Exam 2 International Business
A firm's organizational culture refers to the values and norms that are shared among employees of an organization and those outside the organization.
F
A manager from the United States is sent to Nigeria to supervise the construction of a road. As a righteous moralist, he is likely to learn the ethics and values of Nigeria and follow them, even if they don't concur with his own.
F
Corporations can contribute to the global tragedy of the commons by not pumping pollutants into the atmosphere or dumping them in oceans or rivers.
F
Cultural relativism suggests that even if slavery is culturally acceptable in a country, a foreign firm operating in that country should avoid using slave labor.
F
Diminishing returns show that it is feasible for a country to specialize to the degree suggested by the simple Ricardian model.
F
Ethical strategies are the accepted principles of right or wrong governing the conduct of businesspeople.
F
Heckscher-Ohlin theory stresses that comparative advantage arises from differences in productivity.
F
International businesses cannot gain economic advantages by making payments to corrupt government officials.
F
Mercantilist doctrine advocates unrestricted free trade between countries.
F
Porter's theory of national competitive advantage recommends unrestricted free trade between countries.
F
Societal business ethics are divorced from personal ethics.
F
The Friedman doctrine is the belief that ethics are nothing more than a reflection of culture and therefore, a firm should adopt the ethics of the culture in which it is operating.
F
The ethical obligations of a multinational corporation toward employment conditions, human rights, environmental pollution, and the use of power are always clear-cut.
F
The utilitarian approach to ethics is a straw man approach to business ethics that has some inherent value, but is unsatisfactory in important ways.
F
To establish moral intent, managers need to stand in the shoes of a stakeholder and ask how a proposed decision might impact that stakeholder.
F
To foster ethical behavior, many businesses draft a code of ethics, which is an informal statement of the ethical priorities the company follows.
F
XYZ Toys manufactures and sells small quantities of each of its products, but it can still benefit from economies of scale.
F
The _____ outlawed the paying of bribes to foreign government officials to gain business.
Foreign Corrupt Practices Act
____ arguments suggest that improving working conditions beyond the level required by the law and necessary to maximize employee productivity will reduce profits and are therefore not appropriate.
Friedman's
Companies can strengthen the _____ of employees by committing themselves to not retaliate against employees who complain about unethical actions.
Moral courage
Which of the following was designed to allow GM to operate ethically in South Africa as long as the company did not obey the apartheid laws in its own South African operations?
Sullivan principles
A country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it.
T
A key assumption in the Heckscher-Ohlin theory is that technologies are the same across countries.
T
According to Paul Samuelson's critique, a poor country will rapidly improve its productivity if a rich country enters into a free trade agreement with it.
T
According to the new trade theory, firms that establish a first-mover advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.
T
An individual with a strong sense of personal ethics is less likely to behave in an unethical manner in a business setting.
T
Building an organization culture that places a high value on ethical behavior requires incentive and reward systems.
T
Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable.
T
Ethics officers are hired by many businesses to make sure that all employees are trained to be ethically aware and that ethical considerations enter the business decision-making process at all levels of the organization.
T
Factor endowments refer to the extent to which a country is gifted with such resources as land, labor, and capital.
T
From a profit perspective, it makes sense for firms to disperse their productive activities to those countries where they can be performed most efficiently.
T
Heckscher-Ohlin theory supports the case for unrestricted free trade between nations.
T
In a business setting, noblesse oblige is taken to mean benevolent behavior that is the responsibility of successful enterprises.
T
Milton Friedman's basic position is that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.
T
New trade theorists stress the role of luck in giving a firm first-mover advantages.
T
Social responsibility refers to the idea that businesspeople should favor decisions that have both good economic and social consequences.
T
Some of the arguments made by the product life-cycle theory seem ethnocentric and increasingly dated when viewed from an Asian or European perspective.
T
The Foreign Corrupt Practices Act was amended to allow "facilitating payments" to secure contracts that would not otherwise be secured.
T
The Sullivan principles mandated that GM could operate in South Africa as long as the company did not comply with and promoted the abolition of apartheid laws.
T
The simple model of free trade assumed away transportation costs between countries.
T
The theories of Smith and Ricardo show that a country should engage in international trade, even for products that it is able to produce for itself.
T
What is considered normal business practice in one country may be considered unethical in other countries.
T
Which of the following observations about the Foreign Corrupt Practices Act is true?
The act outlawed the paying of bribes to foreign government officials to gain business.
Often, the code of ethics draws heavily upon documents such as the _____, which itself is grounded in Kantian and rights-based theories of moral philosophy.
