Business and Its Environment 7th Edition by Baron Test Bank

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Business and Its Environment 7th Edition by Baron Test Bank

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Chapter Eight:
Implementing Nonmarket Strategies in Government Arenas

True/False Questions:

1) Media and public attention are high-profile strategies and play an important role in nonmarket issues.
Answer: True
Page reference: 195
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

2) Lobbying takes place only on the federal level and not at state and local levels.
Answer: False
Page reference: 196
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

3) Technical information does not interest officeholders but is still a part of lobbying.
Answer: True
Page reference: 197
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

4) Political information pertains to the impact of an alternative on the constituents or policy interests of an officeholder.
Answer: True
Page reference: 197
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

5) Even if the interests of a firm and the government officeholder are aligned, lobbying will be ineffective when the information provided is soft and not backed by conclusive data.
Answer: False
Page reference: 198
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment
6) Congressional members staffs are usually ignored in the lobbying effort because they have little influence on their bosses.
Answer: False
Page reference: 198
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

7) There are many principles for effective lobbying, including shading the facts if it is in the firms best interest.
Answer: False
Page reference: 198
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

8) In ones lobbying efforts, it is a good principle to make straightforward presentations to members of trade associations.
Answer: True
Page reference: 198
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

9) For lobbying in agencies that do not have direct constituents, political information is relatively more important than technical information.
Answer: False
Page reference: 199
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

10) A firm that interacts with Congress on a variety of issues must maintain access to several committees and their relevant subcommittees.
Answer: True
Page reference: 199
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

11) On nonmarket issues a company or an industry association engages in implicit and not explicit bargaining.
Answer: False
Page reference: 199
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

12) The effectiveness of lobbying is independent of government allies.
Answer: False
Page reference: 200
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

13) As firms do not have the right to petition the government, lobbying is a relatively regulated activity.
Answer: False
Page reference: 200
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

14) Lobbyists are required to report the fees they receive as well as their expenditures.
Answer: True
Page reference: 200
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

15) Campaign financing involves huge amounts of money and always affects the outcome of elections.
Answer: False
Page reference: 203
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

15) There are no limits on contributions to candidates campaigns as it would violate the First Amendment.
Answer: False
Page reference: 203
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

16) Campaign contributions by businesses are not made to affect the outcomes of elections.
Answer: True
Page reference: 204
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

17) In lobbying, senior members, and particularly the chairs of committees and subcommittees, should receive more contributions than other members.
Answer: True
Page reference: 204
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

18) Trade associations emphasize issues that affect more than one industry.
Answer: False
Page reference: 205
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

19) Ad hoc coalitions include firms from a number of industries and thus represent a range of interests.
Answer: False
Page reference: 206
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

20) Bargaining is more complex and lengthy when the interests on an issue are poorly aligned.
Answer: True
Page reference: 206
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

21) Testimony is based on the connection between constituents and their elected representatives.
Answer: False
Page reference: 207
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

22) Mobilization of stakeholders of firms is important to an effective grassroots action.
Answer: True
Page reference: 208
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

23) The larger the number of participants in a grassroots program and the more extensive their coverage of political jurisdictions, the more effective it is likely to be.
Answer: True
Page reference: 209
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

24) Judicial actions pertain only to those cases in which a firm finds itself the defendant and not to those in which it initiates legal action as a component of a nonmarket strategy.
Answer: False
Page reference: 211
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

25) Management involvement in nonmarket strategy formulation and implementation is required in spite of effective lobbying.
Answer: True
Page reference: 213
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

Multiple Choice Questions:

26) Which of the following is a nonmarket strategy implementation activity?
a) account-based marketing
b) product pricing
c) brand management
d) lobbying
Answer: D
Page reference: 195
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

27) Which of the following is a low-profile nonmarket implementation strategy?
a) lobbying
b) grassroots campaign
c) judicial action
d) public advocacy
Answer: A
Page reference: 195
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

28) Which of the following nonmarket implementation activities typically takes place behind the scenes?
a) public advocacy
b) lobbying
c) testimony
d) peak association
Answer: B
Page reference: 195
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

29) ________ is the strategic communication of politically relevant information to government officeholders.
a) Public advocacy
b) Judicial strategy
c) Lobbying
d) Coalition building
Answer: C
Page reference: 195
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

30) Lobbying does not involve ________.
a) constituency connection
b) personal relationship
c) campaign contribution
d) threats and coercion
Answer: D
Page reference: 196
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

31) Which of the following is an example of technical information provided for lobbying?
a) A firm publishes a report on the increase in state employment rate after its various branches were opened.
b) A firm provides data for the loss of annual manufacturing revenue if the legislation on carbon tax is passed.
c) A firm provides information for state revenue loss on sales tax for internet purchases.
d) A firm publishes a report on the increase in local education rate if the legislation on business research tax was passed.
Answer: B
Page reference: 197
Difficulty: Difficult
AACSB: Analytic skills
Learning Outcome: Describe the components of the management environment

