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Business & Society, 16e (Lawrence)
Chapter 8 Influencing the Political Environment
1) Businesses believe they should avoid politics because the economic stakes are too high.
2) The emergence of public issues often encourages companies to monitor public concerns,
respond to government proposals, and participate in the political process.
3) Those who oppose business involvement with politics argue that managers do not have enough
expertise to participate.
4) Stakeholder groups typically use far different tactics than businesses to influence government
officials, elections, and regulation.
5) Businesses that are frequent targets of public debate are more likely to develop a long-term
political strategy.
6) A firm that provides technical details to policymakers to influence a political outcome is using
the financial-incentives strategy.
7) Businesses must wait for a public issue to arise before forming a political strategy.
8) A Super PAC is a financial-incentive political strategy tool.
9) Businesses and trade associations spend very little on lobbying.
10) Under U.S. law, lobbying activities must be disclosed publicly.
11) Sometimes businesspeople leave the private sector to take employment in government before
returning to the corporate world.
12) Expert witnesses provide testimony to legislators for businesses or business groups.
13) When a manager directly employs a lobbyist to represent the company's political strategy, in
Washington this is called aggressive organizational involvement in politics.
14) According to the textbook, most public affairs departments are managed by someone in a vice
president position.
15) U.S. firms that operate outside the country have no need to understand businesses' role in
foreign politics.
16) Public policies and government regulations are shaped by:
A) Business.
B) Special interest groups.
C) Government.
D) All of these answers are correct.
17) Proponents of business as a political participant argue:
A) A pluralistic system invites many participants.
B) It is business's constitutional right to be involved.
C) Business is a vital stakeholder of government.
D) Both of these answers are correct: A pluralistic system invites many participants; and business
is a vital stakeholder of government.
18) A large sporting goods store that raised the age for purchase of some firearms in response to
public concerns for gun control were seen by detractors as:
A) Being too selfish to care about humanity.
B) Trying to solve a problem they had no expertise in.
C) Risking their reputation by engaging in politics.
D) Being too small and weak to make a difference.
19) A corporate political strategy does not:
A) Hinder a competitor's ability to compete economically.
B) Seek to continue the firm's economic survival or growth.
C) Determine the legal limits allowed for campaign financing.
D) Exercise a firm's right to a voice in government affairs.
20) Firms in the chemical industry, which must contend with frequently changing environmental
regulations and the risk of dangerous accidents, usually have:
A) No defined political strategy.
B) A sophisticated political strategy.
C) A political strategy focused on intellectual property rights.
D) A political strategy focused on licensing rights.
21) To influence government policymakers' actions, an information strategy involves:
A) Business leaders speaking before government policymakers.
B) Government policymakers hiring special interest groups for fact-finding projects.
C) Businesses listening to government policymakers in order to develop a corporate strategy.
D) Gaining support from other affected organizations.
22) Which political action strategy seeks to gain support from other affected organizations to
better influence policymakers?
A) Information strategy.
B) Constituency-building strategy.
C) Financial-incentive strategy.
D) Lobbying strategy.
23) A common tactic in a financial-incentive political strategy is:
A) Lobbying.
B) Legal challenges.
C) Expert witness testimony.
D) Political contributions.
24) Which of the following is not a constituency-building strategy tool?
A) Expert witness testimony.
B) Advocacy advertising.
C) Public relations.
D) Legal challenges.
25) A company that builds stakeholder coalitions to influence government is using which strategy?
A) Informational.
B) Financial-incentives.
C) Constituency-building.
D) Friendly forces.
26) The information strategy tool most used by business is:
A) Political contributions.
B) Lobbying.
C) Legal challenges.
D) Direct communication.
27) Lobbyists, under U.S. law, must disclose their:
A) Political affiliation and expenses.
B) Earnings only.
C) Expenses only.
D) Earnings and expenses.
28) Since 2008, the total amount spent on lobbying activity has:
A) Remained exactly the same.
B) Doubled.
C) Decreased slightly.
D) Increased slightly.
29) Hiring former government officials for positions in the corporate world is:
A) Normally legal.
B) Always unethical.
C) Considered unethical by over 50% of Americans.
D) Both of these answers are correct: Always unethical; and considered unethical by over 50% of
Americans.
