CH 2 - Managing Public Issues and Stakeholder Relationships

What advantage does competitive intelligence offer managers?

The ability to make informed decisions

Public issues are considered broad in nature because they ______.

are of concern to a significant number of people

Corporate stakeholder engagement is defined as the process of ongoing relationships between _____. (Check all that apply.)

businesses and the government businesses and customers

The components of a typical issues management process include: A) Identify issue, take action, scan for new issues. B) Generate options, predict the firm's profitability, evaluate results. C) Identify issue, analyze issue, allow the government to take action. D) All of these answers are correct.

D) All of these answers are correct.

True or false: Four out of five Millennials believe that business should completely avoid social involvement, according to a 2014 survey.

False. Four of five Millennials believed that business needs to get involved in solving social issues, according to the 2014 survey.

Identify the benefits of stakeholder engagement. (Check all that apply.)

Raising awareness of emerging issues Access to information in stakeholder networks

The properties of competitive intelligence include _____. (Check all that apply.)

external information continuous systematic

Environmental analysis refers to scanning for public issues _____.

outside the organization

Once an issue has been identified, its implications must be: A) Acted upon. B) Analyzed. C) Segmented. D) Deleted.

B) Analyzed.

Understanding and responding to changing societal expectations is a business necessity.

True

The importance of a stakeholder to a firm is called stakeholder _____.

materiality

Which types of businesses cut ties with the NRA after the Parkland shootings, according to the case Businesses Respond to the Movement for School Safety? (Check all that apply).

Insurance companies Banking organizations

The search for competitive intelligence sometimes causes which boundaries to be crossed? (Check all that apply.)

Legal Ethical

Stakeholder materiality is a method companies use to prioritize the relevance of the stakeholders and their issues.

True

A corporation's issue management activities are usually overseen by: A) The board of directors. B) Top management. C) Both the board of directors and top management levels. D) The strategic governance committee.

C) Both the board of directors and top management levels.

Match the strategic radar screens (in the left column) with their characteristics (in the right column).

Customer Includes demographic factors. Competitor Includes information on the number and strength of rivals. Economic Includes information about costs, prices, and international trade. Technological Provides faster access to information through handheld electronic devices. Social Includes cultural patterns, values, beliefs, trends, and conflicts in society. Political Includes the structure, processes, and actions of all levels of government. Legal Includes patents, copyrights, trademarks, and considerations of intellectual property. Geophysical Relates to an organization's dependency and impact on natural resources.

True or false: Stakeholder expectations are a mixture of people's opinions, attitudes, and beliefs about what constitutes reasonable business behavior.

True

Where can a company search for reliable stakeholder issues? (Check all that apply.)

Websites Mission statements 10-K filings

Financially sound companies do not need to understand how a public issue is likely to evolve, or how it will affect them.

False

Failure to understand a firm's stakeholder concerns can result in _____.

missed business opportunities

Emerging public issues are both a risk and an opportunity.

True

The European Academy of Business in Society (EABIS) identified the most effective global leadership skills as _____.

the ability to lead in the face of complexity understanding the changing business context the skill to engage with external stakeholders using connectedness

According to Nestle's Stakeholder Materiality Matrix in Figure 2.3, the priorities of issues for stakeholders are shown _____.

vertically from the lowest priority on the bottom to the highest priority on the top

Stakeholder engagement is, at its core, a: A) Program. B) Relationship. C) Process. D) Systems model.

B) Relationship.

Failure to understand the beliefs and expectations of stakeholders: A) Causes a company's profits to increase in the short run. B) Causes a company's profits to decrease in the short run. C) Causes the performance-expectations gap to grow larger. D) Decreases the chance of a corporate buy-out.

C) Causes the performance-expectations gap to grow larger.

The drivers of stakeholder engagement are: A) Scanning, assessment, and growth. B) Data, strategy, and organizational development. C) Goals, motivation, and operational capacity. D) Financial, operational, and legal.

