Canadian Business & Society Ethics, Responsibilities And Sustainability 4Th Edition By by Robert Sexty – Test Bank

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Canadian Business & Society Ethics, Responsibilities And Sustainability 4Th Edition By by Robert Sexty – Test Bank

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Chapter 02

Ethics and Capitalism

 

 

True / False Questions

1. Canada’s economy primarily operates in a private market system.
   TRUE

 

Difficulty: Easy
Learning Objective: 02-01 Enumerate and discuss the eight fundamentals of a capitalist business system.
Topic: 02-01 Introduction

2. It is argued that the private system is less cumbersome and less costly to run than a centralized, government-operated system, and that it is more responsive to society’s needs because it allows individuals and business corporations to be more innovative.
   TRUE

 

Difficulty: Medium
Learning Objective: 02-01 Enumerate and discuss the eight fundamentals of a capitalist business system.
Topic: 02-01 Introduction

3. Much of the theory of the classical capitalist system is based on the philosophical underpinnings of the American system, but is equally applicable to the Canadian economy.
   FALSE

 

Difficulty: Easy
Learning Objective: 02-01 Enumerate and discuss the eight fundamentals of a capitalist business system.
Topic: 02-01 Introduction

 

4. Capitalism requires a strong ethical system, as without it, the justice system will intervene.
   TRUE

 

Difficulty: Easy
Learning Objective: 02-01 Enumerate and discuss the eight fundamentals of a capitalist business system.
Topic: 02-01 Introduction

5. Individuals and enterprises have been allowed to accumulate capital wealth, which has led to an even distribution of wealth among members of society.
   FALSE

 

Difficulty: Medium
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

6. “It’s my land!” exclaimed the farmer, responding to the environmentalists. “If I want to cut down every single tree on it, this is my right.” The farmer is claiming the fundamental right of capitalism—the right of private property.
   TRUE

 

Difficulty: Medium
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

7. Fortunately in Canada there is an even distribution of wealth among members of society.
   FALSE

 

Difficulty: Easy
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

8. Most of the natural resources in Canada are privately owned.
   FALSE

 

Difficulty: Easy
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

 

9. Intellectual property, such as an artist’s ownership of music, is becoming increasingly important in Canada.
   TRUE

 

Difficulty: Easy
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

10. The individualism view of capitalism assumes that individuals are inherently self-serving, but neither decent nor rational.
    FALSE

 

Difficulty: Medium
Learning Objective: 02-03 Explain individualism and economic freedom and the related ethical implications.
Topic: 02-05 Individualism and Economic Freedom

11. Economic freedom does not address the rights of individuals, only of business enterprises.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-03 Explain individualism and economic freedom and the related ethical implications.
Topic: 02-05 Individualism and Economic Freedom

12. The gap between executive compensation and worker compensation has declined.
    FALSE

 

Difficulty: Medium
Learning Objective: 02-04 Define equality of opportunity and elaborate upon the ethical implications for business.
Topic: 02-08 Equality of Opportunity

13. It is easier to achieve equity than equality.
    TRUE

 

Difficulty: Medium
Learning Objective: 02-04 Define equality of opportunity and elaborate upon the ethical implications for business.
Topic: 02-08 Equality of Opportunity

 

14. Equality is inevitable with a capitalistic system.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-04 Define equality of opportunity and elaborate upon the ethical implications for business.
Topic: 02-08 Equality of Opportunity

15. Gender equality means that women and men have equal means and opportunities for realizing their full human rights and responsibilities
    TRUE

 

Difficulty: Easy
Learning Objective: 02-04 Define equality of opportunity and elaborate upon the ethical implications for business.
Topic: 02-08 Equality of Opportunity

16. Capitalism assumes that competition is both natural and desirable.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-05 Describe the competition fundamental and link ethical implications to it.
Topic: 02-11 Competition

17. A monopoly occurs when there are few sellers in an industry and these sellers behave similarly.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-05 Describe the competition fundamental and link ethical implications to it.
Topic: 02-11 Competition

18. The barriers to entry existing in many industries and the need for increasing size to achieve efficiency may have led to profits lower than normal under perfect competition.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-06 Understand profits and the associated ethical implications.
Topic: 02-14 Profits

 

19. Competition ensures that if excessive profits are made, others will be attracted to the industry.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-06 Understand profits and the associated ethical implications.
Topic: 02-14 Profits

20. The barriers to entry existing in many industries and the need for increasing size to achieve efficiency may have led to profits higher than normal under perfect competition.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-06 Understand profits and the associated ethical implications.
Topic: 02-14 Profits

21. According to the work ethic, unemployment is a temporary, misfortunate event.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-07 Link the work ethic to ethical implications.
Topic: 02-17 The Work Ethic

22. The Protestant ethic claims, in part, that being thrift through saving is an element of God’s will.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-07 Link the work ethic to ethical implications.
Topic: 02-17 The Work Ethic

