Question 1

A business organization that serves a specific purpose and is not driven by profit is known as what form of business?

Accepted Answer

Nonprofits do not have shareholders and are strictly created for social service functions; they are not driven to maximize profits.

Question 2

UNICEF is a world-wide organization that focuses on the health, safety, and education of children. They depend on donations to support their cause. This is an example of what type of business form?

Accepted Answer

UNICEF does not operate for profits; it operates strictly for the social well-being of children, making them a nonprofit enterprise.

Question 3

A dependent stakeholder is one that a company views as having merit to their claim, but they do not have _______, which makes their claims less likely to been viewed as important enough to create change.

Accepted Answer

Dependent stakeholders have urgency and legitimacy in their claims, but they lack the power to make any change within a company. They depend on those who do have power to help them be heard.

Question 4

If stakeholders want to gain ground and find a way to make their voices heard, they may cross the line and act in a manner that is viewed as dangerous. When this is done, it creates a lack of _______ to their cause.

Accepted Answer

When stakeholders become dangerous, their legitimacy is lessened if, in order to be heard, they act in what can be an unlawful manner.

Question 5

If a stakeholder group has a legitimate claim but lacks the power to be taken seriously by an organization, which one of the following choices is the most effective way for that stakeholder group to gain power?

Accepted Answer

Becoming a larger collective group may help give more power and weight to the cause. However, contacting the media and having a larger voice in society as a whole, at least in the community, will likely cause the company to respond in some manner to their claim.

Question 6

A company that puts its products through rigorous testing to ensure product safety for consumers is showing concern for the basic rights of which group?

Accepted Answer

The rights of consumers to have safe products is part of the intrinsic stakeholder model.

Question 7

C-Corps are required to have some form of corporate social responsibility in their mission and business goals, but this can lead to being viewed as less socially responsible to society. This has become an increasingly important factor for which of the following groups?

Accepted Answer

Organizations recognize that their reputation beyond high earnings has become an important factor in business responsibility as viewed by external and internal stakeholders.

Question 8

Which one of the following statements is the best way for Patagonia to demonstrate the intrinsic stakeholder model?

Accepted Answer

By allowing customers to send products to be repaired at a minimal cost, there is less clothing in landfills and items have a longer useful life.

Question 9

If an organization sets strict expectations as to how its suppliers, employees, and other business partners are expected to function in order to meet organizational standards, they are likely giving high importance to all of the following, EXCEPT

Accepted Answer

When businesses set strict standards, they are likely doing so to meet social expectations, and while profits are important, they are not driving business decisions.

Question 10

Business decisions that are socially responsible may also be grounded in which of the following choices?

Accepted Answer

Focusing on stakeholders in a socially responsible manner extends beyond those that are directly linked to the business and beyond environmental goals.

Question 11

When large organizations are successful and set social or charitable goals, many other organizations may jump on board and follow the same guidance. These expectations can become known as which of the following options for businesses of a similar size and function?

Accepted Answer

When large companies create certain expectations and other businesses follow suit, new standards can be created that become the norm when it comes to business operations.

Question 12

If an investor looks for organizations that provide high returns and payouts to shareholders, they are likely to invest in companies that use what type of model?

Accepted Answer

Businesses that make decisions to give investors the greatest return tend to use the shareholder model.

Question 13

If an organization wants to be strategic and profitable, but also sees the value in being responsive to stakeholders, which of the following choices states what the organization should do?

Accepted Answer

If a company shifts its focus, this could decrease profitability, which could lead to investors having a decline in confidence. However, investors that appreciate the company's shift may invest and purchase former investors' shares.

Question 14

As an employee of an organization, one has the right to a safe working environment. This was not always the case, but it became a standard all organizations in the United States must meet. Following safety regulations leads to a decrease in which of the following choices?

Accepted Answer

Being a lawful organization can cost money compared to cutting corners and finding ways to operate at a lower cost. However, these costs must be spent in order to be in compliance, or there is a risk of being fined or having a lawsuit brought against the organization.

Question 15

A local grocery store gives food that is near expiration or nearly past its prime to a homeless shelter and they use it to prepare meals for its visitors. This demonstrates a concern for which kind of stakeholders?

Accepted Answer

Caring for local homeless citizens is an example of a community stakeholder.

Question 16

If a company treats employees well, which of the following choices explain how the company and employee benefit?

Accepted Answer

Both the company and employee benefit when employees are treated well regarding pay, benefits, and promotion opportunities. Employees are less likely to leave, will work to achieve the company mission, and will go after management positions to carry on the company's success.

Question 17

Managers of a social enterprise should base their decisions on which of the following choices?

Accepted Answer

The manager may make decisions for any of these, but the company's mission should be the deciding factor as to which is the main driver for decision making.

Question 18

There is a spectrum of stakeholder involvement in business decisions. Which types of firms usually include extensive stakeholder involvement?

Accepted Answer

The B-Corporation has a focus to be profitable, but also to listen to stakeholders in order to achieve societal goals along with business goals.

Question 19

There is a spectrum of stakeholder involvement in business decisions. On one end, there is extensive involvement. On the other end, there is minimal involvement. What type of firm would fall on the minimal involvement end of the spectrum?

Accepted Answer

C-Corps tend to get little involvement from stakeholders. The main focus is shareholders and what is best for the profits of the organization in order to maximize returns to investors.

Question 20

Which form of business uses profits funneled from a corporation to a foundation in order to use those profits in a charitable manner?

Accepted Answer

In order to create a philanthropic enterprise, a foundation must be set up to determine how the profits of a corporation will be distributed to charitable causes.

Quiz 4: Corporate Organization and the Role of Stakeholders