TEST BANK Business and Society
Stakeholders, Ethics and Public
Policy Weber All Chapters 1-19
Business - answers any organization that is engaged in making a product or providing a
service for a profit
Society - answers segments of humankind, such as members of a particular community
nation, or interest group.
Relationship between business and society and the ways they are part of an interactive
system - answers Business activities impact other activities in society, and actions by
various social actors and governments continuously affect business.
need to understand their company's key relationships and how the social and economic
system they are part of affects and is affected by their decisions.
interactive social system - answers the closely intertwined relationships between
business and society
What is the Purpose of the modern corporation? Ownership Theory of the firm -
answers purpose is to maximize its long-term market value to make the most money it
can for shareholders.
Owners interests take precedence over the interests of others
What is the Purpose of the modern corporation?
Stakeholder Theory of the firm - answers to create value for society
depends on trust of essential stakeholders
Descriptive: - answers more realistic, directs attention to all stakeholders not just
owners.
Instrumental: - answers more effective as a corporate strategy, helps produce motivated
employees, satisfied customers and supportive communities.
Normative: - answers simply the right thing to do, individuals or groups who make a
contribution or takes a risk has a moral right to some claim on the corporation's rewards.
Stakeholder - answers persons and groups that affect or are affected by organization's
decisions, policies and operations.
have interest or claim on a business enterprise
,customers, employees, stockholders, the media, governments, professionals/trade
associations, social and environmental activists, non-governmental organizations
Market Stakeholders - answers those that engage in economic transactions with the
company as it carries out its purpose of providing society with goods and services
it is a 2 way exchange
External Market: stockholders, customers, suppliers, etc.
Nonmarket Stakeholders - answers people and groups who - although they do not
engage in direct economic exchange with the firm - are nonetheless affected by or can
affect its actions
External NonMarktet: governments, communities, media, etc.
Internal Stakeholders - answers "inside the firm" employees and managers who
contribute their effort and skill on site
External Stakeholders - answers may have transactions with the firm but are not directly
employed by it.
Stakeholder Analysis - answers identify relevant stakeholders and to understand both
their interests and the power they may have to assert these interests
Who are the relevant stakeholders? - answers whoever is identified to be most relevant
to the situation (customers, employees, creditors, stockholders etc.)
What are the interests of each stakeholder? - answers they are the nature of each
group's stake, concerns, what they want out of the relationship with a firm.
(good deals, fluid transaction of dividends and capital, fair compensation, assure
human rights, etc.)
What is the power of each stakeholder? - answers the ability of a group to use
resources to make an event happen or to secure a desired outcome
(voting power, economic power, political power, legal power, and informational power)
Salience - answers stands out, seen as important or draws attention. more likely to do
this with power, legitimacy and urgency
What are diverse ways modern corporations organize to interact with various
stakeholders? - answers Through Boundary-Crossing/Spanning departments
(human relations with health and public safety)
, What are some forces of change that reshape the business and society relationship? -
answers new technology, dynamic natural environment, evolving government
regulations, globalization, emphasis on ethical reasoning and actions.
What are the roles and responsibilities of big corporations in a democratic society? -
answers should act in a way that enhances society and it's inhabitants and be held
accountable for any of its actions that affect people, their communities and their
environment.
social, economic, legal
What is power/corporate power - answers the capability of corporations to influence
government, the economy, and society based on their organizational resources
influence what people want and how they act around the world
(job creation, standards of living, banking, insurance, health care)
Iron law of responsibility - answers in the long run, those who do not use power in ways
that society considers responsible will tend to lose it
Phases of Social responsibility - answers Social Stewardship:
Social responsiveness:
Business Ethics
Global Citizenship
Social Stewardship Oldest - answers acts of charity, managers as public trustee-
stewards balancing social pressures
Social responsiveness Old - answers social impact analysis, strategic priority for social
response, organizational redesign and training for responsiveness, stakeholder
mapping and implementation.
Business Ethics Second Newest - answers Foster an ethical corporate culture establish
an ethical organizational climate, recognize common ethical principles
Global Citizenship Newest - answers Stakeholder partnerships, integrate financial,
social, and environmental performance, identify globalization impacts, sustainability of
company and environment.
How does a company's purpose or mission integrate social objectives with economic
objectives? - answers
What is enlightened self interest? - answers contribute to the well-being of society and
the environment it functions in and by doing so would be profitable.
