Test Bank Complete_
Business and Society: Stakeholders, Ethics Public Policy 17th Edition, (2022)
By Anne T. Lawrence (Author), James Weber (Author)
All Chapters 1-19| Complete Solutions
,PART ONE: BUSINESS IN SOCIETY? __________________________________________________ 3
Chapter 1: The Corporation And Its Stakeholders? __________________________________________ 3
Chapter 2: Managing Public Issues And Stakeholder Relationships? ___________________________ 19
Chapter 3: Corporate Social Responsibility And Global Citizenship? ___________________________ 29
Chapter 4: Business In A Globalized World? ______________________________________________ 41
PART TWO: BUSINESS AND ETHICS? _______________________________________________ 52
Chapter 5: Ethics And Ethical Reasoning? ________________________________________________ 52
Chapter 6: Organizational Ethics? ______________________________________________________ 64
PART THREE: BUSINESS AND PUBLIC POLICY? ________________________________________ 76
Chapter 7: Business–Government Relations? _____________________________________________ 76
Chapter 8: Influencing The Political Environment? _________________________________________ 88
PART FOUR: BUSINESS AND THE NATURAL ENVIRONMENT?___________________________ 100
Chapter 9: Sustainable Development And Global Business? ________________________________ 100
Chapter 10: Managing For Sustainability? _______________________________________________ 112
PART FIVE: BUSINESS AND TECHNOLOGY? _________________________________________ 123
Chapter 11: The Role Of Technology? __________________________________________________ 123
Chapter 12: Regulating And Managing Technology? _______________________________________________ 134
PART SIX: BUSINESS AND ITS STAKEHOLDERS? ______________________________________ 146
Chapter 13: Shareholder Rights And Corporate Governance? _______________________________ 146
Chapter 14: Consumer Protection? ____________________________________________________ 158
Chapter 15: Employees And The Corporation? ___________________________________________ 170
Chapter 16: Managing A Diverse Workforce? ____________________________________________ 182
Chapter 17: Business And Its Suppliers? ________________________________________________ 194
Chapter 18: The Community And The Corporation? _______________________________________ 206
Chapter 19: Managing The Public And The Corporate Reputation? ___________________________ 218
, Chapter 1-19 {Also with Answers At The End Of Each Chapter)
PART ONE: BUSINESS IN SOCIETY?
Chapter 1: The Corporation And Its Stakeholders?
Student Name: __________
True/False - Write 'T' If The Statement Is True And 'F' If The Statement Is False.
1. A Business Is Any Organization That Is Engaged In Making A Product Or Providing
A Service For A Profit.
o ⊚ True
o ⊚ False
ANS: True
A business is fundamentally an organization involved in activities that provide
goods or services with the objective of generating profit.
2. The Term Stakeholder Refers Exclusively To The Founders Of A Business
Organization.
o ⊚ True
o ⊚ False
ANS: False
The term stakeholder refers to all individuals or groups that are affected by or can
affect the activities of a business. This includes employees, customers, suppliers,
investors, communities, and more, not just the founders.
3. Businesses And Society Are Independent Of Each Other.
o ⊚ True
o ⊚ False
ANS: False
Businesses and society are interconnected. Businesses operate within society and are
influenced by social, economic, and environmental factors, while they also impact
society through their activities.
4. The Stakeholder Theory Of The Firm Argues That A Firm’s Sole Purpose Is To
Create Long-Term Value For Its Shareholders.
o ⊚ True
o ⊚ False
ANS: False
The stakeholder theory suggests that businesses should consider the interests of all
stakeholders (not just shareholders), including employees, customers, suppliers, and
the broader community, in creating long-term value.
,5. The Instrumental Argument For The Stakeholder Theory Of The Firm Says That
Companies Perform Better If They Consider The Rights And Concerns Of Multiple
Groups In Society.
o ⊚ True
o ⊚ False
ANS: True
The instrumental argument for stakeholder theory posits that companies that
consider and balance the needs of multiple stakeholders tend to perform better in the
long term, as this approach can lead to improved relationships, trust, and long-term
success.
6. The Normative Argument For The Stakeholder Theory Of The Firm Says That The
Stakeholder View Is Simply A More Realistic Description Of How Companies Really
Work.
o ⊚ True
o ⊚ False
ANS: False
The normative argument for stakeholder theory asserts that businesses have an
ethical obligation to consider the interests of all stakeholders, not just shareholders.
It is not just about how companies work, but about what they ought to do from a
moral perspective.
7. Nonmarket Stakeholders Are Those That Engage In Economic Transactions With The
Company As It Carries Out Its Primary Purpose Of Providing Society With Goods
And Services.
o ⊚ True
o ⊚ False
ANS: False
Nonmarket stakeholders do not engage in direct economic transactions with the
business but may influence or be affected by the company's activities, such as
government agencies, NGOs, and local communities.
