Question 1

The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.  True False

Accepted Answer

True

Question 2

Many of the ethical issues in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation.  True False

Accepted Answer

True

Question 3

The Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business.  True False

Accepted Answer

True

Question 4

\"Facilitating payments\" are payments to secure contracts that would not otherwise be secured.  True False

Accepted Answer

False

Question 5

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member-states and other signatories to make the bribery of foreign public officials a criminal offense.  True False

Accepted Answer

True

Question 6

The concept of corporate social responsibility (CSR) refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions.  True False

Accepted Answer

True

Question 7

The power of a multinational corporation is constrained not only by laws and regulations, but also by the discipline of the market and the competitive process.  True False

Accepted Answer

True

Question 8

Ethical dilemmas are situations in which only one of the available alternatives seems ethically acceptable.  True False

Accepted Answer

False

Question 9

Societal business ethics are not divorced from personal ethics.  True False

Accepted Answer

True

Question 10

An organizational culture that requires all decisions to be purely economic allows unethical behavior to flourish and persist.  True False

Accepted Answer

True

Question 11

According to Milton Friedman, businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.  True False

Accepted Answer

False

Question 12

According to the concept of cultural relativism, a firm, while operating in any host country, should adopt the ethics of the culture that is predominant in its home country.  True False

Accepted Answer

False

Question 13

A righteous moralist claims that while operating in a foreign country, a multinational company should follow the ethical standards of the host country.  True False

Accepted Answer

False

Question 14

The righteous moralist\'s approach to ethics is typically associated with managers from developed nations.  True False

Accepted Answer

True

Question 15

Kantian ethics 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.  True False

Accepted Answer

False

Question 16

According to John Rawls\'s difference principle, wide variations in income and wealth can be considered just if the market-based system that produces this unequal distribution also benefits the least-advantaged members of society.  True False

Accepted Answer

True

Question 17

Business leaders should use every relevant opportunity to stress the importance of business ethics and make sure that key business decisions not only make good economic sense but also are ethical.  True False

Accepted Answer

True

Question 18

The internal stakeholders of a company do not have an exchange relationship with the company.  True False

Accepted Answer

False

Question 19

Ethics officers act as an internal ombudsperson with responsibility for handling confidential inquiries from employees.  True False

Accepted Answer

True

Question 20

Which of the following refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.    A. strategy    B. goodwill    C. ethics    D. mission    E. vision

Accepted Answer

C. ethics

Question 21

The Sullivan principles attempted to fight against:    A. globalization.    B. apartheid laws.    C. legalization of facilitating payments.    D. democratic structures.    E. anti-dumping laws.

Accepted Answer

B. apartheid laws.

Question 22

Which of the following statements is true about the Sullivan principles?    A. They were widely opposed by U.S. firms, such as General Motors, operating in South Africa.    B. They promoted the abolition of apartheid laws.    C. It has been argued that they led to the violation of human rights in South Africa.    D. They were against the introduction of democratic elections in South Africa.    E. Western businesses that followed them were considered unethical.

Accepted Answer

B. They promoted the abolition of apartheid laws.

Question 23

Due to certain strict environmental and employment standards in its home nation, Taurus Inc. has shifted its operations to developing nations. Hence, the firm has now been able to gain competitive advantage by avoiding costly pollution controls. This strategic move of Taurus Inc. will be considered:    A. illegal.    B. ethical.    C. immoral.    D. uneconomical.    E. totalitarian.

Accepted Answer

C. immoral.

Question 24

Which of the following is most likely to be considered unethical?    A. Galaxy Inc. ceased its operations in some developing nations on account of low employment standards in those countries.    B. Unicorn Inc. sells its medicines at a lower price in less developed nations.    C. Capricorn Inc., a multinational company operating in developing nations, pays its labor 30 percent more than what the local competitors pay.    D. Centaur Inc. had to close down a production plant as the local management there had employed child labor.    E. Orion Inc. sends its waste products for disposal to a developing nation because the pollution control laws in its home country are much more strict than those in the developing nation.

