
$ns%er" c&i!!iculty" Easy
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibility" The ar3et $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /62eedbac3" ar3ets can %or3 to prevent harm only throuh in!ormation supplied by the
e,istence o! mar3et !ailures. This is 3no%n as the !irst eneration problem.
A0. Be!ore environmental leislation %as enacted# the primary leal avenue open !oraddressin environmental concerns %as"
a. tort la%.
b. international la%.
c. public la%.d. criminal la%.
$ns%er" a&i!!iculty" Easy
Learnin 'b(ective" 09)0A
Topic" Business+ Environmental -esponsibility" The -eulatory $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /6
2eedbac3" uch o! the most sini!icant environmental leislation in the Dnited States %asenacted durin the 190s. Be!ore this leislation %as enacted# the primary leal avenue open
!or addressin environmental concerns %as tort la%.
A1. 5hich o! the !ollo%in is true about the reulatory approach to environmental challenes
a. *t overestimates the in!luence that business can have on establishin the la%.
b. The overnment established reulatory standards to o!!er compensation a!ter theoccurrence o! pollution or any other environmental harm.
c. *t shi!ted the burden !rom those threatened %ith harm to those %ho %ould cause the harm.
d. This approach ensures that business does not pursue any !inancial opportunities that cause
harm to the environment.$ns%er" c
&i!!iculty" Easy
Learnin 'b(ective" 09)06Topic" Business+ Environmental -esponsibility" The -eulatory $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /
2eedbac3" The environmental reulation enacted durin the 190s established standards that
e!!ectively shi!ted the burden !rom those threatened %ith harm to those %ho %ould cause the
harm. This is not a problem associated %ith the reulatory approach but one o! the chanes
9)67 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
that occurred a!ter it %as enacted.
A8. 5hich o! the !ollo%in is a problem associated %ith the reulatory approach toenvironmental challenes
a. The reulatory model assumes that economic ro%th is environmentally and ethically
benin. b. *! people rely on the la% to protect the environment# environmental protection %ill e,tend
beyond the la%.
c. Business passively responds to consumer desires and consumers are una!!ected by themessaes that business conveys.
c. =ational reulations are the only means to e!!ectively address international environmental
challenes.
$ns%er" a&i!!iculty" Easy
Learnin 'b(ective" 09)06
Topic" Business+ Environmental -esponsibility" The -eulatory $pproach
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /2eedbac3" The most troublin problem !rom an environmental standpoint is that the
reulatory model assumes that economic ro%th is environmentally and ethically benin.
AA. 5hich o! the !ollo%in is true about the concept o! sustainable development and
sustainable business practice
a. *t suests a radically ne% vision !or interatin !inancial and environmental oals#
compared to the ro%th model that preceded it. b. $ccordin to this concept# only individuals %ho can prove that they had been harmed by
pollution can raise leal challenes.
c. $ccordin to this concept# an economic solution to compensation should be o!!ered !or theharm only a!ter the harm has been done.
d. *t !ocuses only on the costs that businesses incur in pursuin environmental oals.
$ns%er" a&i!!iculty" Easy
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /)/9
2eedbac3" The concept o! sustainable development and sustainable business practice suestsa radically ne% vision !or interatin !inancial and environmental oals# compared to the
ro%th model that preceded it.
A/. The three oals o! sustainable development that include economic# environmental# and
ethical sustainability are re!erred to as the"
a. tripartite oals.
b. three pillars o! sustainability.
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any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
c. three proned charter.
d. shoulders o! sustainability.
$ns%er" b&i!!iculty" Easy
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /92eedbac3" These three oals# economic# environmental# and ethical sustainability# are o!ten
re!erred to as the three pillars o! sustainability.
A. 5hich o! the !ollo%in %as chared %ith developin recommendations !or paths to%ardeconomic and social development that %ould not achieve short)term economic ro%th at the
e,pense o! lon)term environmental and economic sustainability
a. The Blue%ash Commission
b. The Bindin Commissionc. The Barentsbur Commission
d. The Brundtland Commission$ns%er" d
&i!!iculty" edium
Learnin 'b(ective" 09)0Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /92eedbac3" The Brundtland Commission %as chared %ith developin recommendations !or
paths to%ard economic and social development that %ould not achieve short)term economic
ro%th at the e,pense o! lon)term environmental and economic sustainability.
A6. 5hich o! the !ollo%in is true o! the Brundtland Commission
a. *t %as named as the Brundtland Commission a!ter the place in =or%ay# %here the summit%as conducted !or the !irst time.
b. *t %as chared %ith developin recommendations !or paths to%ard economic and social
development at the e,pense o! underdeveloped and developin countries.
c. *t de!ined sustainable development as development that meets the needs o! the present%ithout compromisin the ability o! !uture enerations to meet their o%n needs.
d. *t critici<ed the report !rom the Dnited =ations+ 5orld Commission on Environment and
&evelopment published in 19.$ns%er" c
&i!!iculty" edium
Learnin 'b(ective" 09)0Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /9
9)7 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
7/26/2019 Ethics business TBChap009
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Chapter 09 – Business and Environmental Sustainability
2eedbac3" The Brundtland Commission o!!ered %hat has become the standard de!inition o!
sustainable development. Sustainable development is development that meets the needs o! the
present %ithout compromisin the ability o! !uture enerations to meet their o%n needs.
