Business and Society Ethical, Legal, and Digital Environments 2nd Edition By Cynthia Clark, Kabrina Chang | Test Bank | All Chapters 1-16

Business and Society Ethical, Legal, and Digital Environments 2e By Cynthia Clark, Kabrina Chang (Test Bank All Chapters
1-16, 60 Questions in Each Chapter. MCQs, True False, Essay Questions with Answers)
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Chapter 1 Test Bank
Stakeholder and Shareholder Theories


Multiple Choice Questions
1. A ______ is a legal entitlement or a right to be treated in a certain way.
A. share
B. stakeholder
C. claim
D. shareholder
Correct Answer: C. claim

2. A kind of interest in something of value is broadly called a ______.
A. share
B. stake
C. stakeholder
D. shareholder
Correct Answer: B. stake

3. A ______ is any identifiable group or individual who can affect the achievement of an organization's
objectives or who is affected by the achievement of an organization's objectives.
A. shareholder
B. claimant
C. stake group
D. stakeholder
Correct Answer: D. stakeholder

4. A ______ is a person, group, or organization owning one or more shares of stock in a corporation.
A. shareholder
B. stakeholder
C. claimant
D. stake group
Correct Answer: A. shareholder

5. A(n) ______ is a set of propositions or concepts that seeks to explain or predict something.
A. shareholder
B. theory
C. explanation
D. hypothesis
Correct Answer: B. theory

6. Stakeholder- and shareholder-oriented theories are both ______ theories because they state the way
things should be.
A. associational
B. positive
C. normative



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D. proscriptive
Correct Answer: C. normative

7. ______ theory states that managers should act in the interests of people holding company stock,
minimizing other factors.
A. Shareholder
B. Claim
C. Stakeholder
D. Stake
Correct Answer: A. Shareholder

8. The obligation of mangers to act in the shareholders' best interests is called ______.
A. stakeholder salience
B. fiduciary duty
C. a claim
D. a take
Correct Answer: B. fiduciary duty

9. The rules and processes that ensure a firm's accountability, fairness, and transparency among all
parties are collectively termed ______.
A. power
B. legitimacy
C. fiduciary duty
D. corporate governance
Correct Answer: D. corporate governance

10. The ______ view believes that a firm can better achieve competitive advantage when managers are not
held accountable for other stakeholders' concerns.
A. shareholder
B. stakeholder
C. legitimacy
D. corporate governance
Correct Answer: A. shareholder

11. Stakeholder theory requires managers to endorse the attitude that all stakeholders have a legitimate
stake in the firm because they have ______ value.
A. fiduciary
B. positive
C. normative
D. intrinsic
Correct Answer: D. intrinsic

12. Stakeholder theory is fundamentally ______ because of its guidance about what are right and wrong
behaviors.
A. positive
B. associational
C. normative



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D. descriptive
Correct Answer: C. normative

13. ______ stakeholders engage with the firm through economic exchanges as the company carries out its
primary purpose.
A. Market
B. Nonmarket
C. Primary
D. Secondary
Correct Answer: A. Market

14. ______ stakeholders do not engage in direct economic exchange with the firm but are affected by the
firm or can affect the firm.
A. Primary
B. Secondary
C. Nonmarket
D. Market
Correct Answer: C. Nonmarket

15. What is a key question that managers should ask about stakeholders in analyzing their interests?
A. What are their levels of economic power?
B. What are the groups' issues or concerns?
C. How much money do they provide to the company?
D. Why should we care about their interests?
Correct Answer: B. What are the groups' issues or concerns?

16. The two key areas in which shareholder theories and stakeholder theories complement each other are
in value and ______.
A. power
B. legitimacy
C. accountability
D. salience
Correct Answer: C. accountability

17. Stakeholder ______ is a group's ability to gain recognition through having power, legitimacy, and
urgency.
A. importance
B. power
C. values
D. salience
Correct Answer: D. salience

18. ______ is the ability or potential of a group to influence another and to secure a desired outcome.
A. Stakeholder salience
B. Power
C. Stakeholder influence
D. Contextual salience



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Correct Answer: B. Power

19. ______ represents some form of acceptance of a stakeholder's claim or of the group itself.
A. Power
B. Salience
C. Pragmatism
D. Legitimacy
Correct Answer: D. Legitimacy

20. ______ legitimacy occurs when the audience's self-interest is satisfied.
A. Salience
B. Pragmatic
C. Moral
D. Cognitive
Correct Answer: B. Pragmatic

21. ______ legitimacy is when the concerns over what ought to be are satisfied.
A. Salience
B. Pragmatic
C. Moral
D. Cognitive
Correct Answer: C. Moral

22. ______ legitimacy is based on whether something is taken for granted and well known or accepted.
A. Cognitive
B. Power
C. Moral
D. Ethical
Correct Answer: A. Cognitive

23. Firms that emphasize ______ values are more prone to exercise power over stakeholders to maintain
their interests.
A. other-regarding
B. self-regarding
C. market
D. nonmarket
Correct Answer: B. self-regarding

24. ______ leadership is possible with a deep understanding of the power, legitimacy, interests, and issues
of concern to the stakeholders.
A. Value
B. Stakeholder
C. Ethical
D. Legitimate
Correct Answer: C. Ethical

25. What is the scope of companies in the World Economic Forum?
A. national

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