Deck 10: Ethical Issues in the Global Arena

Question 1

A major ethical challenge ofMNCs is that their fmns' cultures and philosophies may differ from that of their host
countries.

Answer 1

True

Question 2

Corruption,at its core,is essentially an abuse of power.

Answer 2

True

Question 3

Cultural relativism is the best ethical guide for MNCs faced with a moral dilemma in its host country.

Answer 3

False

Question 4

The Nestle infant formula case is one in which a normal business practice in the frrm's horne country proved to be problematic in the host countries.

Question 5

For an MNC to be perceived as legitimate in the eyes of a host country,it must fulfill its social responsibilities.

Question 6

One way to resolve ethical conflicts between an MNC's horne country and host country is to simply stop doing business in the host country.

Question 7

Countries at earlier stages of economic development often do not have a legal or ethical infrastructure in place to help protect their citizenry.

Question 8

The Alien Tort Claims Act has recently been interpreted by the U.S.Supreme Court to apply not only within the
U.S. ,but outside it as well.

Question 9

Most of the ethical problems that arise in international markets are very different than the moral issues encountered in their horne countries.

Question 10

MNCs often pay their employees in underdeveloped countries less than the average local wage.

Question 11

One of the fortunate things about ethical issues in the global market is that they do not affect domestic operations.

Question 12

MNCs based in the United States and in the European Union have played a key leadership role in world affairs.

Question 13

Involving two or more cultures in ethical issues makes their resolution much more difficult.

Question 14

One of the things that makes it difficult for U.S.MNCs to deal with sweatshops is that they only occur in foreign
countries.

Question 15

One of the ethical issues that is exacerbated by operating in an developing countries is that the host nation's citizeus ofteu do not understand the technology being used,nor do they recognize its poteutial dangers.

Question 16

Despite the poor economy,there is a backlash against globalization.

Question 17

Global codes of conduct seek to establish domestic principles or guidelines by which businesses might follow while doing business around the world.

Question 18

Cultural differences between an MNC's horne country and its host country sometimes make it difficult to distinguish between cultural issues and ethical issues.

Question 19

The ethical issues eucountered in underdeveloped countries are ofteu more difficult than those found in industrialized
nations.

Question 20

According to Transparency International's Corruption Perception Index (CPI),underdeveloped countries typically rank low in corruption.

Question 21

The opposite of cultural relativism is ethical imperialism.

Question 22

Which of the following is not one the broad issues facing MNCs in their relationships with host countries?

A)cultural aspects
B)business/goverrunent interactions
C)exploration of global markets
D)religious and other traditional holidays

Question 23

Regarding the infant formula controversy,Nestle was criticized for all of these actions except:

A)distributing free samples.
B)providing purified water with the formula.
C)promoting bottle-feeding over breast-feeding.
D)the use of so-called "milk nurses."

Question 24

Moving jobs that have historically resided in the horne country to a lower-cost host country is called

A)expense minimization.
B)offshoring.
C)career displacement.
D)employment modernization.

Question 25

All of the following groups have criticized MNC labor practices except

A)social activist groups.
B)church groups.
C)labor unions.
D)grassroots organizations.

Question 26

The FCPA has had a significant impact on the way American firms do business globally.

Question 27

The process by which firms increase their awareness of the influence of international activities on their future and establish and conduct transactions with firms from other countries is known as

A)legitimization.
B)internationalization.
C)market awareness.
D)multinationalism.

Question 28

The most challenging situation for an MNC to face is

A)operating in socialist countries.
B)operating in more than ten countries at the same time.
C)operating is less-developed countries.
D)operating without a clearly defined strategic plan.

Question 29

Which of the following is not a feature of the global economy?

A)international movement oflabor
B)more trade in goods than in services
C)international flow of capital
D)international laws governing fair trade

Question 30

International markets must be pursued iffmns want to remain

A)competitive.
B)ethical.
C)free from corruption.
D)legitimate.

Question 31

Peter Drucker has labeled the expanded global marketplace the

A)moral free space.
B)hypercompetitive economy.
C)transnational economy.
D)multinational competitive sphere.

Question 32

In the 1970s,because of the differing safety standards around the world,American fmns:

A)continued to export drugs that had been banned in the U.S.
B)continued to export pesticides that had been banned in the U.S.
C)built asbestos manufacturing plants,banned in the U.S. ,in other countries.
D)took all of these actions.

