Chapter 2—Stakeholder and Issues Management Approaches

TRUE/FALSE

1. The primary stakeholders of a firm include its owners, suppliers, employees, customers, and
competitors.

ANS: F DIF: Easy REF: p. 43

2. Monitoring shifting coalitions is one of the steps in conducting the stakeholder analysis.

ANS: T DIF: Easy REF: p. 45

3. Organizations take voluntary steps to uphold moral responsibilities to their stakeholders.

ANS: T DIF: Moderate REF: p. 49

4. The ideal strategic situation for an organization, according to the diagnostic typology of organizational
stakeholders, is type 4, the mixed blessing stakeholder.

ANS: F DIF: Moderate REF: p. 50

5. The appropriate strategy with type 2, marginal stakeholder, is to collaborate.

ANS: F DIF: Hard REF: p. 50

6. A distributive method resolution technique should be the first approach a CEO uses to resolve a
dispute with stakeholders.

ANS: F DIF: Moderate REF: p. 54

7. Stakeholder analysis applies to both internal and external events.

ANS: T DIF: Hard REF: p. 53

8. Moral dilemmas can arise for HR managers when affirmative action policies are threatened in favor of
corporate decisions to hide biases or protect corporate profits.

ANS: T DIF: Moderate REF: p. 60

9. According to Thomas Marx, the first stage of Life Cycle Issue Development is social control.

ANS: F DIF: Easy REF: p. 67

10. To effectively deal with a crisis, the solution must represent cross-departmental involvement.
 ANS: T DIF: Moderate REF: p. 72

MULTIPLE CHOICE

1. Which of the following is a common area of focus for stockholder and stakeholder approach?
a. Moral factors
b. Economic factors
c. Political and legal factors
d. Technological interests
ANS: B DIF: Hard REF: p. 43

2. The management approach that includes analytic concepts for mapping and evaluating strategy is
_____.
a. stakeholder management
b. stakeholder mapping
c. analytic review
d. stakeholder analysis
ANS: D DIF: Moderate REF: p. 42

3. Which approach provides a framework that enables users to map and, ideally, manage the
corporation’s relationship with groups to reach “win-win” collaborative outcomes?
a. Stockholder approach
b. Issues management approach
c. Crisis management approach
d. Stakeholder approach
ANS: D DIF: Moderate REF: p. 42

4. The primary stakeholders of a firm include all of the following except

a. competitors.
b. customers.
c. employees.
d. suppliers.
ANS: A DIF: Easy REF: p. 43

5. A ____ is any interest, share, or claim that a group or individual has in the outcome of a corporation’s
policies, procedures, or actions toward others.
a. crises
b. stake
c. strategy
d. stock
ANS: B DIF: Easy REF: p. 44

6. Which of the following represent the first step in the stakeholder analysis?
a. Monitoring shifting coalitions
b. Constructing a matrix of shareholder moral responsibilities
 c. Assessing the nature of each stakeholder’s interest
d. Mapping stakeholder relationships
ANS: D DIF: Moderate REF: p. 45

7. Which of the following is the final step in the stakeholder analysis?

a. Monitoring shifting coalitions
b. Constructing a matrix of shareholder moral responsibilities
c. Assessing the nature of each stakeholder’s interest
d. Mapping stakeholder relationships
ANS: A DIF: Moderate REF: p. 45

8. According to the stakeholder analysis, once you have identified the stakeholders who are directly or
indirectly involved with your firm, which of the following steps comes next?
a. Monitoring shifting coalitions
b. Constructing a matrix of shareholder moral responsibilities
c. Assessing the nature of each stakeholder’s interest
d. Mapping stakeholder relationships
ANS: D DIF: Hard REF: p. 45

9. Which of the following is NOT an area of moral responsibility for organizations?

a. Economic
b. Societal
c. Legal
d. Ethical
ANS: B DIF: Moderate REF: p. 49

10. All of the following are types of power stakeholders except those with
a. voting power.
b. social power.
c. political power.
d. economic power.
ANS: B DIF: Easy REF: p. 48

11. According to the diagnostic typology of organizational stakeholders, the ideal strategic situation for the
focal corporations is type
a. 1.
b. 2.
c. 3.
d. 4.
ANS: A DIF: Moderate REF: p. 50

12. A type 2 stakeholder, according to the diagnostic typology, is referred to as a ____ stakeholder.
a. supportive
b. nonsupportive
c. marginal
d. mixed blessing
 ANS: C DIF: Moderate REF: p. 50

