Stakeholder Theory of the Firm: Creating Value for Shareholders
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General Motors has been called a "template for 21st century capitalism ?
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False
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A business is any organization that is engaged in making a product or providing a service for a profit ?
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True
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Businesses and society are independent of one another?
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False
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The stakeholder theory of the firm argues that a firm's sole purpose is to create value for its shareholders?
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False
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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
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True
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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?
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False
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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 ?
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False
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Market stakeholders include nongovernmental organizations and the media ?
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False
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Each stakeholder group has only one source of power in relation to a firm ?
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False
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The interests of different stakeholders often coincide ?
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True
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Stakeholders involved with one part of a company often may have little or no involvement with another part of the company ?
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True
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Some scholars have suggested that managers pay the most attention to stakeholders possessing the least salience?
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False
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Urgency refers to the extent to which a stakeholder's actions are seen as proper or appropriate by the broader society?
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True
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A stakeholder map is a useful tool, because it enables managers to see quickly how stakeholders feel about an issue and whether salient stakeholder tend to be in favor or opposed ?
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True
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The external environment of business is static?
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False
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Which statement is not correct about the business-society interdependence?
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Actions by governments rarely significantly affect business.
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Which of the following examples best illustrates the boundary exchanges a company would encounter according to the general systems theory? A. An industrial company installs new equipment in its plant to comply with environmental regulations. B. A software company develops an application for a client. C. A purchasing department employee negotiates a price on parts from a supplier. D. All of the above.
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All the above
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Which of the following is the result of an inseparable relationship between business and society? A. All business decisions have a social impact. B. The vitality of business depends on society's actions and attitudes. C. The survival of business is independent of society. D. Both A and B, but not C.
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D. Both A and B, but NOT C.
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Which of the following statements is not true about the interactive social system?
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The boundary between business and society is clear and distinct.
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A firm subscribing to the ownership theory of the firm would mainly be concerned with providing value for its: ?
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Shareholder
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Corporations who 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 the above.
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All of the above.
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Which argument says that stakeholder management realistically depicts how companies really work?
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Descriptive argument.
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The instrumental argument says stakeholder management is: ?
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More effective as a corporate strategy.
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The fiduciary duty of managers benefit a firm's ? A. Stockholders. B. Customers. C. Employees. D. All of the above.
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All of the above.
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A number of European countries require public companies to include employee members on their boards of directors, so:
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That their interests will be explicitly represented.
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Stakeholder groups can include: A. Stockholders. B. The media. C. Environmental activists. D. All of the above.
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All of the above
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Which one of the following is considered to be a nonmarket stakeholder of business?
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Media.
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Which of the following is not considered to be a nonmarket stakeholder?
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The natural environment.
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The phenomenon of a person or group holding multiple stakeholder duties is referred to as ?
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Role sets.
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A stakeholder analysis: A. Creates equality among all stakeholder interests. B. Allows managers to examine two primary questions. C. Involves understanding the nature of stakeholder interests. D. All of the above.
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All of the above.
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The four types of stakeholders' power recognized by most experts are: ?
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Voting, economic, political, and legal power.
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Which of the following statements is (are) correct about stakeholder' power? A. Different stakeholders have different types and degrees of power. B. Stockholders' voting power is limited to the percentage of stock owned by the stockholder. C. It uses resources to achieve a desired decision or outcome. D. All of the above.
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D. All of the above.
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Customers can exercise economic stakeholder power by: ?
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Boycotting products if they believe the goods are too expensive.
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Which of the following is not an example of stakeholders' economic power?
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A social group protests a government's decision to raise taxes.
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When a community group sues a company for health effects caused by unsafe toxic chemicals disposal, it is an exercise of a stakeholders': ?
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Legal power
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What stakeholder group(s) can exercise legal power? A. Employees. B. Customers. C. Shareholders. D. All of the above
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D. All of the above
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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 business activity should continue to operate. D. All of the above.
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D. All of the above.
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Stakeholders have been able to form international coalitions more successfully through use of: ?
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Communications technology.
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When something stands out from a background, is seen as important, or draws attention it is: ?
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Salient.
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Stakeholders stand out to managers when they exhibit: ?
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Power, legitimacy, and urgency.
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A. It enables mangers to see quickly how stakeholders feel about an issue. B. It allows managers to evaluate what outcomes are likely regarding an issue. C. It helps managers discourage or dissolve stakeholder coalitions. D. Both A and B, but not C.
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D. Both A and B, but not C.
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Departments, or offices, within an organization that reach across the dividing line that separated the company from groups and people in society are: ?
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Boundary-spanning departments.
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Interactions between business and society occur: -?
