Deck 10: Ethical Issues in the Global Arena

Question 1

Transparency International's Corruption Perception Index (CPI)has historically been highest in underdeveloped countries.

Answer 1

False

Question 2

The most visible issue in the United States related to globalization is moving jobs overseas.

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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 5

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

Question 6

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 7

Over one-half of the world's largest economies are not nation-states,but are MNCs.

Question 8

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

Question 9

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 10

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

Question 11

For an MNC to be perceived as legitimate in the eyes of a host country,it must be properly incorporated and pay its fair share of taxes.

Question 12

Two major issues involved in exploring global markets are the strategic alternatives used by MNCs and pursuit of developing Third World markets.

Question 13

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

Question 14

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

Question 15

The Alien Tort Claims Act has had the effect of transforming human-rights ethical issues into financial issues.

Question 16

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

Question 17

The United States' global economic leadership is demonstrated by the fact that more than half of the world's largest MNCs are based in America.

Question 18

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

Question 19

One of the things that makes it difficult for U.S.MNCs to deal with sweatshops is that they only occur in foreign countries.

Question 20

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

Question 21

Which of the following is not a characteristic of sweatshops?

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

Question 22

Which of the following is not one the broad issues facing MNCs in their relationships with host countries?

A)cultural aspects
B)business/government interactions
C)exploration of global markets
D)religious and other traditional holidays

Question 23

The most challenging situation for an MNC to face is

A)operating in socialist countries.
B)operating in more than ten countries at the same time.
C)operating is less-developed countries.
D)operating without a clearly defined strategic plan.

Question 24

In the book Globality,business is about competing with everyone from everywhere for everything.

Question 25

The center of the controversy that aligns rich nations against poor nations is

A)control of oil.
B)the legitimacy of MNCs in the two types of countries.
C)what the trade rules will be,and who will write the rules.
D)use of natural resources on an equitable basis.

Question 26

Peter Drucker has labeled the expanded global marketplace the

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

Question 27

To resolve the infant formula controversy,Nestlé agreed to do all of the following except

A)restricting the distribution of free samples.
B)providing purified water with the formula.
C)identifying the benefits of breast-feeding and the hazards of bottle-feeding.
D)dropping its policy of giving gifts to health professionals to encourage them to promote infant formula.

Question 28

To be viewed as legitimate in their host countries,MNCs must fulfill their social responsibilities,including all of the following except

A)economic functions.
B)legal duties.
C)philanthropic opportunities.
D)technological functions.

Question 29

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

Question 30

International markets must be pursued if firms want to remain

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

Question 31

Which of the following is not a factor in a host country's perception of the legitimacy of an MNC?

A)size of the firm
B)profitability of the firm
C)similarities and differences between the cultures of the home and host countries
D)values and lifestyles of the firm's managers

Question 32

The process by which firms increase their awareness of the influence of international activities on their future and establish and conduct transactions with firms from other countries is known as

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

Question 33

Which of the following countries was not an original participant in the NAFTA agreement?

A)Canada
B)Puerto Rico
C)United States
D)Mexico

Question 34

There are three levels of sensitivity that MNCs should exhibit for the long-run national interests of less-developed countries.All of the following are levels of sensitivity except

A)the need to modify or redesign products.
B)the impacts of products on the host country.
C)the need to modify marketing efforts to conform to local custom.
D)the extent to which the firm's products are politically vulnerable.

Question 35

The requirement for an MNC to take on local partners is referred to as

A)legitimation.
B)local partnering.
C)creeping expropriation.
D)localization.

Question 36

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 37

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 38

Moving jobs that have historically resided in the home country to a lower-cost host country is called

A)expense minimization.
B)offshoring.
C)career displacement.
D)employment modernization.

Question 39

The main two factors of concern in management and control of global operations are

A)organizational structure/design and human resource management.
B)tax laws and currency exchange rates.
C)manufacturing processes and marketing plans.
D)political parties and economic systems.

Question 40

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 41

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 42

Payment of a bribe implies some type of

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

Question 43

Globalization is expected to expand despite

A)the economic meltdown.
B)deglobalization.
C)positive views.
D)executive opinion.

Question 44

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 45

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 46

The United States' rank in the Corruption Perception Index is

A)worse than that of Haiti.
B)at the very bottom.
C)above that of Sweden.
D)somewhere in the middle.

Question 47

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 48

The Alien Tort Claims Act allows

A)foreign individuals to sue U.S.firms in American courts for their actions abroad.
B)foreign companies to sue U.S.firms in American courts for their actions abroad.
C)foreign individuals to sue U.S.firms in foreign courts for their actions abroad.
D)foreign companies to sue U.S.firms in foreign courts for their actions abroad.

Question 49

Argument 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 50

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 51

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 52

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 53

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 54

Current standards for SA800 include all the following except

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

Question 55

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

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

Question 56

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 57

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 58

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 59

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 60

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 61

Provide a short answer to each of these questions.Be sure to fully explain your answer.
Describe the changing nature of multinational corporations over the past century.

Question 62

Multinational corporations are all of the following except

A)corporations operating with offices,factories,and headquarters in more than one country.
B)multinational enterprises.
C)financial powerhouses
D)transnational corporations.

Question 63

Provide a short answer to each of these questions.Be sure to fully explain your answer.
Discuss the events that marked the beginning of the new,new world of international business,and the implications of those events.

Question 64

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 65

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 66

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.
Why would people object to global capitalism,as they have done at various meetings of the World Trade Organization,the World Bank,and the G8?

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.
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 68

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 69

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 70

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.

Question 71

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 72

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 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.
Transparency International has sought to fight world corruption.Reflect on the meaning of their five priorities and two principles.

Question 74

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

Question 75

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

Question 76

Provide a short answer to each of these questions.Be sure to fully explain your answer.
Describe the MNC's basic barrier to achieving legitimacy in its host country.

Question 77

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 78

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

Question 79

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 80

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.