1 The power of stakeholder has risen over the years.
(A) True
(B) False
2 A/n _______is a major unexpected event that has a large negative consequence.
(A) crisis
(B) strategy
(C) failed plan
(D) regulation
(E) incentive
3 Which of the following is not true of crisis communication?
(A) Often, a company may have only minutes to contain a crisis.
(B) With the Internet and cable television, the world often knows about a crisis before some managers
and the employees.
(C) Managers usually have hours or even days to contain a crisis.
(D) it is important to balance the desire to say something right away with the need to get the facts.
(E) Company officials must be prepared to issue an initial statement to the media and other key
stakeholder groups.
4 What are the 5 Is of strategic analysis, in proper sequence?
(A) Issue identification, interaction strategies, interested strategic stakeholders, incentive of
stakeholders, information-objectives.
(B) Issue identification, interested strategic stakeholders, incentive of stakeholders, information-
objectives, interaction strategies.
(C) Issue identification, interested strategic stakeholders, information-objectives, integrate market and
nonmarket strategies, interaction strategies.
(D) Issue identification, incentive of stockholders, interested strategic stakeholders, information-
objectives, interaction strategies.
(E) None of these is correct.
5 Through a/n __________ process, individuals develop and use critical thinking skills to
analyze business issues and make better decisions for their personal and professional lives.
(A) strategic analysis
(B) default planning
(C) probationary
(D) identification
(E) SWOT
6 Which of the following is not an element of determining the incentives of stakeholders?
(A) Legitimacy
(B) Power
(C) Urgency
(D) Age of majority stakeholder
(E) Likelihood of stakeholder action
7 Which of the following are true about public affairs activities?
(A) It is not concerned with stakeholders.
(B) It refers to how businesses interact with stakeholders.
(C) During PA functions, managers must be ethical, and unethical behavior should be reported through
whistleblowing
(D) It is concerned with firm stakeholder relationships.
(E) Managers usually do not practice ethical behavior when dealing with the public.
8 Which of the following could be considered Public Affairs statements?
(A) “Quality is Job 1.”
(B) “We will not seek an unfair advantage over our competitors.”
(C) “Save money, live better.”
(D) “Finger-lickin’ good.”
(E) “Because you’re worth it.”
9 What are the three phases of issues management?
(A) Scanning the environment to identify issues and trends that will affect society.
(B) Assuming that last year’s issues have been resolved and this year’s issues will be similar.
(C) Using the same categorization process for identifying issues as your competitors do.
(D) Evaluating the impact issues will have on the firm and ranking issues by priority to the firm.
(E) Conducting a strategic analysis to develop strategies for dealing with high-priority public affairs issues.
10 Which of the following would be stages of crisis management?
(A) Developing a crises team with a mix of representatives from all sectors of the organization
to deal with the crisis.
(B) Conducting a risk assessment to determine potential crises, monitoring the event to prevent it from
becoming a crisis, and planning how to deal with a crisis if it occurs
(C) Implementing a plan and communicating to acknowledge or admit to the crisis, state actions you are
taking, and stating how you plan to avoid a repeat crisis in the future.
(D) Analyzing the organization’s effectiveness in managing the crisis, with a focus on doing a better job of
preventing and managing future crises.
(E) Weeding out employees who caused the disaster.
11 Which of the following would be an “A” of communication during a crisis?
(A) Assume that a competitor or stakeholder was at fault and deny liability.
(B) Advise managers to deny the cause of the crisis.
(C) Acknowledge the crisis happened.
(D) Action to tell the public what is being done.
(E) Avoid future events.
12 What are included in the Is of strategic analysis?
(A) Issue identification
(B) Interface with competition
(C) Interested strategic stakeholders
(D) Incentive of stockholders
(E) Interaction strategies
13 Which statements about the issue life-cycle stages with the strategic focus for each stage
are correct?
(A) Identification and formation of the issue and public sentiment.
(B) Interested stakeholder formation.
(C) Issue brought to business for voluntary action.
(D) Legislative and Congressional formation.
