Business and Society Chapter 11

This is the act of a corporation cloaking its lack of social responsibility by insincere membership in the UN Global Compact. A. Apartheid B. Bluewashing C. Snowballing D. Astroturfing

B. Bluewashing

Which of the following is true about the OECD Guidelines? A. An informal process exists to "encourage" observance of the guidelines. B. Each government that joins in the guidelines sets up an office, called a "national contact point." C. Observance of the guidelines is obligatory. D. There are legal sanctions and penalties for violations of the guidelines.

B. Each government that joins in the guidelines sets up an office, called a "national contact point."

Five Tiers of Internationalization

1. Export Sales 2. Licensing 3. Foreign Sales Office 4. Direct Investment 5. Global Production

The economic policy of lowering tariffs and other barriers to encourage trade and investment is known as: A. liberalization. B. globalization. C. capitalism. D. multinationality.

A. liberalization.

The treaty that requires nations to preserve biological diversity by promoting sustainable economic activity is known as the: A. Convention on Biological Diversity. B. 2010 Biodiversity Target. C. Global Biodiversity Information Facility. D. Pacific Biodiversity Information Forum.

A. Convention on Biological Diversity.

Which of the following is a part of the tiers of internationalization? A. Export sales B. Indirect investments C. Importing essential goods D. Portfolio investment

A. Export sales

When multinational corporations invest their funds to start a business in a foreign country, this is called a(n): A. FDI. B. TPI. C. LDC. D. TNI.

A. FDI (Foreign Direct Investment)

An entity headquartered in one country that does business in one or more foreign countries is called a(n): A. MNC. B. LDC. C. TNI. D. FDI.

A. MNC.

This is the limited, speculative purchase of stocks and bonds of a foreign company by individuals or mutual funds. A. Portfolio investment B. FDI C. TNI D. Direct investment

A. Portfolio investment

This is a 1789 law permitting foreign citizens to litigate alleged violations of international law in U.S. federal district courts. A. The Alien Tort Claims Act B. The Sherman Antitrust Act C. The Foreign Exchange Regulation Act D. The Sarbanes-Oxley Act

A. The Alien Tort Claims Act

The main purpose of this code is to boost economic growth of its members by expanding trade. A. The OECD Guidelines for Multinational Enterprises B. The Caux Round Table principles for business C. The Business Charter for Sustainable Development D. The FLA Workplace Code of Conduct

A. The OECD Guidelines for Multinational Enterprises

Direct investment means: A. buying or creating facilities in another country for producing in local markets. B. buying or creating facilities in home country. C. buying facilities based in home country for the purpose of exporting products. D. buying facilities in home country for the sole purpose of importing essential goods.

A. buying or creating facilities in another country for producing in local markets.

Business entities in foreign countries controlled by parent transnational corporations are known as: A. foreign affiliates. B. indigenous producers. C. domestically owned firms. D. parent firms.

A. foreign affiliates.

According to leading progressive, David C. Korten: A. power on earth was being transferred from national governments to transnational corporations which by their nature serve only the short-term interests of citizens. B. "a few hundred" multinational corporations are making daily business decisions which have more impact than those of most sovereign governments. C. developing nations should set up a stable and enabling regulatory environment that indulges the "concern of the business sector for national policies that are enabling but not overly regulating." D. in seeking return on capital invested, MNCs may build or buy facilities, contract with local suppliers, and hire workers.

A. power on earth was being transferred from national governments to transnational corporations which by their nature serve only the short-term interests of citizens.

Which of the following is NOT a general policy of the OECD Guidelines for Multinational Enterprises? A. Enterprises should encourage human capital formation, in particular by creating employment opportunities and facilitating training opportunities for employees. B. Enterprises should take disciplinary action against employees who make bona fide reports to management. C. Enterprises should refrain from seeking or accepting exemptions not contemplated in the statutory or regulatory framework related to environmental, taxation, or other issues. D. Enterprises should respect the human rights of those affected by their activities consistent with the host government's international obligations and commitments.