C) Goals, motivation, and operational capacity.

A leadership role in addressing emerging management issues is often taken by: A) The public affairs department. B) The government relations department. C) The department of sustainability or environmental, health and safety. D) All of these answers are correct.

D) All of these answers are correct.

In the context of management systems, match the terms (in the left column) with their definitions (in the right column).

Environmental analysis is A method managers use to gather information about external issues and trends. Environmental intelligence is The acquisition of information gained from analyzing the multiple environments affecting organizations.

Because the public issues that garner the most public attention change over time, companies do not waste time tracking them.

False

Match the stage of the business-stakeholder relationship on the left with its correct description on the right.

Inactive - company ignores stakeholder concerns Reactive - company takes action only when forced Proactive - firms scan the external environment to anticipate stakeholder concerns Interactive - firms actively engage with stakeholders with trust, respect and openness

The concept of a public issue is characterized by which statement(s)? (Check all that apply.)

It is sometimes called a social or sociopolitical issue. It often has public policy or legislative implications. It is often highly contentious.

Companies progress through the stages of a business-stakeholder relationship in what way? (Check all that apply.)

Remaining in one stage One stage to the next, in order Backward in the sequence

What role does social media play in stakeholder engagement? (Check all that apply.)

Shares information Tracks customer suggestions Identifies problems

What was the major public issue that Coca-Cola started addressing in 2018?

Single-use plastic bottle waste

Environmental analysis is a method managers use to gather information about external issues and trends.

True

True or false: Stakeholder engagement should include both internal, as well as external, stakeholders and emphasize issues that directly affect corporate strategy.

True

According to the Foundation for Public Affairs, the majority of corporate budgets used for remediation of public issue since the mid-2000's has _____.

increased slightly or stayed the same

Competitive intelligence can be used to create business strategies for _____. (Check all that apply.)

marketing research and development financial investing

Why do some Millennials believe that business is equipped to address social issues? (Check all that apply.)

Businesses have access to many financial resources. Companies have collective intelligence and technology.

What did Coca-Cola's program "A World Without Waste" aim to accomplish?

Collect and recycle all equivalent plastic packaging

What is the critical difference between using social media for stakeholder engagement over traditional communications?

Communications are faster and more effective.

When managers are flexible, creative and willing to learn from mistakes, they are addressing which aspect of emerging public issues?

Complexity

When working well, the issue management process: A) Is static and never pulls in additional information that would disturb the balance. B) Generates two specific options for each issue. C) Minimizes dialogue with the stakeholders and focuses on short-term survival. D) Continuously cycles back to the beginning and repeats.

D) Continuously cycles back to the beginning and repeats.

The emergence of a public issue indicates that: A) A gap may be developing between what stakeholders expect and what an organization is actually doing. B) Technology is forcing ethics and business strategy closer together. C) Consumers are unaware of how an organization's actions affect them. D) All of these answers are correct.

A) A gap may be developing between what stakeholders expect and what an organization is actually doing.

Customer environmental intelligence includes: A) Demographic factors. B) An analysis of the firm's competitors. C) New technological applications. D) The cost of producing consumer goods.

A) Demographic factors.

According to management scholar Karl Albrecht, scanning to acquire environmental intelligence should focus on: A) Eight strategic radar screens. B) ix management templates. C) Eight process improvement models. D) Six ethical decision indicators.

A) Eight strategic radar screens.

Over time, the nature of business's relationship with its stakeholders often: A) Remains static. B) Evolves through a series of stages. C) Becomes more hostile. D) None of these answers is correct.

B) Evolves through a series of stages.

Because of the risks and opportunities public issues present, organizations need: A) A strong relationship with a lobbying firm or an in-house lobbying department. B) Executives to be rewarded with substantial bonuses as part of total compensation. C) A systematic way of identifying, monitoring, and selecting public issues. D) Tougher government regulations and oversight by political action committees.

C) A systematic way of identifying, monitoring, and selecting public issues.

