BUSINESS AND SOCIETY ETHICS
SUSTAINABILITY AND STAKEHOLDER
MANAGEMENT EXAM PREPARATION PACK
2026 KEY CONCEPTS AND REVISION NOTES
◉ Internal Stakeholder.
Answer: Individuals who are employed by the firm, such as
employees and managers
◉ Ownership theory of the firm.
Answer: A theory that holds that the purpose of the firm is to
maximize that long- term return for its shareholders (also known as
the property or finance theory of the firm)
◉ Society.
Answer: Refers to human being and to the social structures they
collectively create; specifically refers to segments of humankind,
such as members of a particular community, nation, or interest
group.
◉ Stakeholder.
,Answer: A person or group that affects, or is affected by, a
corporation's decisions, policies, and operations.
◉ Stakeholder Salience.
Answer: A stakeholder's ability to stand out from the background, to
be as important, or to draw attention to itself or its issue.
Stakeholders are more salient when they possess power, legitimacy,
and urgency
◉ Issue Management.
Answer: The active management of public issues once they come to
the attention of a business organization
◉ Performance- Expectations gap.
Answer: The perceived distance between what a firm wants to do or
is doing and what the stakeholder expects
◉ B Corporation.
Answer: A business that explicitly seeks to blend its social objectives
with its financial goals
Must meet rigorous, independent social and environmental
performance standards.
B Corporation must prove its socially responsible by meeting the B
Lab standards
, ◉ Corporate Citizenship.
Answer: This term refers to the actions corporations take to put
their commitments to corporate social responsibility into practice
worldwide
◉ Corporate Social Responsibility.
Answer: The idea that businesses should act in a way that enhances
society and their stakeholders and should be held accountable for
any of its actions that affect people, their communities, and their
environment.
◉ Enlightened Self Interest.
Answer: The view that holds it is in a company's self-interest in the
long run to provide true value to its stakeholders
◉ Integrated Reporting.
Answer: The combining of legally required financial information
with social and environmental information into a single report
◉ Iron Law of Responsibility.
Answer: The belief that those who do not use their power in ways
that society considers responsible will tend to lose their power in
the long run
SUSTAINABILITY AND STAKEHOLDER
MANAGEMENT EXAM PREPARATION PACK
2026 KEY CONCEPTS AND REVISION NOTES
◉ Internal Stakeholder.
Answer: Individuals who are employed by the firm, such as
employees and managers
◉ Ownership theory of the firm.
Answer: A theory that holds that the purpose of the firm is to
maximize that long- term return for its shareholders (also known as
the property or finance theory of the firm)
◉ Society.
Answer: Refers to human being and to the social structures they
collectively create; specifically refers to segments of humankind,
such as members of a particular community, nation, or interest
group.
◉ Stakeholder.
,Answer: A person or group that affects, or is affected by, a
corporation's decisions, policies, and operations.
◉ Stakeholder Salience.
Answer: A stakeholder's ability to stand out from the background, to
be as important, or to draw attention to itself or its issue.
Stakeholders are more salient when they possess power, legitimacy,
and urgency
◉ Issue Management.
Answer: The active management of public issues once they come to
the attention of a business organization
◉ Performance- Expectations gap.
Answer: The perceived distance between what a firm wants to do or
is doing and what the stakeholder expects
◉ B Corporation.
Answer: A business that explicitly seeks to blend its social objectives
with its financial goals
Must meet rigorous, independent social and environmental
performance standards.
B Corporation must prove its socially responsible by meeting the B
Lab standards
, ◉ Corporate Citizenship.
Answer: This term refers to the actions corporations take to put
their commitments to corporate social responsibility into practice
worldwide
◉ Corporate Social Responsibility.
Answer: The idea that businesses should act in a way that enhances
society and their stakeholders and should be held accountable for
any of its actions that affect people, their communities, and their
environment.
◉ Enlightened Self Interest.
Answer: The view that holds it is in a company's self-interest in the
long run to provide true value to its stakeholders
◉ Integrated Reporting.
Answer: The combining of legally required financial information
with social and environmental information into a single report
◉ Iron Law of Responsibility.
Answer: The belief that those who do not use their power in ways
that society considers responsible will tend to lose their power in
the long run