13. Which of these strategies is suggested for a type 4, mixed blessing, stakeholder?
a. Involve
b. Monitor
c. Defend
d. Collaborate
ANS: D DIF: Moderate REF: p. 50

14. A type 2, marginal, stakeholder calls for a(n) ____ strategy.

a. involve
b. defend
c. monitor
d. collaborate
ANS: C DIF: Moderate REF: p. 50

15. Fry and Ury base their negotiation recommendations on all of the following except
a. separate people from problems.
b. focus on positions.
c. generate a variety of options.
d. use objective criteria.
ANS: B DIF: Hard REF: p. 55

16. To identify and respond to trends that lead to organizational opportunities and threats, many companies
use which of the following?
a. Trend setters
b. Market researchers
c. Issues managers
d. Codes of ethics
ANS: C DIF: Moderate REF: p. 60

17. Which of the following represents the first step in the 6-step issue management process?
a. A felt need arises
b. Social expectations
c. Environmental scanning and issue identification
d. Issues analysis
ANS: C DIF: Moderate REF: p. 64

18. Which of the following represents the final step in the 6-step issue management process?
a. Social control
b. Issue evaluation and monitoring
c. Issues and policies enter litigation
d. Issues response and implementation
ANS: B DIF: Moderate REF: p. 64

19. Which of the following represents the first phase of the 7-phase issue development process?
 a. A felt need arises
b. Social expectations
c. Environmental scanning and issue identification
d. Issues analysis
ANS: A DIF: Moderate REF: p. 65

20. Which of the following represents the final phase of the 7-phase issue development process?
a. Social control
b. Issue evaluation and monitoring
c. Issues and policies enter litigation
d. Issues response and implementation
ANS: C DIF: Moderate REF: p. 66

21. Which of the following represents the first stage in the 4-stage issue life cycle?
a. A felt need arises
b. Social expectations
c. Environmental scanning and issues identification
d. Legislation
ANS: B DIF: Moderate REF: p. 67

22. The final stage of the 4-stage issue life cycle is

a. litigation.
b. issue evaluation and monitoring.
c. legislation.
d. social control.
ANS: D DIF: Moderate REF: p. 67

23. Which of the following is the first stage of the 4-stage crisis management approach?
a. Reaction
b. Accommodation
c. Prodromal
d. Acute
ANS: C DIF: Easy REF: p. 69

24. Which of the following is the first stage of the 5-stage crisis management approach, according to
Matthews, Goodpaster, and Nash?
a. Reaction
b. Accommodation
c. Prodromal
d. Acute
ANS: A DIF: Easy REF: p. 71

25. ____ is the final stage of the 5-stage crisis management approach.
a. Agency
b. Defense
c. Reaction
 d. Accommodation
ANS: A DIF: Moderate REF: p. 71

26. During which stage of the 5-stage crisis management approach does the company attempt to
understand the causes of the safety issue and develop an education program for the public?
a. Agency
b. Defense
c. Reaction
d. Accommodation
ANS: A DIF: Hard REF: p. 71

27. Which of the following should a manager NOT use to effectively deal with a crisis situation?
a. Use the firm’s philosophy
b. Stage “war games”
c. Understand the entire business
d. Delay response to customers until the solution has been tried
ANS: D DIF: Moderate REF: p. 72

ESSAY

1. Briefly describe the seven steps of stakeholder analysis.

ANS:
Students should describe: (1) Mapping stakeholder relationships; (2) Mapping stakeholder coalitions;
(3) Assessing the nature of each stakeholder’s interest; (4) Assessing the nature of each stakeholder’s
power; (5) Constructing a matrix of stakeholder moral responsibilities; (6) Developing specific
strategies and tactics; and (7) Monitoring shifting coalition.

REF: p. 44 - p. 52

2. Explain the diagnostic typology of organizational stakeholders.

ANS:
Please refer to Figure 2.4 in the chapter.

REF: p. 50

3. Discuss the 7-phase issue development process using an example.

ANS:
Please refer to Figure 2.9 in the text.

REF: p. 74 - p. 66

4. Describe the 4-stage issue life cycle approach.

 ANS:
Please refer to Figure 2.10 in the text.

REF: p. 74 - p. 67

5. Identify and explain the 4-stage approach to crisis management.

ANS:
Please refer to Figure 2.11 in the text.

REF: p. 69