Business and Society Stakeholders Ethics Public Policy 17th Edition By Anne
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Lawrence
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Chapter 1-19 Answers are at the end of Each chapterChapter 1
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Student name: f f
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
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1) A business is any organization that is engaged in making a product or providing a service fora
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profit.
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⊚ true f
⊚ false f
2) The term stakeholder refers exclusively to the founders of a business organization.
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⊚ true f
⊚ false f
3) Businesses and society are independent of each other.
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⊚ true f
⊚ false f
4) The stakeholder theory of the firm argues that a firm’s sole purpose is to create long-term
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value for its shareholders.
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⊚ true f
⊚ false f
5) The instrumental argument for the stakeholder theory of the firm says that companies
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perform better if they consider the rights and concerns of multiple groups in society.
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⊚ true f
⊚ false f
6) The normative argument for the stakeholder theory of the firm says that the stakeholder viewis
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f simply a more realistic description of how companies really work.
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⊚ true f
⊚ false f
,7) Nonmarket stakeholders are those that engage in economic transactions with the company asit
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f carries out its primary purpose of providing society with goods and services.
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⊚ true f
⊚ false f
8) Market stakeholders include nongovernmental organizations and business support groups.
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⊚ true f
⊚ false f
9) Government can be considered both a market and a nonmarket stakeholder.
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⊚ true f
⊚ false f
10) The interests of different stakeholders often coincide.
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⊚ true f
⊚ false f
11) The first step of stakeholder analysis is to identify relevant stakeholders.
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⊚ true f
⊚ false f
12) Some scholars have suggested that managers pay the most attention to stakeholders
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possessing the least salience.
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⊚ true f
⊚ false f
13) The organization of a corporation’s boundary-spanning functions is complex.
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⊚ true f
⊚ false f
14) Businesses are increasingly trying to meet their commitments to multiple stakeholders.
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⊚ true f
⊚ false f
15) The external environment of business is static.
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⊚ true f
⊚ false f
,MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
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answers the question.
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16) The relationship between business and society is most accurately described by which
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statement?
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A) Business is an unbounded entity within the larger bounded entity of society.
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B) Society is a distinct bounded entity within the larger bounded entity of business.
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C) Business is a distinct bounded entity separate from the bounded entity of society.
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D) Business is a distinct bounded entity within the larger bounded entity of society.
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17) According to general systems theory, boundary exchanges are exemplified by which of the
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following?
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A) An industrial company installs new equipment in its plant to comply with
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environmental regulations.
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B) A software company develops an application for a client.
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C) A purchasing department employee negotiates a price on parts with a supplier.
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D) All of these choices are correct.
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18) The inseparable relationship between business and society results in which of the following?
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A) All business decisions have a social impact.
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B) The vitality of business depends on society's actions and attitudes.
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C) The survival of business is independent of society.
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D) Both “All business decisions have a social impact” and “The vitality of business
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depends on society’s actions and attitudes” are correct.
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19) Which of the following statements is not true about the interactive social system?
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A) Business and society need, as well as influence, each other. f f f f f f f f f
B) The boundary between business and society is clear and distinct.
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C) Business is a part of society, and society penetrates far and often into business.
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D) Business and society are both separate and connected. f f f f f f f
20) A firm subscribing to the shareholder theory of the firm would mainly be concerned with
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providing long-term value for its
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A) investors.
B) customers.
C) board of Directors. f f
D) community.
, 21) Corporations that follow the stakeholder theory of the firm create value by
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A) constantly innovating new products. f f f
B) increasing their stock price. f f f
C) developing their employees’ skills. f f f
D) All of these choices are correct.
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22) Which argument says that stakeholder management realistically depicts how companies
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really work?
f f
A) descriptive argument f
B) instrumental argument f
C) normative argument f
D) fiduciary argument f
23) The instrumental argument states that stakeholder management is
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A) a more realistic description of how companies really work.
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B) more effective as a corporate strategy.
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C) simply the right thing to do. f f f f f
D) determined by the amount of stock issued. f f f f f f
24) The fiduciary duty of managers benefits a firm's
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A) shareholders.
B) customers.
C) employees.
D) All of these choices are correct.
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25) The main reason a number of European countries require public companies to include
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employee members on their boards of directors is that
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A) the employees will be available to answer other board members' questions.
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B) management will not have to attend the meetings. f f f f f f f
C) employees' interests will be explicitly represented. f f f f f
D) employees will have more power than any other stakeholder. f f f f f f f f
26) Stakeholder groups can include f f f
A) shareholders.
B) business support groups. f f
C) environmental activists. f
D) All of these choices are correct.
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