Bachelor of General Studies (BGS) Degree Practice Exam

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Which outcome is often associated with a lack of corporate social responsibility?

Lowered operational costs
Increased customer loyalty
Higher chances of government intervention
Enhanced brand reputation

The correct answer is: Higher chances of government intervention

A lack of corporate social responsibility (CSR) typically leads to higher chances of government intervention. Companies that do not engage in socially responsible practices may attract scrutiny from regulatory bodies, leading to potential fines, sanctions, or increased regulation. This heightened intervention often stems from public pressure or negative perceptions surrounding the company’s practices, indicating that stakeholders, including consumers and activists, are dissatisfied with the corporate behavior. When a company fails to adopt CSR, it may also face negative public opinion or reputational damage, which can have serious ramifications on its profitability and longevity. Hence, the relationship between CSR and government oversight underscores the importance of responsible business practices in maintaining a favorable operating environment.