A. 5hich o! the !ollo%in models does not di!!erentiate natural resources !rom the other
!actors o! production and does not e,plain the oriin o! resourcesa. The circular !lo% model
b. The triple bottom line model
c. The bilinear modeld. The sustainability model
$ns%er" a
&i!!iculty" edium
Learnin 'b(ective" 09)0Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /912eedbac3" The circular !lo% model does not di!!erentiate natural resources !rom the other
!actors o! production. This model does not e,plain the oriin o! resources.
A. 5hich o! the !ollo%in is true o! the circular !lo% model
a. *t di!!erentiates natural resources !rom the other !actors o! production. b. *t suests that to 3eep up %ith the economy# the population must ro%.
c. *t treats economic ro%th as both the solution to all social ills and also as boundless.
d. *t arues that the economy cannot ro% inde!initely.
$ns%er" c&i!!iculty" edium
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /912eedbac3" $n observation o! the circular !lo% model is that it treats economic ro%th as both
the solution to all social ills and also as boundless.
A9. The possibility that the economy cannot ro% inde!initely is simply not part o! the"a. three pillars o! sustainability approach.
b. circular !lo% model.
c. triple bottom line approach.d. bilinear model.
$ns%er" b
&i!!iculty" ediumLearnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
9)97 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
ae" /91
2eedbac3" $n observation about the circular !lo% model is that it treats economic ro%th as
both the solution to all social ills and also as boundless. To 3eep up %ith population ro%th#the economy must ro%. To provide !or a hiher standard o! livin# the economy must ro%.
To alleviate poverty# huner# and disease# the economy must ro%. The possibility that the
economy cannot ro% inde!initely is simply not part o! this model.
/0. $ccordin to economist ;erman &aly# neoclassical economics# %ith its emphasis on
economic ro%th as the oal o! economic policy %ill inevitably !ail to meet these challenes"a. i! it suests that the population o! the %orld needs to be controlled.
b. unless it reconi<es that the economy is but a subsystem %ithin earth+s biosphere.
c. unless it reconi<es that resources are in!inite.
d. i! it !ocuses on recyclin and reusin the by)products o! the production process.$ns%er" b
&i!!iculty" ;ard
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /91
2eedbac3" &aly arues that neoclassical economics# %ith its emphasis on economic ro%th as
the oal o! economic policy# %ill inevitably !ail to meet these challenes unless it reconi<esthat the economy is but a subsystem %ithin earth+s biosphere.
/1. $ccordin to the @@@@@ la% o! thermodynamics the conservation o! matterJenery#
neither matter nor enery can truly be Fcreated#G it can only be trans!erred !rom one !orm toanother.
a. !irst
b. secondc. third
d. !ourth
$ns%er" a&i!!iculty" ;ard
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /91
2eedbac3" The sustainable model reconi<es that the economy e,ists %ithin a !inite biospherethat encompasses a band around the earth that is little more than a !e% miles %ide. 2rom the
!irst la% o! thermodynamics the conservation o! matterJenery# %e reconi<e that neither
matter nor enery can truly be Fcreated#G it can only be trans!erred !rom one !orm to another.
/8. The model o! economy# in consistency %ith the second la% o! thermodynamics# implies
that"
a. the amount o! re)usable products decreases %ith an increase in production.
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any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
b. the economy e,ists beyond a !inite biosphere.
c. %astes are not produced at each stae o! economic activity.
d. the amount o! usable enery decreases over time.$ns%er" d
&i!!iculty" ;ard
Learnin 'b(ective" 09)0Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /91)/98
2eedbac3" The model o! the economy or Economic System as a subset o! the biosphere or
Ecosystem di!!ers !rom the circular !lo% model is several %ays. Enery is lost at every stae
o! economic activity. Consistent %ith the second la% o! thermodynamics entropy increased%ithin a closed system# the amount o! usable enery decreases over time.
/A. 'ver the lon term# resources and enery cannot be used# nor %aste produced# at rates at
%hich the biosphere cannot replace or absorb them %ithout (eopardi<in its ability to sustainli!e. These are %hat ;erman &aly calls the"
a. Feconomic limitations.G b. Fbac3castin e!!ect.G
c. Fbiophysical limits to ro%th.G
d. Fun)e,pandable boundaries.G$ns%er" c
&i!!iculty" edium
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /982eedbac3" 'ver the lon term# resources and enery cannot be used# nor %aste produced# at
rates at %hich the biosphere cannot replace or absorb them %ithout (eopardi<in its ability to
sustain human li!e. These are %hat &aly calls the Fbiophysical limits to ro%th.G
//. 5hich o! the !ollo%in is true o! the sustainability model in terms o! environmental
responsibilities
a. Sustainability need not be a lon)term stratey. b. The hue unmet mar3et potential amon the %orld+s developin economies
can only be met in sustainable %ays.
c. Sustainable practices lead to reduced cost savins.d. 2irms that !ollo% sustainable practices lose competitive advantae.
$ns%er" b
&i!!iculty" ediumLearnin 'b(ective" 09)0
Topic" The FBusiness CaseG !or a Sustainable Economy
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalytic
9)117 801/ by c:ra%);ill Education. This is proprietary material solely !or authori<ed instructor use. =ot authori<ed !or sale or distribution in
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Chapter 09 – Business and Environmental Sustainability
ae" /9A
2eedbac3" The hue unmet mar3et potential amon the %orld+s developin economies can
only be met in sustainable %ays.
/. 5hich o! the !ollo%in is true o! the sustainability model in terms o! environmental
responsibilitiesa. Sustainability reduces competitive advantae.
b. Sustainability is not a prudent lon)term stratey.
c. Sustainability is a ood ris3 manaement stratey.d. Sustainability leads to reduced cost)savins.
