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Q:
Studies indicate that employee morale is largely unaffected by a company's corporate behavior.
Q:
The U.N. Global Compact is a legally binding document that requires MNEs to establish codes of conduct.
Q:
According to the Ethical Trading Initiative, child labor cannot be used unless there are no suitable alternatives for employees.
Q:
The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) permits developing countries to import generic products from other countries if they don't have the capacity to produce generic drugs.
Q:
When a pharmaceutical company charges a market price in developed countries and a discounted price in developing countries, the company is using partial source pricing.
Q:
U.S. MNEs that operate in Europe are under pressure to conform to the emissions standards of the Kyoto Protocol.
Q:
Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as sustainability.
Q:
The OECD Convention against bribery is an example of an agreement that targets the demand side of bribery.
Q:
Transparency International, the OECD, and the ICC are all working to stop bribery around the world.
Q:
A payment to a customs official to clear legitimate merchandise is permitted by the Foreign Corrupt Practices Act.
Q:
The Foreign Corrupt Practices Act applies only to companies registered in the United States.
Q:
The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of externalities.
Q:
Under the practice of extraterritoriality, legal and ethical values in a country may cause its companies to operate abroad according to home country laws rather than host country laws.
Q:
The argument that "anything legal is ethical" is insufficient as a basis for ethical behavior because the law usually does not apply to everyone and does not have enforceable rules.
Q:
The law is often based on imprecisely defined moral concepts that cannot be separated from legal concepts.
Q:
Normativism asserts that universal standards of behavior exist and should be accepted in all cultures.
Q:
Relativism is the theory that ethical truths depend on the values of the groups holding them; thus, MNEs should adhere to or adopt the cultures of the countries in which they are located.
Q:
An important business objective for pursuing ethical behavior is to create a better relationship with corrupt politicians and customers.
Q:
Pursuing responsible behavior for strategic and financial success is an example of relative behavior.
Q:
Governmental agencies and nongovernmental organizations monitor the behavior of companies and their employees to ensure that laws are being followed.
Q:
GE's Ecomagination program has enabled the firm to develop a competitive advantage over its competitors.
Q:
According to utilitarianism, actions are moral if they produce the greatest amount of good for the greatest number of people.
Q:
The teleological approach asserts that individuals make moral judgments independent of consequences.
Q:
Stockholders are typically more interested in corporate social responsibility than in earning profits.
Q:
In the long run, MNEs must adequately meet the needs of all stakeholders in order to prosper and survive.
Q:
General Electric's Ecomagination initiative is responding in part to the fact that it is operating in many countries which require compliance with higher environmental standards than exist in the United States.
Q:
Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following guidelines enforced by Quantum would LEAST likely be supported by the International Labor Organization?
A) establishing bridge schools
B) monitoring workplace safety
C) allowing children ages 10-15 to work a maximum of 4 hours per day
D) prohibiting abusive labor conditions
Q:
Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum outsources portions of its production to independent companies located in Bangladesh and India where child labor is common. Other clothing and footwear firms have recently faced criticism regarding the use of child labor, and Quantum executives want to avoid similar problems. Which of the following would be the best approach for Quantum?
A) improving conditions at the subcontract facilities
B) developing an external ethics code for foreign partners and letting them worry about compliance.
C) requiring local governments to alter their labor policies
D) leaving the market and focusing on domestic production
Q:
What is the primary reason that Anglo American PLC developed its ART program?
A) comply with government standards
B) maintain a healthy workforce
C) abide by union demands
D) reduce employee benefits
Q:
What is the primary problem associated with Anglo American PLC's ART program?
A) unknown side effects to drugs and treatment
B) rising costs of medications and procedures
C) poor treatment adherence by employees
D) lack of sufficient insurance coverage
Q:
Which of the following is most important to the effectiveness of an internal code of conduct?
A) ensuring that employees understand the code by requiring confirmation in writing
B) paying bonuses to suppliers and distributors that agree to the code
C) relying on nonprofit NGOs to develop guidelines
D) adhering to industry standards and norms
Q:
Which of the following is most important when designing an internal code of conduct?