 

23. In modern society, the desire to consume is a driving force which compels many individuals to work hard to acquire material possessions. The result is a consumption ethic in this generation of workers.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-07 Link the work ethic to ethical implications.
Topic: 02-17 The Work Ethic

24. It is consumers’ evaluation of a business that determines whether or not it will survive.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

25. Those who question the degree of consumer sovereignty in Canada argue that governments influence or regulate in the “public interest,” which frequently is more in the “producer interest.”
    TRUE

 

Difficulty: Medium
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

26. The more competitive a market, the lower the power of the consumer.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

 

27. Canada’s economic system is capable of taking into consideration social and ethical concerns.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

28. In recent years, there has been less government involvement in the Canadian economy.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-09 Explain the role of government in a capitalist business system and what the ethical implications are in this system.
Topic: 02-23 The Role of Government

29. The government’s role in the Canadian economy is often described as laissez-faire.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-09 Explain the role of government in a capitalist business system and what the ethical implications are in this system.
Topic: 02-23 The Role of Government

30. Government involvement in the market, for reasons other than laws relating to contractual arrangements is considered to weaken efficiency.
    TRUE

 

Difficulty: Medium
Learning Objective: 02-09 Explain the role of government in a capitalist business system and what the ethical implications are in this system.
Topic: 02-23 The Role of Government

 

31. Government involvement in the economy has always been greater in Canada than in the United States.
    TRUE

 

Difficulty: Medium
Learning Objective: 02-09 Explain the role of government in a capitalist business system and what the ethical implications are in this system.
Topic: 02-23 The Role of Government

32. Competition legislation makes some types of trade practices illegal and attempts to encourage monopolization.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-09 Explain the role of government in a capitalist business system and what the ethical implications are in this system.
Topic: 02-23 The Role of Government

33. State capitalism involves market manipulation.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

34. The “patched up” system, or mixed economy that exists in Canada is the best that can be expected, given human limitations and a democratic government.
    TRUE

 

Difficulty: Medium
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

 

35. Germany practises “stakeholder capitalism,” a form of producer capitalism.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

36. Frontier capitalism is practised in the United States.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

37. The government has a stronger role in consumer capitalist systems than in frontier capitalist systems.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

38. Co-determination takes place in producer capitalist systems.
    TRUE

 

Difficulty: Hard
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

39. Employees at ABC Corporation own shares in the company. This is referred to as “employee capitalism.”
    TRUE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

 

40. Canada practises consumer capitalism.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

41. Innovation is accelerated within a producer capitalism system.
    FALSE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

42. The resolution of social needs is the primary goal of economic activity under creative capitalism.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

43. According to Bill Gates of Microsoft Corp., creative capitalism would discover new, innovative ways to solve the problems of the poorest by combining self-interest (or individualism) and caring for others.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-10 Define Canadian capitalism and recognize that capitalism exists in different forms around the world.
Topic: 02-26 The Fundamentals and Various Forms of Capitalism

44. Self-interest can be a benefit of capitalism.
    FALSE

 

Difficulty: Medium
Learning Objective: 02-11 Recognize the challenges to presenting the case for ethics of capitalism.
Topic: 02-27 The Ethics of Capitalism

 

45. As of 2009, a majority of Canadians trusted business less than the year before.
    TRUE

 

Difficulty: Easy
Learning Objective: 02-11 Recognize the challenges to presenting the case for ethics of capitalism.
Topic: 02-27 The Ethics of Capitalism

 

Multiple Choice Questions

46. Which of the following is true of the capitalist system?
    A.The market system coordinates economic activity.
    B. It is less cumbersome then a government-operated system.
    C. It is less costly than a government-operated system.
    D. It is more responsive to society’s needs.
    E. All of the above are true of a capitalist system.

 

Difficulty: Easy
Learning Objective: 02-01 Enumerate and discuss the eight fundamentals of a capitalist business system.
Topic: 02-01 Introduction

47. Much of the theory of the classical capitalist system is based on the philosophical underpinnings of:
    A.Marxist theory.
    B. the Communist Manifesto.
    C. the Wealth of Nations.
    D. the European market model.
    E. the American system.

 

Difficulty: Easy
Learning Objective: 02-01 Enumerate and discuss the eight fundamentals of a capitalist business system.
Topic: 02-01 Introduction

 

48. A capitalist system requires a strong system of ethical behaviour, as without it:
    A.profits fail to exist.
    B. competitive rivalry is limited.
    C. monopolies control the market.
    D. the government must intervene and regulate markets.
    E. hoarding occurs.

