executives, managers, and workers), and board members.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-03 Assess the
relationship between stakeholder
strategy and sustainable competitive
advantage.
The best example of a firm’s external stakeholder is a(n)
government agency that regulates the prices of products manufactured by the firm.
board member from a wholly-owned foreign subsidiary of the firm.
shareholder who has invested money in the firm but is not employed by the firm.
employee of the firm who is responsible for a contract project.
The best example of a firm’s external stakeholder is a government agency that regulates the prices
of products manufactured by the firm. External stakeholders of a firm include customers, suppliers,
alliance partners, creditors, unions, communities, media, and governments at various levels.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-03 Assess the
relationship between stakeholder
strategy and sustainable competitive
advantage.
33.
Award: 1.00 point
The interaction between a firm and its diverse internal and external stakeholders is best described
as a(n)
ergonomic relationship.
cartel arrangement.
exchange relationship.
fiduciary responsibility.
All stakeholders make specific contributions to a firm, which in turn provides different types of
benefits to different stakeholders. The firm, therefore, is embedded in a multifaceted exchange
relationship with a number of diverse internal and external stakeholders.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-03 Assess the
relationship between stakeholder
strategy and sustainable competitive
advantage.
34.
Award: 1.00 point
Dimitre Corp. has been able to gain and sustain a competitive advantage due to its strong
relationship with its employees, customers, suppliers, and local communities. The company believes
in lifetime employment and ensures that its employees grow along with the company. Investors are
more than satisfied with the returns on their investments. Also, 3 percent of the company’s profit is
spent on community development. With initiatives like these, customers feel privileged to associate
themselves with Dimitre products. This scenario best illustrates the implementation of a
strategic analysis.
stakeholder strategy.
wild card event.
black swan event.
The scenario best illustrates the implementation of a stakeholder strategy. Stakeholder strategy is
an integrative approach to managing a diverse set of stakeholders effectively in order to gain and
sustain competitive advantage.
References
Multiple Choice Difficulty: 3 Hard Learning Objective: 01-03 Assess the
relationship between stakeholder
strategy and sustainable competitive
advantage.
35.
Award: 1.00 point
Which of the following scenarios best illustrates a good stakeholder strategy?
ASI Inc. follows a strategy in which maximization of the shareholder’s wealth is the primary
concern of the managers.
Ben’s Buttons Inc. ensures that its employees are paid the least in the industry so that its
external stakeholders can get the best price.
Nowadays Corp. distributes only 40 percent of its annual profit after taxes to shareholders,
while the remaining is invested for further research and distributed among employees and
the local community.
Knights for Lights Corp. ensures that it fully exploits free natural resources, so that most of
its profits go to shareholders in the form of dividends.
Nowadays Corp. demonstrates a good stakeholder strategy because it distributes only 40 percent
of its annual profit after taxes to its shareholders, while the remaining is invested for further
research, and distributed among employees and the local community. A core tenet of stakeholder
strategy is that a single-minded focus on shareholders alone exposes a firm to undue risks that can
undermine economic performance and can even threaten the very survival of the enterprise.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-03 Assess the
relationship between stakeholder
strategy and sustainable competitive
advantage.
36.
Award: 1.00 point
Better Capsules is a highly successful vitamin manufacturer. At the close of its most recent fiscal
year, the company’s balance sheet showed cash holdings of $110 million. Which of the following
actions will provide the most benefit for stakeholders?