A) requesting U.N. oversight and intervention when necessary
B) communicating the code of conduct only to employees
C) reporting results to external stakeholders
D) forming local polices for each subsidiary
Q:
The U.N. Global Compact is best described as a(n) ________.
A) corruption mandate
B) environmental initiative
C) external code of conduct
D) international trade guideline
Q:
A guideline for responsible action by a firm in its operations worldwide is a(n) ________.
A) code of conduct
B) corporate monitoring policy
C) education program
D) honor code
Q:
Which of the following best explains Nike's quick response to criticism of unfair employment practices in developing countries?
A) retaining employees
B) improving public relations
C) addressing product safety concerns
D) cutting costs in order to improve profits
Q:
Which of the following is NOT a likely reason for companies to act more ethically?
A) Consumer boycotts may result from unethical corporate behavior.
B) Irresponsible and unethical actions may lead to legal problems for MNEs.
C) Unethical or irresponsible behavior can negatively impact employee morale.
D) The U.N. Global Compact enforces fines on global firms that fail to act ethically.
Q:
Which of the following best supports the idea that MNEs should remain in countries that allow child labor?
A) MNEs have a positive influence on government employment policies in most foreign countries.
B) Many MNEs have substantially improved the working conditions of their foreign plants.
C) MNEs are required to pay child workers more than local companies.
D) Most MNEs employ local managers to handle cultural differences.
Q:
According to the Ethical Trading Initiative (ETI), ________.
A) child labor cannot be used unless there are no suitable alternatives
B) employment need not be freely chosen in order to be acceptable
C) no harsh or inhumane treatment of workers should be allowed
D) MNEs are not responsible for establishing codes of conduct
Q:
The Ethical Trading Initiative (ETI)is primarily focused on ________.
A) fair trade laws for undeveloped countries
B) tiered pricing by pharmaceutical firms
C) greenhouse gas emission reduction
D) employment practices of MNEs
Q:
Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention?
A) safe and hygienic working conditions
B) reasonable living wages
C) inhumane treatment
D) child labor
Q:
Which of the following has been the primary reason for the recent growth of India's pharmaceutical industry?
A) globalized supply chains
B) tiered pricing guidelines
C) patent-protection laws
D) foreign investors
Q:
The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) ________.
A) allows rich countries to produce generic versions of patented drugs without having to pay royalties to the patent holder
B) permits developing countries to import generic products from other countries if they don't have the capacity to produce generic drugs
C) requires pharmaceutical companies to provide low-cost vaccines and HIV/AIDS medications to developing countries
D) requires tiered pricing for most essential drugs
Q:
Some countries reverse engineer pharmaceutical products ________.
A) because they know that generic products are inherently better than branded products
B) to lower the cost of certain drugs to the domestic market
C) as a way to charge higher prices in domestic markets
D) to comply with international patent laws
Q:
Medco Pharmaceuticals charges a market price for heart medication to distributors in Italy and a discounted price for the same medication to distributors in Bangladesh. Medco is most likely using ________.
A) discounted pricing
B) skimmed pricing
C) penetrated pricing
D) tiered pricing
Q:
How has the Kyoto Protocol affected U.S. companies operating in Europe?
A) U.S. companies are changing the way they do business in order to comply with new emissions standards in Europe.
B) The Kyoto Protocol has not affected U.S. companies with subsidiaries in Europe because the U.S. has not signed the Kyoto Protocol.
C) Before U.S. companies can open any more European subsidiaries, the U.S. government must sign the Kyoto Protocol.
D) Because the United States is not a party to the Kyoto Protocol, U.S. companies may not operate in European countries that have signed the Kyoto Protocol.
Q:
Firms that operate in countries that have adopted the Kyoto Protocol are required to either reduce emissions or ________.
A) purchase carbon credits from other firms
B) file petitions to appeal the requirement
C) cease manufacturing operations
D) pay fines to the U.N.
Q:
The 1997 Kyoto Protocol is best described as an agreement that requires ________.
