Ch4 1 - practice questions PDF

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1. Ethical strategies are the accepted principles of right or wrong governing the conduct of businesspeople. ฀ ฀ True False 2. What is considered normal business practice in one country may be considered unethical in other countries. ฀ ฀ True False 3. In an international business setting, the most common ethical issues involve employment practices, human rights, environmental regulations, corruption, and the moral obligation of multinational companies. ฀ ฀ True False 4. Basic human rights are respected by almost all nations. ฀ True False

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5. Rights that are taken for granted in developed nations, such as freedom of association, freedom of speech, freedom of assembly, and so on, are universally accepted. ฀ ฀ True False 6. The Sullivan principles mandated that GM could operate in South Africa as long as the company complied with the apartheid laws. ฀ ฀ True False 7. Myanmar has one of the worst human rights records in the world. ฀ True False

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8. Nearly all developing nations have substantial regulations governing the emission of pollutants, the dumping of toxic chemicals, the use of toxic materials in the workplace, and so on. ฀ ฀ True False 9. The 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. ฀ ฀ True False 10. Corporations can contribute to the global tragedy of the commons by not pumping pollutants into the atmosphere or dumping them in oceans or rivers. ฀ ฀ True False 11. International businesses cannot gain economic advantages by making payments to corrupt government officials. ฀ ฀ True False 12. The Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business. ฀ ฀ True False 13. The Foreign Corrupt Practices Act originally allowed "facilitating payments" to secure contracts that would not otherwise be secured. ฀ ฀ True False 14. Facilitating payments are also known as speed money or grease payments. ฀ True False

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15. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member states to make the bribery of foreign public officials a criminal offense. ฀ ฀ True False 16. Noblesse oblige refers to payments that ensure receiving the standard treatment that a business ought to receive from a foreign government. ฀ ฀ True False 17. Social responsibility refers to 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. ฀ ฀ True False 18. When multinationals use their power in a positive way to increase social welfare, it is ethical. ฀ True False

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19. The ethical obligations of a multinational corporation toward employment conditions, human rights, environmental pollution, and the use of power are always clear-cut. ฀ ฀ True False 20. Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable. ฀ ฀ True False 21. An individual with a strong sense of personal ethics is less likely to behave in an unethical manner in a business setting. ฀ ฀ True False 22. Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics. ฀ ฀ True False 23. A firm's organizational culture refers to the values and norms that are shared among employees of an organization. ฀ ฀ True False 24. The Enron debacle indicates that an organizational culture can legitimize behavior that a society would judge as unethical. ฀ ฀ True False 25. Employees in a business often take their cue from business leaders, and if those leaders do not behave in an ethical manner, they might not either. ฀ ฀ True False 26. 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. ฀ ฀ True False 27. Cultural relativism 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. ฀ ฀ True False 28. According to the righteous moralist, 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. ฀ ฀ True False 29. The naive immoralist claims that a multinational's home country standards of ethics are the appropriate ones for companies to follow in foreign countries. ฀ ฀ True False

30. Most moral philosophers see value in utilitarian and Kantian approaches to business ethics. ฀ True False

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31. The utilitarian approaches to ethics hold that the moral worth of actions or practices is determined by their consequences. ฀ ฀ True False 32. It typically is fairly easy to measure the benefits, costs, and risks of a course of action. ฀ True False

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33. An advantage of utilitarianism is that the philosophy allows for the consideration of justice. ฀ True False

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34. Rights theories recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures. ฀ ฀ True False 35. A just distribution is one that is considered fair and equitable. ฀ True False

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36. According to Rawls, inequalities can be just if the system that produces inequalities is to the advantage of everyone. ฀ ฀ True False 37. Talking with prior employers regarding someone's reputation is a good way to discern a potential employee's ethical predisposition. ฀ ฀ True False 38. Building an organization culture that places a high value on ethical behavior requires incentive and reward systems. ฀ ฀ True False 39. A firm's stakeholders are individuals or groups that have an interest, claim, or stake in the company, what it does, and how well it performs. ฀ ฀ True False 40. Companies can strengthen the moral courage of employees by committing themselves to retaliate against employees who exercise moral courage, say no to superiors, or otherwise complain about unethical actions. ฀ ฀ True False 41. Identify the incorrect statement regarding ethical issues in international business. ฀ ฀ A.They are often rooted in the fact that political systems, law, economic development, and culture of nations vary significantly. B. Human rights and environmental regulations are some of the common ethical issues. C. Ethical practices of all nations are similar in nature. D Managers in multinational firms need to be particularly sensitive to differences in business practices . because they work across national borders. 42. To guard against abuse of employment practices in other nations, multinationals should do all of the following except: ฀ ฀ A. establish minimal acceptable standards that safeguard the basic rights and dignity of employees. B.adhere to working conditions of the host country if they are clearly inferior to those in a multinational's C. audit foreign subsidiaries and subcontractors on a regular basis to make sure established standards are met. D. take action to correct unacceptable behavior.

