Business Ethics, Stakeholders, and Global Commerce: Key Concepts and
Theories
Study online at https://quizlet.com/_ixui2h
1. What does a business do?: Produces goods/services, creates value, earns profit, provides jobs,
contributes to society.
2. Why are business and society inseparable?: Businesses depend on society for resources and
customers; society depends on businesses for jobs, goods, and taxes.
3. What is shareholder theory?: The firm's main purpose is to maximize shareholder wealth.
4. What is stakeholder theory?: The firm should create value for all stakeholders, not just shareholders.
5. What is fiduciary duty?: Managers' legal obligation to act in shareholders' best interests (loyalty, care,
good faith).
6. What are market stakeholders?: Stakeholders with direct economic relationships (customers,
employees, suppliers, shareholders).
7. What are nonmarket stakeholders?: Groups without direct economic exchange (government,
media, activists, communities).
8. What is stakeholder analysis?: Identifying stakeholders, assessing interests/power, and developing
response strategies.
9. What are the 5 types of stakeholder power?: Economic, Voting, Political, Legal, Informational.
10. What is a public issue?: An issue affecting both a company and society, often involving ethics or
regulation.
11. What happens if a company ignores stakeholder expectations?: Loss of trust,
damaged reputation, legal trouble, financial loss.
12. What is customer environmental intelligence?: Gathering information about customers,
competitors, trends, and regulations.
13. What is stakeholder salience?: The priority given to stakeholders based on power, legitimacy, and
urgency.
14. What is materiality?: Issues that significantly impact company performance or stakeholder decisions.
15. Why is issue management important?: Prevents crises, protects reputation, reduces risk.
16. What is the Iron Law of Responsibility?: Businesses that misuse power will lose it.
17. What is Corporate Social Responsibility (CSR)?: A company's obligation to benefit society
beyond profit-making.
18. What is corporate citizenship?: A business acting as a responsible member of society.
19. What are drivers of CSR?: Consumer demand, regulation, investor pressure, globalization, employee
expectations.
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Theories
Study online at https://quizlet.com/_ixui2h
1. What does a business do?: Produces goods/services, creates value, earns profit, provides jobs,
contributes to society.
2. Why are business and society inseparable?: Businesses depend on society for resources and
customers; society depends on businesses for jobs, goods, and taxes.
3. What is shareholder theory?: The firm's main purpose is to maximize shareholder wealth.
4. What is stakeholder theory?: The firm should create value for all stakeholders, not just shareholders.
5. What is fiduciary duty?: Managers' legal obligation to act in shareholders' best interests (loyalty, care,
good faith).
6. What are market stakeholders?: Stakeholders with direct economic relationships (customers,
employees, suppliers, shareholders).
7. What are nonmarket stakeholders?: Groups without direct economic exchange (government,
media, activists, communities).
8. What is stakeholder analysis?: Identifying stakeholders, assessing interests/power, and developing
response strategies.
9. What are the 5 types of stakeholder power?: Economic, Voting, Political, Legal, Informational.
10. What is a public issue?: An issue affecting both a company and society, often involving ethics or
regulation.
11. What happens if a company ignores stakeholder expectations?: Loss of trust,
damaged reputation, legal trouble, financial loss.
12. What is customer environmental intelligence?: Gathering information about customers,
competitors, trends, and regulations.
13. What is stakeholder salience?: The priority given to stakeholders based on power, legitimacy, and
urgency.
14. What is materiality?: Issues that significantly impact company performance or stakeholder decisions.
15. Why is issue management important?: Prevents crises, protects reputation, reduces risk.
16. What is the Iron Law of Responsibility?: Businesses that misuse power will lose it.
17. What is Corporate Social Responsibility (CSR)?: A company's obligation to benefit society
beyond profit-making.
18. What is corporate citizenship?: A business acting as a responsible member of society.
19. What are drivers of CSR?: Consumer demand, regulation, investor pressure, globalization, employee
expectations.
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