 

Difficulty: Easy
Learning Objective: 02-01 Enumerate and discuss the eight fundamentals of a capitalist business system.
Topic: 02-01 Introduction

49. Marco is delighted to finally have purchased his own car. He washes it weekly and always ensures that it is well maintained. His father is shocked at how well Marco is looking after the car; whenever he used to borrow his father’s car, Marco would neglect its care. Marco’s care for his own car exemplifies that the right to private property, within a capitalist system, results in all of the following, except:
    A.greater control over one’s own destiny.
    B. pride taken in ownership results in better care being taken of one’s own property.
    C. a sense of security.
    D. respect for the property of others.
    E. a burden of responsibility over one’s destiny.

 

Difficulty: Hard
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

50. The municipal government has determined that it wants to expand a popular walking trail system that runs through the city. This city issues a notice to the effected landowners stating that it is claiming this land and that the landowners will receive an assessment of the value of their land and payment. Can the government do this?
    A.Yes, the government has eminent domain over the property and fair price is offered.
    B. Yes, the government ultimately owns all property in Canada.
    C. No, the government cannot do this as it violates the fundamental right to ownership of private property.
    D. No, the government cannot do this, unless the owner voluntarily relinquishes the land.
    E. It depends on the municipality.

 

Difficulty: Hard
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

 

51. All of the following are true concerning the government of Canada, except:
    A.owns most natural resources, even if they are on private property.
    B. controls property through regulations and restrictions.
    C. redistributes wealth through taxation.
    D. can expropriate private property.
    E. cannot expropriate any property.

 

Difficulty: Easy
Learning Objective: 02-02 Define the right of private property and identify ethical implications associated with it.
Topic: 02-02 The Right of Private Property

52. JKM Corporation has decided to relocate its factory to a remote, rural location. The current employees are dismayed and are asking their employee to reconsider. JKM states that they can and will relocate their business wherever they choose. JKM Corporation is asserting which fundamental element of capitalism?
    A.Right to personal property
    B. Competition
    C. Individualism and Economic freedom
    D. Equality of opportunity
    E. Profit maximization

 

Difficulty: Medium
Learning Objective: 02-03 Explain individualism and economic freedom and the related ethical implications.
Topic: 02-05 Individualism and Economic Freedom

53. Frank, the owner of a manufacturing company, is explaining to the employees that the relocation of the factory to a small, rural community will be beneficial to the company. He believes that each employee can decide for him or herself whether to relocate, as it was his own right to choose to relocate his business. Frank is asserting the principle of:
    A.Individualism.
    B. Equality of opportunity.
    C. Intellectual property.
    D. Right to personal property.
    E. Profit maximization.

 

Difficulty: Medium
Learning Objective: 02-03 Explain individualism and economic freedom and the related ethical implications.
Topic: 02-05 Individualism and Economic Freedom

 

54. Denise, the owner of an Internet company, is relocating the business to Toronto. Her employees all believe that she should have considered their needs in this decision as they are part of the team that has made the business successful and that customers in the community will be hurt by this move. The employees are applying the principle of __________ in asking her to consider their request.
    A.individualism
    B. communitarianism
    C. consumer sovereignty
    D. team building
    E. collectivism

 

Difficulty: Medium
Learning Objective: 02-03 Explain individualism and economic freedom and the related ethical implications.
Topic: 02-05 Individualism and Economic Freedom

55. “It’s a level playing field,” said the executive to the new hires. “No matter where you went to school, you will succeed here based on what you do starting today. It is all up to you.” This sentiment expresses the __________ assumption of capitalism.
    A.individualism
    B. intellectual property
    C. equality of opportunity
    D. right to personal property
    E. profit maximization

 

Difficulty: Medium
Learning Objective: 02-04 Define equality of opportunity and elaborate upon the ethical implications for business.
Topic: 02-08 Equality of Opportunity

56. The taxation system in Canada is considered progressive. This means that those who earn higher income are taxed at a higher rate than are those with lower income. This approach reflects a movement towards ____________ as a priority in Canada.
    A.equality of opportunity
    B. equality of results
    C. individualism
    D. oligopoly
    E. regression

 

Difficulty: Medium
Learning Objective: 02-04 Define equality of opportunity and elaborate upon the ethical implications for business.
Topic: 02-08 Equality of Opportunity

 

57. There are several initiatives that business can undertake to foster gender equality, except:
    A.Increase access to education and training.
    B. Insure that hiring and recruitment practices are not discriminatory.
    C. Provide affordable child care.
    D. Eliminate job sharing.
    E. Develop policies relating to employment maternity and paternity leave.

 

Difficulty: Medium
Learning Objective: 02-04 Define equality of opportunity and elaborate upon the ethical implications for business.
Topic: 02-08 Equality of Opportunity

58. Which of the following statements regarding competition, as a fundamental element of capitalism, is not true?
    A.Competition is responsible for the orderly operation of the market.
    B. The fittest firms tend to survive.
    C. Competition ensures that goods and services are provided at the lowest price.
    D. Competition holds profits to a minimum.
    E. Capitalism guarantees a profit is made.

