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Chapter 05

chapter 05.doc

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Department
Administrative Studies
Course Code
ADMS 3960
Professor
Brian Zeiler- Kligman

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International Business: Environments and Operations, 14e (Daniels et al.) Chapter 5 Globalization and Society 1) According to the text, which of the following has resulted from GE's Ecomagination initiative? A) rising profitability for many GE products B) increasing doubt among GE's foreign partners C) reducing investments by GE due to poor returns D) improving pollution levels near GE plants in China Answer: A Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 4 2) General Electric has focused on being more "green" in recent years most likely because ________. A) the industry has always looked to GE as a trend setter in green technology B) GE executives believe the firm can strategically align investor and environmental interests C) GE executives realize that the firm can save significant money through the use of solar technology D) the U.S. government has decided to use GE as a test case to see if the adoption of the Kyoto Protocol can actually work for a U.S. firm Answer: B Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 3 3) Which of the following statements about GE and its "Green is Green" movement is true? A) GE is responding in part to the fact that it is operating in many countries which require compliance with higher environmental standards than exist in the United States. B) GE has decided to develop new products that are environmentally friendly rather than adopt internal policies to reduce greenhouse gas emissions. C) GE has moved aggressively to reduce greenhouse gas usage internally but has not been able to develop commercially viable "clean" technologies. D) GE considered joining the U.S. Climate Action Partnership but decided the group was too radical in its approach to reducing greenhouse gas emissions. Answer: A Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 3 AACSB: Dynamics of the global economy 1 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4) Which of the following is NOT a key stakeholder group that a company must work to satisfy in order to survive in a global environment? A) employees B) competitors C) shareholders D) customers Answer: B Diff: 2 Skill: Concept Objective: 1 5) Which stakeholder group primarily wants additional sales and increased productivity? A) customers B) shareholders C) society at large D) government Answer: B Diff: 2 Skill: Concept Objective: 1 6) Which stakeholder group is most interested in trustworthy behavior by corporate executives and increased corporate taxes? A) shareholders B) society C) employees D) customers Answer: B Diff: 2 Skill: Concept Objective: 1 7) Which of the following statements is most likely true regarding relationships between MNEs and stakeholders? A) An MNE typically serves all stakeholder groups equally at any given time. B) No individual stakeholder group is powerful enough to cause the demise of an MNE. C) All stakeholders of an MNE have the same short-term and long-term goals and interests. D) The inability to adequately meet the long-term needs of all stakeholders increases the probability of an MNE failing. Answer: D Diff: 3 Learning Outcome: Define the fundamental concepts of international business Skill: Application Objective: 1 2 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 8) Monique has recently been hired as an accounts supervisor at Ballston Enterprises. She wants to understand Ballston's values and its expectations for employee behavior. Which of the following would most likely provide Monique with this information? A) mission statement B) code of conduct C) vision statement D) employee contract Answer: B Diff: 2 Skill: Application Objective: 1 9) All of the following are levels of moral development EXCEPT the ________. A) preconventional level B) autonomous level C) internalized level D) conventional level Answer: C Diff: 2 Skill: Concept Objective: 1 10) Which level of moral development involves an individual learning role-conformity from peers, parents, and laws? A) conventional B) principled C) autonomous D) preconventional Answer: A Diff: 2 Skill: Concept Objective: 1 11) Which of the following statements is most likely true about the postconventional level of moral development? A) Individuals learn what is moral but not why such behavior is moral. B) Individuals behave morally because they fear negative repercussions. C) Individuals learn how to conform to society's values through observation. D) Individuals behave morally because they believe such actions are right. Answer: D Diff: 2 Skill: Concept Objective: 1 3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 12) According to the teleological approach, individuals base moral decisions on ________. A) personal and social responsibilities B) consequences of an action C) cultural value systems D) opinions of peers Answer: B Diff: 2 Skill: Concept Objective: 1 13) Which of the following most likely complicates ethical behavior for firms that expand overseas? A) local laws and values B) expatriate management C) unstable financial settings D) international codes of conduct Answer: A Diff: 2 Learning Outcome: Explain how differences in culture affect the international business environment Skill: Concept Objective: 1 AACSB: Dynamics of the global economy 14) Which of the following is a primary business objective for pursuing