$ns%er" c
&i!!iculty" edium
Learnin 'b(ective" 09)0Topic" The FBusiness CaseG !or a Sustainable Economy
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalytic
ae" /9/2eedbac3" Sustainability is a ood ris3 manaement stratey. -e!usin to move to%ard
sustainability o!!ers many do%nsides that innovative !irms %ill avoid.
/6. Estimates suest that %ith present technoloies# businesses can readily achieve at least a
!our!old increase in e!!iciency# and perhaps as much as a ten!old increase. This can beachieved throuh the !irst principle o! sustainability 3no%n as"
a. biomimicry.
b. eco)e!!iciency.
c. the cradle)to)cradle responsibility.d. the ta3e)ma3e)%aste model.
$ns%er" b
&i!!iculty" EasyLearnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /9/)/9
2eedbac3" Eco)e!!iciency has lon been a part o! the environmental movement. F&oin more
%ith lessG has been an environmental uideline !or decades. Some estimates suest that %ith present technoloies alone# business could readily achieve at least a !our!old increase in
e!!iciency and perhaps as much as a ten!old increase. The !irst principle o! sustainability is
sometimes 3no%n as eco)e!!iciency.
/. 5hich o! the !ollo%in recommends cyclin the %aste o! one activity into the resource o!
anothera. The biomimicry principle
b. The cradle)to)rave model
c. The cradle)to)cradle model
d. The eco) e!!iciency principle
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Chapter 09 – Business and Environmental Sustainability
$ns%er" a
&i!!iculty" EasyLearnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /9
2eedbac3" *n an ideal situation# the %aste o! one !irm becomes the resource o! another# andsuch syneries can create eco)industrial par3s. Kust as bioloical processes such as
photosynthesis cycle the F%asteG o! one activity into the resource o! another# this principle is
o!ten re!erred to as biomimicry.
/. FClosed)loopG production see3s to interate %hat is presently %aste# bac3 into production.
*n an ideal situation# the %aste o! one !irm becomes the resource o! another# and such
syneries can create eco)industrial par3s. This principle is o!ten re!erred to as"
a. biomimicry. b. eco)e!!iciency.
c. biosynery.d. bac3cast.
$ns%er" a
&i!!iculty" EasyLearnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /9
2eedbac3" FClosed)loopG production see3s to interate %hat is presently %aste bac3 into
production. *n an ideal situation# the %aste o! one !irm becomes the resource o! another# andsuch syneries can create eco)industrial par3s. Kust as bioloical processes such as
photosynthesis cycle the F%asteG o! one activity into the resource o! another# this principle is
o!ten re!erred to as biomimicry.
/9. 5hich o! the !ollo%in suests that a business ta3es resources# ma3es products out o!
them# and discards %hatever is le!t over
a. The cradle)to)rave model b. The ta3e)ma3e)%aste approach
c. The Cradle)to)cradle model
d. The eco)e!!iciency principle$ns%er" b
&i!!iculty" Easy
Learnin 'b(ective" 09)09Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /9
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any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
2eedbac3" The evolution o! business stratey to%ard biomimicry can be understood alon a
continuum. The earliest phase has been described as Fta3e)ma3e)%aste.G Business ta3es
resources# ma3es products out o! them# and discards %hatever is le!t over.
0. 5hich o! the !ollo%in holds that a business is responsible !or the entire li!e o! its
products# includin the ultimate disposal even a!ter the salea. The cradle)to)rave model
b. The ta3e)ma3e)%aste appoach
c. The cradle)to)cradle modeld. The eco)e!!iciency principle
$ns%er" a
&i!!iculty" Easy
Learnin 'b(ective" 09)09Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /92eedbac3" The Fcradle to raveG or Fli!e)cycleG model holds that a business is responsible !or
the entire li!e o! its products# includin the ultimate disposal even a!ter the sale.
1. Cradle)to)rave and cradle)to)cradle responsibilities are part o! the @@@@@ sustainable
business principle.a. eco)e!!iciency
b. bac3castin
c. biomimicry
d. ta3e)ma3e)%aste$ns%er" c
&i!!iculty" edium
Learnin 'b(ective" 09)09Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /99)00
2eedbac3" The evolution o! business stratey to%ard biomimicry can be understood alon a
continuum. The earliest phase has been described as Fta3e)ma3e)%aste.G Business ta3es
resources# ma3es products out o! them# and discards %hatever is le!t over. $ second phaseenvisions business ta3in responsibility !or its products !rom Fcradle to rave.G $ third phase
has been described as the Fcradle)to)cradleG responsibility# %hich holds that a business should
be responsible !or incorporatin the end results o! its products bac3 into the productive cycle.
8. 5hich o! the !ollo%in %ould hold a business liable !or round%ater contamination
caused by its products even years a!ter they had been buried in a land!illa. FBac3castG model
b. FEco)e!!iciencyG model
c. FTa3e)ma3e)%asteG model
d. FCradle)to)raveG model
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Chapter 09 – Business and Environmental Sustainability
$ns%er" d
&i!!iculty" Easy
Learnin 'b(ective" 09)09Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /9
2eedbac3" Cradle)to)rave or li!e)cycle responsibility holds that a business is responsible !or
the entire li!e o! its products# includin the ultimate disposal even a!ter the sale. Thus# !ore,ample# a cradle)to)rave model %ould hold a business liable !or round%ater contamination
caused by its products even years a!ter they had been buried in a land!ill.
