MGMT 309 - Chapter 2

49) Under governmentalism, the government uses its policy-setting role to favor national interests, rather than relying on ________.

A) market forces

60) Global interdependence creates demands on international managers to take a positive stance on issues of social responsibility and ethical behavior.

TRUE

64) The sales, debts, and resources of some of the largest multinational firms exceed the gross national product, the public and private debt, and the resources, respectively, of some nations.

TRUE

66) Improved customer attraction and retention; improved reputation; and improved employee recruitment, motivation, and retention are business benefits of corporate social responsibility.

TRUE

69) Ethical relativism adopts the local moral code of the country in which it is operating.

TRUE

76) When managing interdependence, international managers must go beyond general issues of social responsibility and deal with the specific concerns of the MNC subsidiary--host country relationship.

TRUE

78) Under governmentalism, the government uses its policy-setting role to favor national interests, rather than relying on market forces.

TRUE

39) Which of the following is the last step of making an ethical decision?

B) following your own conscience and moral code

6) Which of the following terms refers to an integration of the business environments in which firms currently operate, resulting from a dissolution of traditional boundaries and from increasing links among MNCs?

B) global corporate culture

33) Which of the following prohibits U.S. companies from making illegal payments or other gifts or political contributions to foreign government officials for the purposes of influencing them in business transactions?

D) Foreign Corrupt Practices Act

57) ________ is a systems view in which one seeks to optimize the total materials cycle from virgin material, to finished material, to component, to product, to obsolete product, and to ultimate disposal.

D) Industrial ecology

19) According to the international codes of conduct, MNEs should ________.

D) conduct research and development activities in developing countries

62) Social responsibility deals with decisions and interactions mostly on an individual level.

FALSE

72) Globalization has reduced the ethical problems facing organizations.

FALSE

74) The biggest single problem for MNCs in their attempt to define a corporate-wide ethical posture is the great variation of ethical standards around the world.

TRUE

42) Which of the following MNC subsidiary activities is blamed for rising interest rates in host countries?

C) raising capital from local sources

13) Which of the following creates shared value?

C) reconceiving products and markets

35) One of the primary complaints about the Foreign Corrupt Practices Act is that the legislation ________.

A) puts U.S. firms at a competitive disadvantage

27) Which of the following is a primary focus of the research that is carried out by Transparency International?

A) relative prevalence of bribery in various spheres of people's lives

20) According to the international codes of conduct, the MNE behavior toward the public is related to ________.

A) technology transfer and environmental protection

31) Tokens of appreciation and grease money are considered ________.

B) questionable payments

12) Creating Shared Value(CSV) creates ________.

C) economic value by creating social value

54) Which of the following is the main reason why companies dispose hazardous wastes in less developed countries?

B) weak regulations and low costs

58) ________ model provides a system for examining, measuring, and managing the drivers of corporate sustainability.

A) Epstein's

16) Primo is a multinational enterprise based in California that manufactures and sells affordably priced athletic shoes in retail stores around the world. A Primo manufacturing subsidiary in China employs over 20,000 locals. Primo executives recently learned of human rights violations at the firm's China subsidiary. Workers had been forced to work more than 60 hours each week and minimum wage laws were regularly ignored. As a result, Primo executives need to decide if operations in China should be discontinued. Which of the following, if true, would best support a decision by Primo to remain in China?

A) Primo becomes SA8000 certified.

51) ________ lies at the intersection of financial, social, and environmental health--sometimes described as the "triple bottom line."

A) Sustainability

23) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

A) consumer protection

32) The Foreign Corrupt Practices Act of 1977 was primarily established to ________.

A) distinguish between harmless customs and actual bribery

18) According to the international codes of conduct, the MNE behavior toward the host government is related to ________.

A) economic and developmental policies, laws and regulations, and political involvement

10) A company subscribing to ethical relativism would implement the morality of the ________.

A) host country

21) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

A) human rights

56) Which of the following concepts requires that an industrial system be viewed not in isolation from its surrounding systems, but in concert with them?

A) industrial ecology

44) Which of the following terms refers to the practice by a country of rallying public opinion in favor of national goals and against foreign influences?

A) nationalism

43) Which of the following best defines the concept of managing interdependence?

A) the effective management of a long-term, MNC subsidiary-host-country relationship through cooperation and consideration for host concerns

25) According to Robertson and Crittenden, which of the following has made integrating an ethical component into international strategic decisions, challenging?

B) cultural constraints

22) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

B) employment practices

47) Which of the following is most likely a benefit to host countries with MNC operations?

B) export diversification

30) Payments to expedite routine transactions are often referred to as ________.

B) grease money

1) In recent years, which of the following has lessened the criticisms of MNCs?

B) greater emphasis on social responsibility by MNCs

36) Which of the following shows that employees have understood, and signed off on, the legal obligations regarding bribery and corruption in the countries where they do business?

B) having a global compliance system

55) If MNCs want to take the lead in dealing with ecological interdependence, then they most likely need to ________.

