Deck 4: Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Question 1

Acme Ethical Standards (Scenario)
Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil.


-________ is most likely to point to a controversial practice in his/her country in which the compensation of top executives is far greater than that of low-ranking subordinates.

A) Geoff
B) Luis
C) Jang
D) Marta

Answer 1

Marta

Question 2

Ethics and appropriate behavior transcend all international business activities and figure prominently in management decisions about financial performance and competitive advantage.

Answer 2

True

Question 3

According to relativists ________.

A) a passive acceptance of others' values is unethical
B) ethical truths differ from group to group
C) firms and individuals should seek to uphold ethical behavioral standards consistently around the world
D) ethical truths are absolute

Answer 3

B

Question 4

Advances in communications technologies makes it difficult to deceive consumers in foreign countries.

Question 5

________ means meeting humanity's needs without harming the ability of future generations to meet their needs.

A) Sustainability
B) Corporate social responsibility
C) Ethical behavior
D) Casuistry

Question 6

________ refers to the system of procedures and processes by which corporations are managed, directed, and controlled.

A) Corporate governance
B) Deceptive marketing
C) Global sourcing
D) Corporate social responsibility

Question 7

Piracy is equivalent to counterfeiting.

Question 8

An individual who believes in ethical normativism is most likely to view ethical behavioral standards as ________.

A) universal
B) constantly changing
C) dependent on societal norms
D) superior to religious beliefs

Question 9

________ represents the base of the pyramid of ethical behavior.

A) Ethical behavior
B) Corporate social responsibility
C) Complying with laws and regulations
D) Guarding against corruption

Question 10

A corporate culture that advocates profit over sustainability and human welfare cannot lead to employee abuse.

Question 11

Acme Ethical Standards (Scenario)
Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil.


-Who among the following managers is most likely to raise concern over the ban on advertising directed at children in his/her country?

A) Marta
B) Geoff
C) Luis
D) Jang

Question 12

Freedom Shoes (Scenario)
Freedom Shoes Inc., a sports shoe company, is considering entering into a contract with an overseas vendor to expand its production capacity. The company investigated several suppliers and found one vendor to be the most attractive in terms of cost and manufacturing efficiency. However, Freedom's managers have heard reports that the vendor operates factories with sweatshop conditions.
Sean, a senior manager in Freedom, adheres to the relativist view regarding ethical standards. He goes by the rule, "When in Rome, do as the Romans do." Sean is most likely to agree strongly with which of the following views?

A) Freedom should not partner with foreign business entities.
B) Freedom should passively accept the practices that prevail in countries where it does business.
C) Freedom should not hire foreign managers.
D) Freedom should institute a single global code of conduct for all its employees and suppliers.

Question 13

________ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong.

A) Attitudes
B) Ethics
C) Laws
D) Biases

Question 14

Widespread corruption hinders economic development.

Question 15

Standards of ethical behavior are uniform worldwide.

Question 16

Intellectual property rights law enacted in one country are enforceable worldwide.

Question 17

Which of the following behaviors of a firm can be called unethical?

A) setting up operations abroad
B) manufacturing luxury consumer goods
C) tolerating sweatshop conditions
D) failing to meet shareholders' expectations with regard to annual profit

Question 18

An international human rights organization recommends that its member countries review their human rights policies on a periodic basis to ensure that their governments are upholding ethical standards for the treatment of prisoners. Which of the following represents the most effective reasoning in support of the organization's recommendation?

A) Ethical policies and practices tend to remain consistent within the same country over time.
B) Nations should emphasize more rehabilitation than retribution in their treatment of prisoners.
C) Nations should enforce only those ethical standards that have been adopted by other nations.
D) Ethical standards change over time, so national policies should be updated as necessary.

Question 19

________ represents the apex of the pyramid of ethical behavior.

A) Ethical behavior
B) Corporate social responsibility
C) Complying with laws and regulations
D) Guarding against corruption

Question 20

Acme Ethical Standards (Scenario)
Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil.
The managers discuss various ethical problems commonly encountered in their local territories. Which of the following representatives is most likely to label counterfeiting of goods as the biggest challenge in his/her country?

A) Jang
B) Luis
C) Marta
D) Geoff

Question 21

Define ethics. Provide examples of unethical behavior exhibited by firms.

Question 22

The process of reproducing assets without compensating those who originally created them is known as ________.

A) counterfeiting
B) bribery
C) product differentiation
D) trademarking

Question 23

________ refers to offering, giving, receiving, or soliciting anything of value to influence the actions of a government official or a corporate manager.

A) Patenting
B) Piracy
C) Bribery
D) Normativism

Question 24

Grease payments intended to expedite transactions are both accepted and legal in many countries.

Question 25

Which of the following grants protections to the creators of art, music, books, software, movies, and TV shows?

A) patent
B) trademark
C) copyright
D) domain registration

Question 26

In countries with minimal corruption ________.

A) commercial laws are unfair and discriminatory
B) financial and accounting information is transparent
C) direct investment does not take place
D) the contribution of the private sector to the national GDP is negligible

Question 27

Experienced managers scan operations in each country and potential partners for the possibility of ethical abuses. Such scanning is an ongoing process because company operations and environments evolve continuously.