Accepted Answer

E. Orion Inc. sends its waste products for disposal to a developing nation because the pollution control laws in its home country are much more strict than those in the developing nation.

Question 25

The term global commons refers to:    A. social norms and values that are common across the globe.    B. a group of nations that share similar ideologies on globalization.    C. natural resources from which everyone benefits but for which no one is specifically responsible.    D. common laws to be obeyed by companies involved in international business.    E. arrangements, like common currencies, between countries to simplify international trading.

Accepted Answer

C. natural resources from which everyone benefits but for which no one is specifically responsible.

Question 26

Which of the following occurs when a resource held jointly by all, but owned by no one, is overused by individuals, resulting in its degradation?    A. Social loafing    B. Cultural relativism    C. The tragedy of the commons    D. A deadweight loss    E. Capital deepening

Accepted Answer

C. The tragedy of the commons

Question 27

In the modern world, corporations can worsen the global tragedy of the commons by:    A. moving production to locations where they are free to pump pollutants into the environment.    B. imposing stringent environmental standards on developing countries.    C. creating common environmental and employment standards for all nations.    D. adopting costly pollution controls and in turn losing out on economic advantages.    E. adhering to civil laws rather than common laws in case of any environmental violations.

Accepted Answer

A. moving production to locations where they are free to pump pollutants into the environment.

Question 28

Brain Wing Inc. has won the bid to build airplanes for a host country government. However, the execution of the contract has been delayed due to certain unproductive, bureaucratic procedures in the less developed nation. In order to legally overcome this problem, Brain Wing Inc. could resort to the payment of:    A. customs duties.    B. excise taxes.    C. expatriation taxes.    D. speed money.    E. repatriation fees.

Accepted Answer

D. speed money.

Question 29

Which of the following 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?    A. Corporate dissonance    B. Class consciousness    C. Corporate dynamism    D. Social responsibility    E. Economies of scale

Accepted Answer

D. Social responsibility

Question 30

In a business setting, the term noblesse oblige refers to:    A. a benevolent behavior that is considered the responsibility of successful enterprises.    B. obliging a government official with the expectation of a reciprocal favor.    C. rich corporations abusing their power for private gain.    D. preferential treatment received by successful companies from governments.    E. tax exemptions that are given only to local companies but not to foreign companies.

Accepted Answer

A. a benevolent behavior that is considered the responsibility of successful enterprises.

Question 31

The practice of \"gift giving\" between the parties to a business negotiation is considered right and proper behavior in many Asian cultures. However, some Westerners view the practice as a form of bribery, and therefore unethical, particularly if the gifts are substantial. This reflects that:    A. notions of ethics are universal.    B. Asian countries are still under the influence of totalitarianism.    C. what is ethical depends on one\'s cultural perspective.    D. Asian cultures are more economically advanced.    E. there is unanimous agreement about accepted employment practices.

Accepted Answer

C. what is ethical depends on one\'s cultural perspective.

Question 32

Davis is the manager of a pharmaceutical manufacturing facility in a developing country. The manufacturing unit does not meet the acceptable standards of the manufacturing facility in the home nation. He knows that demanding a better manufacturing unit will raise the cost of the drugs mainly exported to other less developed countries, and hence its price. But he also realizes that by not demanding a better unit, the employees are prone to serious health issues. Davis is facing:    A. a role conflict.    B. the tragedy of the commons.    C. a positivity offset.    D. an ethical dilemma.    E. a negativity effect.

Accepted Answer

D. an ethical dilemma.

Question 33

Which of the following best exemplifies an ethical dilemma?    A. Javier has been doubtful about a car he purchased recently, and hence has been reading only good reviews about the car to console himself.    B. After seeing a whole new collection of phones at a store, Max is regretting the purchase of an outdated phone he made last month.    C. The manager at Almas Inc. has to make a vendor choice between his underqualified cousin and a highly experienced, trusted supplier.    D. Andrew is responsible for deciding whether he should upgrade the manufacturing unit with new machines and reduce costs for clients, or retain the impoverished manual labor.    E. Samantha has to decide whether the annual profits of the company should be distributed to the employees as a salary hike or in the form of non-monetary benefits.