A. 5hich o! the !ollo%in holds that a business should be responsible !or incorporatin theend results o! its products bac3 into the productive cycle
a. Bac3castin
b. Cradle)to)cradle
c. Ta3e)ma3e)%asted. Cradle)to)rave
$ns%er" b&i!!iculty" Easy
Learnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable BusinessBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /9
2eedbac3" Cradle)to)cradle responsibility holds that a business should be responsible !orincorporatin the end results o! its products bac3 into the productive cycle.
/. 5hich o! the !ollo%in responsibilities entail an incentive to redesin products so thatthey can be recycled e!!iciently and easily
a. Cradle)to)rave
b. Bac3castinc. Cradle)to)cradle
d. Eco)e!!iciency
$ns%er" c
&i!!iculty" EasyLearnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /9
2eedbac3" Cradle)to)cradle responsibility holds that a business should be responsible !orincorporatin the end results o! its products bac3 into the productive cycle. This
responsibility# in turn# %ould create incentives to redesin products so that they could be
recycled e!!iciently and easily.
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any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
. 5hich o! the !ollo%in is true o! a service)based economy
a. $ service)based economy tends to the consumers+ demand !or clothes cleanin# !loor
coverin# illumination# entertainment# and so !orth. b. $ service)based economy interprets consumer demand as a demand !or %ashin machines#
carpets# lihts# consumer electronics# and so !orth.
c. $ service)based economy %ea3ens the production e!!iciencies.d. $ service)based economy increases material and enery costs sini!icantly.
$ns%er" a
&i!!iculty" EasyLearnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /96
2eedbac3" $ service)based economy interprets consumer demand as a demand !or servicesI
!or clothes cleanin# !loor coverin# illumination# entertainment# cool air# transportation# %ord
processin# and so !orth.
Fill in the Blank Questions
6. The @@@@@ movement made the case that business had ood reasons !or conservin naturalresources# reasons that paralleled the rationale to conserve !inancial resources.
$ns%er" conservation
&i!!iculty" Easy
Learnin 'b(ective" 09)08Topic" Business Ethics and Environmental >alues
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /1
2eedbac3" Conservationists# supporters o! the conservation movement# the !irst phase o!
modern environmentalism# made the case that business had ood reasons !or conservinnatural resources# reasons that paralleled the rationale to conserve !inancial resources.
. $ @@@@@ approach to resolvin environmental challenes suests that environmental
problems are economic problems that deserve economic solutions.$ns%er" mar3et)based
&i!!iculty" Easy
Learnin 'b(ective" 09)0ATopic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" //
2eedbac3" &e!enders o! the mar3et approach contend that environmental problems are
economic problems that deserve economic solutions.
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Chapter 09 – Business and Environmental Sustainability
. *n economic terms# all resources are F@@@@@#G that is# they can be replaced by substitutes#
and in this sense resources are in!inite.
$ns%er" !unible&i!!iculty" Easy
Learnin 'b(ective" 09)0/
Topic" Business+ Environmental -esponsibility" The ar3et $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" //2eedbac3" *n economic terms# all resources are F!unible.G They can be replaced by
substitutes# and in this sense resources are in!inite.
9. Be!ore environmental leislation %as enacted# the primary leal avenue open !oraddressin environmental concerns %as @@@@@ la%.
$ns%er" tort
&i!!iculty" Easy
Learnin 'b(ective" 09)0ATopic" Business+ Environmental -esponsibility" The -eulatory $pproach
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /6
2eedbac3" uch o! the most sini!icant environmental leislation in the Dnited States %asenacted durin the 190s. Be!ore environmental leislation %as enacted# the primary leal
avenue open !or addressin environmental concerns %as tort la%.
60. The concept o! sustainable development can be traced to a 19 report !rom the Dnited =ations+ 5orld Commission on Environment and &evelopment 5CE&# more commonly
3no%n as the @@@@@ Commission.
$ns%er" Brundtland&i!!iculty" edium
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /9
2eedbac3" The concept o! sustainable development can be traced to a 19 report !rom theDnited =ations+ 5orld Commission on Environment and &evelopment 5CE&# more
commonly 3no%n as the Brundtland Commission# named !or its chair# :ro ;arlem
Brundtland.
61. The @@@@@ model does not di!!erentiate natural resources !rom the other !actors o!
production.$ns%er" circular !lo%
&i!!iculty" Easy
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
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any manner. This document may not be copied# scanned# duplicated# !or%arded# distributed# or posted on a %ebsite# in %hole or part.
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Chapter 09 – Business and Environmental Sustainability
Bloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /912eedbac3" The circular !lo% model does not di!!erentiate natural resources !rom the other
!actors o! production.
68. 5hile the reulatory and compliance model tends to interpret environmental
responsibilities as constraints upon business# the @@@@@ model is more !or%ard loo3in and
may present business %ith reater opportunities than burdens.$ns%er" sustainability
&i!!iculty" Easy
Learnin 'b(ective" 09)0
Topic" The FBusiness CaseG !or a Sustainable EconomyBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /98
2eedbac3" 5hile the reulatory and compliance model tends to interpret environmentalresponsibilities as constraints upon business# the sustainability model is more !or%ard loo3in
and may present business %ith reater opportunities than burdens.
6A. The ultimate oal o! @@@@@ is to eliminate %aste altoether rather than reducin it.
$ns%er" biomimicry&i!!iculty" Easy
Learnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember $$CSB" $nalytic
ae" /9
2eedbac3" The ultimate oal o! biomimicry is to eliminate %aste altoether rather thanreducin it.
6/. The @@@@@ responsibility holds that a business should be responsible !or incorporatin theend results o! its products bac3 into the productive cycle.
