Deck 9: Ethical Issues in the Global Arena

Question 1

One of the seven moral guidelines by Richard DeGeorge is the right to political participation.

Answer 1

False

Question 2

A multinational corporation has one or more subsidiaries in countries other than its home country.

Answer 2

True

Question 3

A multinational corporation must bear pressures to meet the standards and practices of its home country as well as the often differing standards and practices of its host country.

Answer 3

True

Question 4

In discussing the Union Carbide accident in Bhopal, the text conveys the idea that the more rural areas of the developing world are ideal for testing complex new technology.

Question 5

According to some experts, the most recent (1980-Present) eras in the trend toward the internationalization of business is called the new international order.

Question 6

A barrier to an MNC's gaining legitimacy in a host country is often due to conflicts of interest between the interests of the MNC and those of the host country.

Question 7

Sweatshops have been completely eliminated in North America.

Question 8

The Ethical Trading Action Group (ETAG) is a Canadian anti-sweatshop coalition.

Question 9

Sweatshops are characterized by poor working conditions, worker abuse, health and safety violations, and low pay.

Question 10

It seems that today firms must pursue the expanding world marketplace if they are to remain competitive.

Question 11

The Union Carbide accident in Bhopal has led many MNCs to analyze not only how they operate abroad, but also whether to operate abroad at all.

Question 12

The fact that the people of LDCs are often not aware of the dangers of new technology was not really an important issue in the Bhopal incident.

Question 13

During the infant formula controversy, Nestlé had been giving gifts to health professionals to encourage them to promote infant formula.

Question 14

Canadian businesses have never been found guilty of bribing public officials in other countries.

Question 15

Global business ethics can be considered as a simple extension of North American business practices.

Question 16

All countries view the bribing of government officials as unethical.

Question 17

North American firms operating in less developed countries have not attracted much attention since these operations are usually fairly small in scale.

Question 18

A frequently cited argument for bribes is that it is a normal and expected practice in many countries.

Question 19

Numerous North American companies have codes of conduct that specifically address international business.

Question 20

Ethical challenges increase as Canadian business becomes increasingly present on the global business scene.

Question 21

According to the distinction in the text between bribes and grease payments, which of the following would best illustrate a grease payment?

A) An advertising agency gives money to a car manufacturer so that the latter brings in business.
B) A chemical company gives money to a potential buyer to convince the latter to buy this company's chemicals.
C) The manager in charge of an emergency shipment of medical supplies gives money to a dock official to expedite the unloading and delivery of the supplies.
D) Company A gives money to Company B as a "bonus" if the latter signs a contract with the former.

Question 22

Child labor, low pay, poor working conditions, and worker abuse are all characteristics of

A) Sweatshops
B) salvage houses
C) child labor jobs
D) none of the above

Question 23

All of the following are arguments in favor of permitting bribery except

A) they are necessary for profits in order to do business.
B) everybody does it - it will happen anyway.
C) it is accepted practice in many countries.
D) one should take a stand for honesty and morality.

Question 24

When Nestlé reached agreement with the protesting organizations, it agreed to do all of the following except

A) discontinue infant formula sales in LDCs.
B) restrict the distribution of free samples of the infant formula.
C) help ensure that hospitals that used its products did so in accordance with the WHO code.
D) use Nestlé labels to identify the benefits of breast-feeding and the hazards of bottle-feeding.

Question 25

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 referring to?

A) Globalization
B) Internationalization
C) Environment
D) host country challenges

Question 26

Which of the following was not true of the Union Carbide accident in Bhopal?

A) Thousands of people lived very near the plant.
B) There were no evacuation procedures for residents.
C) The Union Carbide Bhopal plant had not been inspected in over two years.
D) The Bhopal plant adequately met U.S. standards for plant safety.

Question 27

Perhaps the most abusive marketing practice in the infant formula controversy was

A) the use of billboards exploiting women.
B) radio jingles.
C) the use of "milk nurses."
D) the use of comparative advertising.

Question 28

Which of the following time periods was considered the first era in the internationalization of business?

A) 1935-1945
B) 1945-1955
C) 1955-1965
D) 1965-1975

Question 29

The International Labor Organization reported that there is an unprecedented number of child laborers in the world. How many child laborers were reported?

A) 100 million
B) 175 million
C) 250 million
D) 485 million

Question 30

Which of the following was cited as an argument for bribery?

A) One should not compromise his or her own beliefs.
B) Those receiving bribes are the only ones who benefit.
C) It is a normal and expected practice in many countries.
D) One should take a stand for honesty, morality, and ethics.

Question 31

Which of the following is a Canadian Multinational corporation?

A) Nortel
B) Bombardier
C) Bata
D) All of the above

Question 32

Which of the following was a lesson learned from the Union Carbide accident in Bhopal?

