Question 1

_____________ focuses on the structures and processes necessary for the pursuit of shareholder value.

Accepted Answer

Financial governance specifically deals with the management of financial resources and the establishment of structures and processes that promote the creation of shareholder value. Consumer protection and environmental governance may be important considerations for a business, but are not directly related to the pursuit of shareholder value.

Question 2

Which of the following attributes has NOT been important to MNEs in regard to corporate social responsibility?

Accepted Answer

All the options listed (corporate reputation, women and minority employment, and employee safety and health) have been important aspects of corporate social responsibility for multinational enterprises (MNEs).

Question 3

Which of the following is not a component of ISO 14000?

Accepted Answer

The components of ISO 14000 are environmental management systems, environmental auditing, and life cycle assessment. The term "environmental index unit" is not a recognized component of ISO 14000.

Question 4

Which of the following is correct?

Accepted Answer

This is the only option that aligns with ethical business practices and the law. A is not always appropriate, as it may lead to further escalation of the dispute. B is not ideal as MNEs should use all available channels to seek resolution. D is not specific and does not provide a clear answer.

Question 5

Which of the following is incorrect?

Accepted Answer

All three statements are correct and align with ethical considerations for MNEs operating in foreign countries. Therefore, none of the choices are incorrect.

Question 6

Global payment systems that place priority on speed of transaction rather than knowing whether the electronic money transfers are legal is an example of a practice that encourages_________________.

Accepted Answer

Global payment systems that prioritize speed of transaction over legal compliance make it easier for individuals and organizations to engage in money laundering, which involves hiding the source of illegal funds by transferring them through a series of legitimate-looking transactions.

Question 7

Which of the following is an example of international business corruption?

Accepted Answer

All of the options given are examples of international business corruption. A request for a fee to expedite customs clearance is a form of bribery, a consultant fee demanded by government officials involved in project approval is a form of kickback, and a bid awarded to regulators and their proxies is a form of conflict of interest.

Question 8

Diminished national control over trade policies, damages incurred by legitimate importers, and manufacturers whose reputations are tarnished are examples of some of the effects that are a result of ____________________.

Accepted Answer

Smuggling can lead to diminished national control over trade policies because it bypasses legal channels. It also harms legitimate importers who follow the rules and can damage the reputation of manufacturers when counterfeit or illegal goods enter the market under their brand name.

Question 9

An example of a country with increased probability of corruption is ______________.

Accepted Answer

Developing and transitional economies often have weak institutions, low levels of transparency, and limited resources for enforcing laws and regulations, which increase the probability of corruption. On the other hand, well-developed economies with adequate legal frameworks and strong enforcement tend to have lower levels of corruption. A country where institutes lead economic and social change may or may not have an increased probability of corruption, depending on the specific context and the strength of regulatory mechanisms.

Question 10

Communications, infrastructure, energy, and transportation are examples of areas prone to _____________________.

Accepted Answer

These areas are often associated with large sums of money or crucial to the functioning of society, making them vulnerable to corrupt practices such as bribery, embezzlement, and favoritism.

Question 11

An MNE's corporate social responsibility is typically not focused on the relationships with several major stakeholders and solely depends on the company's executives only.

Accepted Answer

An MNE's corporate social responsibility should focus on various major stakeholders including employees, customers, suppliers, local communities, and the environment. It involves the participation and collaboration of all levels of the organization and should not solely depend on the company's executives.

Question 12

Philanthropic responsibilities reflect expectations that business will engage in social activities that are neither mandated by law nor generally expected of business in an ethical sense.

Accepted Answer

Philanthropic responsibilities go beyond legal and ethical obligations and reflect societal expectations of businesses to engage in social activities that contribute to the greater good.

Question 13

Global business ethics are essentially about the reconciliation of home- and host-country ethical standards and the identification of norms that will satisfy both.

Accepted Answer

Global business ethics aim to find a common ground between the ethical standards of the home country and the host country in order to satisfy both.

Question 14

Piracy and counterfeiting are not the same.

Accepted Answer

Piracy involves copying and distributing copyrighted material without permission while counterfeiting involves copying and selling goods that are designed to look like authentic products, but are actually fake and of inferior quality.

Question 15

Smuggling does not diminish national control over trade policies.

Accepted Answer

Smuggling undermines national control over trade policies by allowing goods to enter or leave a country without being subject to customs duties or other regulations.

Question 16

Nigeria has become infamous for it corrupt practices.

Accepted Answer

Nigeria has been ranked one of the most corrupt countries in the world by organizations such as Transparency International. Corruption in Nigeria has affected many facets of society including politics, business, and law enforcement.

Question 17

Foreign investors may be reluctant to invest in an economy known for its corrupt practices.

Accepted Answer

Foreign investors are less likely to invest in an economy with a reputation for corruption as it introduces risks and uncertainties, leading to reduced investor confidence.

Question 18

All corruption violates the law.

Accepted Answer

Corruption often involves illegal activities, but not all corrupt practices are explicitly illegal in every jurisdiction. Some forms of corruption may exploit legal loopholes or be legal but unethical.

Question 19

While ethical issues have been on the radar screen of MNEs for a long time, corruption was often an issue not talked about.

Accepted Answer

Corruption has historically been a sensitive and less openly discussed issue among Multinational Enterprises (MNEs), even though ethical concerns have been acknowledged for a long time.

Question 20

Ethical behavior implies not only following the rule of law but also attending to the values, norms and concerns of the home and host environments.

Accepted Answer

Ethical behavior goes beyond simply obeying the law, and takes into account the cultural and societal values of both the home (i.e. the individual's own culture) and host (i.e. the culture they are operating in) environments.

Quiz 19: Social Responsibility and Corruption in the Global Marketplace