Question 33

Which of the following is not a characteristic of sweatshops?

A)child labor
B)low pay
C)poor working conditions
D)forced prostitution

Question 34

Economic integration of many formerly national economies into one worldwide economy is called

A)globalization.
B)world-system theory.
C)capitalization.
D)material diversification.

Question 35

Ethical issues in the global envirornnent include all of these except:

A)product safety.
B)human resource management.
C)production efficiency.
D)marketing.

Question 36

The criticism of their use of sweatshops has led MNCs to do all of these things except::

A)work to improve working conditions.
B)establish codes of conduct.
C)perform social or ethical audits.
D)create the Fair Labor Association (FLA).

Question 37

Major strategies MNCs may use to conduct global business,but still maintain an ethical sensitivity include all of these except:

A)modify or redesign products.
B)link ethics with global strategy.
C)suspend business activities in certain countries.
D)conduct ethical audits.

Question 38

The FCPA differentiates between:

A)domestic and international disputes
B)land ownership and building rental
C)bribes and grease payments
D)entry fees and corporate filing fees

Question 39

The advantages of offshoring to developing countries have been: ..

A)mcreasmg
B)decreasing
C)staying the same
D)doubling each decade

Question 40

The philosophy of Western industrialized nations and their MNCs includes all of these factors except:

A)economic growth.
B)decentralization.
C)efficiency.
D)free trade.

Question 41

Which of the following is not a strategy for improving global business ethics?

A)use of global codes of conduct
B)incorporating ethical dimensions into top level strategic planning processes
C)imposing the horne country's ethical standards on the host country
D)suspension of activities

Question 42

The position that advocates that an MNC follow the host country's ethical standards is called

A)ethical relativism.
B)ethical egoism.
C)ethical imperialism.
D)ethical hegemony.

Question 43

Which of the following is not an argument commonly used against bribery?

A)Bribes are inherently wrong.
B)Bribes create dependence on corrupt individuals.
C)Bribes are unfair because foreigners can get them,while U.S.citizens cannot.
D)Once bribes start,they never stop.

Question 44

All of the following are arguments in support of bribery except

A)everybody does it.
B)it is normal practice in many countries.
C)it is a form of commission,tax,or compensation for doing business between cultures.
D)it is a way of providing needy foreiguers with money they need.

Question 45

Which of the following is not an SA8000 standard proposed to improve sweatshop conditions?

A)prohibition on employing workers under a certain age
B)provision of a safe and healthy working environment
C)provision of educational opportunities for workers
D)prohibition of discriminatory practices

Question 46

Which of the following is not part of the anticorruption movement?

A)Transparency International
B)OECD antibribery initiatives
C)individual country initiatives
D)World Trade Organization

Question 47

Which of the following is not one ofhome!host stakeholder pressures?

A)culture
B)system of government
C)economic system
D)laws

Question 48

All of the following are proposed standards for the SA8000 program,to improve sweatshop conditions,except

A)allowing workers to form unions.
B)prohibiting corporal punishment.
C)providing retirement benefits.
D)limiting work to a maximum of 48 hours per week.

Question 49

Global trade is:

A)speeding up.
B)slowing down.
C)doing about the same.
D)diminishing exponentially.

Question 50

The Alien Tort Claims Act applies to:

A)actions that occur on foreign soil.
B)actions that occur on U.S.soil.
C)actions that occur in the host country where a U.S.firm is based.
D)actions that occur in a foreign country where a foreign firm is based.

Question 51

In 2012,the United States' rank in the Corruption Perception Index was:

A)first,being least corrupt.
B)in the top 10.
C)in the top 20.
D)at the very bottom.

Question 52

Which of the following is not an example of corruption?

A)bribery
B)paying for political favors
C)negotiating for the lowest price on a contract
D)paying protection money to the police

Question 53

The ethics and global strategy plan for improving global business ethics has as its central idea

A)placing ethics ahead of profits as the number one priority.
B)focusing on human rights rather than profits.
C)employing only hypernorrns for the MNC's ethical standards.
D)utilizing ethical standards as siguificant inputs into top-level strategy formulation and implementation.

Question 54

Payment of a bribe implies some type of

A)extortion.
B)quid pro quo.
C)gambling.
D)physical harm to the payee.

