BUS 498 True/False Ch. 5

Kantian ethics asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.

FALSE A naive immoralist asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.

A righteous moralist claims that while operating in a foreign country, a multinational company should follow the ethical standards of the host country.

FALSE A righteous moralist claims that a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

The internal stakeholders of a company do not have an exchange relationship with the company

FALSE All stakeholders are in an exchange relationship with the company. Each stakeholder group supplies the organization with important resources (or contributions), and in exchange each expects its interests to be satisfied (by inducements).

Ethical dilemmas are situations in which only one of the available alternatives seems ethically acceptable.

FALSE An ethical dilemma is a situation in which there is no ethically acceptable solution.

According to the concept of cultural relativism, a firm, while operating in any host country, should adopt the ethics of the culture that is predominant in its home country.

FALSE Cultural relativism believes that ethics are nothing more than the reflection of a culture—all ethics are culturally determined—and that accordingly, a firm should adopt the ethics of the culture in which it is operating.

"Facilitating payments" are payments to secure contracts that would not otherwise be secured.

FALSE Facilitating payments are not payments to secure contracts that would not otherwise be secured, nor are they payments to obtain exclusive preferential treatment.

The Foreign Corrupt Practices Act does not allow for "facilitating payments."

FALSE Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business. Some U.S. businesses immediately objected that the act would put U.S. firms at a competitive disadvantage. The act was subsequently amended to allow for "facilitating payments."

The first step in an ethical algorithm is to identify those common resources that are not owned by anyone in particular but are used by everybody.

FALSE In the first step of an ethical algorithm, businesspeople should identify which stakeholders a decision would affect and in what ways.

According to Milton Friedman, businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.

FALSE Milton Friedman explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.

Noblesse oblige is a French term referring to those multinationals that have unethically used their power for private gain.

FALSE Noblesse oblige is a French term that refers to honorable and benevolent behavior considered the responsibility of people of high (noble) birth. In a business setting, it is taken to mean benevolent behavior that is the responsibility of successful enterprises.

Leon Sullivan argued that it was ethically justified for Western businesses to operate in South Africa so long as the companies obeyed the apartheid laws.

FALSE Sullivan argued that it was ethically justified for General Motors to operate in South Africa so long as two conditions were fulfilled. First, the company should not obey the apartheid laws in its own South African operations (a form of passive resistance). Second, the company should do everything within its power to promote the abolition of apartheid laws.

Enterprises headquartered in a country which scores high on masculinity and power distance measures are more likely to behave ethically than enterprises headquartered in a culture where individualism and uncertainty avoidance are strong.

FALSE Using Hofstede's dimensions of social culture, it was found that enterprises headquartered in cultures where individualism and uncertainty avoidance are strong were more likely to emphasize the importance of behaving ethically than firms headquartered in cultures where masculinity and power distance are important cultural attributes.

Multinational corporations do not qualify to act as moral agents within the framework of rights theories.

FALSE Within the framework of a theory of rights, certain people or institutions are obligated to provide benefits or services that secure the rights of others. Such obligations also fall upon more than one class of moral agent (a moral agent is any person or institution that is capable of moral action such as a government or corporation).

An organizational culture that requires all decisions to be purely economic allows unethical behavior to flourish and persist.

TRUE A cause of unethical behavior in businesses is an organizational culture that deemphasizes business ethics, reducing all decisions to the purely economic.

The righteous moralist's approach to ethics is typically associated with managers from developed nations.

TRUE A righteous moralist claims that a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. This approach is typically associated with managers from developed nations.

To strengthen the moral courage of employees, companies should not retaliate against those employees who complain about unethical actions.

TRUE Companies can strengthen the moral courage of employees by committing themselves to not retaliate against employees who exercise moral courage, say no to superiors, or otherwise complain about unethical actions.

Ethics officers act as an internal ombudsperson with responsibility for handling confidential inquiries from employees.

TRUE Ethics officers act as an internal ombudsperson with responsibility for handling confidential inquiries from employees, investigating complaints from employees or others, reporting findings, and making recommendations for change.

John Rawls argues that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage.

TRUE John Rawls argues that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage.

Business leaders should use every relevant opportunity to stress the importance of business ethics and make sure that key business decisions not only make good economic sense but also are ethical.

TRUE Leaders in the business must give life and meaning to words in a code of ethics by repeatedly emphasizing their importance and then acting on them. This means using every relevant opportunity to stress the importance of business ethics and making sure that key business decisions not only make good economic sense but also are ethical.

Many of the ethical issues in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation.

TRUE Many of the ethical issues in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation. What is considered normal practice in one nation may be considered unethical in another.

According to Friedman's doctrine, the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

TRUE Milton Friedman's basic position is that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law. He explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.

The power of a multinational corporation is constrained not only by laws and regulations, but also by the discipline of the market and the competitive process.

TRUE Multinational corporations have power that comes from their control over resources and their ability to move production from country to country. Although that power is constrained not only by laws and regulations, but also by the discipline of the market and the competitive process, it is substantial.

John Rawls's veil of ignorance is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas.

TRUE Rawls's veil of ignorance follows that it is unjust, and by extension unethical, for companies to pursue actions that contribute toward extensive degradation of important global commons. Thus, it is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas.

Societal business ethics are not divorced from personal ethics

TRUE Societal business ethics are not divorced from personal ethics, which are the generally accepted principles of right and wrong governing the conduct of individuals.

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member-states and other signatories to make the bribery of foreign public officials a criminal offense.

TRUE The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member-states and other signatories to make the bribery of foreign public officials a criminal offense.

The Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business.

TRUE The Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business.

The concept of corporate social responsibility (CSR) refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions.

TRUE The concept of corporate social responsibility (CSR) refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences.

The action that produces the greatest good for the greatest number of people can result in the unjustified treatment of a minority.

TRUE The second problem with utilitarianism is that the philosophy omits the consideration of justice. The action that produces the greatest good for the greatest number of people may result in the unjustified treatment of a minority.

The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.

TRUE The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.

According to John Rawls's difference principle, wide variations in income and wealth can be considered just if the market-based system that produces this unequal distribution also benefits the least-advantaged members of society.

TRUE Wide variations in income and wealth can be considered just if the market-based system that produces this unequal distribution also benefits the least-advantaged members of society. One can argue that a well-regulated, market-based economy and free trade, by promoting economic growth, benefit the least-advantaged members of society. In principle at least, the inequalities inherent in such systems are therefore just.