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Chapter 1 The Corporation and its stakeholders

1. A stakeholder is defined by anyone who owns a piece, or stake, of the company
A) True
B) False
False
2. AT&T has been called the “template for 21st century capitalism.”
A) True
B) False
True
3, General Systems theory was first introduced in the 1940s.
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
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
10. In order to develop a stakeholder map, managers should consider, in order, urgency, legitimacy and saliency.
A) True
B) False
False
11. Creditors generally have high stakeholder salience and little concern over a company’s position on an issue.
A) True
B) False
True
12. The world economy is increasingly interactive
A) True
B) False
True
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
15. Affordable housing is difficult to find around Disneyland for many of the park’s employees
A) True
B) False
True
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.
17. In 2008. Lee Scott was the CEO of
A) Walmart
B) Target
C) Dell
D) Sun
Walmart
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
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.
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
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
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
34. What stakeholder group(s) can exercise legal power?
A) Employees.
B) Customers.
C) Shareholders
D) All of the above.
All of the above.
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.
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.
37. When something stands out and is seen as important it is defined as
A) Normative
B) Salient
C) Urgent
D) Legitimate
Salient
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.
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
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.
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.
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.

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