B. Enterprises should take disciplinary action against employees who make bona fide reports to management.

This is a part of the tiers of internationalization. A. Indirect investments B. Establishment of foreign sales offices C. Portfolio investment D. Importing essential goods

B. Establishment of foreign sales offices

This is measured as the dollar value of funds invested by a parent corporation for starting, acquiring, or expanding an enterprise in a foreign nation. A. Portfolio investment B. FDI C. Debt security D. TNI

B. FDI

Which of the following statements about portfolio investments is true? A. It is measured as the dollar value of funds invested by a parent corporation. B. It is limited and speculative. C. It confers a degree of control over the company. D. It is a long-term investment that cannot be sold anytime.

B. It is limited and speculative.

Which of the following is a less preferred name, compared to the others, for a multinational corporation? A. Global B. Multidomestic C. Transnational D. International

B. Multidomestic

The most widely used index measure of a corporation's "multinationality" is called the: A. LDC. B. TNI. C. FDI. D. TNC.

B. TNI.

Which Act makes it illegal for U.S. citizens anywhere in the world to bribe foreign officials? A. The International Anti-Bribery Act B. The Foreign Corrupt Practices Act C. The Sarbanes-Oxley Act D. The Foreign Investment and National Security Act

B. The Foreign Corrupt Practices Act

Which of the following is NOT one of the three most common reasons for corporations to make foreign direct investments? A. They seek access to new markets. B. They seek to introduce new management skills and technologies to foreign markets. C. Companies in nations with small domestic markets enter foreign markets to grow. D. Some companies create efficiencies and lower their costs by moving production across borders.

B. They seek to introduce new management skills and technologies to foreign markets.

The five tiers of internationalization in MNCs: A. state a common method to enter foreign market in five stages. B. represent alternate ways to extend business activity into foreign markets. C. explain a common method to enter the domestic market in stages. D. represent ways to expand business in the domestic market.

B. represent alternate ways to extend business activity into foreign markets.

Business groups say that the Alien Tort Claims Act: A. brings justice for the oppressed. B. victimizes the world's poor "by imposing an enormous tax on investment in developing countries at a time the world desperately needs such investment." C. will restrict U.S. officials from going to different corners of the globe and exploiting the local populations. D. gives "people in foreign countries comfort that U.S. corporations will abide by international standards."

B. victimizes the world's poor "by imposing an enormous tax on investment in developing countries at a time the world desperately needs such investment."

Most multinational corporations (MNCs) are: A. public enterprises. B. state-owned. C. cooperatives. D. private enterprises.

D. private enterprises.

Which of the following is a negative economic effect of FDI? A. Governments protect politically powerful industries with characteristic control. B. MNCs in manufacturing are accused of exploiting factory workers. C. Although competition from a new foreign affiliate can stimulate local firms, the new entry can also overwhelm them. D. Multinational corporations are criticized for repatriating profits to host countries, so that local residents get limited benefit from their presence.

C. Although competition from a new foreign affiliate can stimulate local firms, the new entry can also overwhelm them.

The single most conspicuous effort to promote MNC social responsibility and to harness FDI for economic development is the: A. social contract. B. Universal Declaration of Human Rights. C. Global Compact. D. transnationality index.

C. Global Compact.

These are aspirational statements of principles, policies, and rules for foreign operations that a multinational corporation voluntarily agrees to follow. A. Industrial codes of conduct B. Professional codes of conduct C. International codes of conduct D. Corporate codes of conduct

C. International codes of conduct

Identify the tier that is a part of internationalization. A. Indirect investments B. Importing essential goods C. Licensing franchises D. Portfolio investment

C. Licensing franchises

Which of the following is true about typical MNCs? A. Most MNCs are said to be stateless. B. Corporations are formed under international incorporation laws. C. They remain national rather than international. D. MNCs have become too transnational.

