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BUS101 Saylor Adcamy
Unit 1; 1.1; Section 5; Q & A
| Question | Answer |
|---|---|
| What is a stakeholder? | An individual or group with an interest in an entity's ability to deliver intended results while maintaining viability of the product or service. |
| What is a stockholder? | An owner of stock in a company. |
| What is fiduciary duty? | A legal or ethical relationship of trust where a fiduciary prudently takes care of money for another person. |
| How does stakeholder theory differ from the traditional view of the firm? | The traditional view focuses only on stockholders, while stakeholder theory includes other parties such as employees, communities, governments, and even competitors. |
| What are market stakeholders? | Stakeholders who engage in direct economic transactions with the business, such as customers, suppliers, creditors, or employees. |
| What are non-market stakeholders? | Stakeholders who generally do not engage in direct economic exchange but are affected by or can affect the business, such as communities, activist groups, and the media. |
| Can competitors be stakeholders? | Yes, in some scenarios competitors are considered stakeholders. |
| What do stakeholders prioritize compared to shareholders? | Stakeholders focus on corporate responsibility, while shareholders focus on profitability. |
| What is the main goal according to stakeholder theory? | To achieve satisfaction among all parties involved, not just maximize profit. |
| What does the traditional input-output model of a corporation focus on? | Converting inputs from investors, employees, and suppliers into outputs customers buy, benefiting the firm. |
| List four key arguments for managing a firm for stakeholders. | Maximizing joint outcomes, recognizing contributions of all parties, limiting stockholder dominance, and protecting brand/image. |
| How can maximizing joint outcomes create value? | By addressing customer wishes along with employee and shareholder interests, leading to increased sales and benefits for all. |
| Why do some oppose giving stockholders a preeminent role? | Because debt holders, employees, and suppliers also contribute and take risks in creating a successful firm. |
| Why is brand and image important for companies in stakeholder theory? | Fulfilling diverse stakeholder needs protects brand, increases sales, avoids legal issues, and reduces pressure group targeting. |
| How does stakeholder focus reduce risks? | It prevents damage to brand, loss of sales, customer dissatisfaction, and costly legal liabilities. |
| When was the term 'stakeholder' first used? | In 1963, in an internal memorandum at the Stanford Research Institute. |
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