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MCQs on Stakeholders and corporate objectives

Corporate objectives should relate to the business as a whole and can be both financial and non- financial (e.g. Profitability, Customer satisfaction,

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MCQs on Stakeholders and corporate objectives

Corporate objectives should relate to the business as a whole and can be both financial and non- financial (e.g. Profitability, Customer satisfaction, Market share). Here on MCQs.CLUB we have prepared easy and useful MCQs on Stakeholders and corporate objectives that fully cover MCQs on stakeholder meaning, definition, theory, management, value with examples. These also cover the key stakeholders such as internal and external stakeholders in business and their responsibility towards consumer and other different types of stakeholders. These Business & Stakeholder Objectives Quiz and test questions are also useful for competitive exams, business management exams and professional accountancy exams.

Which of the following is correct?

1. Strategies are developed in order to achieve desired outcomes. These desired outcomes are inherent in the organisation’s mission and vision.
2. Mission describes an organisation’s basic purpose, and what it is trying to achieve. As such it can guide strategic decisions and helps to identify the organisation’s values.
3. Vision is oriented towards the future, and can help give the organisation a sense of direction.
4. All of the above

An organisation’s mission identifies the overriding purpose of the organisation, and what the organisation is trying to achieve. Mission is sometimes described in relation to the questions of ‘What is the organisation for?’ or ‘What business are we in?’

1. The above statement is correct
2. The above statement is incorrect

The reasons why a business should give serious consideration to establishing a clear concept of its corporate mission include:

1. Values are acknowledged as integral elements of consumers’ buying decisions; this is shown by the attention paid to them in advertising, brand building and market research.
2. People are motivated by many things other than money; employees are likely to be both more productive and more satisfied with their work when they feel that what they are doing has significance beyond the mere pursuit of a living.
3. Both A&B
4. None

A ‘Mission Statement’ is a published statement, apparently of the entity’s fundamental objective(s). This may or may not summarise the true mission of the entity.

1. True
2. False

Mission statements are likely to have characteristics such as:

1. Stating the purpose of the organization
2. Stating the business areas in which the organisation intends to operate
3. Providing a general statement of the organisation’s culture
4. Acting as a guide to develop the direction of the entity’s strategy and its goals/objectives
5. All of the above

The criteria by which to judge the effectiveness of a corporate mission statement include:

1. Is it specific enough to impact upon individuals’ behaviour throughout the business?
2. Does it reflect the distinctive advantage of the organisation and recognise its strengths and weaknesses?
3. Is it realistic and attainable?
4. Is it flexible to the demands of a changing environment?
5. All of the above

Although a number of successful companies have mission statements, critics raise criticisms of mission statements such as:

1. They are often public relations exercises rather than an accurate portrayal of the organisation’s actual values.
2. They may be ignored by the people responsible for formulating or implementing strategy.
3. They become obsolete, as they fail to evolve over time to reflect changes in the organisation, or in its markets or the external environment.
4. All of the above

Which of the following is correct?

1. There are no fixed rules about how long an organisation should keep the same mission statement.
2. A company’s mission statement could be periodically reviewed to ensure it still accurately reflects the company’s position and its environment.
3. Both A&B
4. None

The mission statement can play an important role in the strategic planning process such as:

1. Plans should further the organisation’s goals and be consistent with its values
2. Mission acts as a yardstick by which plans are judged.
3. Mission also affects the implementation of a planned strategy in terms of the ways in which an organisation carries out its business, and through the culture of the organisation.
4. All of the above

An organisation’s vision also relates to its overall goals, but crucially it refers to the desired future state of the organisation. Its vision should address questions of:

1. What do we want to achieve?
2. Where is the organisation going?
3. Both A&B
4. None

Which of the following is correct?

1. Vision statements should express the organisation’s aspirations, with a view to mobilising the motivation and energy of its employees in order to realise those aspirations.
2. Vision give a general sense of direction to an organisation, which provides a framework to develop specific objectives and the detail of the organisation’s strategy.
3. Both A&B
4. None

Which of the following is correct?

1. Goals and objectives derive from mission and support it.
2. Goals that are related to one another should be mutually supportive (goal congruence).
3. Both A&B
4. None

Goals can be related in several ways:

1. Hierarchically, as in the pyramid structure
2. Functionally, as when colleagues collaborate on a project
3. Logistically, as when resources must be shared or used in sequence
4. In wider organisational senses, as when senior executives make decisions about their operational priorities
5. All of the above

Which of the following is correct?