43. 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? ฀ ฀ A. The righteous moral system B. Sullivan principles C. Noblesse oblige D. Cultural relativism 44. Identify the incorrect statement pertaining to foreign multinationals doing business in countries with repressive regimes. ฀ ฀ AInward investment by multinationals can be a force for economic, political, and social progress that . ultimately improves the rights of people in repressive regimes. records of developed nations. C.Multinational investment cannot be justified on ethical grounds in some regimes due to their extreme human rights violations. D. Multinationals adopting an ethical stance can, at times, improve human rights in repressive regimes. 45. Identify the incorrect statement about environmental regulations. ฀ ฀ A. Environmental regulations are often lacking in developing nations. B C. Developed nations have substantial regulations governing the emission of pollutants, the dumping of toxic chemicals, etc. D. Inferior environmental regulations in host nations, as compared to home nation, can lead to ethical issues. 46. The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation. ฀ ฀ B. noblesse oblige C. ethical dilemma D. Friedman system 47. Which of the following observations about the Foreign Corrupt Practices Act is true? ฀

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B. There is enough evidence that it put U.S. firms at a competitive disadvantage. C. The act originally allowed for "facilitating payments." D. The Nike case was the impetus for the 1977 passage of this act. 48. Facilitating payments are: ฀

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B. a direct violation of the Foreign Corrupt Practices Act. C. permitted so long as they designed only to gain exclusive preferential treatment. D. used to secure contracts that would otherwise not be secured. 49. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions excludes: ฀ ฀ A. speed payments to secure contracts that would otherwise not be secured. B. grease payments to gain exclusive preferential treatment. C. facilitating payments made to expedite routine government action. D. payments to government officials for special privileges. 50. Grease payments: ฀ ฀ A. are not the same as facilitating payments or speed money. C. are payments to gain exclusive preferential treatments. D. can be used to secure contracts that would otherwise not be secured.

51. 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: ฀ ฀ A. business ethics. C. ethical dilemma. D. social responsibility. 52. Which of the following, in a business setting, is taken to mean benevolent behavior that is the responsibility of successful enterprises? ฀ ฀ A. Sullivan's principles B. Ethical dilemma C. Tragedy of the commons D. Noblesse oblige 53. Ethical dilemmas exist because of all of the following reasons except: ฀ ฀ A. many real-world decisions are complex and difficult to frame. B. decisions may involve first, second, and third-order consequences that are hard to quantify. C. doing the right thing, or knowing what the right thing might be, is often far too easy. D. they are situations in which none of the available alternatives seem ethically acceptable. 54. Which of the following is not likely to lead to unethical behavior? ฀ ฀ A. An organizational culture that deemphasizes business ethics. B. A process that does not incorporate ethical considerations into business decision making. C. A strong personal ethical code governing the conduct of an individual. D. Pressure from the parent company to meet unrealistic performance goals. 55. Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of all of the following reasons except: ฀ ฀ A. they are away from their ordinary social context and supporting culture. B. they are psychologically and geographically closer to the parent company. C. they may be based in a culture that does not place the same value on ethical norms important in the manager's home country. D. they may be surrounded by local employees who have less rigorous ethical standards. 56. Which of the following refers to the values and norms that the employees of an organization share? ฀ A. Vision statement B. Cultural relativism C. Organization culture D. Power orientation

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57. According to _____, the social responsibility of business is to increase profits, so long as the company stays within the rules of law. ฀ ฀ A. the naive immoralist B. the righteous moralist C. cultural relativism D. the Friedman doctrine 58. According to the Friedman doctrine: ฀ ฀ A. ethics are nothing more than the reflection of culture. B. a multinational's home-country standards of ethics are inappropriate to follow in foreign countries. C businesses should not undertake social expenditures beyond those mandated by the law and required . for the efficient running of a business. D 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.

59. Cultural relativism suggests that: ฀ ฀ A.ethics are nothing more than the reflection of culture and that a firm should adopt the ethics of the culture in which it is operating. B. the only social responsibility of business is to increase profits. C. managers of a firm should not make decisions regarding social investments. D. a multinational's home-country standards of ethics are always appropriate to follow in foreign countries. 60. 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? ฀ ฀ A. Righteous moralist B. Cultural relativism C. The justice theory D. The rights theory 61. The idea that universal notions of morality transcend different cultures is implicitly rejected by: ฀ A. the righteous moralist. B. the naive immoralist. C. the Friedman doctrine. D. cultural relativism.

