Which one of the following is considered to be a nonmarket stakeholder of business

Journal of Product Innovation Management (2013), Volume 30, Issue 2, pp. 364-379

45 Pages Posted: 12 Oct 2011 Last revised: 13 Feb 2013

Paul H. Driessen

Radboud University Nijmegen - Institute for Management Research

Bas Hillebrand

Radboud University Nijmegen - Institute for Management Research

Date Written: December 1, 2010

Abstract

Addressing the interests of a wide set of stakeholders is important because it may have positive effects on financial performance. At the same time, however, it is also very complex because managers may face conflicting stakeholder issues, much more so than organizations that listen to only one stakeholder. Little is known about how multiple stakeholder issues are dealt with in the context of new product development (NPD). The objective of this study is to delineate the elements of stakeholder integration in the context of NPD. A combination of insights from stakeholder theory and market information processing serves as a theoretical perspective to guide the empirical exploration in this study. The authors take the development of green (ecological) products as an empirical context for their qualitative multiple-case study. Specifically, they selected four case studies with different expected levels of stakeholder integration, based on literature about green NPD. Data was collected through in-depth interviews with key informants, collecting documents, and obtaining artifacts. In total 28 informants from various domains were interviewed. Transcribed interviews were coded using qualitative analysis software. The results show that a distinction needs to be made between market and nonmarket stakeholders, and that not all organizations are equally capable of identifying issues that are important to both categories of stakeholders. Organizations that identify issues that are relevant to both market stakeholders and nonmarket stakeholders are more likely to face tensions between stakeholder issues in NPD. Organizations manage these tensions by using several, sometimes redundant, coordination mechanisms and by using multiple prioritization principles in conjunction. Based on the results, the authors conceptualize stakeholder integration capability in an NPD context as the combination of stakeholder issue identification techniques, coordination mechanisms and prioritization principles. They propose that stakeholder integration capability is the result of a learning process. Moreover, they propose that proactivity of environmental management and environmental impact of the industry help to explain why stakeholder issue identification techniques are developed, and that the identification of more stakeholder issues leads organizations to develop coordination mechanisms and prioritization principles. Finally, the authors propose that stakeholder integration capability leads to competitive advantage through organizational identification by stakeholders. The study implies that integrating multiple stakeholder issues is not just a matter of feeding additional information into NPD processes, but of changing the nature of these NPD processes.

Keywords: Social Responsibility, New Product Development, Stakeholders, Green NPD, Case-study analysis

JEL Classification: O32

Suggested Citation: Suggested Citation

Driessen, Paul H. and Hillebrand, Bas, Integrating Multiple Stakeholder Issues in New Product Development: An Exploration (December 1, 2010). Journal of Product Innovation Management (2013), Volume 30, Issue 2, pp. 364-379, Available at SSRN: https://ssrn.com/abstract=1935455

Chapter 01

The Corporation and Its Stakeholders

True / False Questions

1. Walmart has been called a "template for 21st century capitalism."

True False

1. A business is any organization that is engaged in making a product or providing a service for a profit.

True False

1. Businesses and society are independent of one another.

True False

1. The stakeholder theory of the firm argues that a firm's sole purpose is to create value for its shareholders.

True False

1. The instrumental argument for the stakeholder theory of the firm says that companies perform better if they consider the rights and concerns of multiple groups in society.

True False

1. The normative argument for the stakeholder theory of the firm says that the stakeholder view is simply a more realistic description of how companies really work.

True False

1. Nonmarket stakeholders are those that engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services.

True False

1. Market stakeholders include nongovernmental organizations and the media.

True False

1. Government can be considered both a market and nonmarket stakeholder.

True False

1. The interests of different stakeholders often coincide.

True False

1. Stakeholders involved with one part of a company often may have little or no involvement with another part of the company.

True False

1. Some scholars have suggested that managers pay the most attention to stakeholders possessing the least salience.

True False

1. Urgency refers to the extent to which a stakeholder's actions are seen as proper or appropriate by the broader society.

True False

1. A stakeholder map is a useful tool, because it enables managers to see quickly how stakeholders feel about an issue and whether salient stakeholders tend to be in favor or opposed.

True False

1. The external environment of business is static.

True False

Multiple Choice Questions

1. Which statement is not correct about the business-society interdependence?

A. Business is a part of society. B. Business is separated from the rest of society by clear boundaries. C. Business activities impact other activities in society. D. Actions by governments rarely significantly affect business.

1. Which of the following examples best illustrates the boundary exchanges a company would encounter according to the general systems theory?

A. An industrial company installs new equipment in its plant to comply with environmental regulations. B. A software company develops an application for a client. C. A purchasing department employee negotiates a price on parts from a supplier. D. All of the above.

1. The fiduciary duty of managers benefits a firm's:

A. Stockholders. B. Customers. C. Employees. D. All of the above.

1. A number of European countries require public companies to include employee members on their boards of directors, so:

A. The employees are available to answer questions. B. Management does not have to attend the meetings. C. That their interests will be explicitly represented. D. They have more power than any other stakeholder.