1. A Goal is often a longer-term overall aspiration
2. Goals are ‘the intentions behind decisions or actions, the states of mind that drive individuals or organisations to do what they do.
3. Goals may be difficult to quantify and it may not be very helpful to attempt to do so.
4. All of the above

Objectives are often quite specific and well-defined, though they can also embody comprehensive purposes.

1. True
2. False

The ‘objectives’ should be:

1. Specific
2. Measurable
3. Achievable
4. Relevant
5. Time-related
6. All of the above

Functions of objectives are:

1. objectives define what the plan is about.
2. objectives should support one another and be consistent; this integrates the efforts of different departments.
3. the first step in motivation is knowing what is to be done. Objectives must be created for all areas of performance.
4. All of the above

Corporate objectives should relate to the business as a whole and can be both financial and non- financial (e.g. Profitability, Customer satisfaction, Market share).

1. True
2. False

There are different ways of expressing a financial objective in quantitative terms. Financial objectives would include the following:

1. Profitability
2. Return on investment (ROI) or return on capital employed (ROCE)
3. Share price, earnings per share, dividends
4. All of the above

Some objectives are more important than others. Objectives may be:

1. Primary
2. Secondary
3. Subsidiary
4. All of the above

Goals for markets will involve several types of decisions including:

1. Whether the organisation wants to be the market leader, or number two in the market, what rate of growth it desires and so on
2. Whether there should be an objective to shift position in the market – e.g. from producing low-cost for the mass market to higher-cost specialist products
3. Whether there should be an objective of broadening the product range or extending the organisation’s markets
4. All of the above

Goals for products and services include:

1. Labour productivity objectives
2. Capital productivity
3. Quality and technology objectives
4. All of the above

Which of the following is correct?

1. Where there are multiple objectives a problem of ranking can arise.
2. There is never enough time or resources to achieve all of the desired objectives. Some might be achieved only at the expense of others.
3. Both A&B
4. None

The critical success factor approach is an alternative to the pyramid structure of objectives. It aims to identify a small number of performance areas in which satisfactory results will derive successful competitive performance overall.

1. The above statement is correct
2. The above statement is incorrect

Which of the following is correct?

1. Critical Success Factors (CSFs) are ‘Elements of the organisational activity which are central to its future success.
2. Critical success factors may change over time, and may include items such as product quality, employee attitudes, manufacturing flexibility and brand awareness’.
3. Both A&B
4. None

The stage process for using Critical Success Factors (CSFs) are:

1. Identify the CSFs for the process under review.
2. Identify the underlying competences required to gain a competitive advantage in each of the CSFs.
3. Ensure the list of competences is sufficient to generate competitive advantage.
4. Develop performance standards – key performance indicators (KPIs).
5. Ensure developed standards cannot be matched by competitors.
6. Monitor competitors and assess the impact on the CSFs of any response competitors may make.

1. (I)(III) and (V) only
2. (I) (IV) and (VI) only
3. (II) (III) and (VI) only
4. All of the above

Objectives are set for varying time horizons. There is a trade-off between long-term and short-term objectives when they are in conflict, or its resources are scarce.

1. True
2. False

The trade-offs between short and long-term objectives is referred to as S/L trade-off.

1. True
2. False

Decisions which involve the sacrifice of longer-term objectives include:

1. Postponing or abandoning capital expenditure projects, which would eventually contribute to growth and profits, in order to protect short-term cash flow and profits.
2. Reducing the level of customer service, to save operating costs (but sacrificing goodwill).
3. Both A&B
4. None

Stakeholders – are ‘Those persons and organisations that have an interest in the strategy of the organisation. Stakeholders normally include shareholders, customers, staff and the local community.’

1. The above definition is correct
2. The above definition is incorrect

Which of the following is correct?

1. Stakeholders’ interests can have an influence on an organisation’s mission, objectives and strategy.
2. The variety of different stakeholder groups an organisation may have – each with very different interests and requirements.
3. The organisation may have to manage the conflicting interests of different stakeholder groups.
4. All of the above

An organisation must take the needs of its stakeholders into account when formulating its mission and objectives, but if the needs of different stakeholders conflict the organisation will need to prioritise the interests of its key stakeholders (based on their level of power and interest in the organisation).