B) incorporate sustainability goals into strategic planning

2) Which of the following concepts includes the expectation that MNCs should be concerned with the social and economic effects of their decisions?

B) international social responsibility

59) Social responsibility, ethical behavior, and interdependence are important concerns to be built into ________.

B) management control

26) Transparency International is best described as a(n) ________.

B) nongovernmental organization that fights corruption

17) Which of the following is one of the standards of SA8000?

B) providing a safe work environment

46) Under governmentalism, the government uses its policy-setting role to favor the interests of ________.

B) the nation

14) The Anti-Sweatshop Code of Conduct requires companies to provide a healthy and safe work environment and ________.

B) to pay the prevailing local minimum wage

28) Which of the following is considered the primary problem for MNCs attempting to define their corporate-wide ethics?

B) variations in ethical standards around the world

15) Which of the following is a policy of the Electronic Industry Code of Conduct (EICC)?

C) Contract manufacturers should follow some basic environmental requirements.

3) Which of the following significantly increases the complexity of social responsibility and ethical behavior of MNCs?

C) additional stakeholders associated with the firm's activities

7) Moral universalism is the need for a moral standard that is accepted by all ________.

C) cultures

9) McDonald's, a fast food chain headquartered in the United States, applies the morality it practices in the United States to all foreign countries in which it operates. McDonald's is adhering to ________.

C) ethnocentrism

41) The profitability of individual companies depends on a cooperative and constructive attitude toward ________.

C) global interdependence

5) Which of the following is a business benefit from corporate social responsibility?

C) increase in brand value

53) In recent years, the export of hazardous wastes from developed countries to less developed ones has ________.

C) increased significantly

4) Sundew, an American soda company, opened a number of manufacturing units in a developing country. It employed people from the host country to work in the new units. This move radically lowered the poverty rate in the developing country. In this scenario, Sundew is ________.

C) making a foreign investment

45) Which of the following terms refers to a country's use of tariff and nontariff barriers to partially or completely close its borders to various imported products that would compete with domestic products?

C) protectionism

11) Which of the following often forces the MNC to act in accordance with ethnocentric value systems?

C) public pressure in the home country

52) Which of the following terms refers to adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today, while protecting, maintaining, and enhancing the human and natural resources that will be needed in the future?

C) sustainability

29) Which of the following is dedicated to monitoring issues of data privacy in Europe?

C) the EU Directive of Data Protection

48) Primo is a multinational enterprise based in California that manufactures and sells affordably priced athletic shoes in retail stores around the world. A Primo manufacturing subsidiary in China employs over 20,000 locals. Primo executives recently learned of human rights violations at the firm's China subsidiary. Workers had been forced to work more than 60 hours each week, and minimum wage laws were regularly ignored. As a result, Primo executives need to decide whether to continue operations in China. Which of the following is MOST relevant to the decision by Primo to remain in China?

C) the benefits that the local Chinese community might have

37) The FCPA allows "grease" payments to facilitate business in a foreign country, if ________.

C) those payments are lawful in that country

34) Which of the following was the primary purpose of the Organization for Economic Cooperation and Development Convention on Bribery?

C) to combat corporate corruption

24) ________ refers to the business conduct or morals of MNCs in their relationships with individuals and entities.

D) International business ethics

40) John, an American national, works as a manager at his firm's subsidiary in Indonesia. A local government official tells John that materials could be delivered to the firm's facility more quickly if John pays an extra fee to the port supervisor. What should be John's first action?

D) consult both American and Indonesian laws

38) Which of the following is the first step of making an ethical decision?

D) consulting the laws of both the host and the home countries

8) With an ethnocentric approach, a company applies the morality used in its ________.

D) home country

50) Which of the following is a potential benefit to the host country of MNC operation?

D) infrastructure development and support

63) Decisions about ethics tend to be made at a higher level, affect more people, and reflect a general stance taken by a company or a number of decision makers.

FALSE

65) The increased complexity regarding the social responsibility and ethical behavior of firms across borders is brought about by the distance between the headquarters and its subsidiaries.

FALSE

67) Ethnocentric culture is an integration of the business environments in which firms currently operate.

FALSE

68) The term "moral idealism" is used to address the need for a moral standard that is accepted by all cultures.

FALSE

71) Creating Shared Value (CSV) leverages the unique resources and expertise of the company to create social value by creating economic value.

FALSE

73) Global corporate culture refers to the business conduct or morals of MNCs in their relationships with individuals and entities.

FALSE

77) Under nationalism, the host institutes a partial or complete closing of borders to withstand competitive foreign products, using tariff and nontariff barriers.

FALSE

79) Under protectionism, public opinion is rallied in favor of national goals and against foreign influences.

FALSE

61) The difference between social responsibility and ethical behavior is a matter of scope and degree.

TRUE

70) In a globalized market economy, CSR has to be part of modern business.

TRUE

75) The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from making illegal payments, other gifts, or political contributions to foreign government officials for the purpose of influencing them in business transactions.

TRUE