international business test #1

Naive Immoralist

"Everyone is doing it" is not sufficient to prove that an action is ethically justified and is a criticism against _____.

Hinduism

-A moral force in society requires the acceptance of certain responsibilities, called dharma -Rebirth into a different body, called reincarnation -The spiritual progression of each persons soul, called karma -achieving a complete spiritual perfection, called nirvana

Making Ethical Decision: 4. Ethics Officers

-Access the needs and risks that an ethics program must address -Develop and distribute a code of ethics -conduct training programs for employees -establish and maintain confidentiality of employees -comply with government laws and regulations -monitor and audit ethical conduct -take action, where appropriate -periodically reviewing and updating the code ethics

Ethical Implications of Corruption

-Are brides the price to pay to do a greater good? -Do bribes reduce businesses incentive to invest -Some multinationals adopting a zero-tolerance policy

Economic Implications of Islam:

-Associated in the West with militants, terrorist -A response to social pressures to move toward modernization and the influence of western societies

Overall Attractiveness

-Based on balancing the benefits, costs, and risks associated with doing business in that country -Other things being in equal, the benefit-cost-risk trade-off is likely to be most favorable in politically stable developed and developing nations that have free-market systems and no dramatic upsurge in either inflation rate or private sector debt.

Cross-Cultural Literacy

-Companies must be informed about the culture of another nation when conducting business (if you understand the culture you will have a competitive advantage)

The shift toward a market based system involves:

-Deregulation -Privatization -a legal system to safeguard property rights

Economic Development

-Differences among nations affects how attractive it is for doing business -Trends that foster greater economic development (democratic forms of government, market based economic reforms, legal systems that better enforce property rights)

Economic implications of Buddhism

-Does not emphasize wealth creation -Does not support the caste system, individuals do have some mobility and can work with individuals from different classes -Recently the "Zen" orientation has been introduced into business in the western world

Broader Conceptions of Development: Amartya Sen

-Economic development should be assessed by the capabiltes and opportunities people enjoy -Economic progress requires the democratization of political communities to give citizens a voice

Most common ethical issues

-Employment practices -human rights -environmental regulations -corruption -moral obligations or multinational corporations

ethical dilemma

-Ethical obligations of multinational corporations are not always clear (no other alternatives seem ethical behavior)

Buddhism

-Has about 535 million followers -Stresses spiritual growth and the afterlife, rather than achievement in this world

Making Ethical Decision: 1. Hiring and Promotion

-Hire and promote with a well-guided sense of personal ethics -refrain from promoting individuals who have acted unethically -try to hire only people with strong ethics -prospective employees should find out as much as they can about the ethical climate in an organization prior to taking a position

Spoken Language

-Language structures the way we see the world -Countries with more than one language often have more than one culture

Totalitarian States

-Limit freedom -They suppress human development

Economic Implications of Hinduism

-Max Weber: Hindus are valued by their spiritual rather than material achievements -Caste system abolished in India but still has an effect

Economic implications of Islam

-May pro-free enterprise principles, protection of private property, concern with social justice -Prohibits the payment of receipt of interest

Christianity

-Most widely practiced religion, monotheistic -Found throughout Europe, the Americas, and other countries settled by Europeans

Confucianism

-Practiced mainly China, Korea, and Japan -Teaches the importance of attaining personal salvation through right action -High morals, ethical conduct, and loyalty to others

demographics of a global economy up until the 1960s

-Roughly half of the globe was off-limits to Western international business -U.S. dominance in world foreign direct investment -Dominance of large, multinational U.S. firms in the international business scene -U.S. dominance in the world economy and world trade

What are the four principles of social stratification?

-Social stratification is generally universal. -Social stratification involves beliefs as well as inequality, -Social stratification is a trait of society. -Social stratification carries over to the next generation.

