Deck 5: Ethics, Corporate Social Responsibility, and Sustainability

Question 1

An individual's personal ethical code generally has little influence on their behavior in business.

Answer 1

False

Question 2

Many of the ethical issues in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation.

Answer 2

True

Question 3

John Rawls argues that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage.

Answer 3

True

Question 4

Business leaders should use every relevant opportunity to stress the importance of business ethics and make sure that key business decisions not only make good economic sense but also are ethical.

Question 5

According to the concept of cultural relativism, a firm, while operating in any host country, should adopt the ethics of the culture that is predominant in its home country.

Question 6

One criticism of the righteous moralist approach to ethics is that adopting home-country standards isn't always appropriate.

Question 7

The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.

Question 8

An ethical dilemma occurs when neither of the choices in a situation seem appropriate or right.

Question 9

The utilitarian approaches to ethics are based on the idea that the moral worth of actions is determined by their ultimate consequences.

Question 10

In order to create a business culture that places a high value on ethical behavior, a system of incentives and rewards must be in place.

Question 11

After it was amended, the Foreign Corrupt Practices Act allowed for "facilitating payments."

Question 12

The phenomenon known as the tragedy of the commons occurs when multiple companies attempt to produce and sell the same products.

Question 13

One concern with the utilitarian approach is that the action that produces the greatest good for the greatest number of people may result in the unjustified treatment of a minority.

Question 14

The social rules that provide guidelines for appropriate behavior in a particular situation are known as values.

Question 15

Kantian ethics is concerned with environmental ethical issues such as manufacturing emissions and polluted waters.

Question 16

The Sullivan principles stem from the beliefs of Leon Sullivan who felt it was not ethical for General Motors to operate in South Africa unless the company participated in apartheid laws for its African operations.

Question 17

According to John Rawls's veil of ignorance, inequalities are justified if they benefit the position of the least-advantaged person.

Question 18

Unfortunately, it is common in business practices to assume that people from different cultures make ethical decisions using the same process.

Question 19

"Facilitating payments" are payments to secure contracts that would not otherwise be secured.

Question 20

The OECD convention on bribery obliges member states and other signatories to make the bribery of foreign public officials a criminal offense.

Question 21

Over the past few years, three new factories have been built near Pleasantown. A four-acre area of land lies between these three factories and since no one "owns" this land, all three factories are using it as a landfill to dump waste products. The once-beautiful land is now encased in garbage. What phenomenon does this portray?

A) social loafing
B) cultural relativism
C) tragedy of the commons
D) deadweight loss
E) antidumping

Question 22

The term global commons refers to

A) social norms and values that are common across the globe.
B) a group of nations that share similar ideologies on globalization.
C) natural resources from which everyone benefits but for which no one is specifically responsible.
D) common laws to be obeyed by companies involved in international business.
E) arrangements, like common currencies, between countries to simplify international trading.

Question 23

Ethics officers act as an internal ombudsperson with responsibility for handling confidential inquiries from employees.

Question 24

Due to strict environmental standards in its home nation, Neptune Inc. has shifted its operations to developing nations. The firm has now been able to gain competitive advantage by avoiding costly pollution controls. This strategic move of Neptune Inc. would be considered

A) illegal.
B) ethical.
C) immoral.
D) uneconomical.
E) totalitarian.

Question 25

The first step in an ethical algorithm is to identify those common resources that are not owned by anyone in particular but are used by everybody.

Question 26

The core idea behind sustainability is for business to NOT exert a negative impact on the ability of future generations to meet their own economic needs.

Question 27

The concept of corporate social responsibility (CSR) refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions.

Question 28

BlueLine Boxes moved its entire production operation to a foreign country, where the company was free to dump pollutants into the river located adjacent to the factory. In this scenario, BlueLine Boxes is contributing to

A) environmental growth.
B) corruption.
C) human rights growth.
D) improving its corporate social responsibility.
E) the global tragedy of the commons.

Question 29

SolarCorp. won the bid to build an energy facility for a host country government. However, the execution of the contract has been delayed due to bureaucratic procedures in the less developed nation. In order to legally overcome this problem, SolarCorp. could resort to the payment of

A) customs duties.
B) excise taxes.
C) expatriation taxes.
D) speed money.
E) repatriation fees.

Question 30

Which of these companies has adopted unethical practices?

