Deck 2: Stakeholder Relationships, Social Responsibility, and Corporate Governance

Question 1

The idea that the mission of business is to produce goods and services at a profit, thus maximizing its contribution to society is associated with

A)Adam Smith.
B)Archie Carroll.
C)Jack Ma.
D)Noel Biderman
E)Milton Friedman.

Answer 1

E

Question 2

Minimizing the use of energy and reducing emissions and waste are issues of importance to which stakeholder?

A)Environmental groups
B)Suppliers
C)Employees
D)Industry leaders
E)Investors

Answer 2

A

Question 3

Which of the following describes the four levels of social responsibility?

A)Economic, social, legal, and voluntary
B)Economic, legal, environmental, and ethical
C)Financial, legal, environmental, and philanthropic
D)Economic, financial, legal, and ethical
E)Economic, legal, ethical, and philanthropic

Answer 3

E

Question 4

When unethical acts are discovered in a firm, in most instances

A)they are caused by unwilling participants.
B)the cause is due to external stakeholders.
C)the perpetrators are caught and prosecuted.
D)there was knowing cooperation or complicity from within the company.
E)the cause is a corrupt board of directors.

Question 5

A stakeholder orientation can be viewed as a(n)

A)necessity for business success.
B)continuum.
C)polarizing concept.
D)good marketing ploy.
E)expensive proposition.

Question 6

A stakeholder group that is absolutely necessary for a firm's survival is defined as

A)direct.
B)tertiary.
C)secondary.
D)special-interest.
E)primary.

Question 7

The normative approach ______________________.

A)focuses on the actual behavior of the firm and usually addresses how decisions and strategies are made for stakeholder relationships
B)describes what happens if firms behave in a particular way
C)is the degree to which a firm understands and addresses stakeholder demands
D)describes reciprocal relationships between the firm and a host of stakeholders
E)identifies guidelines that dictate how firms should treat stakeholders

Question 8

The degree to which a firm understands and addresses stakeholder demands can be referred to as

A)a stakeholder orientation.
B)a shareholder orientation.
C)the stakeholder interaction model.
D)a two-way street.
E)a continuum.

Question 9

Shareholders provide resources to an organization that are critical to long-term success. Which of the following does the book suggest that suppliers offer?

A)The promise of customer loyalty
B)Material resources and/or intangible knowledge
C)Infrastructure
D)Revenue
E)Leadership skills

Question 10

The first of the three activities that are associated with the stakeholder orientation is the

A)organization-wide generation of data.
B)organization's responsiveness to intelligence.
C)set of consumer attributes identified.
D)organizational strategy of target markets.
E)human relations department's set of priorities.

Question 11

Some economists believe that if companies address economic and legal issues, they are satisfying the demands of society, and that trying to anticipate and meet additional needs would be almost impossible. Which economist's theory are they following most closely with this belief?

A)Adam Smith.
B)Archie Carroll.
C)Jack Ma.
D)Noel Biderman.
E)Milton Friedman.

Question 12

Stakeholders' power over businesses stems from their

A)ability to withdraw or withhold resources.
B)ability to generate profits.
C)media impact.
D)political influence.
E)stock ownership.

Question 13

Which of the following do not typically engage in transactions with a company and thus are not essential for its survival?

A)Employees
B)Secondary stakeholders
C)Primary stakeholders
D)Investors
E)Customers

Question 14

Which of the following industries tends to generate a high level of trust from consumers and stakeholders?

A)Insurance
B)Technology
C)Banks
D)Mortgage lenders
E)Financial services

Question 15

Public health and safety and support of local organizations are issues most relevant to which stakeholder group?

A)Investors
B)Community
C)Suppliers
D)Customers
E)Employees

Question 16

_________________ is the idea that because people live in a community, social rules should benefit the community.

A)The stakeholder interaction model
B)Consumer protection
C)The common good
D)Sustainability
E)Corporate governance

Question 17

Why is it important for businesses to recognize secondary stakeholder groups?

A)They are absolutely necessary for the firm's survival.
B)They include the employees necessary for the firm's success.
C)They usually have more power than primary stakeholders.
D)They provide vital resources that companies need.
E)They have legitimacy and can exert power.

Question 18

The originator of the idea of the invisible hand, which is a fundamental concept in free market capitalism, was

A)Adam Smith.
B)Archie Carroll.
C)Jack Ma.
D)Noel Biderman.
E)Milton Friedman.

Question 19

A firm that makes use of a _____ recognizes other stakeholders beyond investors, employees, and suppliers, and explicitly acknowledges the two-way dialog that exists between a firm's internal and external environments.

A)stakeholder model of socially responsible corporate governance
B)stakeholder bias
C)code of ethics
D)stakeholder interaction model
E)corporate interface model

Question 20

Those who have a claim in some aspect of a firm's products, operations, markets, industry, and outcomes are known as

A)shareholders.
B)stockholders.
C)stakeholders.
D)claimholders.
E)special-interest groups.

Question 21

Which of the following are not typically secondary stakeholders?

A)Television news anchors
B)Special-interest groups
C)Customers
D)Trade associations
E)Journalists

Question 22

Compare and contrast the stakeholder and shareholder models of corporate governance.

