Chapter 1 The Corporation and its stakeholders

3, General Systems theory was first introduced in the 1940s. A) True B) False

True

32. Which of the following is not an example of stakeholders' economic power? A) A toy manufacturer halts supplies to a distributor asking higher than fair prices. B) A social group protests a government's decision to raise taxes. C) A local community boycotts a grocery store suspected of inaccurate weight scales. D) A social organization demands the closure of a store that has a discriminatory hiring policy.

A social group protests a government's decision to raise taxes.

22. The argument says that stakeholder view is simply a more realistic description of how companies work. A) Descriptive B) Instrumental C) Normative D) Fiduciary

Descriptive

12. The world economy is increasingly interactive A) True B) False

True

29. The four types of stakeholders' power recognized by most experts are: A) Voting, economic, political, and legal power. B) Social, legal, environmental, and political power. C) Social, regulatory, voting, and media power. D) Economic, media, legal, and political power.

Voting, economic, political, and legal power.

17. In 2008. Lee Scott was the CEO of A) Walmart B) Target C) Dell D) Sun

Walmart

16. What movie featured a former Miss America speaking out against Walmart. A) One born every minute. B) Walmart: The High Cost of low prices C) Walmart Nation. D) None of the above.

Walmart Nation.

42. Organized labor, church groups and community groups all opposed the following: A) A Walmart in Inglewood. B) A Nike plant in La Paz C) A bull fighting ring in Tempe. D) Legalized, unlicensed prostitution in Key West.

A Walmart in Inglewood.

38. Proactive companies anticipate stakeholder concerns by: A) Forming specialized departments to handle the needs of stakeholders. B) Responding to concerns when a crisis occurs. C) Signing contracts with stakeholder groups to avoid potential lawsuits. D) A and B, but not C.

A and B, but not C.

40. A stakeholder map is: A) A graphic representation of the relationship of stakeholder salience on an issue. B) Developed to deal with issues once a company has hit "crisis mode". C) Used to split negative stakeholders on salient issues. D) All of the above.

A graphic representation of the relationship of stakeholder salience on an issue.

21. Corporations who model their operations according to the stakeholder theory create value by: A) Innovating new products. B) Increasing their stock price. C) Developing their employees' professional skills. D) All of the above.

All of the above

41. Per the textbook, which of the following does not shape the business and societal relationship: A) Globalization. B) Technology. C) Changing societal expectations. D) All of the above shape the business and societal relationship.

All of the above shape the business and societal relationship.

24. Under U.S. law, the fiduciary duty of managers must benefit a firm's A) Stockholders. B) Customers. C) Employees. D) All of the above.

All of the above.

25. Stakeholder groups can include: A) Stockholders. B) The Media. C) Environmental activists. D) All of the above.

All of the above.

30. Which of the following statements is (are) correct about stakeholder' power? A) Different stakeholders have different types and degrees of power. B) Stockholders' power is limited to the percentage of voting stock owned by the stockholder. C) It uses resources to achieve a desired decision or outcome. D) All of the above.

All of the above.

34. What stakeholder group(s) can exercise legal power? A) Employees. B) Customers. C) Shareholders D) All of the above.

All of the above.

39. are departments within an organization which which reach across dividing lines which separate the company from society. A) Human Resources B) Harmonization departments C) International lobbying guilds D) Boundary-spanning departments

Boundary-spanning departments

31. Customers can exercise economic stakeholder power by: A) Voting on a proposed merger for the company and a competitor. B) Boycotting products if they believe the goods are too expensive. C) Attending the company's annual meeting. D) Applying for a job with the company.

Boycotting products if they believe the goods are too expensive.

36. Stakeholders have been able to form international coalitions more successfully through use of: A) Government regulation. B) Community involvement. C) Communications technology. D) Unions.

Communications technology.

28. A stakeholder analysis: A) Creates equality among all stakeholder interests. B) Allows managers to review media coverage on the company. C) Involves understanding the nature of stakeholder interests. D) All of the above.

Involves understanding the nature of stakeholder interests.

26. Which of the following statements most accurately describes a firm's responsibility to market stakeholders? A) It is a relationship with political and cultural influences. B) It must provide stakeholders with goods and services. C) It is more important to the survival of business than nonmarket relationships. D) It mostly occurs at a broad conceptual level.

It must provide stakeholders with goods and services.

33. When a customer sues a company for physical and mental hard caused by unsafe toxic chemicals disposal, it is an exercise of a stakeholders': A) Political power. B) Legal power. C) Economic power. D) Media power.

Legal power

23. The instrumental argument says stakeholder management is: A) A more realistic description of how companies really work. B) More effective as a corporate strategy. C) Simply the right thing to do. D) Determined by the amount of stock owned in the firm.

More effective as a corporate strategy.

18. Ownership theory of the firm is also called . A) Shareholder theory B) Property theory C) Expansive theory D) Brick and mortar theory

Property theory

37. When something stands out and is seen as important it is defined as A) Normative B) Salient C) Urgent D) Legitimate

Salient

20. A firm subscribing to the ownership theory, would be concerned with providing value for its: A) Shareholders. B) Customers. C) Board of Directors. D) Community.

Shareholders

19. Which of the following statements is not true about the interactive social system? A) Business and society need, as well as influence, each other. B) The boundary line between business and society is clear and distinct. C) Business is a part of society, and society penetrates far and often into the business. D) Business and society are both separate and connected.

The boundary line between business and society is clear and distinct.

27. Which of the following is not considered to be a nonmarket stakeholder? A) Government agencies. B) The natural environment. C) Activist groups. D) Nongovermental organizations.

The natural environment.

11. Creditors generally have high stakeholder salience and little concern over a company's position on an issue. A) True B) False

True

15. Affordable housing is difficult to find around Disneyland for many of the park's employees A) True B) False

True

2. AT&T has been called the "template for 21st century capitalism." A) True B) False

True

4. The instrumental argument in the stakeholder theory says that companies perform better if they consider the rights and concerns of multiple groups in society. A) True B) False

True

5. A fiduciary exercises power for the good of another A) True B) False

True

6. Because they are more important, market stakeholders are sometimes called primary stakeholders. A) True B) False

True

35. What kind of power might the local community use to influence a company's decisions? A) Publicizing an issue. B) Lobbying government for regulation. C) Challenging whether a business activity should continue to operate. D) All of the above.

All of the above.

1. A stakeholder is defined by anyone who owns a piece, or stake, of the company A) True B) False

False

10. In order to develop a stakeholder map, managers should consider, in order, urgency, legitimacy and saliency. A) True B) False

False

13. Over the last 30 years, Government has consistently tightened business regulations A) True B) False

False

14. In 2007, The Walt Disney Company earned slightly less than $27 billion dollars. A) True B) False

False

7. Stakeholders can exercise direct political power by urging elected officials to pass legislation. A) True B) False

False

8. Each stakeholder group has one source of power in relation to a firm. A) True B) False

False

9. In 2000, the Peruvian government listened to stakeholders and cancelled plans for a salt mine off the Pacific Coast. A) True B) False

False