Chapter 4
TF 78) In helping identify ethical problems, the firm's code of conduct should be tailored to match the norms of each individual region from which the firm operates.
F
TF 90) Creating alternatives is the last step of the framework for arriving at ethical decisions.
F
TF 91) According to the framework for arriving at ethical decisions, a course of action must be identified as soon as the ethical problem is detected.
F
TF 88) Relying on one's instincts is often the best way to identify an ethical problem.
T
TF 15) Ethics and appropriate behavior transcend all international business activities and figure prominently in management decisions about financial performance and competitive advantage.
T
TF 16) Widespread corruption hinders economic development.
T
TF 20) Piracy is equivalent to counterfeiting.
T
TF 21) Grease payments intended to expedite transactions are both accepted and legal in many countries.
T
TF 23) Ethical behavior is essential for business success.
T
TF 25) Experienced managers scan operations in each country and potential partners for the possibility of ethical abuses. Such scanning is an ongoing process because company operations and environments evolve continuously.
T
TF 49) Corporate social responsibility represents the apex of the pyramid of ethical behavior.
T
TF 52) Failure to adopt CSR behaviors can have high detrimental effects on a company.
T
TF 53) Upholding the right to join labor unions is an example of CSR values.
T
TF 74) The five approaches to analyzing ethical dilemmas often lead to similar solutions.
T
TF 75) Corporate codes of conduct emphasize standards related to ethics and social responsibilities.
T
TF 79) The Global Reporting Initiative pioneered the development of the most widely used sustainability reporting framework.
T
TF 87) When it comes to ensuring ethical behavior, experienced managers follow a systematic process.
T
TF 89) Acknowledging the presence of an ethical problem is the first step of the framework for arriving at ethical decisions.
T
TF 92) Evaluation of results is the last step of the framework for arriving at ethical decisions.
T
TF 61) The most advanced companies monitor suppliers to ensure that they use sustainable practices.
T
43) In 2014,________ was the largest single source of counterfeit products imported into the U.S. A) China B) The United States C) Iran D) Russia
A) China
TF 14) Standards of ethical behavior are uniform worldwide.
F
TF 17) A corporate culture that advocates profit over sustainability and human welfare cannot lead to employee abuse.
F
TF 18) Advances in communications technologies makes it difficult to deceive consumers in foreign countries .
F
TF 19) Intellectual property rights law enacted in one country are enforceable worldwide.
F
TF 22) Scholars examining ethics from the perspective of relativism hold that ethical truths are absolute.
F
TF 24) In countries with questionable ethical norms, it is usually ill-advised to maintain ethical standards superior to what is required by local laws and values.
F
34) Which of the following countries have the LEAST corruption? A) Mexico B) Philippines C) Russia D) Denmark
D) Denmark
TF 77) The five approaches to analyzing ethical problems rarely conflict with each other.
F
44) Which of the following is true with regard to bribery? A) Bribery promotes a culture of dishonesty and immorality. B) Bribery poses no significant threat to market economies. C) Bribery is considerably rare in developing economies. D) Bribery is not acceptable in much of the world.
A) Bribery promotes a culture of dishonesty and immorality.
1) ________ refers to the system of procedures and processes by which corporations are managed, directed, and controlled. A) Corporate governance B) Deceptive marketing C) Global sourcing D) Corporate social responsibility
A) Corporate governance
68) Which of the following is true of a code of ethics? A) It guides decision-making by all employees in the firm. B) It does not define the values and principles that are intended to guide organizational decision making. C) It emphasizes profit over righteousness. D) It is a cure for all ethical dilemmas.
A) It guides decision-making by all employees in the firm.
