Question 1

All of the following refer to the shareholders of a firm EXCEPT:

Accepted Answer

creditors

Answer

owners

Answer

stockholders

Answer

investors

Question 2

Institutional investors are accurately described all of the following statements EXCEPT:

Accepted Answer

Banks and student loans are examples of institutional investors.

Answer

As of 2022, institutions accounted for about 80% of the volume of trades on the New York Stock Exchange.

Answer

Institutional investors include banks, mutual funds, hedge funds, insurance companies, and pension funds.

Answer

The number of institutional investors in the United States has increased significanctly since the 1960s.

Question 3

All of the following are true EXCEPT:

Accepted Answer

The idea behind pay-for-performance incentives is to shield executives from risks beyond their control.

Answer

It actually becomes a disincentive because the stakes are too high to manage.

Answer

Executive stock options help align managerial incentives with corporate performance.

Answer

Today’s high salaries for executives help companies attract and retain top talent.

Question 4

The best example of a company guided by enlightened self-interest is one that

Accepted Answer

invests in long-term programs that provide assistance to their stakeholders.

Answer

follows all government rules and regulations to avoid penalties and fines.

Answer

spends money on short-term projects to benefit market stakeholders.

Answer

puts most of their effort into marketing schemes to attract more business.

Question 5

The social reputation of a firm helps a company's stakeholder relationships by increasing

Accepted Answer

trust

Answer

profits

Answer

assets

Answer

liabilities

Question 6

Which of the following correctly completes the sentence: Costs of corporate social responsibility may ultimately be passed on to

Accepted Answer

consumers through higher prices.

Answer

shareholders through higher dividends.

Answer

workers through higher wages.

Answer

suppliers through discounts.

Question 7

When a business diverts resources for social purposes, which of the following is LEAST likely to occur:

Accepted Answer

more backlash from social activists.

Answer

lower profitability.

Answer

a decrease in sales.

Answer

an improved reputation among consumers.

Question 8

The relevance and importance of stakeholders and their issues is known as

Accepted Answer

stakeholder salience.

Answer

stakeholder materiality.

Answer

competitive intelligence.

Answer

organizational capacity.

Question 9

Firms that generally act only when forced to do so, and then in a defensive manner, are

Accepted Answer

reactive.

Answer

inactive.

Answer

interactive.

Answer

proactive.

Question 10

An interactive business–stakeholder relationship is one where

Accepted Answer

companies actively engage with stakeholders through mutual respect and trust.

Answer

competitive advantage is realized through a constant change of internal representatives.

Answer

companies engage with all of their stakeholders using only electronic communications.

Answer

organizations use role-playing to effectively engage with external stakeholders.

Question 11

Social media can improve stakeholder engagement and relationships in all of the following ways EXCEPT:

Accepted Answer

attracts interest through controversial public relation statements

Answer

makes stakeholder communications faster and more effective

Answer

offers a mechanism for the public to voice their opinions of the firm and its products via reviews

Answer

provides a forum for the firm to share information with the public via blogs and press releases

Question 12

Critics of corporate social responsibility argue that public officials, not businesspeople, should solve societal problems because for all of the following reasons EXCEPT:

Accepted Answer

government is better at finding innovative solutions to social problems.

Answer

the private sector is not mandated to solve public issues.

Answer

only public officials were elected to manage social topics.

Answer

businesspeople may not have the skills or incentives to solve societal problems.

Question 13

Visionary CEOs see global citizenship as an opportunity to do all of the following EXCEPT:

Accepted Answer

generate profits myopically.

Answer

help address global challenges.

Answer

create value for their organization.

Answer

gain a competitive advantage.

Question 14

The mission of the Securities and Exchange Commission (SEC) is to

Accepted Answer

protect shareholders’ rights by making sure that stock markets are run fairly.

Answer

protect companies from hostile takeovers.

Answer

ensure that institutional investors do not take control of company management.

Answer

ensure that the federal Treasury receives its share of the revenues from stock trading.

Question 15

Which statement best describes the what proponents of shareholder capitalism believe?

Accepted Answer

Striving to maximize shareholder value is the most practical way to create the most economical value.

Answer

Striving to maximize shareholder value is the fairest way to ensure people get what they deserve.

Answer

Striving to maximize shareholder value is effective way to promote equity.

Answer

Striving to maximize shareholder value is the most likely way to generate public goods.

Question 16

In stakeholder capitalism, success is best measured by:

Accepted Answer

Long-term value creation for all stakeholders

Answer

Financial performance

Answer

Promoting social justice

Answer

Compliance with government regulations only

Question 17

Corporate Social Responsibility is best understood as a focus on:

Accepted Answer

Incorporating ethical and socially responsible practices into business operations

Answer

Engaging in stakeholder dialogue.

Answer

Considering the impact of business on the environment

Answer

Meeting the needs of employees

Question 18

All of the following arguments are common defenses of shareholder capitalism EXCEPT:

Accepted Answer

creates incentives to minimize negative externalities

Answer

promotes economic growth which benefits society as a whole.

Answer

encourages innovation

Answer

provides a clear and measurable objectives

Question 19

All of the following are common criticisms of stakeholder capitalism EXCEPT:

Accepted Answer

increases short-termism

Answer

impedes timely and decisive choices.

Answer

lacks clear definitions and measurable metrics.

Answer

results in rhetoric but not meaningful change (i.e., "greenwashing")

Question 20

What is one of the primary ethical concerns associated with outsourcing in business?

Accepted Answer

Exploitation of cheap labor

Answer

Exorbitant executive compensation

Answer

Cultural appropriation

Answer

Operational inefficiency

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