Which argument says that stakeholder management realistically depicts how companies really work?

Subject: Business
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Question 1

Which argument says that stakeholder management realistically depicts how companies really work?

A. Descriptive argument

B. Instrumental argument

C. Normative argument

D. Fiduciary argument

Question 2

A stakeholder analysis:

A. creates equality among all stakeholder interests.

B. allows managers to examine two primary questions.

C. involves understanding the nature of stakeholder interests.

D. All of the above

Question 3

The instrumental argument says stakeholder management is:

A. A more realistic description of how companies really work.

B. More effective as a corporate strategy.

C. Simply the right thing to do.

D. Determined by the amount of stock owned in the firm.

Question 4

Interactions between business and society occur:

A. Within a finite natural ecosystem.

B. Only during an environmental crisis.

C. When business employees and the community are of similar cultural backgrounds.

D. When legislation is passed requiring interaction.

Question 5

Customers can exercise economic stakeholder power by:

A. Voting on a proposed merger for the company and a competitor.

B. Boycotting products if they believe the goods are too expensive.

C. Attending the company’s annual meeting.

D. Applying for a job with the company.

Question 6

Which of the following is not considered to be a nonmarket stakeholder?

A. Government agencies.

B. Creditors.

C. Activist groups.

D. Non-governmental organizations.

Question 7

The phenomenon of a person or group holding multiple stakeholder duties is referred to as:

A. Role sets.

B. Primary Stakeholder[s].

C. Ownership Theory.

D. None of the above.

Question 8

When something stands out from a background, is seen as important, or draws attention it is:

A. Urgent.

B. Salient.

C. Powerful.

D. Legitimate.

Question 9

The five types of stakeholders’ power recognized by most experts are:

A. Voting, economic, political, legal, and informational power.

B. Social, legal, environmental, economic, and political power.

C. Social, regulatory, voting, governance, and media power.

D. Economic, media, legal, stockholder, and political power.

Question 10

A number of European countries require public companies to include employee members on their boards of directors, so:

A. The employees are available to answer questions.

B. Management does not have to attend the meetings.

C. That their interests will be explicitly represented.

D. They have more power than any other stakeholder.

Question 11

A firm subscribing to the ownership theory of the firm would mainly be concerned with providing value for its:

A. Shareholders.

B. Customers.

C. Board of Directors.

D. Community.

Question 12

When a community group sues a company for health effects caused by the unsafe disposal of toxic chemicals, this is an exercise of a stakeholder’s:

A. Legal power.

B. Voting power.

C. Economic power.

D. Political power.

Question 13

Which one of the following is considered to be a nonmarket stakeholder of business?

A. Customers.

B. Media.

C. Creditors.

D. Stockholders.

Question 14

All of the following are external stakeholders of the firm except:

A. Managers.

B. Customers.

C. Stockholders.

D. Suppliers.

Question 15

Departments, or offices, within an organization that reach across the dividing line that separates the company from groups and people in society are:

A. Inter-departmental divisions.

B. Geographical location areas.

C. Boundary-spanning departments.

D. Organizational maps.

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“The 21st Century is one of “Managing for Stakeholders.” The task of executives is to create as much value as possible for stakeholders without resorting to tradeoffs. Great companies endure because they manage to get stakeholder interests aligned in the same direction.”                                                                                     — R. Edward Freeman

About the Stakeholder Theory

Stakeholder Theory is a view of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization. The theory argues that a firm should create value for all stakeholders, not just shareholders.

In 1984, R. Edward Freeman originally detailed the Stakeholder Theory of organizational management and business ethics that addresses morals and values in managing an organization. His award-winning book Strategic Management: A Stakeholder Approach identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups.

The theory has become a key consideration in the study of business ethics and has served as a platform for further study and development in the research and published work of many scholars, including those featured on this website.

Since the 1980s, there has been a substantial rise in the theory’s prominence, with scholars around the world continuing to question the sustainability of focusing on shareholders’ wealth as the most fundamental objective of business.

We aim to be the hub of leading stakeholder research and thinking by providing resources to new scholars, students, and business leaders.

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