Question 1

Some transformative MNEs go beyond commercial relationships with their consumers and offer their products and services to those who most desperately need them,regardless of their ability to pay.

Accepted Answer

A prominent example of this phenomenon is Merck's free distribution of a drug that prevents river blindness to more than 18 million victims of the disease in developing countries who could not afford the treatment.This effort has been estimated to prevent 50,000 cases of blindness each year.Similarly,in July 2010,Ivey Publishing announced that it would make its case collection available at no cost to business schools in the 39 countries with per capita income of less than $2,000/year.For more information,please see https://www.ivey.uwo.ca/internationalbusiness/39-country-initiative/

Question 2

The relationship between transactional MNEs and non-governmental organizations (NGOs)is frequently characterized by confrontation and accusation.

Accepted Answer

Although not always enthusiastically embracing each other,this relationship has become based more on monitoring and challenging than on confrontation and accusation.While NGOs might agree that "doing no harm" is a positive characteristic,they also challenge companies to consider whether that is a sufficient role for the MNE in the 21ˢᵗ century

Question 3

The exploitative approach to managing MNEs is now considered to be a relic from the past and has been essentially non-existent since the late 1980s.

Accepted Answer

Although a few firms have remained stuck in an exploitative mode,most have adopted,at a minimum,a transactional approach.With the growing influence of public,government and NGO demands,and rising shareholder expectations,the trend is clearly moving toward responsive and even transformative models

Question 4

Progress in reducing global poverty has been observed to be more closely associated with investments by MNEs than it has with the foreign aid efforts of national governments and non-governmental organizations that have historically demonstrated a lack of business experience.

Accepted Answer

The eyes of many in the international community began to turn toward the MNEs to provide at least a part of the solution to the intractable problems that numerous developing countries faced.In financial power alone,the World Bank estimated that the net inflows of FDI into low and middle income countries in 2015 was about $1.4 trillion,nearly five times the amount of foreign aid and development funding flowing into that same group of countries.

Question 5

MNEs have successfully insulated themselves from the accusations associated with entering regulatory environments that permit sweatshops by outsourcing manufacturing to arm's-length suppliers.

Accepted Answer

Stories such as the one in The New York Times have resulted in widespread consumer outrage and public demands that MNEs take responsibility for the suppliers with whom they contract to make their products.

Question 6

The World Bank estimates that approximately one-tenth of the world's population subsides on less than $2 per day.

Accepted Answer

The World Bank indicates that the percentage of the world's population living on less than $1.90 a day in constant 2011 purchasing price parity 
the level defined as "extreme poverty",decreased from 41.9% in 1981 to 10.7% in 2013,there was still widespread concern that after three decades of globalization-driven growth,767 million people were still barely surviving at this near-starvation income level.

Question 7

Which of the following four adjectives are not typically used to describe the manner in which MNEs might respond to developing world needs:
A) transformative.
B) transactional.
C) exploitative.
D) compensatory.

Accepted Answer

While "compensatory" is not typically an adjective used to describe the manner in which MNEs might respond to developing world needs,responsive is more commonly used,along with transformative,transactional and exploitative

Question 8

Transformative MNEs commit to leading initiatives to bring life-enhancing changes to their home countries.

Accepted Answer

Rather than committing to leading initiatives to bring life-enhancing changes to their home countries,transformative MNEs commit to leading initiatives to bring life-enhancing changes to the broader society

Question 9

A short-term challenge for MNEs is to determine whether they are willing to take a leadership role in dealing with the problems that are the underlying causes of the anti-globalization movement.

Accepted Answer

A longer term challenge for MNEs is to determine whethere they are willing to take a leadership role in dealing with the problems that are the underlying causes of the anti-globalization movement

Question 10

To buttress the arguments of activists who have demonstrated against increasing globalization,a former chief economist at the World Bank has argued that the actions and policies of all the following groups have often damaged developing countries' economies more than they have helped them,except:
A) the International Monetary Fund (IMF).
B) the United Nations Global Compact (UNGC).
C) the World Trade Organization (WTO).
D) the World Bank.

Accepted Answer

In his book Globalization and Its Discontents,Nobel Laureate Joseph Stiglitz suggests that the previous actions of the WTO,IMF and the World Bank had often damaged developing countries' economies more than they had helped them

Question 11

The Global Compact is a legislated and enforceable code that provides a way for MNEs to have a more responsive and constructive role in the developing world.