Accepted Answer

D. Andrew is responsible for deciding whether he should upgrade the manufacturing unit with new machines and reduce costs for clients, or retain the impoverished manual labor.

Question 34

Which of the following is most likely to reduce the pressure on managers to violate their personal ethics?    A. Making managers work away from their ordinary social context and supporting culture    B. Keeping managers psychologically and geographically close to the parent company    C. Pressuring managers to meet unrealistic business goals    D. Adopting an organizational culture which emphasizes that all decisions should be purely economic    E. Pressuring managers to shun the concept of noblesse oblige

Accepted Answer

B. Keeping managers psychologically and geographically close to the parent company

Question 35

Unipeg Corporation has uniform high sales targets for its employees all across the globe, regardless of the environmental constraints in each market. Employees are penalized for any shortfall. This has caused many employees to falsify the values of their sales. In this context, the roots of unethical behavior can be traced to:    A. unrealistic performance expectations.    B. cultural differences of countries.    C. strong personal ethics among employees.    D. varying ethical standards in different nations.    E. national differences in factors of production.

Accepted Answer

A. unrealistic performance expectations.

Question 36

The CEO of Gold Chip Software engages in corruption and uses his power in the company to enrich himself and his family members. Consequently, his employees also engage in the same behavior. In this case, the roots of unethical behavior can be traced to:    A. unrealistic performance expectations.    B. organizational leadership.    C. noblesse oblige and social responsibility.    D. varying ethical standards in different cultures.    E. geographical distance between employees and the parent company.

Accepted Answer

B. organizational leadership.

Question 37

Which of the following explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business?    A. The Friedman doctrine    B. The Sullivan principles    C. Utilitarianism    D. Marxism    E. Kantian ethics

Accepted Answer

A. The Friedman doctrine

Question 38

Who asserted that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law?    A. Milton Friedman    B. Leon Sullivan    C. Karl Marx    D. Immanuel Kant    E. David Hume

Accepted Answer

A. Milton Friedman

Question 39

Which of the following straw men approaches to business ethics is best summarized by the maxim \"When in Rome, do as the Romans\"?    A. Cultural relativism    B. Just distribution    C. Kantian ethics    D. Righteous moralist    E. Sullivan principles

Accepted Answer

A. Cultural relativism

Question 40

Neon Synergy Inc. operates in three different countries, and is headed by a CEO who believes that the best approach to ethics is cultural relativism. In this context, which of the following statements is most likely to be true regarding Neon Synergy?    A. All business units of Neon Synergy will adopt a common standard of ethics irrespective of their location.    B. Business decisions made by managers of Neon Synergy will be solely based on the goal of maximization of societal good.    C. The business units of Neon Synergy will be empowered to adopt the standards of ethics followed in their respective host nations.    D. Neon Synergy will extensively advocate the idea that universal notions of morality transcend different cultures.    E. Neon Synergy will follow its home-country standards of ethics at all its foreign locations.

Accepted Answer

C. The business units of Neon Synergy will be empowered to adopt the standards of ethics followed in their respective host nations.

Question 41

Three Torque Inc., a U.S.-based multinational company, allows its managers to make facilitating payments in host countries to expedite government formalities. However, in countries where such payments are considered as unethical, the company restricts its managers from indulging in such activities. This behavior of the company illustrates the straw man approach of:    A. the righteous moralist.    B. cultural relativism.    C. ethnocentrism.    D. just distribution.    E. cultural convergence.

Accepted Answer

B. cultural relativism.

Question 42

Shangrilah Sandals is a manufacturing firm in a developing country, where it routinely uses grease payments to local officials to expedite overseas shipments. It has decided to open a plant in the United States, and has determined that it would not offer any facilitating payments to U.S. officials. Shangrilah\'s behavior illustrates the straw man approach of:    A. the righteous moralist.    B. cultural relativism.    C. ethnocentrism.    D. just distribution.    E. cultural convergence.