Economic Implications of Christianity:

-Sociologist argue that protestant branch has most important economic intelligence -Max Weber, Protestant ethics and spirit of capitalism

Determinates of culture

-The values and norms of a culture evolve over time -religion -political philosophy -economic philosophy -education -language -social structure

Islam

-The worlds second largest religion -Monotheistic, one true omnipotent God (Allah)

Economic Implications of Confucianism

-Three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in _______ societies -Guanxi are relationship networks supported by reciprocal

Market economy

-all productive activities are privately owned -production is determined by supply and demand -to work, supply must not be restricted (so people are energized to create things) -role of the government is to encourage vigorous free and fair competition

Individualism

-an individual should have the freedom in economic and political pursuits -the interest of the individual should take precedence over the interest of the states -creates new value and everyone benefiting from it -secret to wealth/growth globally

Democratic Regimes

-are probably more conducive to long-term economic growth -China, South Korea, Taiwan, Hong Kong all had undemocratic governments but experienced economic growth -property rights are only secure in well-functioning, mature democracies

Making Ethical Decision: 2. Organizational Culture and leadership

-build and organizational culture that places a high value on ethical behavior -Articulate values that place a strong emphasis on ethical -emphasize the importance of a code of ethics -implement a system of incentives and rewards that recognize people who engage in ethical behavior and sanction those who do not

Making Ethical Decision: 5. Moral Courage

-decisions made even though it may hurt the company -Enables managers to walk away from a decision that is profitable but unethical -gives an employee the strength to say no to a superior who instructs employees to pursue actions that are unethical -gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company

__________ and _________ go hand in hand

-democracy and individualism -collectivism and totalitarianism

Purpose of the United Nations

-develop friendly relations among nations -maintain international peace and security -be a center for harmonizing the actions of nations -cooperate in solving international problems

Entrepreneurs

-first commercialize innovative new products and processes -provides much of the dynamism in an economy

Command Economy

-government plans the goods and services, quantity and price, then allocates them for "the good of society" -all businesses are state owned -historically found in communist countries -no incentive for individuals to look for better ways to serve needs (ex: Venezuela)

Purchasing power parity (PPP)

-is an adjustment in gross domestic product per capita to reflect differences in cost of living -comparing a companies prices in a place and how much it would be worth in another

Gross national income

-measures the total annual income received by residents of a nation -GNI doesn't not consider difference in cost of living

How should corporations handle ethical dilemmas regarding unemployment, human rights, corruption, and environmental pollution?

-pressure from customers and stakeholders to be transparent in ethical decision making -no universal worldwide agreement about what constitutes accepted ethical principles

Environmental Pollution

-problem occurs when environmental regulations differ between host nations and home nation

Product safety and product liability

-product safety laws set certain safety standards to which a product must adhere -Product liability involves holding a firm and it officers responsible when a product causes injury, death, or damage -can be much greater if a product does not conform to safety standards -criminal and civil laws apply -raises ethical issues when doing business abroad

socialism

-public ownership of the means of production for the common good -Karl Marx -communist verses social democrats -privatization

Making Ethical Decision: 3. Decision-Making Processes

-put decision-making processes in place that require people to consider the ethical dimension of business decisions -does that decision fall within the accepted values of standards that typically apply in the organizational environmental? -is there a willingness to see the decision communicated to stakeholders affected by it? -Would people close to me (family members, friends, colleagues) approve of the decision?

legal systems: the protection of intellectual property

-refers to property that is the product of intellectual activity such as computer software, a screenplay, a music score -World intellectual property organization -Paris convention for the protection of industrial property

Cross-cultural literacy

-refers to understanding how cultural differences across and within countries can affect the way business is practiced -cultural differences create common bond among people -numerous values and norms exist in these cultural systems that might affect international business -cultural can and does evolve

U.S. Foreign Corrupt Practices Act (FCPA)

-regulates conduct of international business in taking of bribes and other unethical -Amended to allow for "facilitating payments"

Determinate's of Ethical Behaviors

-social culture -decision-making processes -leadership -unrealistic performance goals -organizational culture -personal ethics

Mixed economy

-some sectors are privately owned, some are government owned -once common in developed world, less so now -government may aid troubled firms whose operations are vital to national interest

Differences in Economic Develoment

-the "official" figures can be misleading -do not account for black economy transactions that include unrecorded cash transactions or barter agreements -China and India are currently relatively poor, but their economies are growing more rapidly than many advanced nations

Indulgence vs. Restraint

-the degree to which a society allows relatively free gratification of basic and natural human drives related to enjoying life and having fun -suppresses gratification of needs and regulates it by means of strict social norms

political economy

-the political, economic, and legal systems of a country -these systems are interdependent -they influence each other

Human Development Index (HDI)

-to measure quality go human life in different nations -another # a company may use to judge doing international business (life expectancy at birth, educational attainment, whether average incomes are sufficient to meet the basic needs of life in a country)

Benefits

1. Size of economy 2. Likely economic growth

3 things of overall attractiveness

1. benefits 2. costs 3. risks

Costs

1. corruption 2. lack of infrastructure 3. legal costs

Politcal Systems have two dimension which are ?

