Deck 5: Ethics, Corporate Social Responsibility, and Sustainability

Question 1

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.

Answer 1

True

Question 2

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.

Answer 2

False

Question 3

An organizational culture that requires all decisions to be purely economic is more likely to allow unethical behavior to flourish and persist.

Answer 3

True

Question 4

The righteous moralist's approach to ethics is typically associated with managers from developed nations.

Question 5

Multinational corporations do not qualify to act as moral agents within the framework of rights theories.

Question 6

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member-states and other signatories to make the bribery of foreign public officials a criminal offense.

Question 7

Kantian ethics asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation,that manager should not either.

Question 8

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.

Question 9

Societal business ethics are not divorced from personal ethics.

Question 10

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

Question 11

After it was amended,the Foreign Corrupt Practices Act did not allow for "facilitating payments."

Question 12

John Rawls's veil of ignorance is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas.

Question 13

According to Friedman's doctrine,the only social responsibility of business is to increase profits,so long as the company stays within the rules of law.

Question 14

The Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business.

Question 15

According to the Utilitarian approach,the action that produces the greatest good for the greatest number of people can result in the unjustified treatment of a minority.

Question 16

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

Question 17

Leon Sullivan argued that it was ethically justified for Western businesses to operate in South Africa so long as the companies obeyed the apartheid laws.

Question 18

Based on Hofstede's cultural dimensions,enterprises headquartered in a country which scores high on masculinity and power distance measures are more likely to behave ethically than enterprises headquartered in a culture where individualism and uncertainty avoidance are strong.

Question 19

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 20

Noblesse oblige is a French term referring to those multinationals that have unethically used their power for private gain.

Question 21

The Foreign Corrupt Practices Act was subsequently amended to allow for speed money or grease payments,which 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 22

Which of the following statements is true about the Sullivan principles?

A)They were widely opposed by U.S.firms,such as General Motors,operating in South Africa.
B)They promoted the abolition of apartheid laws.
C)It has been argued that they led to the violation of human rights in South Africa.
D)They were against the introduction of democratic elections in South Africa.
E)Western businesses that followed them were considered unethical.

Question 23

Due to certain strict environmental and employment standards in its home nation,Taurus Inc.has shifted its operations to developing nations.Hence,the firm has now been able to gain competitive advantage by avoiding costly pollution controls.This strategic move of Taurus Inc.will be considered

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

Question 24

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 25

The internal stakeholders of a company do not have an exchange relationship with the company.

Question 26

Delta Inc.moved its entire production operation to the country of Xondervan,where the company was free to dump pollutants to the atmosphere.Delta Inc.is contributing to

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

Question 27

Brain Wing Inc.has won the bid to build airplanes for a host country government.However,the execution of the contract has been delayed due to certain unproductive,bureaucratic procedures in the less developed nation.In order to legally overcome this problem,Brain Wing Inc.could resort to the payment of

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

Question 28

In the modern world,corporations can worsen 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 29

Which of the following occurs when a resource held jointly by all,but owned by no one,is overused by individuals,resulting in its degradation?

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

Question 30

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 31

To strengthen the moral courage of employees,companies should not retaliate against those employees who complain about unethical actions.

Question 32

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 33

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

Question 34

Which of the following best exemplifies 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

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 36

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 37

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 a host nation.Such payments are typically referred to as

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

Question 38

The Sullivan principles attempted to fight against

A)globalization.
B)apartheid laws.
C)legalization of facilitating payments.
D)democratic structures.
E)anti-dumping laws.

Question 39

Which of the following is most likely to be considered unethical?

A)Galaxy Inc.ceased its operations in some developing nations on account of low employment standards in those countries.
B)Unicorn Inc.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.had to close down a production plant as the local management there had employed child labor.
E)Orion Inc.sends its waste products for disposal to a developing nation because the pollution control laws in its home country are more strict than those in the developing nation.

Question 40

Which of the following 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?

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

Question 41

Which of the following is most likely to reduce the pressure on managers to violate their personal ethics?