Accepted Answer

Although it is a voluntary,self-regulated set of aspirational norms rather than a legislated and enforceable code,the Global Compact offers a way forward by encouraging MNEs to embrace a more responsive and constructive role in the developing world.

Question 12

The primary difference between transactional MNEs and exploitative MNEs is that the former employs an approach that tends to be legally compliant and non-oppressive in its emerging market dealings.

Accepted Answer

The difference between the transactional MNE and the exploitative one is that the former adopts an approach that is both legally compliant and socially aware in its emerging market dealings.Conversely,exploitative MNEs are renowned for their willingness to ignore the welfare of their end consumers and employees,collude with political elites,violate environmental norms and expose emerging market communities to potential harm

Question 13

MNEs that internationalize in developing countries have encountered all of the following differences pertaining to the labor force,except:
A) lower wages and fewer restrictions on living standards.
B) greater number of hours worked per week.
C) higher standards with respect to working conditions.
D) lower standards for human rights.

Accepted Answer

Higher standards with respect to working conditions are rarely,if ever, encountered by MNEs that internationalize in developing countries

Question 14

Responsive MNEs act in a way that is sensitive and responsive to the needs of all its immediate stakeholders.

Accepted Answer

Responsive MNEs prioritize the needs of all their stakeholders, including employees, customers, suppliers, and the communities in which they operate, and work to create value for them.

Question 15

Experience has shown that encouraging foreign direct investment by MNEs in developing economies has been less effective than government-funded aid programs in efforts to reduce global poverty.

Accepted Answer

In what the World Bank calls "the greatest poverty reduction program in human history," hundreds of millions of people in China have moved out of poverty since the late 1970s.In large part,this transformation has been due to the cumulative investment of $1,765 billion in 864,304 foreign investment projects approved in the 35 years following the announcement of China's open-door policy in 1979.

Question 16

Transformative MNEs are sensitive and responsive to the problems and the needs of the developing world but the freedom of these MNEs to lead broad-scale efforts to deal with their root causes is often limited by governance issues and the need to generate profits.

Accepted Answer

Notwithstanding the significant financial commitment required,many pioneering transformative MNEs are leading major initiatives to help deal with the root causes of problems facing the developing world.Initiatives undertaken by Unilever,Heineken and Merck provide several examples

Question 17

Excessive pressure from all of the following groups has caused exploitative MNEs to close down manufacturing operations and move to a new location,except:
A) governments.
B) non-unionized employee interest groups.
C) nongovernmental organizations (NGOs).
D) consumers.

Accepted Answer

Exploitative MNEs have been widely documented as having taken steps to close down and move factories to alternate jurisdictions when the pressure from governments,nongovernmental organizations NGOs and consumers becomes too great

Question 18

In the 1970s,Nobel economist Milton Friedman advocated all of the following behaviours by MNEs,except:
A) focusing only on the interests of shareholders.
B) avoiding pollution.
C) maximizing profits.
D) leveraging cross-country differences in wages.

Accepted Answer

In addition to advocating companies' efforts to maximize profits and to focus solely on the interests of shareholders,economist Milton Friedman once argued that"[those who believe that] business….takes seriously its responsibilities for…..avoiding pollution….are preaching pure and unadulterated socialism"

Question 19

Government-funded aid programs flowing between developed and developing countries have failed to reduce global poverty primarily due to the creation of overly-detailed accountability systems and the excessive volume of feedback.

Accepted Answer

In fact,a large portion of foreign aid takes a paternalistic view,in that it defines both the problems and the solutions and provides for neither accountability,nor feedback.

Question 20

In the past,many MNEs exhibited behaviour that was significantly exploitative or transactional.

Accepted Answer

In the past,a large number - perhaps a majority - of MNEs might have exhibited behavior that was significantly or even predominantly exploitative or transactional,as we have described those terms.In recent years,however,management's concept of a responsible strategy has migrated from a passing acknowledgment of the need to develop socially sensitive corporate policies to a recognition that companies must articulate a philosophy that reflects their long-term viability as both participants in and contributors to the broader social,economic,and environmental practices in every environment in which they operate.

Quiz 8: The Future of the Transnational: An Evolving Global Role