Business & Society, 16e (Lawrence)
Chapter 2 Managing Public Issues and Stakeholder Relationships
1) A public issue exists when there is agreement between the stakeholders’ expectations of what a
business firm should do and the actual performance of that business firm.
2) Emerging public issues are both a risk and an opportunity.
3) Understanding and responding to changing societal expectations is a business necessity.
4) Because the public issues that garner the most public attention change over time, companies do
not waste time tracking them.
5) Organizations always have full control of a public issue.
6) Environmental analysis is a method managers use to gather information about external issues
and trends.
7) Environmental intelligence is the acquisition of information gained from analyzing the multiple
environments affecting organizations.
8) Legal environment includes the structure, processes, and actions of government at the local,
state, national, and international levels.
9) Competitive intelligence enables managers in companies of all sizes to make informed
decisions in all areas of the business.
10) Stakeholder materiality is a method companies use to prioritize the relevance of the
stakeholders and their issues.
11) In the issue management process, identifying the issue involves anticipating emerging issues.
12) Financially sound companies do not need to understand how a public issue is likely to evolve,
or how it will affect them.
13) For stakeholder engagement to occur, both the business and the stakeholder must be motivated
to work with one another to solve the problem.
14) Dialogue between a single firm and its stakeholders is always sufficient to address an issue
effectively.
15) Companies are learning that it is important to take a strategic approach to the management of
public issues, both domestically and globally.
16) Public issues are also sometimes referred to as:
A) Social issues.
B) Sociopolitical issues.
C) Social issues and sociopolitical issues.
D) None of these answers is correct.
17) The emergence of a public issue indicates that:
A) A gap may be developing between what stakeholders expect and what an organization is
actually doing.
B) Technology is forcing ethics and business strategy closer together.
C) Consumers are unaware of how an organization’s actions affect them.
D) All of these answers are correct.
18) Failure to understand the beliefs and expectations of stakeholders:
A) Causes a company’s profits to increase in the short run.
B) Causes a company’s profits to decrease in the short run.
C) Causes the performance-expectations gap to grow larger.
D) Decreases the chance of a corporate buy-out.
19) Because of the risks and opportunities public issues present, organizations need:
A) A strong relationship with a lobbying firm or an in-house lobbying department.
B) Executives to be rewarded with substantial bonuses as part of total compensation.
C) A systematic way of identifying, monitoring, and selecting public issues.
D) Tougher government regulations and oversight by political action committees.
20) Customer environmental intelligence includes:
A) Demographic factors.
B) An analysis of the firm’s competitors.
C) New technological applications.
D) The cost of producing consumer goods.
21) According to management scholar Karl Albrecht, scanning to acquire environmental
intelligence should focus on:
A) Eight strategic radar screens.
B) Six management templates.
C) Eight process improvement models.
D) Six ethical decision indicators.
22) The explosive use of social media is an example of which environment?
A) Customer.
B) Competitor.
C) Economic.
D) Social.
23) An analysis of the stability or instability of a government is an example of scanning which
environment?
A) Social.
B) Legal.
C) Geophysical.
D) Political.
24) Legal environmental intelligence includes:
A) Patterns of aggressive growth versus static maintenance.
B) Analysis of local, state, national, and international politics.
C) Considerations of patents, copyrights, or trademarks.
D) Information regarding costs, prices, and international trade.
25) The role of special interest groups is an important element in acquiring intelligence from which
environment?
A) Customer.
B) Competitor.
C) Economic.
D) Social.
26) The relevance and importance of stakeholders and their issues is known as:
A) Stakeholder salience.
B) Competitive intelligence.
C) Stakeholder materiality.
D) Organizational capacity.
27) The issue management process is a:
A) Beneficial tool used only to maximize the positive effects of a public issue for the
organization’s advantage.
B) Beneficial tool used only to minimize the negative effects of a public issue for the
organization’s advantage.
C) Systematic process companies use when responding to public issues that are of greatest
importance to the business.
D) Confusing process that is rarely used to help top management within an organization.
28) The components of a typical issues management process include:
A) Identify issue, take action, scan for new issues.
B) Generate options, predict the firm’s profitability, evaluate results.
C) Identify issue, analyze issue, allow the government to take action.
D) All of these answers are correct.
