Business and Its Environment (Baron): News Media, Private Politics, and Crisis Management University

Business and Its Environment (Baron) — Chapters 3–5 Exam

50 questions

90 min

Answer key

Exam info

Subject: Business and Its Environment (Baron): News Media, Private Politics, and Crisis Management
Exam type: University
Questions: 50
Duration: 90 min
Answers: ✓ With explanations

Questions (50)

Q 1.
According to Baron's two-axis theory of media coverage and treatment, what primarily determines WHETHER and HOW MUCH the media will cover an issue?
- A.
  Societal significance of the issue
- B.
  Intrinsic audience interest
- C.
  Direct government pressure on editors
- D.
  Industry lobbying expenditures
Q 2.
In Baron's Figure 3-2 grid, what primarily determines the TREATMENT (advocacy vs. factual) of media coverage?
- A.
  Audience interest
- B.
  Societal significance
- C.
  The time of day the story breaks
- D.
  Advertising spend by involved firms
Q 3.
The concept that media coverage causes the public to regard an issue as MORE IMPORTANT than they otherwise would is known as:
- A.
  Priming
- B.
  Framing
- C.
  Agenda setting
- D.
  Gatekeeping
Q 4.
Coverage that shapes 'what springs to mind' when people later judge issues and political leaders is referred to as:
- A.
  Agenda setting
- B.
  Priming
- C.
  Framing
- D.
  Indexing
Q 5.
The term 'fourth estate' or 'fourth branch' traditionally refers to:
- A.
  The business community acting as a check on government
- B.
  The press, alongside legislative, executive, and judicial branches
- C.
  Professional lobbyists
- D.
  The state-level judiciary
Q 6.
Under NYT v. Sullivan (1964), a public-figure plaintiff must prove which standard to win a U.S. defamation case?
- A.
  Ordinary negligence by the journalist
- B.
  Strict liability for any false statement
- C.
  Actual malice — knowledge of falsity or reckless disregard for the truth
- D.
  That the article generated publishing profit
Q 7.
According to Baron, a 'media vacuum' arises when:
- A.
  A firm aggressively attacks the press
- B.
  A firm stays silent, allowing critics to fill the void with their own story
- C.
  Media outlets run out of editorial space
- D.
  Government censors all coverage of an industry
Q 8.
In the Alar case, the NRDC's strategy of placing the story on 60 Minutes and then launching 'Mothers and Others' with Meryl Streep a week later illustrates how activists can:
- A.
  Prove scientific claims beyond a reasonable doubt
- B.
  Create 'two stories instead of one,' sustaining media attention despite weak science
- C.
  Replace print media with television permanently
- D.
  Demonstrate that celebrity endorsements always backfire
Q 9.
Libel and slander differ in that:
- A.
  Libel is spoken; slander is written or broadcast
- B.
  Libel refers to written or broadcast statements; slander refers to spoken statements
- C.
  Libel is a criminal offense; slander is civil
- D.
  U.S. law treats slander more severely than libel
Q 10.
The Électricité de France case, in which the firm disciplined an author who criticized it, illustrates that attacking critics can:
- A.
  End the controversy immediately
- B.
  Generate a second news story and amplify the critic's message
- C.
  Demonstrate that the firm is always right
- D.
  Pre-empt all future lawsuits by the critic
Q 11.
Which of the following is NOT typically considered a driver of 'newsworthiness' in Baron's discussion?
- A.
  Urgency
- B.
  Celebrity involvement
- C.
  Visual appeal
- D.
  Long-term, gradual structural change
Q 12.
Which of the following was a major consequence of the News of the World phone-hacking scandal (2011)?
- A.
  The paper received prestigious journalism awards
- B.
  The paper closed, the BSkyB bid was withdrawn, and executives resigned
- C.
  The editor was promoted to oversee all UK media
- D.
  Phone hacking was legalized in the UK
Q 13.
When Procter & Gamble withdrew about $1 million in annual advertising from WHDH-TV after it aired the Neighbor to Neighbor critical ad, this action is best categorized as:
- A.
  A formal defamation lawsuit
- B.
  A private/economic measure against unfavorable media coverage
- C.
  A government regulatory action
- D.
  A pre-emptive public apology
Q 14.
In Evans' advice summarized by Baron, when working with the media firms should aim to build:
