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MGMT 3211 Chapter 1

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business
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an organizations that is engaged in making a product or providing a service for a profit
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society
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refers to human beings and to the social structures they collectively create; specifically refers to segments of humankind, such as members of a particular community, nation, or interest group
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general systems theory
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a theory that holds that all organisms are open to, and interact with, their external enviornments
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interactive social system
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the closely intertwined relationships between business and society
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ownership theory of the firm
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a theory that holds that the purpose of the firm is to maximize the long-term return for its shareholders. (Also called the property or finance theory of the firm)
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stakeholder theory of the firm
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theory that holds that the purpose of the firm is to create value for society
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stakeholder
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a person or group that affects, or is affected by, a corporation’s decisions, policies, and operations
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market stakeholders
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stakeholder that engages in economic transactions with a company
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nonmarket stakeholders
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stakeholder that does not engage in direct economic exchange with a company, but is affected by or can affect its actions
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internal stakeholders
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individuals who are employed by the firm, such as employees and managers
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external stakeholders
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individuals or groups that make important transactions with a firm but are not directly employed by the firm, such as customers or suppliers
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stakeholder analysis
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analytic process used by managers that identifies the relevant stakeholders in a particular situation and seeks to understand their interests, power, and likely coalitions
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focal organization
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the organization central to the stakeholder analysis being conducted
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stakeholder interests
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the nature of each stakeholder group, its concerns, and what it wants from its relationship with the firm
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stakeholder power
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the ability of one or more stakeholders to achieve a desired outcome in their interactions with a company. The five types are: voting power, economic power, political power, legal power, and informational power
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stakeholder coalitions
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alliances among a company’s stakeholders to pursue a common interest
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stakeholder map
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graphical representation of the relationship of stakeholder salience to a particular issue
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boundary-spanning departments
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departments, or offices, within an organization that reach across the dividing line that separates a company from groups and people in society
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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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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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Businesses and society are independent of one another.
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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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Market stakeholders include nongovernmental organizations and the media.
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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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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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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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The external environment of business is static.
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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 interests of different stakeholders often coincide.
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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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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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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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Walmart has been called a “template for 21st century capitalism.”
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True
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descriptive
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more realistic description of how companies work
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normative
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stakeholder management is the right thing to do
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instrumental
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more effective corporate strategy
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instrumental
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more effective corporate strategy