 

Difficulty: Medium
Learning Objective: 02-05 Describe the competition fundamental and link ethical implications to it.
Topic: 02-11 Competition

59. Which of the following are advantages of competition?
    A.Competition lowers costs.
    B. Competition reduces waste and inefficiency.
    C. Competition widens the choice of goods and services provided to consumers.
    D. Competition holds profits to a minimum.
    E. All of the above are advantages of competition.

 

Difficulty: Medium
Learning Objective: 02-05 Describe the competition fundamental and link ethical implications to it.
Topic: 02-11 Competition

 

60. Driving to university on Monday morning, Mary noticed that all the gasoline retail stations she passed were selling gasoline at exactly the same price, right down to the decimal point. There are very few sellers of gasoline in her city and they set the price at comparable levels. This is an example of:
    A.competition.
    B. monopoly.
    C. oligopoly.
    D. profit.
    E. price-fixing.

 

Difficulty: Hard
Learning Objective: 02-05 Describe the competition fundamental and link ethical implications to it.
Topic: 02-11 Competition

61. Canadian governmental regulation on telecommunications, transportation, and banking industries does all of the following, except:
    A.restrict competition.
    B. restricts foreign ownership.
    C. increases competition.
    D. restricts entry to the industry.
    E. reduced consumer choice.

 

Difficulty: Medium
Learning Objective: 02-05 Describe the competition fundamental and link ethical implications to it.
Topic: 02-11 Competition

62. Francois is determined to start an Internet development company. A family friend had entered the business many years ago and has become quite wealthy. His income, however, levelled off after the first few years because excessive ________ attracted others to the industry, increasing ___________.
    A.competition; profits
    B. profits; competition
    C. work ethic; profits
    D. profits; work ethic
    E. profits; costs

 

Difficulty: Medium
Learning Objective: 02-06 Understand profits and the associated ethical implications.
Topic: 02-14 Profits

 

63. Profits:
    A.are closely associated with competition.
    B. spurs people into action.
    C. act as a signal to other entrants.
    D. can be retained in a business as a source of funds.
    E. all of these choice are true of profits.

 

Difficulty: Easy
Learning Objective: 02-06 Understand profits and the associated ethical implications.
Topic: 02-14 Profits

64. Tammy is a very dedicated employee. She is considered to have a strong work ethic. Which of the following statements regarding Tammy would NOT be correct if her behaviour is consistent with a work ethic?
    A.Tammy sees that work is the purpose of one’s life.
    B. Tammy sees work as socially valuable.
    C. Unemployment, to Tammy, would be a temporary misfortune.
    D. Tammy has a consumption ethic as well.
    E. All of the statements are consistent with the body of moral principles considered as work ethic.

 

Difficulty: Hard
Learning Objective: 02-07 Link the work ethic to ethical implications.
Topic: 02-17 The Work Ethic

65. Which of the following statements accurately reflects one view of the work ethic of the Millennials?
    A.The Net Generation of workers is spoiled and lazy.
    B. The Millennials spend too much time social networking.
    C. They are difficult to manage.
    D. They have a tendency to plagiarize.
    E. All of the statements accurately reflect one view of today’s Millennials’ workforce.

 

Difficulty: Easy
Learning Objective: 02-07 Link the work ethic to ethical implications.
Topic: 02-17 The Work Ethic

 

66. The assumption that consumers have power over producers through the decisions they make in purchasing goods and services is known as:
    A.work ethic.
    B. consumer sovereignty.
    C. consumption ethic.
    D. economic freedom.
    E. equality of opportunity.

 

Difficulty: Medium
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

67. Consumer sovereignty is the assumption that:
    A.the consumer is servant to the producer.
    B. the producer is servant to the consumer.
    C. consumers are guaranteed to experience equality of opportunity in the product market.
    D. the work ethic of individuals is extremely diligent in all instances.
    E. economic freedom exists for consumers in an oligopolistic market.

 

Difficulty: Easy
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

68. A recent trip to the grocery store was disappointing for Robert. He discovered that his favourite brand of canned salmon was no longer being carried. When he asked the store manager, he was told that customers were not buying the product in sufficient quantities to allow them to continue to stock it. This is an example of ______________, which is a fundamental part of capitalism.
    A.consumer sovereignty
    B. competition
    C. equality of opportunity
    D. work ethic
    E. economic freedom

 

Difficulty: Medium
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

 

69. Sometimes consumers face challenges in exercising their sovereignty because:
    A.some product classes have few choices.
    B. they are not capable of understanding the technical complexities of some products.
    C. they lack information about available alternatives.
    D. large corporations influence consumers’ preferences through advertising.
    E. All of the able are reasonable challenges face by individuals in exercising their sovereignty.

