HW 1

Government can be considered both a market and nonmarket stakeholder. a. True b. False

a

A market stakeholder is exemplified by which of the following? a. Government agencies. b. Creditors. c. Activist groups. d. Nongovernmental organizations.

b

The stakeholder theory of the firm argues that a firm's sole purpose is to create value for its shareholders. a. True b. False

b

Departments, or offices, within an organization that reach across the dividing line that separates the company from groups and people in society are: a. Inter-departmental divisions. b. Geographical location areas. c. Boundary-spanning departments. d. Organizational maps.

c

A business is any organization that is engaged in making a product or providing a service for a profit. a. true b. false

a

A firm subscribing to the shareholder theory of the firm would mainly be concerned with providing value for its: a. Investors. b. Customers. c. Board of Directors. d. Community.

a

Interactions between business and society occur: a. Within a finite natural ecosystem. b. Only during an environmental crisis. c. When business employees and the community are of similar cultural backgrounds. d. When legislation is passed requiring interaction.

a

The five types of stakeholders' power recognized by most experts are: a. Voting, economic, political, legal, and informational power. b. Social, legal, environmental, economic, and political power. c. Social, regulatory, voting, governance, and information power. d. Economic, informational, legal, shareholder, and political power.

a

The instrumental argument for the stakeholder theory of the firm says that companies perform better if they consider the rights and concerns of multiple groups in society. a. True b. False

a

When a community group sues a company for health effects caused by the unsafe disposal of toxic chemicals, this is an exercise of a stakeholder's: a. Legal power. b. Voting power. c. Economic power. d. Political power.

a

Which argument says that stakeholder management realistically depicts how companies really work? a. Descriptive argument. b. Instrumental argument. c. Normative argument. d. Fiduciary argument.

a

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.

b

Market stakeholders include nongovernmental organizations and business support groups. a. True b. False

b

Nonmarket stakeholders are those that engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services. a. True b. False

b

Stakeholders stand out to managers when they exhibit: a. Integrity, power, and legitimacy. b. Power, legitimacy, and urgency. c. Integrity, loyalty, and power. d. Legitimacy, loyalty, and urgency.

b

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.

b

The normative argument for the stakeholder theory of the firm says that the stakeholder view is simply a more realistic description of how companies really work. a. True b. False

b

Which of the following is not an example of stakeholders' economic power? a. A supplier halts shipments to a business customer that demanded very low 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. An equal rights group refuses to do business with a company that has a discriminatory hiring policy.

b

Which one of the following is considered to be a nonmarket stakeholder of business? a. Customers. b. Nongovernmental organizations. c. Creditors. d. Shareholders.

b

A stakeholder map is a useful tool because: a. It enables managers to quickly see how stakeholders feel about an issue. b. It can help managers evaluate possible outcomes regarding an issue. c. It helps managers discourage or dissolve stakeholder coalitions. d. Both of these answers are correct: It enables managers to quickly see how stakeholders feel about an issue, and It can help managers evaluate possible outcomes regarding an issue.

d

Corporations that run their operations according to the stakeholder theory of the firm create value by: a. Innovating new products. b. Increasing their stock price. c. Developing their employees' professional skills. d. All of these answers are correct.

d

Stakeholder groups can include: a. Shareholders. b. Business support groups. c. Environmental activists. d. All of these answers are correct.

d

The fiduciary duty of managers benefits a firm's: a. Shareholders. b. Customers. c. Employees. d. All of these answers are correct.

d

What kind of power might a local community use to influence a company's decisions? a. Publicizing an issue. b. Lobbying government policy makers for regulations. c. Challenging whether a specific business activity should continue. d. All of these answers are correct.

d

What stakeholder group(s) can exercise legal power? a. Employees. b. Customers. c. Shareholders. d. All of these answers are correct.

d