ethical behavior? A) avoiding industrial sanctions B) developing competitive advantages C) developing creative advertisements D) discouraging false commitments to the firm Answer: B Diff: 2 Skill: Concept Objective: 1 AACSB: Ethical understanding and reasoning abilities 15) Which of the following is a primary business objective for pursuing ethical behavior? A) replacing home-country technology with host-country technology B) minimizing federal investigations into corporate finances C) avoiding being perceived as a socially irresponsible firm D) imposing home-country behavior on the host country Answer: C Diff: 2 Skill: Concept Objective: 1 AACSB: Ethical understanding and reasoning abilities 4 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 16) Encouraging ethical behavior for the purpose of developing competitive advantages will most likely result in all of the following for a firm EXCEPT ________. A) strategic accomplishment B) consumer commitment C) industry resolutions D) financial success Answer: C Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 1 AACSB: Ethical understanding and reasoning abilities 17) Bantam Enterprises, a multi-national enterprise, makes significant efforts to avoid being perceived as socially irresponsible. What is the most likely reason for this? A) Social irresponsibility can lead to labor strikes by international unions. B) Socially irresponsible companies usually have fewer exports and more imports. C) Cultural barriers increase for companies that are socially irresponsible, which hinders expansion into additional countries. D) Social irresponsibility can lead to negative publicity from nongovernmental organizations, which could hurt a company's reputation. Answer: D Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Application Objective: 1 AACSB: Ethical understanding and reasoning abilities 18) Ethical dilemmas tend to be ________ for MNE managers than for domestic managers. A) more complicated B) less controversial C) easier to decide D) less common Answer: A Diff: 1 Learning Outcome: Explain how differences in culture affect the international business environment Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 5 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 19) A manager practicing relativism would most likely ________. A) adapt to local conditions instead of implementing home-country practices B) enforce home-country laws on host-country employees and suppliers C) refuse to change company policies and procedures to comply with local norms D) apply universal laws to each country despite local customs and traditions Answer: A Diff: 3 Skill: Application Objective: 2 AACSB: Ethical understanding and reasoning abilities 20) The belief that there are universal standards of behavior that all cultures should follow is called ________. A) humanism B) relativism C) normativism D) naturalism Answer: C Diff: 1 Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 21) A manager who refuses to bribe customs officials in a foreign country, even though it is morally acceptable in that country, is most likely to believe in which of the following perspectives on ethics? A) relativism B) normativism C) humanism D) existentialism Answer: B Diff: 2 Skill: Application Objective: 2 AACSB: Ethical understanding and reasoning abilities 22) Why is the argument that "anything legal is ethical" most likely insufficient? A) Everything that is unethical is also illegal. B) The law is an extremely efficient way to solve ethical dilemmas. C) Laws are frequently based on imprecisely defined moral concepts. D) Laws can never be changed; thus, rules for all possible ethical dilemmas are found in the law. Answer: C Diff: 3 Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 6 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 23) Which of the following is a reason for an MNE to base its standards for ethical behavior on a country's laws? A) The law embodies many of a country's moral beliefs but is an inadequate guide for proper conduct. B) The law contains unenforceable rules that are impossible for society to follow. C) The law represents a consensus derived from significant deliberation. D) The law is based on precisely defined moral concepts. Answer: C Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 24) An advocate of the legal-justification standard would most likely assert that the law ________. A) develops slowly in response to evolving societal dilemmas B) protects business activities that are unethical but not illegal C) contains enforceable rules that apply to everyone D) offers necessary moral flexibility for a society Answer: C Diff: 3 Skill: Application Objective: 2 25) Which of the following is an example of extraterritoriality? A) a U.S. subsidiary operating in China that is forced to follow some U.S. laws, even though China has no comparable laws B) a U.S. sweatshop operating in Thailand that does not follow U.S. labor laws but allows children to work 60 hours a week C) an MNE manager who, after working in the host country, tries to implement foreign practices in the home-country office D) a British subsidiary operating in Indonesia that maintains the same health and safety standards for its foreign factories that are required in Great Britain, even though the British government does not require it to use those standards Answer: A Diff: 3 Skill: Application Objective: 2 AACSB: Reflective thinking skills 7 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 26) A government that enforces its own laws on foreign subsidiaries