Question 28

________ confer the exclusive right to manufacture, use, and sell products or processes.

A) Patents
B) Trademarks
C) Trade secrets
D) Copyrights

Question 29

Ethical behavior is essential for business success.

Question 30

What is an ethical dilemma? In a short essay, include one example of an ethical dilemma that a business manager might face.

Question 31

Which of the following countries has the LEAST corruption?

A) Mexico
B) Philippines
C) Russia
D) Denmark

Question 32

Which of the following acts makes it illegal for U.S. firms to offer bribes to foreign parties in order to secure or retain business?

A) the U.S. Foreign Corrupt Practices Act
B) the Robinson-Patman Act
C) the U.S. Securities Exchange Act
D) the Sherman Antitrust Act

Question 33

In countries with questionable ethical norms, it is usually ill-advised to maintain ethical standards superior to what is required by local laws and values.

Question 34

Improper ethical behavior is unlikely to result when bad means are justified by good ends.

Question 35

Which of the following is TRUE with regard to corruption?

A) Countries with minimal corruption fail to attract direct investment.
B) In firms, corruption rarely occurs across the range of value chain activities.
C) Corruption harms the poorest in societies.
D) Under the Sherman Antitrust Act, firms charged for corruption may be fined $2 million and managers can be imprisoned for up to five years.

Question 36

Scholars examining ethics from the perspective of relativism hold that ethical truths are absolute.

Question 37

________ refers to ideas or works created by individuals or firms and includes a variety of proprietary, intangible assets: discoveries and inventions; artistic, musical, and literary works; and words, phrases, symbols, and designs.

A) Global sourcing
B) Corporate governance
C) Constant capital
D) Intellectual property

Question 38

________ is the procurement of products or services from suppliers located abroad.

A) Licensing
B) Franchising
C) Deceptive marketing
D) Global sourcing

Question 39

Trademarks, copyrights, and patents are examples of ________.

A) intellectual property rights
B) fundamental rights
C) tangible property rights
D) ethical rights

Question 40

Corruption is defined as ________.

A) the system of procedures and processes by which corporations are managed, directed, and controlled
B) a manner of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers
C) the abuse of power to achieve illegitimate personal gain
D) the tendency to make decisions based purely on cognitive factors

Question 41

Sid Maxwell (Scenario)
Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region.

-Corporate social responsibility represents the base of the pyramid of ethical behavior.

Question 42

Corporate social responsibility represents the apex of the pyramid of ethical behavior.

Question 43

Which of the following is TRUE with regard to bribery?

A) Bribery promotes a culture of dishonesty and immorality.
B) Bribery poses no significant threat to market economies.
C) Bribery is considerably rare in developing economies.
D) Bribery is not acceptable in much of the world.

Question 44

Sid Maxwell (Scenario)
Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region.
The software program embedded in Hudson's signature toy, the Witty Parakeet, is an example of a(n) ________.

A) tangible asset
B) intellectual property
C) trademark
D) trade secret

Question 45

In 2014, ________ was the largest single source of counterfeit products imported into the U.S., which accounted for 63 percent of Homeland Security seizures, followed by Hong Kong, an administrative region of China, amounting to 25 percent of seizures.

A) China
B) The United States
C) Iran
D) Russia

Question 46

Failure to adopt CSR behaviors can have high detrimental effects on a company.

Question 47

The Nike "swoosh" is an example of a ________.

A) patent
B) fad
C) copyright
D) trademark

Question 48

Freedom Shoes (Scenario)
Freedom Shoes Inc., a sports shoe company, is considering entering into a contract with an overseas vendor to expand its production capacity. The company investigated several suppliers and found one vendor to be the most attractive in terms of cost and manufacturing efficiency. However, Freedom's managers have heard reports that the vendor operates factories with sweatshop conditions.
Which of the following, if TRUE, implies that Freedom has a strong social interest?

A) The top management of Freedom actively engages in positively contributing to the disadvantaged communities in the society.
B) According to Freedom, a firm that fails to institute a green purchasing policy in sourcing its inputs is more likely than not to fail in the long run.
C) Freedom considers that the key to success for MNCs lie in their ability to tap resources effectively and at a lower cost.
D) Despite the overseas vendor's effectiveness, Freedom decides not to enter into a contract with it because according to Freedom, tolerating sweatshop conditions is unethical.

Question 49

In a short essay, describe how the African MNE Celtel helped improve the conditions for millions of people and businesses around Africa.

Question 50

Which of the following refers to a typical CSR value?

A) increasing profits
B) upholding market monopolies
C) engaging in philanthropy
D) sustaining sweatshops

Question 51

Which of the following can extend legal protection to Hudson's proprietary software used in its toys?

A) a trademark
B) a patent
C) a copyright
D) a users' license

Question 52

Upholding the right to join labor unions is an example of CSR values.

Question 53

Sustainable practices lead to ________.

A) cost savings from more efficient production
B) the abolition of labor unions
C) higher employee turnover
D) reduced operational flexibility

Question 54

Which of the following would most likely be considered an appropriate action for a multinational company in meeting its global corporate social responsibility obligations?

