Managing in a Global Business Environment - D080 UNIT 3

Internal auditing

A control in which the company investigates and evaluates employees' compliance with company policies and procedures

Sarbanes-Oxley Act

A law passed by Congress that requires the CEO and CFO to certify that their firm's financial statements are accurate.Law aimed at increasing level of ethical transparency within corporate America

UN Convention on Contracts for the International Sale of Goods (CISG)

United Nations treaty that applies to the international sales of commercial goods

Paris Agreement

Universal global climate deal aimed at keeping long-term global temperature increase at below 2°C

Which organization aims to develop a global intellectual property infrastructure?

WIPO Correct! This stands for World Intellectual Property Organization. Its goal is to develop a global IP infrastructure, build international respect for IP, and implement global policy related to IP.

The UCC Article 2 has rules governing the obligations of parties, specifically to the offer, acceptance, and...

performance of sales contracts. It also deals with unfair contract terms and rules for merchants.

collective environment

Understanding that the environment not only belongs to everyone to enjoy but is also everyone's shared responsibility

Many countries from several geographic regions are accused of dumping steel into the U.S. market at unfairly low prices. Which entity can the United States appeal to in order to correct this apparent market manipulation?

World Trade Organization Correct! The World Trade Organization is designed to judge potential market manipulations of its members. The United States has accused several countries around the world of dumping steel.

Kyoto Protocol of 1997

adopted on 11 December 1997. ... In short, the Kyoto Protocol operationalizes the United Nations Framework Convention on Climate Change by committing industrialized countries and economies in transition to limit and reduce greenhouse gases (GHG) emissions in accordance with agreed individual targets.

In the United States, two primary sources of law govern contracts:

the common law and the UCC

cronyism

the practice of favoring one's friends, especially in political appointments

Oil Pollution Act of 1990

U.S. law that strengthened the Environmental Protection Agency's ability to prevent and respond to oil spills

grease payments

A business practice of paying small inducements in order to expedite decisions and transactions

Which condition is part of a contract between international companies that are based in different nations?

A choice of law clause Correct! A choice of law clause specifies the laws and the jurisdiction under which international disputes will be settled. International businesses operating in different countries include such clauses in their contractual agreements to clarify ahead of time how disputes will be settled.

National Labor Committee

A nongovernmental organization involved in anti-sweatshop activities and the implementation of labor laws

whistleblower

A person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization

vertical structure of law

A structure of law where those at the top govern those at the bottom(United States, government branches have legitimate authority to create a rule of law system, and this authority is derived from the U.S. Constitution)All people are subject to domestic laws because they all live in a sovereign state. There is a legitimate law-creating authority at the top and people to be governed at the bottom

Intellectual Property

A work or invention that is the result of creativity to which one has rights and for which one may apply for a patent, copyright, or trademark

Discrepancies

Accounting errors that occur unintentionally These can occur for a wide variety of reasons, such as data points being wrongly entered or shrinkage (e.g., petty theft, mismanaged inventory, perishable goods going unrecorded).

The Environmental Protection Agency (EPA)

American agency established in the 1970s with the goal of monitoring the environmental practices of industry

National Environmental Policy Act (NEPA)

American environmental act from the 1970s that requires federal agencies to prepare environmental impact statements for every recommendation or report

United Nations Environment Programme (UNEP)

Branch of the United Nations that deals specifically with worldwide environmental problems

How should a company ensure that internal controls are effectively implemented?

By performing due diligence with procedures Correct! A company ensures that internal controls are effectively implemented by ensuring that procedures are clearly articulated and by consistently auditing employees to ensure compliance.

A company sells products that many have reported on social media to be culturally insensitive, and sales have decreased significantly since the negative publicity began. How are consumers responding to the publicity?

By voting with their purchases Correct! Consumers who do not believe the product is made in alignment with their values may not buy the product. Not buying the product is considered voting with one's wallet.

A company is reviewing how ethical consumerism is being addressed in the organization. It is hoping to improve its awareness of this factor and how it will influence future business decisions. How does this factor affect business decisions?

Companies must remember that their consumers may care about more than just the final product. Correct! Nearly half of North American consumers report punishing a company by not purchasing a product if they disagree with its manufacturing or other business practices.

antitrust laws

Consumer protection policy used to limit unfair business practices related to competition and control of prices

Worst Forms of Child Labour Convention, 1999

Convention (1999) that aimed to eliminate all practices of child slavery or those similar to slavery

The Maritime Labour Convention (MLC), 2006

Convention (2006) that set out a bill of rights for all seafarers, This convention sets out seafarers' rights to decent work conditions

Domestic Workers Convention, 2011

Convention (2011) aimed at protecting domestic workers from abuse and exploitation

Which term describes the normative beliefs and practices passed from generation to generation that help define a group of people?