67) According to the virtue approach ________. A) the best action emphasizes the welfare of the entire community or nation B) the best action emphasizes moral excellence and righteousness that provide for the full development of our humanity C) the best ethical action is the one that provides the most good or the least harm D) the best action protects and respects the moral rights of everyone involved
B) the best action emphasizes moral excellence and righteousness that provide for the full development of our humanity
Acme Ethical Standards (Scenario) Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil. 10) The managers discuss various ethical problems commonly encountered in their local territories. Which of the following representatives is most likely to label counterfeiting of goods as the biggest challenge in his/her country? A) Jang B) Luis C) Marta D) Geoff
A) Jang
40) ________ confer the exclusive right to manufacture, use, and sell products or processes. A) Patents B) Trademarks C) Trade secrets D) Copyrights
A) Patents
3) ________ means meeting humanity's needs without harming the ability of future generations to meet their needs. A) Sustainability B) Corporate social responsibility C) Ethical behavior D) Casuistry
A) Sustainability
73) In terms of CSR and sustainability, going wide implies ________. A) a continuous effort to understand how CSR and sustainability affect every aspect of the firm's operations worldwide B) institutionalizing appropriate behavior into the organization's culture so it becomes part and parcel of strategy C) encouraging unstructured learning among employees D) a sustained effort to reduce control mechanisms throughout the organization
A) a continuous effort to understand how CSR and sustainability affect every aspect of the firm's operations worldwide
59) Sustainable practices lead to ________. A) cost savings from more efficient production B) the abolition of labor unions C) higher employee turnover D) reduced operational flexibility
A) cost savings from more efficient production
36) The process of reproducing assets without compensating those who originally created them is known as ________. A) counterfeiting B) bribery C) product differentiation D) trademarking
A) counterfeiting
70) In a world ever sensitive to social and environmental issues, more and more firms are embracing CSR and sustainability. Such firms are more likely than not to ________. A) develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions B) minimize their contribution to the local community in order to maximize profits C) be reluctant to hire managers from around the world D) favor region-specific CSR standards to global CSR standards for foreign operations
A) develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions
84) When using the five-step framework for making ethical decisions, which of the following steps involves investigating which individuals have a stake in the outcome? A) examining the facts B) implementing a decision C) evaluating alternatives D) identifying the ethical problem
A) examining the facts
66) Which of the following approaches to ethical standards for corporate governance reflects the view that the best action treats everyone equally and in a just manner? A) fairness approach B) virtue approach C) utilitarian approach D) rights approach
A) fairness approach
38) Trademarks, copyrights, and patents are examples of ________. A) intellectual property rights B) fundamental rights C) tangible property rights D) ethical rights
A) intellectual property rights
32) Which of the following acts makes it illegal for U.S. firms to offer bribes to foreign parties in order to secure or retain business? A) the U.S. Foreign Corrupt Practices Act B) the Robinson-Patman Act C) the U.S. Securities Exchange Act D) the Sherman Antitrust Act
A) the U.S. Foreign Corrupt Practices Act
58) Economic interests refer to a firm's economic impact on ________. A) the localities where it does business B) the top management of the firm C) the middle management of the firm D) the society as a whole
A) the localities where it does business
7) An individual who believes in ethical normativism is most likely to view ethical behavioral standards as ________. A) universal B) constantly changing C) dependent on societal norms D) superior to religious beliefs
A) universal
63) Which of the following approaches to ethical standards for corporate governance reflects the view that the best ethical action is the one that provides the most good or the least harm? A) common good approach B) utilitarian approach C) virtue approach D) fairness approach
B) utilitarian approach
41) The Nike "swoosh" is an example of a ________. A) patent B) fad C) copyright D) trademark
D) trademark
8) ________ represents the apex of the pyramid of ethical behavior. A) Ethical behavior B) Corporate social responsibility C) Complying with laws and regulations D) Guarding against corruption
B) Corporate social responsibility
2) ________ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong. A) Attitudes B) Ethics C) Laws D) Biases
B) Ethics
Freedom Shoes (Scenario) Freedom Shoes Inc., a sports shoe company, is considering entering into a contract with an overseas vendor to expand its production capacity. The company investigated several suppliers and found one vendor to be the most attractive in terms of cost and manufacturing efficiency. However, Freedom's managers have heard reports that the vendor operates factories with sweatshop conditions. 13) Sean, a senior manager in Freedom, adheres to the relativist view regarding ethical standards. He goes by the rule, "When in Rome, do as the Romans do." Sean is most likely to agree strongly with which of the following views? A) Freedom should not partner with foreign business entities. B) Freedom should passively accept the practices that prevail in countries where it does business. C) Freedom should not hire foreign managers. D) Freedom should institute a single global code of conduct for all its employees and suppliers.
B) Freedom should passively accept the practices that prevail in countries where it does business.