 

Difficulty: Easy
Learning Objective: 02-08 Define consumer sovereignty and understand related ethical implications.
Topic: 02-20 Consumer Sovereignty

70. All of the following are examples of government involvement in the Canadian economy, except:
    A.national security.
    B. price determination of consumer electronics.
    C. currency system.
    D. measures.
    E. taxation.

 

Difficulty: Easy
Learning Objective: 02-09 Explain the role of government in a capitalist business system and what the ethical implications are in this system.
Topic: 02-23 The Role of Government

Chapter 04

Stakeholder and Issue Analysis

 

 

True / False Questions

1. Stakeholder management represents how managers perceive stakeholders. This suggests that stakeholders can be controlled.
   FALSE

 

Difficulty: Medium
Learning Objective: 04-01 Explain stakeholder analysis in an organization.
Topic: 04-01 Basic Stakeholder Analysis

2. All corporations should involve themselves in stakeholder management.
   TRUE

 

Difficulty: Easy
Learning Objective: 04-01 Explain stakeholder analysis in an organization.
Topic: 04-01 Basic Stakeholder Analysis

3. The main value of creating a map or diagram of the stakeholders of a company is to gain an understanding for the number of stakeholders and their real and possible influences.
   TRUE

 

Difficulty: Easy
Learning Objective: 04-01 Explain stakeholder analysis in an organization.
Topic: 04-01 Basic Stakeholder Analysis

 

4. Stakeholder management capability involves analysis of the power stakeholders held over the organization’s decisions. This is done in the process level of stakeholder management.
   FALSE

 

Difficulty: Easy
Learning Objective: 04-02 Describe stakeholder management capability.
Topic: 04-02 Freeman’s Stakeholder Management Capability

5. NTM Corporation has assigned Robert to respond to environmental NGOs as a key stakeholder group. Robert considers environmentalism to be an inappropriate concern for business. For this reason, he will be an appropriate choice for this role.
   FALSE

 

Difficulty: Hard
Learning Objective: 04-02 Describe stakeholder management capability.
Topic: 04-02 Freeman’s Stakeholder Management Capability

6. Portfolio analysis can be used to assess stakeholders.
   TRUE

 

Difficulty: Medium
Learning Objective: 04-02 Describe stakeholder management capability.
Topic: 04-02 Freeman’s Stakeholder Management Capability

7. Matrix mapping is a technique of categorizing an organization’s stakeholders by their influence according to two variables.
   TRUE

 

Difficulty: Medium
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

 

8. Bart is hoping to develop effective strategies to help his company deal with hiring practices for employees. He does a matrix map to determine the influence of the union on this process. Although useful, matrix mapping will not help Bart identify appropriate courses of action to counter or influence the demands placed by this stakeholder.
   FALSE

 

Difficulty: Medium
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

9. Nancy identifies that a particular NGO is a problematic stakeholder. This implies that the NGO will oppose the course of action proposed by Nancy’s company and should be considered an important stakeholder.
   FALSE

 

Difficulty: Medium
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

10. Low priority stakeholders are supportive of an organization’s course of action.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

11. A strategy to manage antagonistic stakeholders is to provide educational programs.
    FALSE

 

Difficulty: Easy
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

 

12. When considering the diagnostic typology of organizational stakeholders, the strategy for managing supportive stakeholders is to encourage the cooperative potential and not ignore them or take them for granted.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-04 Discuss the diagnostic typology of organizational stakeholders.
Topic: 04-04 The Diagnostic Typology of Organizational Stakeholders

13. When considering the diagnostic typology of organizational stakeholders, the strategy for managing marginal stakeholders is to monitor them closely while recognizing that their interests are narrow and issue-specific.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-04 Discuss the diagnostic typology of organizational stakeholders.
Topic: 04-04 The Diagnostic Typology of Organizational Stakeholders

14. Ahmed is assessing and managing stakeholder relationships regarding his company’s planned change to their supply chain. He determines that the sales employees within his company are not a particularly powerful threat, but are not likely to cooperate with the planned change. This stakeholder group is considered marginal and should therefore be involved more fully in the decision-making.
    FALSE

 

Difficulty: Hard
Learning Objective: 04-04 Discuss the diagnostic typology of organizational stakeholders.
Topic: 04-04 The Diagnostic Typology of Organizational Stakeholders

15. Stakeholder salience may change by acquiring an attribute.
    TRUE

 

Difficulty: Medium
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

 

16. Legitimacy is a generalized perception that the actions of an entity are appropriate within some socially constructed system of norms.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

17. Stakeholder attributes: power, legitimacy, and urgency, exist in an objective, steady state.
    FALSE

 

Difficulty: Easy
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

18. Latent stakeholders are those with one attribute and low salience, whereas expectant stakeholders possess three attributes and are more salient.
    FALSE

 

Difficulty: Medium
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

19. Nahreem is identifying the salient stakeholders for her company. She determines that a particular NGO is dangerous because it possesses power and urgency but lacks legitimacy.
    TRUE

