Chapter 1 Key
1. Walmart has been called a "template for 21st century capitalism."
(p. 3)
FALSE
Lawrence - Chapter 01 #1
2. A business is any organization that is engaged in making a product or providing a
(p. 4) service for a profit.
TRUE
Lawrence - Chapter 01 #2
3. Businesses and society are independent of one another.
(p. 4)
FALSE
Lawrence - Chapter 01 #3
4. The stakeholder theory of the firm argues that a firm's sole purpose is to create
(p. 6) value for its shareholders.
FALSE
Lawrence - Chapter 01 #4
5. The instrumental argument for the stakeholder theory of the firm says that
(p. 6) companies perform better if they consider the rights and concerns of multiple
groups in society.
TRUE
Lawrence - Chapter 01 #5
6. The normative argument for the stakeholder theory of the firm says that the
(p. 7) stakeholder view is simply a more realistic description of how companies really
work.
FALSE
Lawrence - Chapter 01 #6
7. Nonmarket stakeholders are those that engage in economic transactions with the
(p. 8) company as it carries out its primary purpose of providing society with goods and
services.
FALSE
Lawrence - Chapter 01 #7
,8. Market stakeholders include nongovernmental organizations and the media.
(p. 8)
FALSE
Lawrence - Chapter 01 #8
9. Government can be considered both a market and nonmarket stakeholder.
(p. 10)
TRUE
Lawrence - Chapter 01 #9
10. The interests of different stakeholders often coincide.
(p. 14)
TRUE
Lawrence - Chapter 01 #10
11. Stakeholders involved with one part of a company often may have little or no
(p. 15) involvement with another part of the company.
TRUE
Lawrence - Chapter 01 #11
12. Some scholars have suggested that managers pay the most attention to
(p. 16) stakeholders possessing the least salience.
FALSE
Lawrence - Chapter 01 #12
13. Urgency refers to the extent to which a stakeholder's actions are seen as proper or
(p. 16) appropriate by the broader society.
FALSE
Lawrence - Chapter 01 #13
14. A stakeholder map is a useful tool, because it enables managers to see quickly
(p. 17) how stakeholders feel about an issue and whether salient stakeholders tend to be
in favor or opposed.
TRUE
Lawrence - Chapter 01 #14
15. The external environment of business is static.
(p. 19)
FALSE
Lawrence - Chapter 01 #15
,16. Which statement is not correct about the business-society interdependence?
(p. 5)
A. Business is a part of
society.
B. Business is separated from the rest of society by clear
boundaries.
C. Business activities impact other activities in
society.
D. Actions by governments rarely significantly affect
business.
Difficulty: 2 Medium
Lawrence - Chapter 01 #16
17. Which of the following examples best illustrates the boundary exchanges a
(p. 5) company would encounter according to the general systems theory?
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 from
a supplier.
D. All of the
above.
Difficulty: 3 Hard
Lawrence - Chapter 01 #17
18. Which of the following is the result of an inseparable relationship between
(p. 5) business and society?
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 A and B, but not
C.
Difficulty: 2 Medium
Lawrence - Chapter 01 #18
, 19. Which of the following statements is not true about the interactive social system?
(p. 5)
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
the business.
D. Business and society are both separate and
connected.
Difficulty: 3 Hard
Lawrence - Chapter 01 #19
20. A firm subscribing to the ownership theory of the firm would mainly be concerned
(p. 6) with providing value for its:
A. Shareholder
s.
B. Customer
s.
C. Board of
Directors.
D. Communit
y.
Difficulty: 2 Medium
Lawrence - Chapter 01 #20
21. Corporations that run their operations according to the stakeholder theory of the
(p. 6) firm create value by:
A. Innovating new
products.
B. Increasing their stock
price.
C. Developing their employees' professional
skills.
D. All of the
above.
Difficulty: 2 Medium
Lawrence - Chapter 01 #21
1. Walmart has been called a "template for 21st century capitalism."
(p. 3)
FALSE
Lawrence - Chapter 01 #1
2. A business is any organization that is engaged in making a product or providing a
(p. 4) service for a profit.
TRUE
Lawrence - Chapter 01 #2
3. Businesses and society are independent of one another.
(p. 4)
FALSE
Lawrence - Chapter 01 #3
4. The stakeholder theory of the firm argues that a firm's sole purpose is to create
(p. 6) value for its shareholders.
FALSE
Lawrence - Chapter 01 #4
5. The instrumental argument for the stakeholder theory of the firm says that
(p. 6) companies perform better if they consider the rights and concerns of multiple
groups in society.
TRUE
Lawrence - Chapter 01 #5
6. The normative argument for the stakeholder theory of the firm says that the
(p. 7) stakeholder view is simply a more realistic description of how companies really
work.
FALSE
Lawrence - Chapter 01 #6
7. Nonmarket stakeholders are those that engage in economic transactions with the
(p. 8) company as it carries out its primary purpose of providing society with goods and
services.
FALSE
Lawrence - Chapter 01 #7
,8. Market stakeholders include nongovernmental organizations and the media.
(p. 8)
FALSE
Lawrence - Chapter 01 #8
9. Government can be considered both a market and nonmarket stakeholder.
(p. 10)
TRUE
Lawrence - Chapter 01 #9
10. The interests of different stakeholders often coincide.
(p. 14)
TRUE
Lawrence - Chapter 01 #10
11. Stakeholders involved with one part of a company often may have little or no
(p. 15) involvement with another part of the company.
TRUE
Lawrence - Chapter 01 #11
12. Some scholars have suggested that managers pay the most attention to
(p. 16) stakeholders possessing the least salience.
FALSE
Lawrence - Chapter 01 #12
13. Urgency refers to the extent to which a stakeholder's actions are seen as proper or
(p. 16) appropriate by the broader society.
FALSE
Lawrence - Chapter 01 #13
14. A stakeholder map is a useful tool, because it enables managers to see quickly
(p. 17) how stakeholders feel about an issue and whether salient stakeholders tend to be
in favor or opposed.
TRUE
Lawrence - Chapter 01 #14
15. The external environment of business is static.
(p. 19)
FALSE
Lawrence - Chapter 01 #15
,16. Which statement is not correct about the business-society interdependence?
(p. 5)
A. Business is a part of
society.
B. Business is separated from the rest of society by clear
boundaries.
C. Business activities impact other activities in
society.
D. Actions by governments rarely significantly affect
business.
Difficulty: 2 Medium
Lawrence - Chapter 01 #16
17. Which of the following examples best illustrates the boundary exchanges a
(p. 5) company would encounter according to the general systems theory?
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 from
a supplier.
D. All of the
above.
Difficulty: 3 Hard
Lawrence - Chapter 01 #17
18. Which of the following is the result of an inseparable relationship between
(p. 5) business and society?
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 A and B, but not
C.
Difficulty: 2 Medium
Lawrence - Chapter 01 #18
, 19. Which of the following statements is not true about the interactive social system?
(p. 5)
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
the business.
D. Business and society are both separate and
connected.
Difficulty: 3 Hard
Lawrence - Chapter 01 #19
20. A firm subscribing to the ownership theory of the firm would mainly be concerned
(p. 6) with providing value for its:
A. Shareholder
s.
B. Customer
s.
C. Board of
Directors.
D. Communit
y.
Difficulty: 2 Medium
Lawrence - Chapter 01 #20
21. Corporations that run their operations according to the stakeholder theory of the
(p. 6) firm create value by:
A. Innovating new
products.
B. Increasing their stock
price.
C. Developing their employees' professional
skills.
D. All of the
above.
Difficulty: 2 Medium
Lawrence - Chapter 01 #21
