Deck 4: Private Politics

Question 1

Use of secondary sources, such as, policy studies or scientific investigations to call attention to an issue restricts the social pressure of activists.

Answer 1

False

Question 2

Activists and interest groups use threat of legislation and regulation strategies.

Answer 2

False

Question 3

Direct pressure and boycotts are examples of private nonmarket actions.

Answer 3

True

Question 4

A company's susceptibility to private politics is independent of its lines of business.

Question 5

Even though activists groups have access to the media, public institutions, and the general public they do not have any standing before the courts to sue a firm.

Question 6

An important component of a private politics campaign is the selection of a target.

Question 7

The performance of firms or its policies remain unaffected by boycotts and campaigns.

Question 8

A company that manufactures products with high switching costs is susceptible to private politics.

Question 9

Activists and interest groups implement confrontational strategies to influence the behavior of economic agents.

Question 10

Since the general public sentiment favors righteousness, private politics does not need to implement strategies to influence the outcome of an issue.

Question 11

A potentially vulnerable company will face confrontational private politics irrespective of the amount of self-regulation.

Question 12

One of the keys to managing an activist environment is to understand the broader public support of their agenda.

Question 13

As long as the management of the company is cooperative, it does not need to assess the demands of the activists group or the public.

Question 14

The effectiveness of private politics social pressure is independent of the extent to which companies accept social responsibilities.

Question 15

Companies operating in developing countries are susceptible to private politics because groups in developed countries closely monitor operations in these countries.

Question 16

Activists using cooperative private politics organize corporate and market campaigns to advance issues on their agendas.

Question 17

Activists target individuals in both their personal and professional roles.

Question 18

The success of private politics is independent of public support.

Question 19

Private politics can be motivated by self-interest and broader concerns.

Question 20

Nonmarket issues are addressed largely in the shadow of public institution.

Question 21

Cooperative private politics is beneficial to a potentially vulnerable company.

Question 22

FreeWorld is a non-profit campaigning organization that has discovered that Shine4Ever Corp. is dealing in conflict diamonds-diamonds from the coasts of Liberia that originate from areas controlled by forces that fund anti-government operations. After several demonstrations, boycotts, and advertising campaigns by FreeWorld, Shine4Ever agrees to an external certification process to ensure that the diamonds are "clean". This social pressure is a result of ________.

A) private politics
B) business intelligence
C) market demand
D) competitive analysis

Question 23

Which of the following companies is least susceptible to private politics?

A) ReleeF, a pharmaceutical company that manufactures generic drugs
B) Bluetip, a petroleum exploration and production company
C) MoreSay, a multinational clothing company based in California with the manufacturing done in Vietnamese sweatshops
D) WeGroom Group, that designs and builds houses in developing countries because of the advantages of low-cost labor

Question 24

Which of the following is an important function of private politics?

A) It regulates the market dynamics for a specific industry.
B) It initiates and passes legislation in Congress.
C) It endorses a firm's brand reputation.
D) It mobilizes people to work for causes.

Question 25

Which of the following statements describes the relationship between confrontational and cooperative private politics?

A) cooperative private politics does not affect confrontational private politics
B) cooperative private politics is independent of the threat of confrontational private politics
C) confrontational private politics creates a demand for cooperative private politics
D) confrontational private politics does not provide the adequate threat because of which cooperative private politics is preferred by companies

Question 26

Certification to provide external legitimacy ________.

A) increases the vulnerability of a brand's reputation
B) improves the public standing of a firm
C) increases social pressure on a firm
D) attracts more confrontational activists to the firms' policies

Question 27

A group of activists organize a campaign to constrain the sale of a well-known brand of clothing because of worker rights issues in its Vietnamese branch. Which of the following strategies is applicable to the situation?

A) confrontational public politics
B) confrontational private politics
C) cooperative private politics
D) public nonmarket action

Question 28

Private politics focuses on ________.

A) changing the behavior of the government through regulation and legislation
B) changing the behavior of private economic agents through social pressure
C) changing the behavior of private economic agents through government action
D) changing the behavior of the state through economic policy

Question 29

Which of the following is an example of cooperative engagement in private politics?

A) Advertisement campaign by an NGO that shows a company official melting polar ice.
B) An NGO uses lobby correspondents for their global-warming propaganda.
C) An NGO pressures consumers to switch to a different brand of gas due to the company's high emission level.
D) An NGO appoints a group to provide external legitimacy to a company's environmental practice.

Question 30

An NGO with expertise in environmental practices assists a company to design and implement an external legitimate policy. This is an example of ________.

A) cooperative private politics
B) cooperative public politics
C) public nonmarket action
D) market competition analysis

Question 31

In which of the following ways does private politics shape the nonmarket environment?