 

Difficulty: Medium
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

20. Power can be used to influence another to act in ways other than they intended.
    TRUE

 

Difficulty: Medium
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

 

21. If a definitive stakeholder loses an attribute no salience exists.
    FALSE

 

Difficulty: Medium
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

22. Ishmal determines that the company shareholders expect attention from the company, but their demands are not urgent. He also notes that they do have considerable power and a legitimate claim to have input. This stakeholder is a dependent stakeholder and therefore in the definitive stakeholder category.
    FALSE

 

Difficulty: Hard
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

23. Resource dependence applies when an organization only has one supplier to obtain one or more resources.
    TRUE

 

Difficulty: Medium
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

24. The difference between a withholding strategy and a usage strategy is whether the intention to change behaviour exists.
    FALSE

 

Difficulty: Medium
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

 

25. Indirect strategies, such as influence pathway, requires communication and cooperation of high degree between stakeholders, therefore they are difficult to sustain.
    TRUE

 

Difficulty: Medium
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

26. Increasing the organization’s environmental stability and enhancing control over changing circumstances are goals of collaboration.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-07 Identify the use of stakeholder collaboration approaches.
Topic: 04-07 Stakeholder Collaboration

27. Stakeholder management focuses on managing relationships whereas stakeholder collaboration focuses on building relationships.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-07 Identify the use of stakeholder collaboration approaches.
Topic: 04-07 Stakeholder Collaboration

28. Effective and efficient relationships with stakeholders may provide a competitive advantage.
    TRUE

 

Difficulty: Medium
Learning Objective: 04-07 Identify the use of stakeholder collaboration approaches.
Topic: 04-07 Stakeholder Collaboration

 

29. Stakeholder collaboration is also referred to as stakeholder engagement in the academic literature and in corporate reports.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-07 Identify the use of stakeholder collaboration approaches.
Topic: 04-07 Stakeholder Collaboration

30. The last step in the issue management process is monitoring and evaluating.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-08 Learn about two approaches to issue analysis.
Topic: 04-08 Issue Analysis

31. The degree to which managers give priority to competing issues is called issue salience.
    TRUE

 

Difficulty: Easy
Learning Objective: 04-08 Learn about two approaches to issue analysis.
Topic: 04-08 Issue Analysis

32. Ranking issues by importance instead of the stakeholders is not an effective way to stakeholder management.
    FALSE

 

Difficulty: Medium
Learning Objective: 04-08 Learn about two approaches to issue analysis.
Topic: 04-08 Issue Analysis

 

Multiple Choice Questions
 

33. Which of the following is an industry where it is particularly important for corporations to be involved in stakeholder management?
    A.Oil and Gas industry
    B. Pharmaceutical industry
    C. Automotive industry
    D. Child care services industry
    E. All of these industries should be involved in stakeholder management

 

Difficulty: Hard
Learning Objective: 04-01 Explain stakeholder analysis in an organization.
Topic: 04-01 Basic Stakeholder Analysis

34. A corporation can increase its understanding of its stakeholders by answering these questions except:
    A.Who are our stakeholders?
    B. What are their stakes?
    C. What opportunities and challenges are presented to our firm?
    D. What responsibilities do our stakeholders have to our firm?
    E. What strategies should our firm take?

 

Difficulty: Medium
Learning Objective: 04-01 Explain stakeholder analysis in an organization.
Topic: 04-01 Basic Stakeholder Analysis

35. BCS Corporation is developing its level of stakeholder management capability. In the _______ level of the process of managing stakeholder relationships, the firm identifies coalitions that are formed amongst the stakeholder groups.
    A.rational
    B. process
    C. transactional
    D. stakeholder identification
    E. None of the answers.

 

Difficulty: Medium
Learning Objective: 04-02 Describe stakeholder management capability.
Topic: 04-02 Freeman’s Stakeholder Management Capability

 

36. Roberta is responsible for the firm’s relationship with its suppliers. She is careful to ensure that they receive regular emails regarding product development and that they are invited to company sponsored events. Roberta’s role is consistent with which level of Freeman’s stakeholder relationship process?
    A.Process
    B. Rational
    C. Transactional
    D. Stakeholder identification
    E. None of the answers.

 

Difficulty: Medium
Learning Objective: 04-02 Describe stakeholder management capability.
Topic: 04-02 Freeman’s Stakeholder Management Capability

37. The position/importance matrix is a method used to categorize stakeholders. Stakeholders who would oppose the organization’s course of action and are relatively unimportant to the organization would be placed in the ________ category.
    A.low priority stakeholders
    B. antagonistic stakeholders
    C. supporter stakeholders
    D. problematic stakeholders
    E. None of the answers.

