1|P a g e
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, Chapter 1- br
19 Answers are at the end of Each chapter Chapter 1
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TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
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1) A business is any organization that is engaged in making a product or providing a service for a profit.
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⊚ true
br
⊚ false
br
2) The term stakeholder refers exclusively to the founders of a business organization.
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⊚ true
br
⊚ false
br
3) Businesses and society are independent of each other.
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⊚ true
br
⊚ false
br
4) The stakeholder theory of the firm argues that a firm‘s sole purpose is to create long-
br br br br br br br br br br br br br br br
term value for its shareholders.
br br br br
⊚ true
br
⊚ false
br
5) The instrumental argument for the stakeholder theory of the firm says that companies perform better if they
br br br br br br br br br br br br br br br br br
consider the rights and concerns of multiple groups in society.
br br br br br br br br br
⊚ true
br
⊚ false
br
6) The normative argument for the stakeholder theory of the firm says that the stakeholder view is simply a more
br br br br br br br br br br br br br br br br br br br
realistic description of how companies really work.
br br br br br br
⊚ true
br
⊚ false
br
2|P a g e
br br br br br
,7) Nonmarket stakeholders are those that engage in economic transactions with the company as it carries out its
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primary purpose of providing society with goods and services.
br br br br br br br br
⊚ true
br
⊚ false
br
8) Market stakeholders include nongovernmental organizations and business support groups.
br br br br br br br br
⊚ true
br
⊚ false
br
9) Government can be considered both a market and a nonmarket stakeholder.
br br br br br br br br br br
⊚ true
br
⊚ false
br
10) The interests of different stakeholders often coincide.
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⊚ true
br
⊚ false
br
11) The first step of stakeholder analysis is to identify relevant stakeholders.
br br br br br br br br br br
⊚ true
br
⊚ false
br
12) Some scholars have suggested that managers pay the most attention to stakeholders possessing the least salience.
br br br br br br br br br br br br br br br
⊚ true
br
⊚ false
br
13) The organization of a corporation‘s boundary-spanning functions is complex.
br br br br br br br br
⊚ true
br
⊚ false
br
3|P a g e
br br br br br
, 14) Businesses are increasingly trying to meet their commitments to multiple stakeholders.
br br br br br br br br br br
⊚ true
br
⊚ false
br
15) The external environment of business is static.
br br br br br br
⊚ true
br
⊚ false
br
MULTIPLE CHOICE - br br
Choose the one alternative that best completes the statemen
br br br br br br br br br
t or answers the question.
br br br br
16) The relationship between business and society is most accurately described by which statement?
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A) Business is an unbounded entity within the larger bounded entity of society.
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B) Society is a distinct bounded entity within the larger bounded entity of business.
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C) Business is a distinct bounded entity separate from the bounded entity of society.
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D) Business is a distinct bounded entity within the larger bounded entity of society.
br br br br br br br br br br br br
17) According to general systems theory, boundary exchanges are exemplified by which of the following?
br br br br br br br br br br br br br
A) An industrial company installs new equipment in its plant to comply with environmental regulations.
br br br br br br br br br br br br br
B) A software company develops an application for a client.
br br br br br br br br
C) A purchasing department employee negotiates a price on parts with a supplier.
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D) All of these choices are correct.
br br br br br
18) The inseparable relationship between business and society results in which of the following?
br br br br br br br br br br br br
A) All business decisions have a social impact.
br br br br br br
B) The vitality of business depends on society's actions and attitudes.
br br br br br br br br br
C) The survival of business is independent of society.
br br br br br br br
D) Both ―All business decisions have a social impact‖ and ―The vitality of business depends on society‘s actions and at
br br br br br br br br br br br br br br br br br br
titudes‖ are correct.
br br
4|P a g e
br br br br br
br br br br br
, Chapter 1- br
19 Answers are at the end of Each chapter Chapter 1
br br br br br br br br br br
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
br br br br br br br br br br br br br br br
1) A business is any organization that is engaged in making a product or providing a service for a profit.