1. emphasis on collectivism or individualism 2. degree to while they are democratic of totalitarian

Two tenets of individualism

1. guarantee of individual freedom and self expression 2. welfare of society best served by letting people pursue their ow economic self interest

The Macro Environment Influences Market two implications

1. political, economic, and legal systems of a country raise important ethical issues that have implications for international business 2. political, economics and legal environments of a country clearly influence the attractiveness of that country as a market or investment

civil

A _____ law system is based on a detailed set of laws organized into codes.

common

A country that bases its laws on the traditions within the country's legal history operates under a _____ law legal system.

command economy

A government plans the quantity of goods and services produced as well as the prices at which they are sold in a pure _________________________

civil law

A legal system based on a written code of laws

apartheid system.

A policy of racial segregation and political and economic discrimination against nonwhites in South Africa was known as the

social strata

All societies are divided on a hierarchical basis into social categories called _____.

consciousness

Class ______ is an awareness of one's social or economic rank in society.

__________ ___________ requires the democratization of political communities to give citizens a voice

Economic progress

often leading to adoption of a democratic government.

Economic progress can be characterized as

Most widely spoken language is _________ & is the language of international business

English

are social issues that arise frequently with international business

Ethic, corporate social responsibility and sustainability

_______ ________ are situations in which none of the available alternatives seem ethically acceptable

Ethical dilemmas

The Heritage Foundation index of economic freedom is based on ten indicators. What are four of those indicators?

Foreign investment regulations Trade policy Taxation rules Labor freedom

_________ data are static and do not consider economic growth rates

GNI and PPP

Japan, Sweden, Switzerland, and U.S have _____ GNI

High

mixed

In a ______ economy, both private enterprise and some state monopoly co-exist.

Containerization

It reduces the costs of shipping goods over long distances.

Right-Wing Totalitarianism

It restricts political freedom, frequently on the grounds that it would lead to the rise of communism, but does allow some economic freedom.

Is it ethical for a company to escape regulation by moving production to a nation with lax regulations?

Morally it is wrong

Risks

Political Risks: social unrest/antibusiness trends Economic Risks: Economic Mismanagement Legal Risk: Failure to safeguard property rights

Moral Imagination

Standing in the shoes of a stakeholder and asking how a proposed decision will affect that stakeholder.

social structure

The _____ of a society refers to how it is organized in terms of its values, norms, and societal relationships.

legal

The ______ system of a country refers to the rules, or laws, that regulate behavior along with the system that enforces them.

moore's

The doubling of the power of microprocessor technology while the costs of its production decreases by half is called ______ Law.

property

The legal rights regarding the use of a resource by a business or individual are known as _____ rights.

Economic Risk

The likelihood that events, including economic mismanagement, will cause drastic changes in a country's business environment that adversely affect the profit and other goals of a particular business enterprise.

Political Risk

The likelihood that political forces will cause drastic changes in a country's business environment that will adversely affect the profit and other goals of a particular business enterprise.

Paris Convention for the Protection of Industrial Property

The members of the World Intellectual Property Organization have signed international treaties designed to protect intellectual property, including the oldest such treaty known as the ______, which dates to 1883.

Hinduism

The religion where followers believe in reincarnation and karma is

Buddhism

The religion where followers try to achieve nirvana or spiritual enlightenment is _____.

political economy

The term ______ is used to stress that the political, economic, and legal systems of a country are connected.

long term vs short term orientation

The theory of the extent to which a culture programs its citizens to accept delayed gratification of their material, social, and emotional needs.