A) It attempts to influence public policy through Congress.
B) It informs the management of a corporation about relevant social issues.
C) It organizes labor unions by delivering votes.
D) It enables corporations to make donations to candidates for Federal offices.

Question 32

Which of the following statements is true of private politics?

A) It is not motivated by self-interest or broader concerns.
B) It implements strategies to apply legislation through government action.
C) It implements strategies to affect the public sentiment.
D) It is independent of public support.

Question 33

Which of the following statements is NOT true of activist groups?

A) They alert a corporation to issues about which it is unaware.
B) They can affect the organization of interests by forming watchdog and advocacy groups.
C) They are often appointed to a firm's board of directors.
D) They provide information to the public as well as public office holders.

Question 34

Unless challenged by an activist group or NGO, specific issues of concern in a company can be reserved for later.

Question 35

The ________ of a firm determines the scope of the social pressure the firm could face.

A) brand reputation
B) line of business
C) stock price
D) product switching costs

Question 36

In a private politics campaign, negotiation with activists is involuntary.

Question 37

Cooperative private politics ________.

A) increases the vulnerability of a brand
B) attracts more confrontational activists to the firms' policies
C) increases social pressure on a firm
D) improves the public standing of a firm

Question 38

Which of the following can a company do to make it less attractive to a confrontational activist?

A) adopt an external certification from an NGO
B) neglect required practices
C) adopt a nontransparent policy
D) adopt internal certification

Question 39

A simple agreement accepting the issues is usually sufficient where the stakes are high and monitoring of the firm's actions is difficult.

Question 40

Identifying relevant interest groups and activist organizations in a company's market and nonmarket areas is an important part of addressing an activist environment.

Question 41

Which of the following is the first step in addressing social pressure from activist groups?

A) understand the broader public support for activist group's agenda
B) identify relevant interest groups and activist organizations in a company's market and nonmarket environments
C) assess how the media is likely to cover and treat the issue
D) partner with activist groups

Question 42

Firms need to develop approaches to address social pressure from activist groups. Discuss.

Question 43

In terms of an activists' generic strategy, what is a low-cost method of getting information out to the public that they want to be distributed?

A) use the news media
B) use television spots
C) use nationwide lobbying of legislatures
D) file a lawsuit

Question 44

Which of the following represents a centralized activity used by activists to apply pressure on firms?

A) Activists arrange a campaign led by labor unions to lower emission rates for workers' safety.
B) Activists pressure firms to lower emission rates after reading annual list of companies' emission rates.
C) Activists send emails to spread information about the increasing emission rates of companies.
D) Activists form an online community that shares relevant information on emission rates and signs petitions.

Question 45

What are the two basic strategies of activists?

A) putting direct pressure on firms and working through public institutions
B) putting indirect pressure on firms and direct pressure on government
C) putting little pressure on firms and lots of indirect pressure on government
D) putting pressure on firm boards of directors and working with public entities

Question 46

Which of the following describes an activist group's first-mover advantage?

A) frames an issue by identifying its societal significance
B) stages protests and demonstrations
C) uses low-cost source of information
D) uses social media to coordinate activities

Question 47

Why do activists play an important role in the nonmarket environment?

Question 48

Which of the following is the last step in addressing social pressure from activist groups?

A) understand the broader public support for activist group's agenda
B) identify relevant interest groups and activist organizations in a company's market and nonmarket environments
C) challenge the activists
D) assess how the media is likely to cover and treat the

Question 49

Describe four factors that affect the effectiveness of private politics social pressure.

Question 50

Which of the following statements describes the trust gap in private politics?

A) negative information provided by a firm can have more impact on an issue than that provided by an NGO
B) negative information provided by an NGO can have more impact on an issue than that provided by a firm
C) negative information provided by an NGO does not affect a firm due to the lack of trust gap
D) negative information provided by an NGO does not provide the adequate threat as firms are more trustworthy

Question 51

Which of the following should a company follow when opposing an activist campaign?

A) invest in reputation management
B) file a lawsuit
C) develop an alternative organization
D) develop a corporate campaign

Question 52

Write an essay on the positive and less than positive roles played by activist groups. Give specific examples of each of these roles. Use Greenpeace International as your focus of analysis.

Question 53

Write a short note on confrontational private politics.

Question 54

Which of the following should a company follow when challenging activists?

A) avoid explanations to employees
B) file a lawsuit if the company can bear the social pressure
C) avoid negotiation
D) challenge the group after evaluating the issue

Question 55

Which of the following is applicable to private politics strategy to put pressure on a company and its reputation?

A) It avoids using policy studies.
B) It attempts to pass legislation through government action.
C) It questions the board of directors directly.
D) It uses shareholder rights by questioning at annual meetings.