1. The above statement is correct
2. The above statement is incorrect

Examples of Connected stakeholders are:

1. Shareholders
2. Banker
3. Suppliers
4. All of the above

Examples of External stakeholders are:

1. Government and regulatory agencies
2. Industry associations and trade unions
3. Both A&B
4. None

The examples of the different types of responsibility an organisation has to its stakeholders are:

1. Economic – to generate an acceptable rate of return to shareholders
2. Legal – to comply with relevant rules and regulations
3. Socially responsible – to be a good corporate citizen, and to make a positive contribution to the local community
4. All of the above

Stakeholders may be unable to exercise any power over an organisation, whether as consumers, employees or members of the public at large. In these circumstances, individuals may seek to influence an organisation by joining a pressure group. Pressure groups arise for:

1. Political representatives fail to air important concerns
2. Different groups in society have different interests
3. Both A&B
4. None

The role of pressure groups is controversial because:

1. The existence of a pressure group means that power is diffused widely, and that they are an informal check on ever-increasing power of the state.
2. Pressure groups (e.g. business interests) are far more influential than others and that this is anti-democratic.
3. Both A&B
4. None

The main pressure groups reflecting economic interests are:

1. Professional associations (accountants and doctors)
2. Trade unions
3. Consumers’ associations
4. All of the above

Stakeholder power can come from a number of different sources. For example:

1. Position power within an organisation (e.g. directors)
2. Expert power – e.g. skilled staff may have a high level of power if their skills are critical to a business and difficult to replace
3. Resource power – e.g. a supplier may have high power if it supplies a vital input into a manufacturing process
4. All of the above

An organisation needs to ensure that it understands, acknowledges and manages the expectations of its key stakeholders, and regular communication with the stakeholders should help to achieve this.

1. True
2. False

Which of the following is correct?

1. Successful stakeholder management presents the organisation with the opportunity of creating positive, productive and long-lasting relationships.
2. If the situation is mismanaged, the organisation may damage stakeholder relationships creating threats such as resource withdrawal or reputational damage.
3. Both A&B
4. None

The opportunities and threats regarding stakeholder relationships should be analysed in terms of:

1. Impact, Direction
2. Time scale and Ability to resolve
3. Both A&B
4. None

Which of the following decisions management should consider when determining their approach to stakeholder management:

1. Do they deal directly or indirectly with stakeholders?
2. Do they take an offensive or defensive approach?
3. Do they accommodate, negotiate, manipulate or resist stakeholder claims?
4. All of the above

Ways of resolving conflicting objectives between different stakeholder groups include:

1. Satisficing – Using negotiations between key stakeholder groups to reach a compromise which is acceptable to all of them.
2. If it appears that there is no other way of resolving conflicting views, a senior figure could force through a decision by virtue of the power they possess.
3. Both A&B
4. None

Business Ethics can be defined as the standards of behaviour in the conduct of business.

1. True
2. False

A professional accountant shall comply with fundamental principles of Ethics including:

1. Integrity – acting honestly, straightforwardly and truthfully in all professional and business relationships.
2. Objectivity – not allowing bias, conflict of interest, or the undue influence of others to override professional or business judgements.
3. Professional competence and due care – maintaining professional knowledge and skill at the level required.
4. Confidentiality and Professional behavior
5. All of the above

Threats to the fundamental ethical principles include:

1. Self-interest threat, Self-review threat
2. Advocacy threat, Familiarity threat and Intimidation threat
3. Both A&B
4. None

Safeguards are actions of other measures designed to eliminate threats or reduce them to an acceptable level. The broad categories of safeguard include:

1. Safeguards created by the profession, legislation or regulation.
2. Safeguards in the work environment
3. Both A&B
4. None

Which of the following is correct?

1. Social Cost – ‘Tangible and intangible costs and losses sustained by third parties or the general public as a result of economic activity, for example pollution by industrial effluent’.
2. Social Responsibility Accounting – ‘Identification, measurement and reporting of the social costs and benefits resulting from economic activities.’
3. Both A&B
4. None

Corporate Social Responsibility (CSR) is an organisation’s obligation to maximise positive stakeholder benefits while minimising the negative effects of its actions.

1. True
2. False

Corporate Social Responsibility (CSR) includes:

1. Economic issues
2. legal issues
3. ethical issues
4. All of the above

Which of the following is correct?

1. CSR requires an organisation to go beyond simply adhering to minimum ethical standards.
2. CSR is more closely associated with contemporary business issues, and concerns organisations giving something back to society, and being good citizens.
3. CSR is socially mediated and likely to be specific to the time and culture in which it is considered.
4. All of the above

Examples of CSR could include:

1. Policies for restricting the use of child labour by suppliers
2. Commitment to the protection of the local community
3. Written antidiscrimination policies
4. All of the above

Different organisations take very different stances on social responsibility, and their different stances will be reflected in how they manage such responsibilities. identify corporate social responsibility stances.

1. Laissez-faire
2. Enlightened self-interest (Long-term shareholder interest)
3. Multiple stakeholder obligations
4. Shaper of society
5. All of the above

Which for the following correct?