A) all members of the United Nations to reduce their greenhouse gas emissions by 5.2 percent
B) the United States and Japan to control greenhouse gas emissions by 8% below 1995 levels
C) the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990 levels
D) the signatory countries to reduce greenhouse gas emissions by 80% by 2050
Q:
Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as ________.
A) competitive advantage
B) the Kyoto Protocol
C) sustainability
D) externality
Q:
Which of the following is a voluntary effort by 150 multinational construction and natural-resources companies to end bribery?
A) Foreign Corrupt Practices Act
B) Partnering Against Corruption Initiative
C) OLAF (European Commission Anti-Fraud Office)
D) Sarbanes-Oxley Act
Q:
The OECD Convention against bribery is an example of a(n) ________.
A) bilateral agreement developed for the EU
B) agreement that targets the demand side of bribery
C) agreement that targets the supply side of bribery
D) UN Convention dominated by developing countries
Q:
Which of the following is permitted by the Foreign Corrupt Practices Act?
A) a bribe paid by foreign firms operating in U.S. territories
B) a bribe paid by U.S. firms operating in a foreign country that permits bribes to be paid
C) a payment to a foreign government official to influence a customs official
D) a payment to a customs official to clear legitimate merchandise
Q:
A 1998 U.S. law that outlaws bribery payments by U.S. firms to foreign government officials is known as the ________.
A) Anti-Bribery Act of 2004
B) Foreign Corrupt Practices Act
C) Zero Tolerance Initiative
D) Sarbanes-Oxley Act
Q:
Which of the following statements describes an inconsistency of the FCPA?
A) Facilitation payments are classified as bribery.
B) Facilitation payments are excluded from the FCPA's definition of bribery.
C) Payments to officials who are not directly responsible for carrying out the law are legal.
D) Payments to foreign officials who carry out the law are considered illegal by provisions of the FCPA.
Q:
Which of the following is NOT affected by the Foreign Corrupt Practices Act?
A) companies registered in the U.S.
B) foreign firms operating in U.S. territory
C) foreign firms quoted on a U.S. stock exchange
D) foreign companies managed by U.S. expatriates
Q:
What is the primary concern regarding anti-corruption measures in the EU?
A) resistance to an official anti-fraud commission
B) inability to adopt a corruption definition
C) lack of uniform laws across nations
D) failure to conduct internal auditing
Q:
According to Transparency International, companies from which of the following countries are more likely to pay bribes?
A) China
B) Japan
C) Singapore
D) Belgium
Q:
The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________.
A) utilitarianism
B) extraterritoriality
C) absolute advantage
D) relative advantage
Q:
What is the primary argument against extraterritoriality?
A) increases opportunities for corporate bribery
B) contradicts demands for increased globalization
C) requires oversight by nongovernmental organizations
D) prohibits firms from expanding into foreign territories
Q:
A government that enforces its own laws on foreign subsidiaries of its domestic companies practices ________.
A) civil law
B) relativism
C) externality
D) extraterritoriality
Q:
Which of the following is an example of extraterritoriality?
A) a U.S. subsidiary operating in China that is forced to follow some U.S. laws, even though China has no comparable laws
B) a U.S. sweatshop operating in Thailand that does not follow U.S. labor laws but allows children to work 60 hours a week
C) an MNE manager who, after working in the host country, tries to implement foreign practices in the home-country office
D) a British subsidiary operating in Indonesia that maintains the same health and safety standards for its foreign factories that are required in Great Britain, even though the British government does not require it to use those standards
Q:
An advocate of the legal-justification standard would most likely assert that the law ________.
A) develops slowly in response to evolving societal dilemmas
B) protects business activities that are unethical but not illegal
C) contains enforceable rules that apply to everyone
D) offers necessary moral flexibility for a society
Q:
Which of the following is a reason for an MNE to base its standards for ethical behavior on a country's laws?
A) The law embodies many of a country's moral beliefs but is an inadequate guide for proper conduct.
B) The law contains unenforceable rules that are impossible for society to follow.
C) The law represents a consensus derived from significant deliberation.
D) The law is based on precisely defined moral concepts.
