Deck 10: Ethical Issues in the Global Arena.

Question 1

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

Answer 1

False

Question 2

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

Answer 2

False

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.

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

Question 7

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

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.

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.

Question 10

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

Question 11

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

Question 12

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

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.

Question 14

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

Question 15

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

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.

Question 17

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

Question 18

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

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.

Question 20

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

Question 21

Growth of global business as a critical element in the world economy is known as:

A) legitimization.
B) internationalization.
C) market awareness.
D) multinationalism.

Question 22

Hypernorms are justified if:

A) there is undisputed consensus the principle is universal.
B) they are supported by NGOs.
C) they are a component of well-known global industry standards.
D) All of these.

Question 23

What questions were raised because of the Bhopal tragedy?

A) To what extent should MNCs maintain identical standards at home and abroad regardless of how lax laws are in the host country?
B) How wise are laws that require plants to be staffed entirely by local employees?
C) Should certain kinds of plants even be located in developing nations?
D) All of these questions.

Question 24

The opposite of cultural relativism is ethical imperialism.

Question 25

International markets must be pursued if firms want to remain

A) competitive.
B) ethical.
C) free from corruption.
D) legitimate.

Question 26

Grease payments are used to get minor officials to do all the following except

A) what they are supposed to do.
B) what they are supposed to do, but faster.
C) what the FCPA wants them to do.
D) what they are supposed to do, but better.

Question 27

Peter Drucker has labeled the expanded global marketplace the

A) moral free space.
B) hypercompetitive economy.
C) transnational economy.
D) multinational competitive sphere.

Question 28

Regarding the infant formula controversy, Nestlé was criticized for all of these actions except:

A) distributing free samples.
B) providing purified water with the formula.
C) promoting bottle-feeding over breast-feeding.
D) the use of so-called "milk nurses."

Question 29

Which of the following is not a characteristic of sweatshops?

A) child labor
B) low pay
C) poor working conditions
D) forced prostitution

Question 30

Major strategies MNCs may use to conduct global business, but still maintain an ethical sensitivity include all of these except:

A) modify or redesign products.
B) link ethics with global strategy.
C) suspend business activities in certain countries.
D) conduct ethical audits.

Question 31

Ethical issues in the global environment include all of these except:

A) product safety.
B) human resource management.
C) production efficiency.
D) advertising practices.

Question 32

The philosophy of Western industrialized nations and their MNCs includes all of these factors except:

A) economic growth.
B) decentralization.
C) efficiency.
D) free trade.

Question 33

The practice of offering something in order to gain an illicit advantage is called

A) offshoring.
B) bribery.
C) corruption.
D) grease payments.

Question 34

Economic integration of many formerly national economies into one worldwide economy is called

A) globalization.
B) world-system theory.
C) capitalization.
D) material diversification.

Question 35

All of the following are issues that include an ethical dimension and are national security versus profits issues except

A) increasing
B) sweatshops
C) harboring terrorists.
D) mining of the ocean floor.

Question 36

Which of the following is not a feature of the global economy?

A) international movement of labor
B) more trade in goods than in services
C) international flow of capital
D) international laws governing fair trade

Question 37

The FCPA differentiates between:

A) domestic and international disputes
B) land ownership and building rental
C) bribes and grease payments
D) entry fees and corporate filing fees

Question 38

All of the following groups have criticized MNC labor practices except

A) social activist groups.
B) church groups.
C) labor unions.
D) grassroots organizations.

Question 39

The criticism of their use of sweatshops has led MNCs to do all of these things except::

A) work to improve working conditions.
B) establish codes of conduct.
C) perform social or ethical audits.
D) create the Fair Labor Association (FLA).

Question 40

The FCPA has had a significant impact on the way American firms do business globally.

Question 41

The Alien Tort Claims Act applies to:

A) actions that occur on foreign soil.
B) actions that occur on U.S. soil.
C) actions that occur in the host country where a U.S. firm is based.
D) actions that occur in a foreign country where a foreign firm is based.

Question 42

The Foreign Corrupt Practices Act allows

A) bribes under $10,000.
B) bribes, as long as the firm does not deduct them on its tax return.
C) bribes, as long as they are disclosed to shareholders.
D) grease payments.

Question 43

Payment of a bribe implies some type of

A) extortion.
B) quid pro quo.
C) gambling.
D) physical harm to the payee.

Question 44

Which of the following is not part of the anticorruption movement?

A) Transparency International
B) OECD antibribery initiatives
C) individual country initiatives
D) World Trade Organization

Question 45

Which of the following is not an argument commonly used against bribery?

A) Bribes are inherently wrong.
B) Bribes create dependence on corrupt individuals.
C) Bribes are unfair because foreigners can get them, while U.S. citizens cannot.
D) Once bribes start, they never stop.

Question 46

All of the following are arguments in support of bribery except

A) everybody does it.
B) it is normal practice in many countries.
C) it is a form of commission, tax, or compensation for doing business between cultures.
D) it is a way of providing needy foreigners with money they need.

Question 47

Which of the following is not a strategy for improving global business ethics?

A) use of global codes of conduct
B) incorporating ethical dimensions into top level strategic planning processes
C) imposing the home country's ethical standards on the host country
D) suspension of activities

Question 48

The position that advocates that an MNC follow the host country's ethical standards is called

A) ethical relativism.
B) ethical egoism.
C) ethical imperialism.
D) ethical hegemony.