Stakeholders, Ethics and Public
Policy Weber All Chapters 1-19
Business - answers any organization that is engaged in making a product or providing a
service for a profit
Society - answers segments of humankind, such as members of a particular community
nation, or interest group.
Relationship between business and society and the ways they are part of an interactive
system - answers Business activities impact other activities in society, and actions by
various social actors and governments continuously affect business.
need to understand their company's key relationships and how the social and economic
system they are part of affects and is affected by their decisions.
interactive social system - answers the closely intertwined relationships between
business and society
What is the Purpose of the modern corporation? Ownership Theory of the firm -
answers purpose is to maximize its long-term market value to make the most money it
can for shareholders.
Owners interests take precedence over the interests of others
What is the Purpose of the modern corporation?
Stakeholder Theory of the firm - answers to create value for society
depends on trust of essential stakeholders
Descriptive: - answers more realistic, directs attention to all stakeholders not just
owners.
Instrumental: - answers more effective as a corporate strategy, helps produce motivated
employees, satisfied customers and supportive communities.
Normative: - answers simply the right thing to do, individuals or groups who make a
contribution or takes a risk has a moral right to some claim on the corporation's rewards.
Stakeholder - answers persons and groups that affect or are affected by organization's
decisions, policies and operations.
have interest or claim on a business enterprise
,customers, employees, stockholders, the media, governments, professionals/trade
associations, social and environmental activists, non-governmental organizations
Market Stakeholders - answers those that engage in economic transactions with the
company as it carries out its purpose of providing society with goods and services
it is a 2 way exchange
External Market: stockholders, customers, suppliers, etc.
Nonmarket Stakeholders - answers people and groups who - although they do not
engage in direct economic exchange with the firm - are nonetheless affected by or can
affect its actions
External NonMarktet: governments, communities, media, etc.
Internal Stakeholders - answers "inside the firm" employees and managers who
contribute their effort and skill on site
External Stakeholders - answers may have transactions with the firm but are not directly
employed by it.
Stakeholder Analysis - answers identify relevant stakeholders and to understand both
their interests and the power they may have to assert these interests
Who are the relevant stakeholders? - answers whoever is identified to be most relevant
to the situation (customers, employees, creditors, stockholders etc.)
What are the interests of each stakeholder? - answers they are the nature of each
group's stake, concerns, what they want out of the relationship with a firm.
(good deals, fluid transaction of dividends and capital, fair compensation, assure
human rights, etc.)
What is the power of each stakeholder? - answers the ability of a group to use
resources to make an event happen or to secure a desired outcome
(voting power, economic power, political power, legal power, and informational power)
Salience - answers stands out, seen as important or draws attention. more likely to do
this with power, legitimacy and urgency
What are diverse ways modern corporations organize to interact with various
stakeholders? - answers Through Boundary-Crossing/Spanning departments
(human relations with health and public safety)
, What are some forces of change that reshape the business and society relationship? -
answers new technology, dynamic natural environment, evolving government
regulations, globalization, emphasis on ethical reasoning and actions.
What are the roles and responsibilities of big corporations in a democratic society? -
answers should act in a way that enhances society and it's inhabitants and be held
accountable for any of its actions that affect people, their communities and their
environment.
social, economic, legal
What is power/corporate power - answers the capability of corporations to influence
government, the economy, and society based on their organizational resources
influence what people want and how they act around the world
(job creation, standards of living, banking, insurance, health care)
Iron law of responsibility - answers in the long run, those who do not use power in ways
that society considers responsible will tend to lose it
Phases of Social responsibility - answers Social Stewardship:
Social responsiveness:
Business Ethics
Global Citizenship
Social Stewardship Oldest - answers acts of charity, managers as public trustee-
stewards balancing social pressures
Social responsiveness Old - answers social impact analysis, strategic priority for social
response, organizational redesign and training for responsiveness, stakeholder
mapping and implementation.
Business Ethics Second Newest - answers Foster an ethical corporate culture establish
an ethical organizational climate, recognize common ethical principles
Global Citizenship Newest - answers Stakeholder partnerships, integrate financial,
social, and environmental performance, identify globalization impacts, sustainability of
company and environment.
How does a company's purpose or mission integrate social objectives with economic
objectives? - answers
What is enlightened self interest? - answers contribute to the well-being of society and
the environment it functions in and by doing so would be profitable.