8. Market Stakeholders Include Nongovernmental Organizations And Business Support
Groups.
o ⊚ True
o ⊚ False
ANS: False
Feedback: Market stakeholders are those who engage in economic transactions with
the company, such as customers, suppliers, and investors. NGOs and business
support groups are typically considered nonmarket stakeholders because they do not
directly participate in economic transactions with the business.
9. Government Can Be Considered Both A Market And A Nonmarket Stakeholder.
, o ⊚ True
o ⊚ False
ANS: True
Government can be both a market stakeholder (as a customer or supplier of services)
and a nonmarket stakeholder (influencing the business environment through
regulation and policies).
10. The Interests Of Different Stakeholders Often Coincide.
• ⊚ True
• ⊚ False
ANS: True
While stakeholder interests may sometimes conflict, they often align. For example,
employees may benefit from a company’s profitability and growth, while customers benefit
from high-quality products or services, leading to shared interests.
11. The First Step Of Stakeholder Analysis Is To Identify Relevant Stakeholders.
• ⊚ True
• ⊚ False
ANS: True
Identifying relevant stakeholders is the first step in stakeholder analysis. This process helps
businesses understand who their stakeholders are and what their interests might be.
12. Some Scholars Have Suggested That Managers Pay The Most Attention To
Stakeholders Possessing The Least Salience.
• ⊚ True
• ⊚ False
ANS: False
Stakeholders with the highest salience—those with power, legitimacy, and urgency—
typically receive more attention. It would be counterproductive for managers to focus on
stakeholders with the least salience.
13. The Organization Of A Corporation’s Boundary-Spanning Functions Is Complex.
• ⊚ True
• ⊚ False
ANS: True
Boundary-spanning functions in corporations, which involve interaction with external
stakeholders (e.g., regulators, customers, suppliers), are complex because they require
managing multiple relationships and adapting to changing external factors.
, 14. Businesses Are Increasingly Trying To Meet Their Commitments To Multiple
Stakeholders.
• ⊚ True
• ⊚ False
ANS: True
Modern businesses recognize the importance of balancing the needs of various
stakeholders—employees, customers, investors, and society—and strive to create value for
all of them rather than focusing solely on shareholder profits.
15. The External Environment Of Business Is Static.
• ⊚ True
• ⊚ False
ANS: False
The external environment of business is dynamic and constantly changing, influenced by
factors like economic trends, technological advancements, regulatory changes, and social
shifts. Companies must adapt to remain competitive.
Multiple Choice - Choose The One Alternative That Best Completes
The Statement Or Answers The Question.
16. The Relationship Between Business And Society Is Most Accurately Described By
Which Statement?
• A) Business Is An Unbounded Entity Within The Larger Bounded Entity Of Society.
• B) Society Is A Distinct Bounded Entity Within The Larger Bounded Entity Of Business.
• C) Business Is A Distinct Bounded Entity Separate From The Bounded Entity Of Society.
• D) Business Is A Distinct Bounded Entity Within The Larger Bounded Entity Of Society.
ANS: D
The relationship between business and society is interdependent, with business being a
distinct part of the broader society. Businesses exist within the context of societal norms,
values, and expectations, and thus, are part of the larger societal framework.
17. According to General Systems Theory, Boundary Exchanges Are Exemplified By
Which Of The Following?
, • A) An Industrial Company Installs New Equipment In Its Plant To Comply With
Environmental Regulations.
• B) A Software Company Develops An Application For A Client.
• C) A Purchasing Department Employee Negotiates A Price On Parts With A Supplier.
• D) All Of These Choices Are Correct.
ANS: D
General Systems Theory posits that systems interact with their environment through
boundary exchanges. In all the given examples, businesses interact with external systems
(regulators, clients, suppliers) through boundary-spanning activities such as compliance,
negotiation, or service provision.
18. The Inseparable Relationship Between Business And Society Results In Which Of The
Following?
• A) All Business Decisions Have A Social Impact.
• B) The Vitality Of Business Depends On Society's Actions And Attitudes.
• C) The Survival Of Business Is Independent Of Society.
• D) Both “All Business Decisions Have A Social Impact” And “The Vitality Of Business
Depends On Society’s Actions And Attitudes” Are Correct.
ANS: D
Both statements A and B are true. Business decisions inevitably affect society, and business
success is often influenced by societal expectations, values, and conditions. The relationship
is mutually reinforcing.
19. Which Of The Following Statements Is Not True About The Interactive Social
System?
• A) Business And Society Need, As Well As Influence, Each Other.
• B) The Boundary Between Business And Society Is Clear And Distinct.
• C) Business Is A Part Of Society, And Society Penetrates Far And Often Into Business.
• D) Business And Society Are Both Separate And Connected.
ANS: B
The boundary between business and society is not always clear or distinct. Business
activities influence society, and society’s values and needs influence business decisions,
making the boundary fluid and interconnected.
20. A Firm Subscribing To The Shareholder Theory Of The Firm Would Mainly Be
Concerned With Providing Long-Term Value For Its
• A) Investors.
• B) Customers.
• C) Board Of Directors.
• D) Community.
ANS: A
The shareholder theory emphasizes maximizing value for the company's shareholders,