30) Businesses promote an information strategy by inviting government leaders to:
A) Visit local plant facilities.
B) Attend company award ceremonies.
C) Give speeches to employees.
D) All of these answers are correct.
31) Expert witness testimony is often collected:
A) Through company newsletters.
B) On the steps of the White House.
C) In congressional hearings.
D) From The Wall Street Journal.
32) One of the oldest financial-incentive strategy tools is:
A) Political action committee contributions.
B) Political consulting aid.
C) Advocacy advertising.
D) Lobbying.
33) Which of these statements accurately describes a Super PAC?
A) Allows limited contributions from unions.
B) Allows limited contributions from individuals.
C) Is also called the dependent expenditure-only committee.
D) Does not allow direct contributions to candidates or political parties.
34) Dark money refers to:
A) Anonymous contributions to for-profit organizations.
B) Money collected illegally by PACs.
C) Soft money.
D) Undisclosed contributions to tax-exempt organizations.
35) Economic leverage occurs when a business uses its economic power to:
A) Hire lobbyists to gain a desired political action.
B) Pay for the costs of regulation to acquire a desired political action.
C) Threaten to leave a location unless a desired political action is taken.
D) Buy out another firm to acquire a desired political action.
36) Advocacy ads are also called:
A) Issue advertisements.
B) Research and development plans.
C) Constituent advertisements.
D) Price control advertisements.
37) Supporters of advocacy advertisements believe that they:
A) Identify a company as an interested and active stakeholder.
B) Can help mold public opinion on a particular policy issue.
C) Increase union activity and long-term expenses for an organization.
D) Both of these answers are correct: Identify a company as an interested and active stakeholder;
and can help mold public opinion on a particular policy issue.
38) When a business seeks to overturn a law after it has been passed or threatens to challenge the
legal legitimacy of the new regulation in the courts, this is called:
A) Accumulating.
B) Overturn lobbying.
C) Legal challenges.
D) Funneling.
39) When a firm solicits its stockholders for political contributions for a particular candidate by
letter and then sends those contributions to the candidate on behalf of its stockholders, it is called:
A) Lobbying.
B) Bundling.
C) Collating.
D) Constituency building.
40) When managers become personally involved in developing public policy, the firm is at what
level of business political involvement?
A) Limited organizational involvement.
B) Moderate organizational involvement.
C) Aggressive organizational involvement.
D) Holistic organizational involvement.
41) In a survey of 105 companies in 2017, the most frequent public affairs tactic was related to:
A) Grassroots issues.
B) Political action committees.
C) Issues management.
D) Federal government relations.
42) The typical public affairs executive spends most of the day:
A) Coalition building.
B) Direct lobbying.
C) Fund raising.
D) All of these answers are correct.
43) To help control political favoritism, there have been global efforts to:
A) Promote fairness in the electoral process.
B) Control the rapid decrease in campaign costs.
C) Diminish the role of political parties.
D) Discourage grassroots participation.
44) In Japan's pluralistic public policy process, who are the major participants?
A) Members of religious institutions and non-profits.
B) Representatives of big business, agriculture, and labor.
C) Military personnel and top law enforcement agents.
D) Professors and other members of academia.
45) In 2016, the Global Electoral Organization (GEO) discussed which critical election
administration issues?
A) How to disengage electoral stakeholders.
B) The use of technology to increase accountability.
C) How to increase election disputes.
D) How to hide dark money contributions.
46) In the case Political Action by the U.S. Steel Industry, 2015–2018, what is one reason that
foreign-made steel prices were so much lower than U.S. steel?
A) Foreign steel-makers hired only union labor.
B) American steel manufacturers were overcharging their customers.
C) Many foreign governments subsidized their steel industries.
D) U.S. steel prices were actually lower than foreign steel prices.
47) Prepare a strong argument in favor of and in opposition to businesses being involved in the
political process.
48) Who are the major participants in the U.S. political process and are they cooperative or
adversarial in their relations with each other?
49) How do the three types of corporate political strategies differ from each other?
50) Describe two tactics used to promote each of the three types of corporate political strategies.
51) Compare and contrast the three levels of business political involvement.
52) Describe the role of an organization's public affairs department and describe who would be in
charge of that department.
53) Briefly describe the public policy process of a foreign country and its implication on the
business political activity in that country.