32) ________ is more relevant when lobbying executive branch agencies.
a) Technical information
b) Political information
c) Soft information
d) Campaign contribution
Answer: A
Page reference: 199
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

33) When legislation is being drafted or rewritten, lobbying often centers on ________ .
a) senator
b) executive branch officials
c) committee staff
d) high-level managers
Answer: C
Page reference: 200
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

34) Which of the following statements is true of lobbying?
a) It is always aimed at the top level, therefore, does not require access to the members personal staff or staff of relevant communities.
b) Its timing is independent of the stages of the legislative process because focus is on committee members.
c) Activities involving a firms own managers are not considered lobbying under the Lobbying Act of 1946.
d) It does not require a firm to have bargaining power because nonmarket issues need only political information.
Answer: C
Page reference: 200
Difficulty: Difficult
AACSB:
Learning Outcome: Describe the components of the management environment

35) The Lobbying Disclosure Act of 1995 ________.
a) requires lobbyists to report the fees they receive as well as their expenditures
b) restricts the contacts of former executive branch officials and regulators with their former agencies for a 2-year period
c) prohibits officials who were involved in international trade or negotiations from lobbying their former offices for 1 year.
d) does not require registration of those who lobby the executive branch or the staffs of Congress members
Answer: A
Page reference: 200
Difficulty: Moderate
AACSB:
Learning Outcome: Describe the components of the management environment

36) The Ethics in Government Act of 1978 ________.
a) requires lobbyists to register with the clerk of the House and the secretary of the Senate
b) restricts the contacts of former executive branch officials and regulators with their former agencies for a 2-year period
c) prohibits gifts to the members of Congress, including dinners and privately paid travel to conventions and events
d) requires registration of those who lobby the executive branch and the staffs of Congress members
Answer: B
Page reference: 201
Difficulty: Moderate
AACSB:
Learning Outcome: Describe the components of the management environment

37) Which of the following statements is true of campaign financing?
a) huge amounts of campaign spending is involved in federal elections
b) contributions buy favors from officeholders
c) corporations provide bulk of the funding for campaigns
d) contributions make firms gain access to members of Congress for lobbying
Answer: D
Page reference: 202
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

38) A pharmaceutical manufacturing firm wants to contribute to the presidential election campaign in support of a pro-industry policies candidate. The firm should ________.
a) directly contribute to the campaign to influence legislative voting
b) form multicandidate political action committee for the purpose of soliciting contributions
c) collect funds for political contributions through dues
d) contribute using hard money because there is no limit on its use
Answer: B
Page reference: 203
Difficulty: Difficult
AACSB: Analytic skills
Learning Outcome: Describe the components of the management environment

39) In terms of campaign financing, hard money refers to ________.
a) the amount of money required to buy a favor from officeholders
b) the impact of an alternative on the constituents or policy interests of an officeholder
c) contributions to a candidates campaign
d) expenditures in electoral campaigns
Answer: C
Page reference: 203
Difficulty: Moderate
AACSB:
Learning Outcome: Describe the components of the management environment

40) ________ are the principal means of forging a majority from a collection of minorities.
a) Coalitions
b) Campaign contributions
c) Representation and information strategies
d) Grassroots campaigns
Answer: A
Page reference: 205
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

41) ________ includes firms from a number of industries and thus represent a range of interests.
a) Political coalition
b) Peak associations
c) Trade associations
d) Ad hoc coalition
Answer: B
Page reference: 205
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

42) Which of the following is a nonmarket function of trade associations?
a) development of technical standards
b) research
c) collection of industry statistics
d) reducing the cost of information acquisition
Answer: D
Page reference: 206
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

43) GLOBEagents is formed by individual travel agents, travel organizations, food services and other sub sectors of the travel industry in Colorado State to work for state legislation on travel taxes. GLOBEagents is a ________.
a) political coalition
b) peak associations
c) ad hoc coalition
d) trade associations
Answer: C
Page reference: 206
Difficulty: Moderate
AACSB: Analytic skills
Learning Outcome: Describe the components of the management environment

44) Which of the following is the least expensive grassroots activity?
a) letter-writing
b) telephone-call
c) petition
d) bus-in
Answer: A
Page reference: 208
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

45) To the extent that their interests on an issue are aligned with those of the firm, ________ may be relatively easy to include in a grassroots program.
a) shareholders
b) employees
c) suppliers
d) franchisees
Answer: B
Page reference: 208
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

46) A social networking site generates support to pass legislation on carbon taxes by emailing members of Congress. Which of the following is applicable here?
a) peak association
b) ad hoc coalitions
c) grassroots actions directed at government officeholders
d) grassroots actions directed at constituents
Answer: D
Page reference: 208
Difficulty: Moderate
AACSB:
Learning Outcome: Describe the components of the management environment

