Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
Chapter 3: Stakeholder Theory
Test Bank
Multiple Choice
1. ______ in an organization are the individuals and groups who depend on the firm in
order to achieve their personal goals and on whom the firm depends for its existence.
A. Stakeholders
B. Shareholders
C. Directors
D. Consumers
2. Who is usually credited with contemporary stakeholder theory?
A. Frank Pierce
B. Eric Rhenman
C. Ed Freeman
D. Frank Abrams
3. Why do young children not meet the textbook author’s definition of stakeholder?
A. They are not of legal age.
B. They do not have capacity to affect the firm’s operations.
C. They are not interested in stakeholder issues.
D. They are not consumers.
4. ______ stakeholders are internal to the firm.
A. Organizational
B. Economic
C. Societal
D. Personal
5. ______ stakeholders include consumers, shareholders, and competitors.
A. Organizational
B. Economic
C. Societal
D. Personal
6. The firms most likely to succeed in today’s rapidly evolving global environment will be
those best able to ______ by balancing the conflicting interests of multiple stakeholders.
A. adapt to their environment
B. change their environment
C. regulate their environment
D. ignore their environment
7. When prioritizing stakeholders, firms may consider which of the following factors?
A. employee happiness
B. community desires
C. supplier demands
D. all of these
8. What holds organizations together and allows them to focus on efficiency,
productivity, and profits?
A. respect
B. diversity
C. trust
D. competence
9. Which of the following is NOT one of the five stages of learning organizations go
through when developing a sense of corporate responsibility?
A. defensive
B. compliance
C. managerial
D. offensive
10. A(n) ______ in an organization is (by definition) any group or individual who can
affect or is affected by the achievement of the organization’s objectives.
A. employee
B. customer
C. supplier
D. stakeholder
11. ______ stakeholders are external to the firm.
A. Organizational and economic
B. Economic and personal
C. Economic and societal
D. Personal and organizational
12. According to the textbook, the businesses most likely to succeed in today’s rapidly
evolving global environment will be those best able to ______.
A. meet shareholders’ quarterly growth expectations
B. build the best senior management team
C. balance the conflicting interests of multiple stakeholders
D. state and meet specific CSR objectives
13. Integrating a stakeholder perspective into a strategic framework allows firms to
respond to stakeholder demands in ways that maximize both ______ and ______ value.
A. economic; social
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
B. stakeholder; social
C. economic; shareholder
D. environmental; stakeholder
14. ______ identified the five stages of learning that organizations go through when
developing a sense of corporate responsibility.
A. Ed Freeman
B. Milton Friedman
C. John Mackey
D. Simon Zadek
15. According to Zadek, an issue characterized as being of high strategic relevance and
also being institutionalized is ______.
A. an opportunity
B. a danger
C. irrelevant
D. a caution
16. According to Simon Zadek’s corporate responsibility theory, a company faces the
greatest danger when it is in ______ mode while facing a(n) ______ issue.
A. defensive; institutionalized
B. compliance; latent
C. defensive; consolidating
D. compliance; emerging
17. In Zadek’s model, an irrelevant issue is characterized by ______.
A. high strategic relevance and latent issue
B. high strategic relevance and institutionalized issue
C. low strategic relevance and latent issue
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
D. low strategic relevance and institutionalized issue
18. As CEO of a manufacturing firm, you introduce a standardized process to measure
the carbon footprints of your entire product line and report the information on the labels
of your products. In Zadek’s corporate responsibility model, you are in ______ mode
while facing a(n) ______ issue.
A. defensive; latent
B. civil; institutionalized
C. managerial; latent
D. defensive; emerging
19. The extent to which it has become accepted business practice is known as issue
______.
A. reification
B. evolution
C. operationalization
D. entropy
20. As an owner of a coal mine, you have not had to pay any fines for not failing to meet
federal worker safety guidelines, but you do no more than meet the federal
requirements. In Zadek’s corporate responsibility model, you are in ______ mode.
A. civil
B. compliance
C. defensive
D. managerial
21. In 1994, top executives of the seven largest tobacco companies testified in
Congress that they did not believe that cigarettes were addictive. What stakeholder was
prioritized the least due to this action?
A. shareholders
B. employees
C. the media
D. customers
22. In 1994, top executives of the seven largest tobacco companies testified in
Congress that they did not believe that cigarettes were addictive. In Zadek’s corporate
responsibility model, the executives were in ______ mode while facing a(n) ______
issue.
A. civil; institutionalized
B. civil; latent
C. defensive; institutionalized
D. defensive; latent
23. What is the first step in stakeholder prioritization?
A. act as quickly as is prudent to satisfy as many stakeholders as possible
B. analyze the nature of the issue
C. identify and engage the set of stakeholders that are relevant to the firm
D. prioritize among competing stakeholder interests and demands
24. Why does the textbook’s author not consider the natural environment a
stakeholder?
A. The natural environment lacks agency.
B. Scientists have not presented enough evidence for human-caused global warming.
C. NGOs do not lobby for the natural environment.
D. Other stakeholders do not support the natural environment as an issue.
25. Which of the following is NOT an example of societal stakeholders?
A. employees
B. the media
C. government agencies and regulators
D. local communities
26. While all stakeholder types may be considered important, what is the stakeholder
order of importance for the firm (from most important to least important)?