- A.
  Personal friendship with reporters
- B.
  Credibility, not friendship
- C.
  Fear of legal retaliation
- D.
  Exclusive dependency on the firm
Q 15.
Compared with U.S. defamation law, UK defamation law is generally:
- A.
  More plaintiff-friendly, contributing to the 'libel tourism' critique
- B.
  More protective of journalists via the Sullivan actual-malice standard
- C.
  Identical to U.S. law under First Amendment jurisprudence
- D.
  Based on strict liability for any published statement
Q 16.
Per Baron's framework, an issue with HIGH intrinsic audience interest but LOW societal significance (e.g., sports, weather) is most likely to receive what kind of coverage and treatment?
- A.
  Extensive, advocacy-oriented coverage
- B.
  Moderate coverage with interpretation and advocacy
- C.
  Substantial coverage but essentially factual treatment
- D.
  Minimal coverage because the issue is unimportant
Q 17.
The 'veggie-libel' or 'food disparagement' laws adopted in 13 U.S. states after episodes like Alar were designed primarily to:
- A.
  Protect consumers from misleading food advertising
- B.
  Make it easier to sue critics who disparage food products — at the cost of chilling free speech
- C.
  Regulate organic food labeling standards
- D.
  Ban specific agricultural chemicals
Q 18.
The Edelman 2011 'trust gap' finding showed that, globally, the public:
- A.
  Trusted business much more than NGOs
- B.
  Trusted NGOs more than business (about 61% vs. 56% globally, with similar gaps in the U.S.)
- C.
  Trusted both NGOs and business equally
- D.
  Trusted neither NGOs nor business at all
Q 19.
A 'market campaign' differs from a 'corporate campaign' in that a market campaign primarily:
- A.
  Targets regulators of upstream industries
- B.
  Targets vulnerable value-chain intermediaries (e.g., retailers, banks) who then pressure the upstream supplier
- C.
  Avoids media coverage to stay under the radar
- D.
  Seeks legislative remedies directly
Q 20.
Which type of firm is generally LEAST susceptible to corporate campaigning, per Baron?
- A.
  Consumer-goods firms with strong public brands
- B.
  Pharmaceutical firms with high switching costs and limited consumer brand exposure
- C.
  Cosmetics firms with many branded rivals
- D.
  Coffee retailers facing direct consumer boycotts
Q 21.
Friedman's 1999 study of animal-testing campaigns found that campaigns tended to:
- A.
  Succeed against pharmaceutical firms more than cosmetics firms
- B.
  Succeed against cosmetics firms and fail against pharmaceutical firms
- C.
  Succeed equally in both industries
- D.
  Fail universally in both industries
Q 22.
Baron uses the term 'greenwashing' to refer to:
- A.
  Truly green corporate products
- B.
  Industry-led self-regulatory programs in which NGOs played no substantive role, making them look like PR
- C.
  Government environmental regulation
- D.
  Independent third-party NGO certification
Q 23.
In Baron's 'good cop/bad cop' dynamic, confrontational activists:
- A.
  Always coordinate roles in advance
- B.
  Raise the threat level, which increases demand for cooperative NGOs and their bargaining power with firms
- C.
  Require that police be present at all NGO events
- D.
  Force firms to negotiate only with radical activists
Q 24.
A firm trying to obtain 'external legitimacy' — public and NGO confidence that it will actually implement a policy — is most likely to get it from:
- A.
  Its in-house PR department alone
- B.
  Independent NGO certification or partner endorsement
- C.
  Government regulators only
- D.
  Membership in an industry trade association
Q 25.
In the TXU case, environmental NGO pressure and subsequent negotiation by EDF and NRDC led to:
- A.
  All eleven planned coal plants being built as originally proposed
- B.
  Planned coal plants being cut from 11 to 3 and eased approval of the leveraged buyout
- C.
  Abandonment of the leveraged buyout
- D.
  Nationalization of TXU by the U.S. government
Q 26.
In the Brent Spar case (1995), Shell ultimately:
- A.
  Won the public-opinion battle despite scientific data
- B.
  Backed down from sinking the platform after losing public opinion, even though it believed its science was right
- C.
  Won a definitive German court ruling siding with its position
- D.
