Chapter 3—The Stakeholder Approach to Business, Society, and Ethics York University ADMS 3660

Chapter 3—The Stakeholder Approach to Business, Society, and Ethics

TRUE/FALSE

1. The primary factor behind the transition from a relatively simple business model to the highly complex
state we now have is public recognition that the business organization is no longer the sole property or
interest of its owners.

ANS: T PTS: 1 REF: 81-83
NAT: AACSB Analytic | Environmental Influence

2. The corporation is currently viewed as having a specialized purpose of providing a profit through the
provision of goods and services.

ANS: F PTS: 1 REF: 82
NAT: AACSB Analytic | Environmental Influence

3. Some authors now argue that stakeholder inclusion is the key to corporate success.

ANS: T PTS: 1 REF: 82
NAT: AACSB Analytic | Environmental Influence

4. The stakeholder view of the firm is now universally accepted.

ANS: F PTS: 1 REF: 82
NAT: AACSB Analytic | Environmental Influence

5. A major distinction between the managerial view of the firm and the stakeholder view is the
recognition that groups who think they have a stake in the firm are properly included as stakeholders,
whether managers of the firm agree with them or not.

ANS: T PTS: 1 REF: 85
NAT: AACSB Analytic | Environmental Influence

6. The descriptive value of the stakeholder model is based in its ability to identify and describe particular
stakeholders for the firm.

ANS: F PTS: 1 REF: 92
NAT: AACSB Analytic | Environmental Influence

7. The assumption underlying the instrumental value of the stakeholder model is that effective
stakeholder management should lead to achievement of traditional business goals such as profits and
growth.

ANS: T PTS: 1 REF: 92
NAT: AACSB Analytic | Environmental Influence

8. The stakeholder model has normative value because it emphasizes how stakeholders should be treated.

ANS: T PTS: 1 REF: 92-93
NAT: AACSB Analytic | Environmental Influence

, 9. One of the reasons that the stakeholder model is becoming more popular is because the stakeholder
environment is finally calming down after several decades of turbulence.

ANS: F PTS: 1 REF: 93
NAT: AACSB Analytic | Environmental Influence

10. The use of generic groups to answer the question "Who are our stakeholders?" is generally sufficient
for businesses.

ANS: F PTS: 1 REF: 95
NAT: AACSB Analytic | Environmental Influence

11. Once stakeholders have been identified, the firm can safely assume that they will remain the same for
several years.

ANS: F PTS: 1 REF: 95
NAT: AACSB Analytic | Environmental Influence

12. Before managers in the firm can identify what stakes are held, they must first identify who the
stakeholders are.

ANS: T PTS: 1 REF: 95-97
NAT: AACSB Analytic | Environmental Influence

13. To get a corporation to respond to its demands a stakeholder must hold all three attributes of power,
legitimacy, and urgency.

ANS: F PTS: 1 REF: 88-91
NAT: AACSB Analytic | Environmental Influence

14. Because stakeholder challenges usually contain a risk of damage to the firm, they are given more
attention than stakeholder opportunities in the textbook.

ANS: T PTS: 1 REF: 99-101
NAT: AACSB Analytic | Environmental Influence

15. In the typology of organizational stakeholders shown in Figure 3 - 8, a stakeholder that holds both high
potential for cooperation with and threat to the firm is seen as a mixed blessing.

ANS: T PTS: 1 REF: 103
NAT: AACSB Analytic | Environmental Influence

16. The primary strategy for a manager relative to a marginal stakeholder is to monitor that group.

ANS: T PTS: 1 REF: 103
NAT: AACSB Analytic | Environmental Influence

17. A major criticism of the stakeholder management approach is that it is extremely complex and time
consuming.

ANS: T PTS: 1 REF: 107
NAT: AACSB Analytic | Environmental Influence