Chapter Four:
Private Politics
True/False Questions:
1) Public nonmarket action can arise from self-interest as well as broader concerns.
2) Many nonmarket issues are addressed largely in the shadow of public institution.
3) Private nonmarket actions include direct pressure and boycotts.
4) The groups involved in private nonmarket actions barely affect the nonmarket
environment.
5) These private nonmarket interest groups affect the organization of interests by
forming watchdog and advocacy groups and by mobilizing people to work for
causes.
6) One tool that is used by these private nonmarket groups is the boycott of a firm
and its products.
7) Because of its family-values orientation, Disney has never been boycotted.
8) Boycotts can be used to target causes such as the opportunity presented by the
2000 Olympics in Australia that was used by Greenpeace to launch a boycott
against Coca-Cola and its use of hydorfluorocarbons as a refrigerant in its
dispensing machines.
9) Activists and interest groups use only private politics strategies.
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10) The Health Care Reform Project, an interest group formed by a coalition of
organizations led by labor unions, released a report attacking both Pizza Hut and
McDonald’s for not providing adequate nutrition content in their consumer
products.
11) The choice between public and private politics is strategic, and activists are
increasingly choosing private politics.
12) Activists groups have access to the media, public institutions, the general public,
but they do not have any standing before the courts to sue a firm.
13) An infrequently used strategy of activists is to conduct a policy or scientific
investigation to call attention to an issue such as in the Alar case.
14) An important component of a private politics campaign is selection of a target.
15) Activists target individuals in both their personal and professional roles.
16) Potential targets should not anticipate the actions of activist groups.
17) Ralph Nader groups’ main concern is consumer safety and health. The conduct of
government is not one of their interests.
18) David Bower, former executive director of the Sierra Club, founded the Earth
Island Institute that has spawned other environmental organizations such as the
International Rivers Network and the Rainforest Action Network.
19) Greenpeace International is an environmental organization with about 250 million
members worldwide, offices in 75 countries and a budget of $230 million.
20) Greenpeace has two primary campaigns: nuclear power and ocean dumping.
21) One of the keys to managing an activist environment is to understand the broader
public support of their agenda.
22) When confronted with private nonmarket actions, a natural reaction is to be on the
offensive.
23) It is very rare for a firm to choose as a strategy to meet with activists groups to
show their concern about an issue.
24) Paper agreements are usually sufficient where the stakes are high and monitoring
of the firm’s actions is difficult.
25) Negotiations with activists can be voluntary.
26) To monitor its agreement with Home Depot, RAN used local volunteers.
27) The threat of an indirect action against OnBank created an atmosphere for
negotiations.
28) The demands made in a campaign often are reasonable.
29) Brent Spar, director of Greenpeace in Europe, was the leader of the Greenpeace
activities in the North Sea.
30) Nike’s problems from activists groups came from its labor policies in Mexico.
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Multiple Choice Questions:
31) In general, which of the following statements best describes private collective
action?
a) It is a nonmarket action, which takes place in the shadow of public institutions
b) It includes direct and indirect pressures, boycotts and attempts to affect public
opinion
c) It is intended to force firms to take action
d) All the above are reasonable descriptions
32) Activist groups play the following roles, except:
a) They alert management to issues that the management is unaware of
b) They can affect the organization of interests by forming watchdog and
advocacy groups
c) They are often appointed to a firm’s board of directors
33) Boycotts are sometimes more ________than______ , but many attract
considerable media and public attention.
a) Symbolic; real
b) Political; socially concerned
c) Real; political
d) Consumer-driven; symbolic
34) Firms argue what about the impact of boycotts?
a) They have tremendous impact
b) They do not have any significant effect on their performance
c) They have a fair amount of affect
d) They have no impact whatsoever
35) Which companies are the most susceptible to boycotts?
a) Consumer products
b) Products with low switching costs
c) A brand name that can be damaged
d) All are correct
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36) The Health Care Reform Project released a report attacking Pizza Hut and
McDonald’s. What was the attack about?
a) Both corporations were serving what the Project considered to be food too high
in fat content
b) Both corporations had bad safety and health records
c) Both corporations provided better health care coverage for their German and
Japanese employees than for their U.S. employees
d) Both corporations were out of compliance with several U. S. Department of
Health Services regulations
37) What are the two basic strategies of activists?
a) Putting direct pressure on firms and working through public institutions
b) Putting indirect pressure on firms and direct pressure on government
c) Putting little pressure on firms and lots of indirect pressure on government
d) Putting pressure on firm boards of directors and working with public entities
38) Activist groups use their standing with all of the following except?