(E) Enforcement and litigation.
14 Describe business’s transition from the stockholder to the stakeholder approach.
Answer:
15 Why do businesses engage in PA management?
Answer:
16 Explain how issue management can preclude crisis management.
Answer:
17 List the stages of crisis management.
Answer:
18 What are the five Is of strategic analysis?
Answer:
19 Who does the textbook indicate would be a good choice to head a crisis management team?
(A) Line supervisors
(B) All regional or division managers
(C) Chairman of the Board of Directors
(D) Senior vice presidents
(E) CEO
20 _________ is a public affairs management approach to identifying, monitoring, analyzing,
and selecting public issues that may warrant nonmarket strategies.
(A) Strategic management
(B) Issues management
(C) Management by objective
(D) Public affairs management
(E) Threat assessment
21 Stakeholder theory is a popular area of research.
(A) True
(B) False
22 Firms that are less likely to be active in PA management are those that are significantly
affected by government.
(A) True
(B) False
23 Corporate public policies are general guidelines to influence how employees will interact
with stakeholders.
(A) True
(B) False
24 Issues management is used to anticipate and respond to both threats and opportunities.
(A) True
(B) False
25 A strategic plan can be successful even though the company does not monitor the results.
(A) True
(B) False
26 Some companies use issues management software to measure PA efforts.
(A) True
(B) False
27 A crisis management team is usually led by a junior-level supervisor when the event
actually happens.
(A) True
(B) False
28 Proper communication can help to maintain a positive company and brand reputation.
(A) True
(B) False
29 The sooner the issue is identified (often through issues management), the more time the
business has to plan for and deal with it.
(A) True
(B) False
30 Only products, not issues, go through a life cycle.
(A) True
(B) False
31 Developing stakeholder public policies does not really require an understanding of
stakeholders because many stakeholder entities have similar structure and culture.
(A) True
(B) False
32 Even within the business, society, and government categories, different stakeholders can
have different expectations, concerns, and requests for firm action to meet their special
interest.
(A) True
(B) False
33 Which statement best describes balancing stockholder and other stakeholder interests?
(A) Managers have a responsibility to make a profit for stockholders while operating in a legal
and ethical manner to maximize the benefits to entities other than stakeholders.
(B) Managers have a responsibility to make a profit for stockholders while operating in a legal and ethical
manner and not take advantage of other stakeholders.
(C) Managers should use some of the business profits to help society.
(D) Managers’ only responsibility is to stockholders.
(E) None of these statements is correct.
34 Which of the following is true of the traditional stockholder approach?
(A) It focused on being socially responsible.
(B) It is the best model for successful businesses today.
(C) Managers years ago believed that generating long-term value depended on the needs of many
stakeholders.
(D) The paradigm has shifted from stakeholder to stockholder in recent years.
(E) It focused on meeting the needs of the owners and maximizing profits without regard for other
stakeholders.
35 _______ stakeholders are critically affected by firm action, and/or they can affect firm
performance.
(A) Strategic
(B) Preferred
(C) Consumer
(D) Critical
(E) Management
36 Which statement about public affairs and issues management is not correct?
(A) Public affairs (PA) management is the process of developing corporate public policies and
strategies regarding how the business will interact with stakeholders in the business, social and
government environments.
(B) Issues management is a public affairs management approach to identifying, monitoring, analyzing,
and selecting public issues that warrant nonmarket strategies.
(C) Issues management is broader in scope.
(D) None of these statements is correct
(E) All of these statements are correct
37 Which of the following is not true of public affairs management?
(A) PA management policies and strategies are part of the overall nonmarket strategy, which
must be integrated with market strategies.
(B) Many companies have created specialized departments, with titles such as Public Affairs Department,
to manage PA.
(C) All employees need to view PA as part of their day-to-day work, rather than the job of PA
professionals.
(D) PA has many activities and functions that must be managed effectively for the business to be
successful.
(E) PA is not used in large corporations today.
38 Identify the elements of the issues life cycle.
Answer: