International Business Test 1

People in the West tend to associate a representative democracy with

a market economic system

John, an American executive, learns that a foreign subsidiary hired a 12-year-old orphan girl to work on the factory floor. He knows that using child labor is in direct violation of the company's own ethical code. At the same time, he does not think that denying the child her only source of income is right. John is facing

an ethical dilemma

Which approach to business ethics includes cultural relativism, the righteous moralist, and the naive immoralist?

Straw Men

True or false: According to cultural relativism, all ethics are culturally determined.

True

pressure from the parent company to meet performance goals that are unrealistic and can only be attained by cutting corners or acting in an unethical manner

Unrealistic Performance Goals

______ ethics measure actions on a cost-benefit scale.

Utilitarian

provide the context within which a society's norm are established and justified

Value

In many of the world's nation-states, there has been a move away from ________ since the late 1980s.

centrally planned command economies

As a judge in France, Maurice is not allowed to interpret the law but relies on a strict set of codes to determine the outcome of a case. Which type of law is in place in France?

civil law system

An individual's right to do something may be restricted on the grounds that it runs counter to "the good of society" when the political system emphasizes

collectivism

The belief that ethics are culturally determined and a firm should adopt the ethics of the country it is doing business in is

cultural relativism

A company's organizational _____ reflects the values and norms that are shared among employees of an organization.

culture

The main reason that gross national income figures can be misleading is because they

don't consider differences in the cost of living

Which of the following BEST increases a country's competitive advantage and its attractiveness as a location for international business?

education system that is well developed

American company Software Unlimited is planning to expand its operations to the Bangor Republic where the group is the primary unit of social organization. According to this information, what is a likely outcome for Software Unlimited from operating in the Bangor Republic?

employees will achieve close cooperation with others

Shayla is from South Africa and believes that the customs and beliefs of her culture are superior to those she has encountered during her trip to America. Shayla's attitude is an example of

ethnocentrism

The labor, energy, land, and capital that a company has access to are known as

factors of production

MaryAnne is always late to meetings and she knows she needs to be better about being on time because it is expected by almost everyone living in the United States. This attitude toward time is an example of a

folkway

routine conventions of everyday life

folkways

Which of these is not used to determine culture?

geography

Economist Robert Reich advocates that the outsourcing of productive activities to different suppliers results in the creation of

global products

The merging of national markets that have historically been distinct and separate is the process of

globalization

One cost-cutting measure used by Garr Tool Corp. is sourcing the parts it uses from companies in Germany, Ireland, and Canada that are more economical than home-country sources. The choice to use these sources is an example of the

globalization of production

In a pure command economy, the prices at which goods and services are sold are planned by the

government

A payment made to expedite or to secure the performance of a routine governmental action is called a

grease payment

In the Republic of Nabu, natives are resistant to change and do not like to take risks. They value job security and retirement benefits. In addition, they have a strong need for rules and regulations. Based on this information, the Republic of Nabu demonstrates which cultural dimension identified by Hofstede?

high uncertainty avoidance

According to the Friedman Doctrine, what is the only social responsibility a company has as long as it stays within the rules of law?

increasing profits

When Aristotle said that private property is more highly productive than communal property, he was advocating for

individualism

Which ethical approach typically focuses on the attainment of fair and equitable distribution of economic goods and services?

justice theories

U.S.-based Centra Corporation is hesitant about entering into a licensing agreement with Fission, Inc., a company from another nation, due to the likelihood that Fission will break a contract or expropriate property rights. What specific type of risk is Centra Corporation trying to avoid?

legal

According to Geert Hofstede, what dimension captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors?

long-term versus short-term orientation

James is the warehouse supply manager for a major tool corporation. It is his job to take inventory of the tools the company has available and send orders to make more tools when supplies run low. This supply and demand form of production is an example of a ________ economy.

market

________ gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company.

moral courage

norms that are central to the functioning of a society and its social life

mores

Gigantic Games., a U.S.-based company that specializes in strategy-based board games, has production facilities in Poland and Spain. Based on this information, Gigantic Games can be classified as what type of enterprise?

multinational

The social rules and guidelines that prescribe appropriate behavior in particular situations are called

norms

The social rules and guidelines used to determine appropriate behavior in a particular setting are known as ______.

norms

the values and norms that are shared among employees of an organization

organizational culture

the generally accepted principles of right and wrong governing the conduct of individuals

personal ethics

ABC Company is hesitant about entering Ukraine, because the country has been experiencing social unrest in recent years. Based on this information, what type of risk is ABC Company trying to avoid?

political

One root cause of unethical behavior in business is

pressure to meet unrealistic performance goals

In 2017, the Brazilian government transferred the state ownership of the electric company, the airports, highways, and ports to private investors to stimulate the economy. This is an example of

privatization

Marietta told the management team that the company would have to find a new way to produce the vitamin because the Food and Drug Administration had recently banned "nofon," the key ingredient in their product. The standard set by the FDA is a type of

product safety law

Economist Hernando de Soto believes that the benefits of capitalism will not be achieved until

property rights are better protected

Julie asked her assistant to determine the gross national income of three different countries by evaluating the GNI against the cost of living in the United States. What measure is Julie asking her assistant to use?

purchasing power parity

The United Nations Convention on Contracts for the International Sale of Goods (CISG) was introduced to

resolve disputes that arise in international trade regarding which country's laws to apply.

Unrealistic performance goals can often only be attained by

taking shortcuts or behaving in an unethical manner

During the second stage of the ethical decision-making process, managers must determine whether a proposed decision would violate

the fundamental rights of any stakeholders

Krisp Systems decides to move production to a developing country where they are free to pump pollutants into the atmosphere without legal restriction. By doing this, the company is contributing to

the global tragedy of the commons

When considering globalization, what is considered the single most important innovation since World War II?

the microprocessor

The spread of democracy among countries is most likely to lead to

the promotion of greater competition

Why was the World Trade Organization established?

to police the international trading system

Saturn Systems Inc., which is headquartered in the United States, has its production plant located in a less-developed country where working conditions are poor. For example, employees work 15-hour shifts, are exposed to toxic chemicals, and are forced to work overtime. What type of behavior is Saturn Systems Inc. exhibiting?

unethical

Jacques relies on a cost-benefit analysis to decide if moving operations overseas is better than increasing the size of the current manufacturing facility in the United States. He is using the ________ approach to ethics to determine his answer.

utilitarian

The ________ approach to ethics holds that the moral worth of actions or practices is determined by their consequences and is committed to the maximization of good and the minimization of harm.

utilitarian

AllSpice Incorporated plans to do business with a company located in the Leone Republic, a common law country. The companies have agreed to draft the business contract in the Leone Republic. Since the contract will be drafted under a common law framework, what best characterizes the contract?

very detailed with all contingencies spelled out

vital in helping a firm establish its organizational culture and setting examples

Leadership

______ ethics hold that one should always respect the humanity in others and act in accordance with rules that could apply to everyone.

Kantian

system that stresses the primacy of collective goals over individual goals -needs of society as a whole are generally viewed as being more important than individual freedoms

Collectivism

goods and services a country produces, the quantity in which they are produced, and the price at which they are sold are planned by government

Command economy

Intelligent Tool Corp. is planning to set up a production plant abroad. It has selected five potential countries based on their population size, stage of economic development, labor costs, and access to world markets. Considering the connection between culture and competitive advantage, which of the following countries would be the best investment site for Intelligent Tool Corp.?

Country B, where education is well-developed and social stratification is lacking.

TimeForce, a U.S.-based company, is planning to expand operations to a foreign country. Considering the factors that make a country attractive as a place in which to do business, which country should TimeForce consider for entry?

Country D, which has democratic institutions and a market-based economic system.

a system of values and norms shared among a group of people and, when taken together, constitute a design for living

Culture

as the relevant question: is this decision or action ethical?

Decision-Making processes

political in which government is by the people, exercised either directly or through elected representatives

Democracy

-Trade and investment barriers -Technological change

Drivers of Globalization

Not caring if a part came from a sweatshop, but the parts are needed to make quota so you use them.

Economic decision

labor, energy, land, and capital

Factors of Production

Which of these companies exemplifies the globalization of markets?

Fluffy Pillows, a U.S.-based pillow company, sells the same pillows worldwide.

The straw men theory that states that businesses should behave in a socially responsible manner, according to ethical custom and without deception and fraud is the _______.

Friedman Doctrine

shift toward a more integrated and interdependent world economy

Globalization

According to globalization supporters, what is an advantage of globalization?

Globalization helps create jobs in all countries that participate in the global trading system.

-the merging of historically distinct and separate national markets into one huge global marketplace -the tastes and preferences of consumers in different nations are converging on some global norm, creating a global market -the most global of markets are for industrial goods and materials that serve universal needs around the world

Globalization of markets

-sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production -lower overall cost structure -improvement of the quality or functionalist of a product to compete more effectively

Globalization of products

suggests individuals should have freedom over economic and political pursuits -lets people pursue self-interests to achieve the best overall good for society

Individualism

The mother tongue of the largest number of people is

Mandarin

goods and services a country produces and the quantity in which they are produced is determined by supply and demand

Market economy

includes some elements of market economies and some elements of command economies

Mixed economy

the social rules that govern the actions of people toward one another

Norms

What occurs according to Moore's law?

The power of microprocessor technology doubles and its cost of production falls in half every 18 months.

What is an accurate description of how the political economy of many of the world's nation-states has changed radically since the late 1980s?

There has been a move away from centrally planned and mixed economies and toward a more free market economic model.

form of government in which one person or political party exercises absolute control over all spheres of human life, and opposing political parties are prohibited

Totalitarianism

Jerome knew it was wrong for his company to continue ignoring environmental standards set down by the state. Jerome is able to determine this based on

business ethics