71) The ________ is a policy platform and practical framework for companies committed to sustainability and responsible business practices. It is the world's largest voluntary corporate citizenship initiative, representing thousands of businesses in more than 135 countries. A) Organization for Economic Cooperation and Development B) United Nations Global Compact C) International Economic Development Council D) Global Reporting Initiative
B) United Nations Global Compact
56) Firms with a strong social interest ________. A) openly support the use of sweatshops B) aim to optimize work conditions and diversity in hiring C) are reluctant to provide health insurance to employees D) engage in deceptive marketing
B) aim to optimize work conditions and diversity in hiring
72) In terms of CSR and sustainability, going ________ means institutionalizing appropriate behavior into the organization's culture so it becomes part and parcel of strategy. A) wide B) deep C) local D) global
B) deep
6) According to relativists ________. A) a passive acceptance of others' values is unethical B) ethical truths differ from group to group C) firms and individuals should seek to uphold ethical behavioral standards consistently around the world D) ethical truths are absolute
B) ethical truths differ from group to group
35) In countries with minimal corruption ________. A) commercial laws are unfair and discriminatory B) financial and accounting information is transparent C) direct investment does not take place D) the contribution of the private sector to the national GDP is negligible
B) financial and accounting information is transparent
Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. 45) The software program embedded in Hudson's signature toy, the Witty Parakeet, is an example of a(n) ________. A) tangible asset B) intellectual property C) trademark D) trade secret
B) intellectual property
69) In order to be effective, a corporate code of ethics should be designed to function like a ________. A) business white paper B) moral compass C) project plan D) political treatise
B) moral compass
85) In the five-step framework for making ethical decisions, which of the following approaches to evaluating actions is being used by a manager who questions whether a proposed action embodies character strengths he/she values? A) rights approach B) virtue approach C) common good approach D) utilitarian approach
B) virtue approach
31) ________ refers to offering, giving, receiving, or soliciting anything of value to influence the actions of a government official or a corporate manager. A) Patenting B) Piracy C) Bribery D) Normativism
C) Bribery
9) ________ represents the base of the pyramid of ethical behavior. A) Ethical behavior B) Corporate social responsibility C) Complying with laws and regulations D) Guarding against corruption
C) Complying with laws and regulations
33) Which of the following is true with regard to corruption? A) Countries with minimal corruption fail to attract direct investment. B) In firms, corruption rarely occurs across the range of value chain activities. C) Corruption harms the poorest in societies. D) Under the Sherman Antitrust Act, firms charged for corruption may be fined $2 million and managers can be imprisoned for up to five years.
C) Corruption harms the poorest in societies.
Acme Ethical Standards (Scenario) Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil. 11) Who among the following managers is most likely to raise concern over the ban on advertising directed at children in his/her country? A) Marta B) Geoff C) Luis D) Jang
C) Luis
Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. 47) Which of the following can extend legal protection to Hudson's proprietary software used in its toys? A) a trademark B) a patent C) a copyright D) a users' license
C) a copyright
42) Sustainable firms ________. A) have a high employee turnover rate B) have greater liabilities than assets C) avoid emitting toxic wastes D) actively resist organizational change
C) avoid emitting toxic wastes
64) Which of the following approaches to ethical standards for corporate governance reflects the view that the best action emphasizes the welfare of the entire community or nation? A) rights approach B) utilitarian approach C) common good approach D) virtue approach
C) common good approach
39) Which of the following grants protections to the creators of art, music, books, software, movies, and TV shows? A) patent B) trademark C) copyright D) domain registration
C) copyright
51) Which of the following refers to a typical CSR value? A) increasing profits B) upholding market monopolies C) engaging in philanthropy D) sustaining sweatshops
C) engaging in philanthropy
82) When applying the five-step framework for making ethical decisions, managers should, at first, ________. A) evaluate alternatives B) examine the facts C) recognize the ethical problem D) implement a decision
C) recognize the ethical problem
29) Corruption is defined as ________. A) the system of procedures and processes by which corporations are managed, directed, and controlled B) a manner of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers C) the abuse of power to achieve illegitimate personal gain D) the tendency to make decisions based purely on cognitive factors
C) the abuse of power to achieve illegitimate personal gain
4) Which of the following behaviors of a firm can be called unethical? A) setting up operations abroad B) manufacturing luxury consumer goods C) tolerating sweatshop conditions D) failing to meet shareholders' expectations with regard to annual profit
C) tolerating sweatshop conditions
Sid Maxwell (Scenario) Sid Maxwell is the head of legal affairs at Hudson Inc., an American toy manufacturer. Hudson's signature toy, the Witty Parakeet, includes an embedded software program that allows the bird to interact with children. Hudson is currently planning to expand its market in Asia but Sid is concerned about reports of software piracy in the region. 46) Hudson uses a distinctive sign to enable its customers to easily identify its products. This distinctive sign that the company also uses to distinguish its offerings from that of its competitors is known as a ________. A) patent B) copyright C) trademark D) users' license
C) trademark
TF 76) The utilitarian approach is based on the belief that, regardless of how one deals with an ethical dilemma, human dignity must be preserved.