 

Difficulty: Easy
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

 

38. Kim is applying the position/importance matrix as a method to categorize stakeholders in his company. The company is considering changing the colour of its product from blue to bright pink. Stakeholders who support the organization’s course of action and are relatively unimportant to the company are considered _________ and a(n) __________ strategy is appropriate.
    A.low priority stakeholders; accommodation
    B. supporter stakeholders; educational
    C. low priority stakeholders; educational
    D. supporter stakeholders; accommodation
    E. None of the answers.

 

Difficulty: Hard
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

39. Telus Corporation announced in February 2007 that it has no plans to change its policy of supporting the download of pornography to cellular phones. Parents are opposed to this policy, and are considered by the company to be very important stakeholders. They are also likely to form coalitions to gain further power. Parents are _________ stakeholders and a(n) ________ strategy is appropriate.
    A.antagonistic; avoidance
    B. problematic; defensive
    C. antagonistic; defensive
    D. problematic; avoidance
    E. None of the answers.

 

Difficulty: Hard
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

 

40. The position/importance matrix is a method used to categorize stakeholders. Stakeholder who would support the organization’s course of action and are important to the organization would be placed in the ________ category.
    A.low priority stakeholders
    B. antagonistic stakeholders
    C. supporter stakeholders
    D. problematic stakeholders
    E. None of the answers.

 

Difficulty: Medium
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

41. A large chain of bookstores called Littera is planning to build a new store in a small town in the prairies. They are known for their large selection and low prices. Before going public, the management at Littera decides to categorize identified stakeholders using a position/importance matrix. There are three small, independent bookstores in town. They aren’t considered to be a competitive concern. They would be categorized as:
    A.low priority stakeholders.
    B. antagonistic stakeholders.
    C. supporter stakeholders.
    D. problematic stakeholders.
    E. None of the answers.

 

Difficulty: Hard
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

 

42. A large chain of bookstores called Littera is planning to build a new store in a small town in the prairies. They are known for their large selection and low prices. Before going public, the management at Littera decides to categorize identified stakeholders using a position/importance matrix. The customers who would purchase from Littera would be categorized as:
    A.Low priority stakeholders.
    B. Antagonistic stakeholders.
    C. Supporter stakeholders.
    D. Problematic stakeholders.
    E. None of the answers.

 

Difficulty: Hard
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

43. Wearebig is a retail chain planning to open a new store southern Manitoba. The location was chosen because the city’s size should provide an excellent customer base for the store. Residents of a small, neighbouring town are excited that the store will be open and plan to shop there as well. The residents of the small town are most probably __________ stakeholders and Wearebig should adopt a strategy to ____________.
    A.supportive; provide information to reinforce this position
    B. low priority; provide information to reinforce this position
    C. supportive; promote their involvement with other supporters
    D. low priority; promote their involvement with supporters
    E. None of the answers

 

Difficulty: Hard
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

44. Low priority stakeholders are those who:
    A.Oppose a course of action and is unimportant to the organization.
    B. Support a course of action and are relatively unimportant to the organization.
    C. Oppose a course of action and are important to an organization.
    D. Support a course of action and are important to the organization.
    E. None of the above describe low priority stakeholders.

 

Difficulty: Easy
Learning Objective: 04-03 Understand stakeholder matrix mapping.
Topic: 04-03 Stakeholder Matrix Mapping

 

45. Tammy is responsible for working with a stakeholder group that is considered by many to be the ideal stakeholder. She is working with __________ stakeholder(s), according to Savage’s diagnostic typology.
    A.Type 1
    B. Type 2
    C. Types 1 and 2
    D. Type 2 and supportive

 

Difficulty: Medium
Learning Objective: 04-04 Discuss the diagnostic typology of organizational stakeholders.
Topic: 04-04 The Diagnostic Typology of Organizational Stakeholders

46. The diagnostic typology states that for a mixed blessing stakeholder, a _________ strategy is recommended.
    A.dangerous
    B. collaborate
    C. monitor
    D. defend
    E. threaten

 

Difficulty: Easy
Learning Objective: 04-04 Discuss the diagnostic typology of organizational stakeholders.
Topic: 04-04 The Diagnostic Typology of Organizational Stakeholders

47. Sandra is responsible for working with a stakeholder group that is considered to be non-supportive. An appropriate strategy based on the diagnostic typology is
    A.collaborate.
    B. defend.
    C. encourage.
    D. threaten.
    E. monitor.