Culture

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

Business Ethics

are the accepted principles of right or wrong that govern the conduct of businesspeople

The inability of property owners to establish legal title to their intellectual property.

What is Hernando de Soto's main concern with regard to property rights?

Capitalists take the value created by workers for their own use.

What is an accurate depiction of Karl Marx's arguments on socialism?

a fair distribution of economic goods and services

What is the focus of the justice theories?

tragedy of the commons

When a company acts in its own self-interest and abuses a resource that isn't owned by anyone, such as a river, it is participating in the

Foreign Corrupt Practices Act

Which act outlaws the payment of bribes to foreign government officials to gain businesses?

Utilitarianism

Which ethical theory emphasizes that the best actions are those that benefit the most number of people and harm the least number of people?

Foreign Corrupt Practices Act

Which law makes it illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority?

Leon Sullivan

______ argued that it was ethically justified for General Motors to operate in South Africa so long as conditions of disobeying and promoting the abolition of apartheid laws were fulfilled.

Privatization

______ is one of the steps necessary for a country to shift toward a market-based economic system.

power distance

______ is the Hofstede dimension that describes the extent to which individuals do not have the same levels of physical and intellectual capability.

intellectual property

______ property refers to property such as a screenplay, a music score, or the chemical formula for a new drug.

Noblesse oblige

______ refers to the moral obligation to act in an honorable and benevolent manner.

Tribal

______ totalitarianism occurs when a political party that represents the interests of a particular tribe monopolizes power.

Mandrian (Chinese)

___________ is the mother tongue of the largest number of people

Economic Growth

____________ ____________ often leads to establishment of democratic rights (South Korea and Taiwan)

Ethical Strategy

a course of action that does not violate a company's business ethics

society

a group of people who share a common set of values and norms

Common Law

a system of law based on tradition, precedent and customs

corruption

been a problem in almost every society in history and continues to be one today

Ethnocentrism

belief in the superiority of one's own ethnic group or culture

a country with __________ political institutions, market based economics system, and strong legal system clearly more attractive to do business in

democratic

_______ requires the removal of the major impediments to freedom: poverty, tyranny, poor economic opportunites

development

Amartya Sen would agree that

development should address basic health care and education needs.

_____ are the core starting point

ethics

copyrights

exclusive legal rights of authors, composers, playwrights, artists, and publishers.

Influential economists, politicians, and business leaders who favor globalization argue that

falling barriers to international trade drive the economy toward greater prosperity.

If china adopts a _________ ____________ system, belief is that the country will have greater individual freedoms followed by democracy

free market

Democracy

government is by the people, exercised either directly of through elected representatives

values

ideas about what a group believes to be good, right and desirable

innovation

includes new products, new processes, new organizations, new management practices, and new strategies (because of market economies)

_________ and _________ are the engines of growth

innovation and Entrepreneurship

Understanding and adapting to the local cultural is important in _________ ___________

international companies

patent

inventors exclusive rights for defined period

Ethocentrism

is the practice of judging another culture by the standards of one's own culture

China may become the worlds ________ economy during the next decade

largest

india will be among the ________ economies in the world

largest

China and India have _____ GNI

low

global tragedy of the commons

moving production to locations where they are free to pump pollutants into the atmosphere or dump them in oceans or rivers, thereby harming these valuable global commons

Edward T. Hall

notes Americans tend to be informal and have a different attitude toward time- these can be misconstrued in an international business situation

Tragedy of the Commons

occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation

trademarks

officially registered designs and names used to differentiate products

Totalitarianism

one person or political party exercise absolute control over all spheres of human life and prohibits opposing political parties (ex: china)

Hofstede's Cultural Dimensions

power distance, individualism, masculinity, uncertainty avoidance, long-term orientation, indulgence advoidance

Norms

social rules and guidelines that prescribe appropriate behavior in particular situations

Karl Marx

the few benefit at the expense of the many in a capitalist society where individual freedoms are not restricted

Legal Risk

the likelihood that a trading partner will opportunistically break a contract or expropriate intellectual property rights

collectivism

the needs of society as a whole are generally viewed as being more important that individual freedom

Political systems

the system of government in a nation is called_____

Bp and Dow corning

won't put up with corruption, if you do it your fired