A) Gemini Inc. ceased its operations in some developing nations on account of low employment standards in those countries.
B) ModernMeds Corp. sells its medicines at a lower price in less developed nations.
C) Capricorn Inc., a multinational company operating in developing nations, pays its labor 30 percent more than what the local competitors pay.
D) Centaur Inc. closed down a production plant as the local management there employed child labor.
E) ClearLand Inc. sends its waste products for disposal to a developing nation because the pollution control laws in its home country are stricter than those in the developing nation.

Question 31

The apartheid system was based on a violation of

A) environmental standards.
B) human rights.
C) educational standards.
D) totalitarian beliefs.
E) religious principles.

Question 32

In the modern world, corporations often hasten the global tragedy of the commons by

A) moving production to locations where they are free to pump pollutants into the environment.
B) imposing stringent environmental standards on developing countries.
C) creating common environmental and employment standards for all nations.
D) adopting costly pollution controls and in turn losing out on economic advantages.
E) adhering to civil laws rather than common laws in case of any environmental violations.

Question 33

Speed money, or grease payments, are payments made to

A) secure contracts that would not otherwise be secured.
B) obtain exclusive preferential treatment in a foreign market.
C) influence foreign bureaucrats in the company's favor.
D) ensure a business receives the standard treatment that it ought to receive.
E) secure monopoly rights in less developed countries.

Question 34

Which company is contributing to the global tragedy of the commons?

A) a firm exploiting the weak employment standards in a host nation
B) a firm dumping its chemical wastes directly into an ocean
C) a firm exploiting the weak intellectual property rights in a developing nation
D) a neighboring country opposing the introduction of a free trade area
E) a country denying its citizens basic human rights

Question 35

Business ________ refers to accepted principles of right or wrong that govern the conduct of a businessperson, the members of a profession, or the actions of an organization.

A) strategy
B) goodwill
C) ethics
D) mission
E) vision

Question 36

Ten years after he proposed what came to be known as Sullivan's principles, Leon Sullivan concluded that following his principles

A) was the most ethical way of doing business in South Africa.
B) was not sufficient to ethically justify the existence of Western businesses in South Africa.
C) would be effective only when companies opposed democracy in South Africa.
D) had led international companies to successfully combat the apartheid regime in South Africa.
E) would safeguard the citizens and businesses in South Africa from Western businesses.

Question 37

An external stakeholder includes any individuals and groups that have some type of direct or indirect claim on a company.

Question 38

The result of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was to

A) make it mandatory for companies to adhere to the pollution control standards of their home country in all the nations in which they do business.
B) make bribery of foreign officials a criminal offense but not consider facilitating payments a criminal offense.
C) make grease payments mandatory in order to obtain exclusive preferential treatment in a host nation.
D) consider payment of speed money to be moral, but illegal.
E) make it obligatory for companies to adopt a zero-tolerance approach toward grease payments.

Question 39

In order to build large production units and expedite certain routine government actions related to this, Scorpius Inc. made legal payments to the government officials of the host nation. Such payments are typically referred to as

A) bribes
B) speed money
C) customs duties.
D) excise taxes.
E) preferred dividends.

Question 40

The Sullivan principles resulted from Leon Sullivan's response to

A) globalization.
B) apartheid laws.
C) grease payments.
D) deforestation.
E) anti-dumping laws.

Question 41

After TurboAir opened a facility in a foreign country, it learned that child labor was acceptable in that nation and agreed to hire a group of 15-year-old children as full-time employees. Which philosophical approach to ethics is TurboAir using?

A) Cultural relativism
B) Just distribution
C) Kantian ethics
D) Righteous moralist
E) Sullivan principles

Question 42

The practice of "gift giving" between the parties to a business negotiation is considered right and proper in many Asian cultures. However, some Westerners view the practice as a form of bribery, and therefore unethical, particularly if the gifts are substantial. This demonstrates that

A) notions of ethics are universal.
B) Asian countries are still influenced by totalitarianism.
C) what is ethical depends on one's cultural perspective.
D) Asian cultures are more economically advanced.
E) accepted employment practices are universal.

Question 43

The phrase "when in Rome, do as the Romans" is associated with

A) cultural relativism.
B) utilitarianism.
C) Kantian ethics.
D) the Sullivan principles.
E) naive immoralists.

