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Internationalization may be thought of as

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a "process by which firms increases their awareness of the influence of international activities on their future and establish and conduct transactions with firms from other countries

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Multinational corporations MNCs operate with

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offices, factories, and headquarters in more than one country

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most challenging situation for MNCs is when they

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are operating in so-called emerging nations, developing countries, or less-developed countries (LDCs)

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Firms face two major underlying challenges or problems as they operate in a multinational environment

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Corporate legitimacy and Differing philosophies

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The MNC seeks to optimize globally, while

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host government seeks to optimize locally

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Globalization is, according to Rosabeth Moss Kanter

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"one of the most powerful and pervasive influences on nations, businesses, workplaces, communities, and lives...,"

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Management and control of global operations, Two issues are important here

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Organizational structure and design and Human resource management

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The current standards for SA8000 may be summarized as follows

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Child labor, Forced labor, Health and safety, Freedom of association and right to collective bargaining, Discrimination, Discipline, Working hours, Compensation, Management systems

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One of the primary tools TI uses to combat corruption is its now-famous

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annual corruption perception index CPI

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One of the greatest challenges that businesses face while operating in foreign countries is

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achieving some kind of reconciliation and balance in honoring both the cultural and moral standards of their home and host countries

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Four major strategies or categories of action that could help MNCs conduct global business while maintaining an ethical sensitively in their practices include

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Global codes of conduct, Linking ethics with global strategy, Suspension of business activities in certain countries, Ethical impact statements and audits

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The eight principles identified and described standards of conduct in the following categories:

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fiduciary, property, reliability, transparency, dignity, fairness, citizenship, and responsiveness

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Two of the most widely used global standards are

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the UN global compact and the caux roundtable principles

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Ethical impact statements are

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an attempt to assess the underlying moral justifications for corporate actions and the consequent results of those actions

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The two ethical systems are the

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individualistic ethic of business and the collectivistic ethic of government

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Government influences business through

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regulation, taxation, and other forms of persuasion that we will consider in more detail in the next section

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Business influences the public through

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advertising, public relations, and other forms of communication

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Two major issues merit consideration before w examine some of the specific policy tools or mechanisms government uses to influence business

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Industrial policy and privatization

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Industrial policy

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"every form of state intervention that affects industry as a distinct part of the economy

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Privatization refers to the process of

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turning over to

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Two functions government might perform

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Producing a service and Providing a service

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Two issues are largely unresolved and so they continue to be discussed and debated

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Industrial policy and Privatization

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Government also influences

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business, albeit indirectly, by virtue of its transfer payments

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Four major reasons or justifications for regulations are typically offered

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Controlling natural monopolies, Controlling negative externalities, Achieving social goals, Other reasons

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Government regulations address two basic types of goals

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Economic and social

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Two different types of regulations

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Economic regulation and Social regulation

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Three effects are worthy of elaboration

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Innovation may be affected, New investments in plant and equipment may be affected, Small business may be adversely affected

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The basic idea behind deregulation has been to

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remove certain industries from the old-line economic regulations of the past

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Peter Drucker has labeled the expanded global marketplace the

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transnational economy

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Which of the following is not a feature of the global economy?

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international laws governing fair trade

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The process by which firms increase their awareness of the influence of international activities on their future and establish and conduct transactions with firms from other countries is known as

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internationalization

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The center of the controversy that aligns rich nations against poor nations is

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what the trade rules will be, and who will write the rules

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Moving jobs that have historically resided in the home country to a lower-cost host country is called

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offshoring

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The most challenging situation for an MNC to face is

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operating is less-developed countries

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To be viewed as legitimate in their host countries, MNCs must fulfill their social responsibilities, including all of the following except

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technological functions

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Which of the following is not a factor in a host country's perception of the legitimacy of an MNC?

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profitability of the firm

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The requirement for an MNC to take on local partners is referred to as

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creeping expropriation

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Which of the following is not one the broad issues facing MNCs in their relationships with host countries?

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religious and other traditional holidays

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There are three levels of sensitivity that MNCs should exhibit for the long-run national interests of less-developed countries. All of the following are levels of sensitivity except

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the need to modify marketing efforts to conform to local custom

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To resolve the infant formula controversy, Nestlé agreed to do all of the following except

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providing purified water with the formula

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Which of the following is not an SA8000 standard proposed to improve sweatshop conditions?

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provision of educational opportunities for workers

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U.S. based MNCs are increasingly interested in cases brought under the Alien Tort Claims Act because

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they are increasingly being named as defendants in tort cases for doing business in countries with repressive governments.

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All of the following are arguments in support of bribery except

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it is a way of providing needy foreigners with money they need.

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The Foreign Corrupt Practices Act

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makes it illegal for the representative of an American corporation to offer or pay officials of foreign governments for the purpose of getting or maintaining business

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Payment of a bribe implies some type of

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quid pro quo

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The position that advocates that an MNC should continue to follow its home country's ethical standards even while operating in another country is known as

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ethical imperialism

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The position that advocates that an MNC follow the host country's ethical standards is called

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ethical relativism

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Grease payments are all of following except

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monies given to high ranking officials

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The reason that the United States government passed anti-trust legislation was

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due to the anti-competitive practices of some large trusts

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Government's new role in its relationship with business during the New Deal era was one of

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restoring prosperity and promoting economic growth

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The clash of ethical systems between government and business is centered around

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individualist and collectivist ethics

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Which of the following is not a method that government uses to influence business?

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lobbying

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Arguments for industrial policy include all of the following except

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stifling innovation

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Arguments against industrial policy include all of the following except

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The need to rescue "sunset" industries

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Government influences business through all of the following nonregulatory methods except

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requiring equal employment opportunities be granted to job applicants

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Government payments to industries or groups with special qualifications are called

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subsidies

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Government attempts to persuade business to act in the public interest are called

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moral suasion

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Government regulations have been criticized for all the following reasons except

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being ineffective

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The primary reason for government regulation of business is

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market failure

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A market in which the economies of scale are so great that the largest firm has the lowest costs and is able to drive out competitors is called a(n)

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natural monopoly

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Government intervention in monopolistic industries is often brought about by

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anticompetitive practices

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Negative externalities are often referred to as

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social costs

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The newest type of social regulations is concerned primarily with

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security

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The dilemma of regulation is the tradeoff between

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effective control and the burden placed on firms

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The dilemma of deregulation is

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to enhance competition within the industry without sacrificing applicable social regulations

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Which of the following is not a concern expressed by executives about government involvement in business?

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U.S adults said government should do more

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Which of the following is not a U.S. preference on industrial policy?

answer

one that enables industrialization

ethics ch. 10 and 11 – Flashcards

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