Question 55

The position that advocates that an MNC should continue to follow its horne country's ethical standards even while operating in another country is known as

A)ethical relativism.
B)ethical egoism.
C)ethical imperialism.
D)ethical hegemony.

Question 56

The Foreign Corrupt Practices Act

A)governs the operations offoreigu MNCs in the United States.
B)makes it illegal to make any type of payment to a foreigu citizen for the purpose of doing business.
C)makes it illegal for the representative of an American corporation to offer or pay officials offoreigu governments for the purpose of getting or maintaining business.
D)makes it illegal for American goverrnnent officials to accept bribes from foreigu nationals.

Question 57

Arguments against bribery include all the following except

A)you shouldn't compromise your beliefs.
B)bribery is illegal in the United States.
C)managers can deal with corrupt governments.
D)one should take a stand for honesty.

Question 58

U.S.based MNCs are increasingly interested in cases brought under the Alien Tort Claims Act because

A)they could allow the finn to recoup some costs of incorporating overseas.
B)they could allow the finn to sue foreign fmns on a reciprocal basis.
C)they provide an insight in the customs of the host country.
D)they are increasingly being named as defendants in tort cases for doing business in countries with repressive governments.

Question 59

The Foreign Corrupt Practices Act allows

A)bribes under $10,000.
B)bribes,as long as the finn does not deduct them on its tax return.
C)bribes,as long as they are disclosed to shareholders.
D)grease payments.

Question 60

Current standards for SA800 include all the following except

A)certifications.
B)compensations.
C)management systems.
D)child labor.

Question 61

An attempt to assess the underlying moral justifications for corporate actions and the consequent results of those actions are contained in

A)social audits.
B)ethical impact statements.
C)human rights statements.
D)envirornnental impact statements.

Question 62

Discuss the differing philosophies held by MNCs and less-developed host countries.Which philosophy do you think is more appropriate?

Question 63

What are the most important factors leading a firm to take corporate action against corruption?

Question 64

Arguments in favor of bribery include

A)it's necessary for profit.
B)nobody does it.
C)they are forms of wages.
D)they are not expected.

Question 65

Describe Earth Hour,and its growth.What has been its effect on awareness of global warming and climate change?
Have you ever participated in Earth Hour in your community?

Question 66

Multinational corporations are all of the following except

A)corporations operating with offices,factories,and headquarters in more than one country.
B)multinational enterprises.
C)fmancial powerhouses
D)transnational corporations.

Question 67

Review the major causes of the Nestle infant formula controversy.

Question 68

Make a case for paying premium wages to workers in less-developed countries.

Question 69

Grease payments are all of following except

A)monies given to minor officials
B)get goods through red tape
C)monies given to high ranking officials
D)small sums of money

Question 70

Discuss the previous assumption that global trade would expand continually,the effect of the global economic crisis,and the implications of those events.

Question 71

Describe the differences between internationalization and globalization.

Question 72

Bribery can be initiated by either party to the transaction.The person paying the bribe can offer it,or the recipient can demand it.Determine which party is the least ethical one,the payor who offers the bribe,or the recipient who
demands it.

Question 73

Transparency International has sought to fight world corruption.Reflect on the meaning of their five priorities and two principles.

Question 74

One reason that some observers give for the cause of the Union Carbide Bhopal incident is that the company was forced to take on local partners in the project,thus diluting Union Carbide's profit motive.Assuming this argument is
valid,evaluate it from a deontological perspective.

Question 75

Evaluate Nestle's action in defming the issue and keeping the issue out of the limelight,in the infant formula case.

Question 76

Evaluate the proposed requirement that MNCs pay workers at least the legal minimum wage or prevailing industry wage in their overseas factories.

Question 77

Discuss the best ways to combat bribery.

Question 78

Provide an example of how the FCPA has cracked down on corrupt practices.

Question 79

According to the textbook,Dow Chemical,which bought Union Carbide in 200 I,is still subjected to claims by the survivors of the Bhopal disaster.Based on your understanding of the incident and its aftermath,determine whether
or not Dow should continue to be liable to the victims of Bhopal.

Question 80

Describe a situation in which the best course of action for an MNC would be to suspend business activities in a host country where it is currently doing or contemplates doing business.What would precipitate such an action?