Question 44

Studies have found that facilitating payments ultimately increase the cost of doing business and as a result some companies have

A) embraced a "wait and see" approach.
B) made such payments a part of normal business practice.
C) adopted a zero-tolerance approach.
D) agreed that such payments should only be used in the home country.
E) asked the United Nations to legalize these payments.

Question 45

In a business setting, managers sometimes do not realize they are behaving unethically, primarily because they

A) fail to take into account the ethical dimension of business decisions.
B) ignore business variables such as cost, delivery, and product quality.
C) have a strong system of personal ethics.
D) abide by the concept of noblesse oblige.
E) believe that social investments made by their companies can always compensate for their unethical actions.

Question 46

What situation is most likely to lead to unethical behavior in a business setting?

A) a strong sense of personal ethics exhibited by employees
B) expatriate managers working away from their ordinary social context and supporting culture
C) providing managers with a moral compass or an ethical algorithm
D) large business corporations making social investments in host countries
E) multinational corporations advocating the concept of noblesse oblige

Question 47

Bethany works for FastFashion Inc. which has set the same sales target for all employees in their 550 stores across the globe. The company fails to take into account any environmental constraints which might hamper sales and to avoid being penalized, employees often falsify their sales reports. What is triggering the employees' unethical behavior?

A) unrealistic performance goals
B) cultural differences of countries
C) strong personal ethics among employees
D) varying ethical standards in different nations
E) national differences in factors of production

Question 48

Straw men approaches to ethics refer to those that are

A) inappropriate guidelines.
B) accepted worldwide.
C) used in democratic but not totalitarian states.
D) based on religious values.
E) used in masculine societies.

Question 49

Sun-Yip is the manager of an appliance manufacturing facility in a developing country. This facility does not meet the acceptable standards of the manufacturing facility in his home nation. He knows that demanding a better facility will raise the cost of the appliances that are mainly exported to other less-developed countries. However, he also realizes that by not demanding a better facility, the employees who work there are prone to serious health issues. Sun-Yip is facing

A) a role conflict.
B) the tragedy of the commons.
C) factor endowments.
D) an ethical dilemma.
E) the difference principle.

Question 50

CopperTech Inc. believes that the sole purpose of its existence is to maximize profits for its stockholders. The firm has often been criticized for not engaging in any social investments. However, the firm has been praised for abiding by the laws while earning profits. Which philosophical approach to ethics does this demonstrate?

A) Friedman doctrine
B) Utilitarianism
C) Kantian ethics
D) Sullivan's principles
E) Naive immoralist

Question 51

One way to reduce the pressure on managers to violate their personal ethics is to

A) make managers work away from their ordinary social context and supporting culture.
B) keep managers psychologically and geographically close to the parent company.
C) pressure managers to meet unrealistic business goals.
D) adopt an organizational culture that emphasizes that all decisions should be purely economic.
E) ask managers to shun the concept of noblesse oblige.

Question 52

According to Milton Friedman, the only social responsibility of business is to

A) increase profits.
B) monopolize an industry.
C) demonstrate humanity.
D) improve society.
E) foster creativity.

Question 53

Green Quantum Inc. has research and production units all across the globe. The company expects its expatriate managers to adopt the ethics propagated by the culture in which they operate their respective units. Even in situations when others consider certain actions as unethical, the company allows its managers to pursue such actions if they are permitted in the host nation. Green Quantum is following

A) the Friedman doctrine.
B) Sullivan's principles.
C) righteous moralism.
D) Kantian ethics.
E) cultural relativism.

Question 54

The CEO of Gold Chip Software engages in corruption and uses his power in the company to enrich himself and his family members. Consequently, his employees also engage in the same behavior. In this case, the roots of unethical behavior can be traced to

A) unrealistic performance expectations.
B) organizational leadership.
C) noblesse oblige and social responsibility.
D) varying ethical standards in different cultures.
E) geographical distance between employees and the parent company.

Question 55

Financial Resources Inc. paid a sum of $50,000 to an official of a foreign government to ensure that the company obtained exclusive preferential treatment. The $50,000 can be classified as

A) customs duties.
B) excise taxes.
C) speed money.
D) a bribe.
E) repatriation fees.

Question 56

The ________ is a straw man approach to business ethics.