  Successfully completed the original sinking plan
Q 27.
Per Baron, citing Lenox & Eesley and King & Soule, activists tend to prefer targets that are:
- A.
  Small, low-emission, B2B-only firms with no consumer presence
- B.
  Larger, higher-emitting, advertising-intensive, and consumer-facing
- C.
  Strictly government agencies
- D.
  Privately held firms with no shareholders
Q 28.
In the Alar campaign, the NRDC hired Fenton Communications primarily to:
- A.
  Defend the apple industry against consumer lawsuits
- B.
  Orchestrate media events, including placing the story on 60 Minutes
- C.
  Conduct independent laboratory testing of Alar residues
- D.
  Lobby Congress directly for pesticide legislation
Q 29.
According to Baron, activists overcome the collective-action and free-rider problem primarily by:
- A.
  Receiving direct government subsidies for their campaigns
- B.
  Using media coverage to create common knowledge about the issue and the campaign
- C.
  Paying individual consumers cash to boycott
- D.
  Declaring unilateral binding boycotts
Q 30.
Compared with labor unions, business activists tend to:
- A.
  Have a direct market link to their corporate targets
- B.
  Lack a direct market link to targets, while unions deliver votes and campaign money to politicians
- C.
  Be automatically funded by the federal government
- D.
  Be subject to fewer regulatory constraints than unions
Q 31.
McDonald's 2011 decision to trim fries and add apples to Happy Meals under health-activist and local-government pressure is best described as:
- A.
  Resistance to activist demands
- B.
  Self-regulation undertaken to head off tougher regulation
- C.
  A court-ordered remedy in a lawsuit
- D.
  A market-campaign concession to retailers
Q 32.
In the RAN vs. Citigroup campaign (2000–03), the NGO targeted Citigroup primarily because:
- A.
  Citigroup was the world's largest direct emitter of carbon
- B.
  Citigroup's brand sensitivity (e.g., 'Live Richly'), student card base, and reliance on a polished image made it a vulnerable value-chain intermediary
- C.
  Citigroup was a small local bank with no other targets
- D.
  Citigroup directly operated the coal plants being protested
Q 33.
In Baron's discussion of private governance, an industry-led self-regulatory program in which NGOs played no substantive role is most likely to be characterized as:
- A.
  A best-practice certification
- B.
  Greenwashing
- C.
  A multi-stakeholder initiative
- D.
  An NGO-led certification
Q 34.
'Naming and shaming' is a confrontational private-politics tactic that aims primarily to:
- A.
  Reward good corporate behavior publicly
- B.
  Damage a firm's brand, reputation, and employee morale to force behavioral change
- C.
  Increase consumer product awareness for marketing purposes
- D.
  Encourage cooperative NGO-firm partnerships
Q 35.
Before the 2005 BP Texas City refinery explosion that killed 15 workers, an internal BP safety report had:
- A.
  Certified the plant as the safest in the industry
- B.
  Warned that the refinery would 'likely kill someone in the next 12–18 months' without action
- C.
  Recommended expansion of the same unsafe unit
- D.
  Received a federal exemption from safety rules
Q 36.
Following the 2010 Deepwater Horizon spill, BP experienced which of the following consequences?
- A.
  An immediate rebound in its share price
- B.
  Loss of more than half its market value and the establishment of a roughly $20 billion compensation fund
- C.
  A government bailout that restored its share price
- D.
  Endorsements from environmental NGOs for its rapid response
Q 37.
In Baron's framework, a root cause of the Fukushima nuclear disaster (Tokyo Electric) was:
- A.
  Operator negligence during routine operations
- B.
  Backup cooling systems depending on grid power that the disaster itself knocked out
- C.
  Intentional shutdown by management
- D.
  Cyber-attack on reactor controls
Q 38.
Per Baron, root causes of the 2008 U.S. subprime mortgage crisis included:
- A.
  Strong federal oversight of mortgage origination
- B.
  Upfront-fee incentives for brokers, loans packaged and sold to investors who could not evaluate them, and weak controls
- C.
  Overwhelming consumer demand for fixed-rate loans only
- D.
  Excessively conservative underwriting standards
Q 39.