Legal environmental intelligence includes: A) Patterns of aggressive growth versus static maintenance. B) Analysis of local, state, national, and international politics. C) Considerations of patents, copyrights, or trademarks. D) Information regarding costs, prices, and international trade.

C) Considerations of patents, copyrights, or trademarks.

The use of social media to conduct stakeholder engagement has: A) Slowed down issue resolution. B) Made it difficult for customers to suggest new product designs. C) Increased the ability to share information amongst employees and partners. D) Provided a platform to focus on a single stakeholder at a time.

C) Increased the ability to share information amongst employees and partners.

Firms that generally act only when forced to do so, and then in a defensive manner, are: A) Interactive. B) Proactive. C) Reactive. D) Inactive.

C) Reactive.

Companies that believe they can make decisions unilaterally, without taking into consideration their impact on others, are: A) Interactive. B) Proactive. C) Reactive. D) Inactive.

D) Inactive.

Legal environment includes the structure, processes, and actions of government at the local, state, national, and international levels.

False

Match the drivers of stakeholder engagement (in the left column) with the correct company oriented description (in the right column).

Goal improves corporate reputation. Motivation needs stakeholder expertise or resources. Organizational capacity has support from company leaders and adequate funding.

What are the drivers of stakeholder engagement? (Check all that apply.)

Goals Organizational capacity Motivation

Match the issue management process step on the left with its correct description on the right.

Identify issue - create awareness by tracking media, opinions, and legislation. Analyze issue - understand how an issue is likely to evolve. Generate options - identify and evaluate alternative responses to issues. Take action - design and implement a plan to address issues. Evaluate results - monitor progress and adjust as needed.

How did Chipotle respond to outbreaks of E. coli that sickened hundreds of their customers in 2015?

The firm pledged $10 million to help local growers meet food safety standards.

Companies are learning that it is important to take a strategic approach to the management of public issues, both domestically and globally.

True

Competitive intelligence enables managers in companies of all sizes to make informed decisions in all areas of the business.

True

The primary goals of stakeholder dialogue include _____. (Check all that apply.)

defining a common definition of the problem identifying solutions for mutual gain

When a firm correctly anticipates and addresses a public issue, the firm often _____.

gains a competitive advantage

In the context of management systems, match the terms (in the left column) with their related goals (in the right column).

Environmental analysis - The goal is to develop a company strategy to minimize the threat of external issues. Environmental intelligence - The goal is to help an organization avoid crisis, and to spot opportunities, if done well.

What is the public issue in the case Businesses Respond to the Movement for School Safety? A) First amendment rights and on-the-job worker safety. B) Second amendment rights and the safety of students in schools. C) First amendment rights and the safety of teachers in schools. D) Second amendment rights and safety for law enforcement.

B) Second amendment rights and the safety of students in schools.

Once an organization has implemented the issue management program, it must: A) Use trade associations or consultants to follow high priority issues. B) Study the results and make necessary adjustments. C) Not limit the number of public issues the firm can address. D) Pick a selected number of issues to address immediately.

B) Study the results and make necessary adjustments.

A business and its stakeholders coming together for face-to-face conversations about issues of common concern is called stakeholder: A) Networks. B) Motivation. C) Systems. D) Dialogue.

D) Dialogue.

Contemporary issue management: A) Is a linear process. B) Was useful in the 1970s, but not today. C) Is used by all government agencies. D) Is an interactive, forward-thinking process.

D) Is an interactive, forward-thinking process.

An analysis of the stability or instability of a government is an example of scanning which environment? A) Social. B) Legal. C) Geophysical. D) Political.

D) Political.

The role of special interest groups is an important element in acquiring intelligence from which environment? A) Customer. B) Competitor. C) Economic. D) Social.

D) Social.

Issue management at Publix is correctly described by which of the following? (Check all that apply.)

Each division has a media and community relations team. The corporate communications team handles internal communications. The customer care team manages client issues.

A public issue exists when there is agreement between the stakeholders' expectations of what a business firm should do and the actual performance of that business firm.

False

Dialogue between a single firm and its stakeholders is always sufficient to address an issue effectively.

False

Organizations always have full control of a public issue.

False

How well do companies that actively engage with stakeholders manage public issues, as compared to companies that do not?

Much better

Which quadrant of Figure 2.3, Nestle's Stakeholder Materiality Matrix, should a firm's management focus on when developing company strategy?

The quadrant with the highest priorities for both stakeholders and the firm

Environmental intelligence is the acquisition of information gained from analyzing the multiple environments affecting organizations.

True

For stakeholder engagement to occur, both the business and the stakeholder must be motivated to work with one another to solve the problem.

True

According to the eight radar screens, challenges to acquiring environmental intelligence can include _____. (Check all that apply.)

cultural traditions in the workplace organizational reporting relationships

Successful stakeholder dialogue requires participants to _____.

listen carefully and respectfully to others

A new public issue often indicates a performance-expectations gap between what stakeholders expect and _____. (Check all that apply.)

what a company is currently doing what a company wants to do

The explosive use of social media is an example of which environment? A) Customer. B) Competitor. C) Economic. D) Social.

A) Customer.

An issue's public profile indicates to managers: A) How significant an issue is for the organization, but it does not tell them what to do. B) Both how significant an issue is for the organization and exactly what to do. C) Exactly what to do without indicators of how significant an issue is for the organization. D) Any of these choices depending on the organization type.

A) How significant an issue is for the organization, but it does not tell them what to do.

Proactive companies are: A) Much less likely to be blindsided by crises and negative surprises. B) Much more likely to be blindsided by crises and negative surprises. C) Just as likely to be blindsided by crises and negative surprises. D) Much more likely to be forced to defend themselves.

A) Much less likely to be blindsided by crises and negative surprises.

Corporations working collaboratively with other businesses and concerned persons and organizations is an example of stakeholder: A) Networks. B) Motivation. C) Systems. D) Salience.

A) Networks.

Public issues are also sometimes referred to as: A) Social issues. B) Sociopolitical issues. C) Social issues and sociopolitical issues. D) None of these answers is correct.

C) Social issues and sociopolitical issues.

The relevance and importance of stakeholders and their issues is known as: A) Stakeholder salience. B) Competitive intelligence. C) Stakeholder materiality. D) Organizational capacity.

C) Stakeholder materiality.

The issue management process is a: A) Beneficial tool used only to maximize the positive effects of a public issue for the organization's advantage. B) Beneficial tool used only to minimize the negative effects of a public issue for the organization's advantage. C) Systematic process companies use when responding to public issues that are of greatest importance to the business. D) Confusing process that is rarely used to help top management within an organization.

C) Systematic process companies use when responding to public issues that are of greatest importance to the business.

Stakeholder engagement is: A) Any issue that is of mutual concern to an organization and one or more of its stakeholders. B) Competitive intelligence being collected ethically and systematically. C) The process of ongoing relationship building between a business and its stakeholders. D) The acquisition of information gained from analyzing the multiple environments.

C) The process of ongoing relationship building between a business and its stakeholders.

Place the issue management process steps in the correct order, starting with the step that anticipates emerging concerns at the top of the list.

Identify issues Analyze issues Generate options Take action Evaluate results

Which public issue was associated with business leaders Bill O'Reilly, Roger Ailes, Harvey Weinstein, Matt Lauer, Steve Wynn, and others, in 2017?

Sexual harassment

What action did MetLife, Symantec, Hertz, and Avis take in response to the Parkland shootings, according to the case Businesses Respond to the Movement for School Safety?

They ended discount programs with the NRA.

In the issue management process, identifying the issue involves anticipating emerging issues.

True

True or false: The purpose of environmental analysis is for a firm to identify, monitor, and evaluate public issues that may require action from the firm.

True. Environmental analysis provides a framework for companies to scan, watch, and analyze public issues that they can proactively respond to.