br br br br br br br br br br br br br br br br br br
⊚ true
br
⊚ false
br
2) The term stakeholder refers exclusively to the founders of a business organization.
br br br br br br br br br br br
⊚ true
br
⊚ false
br
3) Businesses and society are independent of each other.
br br br br br br br
⊚ true
br
⊚ false
br
4) The stakeholder theory of the firm argues that a firm‘s sole purpose is to create long-
br br br br br br br br br br br br br br br
term value for its shareholders.
br br br br
⊚ true
br
⊚ false
br
5) The instrumental argument for the stakeholder theory of the firm says that companies perform better if they
br br br br br br br br br br br br br br br br br
consider the rights and concerns of multiple groups in society.
br br br br br br br br br
⊚ true
br
⊚ false
br
6) The normative argument for the stakeholder theory of the firm says that the stakeholder view is simply a more
br br br br br br br br br br br br br br br br br br br
realistic description of how companies really work.
br br br br br br
⊚ true
br
⊚ false
br
2|P a g e
br br br br br
,7) Nonmarket stakeholders are those that engage in economic transactions with the company as it carries out its
br br br br br br br br br br br br br br br br br
primary purpose of providing society with goods and services.
br br br br br br br br
⊚ true
br
⊚ false
br
8) Market stakeholders include nongovernmental organizations and business support groups.
br br br br br br br br
⊚ true
br
⊚ false
br
9) Government can be considered both a market and a nonmarket stakeholder.
br br br br br br br br br br
⊚ true
br
⊚ false
br
10) The interests of different stakeholders often coincide.
br br br br br br
⊚ true
br
⊚ false
br
11) The first step of stakeholder analysis is to identify relevant stakeholders.
br br br br br br br br br br
⊚ true
br
⊚ false
br
12) Some scholars have suggested that managers pay the most attention to stakeholders possessing the least salience.
br br br br br br br br br br br br br br br
⊚ true
br
⊚ false
br
13) The organization of a corporation‘s boundary-spanning functions is complex.
br br br br br br br br
⊚ true
br
⊚ false
br
3|P a g e
br br br br br
, 14) Businesses are increasingly trying to meet their commitments to multiple stakeholders.
br br br br br br br br br br
⊚ true
br
⊚ false
br
15) The external environment of business is static.
br br br br br br
⊚ true
br
⊚ false
br
MULTIPLE CHOICE - br br
Choose the one alternative that best completes the statemen
br br br br br br br br br
t or answers the question.
br br br br
16) The relationship between business and society is most accurately described by which statement?
br br br br br br br br br br br br
A) Business is an unbounded entity within the larger bounded entity of society.
br br br br br br br br br br br
B) Society is a distinct bounded entity within the larger bounded entity of business.
br br br br br br br br br br br br
C) Business is a distinct bounded entity separate from the bounded entity of society.
br br br br br br br br br br br br
D) Business is a distinct bounded entity within the larger bounded entity of society.
br br br br br br br br br br br br
17) According to general systems theory, boundary exchanges are exemplified by which of the following?
br br br br br br br br br br br br br
A) An industrial company installs new equipment in its plant to comply with environmental regulations.
br br br br br br br br br br br br br
B) A software company develops an application for a client.
br br br br br br br br
C) A purchasing department employee negotiates a price on parts with a supplier.
br br br br br br br br br br br
D) All of these choices are correct.
br br br br br
18) The inseparable relationship between business and society results in which of the following?
br br br br br br br br br br br br
A) All business decisions have a social impact.
br br br br br br
B) The vitality of business depends on society's actions and attitudes.
br br br br br br br br br
C) The survival of business is independent of society.
br br br br br br br
D) Both ―All business decisions have a social impact‖ and ―The vitality of business depends on society‘s actions and at
br br br br br br br br br br br br br br br br br br
titudes‖ are correct.
br br
4|P a g e
br br br br br