47) In response to the governments decision to increase the taxes on the food industry, companies involved in the food services industry decide to form a coalition. It works together and launches advertisements to reveal the effect of the legislation on peoples monthly expenditure and future savings. Which of the following is applicable here?
a) lobbying
b) peak associations
c) electoral support
d) public advocacy
Answer: D
Page reference: 210
Difficulty: Difficult
AACSB: Analytic skills
Learning Outcome: Describe the components of the management environment

48) A gaming company files a copyright infringement lawsuit against mobile application development company for using a similar application to register users. Which of the following is applicable here?
a) testimony
b) judicial action
c) grassroots campaign
d) public advocacy
Answer: B
Page reference: 211
Difficulty: Moderate
AACSB:
Learning Outcome: Describe the components of the management environment

49) Which of the following implementation activities is the most expensive?
a) judicial action
b) letter-writing
c) e-mailing
d) testimony
Answer: A
Page reference: 211
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

50) ________ is a necessary condition for lobbying.
a) Bargaining
b) Government allies
c) Access
d) Testimony
Answer: C
Page reference: 212
Difficulty: Easy
AACSB:
Learning Outcome: Describe the components of the management environment

Essay and Review Questions:

51) Describe the broadening of the scope of lobbying.
Answer: The scope of lobbying has broadened considerably over the past two decades. This broadening has had four components. First, managers have become more active participants in lobbying, just as they have become more deeply involved in formulating nonmarket strategies. Second, the professional lobbying industry has grown substantially as more interests participate in public policy processes. Third, the professional lobbying industry has become increasingly specialized with firms focusing on mobilizing constituents, grassroots lobbying, and research and technical services as well as the more traditional functions of monitoring government, providing access, and communicating information. Fourth, on majoritarian issues such as health care policy that affect large numbers of people, lobbying coordinated with advocacy through the mass media has become more common.
Page reference: 196
Difficulty: Difficult
AACSB:
Learning Outcome: Describe the components of the management environment

52) What are the principles of effective lobbying?
Answer: The following are principles of effective lobbying:
Know the institutional arenas in which the issue is addressed (e.g., Congress works through committees).
Look for alignments of interests and explore opportunities to build coalitions.
Time lobbying to the stages of the institutional decision-making process. (Lobby committee members, then pivotal floor members in advance of a floor vote.)
Target key officeholders.
Know the officeholders interests and goals and frame messages accordingly.
Respect the officeholder and staff; in most cases they are intelligent and savvy.
Educate but dont just talk. Listen to the officeholder and staff for information about their interests and concerns and for strategic advice about process, the preferences of other officeholders, and so on.
Make straightforward presentations. Members of Congress are busy, understand politics well, and can see beyond window dressing. (Managers and professional lobbyists often leave a detailed written statement with members or their staff.)
Explore compromises or concessions that might help resolve officeholders concerns.
Give credit to the officeholder.
Establish access and maintain continuing relationships for the future (e.g., meet with committee staff even if there is no pending issue). Dont wait until there is a crisis.
Page reference: 198
Difficulty: Difficult
AACSB:
Learning Outcome: Describe the components of the management environment
53) What are the three basic purposes of campaign contributions?
Answer: Campaign contributions are made for three basic purposes. The first is to affect the outcomes of elections, the second is to obtain access to present or future officeholders, and the third is to obtain services.
Page reference: 204
Difficulty: Moderate
AACSB:
Learning Outcome: Describe the components of the management environment

54) Write a short note on coalition building.
Answer: Coalition building is an important component of many nonmarket strategies. Coalitions are the principal means of forging a majority from a collection of minorities. Business coalitions are of three types: peak organizations, trade associations, and ad hoc coalitions. Peak associations emphasize issues that affect more than one industry, trade associations represent a single industry, and ad hoc coalitions tend to be issue specific. Trade associations and individual firms also participate on issues addressed by peak organizations and trade associations, respectively.
Page reference: 205
Difficulty: Difficult
AACSB:
Learning Outcome: Describe the components of the management environment

55) Discuss judicial actions as an implementation strategy for nonmarket issues.
Answer: Judicial actions pertain not only to those cases in which a firm finds itself the defendant but also to those in which it initiates legal action as a component of a nonmarket strategy. Judicial actions are taken in state and federal courts, which are governed by statutory and common law. Judicial actions are also taken in quasi-judicial arenas, such as those of regulatory and administrative agencies, which are governed by administrative law. Judicial strategies are used to enforce rights, obtain damages for breach of contract, and address unfair competitive practices under the antitrust laws. Judicial action, particularly in the courts, can be costly. Regulatory and administrative law channels may be used for a variety of purposes, including protecting rights, handicapping a competitor, or gaining a direct advantage.
Page reference: 211
Difficulty: Difficult
AACSB:
Learning Outcome: Describe the components of the management environment

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