1. Organisations which adopt a laissez-faire stance take the view that an organisation’s only responsibilities are the short-term interests of shareholders, and to make a profit, pay taxes and provide jobs.
2. Organisations adopting Laissez-faire view believe that it is the government’s role to prescribe, through legislation and regulation, the constraints which are placed on businesses in their pursuit of economic efficiency.
3. Both A&B
4. None

The rationale behind the ‘enlightened self-interest’ stance is that there can be a long-term benefit to shareholders from well-managed relationships with other stakeholders.

1. True
2. False

Which of the following is correct?

1. Organisations adopting Multiple stakeholder obligations stance accept the legitimacy of the expectations of stakeholders other than shareholders and build those expectations into the organisation’s stated purposes.
2. Shapers of society regard financial considerations as being of secondary importance to changing society or social norms.
3. Both A&B
4. None

Arguments against corporate social responsibility include:

1. Businesses do not have responsibilities, only people have responsibilities. Managers in charge of corporations are responsible to the owners of the business, by whom they are employed.
2. Only the maximisation of wealth is the best way that society can benefit from a business’s activities.
3. Both A&B
4. None

Arguments in favour of CSR include:

1. Customer expectations – There is an increasing expectation from consumers and other stakeholders that businesses will act in a more socially responsible manner.
2. Brand name – Being seen as socially responsible can help enhance a business’s reputation and therefore its brand.
3. Lower environmental costs – If firms improve the efficiency of their energy usage.
4. All of the above

Which of the following is correct?

1. Stakeholder theory highlights that the extent of the impact firms have on society is so significant that firms need to be accountable to many more groups in society (stakeholder groups) than just their shareholders.
2. The shareholder-based view of the firm argues that a firm’s primary objective is to meet the needs of its owners (shareholders) and to generate value for them.
3. Both A&B
4. None

Firms sometimes carry out social audits. This generally involves:

1. Recognising a firm’s rationale for engaging in socially responsible activity
2. Identifying programmes which are congruent with the mission of the company
3. Setting objectives and priorities related to this programme
4. Specifying the nature and range of resources required
5. All of the above

Strategies for social responsibility include:

1. Proactive strategy, Reactive strategy
2. Defence strategy and Accommodation strategy
3. Both A&B
4. None

Environmental impacts on business may be direct. For example:

1. Changes affecting costs or resource availability
2. Impact on demand
3. Effect on power balances between competitors in a market
4. All of the above

How green issues will impinge on business, possible issues to consider are:

1. Consumer demand for products which appear to be environmentally friendly
2. Demand that businesses be charged with the external cost of their activities
3. Opportunities to develop products and technologies which are environmentally friendly
4. All of the above

Which of the following is correct?

1. Sustainability involves developing strategies so that the company only uses resources at a rate that allows them to be replenished such that the needs of the current generation can be met without compromising the needs of future generations.
2. Sustainability means that resources consumed are replaced in some way: for every tree cut down another is planted.
3. Both A&B
4. None

A full consideration of sustainability in company reports is hampered by several difficulties. Examples include:

1. Lack of a standard methodology
2. Accountants/auditors lack environmental expertise
3. Difficulties in determining environmental costs
4. Identification and valuation of potential liabilities is problematic
5. All of the above

The triple bottom line (TBL) is sometimes summarised as People, Planet, and Profit.

1. True
2. False

The triple bottom line (TBL) consists of:

1. Social justice – fair and beneficial business practices towards labour and the community and the region in which a corporation conducts its business.
2. Environmental quality – a TBL company endeavours to benefit the natural order as much as possible, or at the least do no harm and curtail environmental impact.
3. Economic prosperity – the economic benefit enjoyed by the host society. It is the lasting economic impact the organisation has on its economic environment.
4. All of the above

Companies should introduce procedures to try to prevent non-compliance with environmental laws and regulations, and to avoid the fines or penalties which accompany such non-compliance. Companies should consider:

1. Developing and operating a code of practice for environmental issues, such as accidental spills and the disposal of waste, especially hazardous waste.
2. Monitoring legal requirements and ensuring that operating procedures are designed to comply with these requirements.
3. Both A&B
4. None

Drivers of business sustainability include:

1. Regulatory requirements
2. Managing reputational risk
3. Cost-cutting and efficiency
4. All of the above

Environmental Management Accounting (EMA) concept can be defined as the identification, collection, analysis and use of:

1. Physical information on the use, flows and fates of energy, water and materials (including wastes).
2. Money metrics on environmentally-related costs, earnings and savings.
3. Both A&B
4. None

Which of the following stakeholder groups and audiences Not-for-profit organisations (NFP) may serve:

1. target public and client public
2. donors and volunteers
3. local and national government
4. All of the above

—more to come soon—

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