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62. The righteous moralist suggests that: ฀ ฀ A. ethics are nothing more than the reflection of culture. B. a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. C. the social responsibility of business is to increase profits, so long as the company stays within the rules of law. D 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. 63. According to the naive immoralist: ฀ ฀ A.a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. B. the social responsibility of business is to increase profits, so long as the company stays within the rules of law. C. ethics are nothing more than the reflection of a culture. D if firms in a host nation do not follow ethical norms then the manager of a multinational should also not . follow ethical norms there. 64. The utilitarian approach to business ethics suggests that: ฀ ฀ A. people should be treated as ends and never purely as means to the ends of others. B. the moral worth of actions or practices is determined by their consequences. C. people have dignity and need to be treated as such. D. human beings have fundamental rights and privileges that transcend national cultures. 65. According to the _____ approach, the best decisions are those that produce the greatest good for the greatest number of people. ฀ ฀ A. naive immoralist B. Friedman doctrine C. utilitarian D. Kantian 66. The Kantian approach to ethics suggests that: ฀ ฀ A. human beings have fundamental rights and privileges that transcend national boundaries. B. the moral worth of actions or practices is determined by their consequences. C. people should be treated as ends and never purely as means to the ends of others. D. ethics are nothing more than the reflection of culture.

67. Identify the correct statement about the rights theories. ฀ ฀ A. Human beings have fundamental rights and privileges that transcend national boundaries. B. The moral worth of actions or practices is determined by their consequences. C. People should be treated as ends never purely as means to the ends of others. D. Minimum levels of morally acceptable behavior should be established. 68. The United Nations' Universal Declaration of Human Rights, related to employment, upholds all of the following except: ฀ ฀ A. just and favorable work conditions. B. equal pay for equal work. C. prohibition of trade unions. D. protection against unemployment. 69. Article 1 of the United Nations' Universal Declaration of Human Rights states: "All human beings are born free and equal in dignity and rights." This best echoes: ฀ ฀ A. cultural relativism. B. Friedman doctrine. C. the righteous moralist approach. D. Kantian ethics. 70. Any person or institution that is capable of moral action such as a government or corporation is a(n): ฀ A. moral agent. B. utilitarian. C. righteous moralist. D. naive immoralist.

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71. Justice theories of business ethics focus on: ฀ ฀ A. the moral worth of actions or practices. B. minimum levels of morally acceptable behavior. C. fundamental rights and privileges that transcend national boundaries. D. the attainment of a just distribution of economic goods and services. 72. Under the veil of ignorance, everyone is imagined to be ignorant of: ฀ A. all of his/her particular characteristics. B. fundamental rights and privileges. C. the moral worth of actions or practices. D. the minimum levels of morally acceptable behavior.

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73. According to John Rawls: ฀ ฀ A. each person should be permitted the maximum amount of basic liberty compatible with a similar liberty for others. B. freedom of speech and assembly is the single most important component in a justice system. C. equal basic liberty is only possible in a pure market economy. D. inequalities in a justice system are not to be tolerated under any circumstance. 74. Rawls' philosophy that inequalities are justified if they benefit the position of the least-advantaged person is known as the: ฀ ฀ A. inequality principle. B. equity principle. C. difference principle. D. indifference principle. 75. Managers of international business can do all of the following to make sure ethical issues are considered in business decisions except: ฀ ฀ A. favor hiring and promoting people with a well-grounded sense of personal ethics. B. build an organizational culture that places a high value on ethical behavior. C. make sure that leaders within the business do not articulate the rhetoric of ethical behavior. D. develop moral courage.

76. External stakeholders: ฀ ฀ A. are individuals or groups who own the business. B. include all employees, the board of directors, and stockholders. C. typically comprise customers, suppliers, lenders, etc. D. are individuals or groups who work for the business. 77. Internal stakeholders: ฀ ฀ A. are individuals or groups who work for or own the business. B. do not have any claim on a firm or its activities. C. typically comprise customers, suppliers, lenders, governments, unions, etc. D. are individuals, except employees, board of directors, and stockholders that have some claim on the firm. 78. _____ means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder. ฀ ฀ A. Veil of ignorance B. Difference principle C. Moral imagination D. Noblesse oblige 79. Establishing _____ involves a business' resolve to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated. ฀ ฀ A. a veil of ignorance B. a difference principle C. moral imagination D. moral intent 80. Which of the following enables managers to walk away from a decision that is profitable, but unethical? ฀ ฀ A. Noblesse oblige B. Moral courage C. The difference principle D. The Friedman doctrine 81. What are business ethics? What is the relationship between business ethics and an ethical strategy? ฀

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82. What is considered normal practice in one country may be considered unethical in others. Discuss. ฀ ฀ ฀ ฀

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83. Discuss how companies such as Exxon, Kodak, and IBM helped improve human rights ...