Which argument says that stakeholder management realistically depicts how companies really work?
A. Descriptive argument
B. Instrumental argument
C. Normative argument
D. Fiduciary argument
Question
2
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
Question
3
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.
Question
4
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.
Question
5
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.
Question
6
Which
of the following is not considered to be a nonmarket stakeholder?
A. Government agencies.
B. Creditors.
C. Activist groups.
D. Non-governmental organizations.
Question
7
The
phenomenon of a person or group holding multiple stakeholder duties is referred
to as:
A. Role sets.
B. Primary
Stakeholder(s).
C. Ownership
Theory.
D. None of
the above.
Question
8
When
something stands out from a background, is seen as important, or draws
attention it is:
A. Urgent.
B. Salient.
C. Powerful.
D.
Legitimate.
Question
9
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 media power.
D. Economic,
media, legal, stockholder, and political power.
Question
10
A
number of European countries require public companies to include employee
members on their boards of directors, so:
A. The
employees are available to answer questions.
B. Management
does not have to attend the meetings.
C. That their
interests will be explicitly represented.
D. They have
more power than any other stakeholder.
Question
11
A
firm subscribing to the ownership theory of the firm would mainly be concerned
with providing value for its:
A.
Shareholders.
B. Customers.
C. Board of
Directors.
D. Community.
Question
12
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.
Question
13
Which
one of the following is considered to be a nonmarket stakeholder of business?
A. Customers.
B. Media.
C. Creditors.
D.
Stockholders.
Question
14
All
of the following are external stakeholders of the firm except:
A. Managers.
B. Customers.
C. Stockholders.
D. Suppliers.
Question
15
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.
The Correct Answer and Explanation is :
Here are the correct answers and explanations for each question:
Question 1: Which argument says that stakeholder management realistically depicts how companies really work?
- Answer: A. Descriptive argument
- Explanation: The descriptive argument states that stakeholder management provides a more accurate reflection of how companies function in reality. Companies often deal with a variety of stakeholders whose interests, needs, and expectations influence business decisions, and the descriptive argument highlights this as a realistic depiction of corporate behavior.
Question 2: A stakeholder analysis:
- Answer: D. All of the above
- Explanation: A stakeholder analysis is a tool used to understand and manage stakeholder interests. It involves creating equality among stakeholder interests (A), allowing managers to examine primary questions about the importance and power of stakeholders (B), and understanding the nature of these interests (C).
Question 3: The instrumental argument says stakeholder management is:
- Answer: B. More effective as a corporate strategy
- Explanation: The instrumental argument focuses on the idea that managing stakeholders effectively leads to better financial performance and corporate success. It suggests that considering stakeholder interests can enhance the company’s long-term profitability and competitive advantage.
Question 4: Interactions between business and society occur:
- Answer: A. Within a finite natural ecosystem
- Explanation: Business and society interact within the larger context of a natural ecosystem. These interactions include the impact of business activities on the environment, the natural resources used, and the social consequences of those activities.
Question 5: Customers can exercise economic stakeholder power by:
- Answer: B. Boycotting products if they believe the goods are too expensive
- Explanation: Economic stakeholder power is the ability to affect a company’s profitability. Customers can exercise this power by refusing to purchase goods, such as through boycotts, especially if they perceive prices as unfair or if a company is not meeting their needs.
Question 6: Which of the following is not considered to be a nonmarket stakeholder?
- Answer: B. Creditors
- Explanation: Nonmarket stakeholders are those groups or individuals who do not directly engage in market transactions but still influence or are influenced by business activities, such as government agencies (A), activist groups (C), and NGOs (D). Creditors, on the other hand, are market stakeholders because they directly engage in financial transactions.
Question 7: The phenomenon of a person or group holding multiple stakeholder duties is referred to as:
- Answer: A. Role sets
- Explanation: Role sets refer to situations where a person or group has multiple responsibilities to different stakeholders. For example, a manager may be responsible to both shareholders and employees.
Question 8: When something stands out from a background, is seen as important, or draws attention it is:
- Answer: B. Salient
- Explanation: Salience refers to the degree to which a stakeholder or issue demands attention. An issue is considered salient if it stands out and is perceived as important.
Question 9: The five types of stakeholders’ power recognized by most experts are:
- Answer: A. Voting, economic, political, legal, and informational power
- Explanation: These five powers are commonly recognized as ways stakeholders can influence businesses. Voting power refers to the ability to vote on business decisions; economic power comes from purchasing or investing; political power involves influencing policy; legal power includes the ability to initiate lawsuits; and informational power refers to access to valuable knowledge.
Question 10: A number of European countries require public companies to include employee members on their boards of directors, so:
- Answer: C. That their interests will be explicitly represented
- Explanation: Including employees on boards of directors ensures that employee interests are represented in corporate governance. This practice aligns with the stakeholder theory that companies should consider the interests of all stakeholders, not just shareholders.
Question 11: A firm subscribing to the ownership theory of the firm would mainly be concerned with providing value for its:
- Answer: A. Shareholders
- Explanation: Ownership theory asserts that the primary responsibility of a firm is to maximize value for its shareholders. This theory places shareholders at the center of corporate decision-making.
Question 12: 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:
- Answer: A. Legal power
- Explanation: Legal power refers to a stakeholder’s ability to take legal action against a company. In this case, the community group is exercising its legal power to hold the company accountable.
Question 13: Which one of the following is considered to be a nonmarket stakeholder of business?
- Answer: B. Media
- Explanation: The media is a nonmarket stakeholder because it can influence public opinion, company reputation, and regulatory decisions, even though it does not engage in direct market transactions with the company.
Question 14: All of the following are external stakeholders of the firm except:
- Answer: A. Managers
- Explanation: Managers are considered internal stakeholders, as they are part of the organization. External stakeholders include customers, stockholders, and suppliers.
Question 15: Departments, or offices, within an organization that reach across the dividing line that separates the company from groups and people in society are:
- Answer: C. Boundary-spanning departments
- Explanation: Boundary-spanning departments are those that bridge the gap between the organization and external groups, such as public relations or government affairs.
These questions cover key concepts related to stakeholder theory and corporate governance, emphasizing how companies engage with their stakeholders and how different stakeholders can influence corporate strategies.