$ns%er" cradle)to)cradle
&i!!iculty" Easy
Learnin 'b(ective" 09)09Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /9
2eedbac3" Cradle)to)cradle responsibility holds that a business should be responsible !or
incorporatin the end results o! its products bac3 into the productive cycle. Thisresponsibility# in turn# %ould create incentives to redesin products so that they could be
recycled e!!iciently and easily.
6. $ @@@@@ economy interprets consumer demand as a demand !or servicesI!or clothes
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Chapter 09 – Business and Environmental Sustainability
cleanin# !loor coverin# illumination# entertainment# cool air# transportation# %ord
processin# and so !orth.
$ns%er" service)based&i!!iculty" Easy
Learnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable BusinessBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /962eedbac3" $ service)based economy interprets consumer demand as a demand !or servicesI
!or clothes cleanin# !loor coverin# illumination# entertainment# cool air# transportation# %ord
processin# and so !orth.
Essay Questions
66. E,plain ho% business understands the opportunities available in the ae o! sustainability.$ns%er" The environmental research and consultin roup The =atural Step uses an imae o!
a !unnel# %ith t%o converin lines# to help business understand the opportunities available inthe ae o! sustainability. The resources necessary to sustain li!e are on a do%n%ard slope.
5hile there is disareement about the anle o! the slope# there is %idespread consensus that
available resources are in decline. The second line represents areate %orld%ide demand#accountin !or both population ro%th and the increasin demand o! consumerist li!estyles.
Barrin an environmental catastrophe# many but not all industries %ill emere throuh the
narro%in !unnel into an era o! sustainable livin.
&i!!iculty" ediumLearnin 'b(ective" 09)01
Topic" *ntroduction
Bloom+s Ta,onomy" Dnderstand$$CSB" $nalytic
ae" /)/9
6. Elaborate on the conservation movement.
$ns%er" By the late 19th century# humans came to reconi<e the sel!)interested reasons !or
protectin the natural environment. The conservation movement# the !irst phase o! modern
environmentalism# advocated a more restrained and prudent approach to the natural %orld.2rom this perspective# the natural %orld %as still valued as a resource# providin humans %ith
both direct bene!its air# %ater# !ood# and indirect bene!its the oods and services produced
by business. Conservationists arued aainst the e,ploitation o! natural resources as i! theycould provide an ine,haustible supply o! material. They made the case that business had ood
reasons !or conservin natural resources# reasons that paralleled the rationale to conserve
!inancial resources. The natural %orld# li3e capital# had the productive capacity to producelon)term income but only i! manaed and used prudently.
Besides the sel!)interested reasons to protect human li!e and health# the natural environment is
essential and valuable !or many other reasons. '!ten# these other values con!lict %ith the more
direct instrumental value that comes !rom treatin the natural %orld as a resource. The beauty
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Chapter 09 – Business and Environmental Sustainability
and randeur o! the natural %orld provide reat aesthetic and inspirational value. any
people vie% the natural %orld as a mani!estation o! reliious and spiritual values. arts o! the
natural %orld can have symbolic value# historical value# and such diverse psycholoicalvalues as serenity and e,hilaration. These values can clearly con!lict %ith the use o! the earth
itsel! as a resource to physically# as opposed to spiritually# sustain those %ho live on it.
&i!!iculty" ;ardLearnin 'b(ective" 09)08
Topic" Business Ethics and Environmental >alues
Bloom+s Ta,onomy" Dnderstand$$CSB" $nalytic
ae" /1
6. &iscuss the mar3et)based approach to resolvin environmental challenes.$ns%er" $ mar3et)based approach to resolvin environmental challenes is reminiscent o! the
narro%# economic vie% o! corporate social responsibility CS-. &e!enders o! this mar3et
approach contend that environmental problems are economic problems that deserve economic
solutions. 2undamentally# environmental problems involve the allocation and distribution o!limited resources. 5hether %e are concerned %ith the allocation o! scarce nonrene%able
resources such as as and oil# or %ith the earth+s capacity to absorb industrial by)productssuch as C'8 or CBs# e!!icient mar3ets can address environmental challenes.
&i!!iculty" ;ard
Learnin 'b(ective" 09)0ATopic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalytic
ae" //
69. 5hat is an optimal level o! pollution
$ns%er" *n his %ell)3no%n boo3# People or Penguins: The Case for Optimal Pollution#5illiam Ba,ter arued that there is an optimal level o! pollution that %ould best serve
society+s interests. This optimal level is best attained# accordin to Ba,ter# by leavin it to a
competitive mar3et. &enyin that there is any FnaturalG or ob(ective standard !or clean air or%ater as this vie% %ould deny there is an ob(ective state o! per!ect health# Ba,ter beins
%ith a oal o! Fsa!eG air and %ater Huality# and translates this oal to a matter o! balancin
ris3s and bene!its. $ more reasonable approach is to aim !or air and %ater Huality that is sa!e
enouh to breathe and drin3 %ithout costin too much. This balance# the Foptimal level o! pollution#G can be achieved throuh competitive mar3ets.
&i!!iculty" edium
Learnin 'b(ective" 09)0/Topic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" //
0. &iscuss the challenes associated %ith the e!!icient mar3et approach to environmental
responsibilities.
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Chapter 09 – Business and Environmental Sustainability
$ns%er" $ variety o! mar3et !ailures involvin environmental issues point to the inadeHuacy
o! mar3et solutions. Since the FcostsG o! such thins as air pollution# round%ater
contamination and depletion# soil erosion# and nuclear %aste disposal are typically borne by parties Fe,ternalG to the economic e,chane e..# people do%n%ind# neihbors# and !uture
enerations# !ree mar3et e,chanes cannot uarantee optimal results.
