Stakeholder Rights & Responsibilities Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Stakeholder Rights & Responsibilities flashcards as text
A company discovers that a product defect could harm customers but fixing it will cost millions. Under stakeholder ethics, what is the primary obligation?
Answer: Disclose the defect and initiate a recall
Stakeholder ethics requires prioritizing customer safety over financial considerations when a known harm exists.
Which principle holds that stakeholders have the right to participate in decisions that substantially affect their interests?
Answer: Stakeholder engagement
Stakeholder engagement is the principle that those affected by corporate decisions have a right to meaningful participation in those decisions.
An employee whistleblower reports ethical violations internally but management ignores the concern. What is the employee's ethical responsibility next?
Answer: Escalate through available channels, including external regulators if necessary
When internal channels fail, escalating to external oversight bodies is the ethically appropriate next step to protect broader stakeholder interests.
The concept of 'legitimate stakeholder claims' suggests that a stakeholder's claim is valid when it is:
Answer: Based on a recognized legal, moral, or contractual basis
A legitimate claim arises from legal rights, moral standing, or contractual relationships — not merely from power or financial position.
A supplier discovers that a buyer company is using its products in ways that violate environmental regulations. What is the supplier's stakeholder responsibility?
Answer: Raise the concern with the buyer and consider contract termination if unresolved
Suppliers have an ethical responsibility to address misuse of their products and may need to cease the relationship if violations continue.
In Freeman's stakeholder theory, which group is considered a primary stakeholder?
Answer: Employees
Primary stakeholders — including employees, customers, suppliers, and investors — have direct transactional relationships with the firm.
When a company's interests conflict with community stakeholder interests, an ethical resolution process should first:
Answer: Identify the nature and severity of each stakeholder's interests
Ethical conflict resolution begins with understanding and mapping each stakeholder's interests and the magnitude of impact before seeking solutions.