A)making managers work away from their ordinary social context and supporting culture
B)keeping managers psychologically and geographically close to the parent company
C)pressuring managers to meet unrealistic business goals
D)adopting an organizational culture which emphasizes that all decisions should be purely economic
E)pressuring managers to shun the concept of noblesse oblige

Question 42

Who asserted that the only social responsibility of business is to increase profits,so long as the company stays within the rules of law?

A)Milton Friedman
B)Leon Sullivan
C)Karl Marx
D)Immanuel Kant
E)David Hume

Question 43

Which of the following statements is true of facilitating payments?

A)According to the Foreign Corrupt Practices Act,"facilitating payments" are as illegal as bribes.
B)Facilitating payments are payments to secure contracts that otherwise would not be secured.
C)It is ethical to have a zero-tolerance approach toward facilitating payments.
D)Companies are allowed to make facilitating payments only in developing countries.
E)The concept of facilitating payments was introduced by the UN to put U.S.firms at a competitive disadvantage.

Question 44

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 45

Davis is the manager of a pharmaceutical manufacturing facility in a developing country.The manufacturing unit does not meet the acceptable standards of the manufacturing facility in the home nation.He knows that demanding a better manufacturing unit will raise the cost of the drugs mainly exported to other less developed countries,and hence its price.But he also realizes that by not demanding a better unit,the employees are prone to serious health issues.Davis is facing

A)a role conflict.
B)the tragedy of the commons.
C)a positivity offset.
D)an ethical dilemma.
E)a negativity effect.

Question 46

Which of the following 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

Lugnow Inc.paid a sum of $76,000 to an official in the government of Nepotismia to ensure that the company obtained exclusive preferential treatment.The $76,000 can be classified as

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

Question 48

Bryan works as a salesman for JumboCorp.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 JumboCorp's product had slowed down.In order to meet his target,Bryan bribed an official of a potential customer.In this context,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 49

Which of the following refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions,and that there should be a presumption in favor of decisions that have both good economic and social consequences?

A)corporate dissonance
B)tragedy of the commons
C)corporate dynamism
D)corporate social responsibility
E)economies of scale

Question 50

The practice of "gift giving" between the parties to a business negotiation is considered right and proper behavior 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 reflects that

A)notions of ethics are universal.
B)Asian countries are still under the influence of totalitarianism.
C)what is ethical depends on one's cultural perspective.
D)Asian cultures are more economically advanced.
E)there is unanimous agreement about accepted employment practices.

Question 51

Which of the following explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business?

A)Friedman doctrine
B)Sullivan principles
C)Utilitarianism
D)Marxism
E)Kantian ethics

Question 52

Cadmium Technologies 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 appreciated for abiding by the laws while earning profits.According to this information,which of the following approaches to ethics is most likely being adopted by Cadmium Technologies?

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

Question 53

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 54

Which of the following is detrimental to an ethical business setting?

A)keeping in mind that each decision has a moral dimension
B)encouraging leaders to demonstrate strong personal ethics
C)operating in cultures which score high on masculinity and power distance measures
D)setting realistic,achievable performance goals for employees
E)frequently auditing the activities of expatriate managers

Question 55

Unipeg Corporation has uniform high sales targets for its employees all across the globe,regardless of the environmental constraints in each market.Employees are penalized for any shortfall.This has caused many employees to falsify the values of their sales.In this context,the roots of 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 56

The CEO of United Synergy Inc.,a company in its embryonic stage,believes that unethical behavior will result in premature decline of the company.In order to ensure that the company starts operating in the most ethical manner,the CEO should

A)set high performance goals for all employees,regardless of market constraints.
B)shun the concept of noblesse oblige.
C)outsource the majority of the jobs in his company to a developing nation which has lax business regulations.
D)base decisions solely on business variables such as cost,delivery,and product quality.
E)hire employees with strong personal ethics.

Question 57

In a business setting,the term noblesse oblige refers to

A)a benevolent behavior that is considered the responsibility of successful enterprises.
B)obliging a government official with the expectation of a reciprocal favor.
C)rich corporations abusing their power for private gain.
D)preferential treatment received by successful companies from governments.
E)tax exemptions that are given only to local companies but not to foreign companies.