Question 49

The position that advocates that an MNC should continue to follow its home country's ethical standards even while operating in another country is known as

A) ethical relativism.
B) ethical egoism.
C) ethical imperialism.
D) ethical hegemony.

Question 50

Global trade is:

A) speeding up.
B) slowing down.
C) doing about the same.
D) diminishing exponentially.

Question 51

Arguments against bribery include all the following except

A) you shouldn't compromise your beliefs.
B) bribery is illegal in the United States.
C) managers can deal with corrupt governments.
D) one should take a stand for honesty.

Question 52

The Foreign Corrupt Practices Act

A) governs the operations of foreign MNCs in the United States.
B) makes it illegal to make any type of payment to a foreign citizen for the purpose of doing business.
C) makes it illegal for the representative of an American corporation to offer or pay officials of foreign governments for the purpose of getting or maintaining business.
D) makes it illegal for American government officials to accept bribes from foreign nationals.

Question 53

The ethics and global strategy plan for improving global business ethics has as its central idea

A) placing ethics ahead of profits as the number one priority.
B) focusing on human rights rather than profits.
C) employing only hypernorms for the MNC's ethical standards.
D) utilizing ethical standards as significant inputs into top-level strategy formulation and implementation.

Question 54

Current standards for SA800 include all the following except

A) certifications.
B) remuneration.
C) management systems.
D) child labor.

Question 55

Which of the following is not an example of corruption?

A) bribery
B) paying for political favors
C) negotiating for the lowest price on a contract
D) paying protection money to the police

Question 56

Which of the following is not an SA8000 standard proposed to improve sweatshop conditions?

A) prohibition on employing workers under a certain age
B) provision of a safe and healthy working environment
C) provision of educational opportunities for workers
D) prohibition of discriminatory practices

Question 57

U.S. based MNCs are increasingly interested in cases brought under the Alien Tort Claims Act because

A) they could allow the firm to recoup some costs of incorporating overseas.
B) they could allow the firm to sue foreign firms on a reciprocal basis.
C) they provide an insight in the customs of the host country.
D) they are increasingly being named as defendants in tort cases for doing business in countries with repressive governments.

Question 58

Which of the following is not one of home/host stakeholder pressures?

A) culture
B) system of government
C) economic system
D) laws

Question 59

In 2012, the United States' rank in the Corruption Perception Index was:

A) first, being least corrupt.
B) in the top 10.
C) in the top 20.
D) at the very bottom.

Question 60

All of the following are proposed standards for the SA8000 program, to improve sweatshop conditions, except

A) allowing workers to form unions.
B) prohibiting corporal punishment.
C) providing retirement benefits.
D) limiting work to a maximum of 48 hours per week.

Question 61

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Provide an example of how the FCPA has cracked down on corrupt practices.

Question 62

Grease payments are all of following except

A) monies given to minor officials
B) get goods through red tape
C) monies given to high ranking officials
D) small sums of money

Question 63

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Discuss the best ways to combat bribery.

Question 64

Arguments in favor of bribery include

A) it's necessary for profit.
B) nobody does it.
C) they are forms of wages.
D) they are not expected.

Question 65

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Describe the differences between internationalization and globalization.

Question 66

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Evaluate the proposed requirement that MNCs pay workers at least the legal minimum wage or prevailing industry wage in their overseas factories.

Question 67

Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it.
Evaluate Nestlé's action in defining the issue and keeping the issue out of the limelight, in the infant formula case.

Question 68

Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it.
Make a case for paying premium wages to workers in less-developed countries.

Question 69

Provide a short answer to each of these questions. Be sure to fully explain your answer.
According to the textbook, Dow Chemical, which bought Union Carbide in 2001, is still subjected to claims by the survivors of the Bhopal disaster. Based on your understanding of the incident and its aftermath, determine whether or not Dow should continue to be liable to the victims of Bhopal.

Question 70

Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it.
One reason that some observers give for the cause of the Union Carbide Bhopal incident is that the company was forced to take on local partners in the project, thus diluting Union Carbide's profit motive. Assuming this argument is valid, evaluate it from a deontological perspective.

Question 71

Anticorruption programs have steps including:

A) performing drug tests on employees.
B) making grease payments.
C) establishing hotlines or helplines for all members.
D) suspending operations.

Question 72

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Review the major causes of the Nestlé infant formula controversy.

Question 73

Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it.
Bribery can be initiated by either party to the transaction. The person paying the bribe can offer it, or the recipient can demand it. Determine which party is the least ethical one, the payor who offers the bribe, or the recipient who demands it.

Question 74

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Describe Earth Hour, and its growth. What has been its effect on awareness of global warming and climate change? Have you ever participated in Earth Hour in your community?

Question 75

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Describe a situation in which the best course of action for an MNC would be to suspend business activities in a host country where it is currently doing or contemplates doing business. What would precipitate such an action?

Question 76

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Discuss the previous assumption that global trade would expand continually, the effect of the global economic crisis, and the implications of those events.

Question 77

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Discuss the differing philosophies held by MNCs and less-developed host countries. Which philosophy do you think is more appropriate?

Question 78

Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it.
Transparency International has sought to fight world corruption. Reflect on the meaning of their five priorities and two principles.

Question 79

Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it.
What are the most important factors leading a firm to take corporate action against corruption?

Question 80

An attempt to assess the underlying moral justifications for corporate actions and the consequent results of those actions are contained in

A) social audits.
B) ethical impact statements.
C) human rights statements.
D) environmental impact statements.