of its domestic companies practices ________. A) civil law B) relativism C) externality D) extraterritoriality Answer: D Diff: 1 Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 27) What is the primary argument against extraterritoriality? A) increases opportunities for corporate bribery B) contradicts demands for increased globalization C) requires oversight by nongovernmental organizations D) prohibits firms from expanding into foreign territories Answer: B Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 2 28) The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________. A) utilitarianism B) extraterritoriality C) absolute advantage D) relative advantage Answer: B Diff: 2 Skill: Application Objective: 2 29) According to Transparency International, companies from which of the following countries are more likely to pay bribes? A) China B) Japan C) Singapore D) Belgium Answer: A Diff: 1 Learning Outcome: Explain how differences in culture affect the international business environment Skill: Concept Objective: 2 AACSB: Dynamics of the global economy 8 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 30) What is the primary concern regarding anti-corruption measures in the EU? A) resistance to an official anti-fraud commission B) inability to adopt a corruption definition C) lack of uniform laws across nations D) failure to conduct internal auditing Answer: C Diff: 2 Skill: Concept Objective: 2 31) Which of the following is NOT affected by the Foreign Corrupt Practices Act? A) companies registered in the U.S. B) foreign firms operating in U.S. territory C) foreign firms quoted on a U.S. stock exchange D) foreign companies managed by U.S. expatriates Answer: D Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 32) Which of the following statements describes an inconsistency of the FCPA? A) Facilitation payments are classified as bribery. B) Facilitation payments are excluded from the FCPA's definition of bribery. C) Payments to officials who are not directly responsible for carrying out the law are legal. D) Payments to foreign officials who carry out the law are considered illegal by provisions of the FCPA. Answer: B Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 33) A 1998 U.S. law that outlaws bribery payments by U.S. firms to foreign government officials is known as the ________. A) Anti-Bribery Act of 2004 B) Foreign Corrupt Practices Act C) Zero Tolerance Initiative D) Sarbanes-Oxley Act Answer: B Diff: 1 Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 9 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 34) Which of the following is permitted by the Foreign Corrupt Practices Act? A) a bribe paid by foreign firms operating in U.S. territories B) a bribe paid by U.S. firms operating in a foreign country that permits bribes to be paid C) a payment to a foreign government official to influence a customs official D) a payment to a customs official to clear legitimate merchandise Answer: D Diff: 2 Skill: Concept Objective: 2 AACSB: Ethical understanding and reasoning abilities 35) The OECD Convention against bribery is an example of a(n) ________. A) bilateral agreement developed for the EU B) agreement that targets the demand side of bribery C) agreement that targets the supply side of bribery D) UN Convention dominated by developing countries Answer: C Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 2 36) Which of the following is a voluntary effort by 150 multinational construction and natural- resources companies to end bribery? A) FCPA B) PACI C) OLAF D) SOX Answer: B Diff: 1 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 2 37) Meeting the needs of the present without compromising the ability of future generations to meet their own needs is known as ________. A) competitive advantage B) the Kyoto Protocol C) sustainability D) externality Answer: C Diff: 1 Skill: Concept Objective: 3 10 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 38) The 1997 Kyoto Protocol is best described as an agreement that requires ________. A) all members of the United Nations to reduce their greenhouse gas emissions by 5.2 percent B) the United States and Japan to control greenhouse gas emissions by 8% below 1995 levels C) the signatory countries to cut greenhouse gas emissions to 5.2 percent below 1990 levels D) the signatory countries to reduce greenhouse gas emissions by 80% by 2050 Answer: C Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 3 AACSB: Ethical understanding and reasoning abilities 39) Firms that operate in countries that have adopted the Kyoto Protocol are required to either reduce emissions or ________. A) purchase carbon credits from other firms B) file petitions to appeal the requirement C) cease manufacturing operations D) pay fines to the U.N. Answer: A Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 3 40) How has the Kyoto Protocol affected U.S. companies operating in Europe? A) U.S. companies are changing the way they do business in order to comply with new emissions standards in Europe. B) The Kyoto Protocol has not affected U.S. companies with subsidiaries in Europe because the U.S. has not signed the Kyoto Protocol. C) Before U.S. companies can open any more European subsidiaries, the U.S. government must sign the Kyoto Protocol. D) Because the United States is not a party to the Kyoto Protocol, U.S. companies may not operate in European countries that have signed the Kyoto Protocol. Answer: A Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 3 11 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 