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Within a finite natural ecosystem.
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Harnessing human imagination to create new approaches to the concerns of modern society is an example of: -?
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Technology.
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A successful business must meet its: -?
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Economic and social objectives.
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Describe how the general systems theory can be applied to a business.
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Answers will vary
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A stakeholder map is a useful tool, because it enables managers to see quickly how stakeholders feel about an issue and whether salient stakeholders tend to be in favor or opposed.
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True
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Which of the following statements is not true about the interactive social system?
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The boundary between business and society is clear and distinct
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Which of the following is not an example of stakeholders' economic power?
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A social group protests a government's decision to raise taxes.
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A firm subscribing to the ownership theory of the firm would mainly be concerned with providing value for its:-?
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Shareholders.
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Customers can exercise economic stakeholder power by:
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Boycotting products if they believe the goods are too expensive.
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Market stakeholders include nongovernmental organizations and the media?
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False
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A stakeholder analysis:
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Involves understanding the nature of stakeholder interests.
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What stakeholder group(s) can exercise legal power? A) Employees. B) Customers. C) Shareholders D) All of the above.
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All of the above.
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Which one of the following is considered to be a nonmarket stakeholder of business?
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Media.
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The instrumental argument says stakeholder management is:-?
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is more effective as a corporate strategy.
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AT&T has been called the "template for 21st century capitalism."
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True
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The interests of different stakeholders often coincide?
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True
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Corporations that run their operations according to the stakeholder theory of the firm create value by:
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All of the above.
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Which of the following is not considered to be a nonmarket stakeholder?
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Creditors
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A number of European countries require public companies to include employee members on their boards of directors, so:-?
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That their interests will be explicitly represented
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Urgency refers to the extent to which a stakeholder's actions are seen as proper or appropriate by the broader society.
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False
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Which of the following examples best illustrates the boundary exchanges a company would encounter according to the general systems theory? A. An industrial company installs new equipment in its plant to comply with environmental regulations. B. A software company develops an application for a client. C. A purchasing department employee negotiates a price on parts from a supplier. D. All of the above.
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D). All of the above. Difficulty: Hard
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Which of the following is the result of an inseparable relationship between business and society?
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The survival of business is independent of society
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Which of the following statements is not true about the interactive social system?
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Business and society need, as well as influence, each other.
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Government can be considered both a market and nonmarket stakeholder?
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True
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The fiduciary duty of managers benefits a firm's:-?
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All of the above
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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?
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True
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The five types of stakeholders' power recognized by most experts are :-?
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Voting, economic, political, legal, and informational power
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Organizations always have full control of a public issue ?
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False
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An analysis of the stability or instability of a government is an example of scanning the:-?
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Political environment
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Companies are learning that it is important to take a strategic approach to the management of public issues, both domestically and globally.
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True
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The issue management process has how may stages?
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Five.
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The role of special interest groups is an important element in acquiring intelligence from the:
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Competitor environment.
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Environmental analysis is a method managers use to gather information about external issues and trends.
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True
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Contemporary issue management:-?
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Is an interactive, forward thinking process
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Because the public issues that garner the most public attention change over time, companies do not waste time tracking them ?
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False
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Proactive companies are:-?
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Much less likely to be blindsided by crises and negative surprises.
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According to management scholar Karl Albrecht, scanning to acquire environmental intelligence should focus on:
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Eight strategic radar screens
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A corporation's issue management activities are usually linked to:
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Both the board of directors and top management levels
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Stakeholder engagement is, at its core, a:
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a relationship
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A business and its stakeholders coming together for face-to-face conversations about issues of common concern is:-?
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Stakeholder dialogue.
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Legal environmental intelligence includes:-?
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patents, copyrights, trademarks and considerations of intellectual property as well as antitrust considerations and trade protectionism and organizational liability issues.
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The components of a typical issues management process include:-?
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All of the above
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The drivers of stakeholders of engagement are:-?
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Goals, motivation, and operational capacity.
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According to management scholar Karl Albrecht, scanning to acquire environmental intelligence should focus on four strategic radar screens?
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False
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Customers, suppliers, and retailers have economic power with the company?
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True
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Customers can boycott products if they believe the goods are too expensive, poorly made, or unsafe ?
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True
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Governments exercise political power through legislation, regulations, or lawsuits?
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True
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Not surprisingly, stakeholder interests often coincide.?
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True
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Stakeholders stand out to managers when they have power, legitimacy, and urgency?
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TRUE
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The purpose of the firm is not simply to make a profit, but to create value for all its stakeholders?
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TRUE
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The purpose of the firm is not simply to make a profit, but to create value for all its stakeholders?
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TRUE
