Business Ethics Flashcards

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Walmart 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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Government can be considered both a market and nonmarket stakeholder.
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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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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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False
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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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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?
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All of the Above: -An industrial company installs new equipment in its plant to comply with environmental regulations. -A software company develops an application for a client. – A purchasing department employee negotiates a price on parts from a supplier.
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Which of the following is the result of an inseparable relationship between business and society?
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Both A & B: – All business decisions have a social impact. – The vitality of business depends on society’s actions and attitudes.
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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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Shareholders.
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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: – Innovating new products – Increasing their stock price. – Developing their employees’ professional skills.
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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 benefits a firm’s:
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All of the Above: – Stockholders. – Customers. – Employees.
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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:
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All of the Above: -Stockholders -The Media – Environmental Activist
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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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Creditors
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All of the following are external stakeholders of the firm except:
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Managers
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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:
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Involves understanding the nature of stakeholder interests
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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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Which of the following statements is (are) correct about stakeholders’ power?
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All of the Above: – Different stakeholders have different types and degrees of power. – Stockholders’ voting power is limited to the percentage of stock owned by the stockholder. – It uses resources to achieve a desired decision or outcome.
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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 the unsafe disposal of toxic chemicals, this is an exercise of a stakeholder’s:
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Legal Power
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What stakeholder group(s) can exercise legal power?
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All of the Above: -Employees -Customers -Shareholders
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What kind of power might a local community use to influence a company’s decisions?
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All of the Above: – Publicizing an issue. – Lobbying government policy makers for regulations. – Challenging whether a business activity should continue to operate.
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With the explosive growth of technologies that facilitate the sharing of information, this kind of stakeholder power has become increasingly important:
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Informational Power
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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 stakeholder map is a useful tool because:
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Both A &B: – It enables mangers to see quickly how stakeholders feel about an issue. – It allows managers to evaluate what outcomes are likely regarding an issue.
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Departments, or offices, within an organization that reach across the dividing line that separates 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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Interactions between business and society occur:
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Within a finite natural ecosystem.
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Interactions between business and society occur:
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Within a finite natural ecosystem.

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