A. organizational, societal, and economic
B. economic, organizational, and societal
C. societal, economic, and organizational
D. organizational, economic, and societal
27. A CEO has told you that the needs of the firm’s different stakeholder groups do not
align; that is, what is best for organizational stakeholders is not what is best for
economic and societal stakeholders. She has asked for your advice on prioritizing the
stakeholder issue. You advise her that the general rule is to prioritize the ______.
A. organizational stakeholders
B. economic stakeholders
C. societal stakeholders
D. economic and societal stakeholders regardless of the impact on organizational
stakeholders
28. Maximum risk arises when a firm is ______ in relation to an institutionalized issue
because it is resisting a potential threat about which everyone agrees.
A. ambivalent
B. offensive
C. defensive
D. conservative
29. At the United Nations COP21 meeting that took place in Paris in 2015, companies
such as Alcoa, Apple, Bank of America, Cargill, Coca-Cola, General Motors, Google,
Microsoft, and Walmart committed significant resources to cutting carbon emissions.
Such recognition of the reality of climate change indicates that this issue is in the
______ stage.
A. latent
B. manifest
C. emerging
D. institutionalized
30. Increasingly, managers will be required to address the competing interests
of______.
A. a narrow group of stakeholders
B. a wide range of stakeholders
C. a shrinking group of stakeholders
D. governmental stakeholders and regulators
31. Being able to prioritize among stakeholder groups is important because ______.
A. managers should satisfy the interests of all stakeholders
B. the interests of most stakeholders will ultimately align
C. the interests of different stakeholder groups often conflict
D. doing so provides the greatest opportunity to meet all societal needs
32. ______ stakeholders are relatively easy compared to ______ stakeholders.
A. Prioritizing; identifying
B. Identifying; prioritizing
C. Developing; sustaining
D. Sustaining; developing
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
33. Which of the following is NOT an example of economic stakeholders?
A. competitors
B. consumers
C. employees
D. shareholders
34. Which of the following is an example of organizational stakeholders?
A. competitors
B. consumers
C. employees
D. shareholders
35. You are the owner of a local bakery. You recognize that by paying your hourly
employees a living wage, you will serve the interests of the employees as well as
maintain a more stable workforce in your firm. In Zadek’s corporate responsibility model,
you are in ______ mode.
A. civil
B. compliance
C. defensive
D. managerial
36. As the owner of a local restaurant, you initiate a practice of composting all
disposable food products and donating edible leftovers to a local homeless shelter. In
Zadek’s corporate responsibility model, you are in ______ mode while facing a(n)
______ issue.
A. defensive; latent
B. civil; institutionalized
C. managerial; latent
D. managerial; consolidating
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
1. Although CSR is important, it is not central to running a business.
2. Societal stakeholders are the largest group of firm stakeholders.
3. Prioritizing stakeholders is easy because it is obvious which stakeholders are most
important to a firm.
4. Societal stakeholders are the least important group of stakeholders.
5. A firm continuing to publicly deny the existence of global warming is in defensive
mode.
1. Ed Freeman famously defined a stakeholder as “any group or individual who can
affect or is affected by the achievement of the organization’s objectives.” Discuss the
Chandler, Strategic Corporate Social Responsibility, 5e
SAGE Publishing, 2020
strengths and weaknesses of this definition, providing examples to support your
argument.
2. How is the concept of stakeholder related to the five driving forces of CSR? Provide
examples in your answer.
Ans: Varies, but good answers will give good examples of each of the five forces and
how each impacts and is impacted by various stakeholders.
Cognitive Domain: Analysis
Answer Location: Throughout Chapter
Difficulty Level: Medium
3. In what ways are the media a stakeholder? Please consider the definition of a
stakeholder in your answer.
4. Customers want lower prices and higher quality; employees want higher wages and
better benefits and better working conditions; suppliers want to give fewer discounts and
want you to buy more of their products; communities want more donations;
governments want higher taxes; investors want higher dividends and higher stock
prices. Present an economic situation that has recently been in the news and justify
how/why each of the stakeholders listed above should have their priority met or not met.
Ans: Varies.
Cognitive Domain: Analysis
Answer Location: Stakeholder Prioritization
Difficulty Level: Hard
5. Putting yourself in the role of a CEO, describe the five steps of stakeholder
prioritization, giving examples from your fictitious firm.
Ans: Varies.
Cognitive Domain: Application
Answer Location: Stakeholder Prioritization | Prioritizing Among Issues and
Stakeholders
Difficulty Level: Medium
6. Simon Zadek identifies five stages of learning that organizations go through in
developing a sense of corporate responsibility and four stages of intensity to measure
the societal issues and public’s expectations around the issues. Describe Zadek’s
model and use the model to analyze a real-life firm facing a corporate responsibility
issue, clearly identifying the firm’s location and the issue’s location on each axis of the
model.
Ans: Varies.
Cognitive Domain: Analysis
Answer Location: Stakeholder Prioritization | Evolving Issues
Difficulty Level: Hard