A) Friedman doctrine
B) Kantian ethics
C) Sullivan principle
D) utilitarian philosophy
E) just distribution theory

Question 57

When the employees at SuperCars learned that management had failed to pay suppliers for parts, the employees began to add more hours to their time cards even though they hadn't worked those extra hours. The employees felt that the company was sending a message that unethical decisions were acceptable. In this situation, the unethical choices of the employees are the result of

A) societal norms.
B) environmental concerns.
C) host-country performance.
D) unrealistic performance goals.
E) leadership choices.

Question 58

Within organizational culture, ________ are abstract ideas about what a group thinks is good, right, and desirable.

A) folkways
B) norms
C) values
D) attitudes
E) mores

Question 59

Bryan works as a salesman for Jumbo Corp. Last year his sales target was $3 million and this year in an aggressive bid for growth, the company increased the sales quota for all its salespeople to $5 million, although the market for Jumbo Corp's product has slowed. In order to meet his target, Bryan bribed an official of a potential customer. The roots of his unethical behavior can be traced to

A) unrealistic performance goals.
B) cultural differences of countries.
C) strong personal ethics among employees.
D) varying ethical standards in different nations.
E) national differences in factors of production.

Question 60

Which of these employees is facing an ethical dilemma?

A) Javier has felt unsure about a car he purchased and has been reading only good reviews about the car to console himself.
B) After seeing a whole new collection of phones at a store, Max is regretting the purchase of an outdated phone he made last month.
C) The manager at Almas Inc. has to make a vendor choice between his underqualified cousin and a highly-experienced, trusted supplier.
D) Salena is responsible for deciding whether she should upgrade the manufacturing unit with new machines and reduce costs or retain the impoverished manual labor force.
E) Lars has to decide whether the annual profits of the company should be distributed to the employees as a salary hike or in the form of non-monetary benefits.

Question 61

A righteous moralist is most likely to claim that

A) a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
B) a firm should adopt the ethics of the culture in which it is operating.
C) people should be treated as ends and never purely as means to the ends of others.
D) human beings have fundamental rights and privileges that transcend national boundaries and cultures.
E) inequalities are justified if they benefit the position of the least-advantaged person.

Question 62

The straw man approach of righteous moralism is typically associated with managers from

A) developing countries.
B) totalitarian nations.
C) BRIC nations.
D) developed nations.
E) war-torn countries.

Question 63

Jaxon Furnishings Company is considering logging opportunities in Alaska to obtain wood for their products. The market analysis team is busy comparing the benefits of increased wood production to the costs of deforestation and resulting environmental conditions. The company is using the ________ approach to make this ethical decision.

A) naive immoralism
B) Friedman doctrine
C) ethnocentrism
D) utilitarianism
E) righteous moralism

Question 64

According to ________, people should be treated as ends and never purely as means to the ends of others.

A) Kantian ethics
B) Friedman doctrine
C) cultural relativism
D) righteous moralism
E) naive immoralism

Question 65

Rapid Removal Inc. operates in three different countries, and the CEO believes that the best approach to ethics is cultural relativism. How will this ethical approach affect the actions of Rapid Removal Inc.?

A) All business units of Rapid Removal Inc. will adopt a common standard of ethics irrespective of their location.
B) Business decisions made by managers of Rapid Removal Inc. will be solely based on the goal of maximization of societal good.
C) The business units of Rapid Removal Inc. will be empowered to adopt the standards of ethics followed in their respective host nations.
D) Rapid Removal Inc. will advocate the idea that universal notions of morality transcend different cultures.
E) Rapid Removal Inc. will follow its home-country standards of ethics at all its foreign locations.

Question 66

Kantian philosophy would view ________ as an ethical violation.

A) employing people to work at sweatshops
B) treating people as ends rather than as means
C) practicing superior standards of employment in the host country
D) empowering people with fundamental rights and privileges
E) treating employees as conscious moral beings

Question 67

The utilitarian philosophy for business ethics primarily focuses on

A) applying home-country standards of ethics in foreign countries.
B) adopting the ethics of the culture in which a business operates.
C) maximizing business profits by increasing employee productivity.
D) ensuring justified treatment of any minority.
E) weighing the benefits, costs, and risks associated with a course of action.

Question 68

According to the utilitarian perspective, the best decisions are those that

A) maximize a firm's profit.
B) maximize stockholders' wealth.
C) have greater social costs than benefits.
D) produce the greatest good for the greatest number of people.
E) result in the justified treatment of a minority.