In the Wendy's 'finger in the chili' episode (2005), the lasting lesson highlighted by Baron is that:
- A.
  Fraud allegations always bankrupt the firm involved
- B.
  Even disproven hoaxes can leave lasting reputational damage because memory of the allegation persists
- C.
  Companies should always conduct a nationwide recall when fraud is alleged
- D.
  Media was wrong about every fact of the case
Q 40.
According to Baron (drawing on Uhlmann et al. 2008), which combination best characterizes effective crisis communication?
- A.
  Deny everything until court rulings are issued
- B.
  Truthful, sincere apology accepting responsibility, action commitment, transparency, and corroboration by independent sources
- C.
  Repeated blaming of regulators until publicity dies down
- D.
  Rigid 'no comment' policies enforced across all employees
Q 41.
Johnson & Johnson's McNeil quality failures in 2009–10 included a so-called 'phantom recall' of Motrin, which involved:
- A.
  A well-publicized nationwide consumer-recall notice
- B.
  Hiring contractors to quietly buy the product back from store shelves while delaying FDA notification
- C.
  Permanent closure of all McNeil manufacturing facilities
- D.
  Immediate public apology and congressional testimony by CEO Weldon
Q 42.
Mattel's 2007 lead-paint toy recall shows that even a generally well-organized response can be undermined by:
- A.
  Excessive coordination with regulators
- B.
  Repeated subsequent recalls, mixed messages, an apology in China that angered U.S. politicians, and prolonged congressional attention
- C.
  Toy popularity falling to zero immediately
- D.
  Lack of any supplier involvement
Q 43.
In Baron's response framework, the rectification pillar primarily refers to:
- A.
  Drafting press releases and talking points
- B.
  Fixing the underlying problem and compensating those harmed
- C.
  Selecting an outside law firm
- D.
  Reducing advertising until the crisis passes
Q 44.
In Baron's framework, the two pillars of an effective crisis response are:
- A.
  Strategy and tactics
- B.
  Rectification and communication
- C.
  Avoidance and preparedness
- D.
  Litigation and lobbying
Q 45.
Baron's recommended response to hoaxes like the 1993 PepsiCo syringe scare is to:
- A.
  Always conduct a costly nationwide recall regardless of evidence
- B.
  Quickly communicate through an informed spokesperson, cooperate with law enforcement, and present evidence (e.g., surveillance video of the planting)
- C.
  Issue blanket 'no comment' statements until the media loses interest
- D.
  Sue every news outlet that repeats the allegation
Q 46.
The four stages of the crisis life cycle in Baron's framework are, in order:
- A.
  Identification, escalation, intervention, resolution
- B.
  Pre-crisis, crisis, post-crisis, learning
- C.
  Awareness, prevention, mitigation, normalization
- D.
  Avoidance, preparedness, response, review
Q 47.
The first two components of crisis management in Baron's framework (in correct order) are:
- A.
  Response and resolution
- B.
  Avoidance and preparedness
- C.
  Detection and intervention
- D.
  Communication and litigation
Q 48.
Exxon Valdez's communication response is widely criticized because Exxon:
- A.
  Quickly accepted full responsibility and publicly apologized to Alaskans
- B.
  Called the event an 'accident,' blamed the captain and Coast Guard, offered little help to local residents, and seemed to prioritize liability over reputation
- C.
  Recalled all of its tankers nationwide immediately
- D.
  Cooperated closely with environmental NGOs
Q 49.
Johnson & Johnson's 1982 Tylenol response is best characterized as a:
- A.
  Court-ordered product withdrawal
- B.
  Voluntary nationwide recall, supported by leadership's transparent communication
- C.
  State-mandated seizure of all Tylenol products
- D.
  Quiet retailer-only withdrawal
Q 50.
In Baron's framework, the 'resolution' component of crisis management primarily involves:
- A.
  Avoiding the next potential crisis
- B.
  Turning the crisis back into a manageable nonmarket issue (fixing the harm, compensating stakeholders, handing matters to authorities, and reassessing avoidance/preparedness)
- C.
  Briefing shareholders before any other stakeholder
- D.
  Identifying which spokesperson to use in the next crisis

Answers and explanations are in mode.