G202 Exam 3 Practice Test 2026 – 150 Questions & Answers | NGO Activism, Private Politics, Starbucks Fair Trade, Nike Labor Practices, Strategic Sustainability & Pollution Permits | Kelley School of Business, Indiana University

This document contains approximately 150 exam-style questions and verified answers covering the core concepts, case studies, and strategic frameworks assessed in G202 Exam 3 at the Kelley School of Business, Indiana University. The material provides comprehensive coverage of NGO activism, private politics, stakeholder management, Starbucks Fair Trade Coffee, Nike labor controversies, strategic sustainability, tradable pollution permits, Suncor's ICO2N initiative, asymmetric information, private regulation, and corporate social responsibility. Presented in a detailed question-and-answer format, this study guide is designed to help students prepare for examinations while developing a deep understanding of how businesses respond to social, political, environmental, and regulatory pressures. A major portion of the document focuses on NGO activism and private politics, one of the most heavily emphasized themes in G202. Students learn how advocacy organizations such as Greenpeace, Global Exchange, CARE, Conservation International, and TransFair influence business behavior outside traditional government policy channels. Topics include NGO campaign development, stakeholder mobilization, boycott strategies, public-relations pressure, direct engagement with corporate leadership, and issue-based activism. The material examines why NGOs target firms with strong consumer brands, leadership positions, high public visibility, low switching costs, and reputational sensitivity. Detailed analysis of Greenpeace's campaign against Apple demonstrates how activists leverage consumer influence, student engagement, and brand vulnerability to encourage corporate change. The guide provides extensive coverage of private politics and stakeholder influence frameworks. Students examine the differences between traditional public-policy development and private political action. Topics include issue development, politicization, legislative processes, implementation stages, NGO-firm negotiations, boycott threats, reputational incentives, and conflict-resolution mechanisms. The material explains why private politics often produces faster outcomes than government regulation and how firms increasingly negotiate directly with activist groups to address stakeholder concerns. These concepts are central to modern non-market strategy and corporate governance. A substantial section examines the Starbucks Fair Trade Coffee case, one of the most important business ethics and stakeholder-management cases in the course. Students learn how Starbucks balanced profitability, supplier relationships, consumer expectations, NGO demands, and social responsibility initiatives. Topics include Fair Trade certification, fair pricing, direct trade relationships, democratic farmer organizations, environmental protection, access to credit, ethical sourcing, C.A.F.E. practices, supplier risks, consumer risks, brand reputation, and NGO negotiations. The material analyzes Starbucks' compromise strategy with advocacy organizations and evaluates the economic benefits and risks associated with Fair Trade coffee adoption. These concepts closely align with corporate social responsibility and stakeholder-management literature. The document also delivers comprehensive instruction on strategic sustainability and environmental business strategy. Students explore how firms integrate sustainability initiatives into profit-maximizing business models while managing social, political, and regulatory risks. Topics include first-mover advantages, employee recruitment and retention, green investment incentives, corporate reputation management, socially responsible investing, government subsidies, regulatory risk mitigation, and market differentiation. The guide emphasizes how sustainability initiatives can create competitive advantages while helping firms respond to growing stakeholder expectations and environmental concerns. Another major section focuses on environmental economics and tradable pollution permits. Topics include carbon reduction strategies, emissions trading systems, pollution-permit allocation, marginal abatement costs, environmental incentives, permit markets, government regulation, and market-based environmental policy tools. Students learn how tradable permits encourage pollution reduction while allowing firms flexibility in achieving compliance. The material highlights both the benefits and limitations of permit systems, including concerns about politically connected firms receiving favorable permit allocations. These concepts closely align with Environmental Economics and Policy by Tom Tietenberg and Lynne Lewis. The guide provides extensive analysis of the Suncor and ICO2N carbon-capture case, focusing on Carbon Capture and Storage (CCS) technology, environmental innovation, industry collaboration, political risk management, and long-term sustainability strategy. Students examine how firms evaluate the costs and benefits of environmental investments while balancing shareholder interests, government incentives, activist pressures, and technological uncertainty. Topics include first-mover disadvantages, lobbying coalitions, climate policy, alternative-energy competition, carbon credits, opportunity costs, and strategic collaboration among energy firms. The case demonstrates how businesses respond to evolving environmental expectations while attempting to maintain profitability and competitive advantage. A substantial section examines asymmetric information and market failures, focusing on hidden information in consumer and labor markets. Students review examples involving used-car transactions, workplace safety, labor-market inefficiencies, and product-quality concerns. Topics include adverse selection, inefficient consumption, worker under-compensation, hidden risks, information disclosure, and market inefficiencies. The material demonstrates how information asymmetry creates socially inefficient outcomes and why both public and private regulatory systems emerge to address these challenges. The document also explores private regulation and certification systems, including CARFAX, Best Western, Underwriters Laboratories (UL), certification labels, brand reputation systems, and third-party verification programs. Students learn how private regulation develops when consumers perceive government oversight as inadequate and how firms profit by providing reliable information about product quality and safety. The guide compares public and private regulatory systems while emphasizing the role of certification programs in reducing information asymmetry and enhancing consumer trust. Another major portion focuses on the Nike labor-practices controversy, one of the most influential stakeholder-management cases in modern business education. Students analyze criticisms involving low wages, child labor, poor working conditions, outsourcing strategies, labor rights, worker safety, and corporate responsibility. Topics include NGO activism, stakeholder leverage, internal audits, external monitoring systems, Fair Labor Association participation, code-of-conduct reforms, factory oversight, labor standards, and corporate responses to reputational crises. The material examines competing perspectives from Phil Knight and labor activist Jeff Ballinger, helping students understand how firms manage social risks while protecting profitability and brand equity. The content closely aligns with coursework in Managerial Economics, Business Ethics, Corporate Sustainability, Strategic Management, Environmental Economics, Corporate Governance, Political Economy, Public Policy, Business Administration, and International Business. Key references include Principles of Economics by N. Gregory Mankiw, Environmental Economics and Policy by Tom Tietenberg and Lynne Lewis, Managerial Economics and Business Strategy by Michael Baye, and leading literature on stakeholder management, NGO activism, sustainability strategy, and corporate social responsibility. This document is particularly valuable for students enrolled in G202 Economics, Business Economics, Managerial Economics, Corporate Sustainability, Business Ethics, Strategic Management, Public Policy, Political Economy, Environmental Economics, International Business, Management, and Business Administration programs. It is also highly beneficial for MBA students, sustainability professionals, ESG analysts, consulting candidates, policy researchers, and individuals seeking a deeper understanding of stakeholder influence, sustainability strategy, and non-market business environments. Keywords: G202, G202 Exam 3, Kelley School of Business, Indiana University, NGO activism, private politics, Greenpeace, Apple campaign, stakeholder management, boycott strategy, corporate reputation, Global Exchange, CARE, Conservation International, TransFair, Fair Trade coffee, Starbucks case, CAFE practices, ethical sourcing, corporate social responsibility, CSR, strategic sustainability, sustainability strategy, ESG, socially responsible investing, SRI, environmental economics, pollution permits, tradable pollution permits, emissions trading, carbon credits, marginal abatement costs, Suncor, ICO2N, carbon capture and storage, CCS, climate policy, environmental regulation, asymmetric information, adverse selection, market failure, used car market, worker safety, private regulation, public regulation, CARFAX, Best Western, Underwriters Laboratories, UL certification, certification labels, Nike labor practices, Phil Knight, Jeff Ballinger, labor rights, outsourcing strategy, Fair Labor Association, FLA, stakeholder engagement, non market strategy, business ethics, corporate governance