Question 58

Which of the following best exemplifies an ethical dilemma?

A)Javier has been doubtful about a car he purchased recently,and hence 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 under-qualified cousin and a highly-experienced,trusted supplier.
D)Andrew is responsible for deciding whether he should upgrade the manufacturing unit with new machines and reduce costs for clients,or retain the impoverished manual labor.
E)Samantha 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 59

Which of the following best exemplifies noblesse oblige?

A)multinational corporations gaining monopoly rights in developing countries in order to weaken the local competition
B)multinational corporations funding schools,universities,and hospitals in developing countries
C)multinational corporations altering the laws of a host country to suit their businesses
D)multinational corporations bribing poorly paid government officials in a foreign market
E)multinational corporations moving production to developing countries to exploit their lower employment standards

Question 60

Which of the following is a straw man approach to business ethics?

A)Friedman doctrine
B)Kantian ethics
C)Sullivan's principles
D)Utilitarian philosophy
E)Just distribution

Question 61

Suburbia Electronics follows a "when in Rome,do as the Romans" philosophy when it comes to ethics .According to this information,which of the following approaches to ethics is most likely being adopted by Suburbia Electronics?

A)Cultural relativism
B)Utilitarianism
C)Kantian ethics
D)Sullivan's principles
E)Naive immoralist

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

Which of the following approaches 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 64

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 65

Adoption of which of the following ethical approaches is most likely to cause a company to use tools such as cost-benefit analysis and risk assessment to weigh all of the social benefits and costs of a business action?

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

Question 66

Maverick Stars Inc.,a U.S.-based multinational company,applies its home-country standards of employment and production in its manufacturing facilities located in some less-developed host nations.In this context,the company is most likely to be criticized for

A)applying low standards of business ethics in its host nations.
B)exploiting the national differences in factors of production.
C)opposing ethnocentrism and righteous moralism.
D)nullifying the reasons for investing in those countries.
E)adopting cultural relativism as its approach to ethics.

Question 67

An American manager of a multinational company who is working in one of the company's production plants located in the country of Cadmia employs child labor at the manufacturing unit he is in charge of.On being criticized as unethical,the manager argues that such actions are ethically defensible because everyone in Cadmia is doing it.Which of the following straw men approaches to ethics is most likely demonstrated by the manager?

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

Question 68

Which of the following philosophies of ethics holds that 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 69

Which of the following straw men approaches to business ethics is best summarized by the maxim "When in Rome,do as the Romans"?

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

Question 70

The best decisions,from a utilitarian perspective,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 71

Shangrilah Sandals is a manufacturing firm in a developing country,where it 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.Shangrilah's behavior illustrates the straw man approach of

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

Question 72

Jonathan is the manager of his company's facilities in the Philippines.He believes in ensuring the exact same standards of working conditions,wages,and labor management in the Philippines as practiced by the company's corporate office in its home country,the United States.His policy does not always lead to profits because of the vast cultural differences between the two nations.Which of the following straw men approaches to ethics is most likely being adopted by Jonathan?

A)Naive immoralism
B)Cultural relativism
C)Righteous moralism
D)Sullivan principles
E)Just distribution

Question 73

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 74

Neon Synergy Inc.operates in three different countries,and is headed by a CEO who believes that the best approach to ethics is cultural relativism.In this context,which of the following statements is most likely to be true regarding Neon Synergy?

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

Question 75

Which of the following 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 76

Silver Meteorite Inc.is a multinational company whose home country,Palumbia Republic,considers grease payments as both illegal and unethical.Hence,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 77

Which of the following statements is true of the utilitarian approach to business ethics?

A)It holds that an action is judged desirable if it leads to the maximization of stockholders' wealth.
B)The best decisions,from a utilitarian perspective,are those that produce the greatest profits for businesses.
C)It recognizes that a business should pursue only those actions where the social benefits outweigh the costs.
D)It asserts that managers should not follow ethical norms if they see that others firms are also not following them.
E)It fails to consider the idea that actions have multiple consequences.

Question 78

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 most likely following

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

Question 79

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 80

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.