Question 69

Three Torque Inc., a U.S.-based multinational company, allows its managers to make facilitating payments in host countries to expedite government formalities. However, in countries where such payments are considered as unethical, the company restricts its managers from indulging in such activities. This behavior of the company illustrates the straw man approach of

A) the righteous moralist.
B) cultural relativism.
C) ethnocentrism.
D) just distribution.
E) cultural convergence.

Question 70

Silver Meteorite Inc. is a multinational company whose home country considers grease payments illegal and unethical. The company has a zero-tolerance approach toward grease payments irrespective of any of its host nations' perspectives toward such payments. In this context, Silver Meteorite Inc. is following the approach to ethics known as

A) naive immoralist.
B) righteous moralist.
C) cultural pluralist.
D) cultural relativist.
E) ethnocentric.

Question 71

The ________ approach to ethics holds that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences.

A) ethnocentric
B) utilitarian
C) cultural relativist
D) naive immoralist
E) righteous moralist

Question 72

The biggest criticism of the righteous moralist approach to an ethical situation is that it

A) ignores home-country standards rather than factoring them into a situation.
B) relies on standards set in individual cultures regardless of living conditions.
C) opposes ethnocentric beliefs.
D) goes too far and not every situation can be approached relying on home-country standards.
E) leans too much on cultural relativism.

Question 73

What is a drawback of the utilitarian approach to business ethics?

A) It omits the consideration of justice.
B) It fails to consider the benefits, costs, and risks of a course of action.
C) It advocates moral imperialism and ethnocentrism.
D) It overemphasizes the significance of maximization of stockholder wealth.
E) It recognizes that actions have multiple consequences.

Question 74

While Kyle realized that his company was allowed to conduct a 12-hour workday in the overseas facility he managed, he instead implemented two 8-hour shifts because he felt it was fundamentally the right thing to do. A rights theorist would say that Kyle is using ________ to make this choice.

A) the tragedy of the common
B) Sullivan's principle
C) his moral compass
D) the difference principle
E) ethnocentrism

Question 75

A multinational corporation that adopts the naive immoralist approach to ethics will most likely

A) lack cultural sensitivity.
B) demonstrate moral imperialism.
C) be highly ethical in its business in a host nation irrespective of the ethical standards followed by other corporations in that host nation.
D) believe that, in a host country, any action is ethically justified if everyone is doing it.
E) demonstrate a high degree of ethnocentrism.

Question 76

An American manager of a multinational company who is working in one of the company's production plants located in a foreign country, employs child labor at the manufacturing unit he oversees. When criticized as unethical, the manager argues that such actions are ethically defensible because every company in the country is doing it. What ethical approach is this manager using?

A) utilitarianism
B) righteous moralist
C) naive immoralist
D) Kantian ethics
E) ethnocentrism

Question 77

Some contemporary moral philosophers view Kant's ethical philosophy as incomplete because his system has no place for

A) basic human rights.
B) the moral worth of actions.
C) moral emotions and sentiments.
D) just and fair treatment of a minority.
E) human dignity.

Question 78

In its home country, Barat's Boxes routinely uses grease payments to local officials to expedite overseas shipments. It has decided to open a plant in the United States and has determined that it would not offer any facilitating payments to U.S. officials. Barat's Boxes behavior illustrates the straw man approach of

A) the righteous moralist.
B) cultural relativism.
C) ethnocentrism.
D) just distribution.
E) cultural convergence.

Question 79

Johan is the manager of CycleUp and has agreed to build a new manufacturing plant in Argentina. He realizes this decision will cause him to shut down a small plant in Ohio, but he decides that since the new facility will cut his operating costs in half, that is worth more than closing a plant employing ten people. Which philosophical approach to ethics does this demonstrate?

A) Righteous moralist
B) Friedman
C) Utilitarian
D) Cultural relativism
E) Naive immoralist

Question 80

Jonathan is the expatriate manager of his company's facility in Indonesia. He expects the exact same standards of working conditions, wages, and labor management in the Indonesian facility as practiced by the corporate office in the United States. His policy does not always lead to profits because of the vast cultural differences between the two nations. What straw men approach to ethics is Jonathan using?

A) naive immoralism
B) cultural relativism
C) righteous moralism
D) Sullivan principles
E) just distribution