mgt 313 exam 1 Question and answer
verified to pass 2026
business - correct answer ✔organizations engaged in making a product or service for profit
society - correct answer ✔human beings and the social structures they create
business and society - correct answer ✔form an interactive social system
general social systems theory - correct answer ✔organisms don't 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
ownership theory of the firm - correct answer ✔Sees the firm as property of owners (shareholders).
Owners' interests take precedence over interests of others.
The purpose of the firm is to maximize its long-term market value and money for its shareholders.
Stakeholder Theory of the Firm - correct answer ✔argues that corporations serve a broad public
purpose: to create value for society... profit is necessary to survive
supporters of stakeholder theory hold 3 arguments for their position - correct answer ✔1. descriptive
2.normative
3. instrumental
, Descriptive Argument - correct answer ✔its a more realistic description of how companies actually
work
normative argument - correct answer ✔its the right thing to do (stakeholder theory)
instrumental argument - correct answer ✔argues that stakeholder theory is more effective for
corporate strategy
Stakeholders - correct answer ✔any persons or groups who will be affected by an organizations
decisions, policies, and operations
stake - correct answer ✔an interest in or a claim on a business enterprise
Market Stakeholders - correct answer ✔those that engage in economic transactions with the company
as it carries out its purpose of providing society with goods and services
ex: shareholders, suppliers, employees
non-market stakeholders - correct answer ✔people and groups who do not engage in direct economic
exchange with the firm but are affected by or can affect its actions
ex: community, gov, business support groups
Internal Stakeholders - correct answer ✔people employed by/ inside the firm that contribute their
efforts at business worksite
ex: employees, managers
External Stakeholders - correct answer ✔people who may have important transactions with the firm
but aren't directly related
ex: suppliers, society, gov, creditors, shareholders, customers
verified to pass 2026
business - correct answer ✔organizations engaged in making a product or service for profit
society - correct answer ✔human beings and the social structures they create
business and society - correct answer ✔form an interactive social system
general social systems theory - correct answer ✔organisms don't 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
ownership theory of the firm - correct answer ✔Sees the firm as property of owners (shareholders).
Owners' interests take precedence over interests of others.
The purpose of the firm is to maximize its long-term market value and money for its shareholders.
Stakeholder Theory of the Firm - correct answer ✔argues that corporations serve a broad public
purpose: to create value for society... profit is necessary to survive
supporters of stakeholder theory hold 3 arguments for their position - correct answer ✔1. descriptive
2.normative
3. instrumental
, Descriptive Argument - correct answer ✔its a more realistic description of how companies actually
work
normative argument - correct answer ✔its the right thing to do (stakeholder theory)
instrumental argument - correct answer ✔argues that stakeholder theory is more effective for
corporate strategy
Stakeholders - correct answer ✔any persons or groups who will be affected by an organizations
decisions, policies, and operations
stake - correct answer ✔an interest in or a claim on a business enterprise
Market Stakeholders - correct answer ✔those that engage in economic transactions with the company
as it carries out its purpose of providing society with goods and services
ex: shareholders, suppliers, employees
non-market stakeholders - correct answer ✔people and groups who do not engage in direct economic
exchange with the firm but are affected by or can affect its actions
ex: community, gov, business support groups
Internal Stakeholders - correct answer ✔people employed by/ inside the firm that contribute their
efforts at business worksite
ex: employees, managers
External Stakeholders - correct answer ✔people who may have important transactions with the firm
but aren't directly related
ex: suppliers, society, gov, creditors, shareholders, customers