a) Courts
b) Legislatures
c) Administrative organizations
d) Boards of Directors
39) What legal tool may serve as a bargaining lever and may generate funds to
support a group’s activities such as in the case of the Natural Resources Defense
Council?
a) Boycotts
b) Lawsuits
c) Lobbying
d) Legislation
40) An important component of a private politics campaign is selection of a
a) Court
b) Target
c) Boycott
d) Strategy
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41) In terms of an activists’ generic strategy, what is a low-cost method of getting
information out to the public that they want to be distributed?
a) Use the news media
b) Use television spots
c) Use nationwide lobbying of legislatures
d) Go with a lawsuit
42) Which of the following is not one of Greenpeace’s campaigns?
a) Ancient rain forests
b) Climate
c) Toxics
d) River dumping in the Amazon
43) In terms of addressing the activist environment, which of the follow is the
guideline for engaging in a fight?
a) Fight all out
b) Win at any cost
c) Fight when you are right and can win—but be careful
d) Fighting never gains an advantage
44) When confronted with a private nonmarket action, a natural reaction is to be
_______, but a better response is to _______the claims and demands the activists
make.
a) Defensive; deny
b) Defensive; evaluate
c) Welcoming; accept
d) Offensive; reject
45) What was Environmental Defense’s (ED) concern about McDonald’s?
a) Sourcing supplies from old growth forests
b) Practice of harvesting old timber
c) Practice of solid waste disposal
d) All of the above
46) All of the following were the threats against OnBank except?
a) Direct action against the bank
b) Required regulatory approval
c) The reporting of lending data by census track
d) Bringing in a union
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47) Why was Royal Dutch/Shell such a formidable company for Greenpeace to take
on?
a) It is well-regarded in the British Isles and it has a history of fighting all comers
b) It is the largest corporation in Europe and the third largest in the world
c) It is the third largest corporation in Europe and the sixth in world
d) It is regarded as the best oil company in the world and consumers back it in all
issues
48) What was one of Greenpeace’s principal strategies used against Royal
Dutch/Shell?
a) Attracting public attention through high profile, confrontational actions that
were covered by Greenpeace photographers and film crews
b) A lawsuit filed in Wales
c) Using passive techniques to encourage a boycott of the company
d) A sit-down strike of all of its gas stations
49) Activist groups were criticizing what about Nike’s factories overseas?
a) Working conditions and wages
b) Working conditions and the lack of unions
c) Political favors and wages
d) The company’s shoe design and costs
50) Among the thousands of groups working for environmental and human rights, ___
was a radical organization.
a) Greenpeace
b) Globe Trade Watch
c) Center for Study of Responsive Laws
d) RAN
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Essay and Review Questions:
1) Write an essay on the positive and less than positive roles played by activist
groups. Give specific examples of each of these roles. Use Greenpeace
International as your focus of analysis.
2) Activist groups may have damaging effects on an industry and on consumers of
services. Explain and give relevant examples of their motivation, strategies and
membership. Be specific in your analysis.
3) Andrea and Rob are graduating from college and are debating joining an activist
group. Andrea is for joining a Nader organization, and Rob is for individual
activism. Outline Andrea’s argument of the benefits of such groups and their
effectiveness as well as Rob’s desire for individual action.
4) You are the president of Andrea’s state university. An activist group headed by
many influential students is advocating boycotting classes to force the university
to cut tuition. Outline a plan of action to deal with this activist group effectively.
Define your strategy and tactics and assess the potential outcome of your actions.
5) Discuss, analyze and critique the issues presented in the cases of Greenpeace,
Shell, and Brent Spar. Use specific facts in your analysis including both sides of
the issue.
6) What is RAN’s objective? What is its position among NGOs?
7) What were the issues Nike faced? How did the CEO react and why? What are the
strategies involved? What is your stand on the Nike situation and explain why you
have taken that stance?
8) In 2001 the nation was made aware of the levels of corporate malfeasance,
corruption and illegal activities, the ‘cooking of the books’ in terms of accounting
practices, and a host of other problems from excessive CEO pay to firm
shareholders losing most if not all of their retirement benefits. Using the chapter
information as a framework, develop a plan for bringing about corporate
responsibility and accountability to all shareholders. Be specific in your
arguments. At the conclusion of your points, develop a short, impassioned speech
you would give to people to back your ideas.