$ second type o! mar3et !ailure occurs %hen no mar3ets e,ist to create a price !or importantsocial oods. Endanered species# scenic vistas# rare plants and animals# and biodiversity are
(ust some environmental oods that typically are not traded on open mar3ets. ublic oods
such as clean air and ocean !isheries also have no established mar3et price. 5ith noestablished e,chane value# the mar3et approach cannot even pretend to achieve its o%n oals
o! e!!iciently meetin consumer demand. ar3ets alone !ail to uarantee that such important
public oods are preserved and protected.
$ third %ay in %hich mar3et !ailures can lead to serious environmental harm involves adistinction bet%een individual decisions and roup conseHuences. 5e can miss important
ethical and policy Huestions i! %e leave policy decisions solely to the outcome o! individual
decisions. Because these are important ethical Huestions# and because they remain unas3ed
!rom %ithin mar3et transactions# %e must conclude that mar3ets are incomplete at best intheir approach to the overall social ood.
There are ood reasons !or thin3in that such ad hoc attempts to repair mar3et !ailures areenvironmentally inadeHuate. 'ne important reason is %hat has been called the !irst)eneration
problem. ar3ets can %or3 to prevent harm only throuh in!ormation supplied by the
e,istence o! mar3et !ailures. That is# %e learn about mar3et !ailures and thereby preventharms in the !uture only by sacri!icin the F!irst enerationG as a means o! ainin this
in!ormation. 5hen public policy involves irreplaceable public oods such as endanered
species# rare %ilderness areas# and public health and sa!ety# such a reactionary stratey is ill
advised.&i!!iculty" ;ard
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibility" The ar3et $pproachBloom+s Ta,onomy" Dnderstand
$$CSB" $nalytic
ae" /)/6
1. 5hat do de!enders o! the mar3et approach to environmental responsibilities state about
the ability o! economic mar3ets to achieve a sound environmental policy &iscuss i! their
responses are environmentally adeHuate.$ns%er" &e!enders o! a narro% economic vie% o! corporate social responsibility have
responses to the challenes associated %ith mar3et !ailures. *nternali<in e,ternal costs and
assinin property rihts to uno%ned oods such as %ild species are t%o responses to mar3et!ailures. But there are ood reasons !or thin3in that such ad hoc attempts to repair mar3et
!ailures are environmentally inadeHuate. 'ne important reason is %hat has been called the
!irst)eneration problem. ar3ets can %or3 to prevent harm only throuh in!ormationsupplied by the e,istence o! mar3et !ailures. 'nly %hen !ish populations in the =orth $tlantic
collapsed# !or e,ample# did %e learn that !ree and open competition amon the %orld+s !ishin
industry !or uno%ned public oods !ailed to prevent the decimation o! cod# s%ord!ish#
$tlantic salmon# and lobster populations. That is# %e learn about mar3et !ailures and thereby
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Chapter 09 – Business and Environmental Sustainability
prevent harms in the !uture only by sacri!icin the F!irst enerationG as a means o! ainin
this in!ormation. 5hen public policy involves irreplaceable public oods such as endanered
species# rare %ilderness areas# and public health and sa!ety# such a reactionary stratey is illadvised.
&i!!iculty" edium
Learnin 'b(ective" 09)0Topic" Business+ Environmental -esponsibility" The ar3et $pproach
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalyticae" /6
8. List the various la%s related to overnmental reulation o! the environment. &escribe the
method o! addressin environmental concerns prior to the establishment o! la%s.$ns%er" :overnmental reulations %ere seen as a better %ay to respond to environmental
problems# compared to unreulated mar3ets. uch o! the most sini!icant environmental
leislation in the Dnited States %as enacted durin the 190s. The Clean $ir $ct o! 190
amended and rene%ed in 19# 2ederal 5ater ollution $ct o! 198 amended and rene%edas the Clean 5ater $ct o! 19# and the Endanered Species $ct o! 19A %ere part o! this
national consensus !or addressin environmental problems. Each la% %as oriinally enacted by a &emocratic Conress and sined into la% by a -epublican president. These la%s share a
common approach to environmental issues.
Be!ore this leislation %as enacted# the primary leal avenue open !or addressinenvironmental concerns %as tort la%. 'nly individuals %ho could prove that they had been
harmed by pollution could raise leal challenes to air and %ater pollution. That leal
approach placed the burden on the person %ho %as harmed and# at best# o!!ered compensation
!or the harm only a!ter the !act. E,cept !or the incentive provided by the threat o!compensation# D.S. policy did little to prevent the pollution in the !irst place. $bsent any
proo! o! nelience# public policy %as content to let the mar3et decide environmental policy.
Because endanered species themselves had no leal standin# direct harm to plant andanimal li!e %as o! no leal concern and previous policies did little to prevent harm to plant
and animal li!e.
&i!!iculty" ;ardLearnin 'b(ective" 09)0A
Topic" Business+ Environmental -esponsibility" The -eulatory $pproach
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalyticae" /6
A. &escribe the challenes associated %ith the reulatory approach to environmentalconcerns.
$ns%er" Several problems suest that the reulatory approach to environmental concerns
%ill prove inadeHuate over the lon term. 2irst# it underestimates the in!luence that businesscan have in establishin the la%. The Corporate $utomotive 2uel E!!iciency C$2E
standards provide a ood e,ample o! ho% this can occur. $ reasonable account o! this la%
suests that the public very clearly e,pressed a political oal o! improvin air Huality by
improvin automobile !uel e!!iciency oals and thereby reducin automobile emissions.