C. They remain national rather than international.

The Global Compact: A. is a code of conduct. B. enforces its principles. C. advances its principles as an "aspirational" set of "shared values." D. requires mandatory participation.

C. advances its principles as an "aspirational" set of "shared values."

All of the following statements are true of FDI EXCEPT: A. it is the financial process by which a corporation takes partial or total control of foreign assets. B. it is measured as the dollar value of funds invested by a parent corporation. C. it is a short-term investment that can be sold anytime. D. it is almost always made by transnational corporations.

C. it is a short-term investment that can be sold anytime.

Almost all FDI comes from: A. hedge funds. B. sovereign wealth funds. C. multinational corporations. D. private equity.

C. multinational corporations.

Transnational corporations are defined as: A. doing business in the state in which they are incorporated. B. doing business in the state of incorporation as well as neighboring states in the same country. C. parent entities that control assets of affiliated entities in foreign countries. D. entities formed between two or more parties only to import essential goods.

C. parent entities that control assets of affiliated entities in foreign countries.

A(n) _____ is a government entity that invests the savings of a nation. A. angel investor B. private investor C. central bank D. sovereign wealth fund

D. sovereign wealth fund

This is the financial process by which a corporation takes partial or total control of foreign assets with the intention of having a long-term presence. A. TPI B. Indirect investment C. Portfolio investment D. FDI

D. FDI

That businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining comes under which Global Compact principle? A. Anti-corruption B. Human rights C. The environment D. Labor standards

D. Labor standards

Principle 9 of the Global Compact Principles urges a precautionary approach to environmental risks, a philosophy rising from the _____ and accepted by regulators in Europe, but less so in the United States. A. Earth Summit B. Convention on Biological Diversity C. Earth Charter D. Rio Declaration

D. Rio Declaration

This is a 1977 code of conduct that required multinational corporations in South Africa to do business in a nondiscriminatory way. A. The MacBride Principles B. The Equator Principles C. The CERES Principles D. The Sullivan Principles

D. The Sullivan Principles

What was the original intent of the 1789 Alien Tort Claims Act? A. To make it illegal for U.S. citizens anywhere in the world to bribe foreign officials. B. To set criminal penalties in abetting the overthrow of the U.S. government. C. To protect the United States from enemy aliens. D. To protect the rights of ambassadors and to try pirates.

D. To protect the rights of ambassadors and to try pirates.

Each of the five tiers of internationalization is seen as all of the following EXCEPT: A. a theory. B. an ideal. C. a model. D. a policy.

D. a policy.

With regard to MNCs in the United States: A. it is still rare for top executives to be naturalized citizens. B. boards of directors are dominated by foreign country majorities. C. most employees at company headquarters are foreign country nationals. D. each company must be chartered by a state.

D. each company must be chartered by a state.

All of the following ratios are used to compute the TNI EXCEPT: A. foreign employment to total employment. B. foreign assets to total assets. C. foreign sales to total sales. D. foreign assets to total unemployment.

D. foreign assets to total unemployment.

The OECD Guidelines for Multinational Enterprises: A. are a set of 16 broadly worded principles about protecting and conserving the natural environment. B. reinforces capitalism by making it moral. C. are global guidelines for socially responsible and ethical behavior based on ethical ideas in the great religions. D. is the only comprehensive global code of corporate conduct endorsed by governments.

D. is the only comprehensive global code of corporate conduct endorsed by governments.

The United Nations defines transnational corporations (TNCs) as: A. doing business in the state in which they are incorporated. B. doing business in the state of incorporation as well as neighboring states in the same country. C. companies that have erased national allegiances and become itinerant firms that move investment and activity from nation to nation in search of profits. D. parent firms that control the assets of affiliated entities in foreign countries including branches, subsidiaries, and joint ventures.

D. parent firms that control the assets of affiliated entities in foreign countries including branches, subsidiaries, and joint ventures.

All of the following are a part of global production EXCEPT: A. research. B. distribution. C. logistics. D. portfolio investment.

D. portfolio investment.