Q:
Why is the argument that "anything legal is ethical" most likely insufficient?
A) Everything that is unethical is also illegal.
B) The law is an extremely efficient way to solve ethical dilemmas.
C) Laws are frequently based on imprecisely defined moral concepts.
D) Laws can never be changed; thus, rules for all possible ethical dilemmas are found in the law.
Q:
A manager who refuses to bribe customs officials in a foreign country, even though it is morally acceptable in that country, is most likely to believe in which of the following perspectives on ethics?
A) relativism
B) normativism
C) humanism
D) existentialism
Q:
The belief that there are universal standards of behavior that all cultures should follow is called ________.
A) humanism
B) relativism
C) normativism
D) naturalism
Q:
A manager practicing relativism would most likely ________.
A) adapt to local conditions instead of implementing home-country practices
B) enforce home-country laws on host-country employees and suppliers
C) refuse to change company policies and procedures to comply with local norms
D) apply universal laws to each country despite local customs and traditions
Q:
Ethical dilemmas tend to be ________ for MNE managers than for domestic managers.
A) more complicated
B) less controversial
C) easier to decide
D) less common
Q:
Bantam Enterprises, a multi-national enterprise, makes significant efforts to avoid being perceived as socially irresponsible. What is the most likely reason for this?
A) Social irresponsibility can lead to labor strikes by international unions.
B) Socially irresponsible companies usually have fewer exports and more imports.
C) Cultural barriers increase for companies that are socially irresponsible, which hinders expansion into additional countries.
D) Social irresponsibility can lead to negative publicity from nongovernmental organizations, which could hurt a company's reputation.
Q:
Encouraging ethical behavior for the purpose of developing competitive advantages will most likely result in all of the following for a firm EXCEPT ________.
A) strategic accomplishment
B) consumer commitment
C) industry resolutions
D) financial success
Q:
Which of the following is a primary business objective for pursuing ethical behavior?
A) replacing home-country technology with host-country technology
B) minimizing federal investigations into corporate finances
C) avoiding being perceived as a socially irresponsible firm
D) imposing home-country behavior on the host country
Q:
Which of the following is a primary business objective for pursuing ethical behavior?
A) avoiding industrial sanctions
B) developing competitive advantages
C) developing creative advertisements
D) discouraging false commitments to the firm
Q:
Which of the following most likely complicates ethical behavior for firms that expand overseas?
A) local laws and values
B) expatriate management
C) unstable financial settings
D) international codes of conduct
Q:
According to the teleological approach, individuals base moral decisions on ________.
A) personal and social responsibilities
B) consequences of an action
C) cultural value systems
D) opinions of peers
Q:
Which of the following statements is most likely true about the postconventional level of moral development?
A) Individuals learn what is moral but not why such behavior is moral.
B) Individuals behave morally because they fear negative repercussions.
C) Individuals learn how to conform to society's values through observation.
D) Individuals behave morally because they believe such actions are right.
Q:
Which level of moral development involves an individual learning role-conformity from peers, parents, and laws?
A) conventional
B) principled
C) autonomous
D) preconventional
Q:
All of the following are levels of moral development EXCEPT the ________.
A) preconventional level
B) autonomous level
C) internalized level
D) conventional level
Q:
Monique has recently been hired as an accounts supervisor at Ballston Enterprises. She wants to understand Ballston's values and its expectations for employee behavior. Which of the following would most likely provide Monique with this information?
A) mission statement
B) code of conduct
C) vision statement
D) employee contract
Q:
Which of the following statements is most likely true regarding relationships between MNEs and stakeholders?
A) An MNE typically serves all stakeholder groups equally at any given time.
B) No individual stakeholder group is powerful enough to cause the demise of an MNE.
C) All stakeholders of an MNE have the same short-term and long-term goals and interests.
D) The inability to adequately meet the long-term needs of all stakeholders increases the probability of an MNE failing.
Q:
Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes?
A) shareholders
B) society
C) employees
D) customers
Q:
Which stakeholder group primarily wants additional sales and increased productivity?
A) customers
B) shareholders
C) society at large
D) government