Stakeholder Management

Stakeholder management involves managing relationships between an organization and external stakeholders to maximize shareholder value. Two main approaches are discussed: the direct effects model, where manager attitudes directly impact financial performance, and the moderation model, where manager orientation moderates the relationship between competitive strategy and financial performance. Both models highlight the importance of stakeholder relationships in influencing financial outcomes.

What is the main objective of stakeholder management?

• To minimize organizational costs

• To enhance product quality

• To maximize shareholder value

• To increase employee satisfaction

Which model suggests that managers' actions towards stakeholders affect financial performance independently?

• Competitive strategy model

• Moderation model

• Direct effects model

• Stakeholder value model

According to the direct effects model, what is the relationship between managers' actions and financial performance?

• It is irrelevant to financial performance

• It is independent of competitive strategy

• It is solely dependent on stakeholder feedback

• It is moderated by competitive strategy

What does the moderation model propose about the role of managers' orientation towards stakeholders?

• It solely determines competitive strategy

• It has no impact on financial outcomes

• It moderates the link between strategy and performance

• It directly influences financial performance

How does the moderation model view the effect of stakeholder relationships on financial performance?

• As a direct effect

• As an irrelevant factor

• As a moderating effect

• As a primary determinant