A) Cultural differences between foreign and host countries need not be considered.
B) The more rural areas of the developing world are ideal for testing new technology.
C) As long as they are not working directly with toxic substances, there is no need to educate the people in developing countries of the hazards of toxic substances.
D) Company executives should be technically, not just administratively, trained in businesses that use toxic materials.

Question 33

Which of the following statements is not true of the Nestlé infant formula controversy?

A) Water supplies in the LDCs were not pure.
B) Some LDCs did not have refrigeration.
C) Mothers in LDCs often substituted less expensive products for the infant formula.
D) As soon as the newspaper articles concerning its practices singled out Nestlé, it ceased its questionable marketing practices.

Question 34

Sweatshops do all of the following except:

A) Have children under the age of 14 work sixty-hour work weeks.
B) Raise ethical dilemmas.
C) violate health and safety standards.
D) give freedom to women.

Question 35

Which of the following was cited as an argument against bribery?

A) Everybody does it--it will happen anyway.
B) Such demands, once started, never stop.
C) Bribes are forms of commissions, taxes, or compensation for conducting business between cultures.
D) It is necessary in order to do business.

Question 36

Which of the following time periods was considered the "Troubled Years?"

A) 1945- 1955
B) 1970-1980
C) 1955-1970
D) 1980-1987

Question 37

Some experts suggest that we need to be sensitive to the long run national interests of other countries. Which of the following is not one of the levels of concern?

A) modifying or redesigning products
B) managers must be sensitive to the impact of products
C) are their products politically vulnerable
D) are their products regulated

Question 38

Which of the following statements is not true of MNCs?

A) They grew rapidly first in Japan.
B) Their operations extend beyond the boundaries of their home countries.
C) They have one or more subsidiaries in host countries.
D) There was a strong rise in MNCs from 1955-1970.

Question 39

Concerning the infant-formula controversy, the main reason for INFACT and ICCR's leading a boycott against Nestlé was that

A) increased bottle-feeding led to decreased breast-feeding.
B) Nestlé employed questionable marketing practices in promoting the formula.
C) the LDC's companies were losing money on their own infant formulas.
D) most of the LDCs did not have refrigeration.

Question 40

Which of the following is least likely to pose a problem in terms of MNCs achieving legitimacy?

A) differences in lifestyles of the managers of the two countries
B) different monetary currencies of the two countries
C) differences in interests of the MNC and the host country
D) majority ownership of MNCs by locals

Question 41

In facing ethical choices in home versus host country situations, the concept of "cultural relativism" was discussed. This position was characterized by foreign direct investors such as MNCs:

A) continuing to follow its home country's ethical standards even while operating in another country.
B) following the host country's ethical standards.
C) operating in the broad middle ground where a mix of home and host country standards may be used.
D) adhering to international standards such as those established by groups such as the United Nations.

Question 42

Which of the following is not one of Laczniak and Naor's four recommended actions for conducting business in foreign environments?

A) Develop worldwide codes of conduct.
B) Suspend activities when faced with unbridgeable ethical gaps.
C) Adjust your company's ethics to the local environment.
D) Develop ethical impact statements periodically.

Question 43

Which of the following is not included in Richard DeGeorge's seven moral guidelines for MNC international operations?

A) MNCs should do no intentional direct harm.
B) MNCs should pay extra taxes since they generate more money than most of the local companies in the host country.
C) MNCs should produce more good than bad for the host country.
D) MNCs should cooperate with the local government in the development and enforcement of just background institutions (e.g., tax system, health and safety standards, etc.).

Question 44

In Ethical Imperialism, an MNC:

A) mixes home and host country ethical standards.
B) follows its home country's ethical standards even while operating in another country.
C) follows its host country's ethical standards.
D) None of the above.

Question 45

Which of the following is considered a course of action for conducting business in foreign environments?

A) accepting bribes from foreign business
B) developing world wide codes of conduct
C) suspend activities when faced with unbridgeable gaps
D) factor ethics into global strategy

Question 46

Ethical impact statements for MNCs

A) guide a corporation in how to treat its host-country employees.
B) analyze the effect of an organization's operations on the public well being.
C) are prepared by residents of a MNC's host country.
D) attempt to assess the underlying moral justifications for corporate actions and the consequent results of those actions.

Question 47

A number of MNCs, such as Johnson's Wax, Allis Chalmers, Rexnord, and Caterpillar Tractor Co. have developed and employed their own

A) global whistle-blowing mechanisms.
B) versions of the Sullivan Principles.
C) stakeholder assessment methodologies (SAM).
D) global codes of conduct.

Question 48

The type of firm that conforms to local customs and ethics, assuming that the ethical standards of the host country are adequate and appropriate refers to which global type?

A) empire type
B) foreign county type
C) interconnection type
D) global type

Question 49

This type of company applies its domestic or home country standards without making any serious adaptations to the host country. Which global type is this referring to?

A) foreign country type
B) empire type
C) interconnection type
D) global type