Question 1

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

Accepted Answer

The statement is incorrect. Underdeveloped countries often struggle with high levels of corruption, leading them to rank low on the CPI.

Question 2

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

Accepted Answer

Cultural relativism, which suggests that moral or ethical systems vary from culture to culture and that no universal standard exists, can lead to ethical dilemmas for MNCs (Multinational Corporations) when the host country's practices conflict with the corporation's or home country's ethical standards. It may not always provide a clear or ethically sound guide for action, especially in cases involving human rights abuses or environmental harm.

Question 3

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

Accepted Answer

This statement is true. Cultural and language barriers, as well as differences in education and understanding, can create ethical dilemmas when using technologies in developing nations. This can include issues such as informed consent, misuse of technology, and potential harm to communities.

Question 4

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

Accepted Answer

The statement is true. Although globalization has been a driving force in economic growth, it has also been criticized for causing job losses and income inequality. The poor economy may have further fueled this backlash against globalization.

Question 5

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

Accepted Answer

Corruption involves individuals or institutions using their power or influence for personal gain, often at the expense of others. This abuse of power can take many forms, such as bribery, embezzlement, or nepotism, and is considered a serious ethical and social issue.

Question 6

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

Accepted Answer

Ethical issues in the global market can have a significant impact on domestic operations. Companies that engage in unethical practices abroad can face reputational damage, legal consequences, and loss of consumer trust, which can affect their business at home. Additionally, unethical practices in the supply chain or production process of goods sourced from overseas can also have implications for domestic operations. Therefore, it is important for companies to prioritize ethical considerations in their global business practices to avoid negative consequences both domestically and internationally.

Question 7

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

Accepted Answer

MNCs (Multinational Corporations) often pay their employees in underdeveloped countries more than the average local wage to attract skilled labor, maintain a competitive edge, and sometimes due to international pressure and corporate policies on fair wages.

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.

Accepted Answer

The U.S. Supreme Court has generally interpreted the Alien Tort Claims Act (ATCA) narrowly, limiting its application to cases with a strong connection to the United States and often ruling against its extraterritorial application.

Question 9

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

Accepted Answer

Countries that are less developed often lack the necessary legal or ethical frameworks to protect their citizens from various forms of exploitation and abuse. These countries may not have established norms and regulations for issues such as labor rights, environmental protection, and consumer safety, leaving their populations vulnerable to exploitation by corporations and other groups. It is therefore important for these countries to develop a robust legal and ethical infrastructure that addresses these issues and promotes the well-being of their citizens.

Question 10

Cheap labor factories that abuse women, children, and workers are called sweatshops.

Accepted Answer

Sweatshops are defined as factories where workers are subjected to poor working conditions, low wages, and long hours without proper benefits or protections. Unfortunately, women and children are often the most vulnerable to abuse in these environments.

Question 11

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

Accepted Answer

Global codes of conduct aim to establish international principles or guidelines that businesses can follow while operating across different countries, not just domestically.

Question 12

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

Accepted Answer

MNCs often have headquarters located in one country, which can result in a clash of values and customs when these firms operate in other countries. This can lead to ethical dilemmas, as MNCs must navigate cultural differences and work to ensure their practices align with their host countries' expectations and standards. Failure to do so can result in lost business opportunities, legal penalties, and damage to the company's reputation.

Question 13

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

Accepted Answer

While ceasing operations in the host country is a drastic measure, it is indeed one way to resolve ethical conflicts when an MNC (Multinational Corporation) faces irreconcilable differences between its home country's ethics and those of the host country.

Question 14

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

Accepted Answer

Involving two or more cultures in ethical issues can create cultural, moral, and religious differences that may complicate finding a resolution that satisfies all parties. Different cultures have their principles, practices, and beliefs that shape their views on ethics, and these may not align with the other culture's. The complexities arising from cultural differences make it harder to find an ethical resolution that honors the interests and values of both parties.

Question 15

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

Accepted Answer

Many ethical problems in international markets are similar to those encountered in home countries, such as corruption, labor practices, and environmental concerns. The difference often lies in the context or scale of these issues, not their nature.

Question 16

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

Accepted Answer

This statement is true. Cultural differences can make it challenging for an MNC to distinguish between what is considered a cultural issue versus an ethical issue. What is considered ethical in one country may not be in another, leading to conflicts in values and beliefs. This can be further complicated by differences in legal frameworks and business practices.

Question 17

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

Accepted Answer

MNCs based in the United States and in the European Union have significant economic and political power, and have played a major role in shaping global trade, investment, and political policies.

Question 18

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

Accepted Answer

Fulfilling social responsibilities can help the MNC build a positive reputation and gain acceptance from the local community and government, which can enhance its legitimacy in the host country. Failure to meet social responsibilities can lead to negative perceptions and resistance from the local community and government, which can hinder the MNC's operations and damage its image. Therefore, fulfilling social responsibilities is essential for MNCs to establish and maintain legitimacy in host countries.

Question 19

The Nestlé infant formula case is one in which a normal business practice in the firm's home country proved to be problematic in the host countries.

Accepted Answer

The Nestlé infant formula case involved the marketing and sales practices of the company's infant formula in developing countries, which were different from those in its home country Switzerland. These practices led to controversy and criticism for allegedly contributing to infant malnutrition and mortality in those countries.

Question 20

The ethical issues encountered in underdeveloped countries are often more acute than those found in industrialized nations.

Accepted Answer

Underdeveloped countries often have limited resources and weak governance systems, which can exacerbate ethical issues such as poverty, corruption, human rights violations, and environmental degradation. Therefore, the ethical issues encountered in these countries are often more severe and complex than those found in industrialized nations.

Quiz 10: Ethical Issues in the Global Arena.