29) Once an issue has been identified, its implications must be:
A) Acted upon.
B) Analyzed.
C) Segmented.
D) Deleted.
30) An issue’s public profile indicates to managers:
A) How significant an issue is for the organization, but it does not tell them what to do.
B) Both how significant an issue is for the organization and exactly what to do.
C) Exactly what to do without indicators of how significant an issue is for the organization.
D) Any of these choices, depending on the organization type.
31) Once an organization has implemented the issue management program, it must:
A) Use trade associations or consultants to follow high priority issues.
B) Study the results and make necessary adjustments.
C) Not limit the number of public issues the firm can address.
D) Pick a selected number of issues to address immediately.
32) When working well, the issue management process:
A) Is static and never pulls in additional information that would disturb the balance.
B) Generates two specific options for each issue.
C) Minimizes dialogue with the stakeholders and focuses on short-term survival.
D) Continuously cycles back to the beginning and repeats.
33) Contemporary issue management:
A) Is a linear process.
B) Was useful in the 1970s, but not today.
C) Is used by all government agencies.
D) Is an interactive, forward-thinking process.
34) A leadership role in addressing emerging management issues is often taken by:
A) The public affairs department.
B) The government relations department.
C) The department of sustainability or environmental, health and safety.
D) All of these answers are correct.
35) A corporation’s issue management activities are usually overseen by:
A) The board of directors.
B) Top management.
C) Both the board of directors and top management levels.
D) The strategic governance committee.
36) Over time, the nature of business’s relationship with its stakeholders often:
A) Remains static.
B) Evolves through a series of stages.
C) Becomes more hostile.
D) None of these answers is correct.
37) Companies that believe they can make decisions unilaterally, without taking into consideration
their impact on others, are:
A) Interactive.
B) Proactive.
C) Reactive.
D) Inactive.
38) Firms that generally act only when forced to do so, and then in a defensive manner, are:
A) Interactive.
B) Proactive.
C) Reactive.
D) Inactive.
39) Proactive companies are:
A) Much less likely to be blindsided by crises and negative surprises.
B) Much more likely to be blindsided by crises and negative surprises.
C) Just as likely to be blindsided by crises and negative surprises.
D) Much more likely to be forced to defend themselves.
40) Stakeholder engagement is:
A) Any issue that is of mutual concern to an organization and one or more of its stakeholders.
B) Competitive intelligence being collected ethically and systematically.
C) The process of ongoing relationship building between a business and its stakeholders.
D) The acquisition of information gained from analyzing the multiple environments.
41) Stakeholder engagement is, at its core, a:
A) Program.
B) Relationship.
C) Process.
D) Systems model.
42) The drivers of stakeholder engagement are:
A) Scanning, assessment, and growth.
B) Data, strategy, and organizational development.
C) Goals, motivation, and operational capacity.
D) Financial, operational, and legal.
43) The use of social media to conduct stakeholder engagement has:
A) Slowed down issue resolution.
B) Made it difficult for customers to suggest new product designs.
C) Increased the ability to share information amongst employees and partners.
D) Provided a platform to focus on a single stakeholder at a time.
44) A business and its stakeholders coming together for face-to-face conversations about issues of
common concern is called stakeholder:
A) Networks.
B) Motivation.
C) Systems.
D) Dialogue.
45) Corporations working collaboratively with other businesses and concerned persons and
organizations is an example of stakeholder:
A) Networks.
B) Motivation.
C) Systems.
D) Salience.
46) What is the public issue in the case Businesses Respond to the Movement for School Safety?
A) First amendment rights and on-the-job worker safety.
B) Second amendment rights and the safety of students in schools.
C) First amendment rights and the safety of teachers in schools.
D) Second amendment rights and safety for law enforcement.
47) What is a public issue and how do they impact modern firms?
48) What is competitive intelligence? Why is it important to the public affairs function?
49) Identify the eight strategic radar screens that enable public affairs managers to scan their
business environment. Briefly discuss the issues involved with each environment.
50) Give an example and explain why stakeholder materiality is important to both the company
and its stakeholders.
51) Identify and discuss the five steps of the Issues Management Process.
52) What are the various stages of the business-stakeholder relationship?
53) Engaging interactively with stakeholders carries a number of potential benefits. Discuss.