Cultural norms Correct! Shared and integrated systems of beliefs and practices that are passed down through generations and characterize a cultural group are cultural norms.

Which action is used by companies wishing to avoid working with vendors who use sweatshops?

Developing and imposing a company internal code of conduct for vendor labor practices Correct! A code of conduct for vendors is contractually imposed, and often publicly posted, to ensure the reputation of the company is protected.

What does business ethics implicitly regulate?

Employee behavior Correct! Employers want employees to self-regulate so that when a stimulus appears they will take proper action in the interest of everyone involved, either directly or indirectly.

Which governmental entity was created to provide regulatory authority regarding pollution by industry?

Environmental Protection Agency Correct! The agency was created in 1970 to monitor industry and industry's environmental practices. The agency is not under any cabinet-level department.

World Intellectual Property Organization (WIPO)

Established by the United Nations to implement global policy related to intellectual property

conflict of interest (COI)

Ethical challenges in which multiple interests are at conflict with one another

copyright

Form of protection provided by the laws of the United States to the authors of "original works of authorship," including literary, dramatic, musical, artistic, and certain other intellectual works

A global company has warned managers that the country involved in their current business venture typically expects small payments to be made to government officials to expedite decisions and transactions. The company has encouraged managers to avoid this type of unethical practice. Which form of activity is the company concerned about?

Grease payments Correct! When a business engages in making small payments to government officials to expedite activities, it is a grease payment.

A coffee company received international criticism for an employee negatively responding towards a customer. The response was said to be racially motivated. The company needs to take swift action to improve how all employees in the organization are viewed by ethical consumers. Which course of action should the company take to meet this goal?

Have employees attend sensitivity training Correct! This is a solution that addresses the entire company and does not cause harm to any employees for any mistakes.

A company that released a new vehicle marketed as being environmentally friendly is found to have cheated when testing the vehicle's total emissions. The company would like to repair damage from the negative publicity by changing its image and catering more to ethical consumers. Which action should the company take to reach this goal?

Hire a new leader to send the message that practices have changed Correct! Establishing a new image and leader can help consumers trust the company again after practices have changed.

How is contract law structured as it applies to global business among nations?

Horizontal Correct! A horizontal business structure means that no nation is in a legally dominant position over another.

An American salesperson is attempting to do business in a Middle Eastern country. What is one of the major cultural issues the salesperson needs to understand about this part of the world?

It is more relationship-based than the United States. Correct! Compared to United States and other Western cultures, relationships, including those in business, are more important.

Which convention protects decent working hours for a cruise ship director who travels in international waters?

Maritime Labor Convention, 2006 Correct! The Maritime Labour Convention, sometimes called the "Seafarer's Bill of Rights," protects the rights of seafaring workers and is law for multiple countries. This convention protects decent working hours for a cruise ship director that travels in international waters.

irregularities

Misrepresentations of accounting data with the intention to defraud. To prevent irregularities, companies can implement numerous internal controls. These include segregating employee duties, assigning specific duties to each employee, rotating employee job assignments, using mechanical devices, and maintaining complete and accurate accounting records.

A business has experienced significant internal and external events, and the owner decides to respond effectively while maintaining the rules of behavior the company has always vocalized as being appropriate. Which component has guided this owner's response?

Organizational ethics Correct! Organizational ethics is how a business responds to stimuli in an ethical manner.

Which of these agreements or treaties was to combat increased temperatures of global climate change?

Paris Correct! This agreement was completed in 2016 to stop or at least slow global warming. Not all countries agreed to these goals.

Which intellectual property right describes a chemical company's filing on their innovative industrial process invention?

Patent Correct! A patent is filed to protect the right to an innovative invention, which must be a manufactured product, an apparatus, chemical composition, or a manufacturing process.

A farmers market has many vendors and consumers who all sell and buy the same produce at the same price. Which type of market is represented?

Perfect competition Correct! Since vendors can enter and exit the market freely with no barriers and the products are homogenous, it is a pure competition.

Which of the following will cause shrinkage in accounting?

Petty theft Correct! Discrepancies are unintentional accounting errors due to reasons such as incorrectly entered data and shrinkage. Petty theft, mismanaged inventory, and perishable goods going unrecorded can cause accounting shrinkage.

What makes the enforcement of United Nations Environmental Program regulations difficult?