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Chapter 09 – Business and Environmental Sustainability
;o%ever# the automobile industry %as able to use its lobbyin in!luence to e,empt liht
truc3s and SD>s !rom these standards.
Second# this approach also underestimates the ability o! business to in!luence consumerchoice. To conclude that business !ul!ills its environmental responsibility %hen it responds to
the environmental demands o! consumers is to underestimate the role that business can play in
shapin public opinion. The best e,ample %ould be the advertisin industry. $ssumin that business is not oin to stop advertisin its products or lobbyin overnment# this model o!
corporate environmental responsibility is li3ely to prove inadeHuate !or protectin the natural
environment.2urther# i! %e rely on the la% to protect the environment# environmental protection %ill e,tend
only as !ar as the la% e,tends. et# most environmental issues# pollution problems especially#
do not respect leal (urisdictions. Similarly# national reulations %ill be ine!!ective !or
international environmental challenes.2inally# and perhaps most troublin !rom an environmental standpoint# this reulatory model
assumes that economic ro%th is environmentally and ethically benin. -eulations establish
side constraints on business+s pursuit o! pro!its and# as lon as they remain %ithin those
constraints# accept as ethically leitimate %hatever road to pro!itability manaement chooses.&i!!iculty" ;ard
Learnin 'b(ective" 09)06Topic" Business+ Environmental -esponsibility" The -eulatory $pproach
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalyticae" /)/
/. 5hy %as the Brundtland Commission !ormed
$ns%er" The concept o! sustainable development can be traced to a 19 report !rom theDnited =ations+ 5orld Commission on Environment and &evelopment 5CE&# more
commonly 3no%n as the Brundtland Commission# named !or its chair# :ro ;arlem
Brundtland. The commission %as chared %ith developin recommendations !or paths to%ardeconomic and social development that %ould not achieve short)term economic ro%th at the
e,pense o! lon)term environmental and economic sustainability. The Brundtland
Commission o!!ered %hat has become the standard de!inition o! sustainable development.FSustainable development is development that meets the needs o! the present %ithout
compromisin the ability o! !uture enerations to meet their o%n needs.G
&i!!iculty" edium
Learnin 'b(ective" 09)0Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /9
. &escribe ;erman &aly+s concepts o! sustainable development and the Fcircular !lo%model.G
$ns%er" Economist ;erman &aly has been amon the leadin thin3ers %ho have advocated
an innovative approach to economic theory based on the concept o! sustainable development.
&aly ma3es a convincin case !or an understandin o! economic development that transcends
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Chapter 09 – Business and Environmental Sustainability
the more common standard o! economic ro%th. Dnless %e ma3e sini!icant chanes in our
understandin o! economic activity# unless Huite literally %e chane the %ay %e do business#
%e %ill !ail to meet some very basic ethical and environmental obliations. $ccordin to&aly# %e need a ma(or paradim shi!t in ho% %e understand economic activity.
5e can bein %ith the standard understandin o! economic activity and economic ro%th
!ound in almost every economics te,tboo3. 5hat is sometimes called the Fcircular !lo%modelG e,plains the nature o! economic transactions in terms o! a !lo% o! resources !rom
businesses to households and bac3 aain.
T%o aspects o! this circular !lo% model are %orth notin. 2irst# it does not di!!erentiatenatural resources !rom the other !actors o! production. This model does not e,plain the oriin
o! resources. They are simply o%ned by households !rom %hich they# li3e labor# capital# and
entrepreneurial s3ill# can be sold to business. Services can be provided in many %ays and by
substitutin di!!erent !actors o! production. *n Simon+s terms# resources can there!ore betreated as Fin!inite.G
$ second observation is that this model treats economic ro%th as both the solution to all
social ills and also as boundless. To 3eep up %ith population ro%th# the economy must ro%.
To provide !or a hiher standard o! livin# the economy must ro%. To alleviate poverty#huner# and disease# the economy must ro%. The possibility that the economy cannot ro%
inde!initely is simply not part o! this model.&i!!iculty" ;ard
Learnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproachBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /9)/90
6. E,plain ;erman &aly+s economic system model also 3no%n as the sustainable model.
$ns%er" 2irst# the sustainable model reconi<es that the economy e,ists %ithin a !inite
biosphere that encompasses a band around the earth that is little more than a !e% miles %ide.2rom the !irst la% o! thermodynamics the conservation o! matterJenery# %e reconi<e that
neither matter nor enery can truly be Fcreated#G it can only be trans!erred !rom one !orm to
another. Second# enery is lost at every stae o! economic activity. Consistent %ith the secondla% o! thermodynamics entropy increased %ithin a closed system# the amount o! usable
enery decreases over time. F5aste eneryG is continuously leavin the economic system and
thus ne% lo%)entropy enery must constantly !lo% into the system. Third# this model no
loner treats natural resources as an undi!!erentiated and une,plained !actor o! productionemerin !rom households. 2inally# it reconi<es that %astes are produced at each stae o!
economic activity and these %astes are dumped bac3 into the biosphere.
&i!!iculty" ediumLearnin 'b(ective" 09)0
Topic" Business+ Environmental -esponsibilities" The Sustainability $pproach
Bloom+s Ta,onomy" Dnderstand$$CSB" $nalytic
ae" /91)/98
. Brie!ly describe the reasons supportin the practice o! sustainability %ithin businesses.
