1. According to the reading, the three models of analysis of business-government
ID: 452576 • Letter: 1
Question
1. According to the reading, the three models of analysis of business-government relations—the shareholder, strategic, and stakeholder perspectives—all have their strengths and weaknesses in varying situations, and the quality of implementation is often as important as the selection of any given model. (61)
a. True
b. False
2. The shareholder model tends to focus on the organizational level, the strategic tends to look at an economic institutional perspective, and stakeholder model tends to have an ethically-based approach. (46)
a. True
b. False
3. Which model tends to focus on the efficiency of the economic system? (46)
a. The shareholder model
b. The strategic model
c. The stakeholder model
d. Crony capitalism model
4. Which model tends to focus on the non-intervention of government? (46)
a. The shareholder model
b. The strategic model
c. The stakeholder model
d. All of the above
e. None of the above
5. Which model tends to focus on the smallest government possible? (46)
a. The shareholder model
b. The strategic model
c. The stakeholder model
d. All of the above
e. None of the above
6. Which of the following is NOT cited by the text as a reason for market failure? (48)
a. Lack of production or protection of public goods like lighthouses and fresh air
b. The asymmetry of information problem
c. Principal-agent problems (where it is nearly impossible for owners to tell what agents are doing)
d. A competitive market
e. None of the above
7. The negative effects of wealth concentration following the industrial revolution led to theories for more state-centric, or socialistic approaches, using government as a force for poverty reduction and progressive improvement of society. (49)
a. True
b. False
8. Which of the following is NOT cited as an occasional weakness of the shareholder model? (48/49)
a. Market imperfections
b. The demand by business itself for government services
c. The excess focus on materialism and wealth accumulation at the expense of other human values
d. The promotion of elaborate welfare regimes
e. All of the above
9. The text uses the Heritage Foundation’s Economic Freedom Index as a tool to rank countries in line with relatively purist neoliberal principles. The U.S. was at the bottom of the top ten (of 177 countries), despite having a very high per capita income. (50)
a. True
b. False
10. Which model tends to focus on the daily practice of business and an individual company perspective? (50)
a. The shareholder model
b. The strategic model
c. The stakeholder model
d. All of the above
e. None of the above
11. Which model tends to focus on government as an occasional advantage, partner, and lucrative source of revenue? (50)
a. The shareholder model
b. The strategic model
c. The stakeholder model
d. All of the above
e. None of the above
12. Which model tends to focus on both competition and collaboration in being successful? (50)
a. The shareholder model
b. The strategic model
c. The stakeholder model
d. All of the above
e. None of the above
13. Which model do Chambers of Commerce tend to demonstrate in their policies? (50)
a. The shareholder model
b. The strategic model
c. The stakeholder model
d. The crony capitalism model
14. Community banks are depository institutions that are generally owned and operated locally. They are a prime example of the shareholder model. (53)
a. True
b. False
15. Russia and China do relatively well as developing and transitional countries on the Global Competitiveness Index, but they do worse on the Economic Freedom Index because they are still relatively authoritarian states. (53)
a. True
b. False
16. If one were to associate types of banks with the three models, community and regional banks would be a good example of the strategic approach. (53)
a. True
b. False
17. Which model tends to focus on business as a part of, and subordinate to, society? (53)
a. The shareholder model
b. The strategic model
c. The stakeholder model
18. The Boeing Company is a prime example of the shareholder model. (54/55)
a. True
b. False
19. What are early examples of corporate ethics efforts? (56)
a. The Good Housekeeping Seal of Approval
b. The Better Business Bureau
c. Consumer Reports
d. All of the above
e. None of the above
20. Goldman Sachs won a Corporate Responsibility award for its efforts to aid Greece in the Great Recession. (56/57)
a. True
b. False
21. Development banks are a prime example of the shareholder model of business-government relations. (58/59)
a. True
b. False
22. The shabby state of corporate ethics is illustrated by the fact that top corporations rarely make the top ten in the Corporate Responsibility journal’s annual ranking. (59)
a. True
b. False
23. In comparison to the other wealthy countries, the U.S. has an extremely low GINI coefficient (indicating income equality). (59)
a. True
b. False
24. According to the text, which of the countries has the highest ranking across all indexes discussed (economic freedom, global competitiveness, human development, environmental concern, and equitable wealth distribution)? (59)
a. China
b. U.S.
c. Russia
d. Switzerland
25. Crony capitalism refers to an economy, or parts of an economy, in which there are close relationships between business and government that lead to favored treatment of individuals, companies, or even entire industries at the expense of the public good. (59)
a. True
b. False
26. What models fit the following values, in the order presented: concern for inclusion that is integrated into business practices, short term wealth creation, synergy of sectors. (60)
a. Shareholder, stakeholder, strategic
b. Strategic, shareholder, shareholder
c. Strategic, shareholder, stakeholder
d. Stakeholder, shareholder, strategic
e. Stakeholder, strategic, shareholder
27. Crony capitalism is most associated with the strategic business model of capitalism. (61)
a. True
b. False
28. The strongman model of crony capitalism exists in countries like Germany and the U.S. where Chancellor Angela Merkel and President Barack Obama are powerful national leaders. (61)
a. True
b. False
29. The fused political-bureaucratic elite model of crony capitalism is a type of aristocratic style of capitalism in which a single in-group or class tends to dominate business and politics. (61)
a. True
b. False
30. Examples of the fused political-bureaucratic elite model include the countries of India, China, Mexico, and Brazil. (61)
a. True
b. False
31. In the economic elite dominance model of crony capitalism, the patterns of business include: (61/62)
a. Regulatory capture by industry, often keeping newcomers out
b. Excessive influence over the media
c. Excessive opportunities to be a part of the political establishment
d. All of the above
e. None of the above
32. The most blatant form of crony capitalism is the economic elite dominance model. A prime example is Russia. (61)
a. True
b. False
33. The U.S. is at a relatively low level of crony capitalism relative to most countries in the world. However, in one form of crony capitalism, that based on wealth concentrated in government-regulated industries, it is in the top 20 countries. (63)
a. True
b. False
34. China has more crony capitalism than Russia. (63)
a. True
b. False
35. An indirect measure of crony capitalism is in the income distribution. When there is a strong middle class, crony capitalism is in check. When there is a small middle class, and a larger lower and upper class, crony capitalism is likely operating. (64)
a. True
b. False
Explanation / Answer
Answer 1.: a. True
There is absolutely no doubt on sentence as all these have their strengths and weaknesses in varying situations, and the quality of implementation is often as important as the selection of any given model.
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