Sovereign rights of nations Correct! The sovereign rights of nations preclude the United Nations from enforcing the regulations. United Nations compliance is normally voluntary and agreements tend to be nonbinding.

trademarks

Protection for any word, name, symbol, device, or any combination used in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others

patents

Protects inventions and improvements to existing inventions for a limited period of time in exchange for detailed public disclosure of those inventions

A sole, national telephone company was found violating antitrust laws and was forced to separate into regional companies. What caused the violation of the antitrust laws?

Reduced competition Correct! Antitrust laws are enacted to protect consumer's rights to competition in the marketplace. The sole, national company was a monopoly, and no competition occurred.

A major footwear brand company is contracting the manufacturing of its products to a contractor's manufacturing plant overseas. The footwear company has been accused of turning a blind eye to sweatshop practices at other overseas contract locations before. How should the footwear company ensure that the contractor will comply with the standards set forth in the code of conduct that explicitly prohibit this practice?

Require that the factories be available for inspections Correct! Making the factories available for inspections and audits, sometimes unannounced, is a best practice to ensure compliance with the code of conduct.

A company requires one employee to be responsible for maintaining a machine. Another employee is responsible for maintaining accounting records for that machine. Which internal control has the company implemented?

Segregating duties Correct! Irregularities are intentional accounting errors with the purpose to defraud, and this action is used as an internal control to prevent irregularities.

Which type of duty is required to take care of the collective environment across the nation?

Shared Correct! Nation states and industry have a shared responsibility to take care of the collective environment of the nation. Collectively, both can accomplish more.

Cultural norms

Shared, sanctioned, and integrated systems of beliefs and practices that are passed down through generations and characterize a cultural group

horizontal structure

Structure of law where neither party is in a legally dominant position over the other (international law or law between sovereign states)

What did the Worst Forms of Child Labor Convention, 1999 define?

The age at which a person becomes an adult Correct! The Worst Forms of Child Labor Convention defines a child as an individual younger than 18 years old.

A global buyer reviews a company's ethical profile and the social responsibility section of its annual report. Understanding that the company's values match the buyer's principles, the buyer purchases the company's products. Which action did the buyer perform regarding the purchase of the company's products?

The buyer practiced ethical consumerism. Correct! When a person evaluates a company's values and then makes purchases from the company based on the person and company's matched values, this is ethical consumerism.

Which two primary sources of law govern contracts in the United States?

The common law and the Uniform Commercial Code Correct! Common law comes from custom and from precedents set by other court decisions. The Uniform Commercial Code provides some a standardized laws and regulations for commercial transactions such as sales. They are the two primary sources of law that govern contracts in the United States.

Sherman Antitrust Act

The first American antitrust policy. Established in 1890, it dealt with limiting the power of price-controlling cartels

Which result occurs when a legally enforceable contract between two businesses from different countries is broken?

The party who has been affected can seek damages. Correct! When a legally enforceable contract is broken, the party who has been affected can seek damages so the business can be made whole as if the breach of contract did not occur.

internal controls

The redundancies that are build into a system to make certain that it accurately maintains material statements

What is the purpose of internal controls?

To ensure the accuracy of a system's performance Correct! Internal controls are built into a system to help guarantee the accuracy and reliability of the financial and accounting information. Internal controls should ensure systems run efficiently, effectively, and accurately and that they reduce accounting misstatements.

What is the agreement that the World Trade Organization has between its member nations that governs all intellectual property laws?

Trade-Related Aspects of Intellectual Property Rights (TRIPS)Correct! This agreement by the WTO governs all IP laws

Westerners tend to trust the system, whereas non-Westerners are...

cemented by personal honor, filial duty, friendship, or long-term mutual obligation.

The EU has a...

centralized administrative system for antitrust enforcement

Consumers are likely to vote with their wallet against..

companies they believe to be unethical.

It is important to note that antitrust laws are also often referred to as

competition laws or antimonopoly laws

Paying bribes is relatively common in many countries, and bribes often take the form of......

grease payments, which are small inducements intended to expedite decisions and transactions.

Organizational ethics

how an organization ethically responds to an internal or external stimulus

A control

is a process of interlocking activities that use properly designed policies and procedures so ethics and compliance officers can do their due diligence—adequately investigating and enforcing given procedures.

antitrust enforcement in the United States is considered a...

matter of criminal law

Different cultures use radically different systems to get things done. Whereas Western cultures are..

primarily rule-based, most of the world's cultures are relationship-based.

The CISG applies to

the sale of goods between parties from countries that are signatories on this treaty. It applies to contracts for international sale of commercial goods.

antitrust laws are based on one basic objective:

to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up.