BUSINESS AND SOCIETY ETHICS
SUSTAINABILITY AND STAKEHOLDER
MANAGEMENT COMPREHENSIVE STUDY
GUIDE 2026 BUSINESS ETHICS AND SOCIAL
RESPONSIBILITY PRINCIPLES
◉ Business.
Answer: An organization that is engaged in making a product or
providing a service for profit
◉ External Stakeholder.
Answer: Individuals or groups that may have important transactions
with a firm but are not directly employed by the firm, such as
customers or suppliers
◉ Focal Organization.
Answer: The organization from whose perspective a stakeholder
analysis is conducted
◉ General System theory.
Answer: A theory that holds that all organisms are open to, and
interact with, their external environment
,Organisms do not exist in isolation but can only be understood in
relationship to their surroundings.
Businesses are embedded in a broader social environment with
which they constantly interact.
◉ Interactive social system.
Answer: The closely intertwined relationships between business
and society
◉ 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
SUSTAINABILITY AND STAKEHOLDER
MANAGEMENT COMPREHENSIVE STUDY
GUIDE 2026 BUSINESS ETHICS AND SOCIAL
RESPONSIBILITY PRINCIPLES
◉ Business.
Answer: An organization that is engaged in making a product or
providing a service for profit
◉ External Stakeholder.
Answer: Individuals or groups that may have important transactions
with a firm but are not directly employed by the firm, such as
customers or suppliers
◉ Focal Organization.
Answer: The organization from whose perspective a stakeholder
analysis is conducted
◉ General System theory.
Answer: A theory that holds that all organisms are open to, and
interact with, their external environment
,Organisms do not exist in isolation but can only be understood in
relationship to their surroundings.
Businesses are embedded in a broader social environment with
which they constantly interact.
◉ Interactive social system.
Answer: The closely intertwined relationships between business
and society
◉ 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