41) Medco Pharmaceuticals charges a market price for heart medication to distributors in Italy and a discounted price for the same medication to distributors in Bangladesh. Medco is most likely using ________. A) discounted pricing B) skimmed pricing C) penetrated pricing D) tiered pricing Answer: D Diff: 2 Skill: Application Objective: 4 42) Some countries reverse engineer pharmaceutical products ________. A) because they know that generic products are inherently better than branded products B) to lower the cost of certain drugs to the domestic market C) as a way to charge higher prices in domestic markets D) to comply with international patent laws Answer: B Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 4 AACSB: Ethical understanding and reasoning abilities 43) The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) ________. A) allows rich countries to produce generic versions of patented drugs without having to pay royalties to the patent holder B) permits developing countries to import generic products from other countries if they don't have the capacity to produce generic drugs C) requires pharmaceutical companies to provide low-cost vaccines and HIV/AIDS medications to developing countries D) requires tiered pricing for most essential drugs Answer: B Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 4 AACSB: Ethical understanding and reasoning abilities 12 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 44) Which of the following has been the primary reason for the recent growth of India's pharmaceutical industry? A) globalized supply chains B) tiered pricing guidelines C) patent-protection laws D) foreign investors Answer: C Diff: 2 Skill: Concept Objective: 4 45) Which of the labor issues identified by the Ethical Trading Initiative (ETI) receives the most attention? A) safe and hygienic working conditions B) reasonable living wages C) inhumane treatment D) child labor Answer: D Diff: 1 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 4 AACSB: Ethical understanding and reasoning abilities 46) The Ethical Trading Initiative (ETI)is primarily focused on ________. A) fair trade laws for undeveloped countries B) tiered pricing by pharmaceutical firms C) greenhouse gas emission reduction D) employment practices of MNEs Answer: D Diff: 2 Skill: Concept Objective: 4 47) According to the Ethical Trading Initiative (ETI), ________. A) child labor cannot be used unless there are no suitable alternatives B) employment need not be freely chosen in order to be acceptable C) no harsh or inhumane treatment of workers should be allowed D) MNEs are not responsible for establishing codes of conduct Answer: C Diff: 2 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 4 AACSB: Ethical understanding and reasoning abilities 13 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 48) Which of the following best supports the idea that MNEs should remain in countries that allow child labor? A) MNEs have a positive influence on government employment policies in most foreign countries. B) Many MNEs have substantially improved the working conditions of their foreign plants. C) MNEs are required to pay child workers more than local companies. D) Most MNEs employ local managers to handle cultural differences. Answer: B Diff: 3 Learning Outcome: Explain how differences in culture affect the international business environment Skill: Application Objective: 4 AACSB: Analytic Skills 49) Which of the following is NOT a likely reason for companies to act more ethically? A) Consumer boycotts may result from unethical corporate behavior. B) Irresponsible and unethical actions may lead to legal problems for MNEs. C) Unethical or irresponsible behavior can negatively impact employee morale. D) The U.N. Global Compact enforces fines on global firms that fail to act ethically. Answer: D Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 5 AACSB: Ethical understanding and reasoning abilities 50) Which of the following best explains Nike's quick response to criticism of unfair employment practices in developing countries? A) retaining employees B) improving public relations C) addressing product safety concerns D) cutting costs in order to improve profits Answer: B Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 5 AACSB: Ethical understanding and reasoning abilities 14 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 51) A guideline for responsible action by a firm in its operations worldwide is a(n) ________. A) code of conduct B) corporate monitoring policy C) education program D) honor code Answer: A Diff: 1 Skill: Concept Objective: 5 AACSB: Ethical understanding and reasoning abilities 52) The U.N. Global Compact is best described as a(n) ________. A) corruption mandate B) environmental initiative C) external code of conduct D) international trade guideline Answer: C Diff: 1 Skill: Concept Objective: 5 53) Which of the following is most important when designing an internal code of conduct? A) requesting U.N. oversight and intervention when necessary B) communicating the code of conduct only to employees C) reporting results to external stakeholders D) forming local polices for each subsidiary Answer: C Diff: 3 Learning Outcome: Discuss the role of ethics and social responsibility in international business Skill: Concept Objective: 5 AACSB: Ethical understanding and reasoning abilities 54) Which of the following is most important to the effectiveness of an internal code of conduct? A) ensuring that employees und
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