1. Stakeholder groups can include:

A. Stockholders. B. The media. C. Environmental activists. D. All of the above.

1. Which one of the following is considered to be a nonmarket stakeholder of business?

A. Customers. B. Media. C. Creditors. D. Stockholders.

1. Which of the following is not considered to be a nonmarket stakeholder?

A. Government agencies. B. Creditors. C. Activist groups. D. Non-governmental organizations.

1. All of the following are external stakeholders of the firm except:

A. Managers. B. Customers. C. Stockholders. D. Suppliers.

1. The phenomenon of a person or group holding multiple stakeholder duties is referred to as:

A. Role sets. B. Primary Stakeholder(s). C. Ownership Theory. D. None of the above.

1. A stakeholder analysis:

A. Creates equality among all stakeholder interests. B. Allows managers to examine two primary questions. C. Involves understanding the nature of stakeholder interests. D. All of the above.

1. The five types of stakeholders' power recognized by most experts are:

A. Voting, economic, political, legal, and informational power. B. Social, legal, environmental, economic, and political power. C. Social, regulatory, voting, governance, and media power. D. Economic, media, legal, stockholder, and political power.

1. Which of the following statements is(are) correct about stakeholders' power?

A. Different stakeholders have different types and degrees of power. B. Stockholders' voting power is limited to the percentage of stock owned by the stockholder. C. It uses resources to achieve a desired decision or outcome. D. All of the above.

1. Customers can exercise economic stakeholder power by:

A. Voting on a proposed merger for the company and a competitor. B. Boycotting products if they believe the goods are too expensive. C. Attending the company's annual meeting. D. Applying for a job with the company.

1. Which of the following is not an example of stakeholders' economic power?

A. A toy manufacturer halts supplies to a customer that demanded very low prices. B. A social group protests a government's decision to raise taxes. C. A local community boycotts a grocery store suspected of inaccurate weight scales. D. An equal rights group refuses to do business with a business that has a discriminatory hiring policy.

1. Stakeholders stand out to managers when they exhibit:

A. Integrity, power, and legitimacy. B. Power, legitimacy, and urgency. C. Integrity, loyalty, and power. D. Legitimacy, loyalty, and urgency.

1. A stakeholder map is a useful tool because:

A. It enables mangers to see quickly how stakeholders feel about an issue. B. It allows managers to evaluate what outcomes are likely regarding an issue. C. It helps managers discourage or dissolve stakeholder coalitions. D. Both A and B, but not C.

1. Departments, or offices, within an organization that reach across the dividing line that separates the company from groups and people in society are:

A. Inter-departmental divisions. B. Geographical location areas. C. Boundary-spanning departments. D. Organizational maps.

1. Interactions between business and society occur:

A. Within a finite natural ecosystem. B. Only during an environmental crisis. C. When business employees and the community are of similar cultural backgrounds. D. When legislation is passed requiring interaction.

46. Stakeholder’s ability to use resources to use resources to secure a desired outcome

is called

a. Stakeholder power

b. Stakeholder resource management

c. Stakeholder influence

d. Stakeholder interest

47 stakeholders refers to

a. Stakeholders who are a part of the industry where business operates in

b. Stakeholders whose shares are traded in a different market

c. Stakeholders who do not have commercial exchange with business

d. Stakeholders who are only affected by the business, not the market

48 statement is incorrect

a. Business is a part of society

b. Business is a distinct entity and separated from the rest of society

c. Business interacts with society

d. Business is more powerful than society

49 statement is correct

a. Government is a nonmarket stakeholder

b. Customers are internal stakeholders

c. Employees are external stakeholders

d. Environmentalists are internal stakeholders

50 general system theory in the business-society context means that

a. Business is not like biological organisms

b. Business must adapt to changes in society

c. Society must adapt to changes in business

d. Society is a part of the business world and therefore should accept emerging

businesses

51 of the stakeholder theory of the firm make three core arguments for their

position. These three arguments are

a. normative, instrumental, descriptive

b. prescriptive, explanatory, and normative

c. directive, strategic, and normative

d. normative, prescriptive, and strategic

52 stakeholder refers to the stakeholders who

a. are not part of the external stakeholders

b. are silent when facing business corruptions

c. are important to the business

d. are business support groups

53 relationship between business and society is two-way, because

a. Business influences society via its decisions and actions

b. Business and society both are responsible for the way business affects

society

c. Business affects and is affected by society

d. Business has commercial and non-commercial interaction with society

54 pedestrian in town is hit and killed by the driver of Company X. The police arrives

at the scene to investigate the incident,

a. The drive is a nonmarket stakeholder

b. People in the town are nonmarket stakeholders

c. The pedestrian is an internal stakeholder

d. The police is an internal nonmarket stakeholder

Which of the following is considered a business stakeholder?

Which is the following is considered to be a non market stakeholder?

Which of the following would least be considered a stakeholder?

Which of the following is true of the stakeholders of a company?