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Chapter 09 – Business and Environmental Sustainability
$ns%er" 2irst# sustainability is a prudent lon)term stratey" business %ill need to adopt
sustainable practices to ensure lon)term survival. 2irms that !ail to adapt to the converin
lines o! decreasin availability o! resources and increasin demand ris3 their o%n survival.Second# the hue unmet mar3et potential amon the %orld+s developin economies can only
be met in sustainable %ays. Enormous business opportunities e,ist in servin the billions o!
people %ho need# and are demandin# economic oods and services. The base o! theeconomic pyramid represents the larest and !astest)ro%in economic mar3et in human
history. et# the sheer si<e o! these mar3ets alone ma3es it impossible to meet this demand
%ith the environmentally damain industrial practices. *t is obvious that ne% sustainabletechnoloies and products %ill be reHuired to meet these demands.
Third# sini!icant cost savins can be achieved throuh sustainable practices. Business stands
to save sini!icant costs in moves to%ard eco)e!!iciency. Savins on enery use and materials
%ill reduce not only environmental %astes# but spendin %astes as %ell. inimi<in %astesma3es sense on !inancial rounds as %ell as on environmental rounds.
2ourth# competitive advantaes e,ist !or sustainable businesses. 2irms that are ahead o! the
sustainability curve %ill both have an advantae servin environmentally conscious
consumers and en(oy a competitive advantae attractin %or3ers %ho %ill ta3e pride andsatis!action in %or3in !or proressive !irms.
2inally# sustainability is a ood ris3 manaement stratey. -e!usin to move to%ardsustainability o!!ers many do%nsides that innovative !irms %ill avoid. $voidin !uture
overnment reulation is one obvious bene!it. $voidin leal liability !or unsustainable
products is another potential bene!it. Consumer boycotts o! unsustainable !irms are also a ris3to be avoided.
&i!!iculty" ;ard
Learnin 'b(ective" 09)0
Topic" The FBusiness CaseG !or a Sustainable EconomyBloom+s Ta,onomy" -emember
$$CSB" $nalytic
ae" /9A)/9/
. 5hat are the eneral principles that %ill uide the movement o! businesses to%ard
sustainability$ns%er" The precise implications o! sustainability %ill di!!er !or speci!ic !irms and industries#
but three eneral principles %ill uide the move to%ard sustainability. 2irms and industries
must become more e!!icient in usin natural resources? they should model their entire
production process on bioloical processes? and they should emphasi<e the production o!services rather than products.
&i!!iculty" edium
Learnin 'b(ective" 09)09Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" -emember
$$CSB" $nalyticae" /9/
9. E,plain %ith an e,ample# ho% eco)e!!iciency can be implemented on an individual and a
business scale.
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Chapter 09 – Business and Environmental Sustainability
$ns%er" F&oin more %ith lessG has been an environmental uideline !or decades. 'n an
individual scale# it is environmentally better to ride a bi3e than to ride in a bus# to ride in a
!uel)cell or hybrid)po%ered bus than in a diesel bus# to ride in a bus than to drive a personalautomobile# and to drive a hybrid car than an SD>. Li3e%ise# business !irms can improve
enery and materials e!!iciency in such thins as lihtin# buildin desin# product desin#
and distribution channels.&i!!iculty" edium
Learnin 'b(ective" 09)09
Topic" rinciples !or a Sustainable BusinessBloom+s Ta,onomy" Dnderstand
$$CSB" $nalytic
ae" /9/)/9
0. E,plain the concept o! eco)e!!iciency# biomimicry and cradle)to)cradle responsibility.
$ns%er" Eco)e!!iciency has lon been a part o! the environmental movement. F&oin more
%ith lessG has been an environmental uideline !or decades. Some estimates suest that %ith
present technoloies alone# business could readily achieve at least a !our!old increase ine!!iciency and perhaps as much as a ten!old increase. Consider that a !our!old increase# called
F2actor)2ourG in the sustainability literature# %ould ma3e it possible to achieve double the productivity !rom one)hal! the resource use.
Kust as bioloical processes such as photosynthesis cycle the F%asteG o! one activity into the
resource o! another# this principle is o!ten re!erred to as biomimicry. The ultimate oal o! biomimicry is to eliminate %aste altoether rather than reducin it. *! %e truly mimic
bioloical processes# the end result o! one process e..# leaves and o,yen produced by
photosynthesis is ultimately reused as the productive resources e..# soil and %ater o!
another process plant ro%th %ith only solar enery added. The evolution o! businessstratey to%ard biomimicry can be understood alon a continuum. The earliest phase has been
described as Fta3e)ma3e)%aste.G Business ta3es resources# ma3es products out o! them# and
discards %hatever is le!t over. $ second phase envisions business ta3in responsibility !or its products !rom Fcradle to rave.G Sometimes re!erred to as Fli!e)cycleG responsibility# this
approach has already !ound its %ay into both industrial and reulatory thin3in.
Cradle)to)rave# or li!e)cycle# responsibility holds that a business is responsible !or the entireli!e o! its products# includin the ultimate disposal even a!ter the sale. Cradle)to)cradle
responsibility e,tends this idea even !urther and holds that a business should be responsible
!or incorporatin the end results o! its products bac3 into the productive cycle. This
responsibility# in turn# %ould create incentives to redesin products so that they could berecycled e!!iciently and easily.
&i!!iculty" ;ard
Learnin 'b(ective" 09)09Topic" rinciples !or a Sustainable Business
Bloom+s Ta,onomy" Dnderstand
$$CSB" $nalyticae" /9/)/9