Question 23

Discuss the difference between primary and secondary stakeholders in the stakeholder interaction model and give examples for each type.

Question 24

Which of the following is a major ethical concern among corporate boards of directors?

A)Compensation
B)The non-traditional directorship approach
C)Dividend reporting
D)Secondary stakeholders
E)Debt swaps

Question 25

Board members being linked to more than one company is an example of

A)the stakeholder concept.
B)the stakeholder model of corporate governance.
C)interlocking directorate.
D)conflict of interest.
E)multiple directorate.

Question 26

Discuss three corporate governance issues, why they are defined as issues, and how you would solve them. Use examples in your answer.

Question 27

The purpose of a stakeholder orientation is to

A)emphasize shareholders and provide them with a return on their investment.
B)maximize positive outcomes that meet stakeholder needs.
C)enhance the profitability of the firm.
D)determine which stakeholders to address and which to ignore.
E)allow stakeholders to determine the limits of executive compensation.

Question 28

In corporate governance, _____ is the process of auditing and improving organizational decisions and actions.

A)profit
B)loyalty
C)accountability
D)control
E)diligence

Question 29

Why is ethical misconduct more difficult to overcome than poor financial performance?

Question 30

What are the four levels of social responsibility?

A)Financial, religious, ethical, and philanthropic
B)Ethical, philanthropic, selfish, and short-sighted
C)Economic, long-term, ethical, and philanthropic.
D)Economic, legal, ethical, and philanthropic
E)Economic, compliance, legal, and philanthropic

Question 31

Why do critics argue that high compensation for boards of directors is a bad thing?

A)It is too expensive for the organization.
B)It could cause conflicts of interest between the directors and the organization.
C)It is not fair to poorly compensated employees.
D)High pay will render the board less complacent.
E)Board of director compensation is negatively related to corporate growth.

Question 32

The _____ model is founded in classic economic precepts.

A)economic
B)shareholder
C)stakeholder
D)board
E)ISO

Question 33

Accountability, oversight, and control all fall under the definition and implementation of corporate

A)profit.
B)loyalty.
C)care.
D)governance.
E)diligence.

Question 34

Major corporate governance issues normally involve _____ decisions. (Choose the response that is most correct)

A)strategic-level
B)tactical-level
C)divisional-level
D)marketing-level
E)accounting-level

Question 35

The specific steps for implementing the stakeholder perspective do not include which of the following?

A)Identifying stakeholder groups
B)Identifying stakeholder issues
C)Identifying and gaining stakeholder feedback
D)Identifying and gaining government feedback
E)Assessing organizational commitment to social responsibility groups

Question 36

What is the first step in implementing a stakeholder perspective in an organization?

A)Identifying resources and determining urgency
B)Identifying stakeholder groups
C)Identifying stakeholder issues
D)Assessing the corporate culture
E)Assessing organizational commitment to social responsibility

Question 37

A stakeholder orientation is not complete unless it includes

A)clear accounting procedures.
B)major financing activities.
C)marketing strategy.
D)feedback from special-interest groups.
E)activities that actually address stakeholder issues.

Question 38

Why do some businesspeople and scholars question whether ethics should have a role in business?

Question 39

Which of the following are not typically primary stakeholders?

A)Customers
B)Trade associations
C)Employees
D)Shareholders
E)Suppliers

Question 40

The term used to express how a firm meets its stakeholder expectations of its economic, legal, ethical, and philanthropic responsibilities is

A)reputation.
B)corporate citizenship.
C)corporate ethical audit.
D)ethical citizenship.
E)fiduciary duties.

Question 41

The board of directors' fiduciary duty to a company means they have assumed a position of trust and confidence that entails certain responsibilities.​

Question 42

Directors share a ______, which means all their decisions should be in the best interests of the corporation and its stakeholders.

A)duty of loyalty
B)duty of oversight
C)duty to audit
D)duty of control
E)duty of cooperation

Question 43

The final step in implementing a stakeholder perspective is identifying stakeholders.​

Question 44

Government regulators are a secondary stakeholder. ​

Question 45

Social responsibility rests on a stakeholder orientation. ​

Question 46

Which of the following is one of an organization's greatest intangible assets with tangible values?

A)Reputation
B)Profitability
C)Philanthropic activities
D)Corporate governance
E)Shareholder value

Question 47

Ethics and social responsibility can be used interchangeably.

Question 48

Both directors and officers of corporations are fiduciaries for the shareholders. Fiduciaries are persons placed in positions of trust that act on behalf of the best interests of the organization. This is defined as

A)duty of oversight and loyalty.
B)duty of care or a duty of diligence
C)duty of control and audit.
D)duty of confidence and leadership.
E)duty of analysis and insight.

Question 49

​InDodge vs. Ford Motor Co., the court ruled that a business exists for the profit of shareholders, and the board of directors should focus on that objective.

Question 50

A broader view of social responsibility​

A)​views customers as the most important stakeholder.
B)​takes into account a shareholder orientation.
C)​prioritizes all stakeholders the same way.
D)​considers the long-term welfare of society.
E)​emphasizes adherence to law as the highest priority.