UN
Miranda is a cultural relativist, which means she likely believes
a firm should adopt the ethics
The righteous moralist suggests that
a multinational's home-country
_____ are the accepted principles of right or wrong governing the conduct of businesspeople.
business ethics
According to the Friedman doctrine,
businesses should not undertake
Which of the following balance-of-payment accounts records onetime changes in the stock of assets?
capital account
What is the term for a company's formal statement of the ethical priorities it expects all of its employees to follow?
code of ethics
The _____ obliges member states to make the bribery of foreign public officials a criminal offense and excludes facilitating payments made to expedite routine government action from the convention.
convention on combating bribery of foreign public officials
A multinational company is accused of paying bribes to the government of a host country to obtain permission to build a production factory. The public relations manager of the company defends the company's actions as being ethically sound; he states that in the host country, paying bribes to government officials is the accepted norm and is in keeping with the social practices in the host country. The public relations manager is using which of the following philosophical doctrines to defend the actions of the company?
cultural relativism
According to the _____ point of view, a firm should adopt the ethics of the culture in which it is operating.
cultural relativism
Child labor is permitted and widely employed in Country X. A multinational company entering Country X decides to employ minors in its subsidiary, even though it is against the multinational's home-country ethics. Which of the following approaches to business ethics would justify the actions of the multinational company?
cultural relativism
In its extreme viewpoint, _____ suggests that if a culture supports slavery, it is all right to use slave labor in the country.
cultural relativism
Which of the following is an example of an external stakeholder?
customers
Walmart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors. This allows Walmart to offer greater discounts to its customers. In this case, Walmart benefits from
economies of scale
____ are unit cost reductions associated with a large scale of output.
economies of scale
It is in the best interest of prospective employees to find out all they can about the
ethical climate in an organization
The Heckscher-Ohlin theory predicts that countries will
export those goods that make intensive use of factors that are locally abundant.
A firm's _____ include customers, suppliers, and lenders.
external stakeholders
Which of the following is one of the four attributes present in Porter's diamond?
factor endowments
Which of the following observations is consistent with Michael Porter's theory of national competitive advantage?
factors such as domestic demand
Ethical dilemmas exist because many real-world decisions involve
first second and third
An international U.S.-based company sets up a production unit in a developing country with poor environmental regulations. This contributes to the
global tragedy of the commons
Factor endowments refer to the extent to which a country
has such resources as land, labor, and capital
Grady works at a fast food restaurant. One day he noticed a co-worker giving free food to a friend. He was unsure about what to do. Grady most likely decided to follow the example of
his supervisor
Identify the correct statement about the rights theories.
human beings
According to the naive immoralist,
if firms in a host nation do not follow ethical norms then the manager of a multinational should also not follow ethical norms there.
Which of the following statements is true of the Leontief paradox?
it raised questions
_____ supports the idea that countries should export more than they import.
mercantillism
Which of the following enables managers to walk away from a decision that is profitable, but unethical?
moral courage
______ enables managers to walk away from a decision that is profitable but unethical.
moral courage
_______ means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder.
moral imagination
Establishing ________ involves a business resolving to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated.
moral intent
Diminishing returns to specialization occur when
more units of resources
A British firm that sets up production units in China is accused of releasing untreated chemical waste into water bodies. The manager of the firm defends the firm stating that, factories in China set up by French and American firms also release untreated chemical waste into water bodies. What approach to business ethics is the manager using?
naive immoralist
A ________ asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.
naive immoralist
Which of the following is an example of a basic factor that a nation will possess as proposed by Porter?
natural resources
The commercial aircraft industry can support only a limited number of firms, largely because the existence of established firms would make it difficult to be competitive. This is a basic tenet of
new trade theory
Which of the following is a theory that can be used to justify limited government intervention to support the development of certain export-oriented industries?
new trade theory
Which of the following theories stress the role of luck, entrepreneurship, and innovation in the production and export of a good or service by the firms in a country?
new trade theory
BP, one of the world's largest oil companies, has made it part of the company policy to undertake "social investments" in the countries where it does business. There was no economic reason for BP to make this social investment, but the company believes it is morally obligated to give something back to the societies that have made its success possible. BP's actions are an example of
noblesse oblige
Which of the following, in a business setting, is taken to mean benevolent behavior that is the responsibility of successful enterprises?
noblesse oblige
Which of the following refers to the values and norms that the employees of an organization share?
organization culture
A country's balance-of-payments accounts keep track of the
payments to and receipts from
The theory of comparative advantage suggests that trade is a _____ game in which all countries that participate realize economic gains.
positive-sum
Which of the following is a reason managers working abroad in multinational firms may behave in a manner that is unethical?
psychological and geographical distances of a foreign subsidiary from the home office
According to the _____, even if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should maintain the standards of the company's home country.
righteous moralist
The idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences is known as
social responsibility
Facilitating payments are also known as
speed money
Business ethics that either deny the value of business ethics or apply the concept in a very unsatisfactory way are termed
straw man
_____ approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate ethical decision making in a multinational enterprise.
straw man
According to Ricardo's theory of comparative advantage, a country should produce goods
that it produces most efficiently
In the international business setting, one of the most common ethical issues involves
the moral obligation
What will happen, according to Paul Samuelson's critique, if a rich country enters into a free trade agreement with a poor country?
the poor country will rapidly improve its productivity
Professor Baldwin believes that early in the life cycle of a U.S. product, demand in other advanced countries is limited to high-income groups. Consequently, it is seldom worthwhile for firms in those countries to start producing the product. This view conforms to
the product life-cycle theory
Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of which of the following?
they may be based in a culture
The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation.
tragedy of the commons
The _____ approaches to ethics hold that the moral worth of actions or practices is determined by their consequences.
utilitarian