A) lowering production costs for specific manufactured items
B) improving the efficiency of assembly line operations
C) developing a strategic plan to enter an emerging market
D) devoting substantial R&D to poor-country ailments

Question 55

Sid Maxwell (Scenario)
Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region.
Hudson uses a distinctive sign to enable its customers to easily identify its products. This distinctive sign that the company also uses to distinguish its offerings from that of its competitors is known as a ________.

A) patent
B) copyright
C) trademark
D) users' license

Question 56

Sustainable firms ________.

A) have a high employee turnover rate
B) have greater liabilities than assets
C) avoid emitting toxic wastes
D) actively resist organizational change

Question 57

Firms with strong environmental interests are most likely to ________.

A) provide employees educational opportunities
B) encourage the use of sweatshops
C) optimize diversity in hiring
D) minimize pollutants in manufacturing

Question 58

Economic interests refer to a firm's economic impact on ________.

A) the localities where it does business
B) the top management of the firm
C) the middle management of the firm
D) the society as a whole

Question 59

Firms with a strong social interest ________.

A) openly support the use of sweatshops
B) aim to optimize work conditions and diversity in hiring
C) are reluctant to provide health insurance to employees
D) engage in deceptive marketing

Question 60

In a short essay, explain the concept of CSR. List some typical CSR values.

Question 61

In order to be effective, a corporate code of ethics should be designed to function like a ________.

A) business white paper
B) moral compass
C) project plan
D) political treatise

Question 62

The ________ is a policy platform and practical framework for companies committed to sustainability and responsible business practices. It is the world's largest voluntary corporate citizenship initiative, representing thousands of businesses in more than 135 countries.

A) Organization for Economic Cooperation and Development
B) United Nations Global Compact
C) International Economic Development Council
D) Global Reporting Initiative

Question 63

In a world ever sensitive to social and environmental issues, more and more firms are embracing CSR and sustainability. Such firms are more likely than not to ________.

A) develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions
B) minimize their contribution to the local community in order to maximize profits
C) be reluctant to hire managers from around the world
D) favor region-specific CSR standards to global CSR standards for foreign operations

Question 64

Which of the following approaches to ethical standards for corporate governance reflects the view that the best ethical action is the one that provides the most good or the least harm?

A) common good approach
B) utilitarian approach
C) virtue approach
D) fairness approach

Question 65

In terms of CSR and sustainability, going ________ means institutionalizing appropriate behavior into the organization's culture so it becomes part and parcel of strategy.

A) wide
B) deep
C) local
D) global

Question 66

The five approaches to analyzing ethical problems rarely conflict with each other.

Question 67

Which of the following approaches to ethical standards for corporate governance reflects the view that the best action emphasizes the welfare of the entire community or nation?

A) rights approach
B) utilitarian approach
C) common good approach
D) virtue approach

Question 68

Which of the following is TRUE with regard to the rights approach?

A) It is based on the belief that the best action treats everyone equally and fairly.
B) It produces the greatest balance of good over harm to customers, employees, shareholders, the community, and the natural environment.
C) According to the rights approach, the most important virtues are truth and prudence.
D) It is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved.

Question 69

The five approaches to analyzing ethical dilemmas often lead to similar solutions.

Question 70

The utilitarian approach is based on the belief that, regardless of how one deals with an ethical dilemma, human dignity must be preserved.

Question 71

The Global Reporting Initiative (www.globalreporting.org) pioneered the development of the most widely used sustainability reporting framework.

Question 72

Corporate codes of conduct emphasize standards related to ethics and social responsibilities.

Question 73

In helping identify ethical problems, the firm's code of conduct should be tailored to match the norms of each individual region from which the firm operates.

Question 74

Which of the following approaches to ethical standards for corporate governance reflects the view that the best action treats everyone equally and in a just manner?

A) fairness approach
B) virtue approach
C) utilitarian approach
D) rights approach

Question 75

In a short essay, describe the three types of interests simultaneously pursued by a sustainable business.

Question 76

Explain the five different approaches to examining ethical problems. What are the difficulties that are likely to arise while using these approaches?

Question 77

According to the virtue approach ________.

A) the best action emphasizes the welfare of the entire community or nation
B) the best action emphasizes moral excellence and righteousness that provide for the full development of our humanity
C) the best ethical action is the one that provides the most good or the least harm
D) the best action protects and respects the moral rights of everyone involved

Question 78

The most advanced companies monitor suppliers to ensure that they use sustainable practices.

Question 79

In terms of CSR and sustainability, going wide implies ________.

A) a continuous effort to understand how CSR and sustainability affect every aspect of the firm's operations worldwide
B) institutionalizing appropriate behavior into the organization's culture so it becomes part and parcel of strategy
C) encouraging unstructured learning among employees
D) a sustained effort to reduce control mechanisms throughout the organization

Question 80

Which of the following is TRUE of a code of ethics?

A) It guides decision making by all employees in the firm.
B) It does not define the values and principles that are intended to guide organizational decision making.
C) It emphasizes profit over righteousness.
D) It is a cure for all ethical dilemmas.