Deck 2: Ethics of International Business

Question 1

Domestic, but not multinational, businesses must confront ethical issues.

Answer 1

False

Question 2

The theory of cultural or ethical relativism holds that it is possible to determine cross-cultural standards of right and wrong.

Answer 2

False

Question 3

A 'rights and duties' approach to ethics bases the morality of an action on its net benefit to society.

Answer 3

False

Question 4

In its simplest formulation, utilitarianism holds that the rightness of an action can be determined by whether it produces more benefits (good) than costs (bad).

Question 5

Stakeholders are all parties either directly or indirectly affected by the decision of a business firm.

Question 6

The open discrimination against blacks sanctioned under South African law was known as Apartheid.

Question 7

The Union Carbide Bhopal disaster occurred in Pakistan.

Question 8

In Kantian ethics, absolute moral duties are known as categorical imperatives.

Question 9

In the ethics of care, a business is considered to have a special obligation to its workers and community.

Question 10

The school of thought known as the myth of the amoral businessperson argues that ethical business practices are inconsistent with long-term profitability.

Question 11

The idea that corporations have social and environmental responsibilities beyond profit making is asserted in the Caux Round Table's Principles for International Business.

Question 12

All corporations are legally and ethically obligated to apply host country standards to practices occurring within that host country.

Question 13

American anti-trust laws do not apply to the activities of U.S. corporations operating in foreign countries.

Question 14

Transparency International is a U.S. governmental agency dedicated to eliminating corruption.

Question 15

Most countries have national laws that outlaw the payment of bribes to government officials.

Question 16

Under the Foreign Corrupt Practices Act (FCPA), American companies are not liable for bribes made by its foreign agents.

Question 17

In order to be liable for illegal payments by its agent to foreign officials, a firm must have actual knowledge that bribery has occurred.

Question 18

A corporation may bring a civil suit against one of its competitors for violation of the Foreign Corrupt Practices Act (FCPA).

Question 19

Minor payments to clerical employees of a foreign government or agency are not considered bribes under the 1988 Amendments to the Foreign Corrupt Practices Act (FCPA).

Question 20

The 1988 Amendments to the Foreign Corrupt Practices Act (FCPA) limited the definition of 'foreign officials' to employees of foreign governments and their agencies.

Question 21

A company can violate the Foreign Corrupt Practices Act (FCPA) without committing any acts of bribery.

Question 22

Under the U.S. Federal Sentencing Guidelines, a corporate or organizational entity cannot be held liable for criminal acts committed by its employees.

Question 23

The Federal Sentencing Guidelines provide that a company that enacts an ethics or compliance program may receive more lenient treatment for statutory violations than one that does not.

Question 24

ISO 9000 is a set of international, voluntary environmental management standards.

Question 25

The development of international standards can reduce barriers to trade by harmonizing national standards and ensuring minimum levels of quality, labor, and environmental standards are being met.

Question 26

The World Trade Organization (WTO) has set stringent labor standards that must be met in order for countries to gain free trade benefits.

Question 27

Comparative advertising is more strictly regulated in the European Union than in the United States.

Question 28

The assessment of ethical issues in international transactions are influenced by:

A) Culture
B) Religion
C) Economics
D) All of the above

Question 29

The theory that holds because each country or culture has different belief systems, then there is no transnational way to determine whether an action is right or wrong is:

A) Utilitarianism
B) Ethical relativism
C) Consequentialism
D) Distributive justice

Question 30

The teleological or consequentialist approach to ethics is:

A) Utilitarianism
B) Rights and duties
C) Virtue ethics
D) Ethics of care

Question 31

A Utilitarian analysis that attempts to monetize an ethical decision by placing a dollar value on the outcome is:

A) Benefit-cost analysis
B) Stakeholder analysis
C) Dominant consideration analysis
D) None of the above

Question 32

When a firm faces a situation in which a certain standard or practice is considered ethical in the host country, but unethical in the home country, it is known as:

A) Conflict of relative development
B) Conflict of core values
C) Conflict of cultural tradition
D) Conflict of rights vs. duties

Question 33

Immanuel Kant is associated which with of the following approach to ethics:

A) Virtue ethics
B) Rights and duties
C) Utilitarianism
D) Ethics of care

Question 34

The employment at will doctrine provides that:

A) Employees may organize labor unions
B) Employers owe no duty of continued employment to workers
C) Employers must enter into collective bargaining before dismissing workers
D) None of the above

Question 35

Motorola's corporate code of conduct represents a(n) _______ approach to ethical conduct in international business:

A) Utilitarian
B) Virtue-based
C) Rights-based
D) All of the above

Question 36

The idea that the only social responsibility of business is to increase profits is most closely associated with:

A) Milton Friedman
B) Adam Smith
C) John Kenneth Galbraith
D) Francis Fukuyama

Question 37

The western concept of the dignity of all humans and the Japanese concept of society working together for the common good are embodied in the principles of which of the following organizations:

A) Transparency International
B) U.N. Global Impact Program
C) Caux Round Table
D) Amnesty International

Question 38

The legal concept whereby home country laws are applied to the foreign activities of a corporation is known as:

A) Grant-back provisions
B) Voluntary restraint laws
C) Escape clauses
D) Extraterritoriality

Question 39

The elimination of foreign bribery and corruption have been addressed by:

A) Foreign Corrupt Practices Act (FCPA)
B) Transparency International
C) Organization for Economic Cooperation and Development (OECD)
D) A & B only
E) All of the above

Question 40

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. firms from paying bribes to:

A) Foreign government officials
B) Foreign agents
C) Foreign competitors
D) A & B only
E) All of the above

Question 41

Exceptions to the Foreign Corrupt Practices Act (FCPA) include payments that are:

A) For routine governmental action
B) Lawful under the written laws of the foreign government
C) For a reasonable and bona fide expenditure
D) A & C only
E) All of the above

Question 42

Under the Foreign Corrupt Practices Act (FCPA), individuals may face imprisonment for up to:

A) Three years
B) Five years
C) Ten years
D) Fifteen years
E) None of the above

Question 43

In Lamb v. Phillip Morris, Inc., the court held that:

A) No private right of action is available under the FCPA.
B) Direct evidence of actual intent to bribe is not required under the FCPA.
C) Third party bribery under the FCPA includes the use of agents.
D) All of the above
E) None of the above

Question 44

A company can mitigate its penalties for violating the law under the Federal Sentencing Guidelines by:

A) Self-reporting the crime
B) Cooperating with government investigation
C) Having an existing compliance program
D) A & B only
E) All of the above

Question 45

The base level of fines to be assessed under the Federal Sentencing Guidelines are based upon:

A) The seriousness of the offense
B) The culpability of the organization
C) The size of the organization
D) A & B only
E) All of the above

Question 46

All regulated products in the European Union require a/an:

A) EU Ecolabel
B) ISO certification
C) CE mark
D) All of the above
E) None of the above

Question 47

A pro-labor device that requires companies to provide information and seek consultation with its workers on plant and workforce relocations is:

A) Evergreen statue
B) Works council
C) Labor clause
D) None of the above

Question 48

The 1997 EU Directive on Comparative Advertising:

A) Prohibited all forms of comparative advertising.
B) Prohibited comparative advertising in Italy, Belgium, and Luxembourg, but allowed it in all other EU countries.
C) Required advertisers to demonstrate promptly the accuracy of comparative claims.
D) Allowed comparative advertising based on subjective factors.
E) None of the above

Question 49

If a private party requests an Attorney General Opinion, the Foreign Corrupt Practices Act (FCPA) requires the Justice Department to issue an opinion:

A) Within 30 days after receiving the request
B) Within 60 days after receiving the request
C) Within 90 days after receiving the request
D) Within 6 months

Question 50

The Foreign Corrupt Practices Act (FCPA) prohibition against offering bribes to foreign officials applies to:

A) U.S. corporations
B) U.S. citizens
C) Foreign subsidiaries of U.S. companies
D) A & B only
E) All of the above

Question 51

The standard that provides a common framework for quality environmental management is:

A) ISO 9000
B) SA 8000
C) ILO 1919
D) ISO 14000

Question 52

The Marketing Supervision Network is a multi-national effort to resolve:

A) International labor disputes
B) International advertising disputes
C) International environmental disputes
D) International trade disputes

Question 53

Compare and contrast the salient features of the four schools of ethical thought discussed in the text, especially as they apply to issues in international business ethics.

Question 54

Discuss Milton Friedman's position that the only social responsibility of business is to increase profits. Do you agree or disagree with this position? Provide support for your answer.

Question 55

Describe the bribery provisions of the Foreign Corrupt Practices Act. Who can be held liable under the Act? Discuss under what circumstances a payment made to a foreign official would not be considered bribery.

Question 56

Discuss how the U.S. Federal Sentencing Guidelines "reward organizations for establishing a legal and ethical compliance program."

Question 57

Why might the adoption of international standards for goods and services be important? What role is ISO playing in this process?