F
Freedom Shoes (Scenario) Freedom Shoes Inc., a sports shoe company, is considering entering into a contract with an overseas vendor to expand its production capacity. The company investigated several suppliers and found one vendor to be the most attractive in terms of cost and manufacturing efficiency. However, Freedom's managers have heard reports that the vendor operates factories with sweatshop conditions. 60) Which of the following, if true, implies that Freedom has a strong social interest? A) The top management of Freedom actively engages in positively contributing to the disadvantaged communities in the society. B) According to Freedom, a firm that fails to institute a green purchasing policy in sourcing its inputs is more likely than not to fail in the long run. C) Freedom considers that the key to success for MNCs lie in their ability to tap resources effectively and at a lower cost. D) Despite the overseas vendor's effectiveness, Freedom decides not to enter into a contract with it because according to Freedom, tolerating sweatshop conditions is unethical.
D) Despite the overseas vendor's effectiveness, Freedom decides not to enter into a contract with it because according to Freedom, tolerating sweatshop conditions is unethical.
5) An international human rights organization recommends that its member countries review their human rights policies on a periodic basis to ensure that their governments are upholding ethical standards for the treatment of prisoners. Which of the following represents the most effective reasoning in support of the organization's recommendation? A) Ethical policies and practices tend to remain consistent within the same country over time. B) Nations should emphasize more on rehabilitation than retribution in their treatment of prisoners. C) Nations should enforce only those ethical standards that have been adopted by other nations. D) Ethical standards change over time, so national policies should be updated as necessary.
D) Ethical standards change over time, so national policies should be updated as necessary.
30) ________ is the procurement of products or services from suppliers located abroad. A) Licensing B) Franchising C) Deceptive marketing D) Global sourcing
D) Global sourcing
37) ________ refers to ideas or works created by individuals or firms and includes a variety of proprietary, intangible assets: discoveries and inventions; artistic, musical, and literary works; and words, phrases, symbols, and designs. A) Global sourcing B) Corporate governance C) Constant capital D) Intellectual property
D) Intellectual property
65) Which of the following is true with regard to the rights approach? A) It is based on the belief that the best action treats everyone equally and fairly. B) It produces the greatest balance of good over harm to customers, employees, shareholders, the community, and the natural environment. C) According to the rights approach, the most important virtues are truth and prudence. D) It is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved.
D) It is based on the belief that, regardless of how you deal with an ethical dilemma, human dignity must be preserved.
Acme Ethical Standards (Scenario) Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil. 12) ________ is most likely to point to a controversial practice in his/her country in which the compensation of top executives is far greater than that of low-ranking subordinates. A) Geoff B) Luis C) Jang D) Marta
D) Marta
86) When making decisions regarding ethical business actions, managers should ________. A) minimize employee empowerment to achieve greater control B) focus mainly on the company's obligations to produce profits for its shareholders C) place the highest emphasis on enhancing the company's ability to benefit from a common pool of resources D) balance their obligation to shareholders with explicit contributions to the broader public good
D) balance their obligation to shareholders with explicit contributions to the broader public good
83) In the five-step framework for making ethical decisions, implementing a course of action implies ________. A) assessing how effective the decision was B) reviewing any proposed action to ensure it is acceptable according to company policy and the firm's code of conduct C) determining the nature and dimensions of the ethical problem D) creating new rules, processes, or procedures, and putting these into effect
D) creating new rules, processes, or procedures, and putting these into effect
50) Which of the following would most likely be considered an appropriate action for a multinational company in meeting its global corporate social responsibility obligations? A) lowering production costs for specific manufactured items B) improving the efficiency of assembly line operations C) developing a strategic plan to enter an emerging market D) devoting substantial R&D to poor-country ailments
D) devoting substantial R&D to poor-country ailments
57) Firms with strong environmental interests are most likely to ________. A) provide employees educational opportunities B) encourage the use of sweatshops C) optimize diversity in hiring D) minimize pollutants in manufacturing
D) minimize pollutants in manufacturing
TF 26) Improper ethical behavior is unlikely to result when bad means are justified by good ends.
F
TF 48) Corporate social responsibility represents the base of the pyramid of ethical behavior.
F