 

Difficulty: Medium
Learning Objective: 04-04 Discuss the diagnostic typology of organizational stakeholders.
Topic: 04-04 The Diagnostic Typology of Organizational Stakeholders

 

48. There are three attributes in the stakeholder typology, power, legitimacy, and urgency. If a stakeholder possesses all three attributes they are called a _____________ stakeholder.
    A.dangerous
    B. definitive
    C. dominant
    D. dependent
    E. discretionary

 

Difficulty: Medium
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

49. An oil company has just announced its intentions for a new drill site. Immediately, a known activists group mobilizes, barricades all access to the new drill site and directs media attention to the environmental concern. This group has a negative public image for getting involved in issues without due diligence in their research. This activist group would be considered a __________ stakeholder.
    A.dangerous
    B. demanding
    C. dependent
    D. discretionary
    E. dominant

 

Difficulty: Hard
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

50. Future generations affected by the effects of an oil company drilling at an environmentally sensitive location are ______ stakeholders and are therefore ______.
    A.dormant; latent
    B. definitive; definitive
    C. discretionary; definitive
    D. discretionary; latent
    E. dormant; definitive

 

Difficulty: Hard
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

 

51. The types of latent stakeholders include all of following, except:
    A.Dormant.
    B. Dangerous.
    C. Discretionary.
    D. Demanding.
    E. All are types of latent stakeholders.

 

Difficulty: Medium
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

52. Which of the following stakeholder types possesses two of the three attributes of power, legitimacy, and urgency?
    A.Dormant
    B. Discretionary
    C. Demanding
    D. Definitive
    E. Dominant

 

Difficulty: Hard
Learning Objective: 04-05 Apply the stakeholder identification and salience typology.
Topic: 04-05 Stakeholder Identification and Salience

53. A chemical manufacturing plant obtains various ingredients from many suppliers. There is one rare ingredient that is only available from a single supplier. This relationship is an example of:
    A.Indirect/usage (firm power).
    B. Direct/usage (high interdependence).
    C. Indirect/withholding (low interdependence).
    D. Direct/withholding (stakeholder power).
    E. None of the answers.

 

Difficulty: Medium
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

 

54. A supplier only makes one product and sells it exclusively to one chemical manufacturing plant. Their relationship is an example of:
    A.Indirect/usage (firm power).
    B. Direct/usage (high interdependence).
    C. Indirect/withholding (low interdependence).
    D. Direct/withholding (stakeholder power).
    E. Direct/usage (firm power).

 

Difficulty: Medium
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

55. When there is interdependence between the corporation and the stakeholder, which strategy exists?
    A.Usage/withholding
    B. Direct/usage
    C. Indirect/withholding
    D. Firm power
    E. Stakeholder power

 

Difficulty: Hard
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

56. NMO Corporation has an exclusive contract with the supplier of a rare metal needed for the production of a specialized engineering process. The supplier, MTLs Inc. decides that it wants to receive more money for the material and refuses to ship. MTLs Inc. is applying a(n) _________ strategy.
    A.withholding
    B. usage
    C. resource dependence
    D. influence pathway
    E. None of the answers

 

Difficulty: Hard
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

 

57. There are very few channels to distribute MNKY Corporation’s product to rural New Brunswick. The company has therefore become dependent upon TRK Shipping to distribute its product. The only alternative shipper makes a deal with TRK Shipping to not bid down the contract price. The alternative shipper is applying a(n) ________ strategy on behalf of TRK Shipping.
    A.withholding
    B. usage
    C. influence pathway
    D. withholding and influence pathway
    E. usage and influence pathway

 

Difficulty: Hard
Learning Objective: 04-06 Explain the application of stakeholder influence strategies.
Topic: 04-06 Stakeholder Influence Strategies

58. Svendsen outlines a framework that includes six steps to foster stakeholder relationships. After an organization has created a foundation, aligned the organizations, and developed a strategy, it must move on to the next step, which is
    A.Initiate contact.
    B. Build trust.
    C. Gain consensus within the whole organization.
    D. Influence pathway.
    E. Evaluate the relationship.

 

Difficulty: Easy
Learning Objective: 04-07 Identify the use of stakeholder collaboration approaches.
Topic: 04-07 Stakeholder Collaboration

59. Stakeholder management includes all of the following, except:
    A.Fragmentation among departments.
    B. Focus on managing relationships.
    C. Long-term goals.
    D. Idiosyncratic implementation.
    E. Buffering the organization.

 

Difficulty: Medium
Learning Objective: 04-07 Identify the use of stakeholder collaboration approaches.
Topic: 04-07 Stakeholder Collaboration

 

60. All of the following are included in the six steps of the issues management process, except:
    A.identification.
    B. analysis.
    C. response formulation.
    D. regulation.
    E. implementation.

 

Difficulty: Medium
Learning Objective: 04-08 Learn about two approaches to issue analysis.
Topic: 04-08 Issue Analysis

61. Which step of the issues management process involves the formulation of issues in many ways, including social forecasting, futures research, environmental scanning, and public issues scanning?
    A.Identification of issues
    B. Analysis of issues
    C. Ranking or prioritizing of issues
    D. Implementing issue response
    E. Monitoring and evaluating issue response

 

Difficulty: Medium
Learning Objective: 04-08 Learn about two approaches to issue analysis.
Topic: 04-08 Issue Analysis

 

Short Answer Questions