Accepted Answer

B. cultural relativism.

Question 43

A righteous moralist is most likely to claim that:    A. a multinational\'s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.    B. a firm should adopt the ethics of the culture in which it is operating.    C. people should be treated as ends and never purely as means to the ends of others.    D. human beings have fundamental rights and privileges that transcend national boundaries and cultures.    E. inequalities are justified if they benefit the position of the least-advantaged person.

Accepted Answer

A. a multinational\'s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

Question 44

Jonathan is the manager of his company\'s facilities in the Philippines. He believes in ensuring the exact same standards of working conditions, wages, and labor management in the Philippines as practiced by the company\'s corporate office in its home country, the United States. His policy does not always lead to profits because of the vast cultural differences between the two nations. Which of the following straw men approaches to ethics is most likely being adopted by Jonathan?    A. Naive immoralism    B. Cultural relativism    C. Righteous moralism    D. Sullivan principles    E. Just distribution

Accepted Answer

C. Righteous moralism

Question 45

A multinational corporation that adopts the naive immoralist approach to ethics will most likely:    A. lack cultural sensitivity.    B. demonstrate moral imperialism.    C. be highly ethical in its business in a host nation irrespective of the ethical standards followed by other corporations in that host nation.    D. believe that, in a host country, any action is ethically justified if everyone is doing it.    E. demonstrate a high degree of ethnocentrism.

Accepted Answer

D. believe that, in a host country, any action is ethically justified if everyone is doing it.

Question 46

The utilitarian philosophy for business ethics primarily focuses on:    A. applying home-country standards of ethics in foreign countries.    B. adopting the ethics of the culture in which a business operates.    C. maximizing business profits by increasing employee productivity.    D. ensuring justified treatment of any minority.    E. weighing the benefits, costs, and risks associated with a course of action.

Accepted Answer

E. weighing the benefits, costs, and risks associated with a course of action.

Question 47

Which of the following approaches to ethics holds that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences?    A. Ethnocentric    B. Utilitarian    C. Cultural relativist    D. Naive immoralist    E. Righteous moralist

Accepted Answer

B. Utilitarian

Question 48

Which of the following is a drawback of the utilitarian approach to business ethics?    A. It omits the consideration of justice.    B. It fails to consider the benefits, costs, and risks of a course of action.    C. It advocates moral imperialism and ethnocentrism.    D. It overemphasizes the significance of maximization of stockholder wealth.    E. It recognizes that actions have multiple consequences.

Accepted Answer

A. It omits the consideration of justice.

Question 49

Which of the following philosophies of ethics holds that people should be treated as ends and never purely as means to the ends of others?    A. Kantian ethics    B. The Friedman doctrine    C. Cultural relativism    D. Righteous moralism    E. Naive immoralism

Accepted Answer

A. Kantian ethics

Question 50

Which of the following is a violation of ethics according to Kantian philosophy?    A. Employing people to work at sweatshops    B. Treating people as ends rather than as means    C. Practicing superior standards of employment in the host country    D. Empowering people with fundamental rights and privileges    E. Treating employees as conscious moral beings

Accepted Answer

A. Employing people to work at sweatshops

Question 51

According to the theory of rights:    A. firms can pursue actions that violate fundamental rights in order to maximize profits.    B. collective good forms the basis for the moral compass that managers should use when making ethical decisions.    C. fundamental human rights and privileges transcend national boundaries and cultures.    D. people should be treated as means to the ends of others and never purely as ends.    E. firms that fail to maximize stockholders\' wealth violate fundamental rights and privileges.

Accepted Answer

C. fundamental human rights and privileges transcend national boundaries and cultures.

Question 52

Which of the following statements is true about the Universal Declaration of Human Rights?    A. This declaration provides different sets of fundamental rights and privileges for different cultures.    B. According to this declaration, it is unethical to employ child labor in sweatshops even if that happens to be common in some countries.    C. This declaration states that it is ethical to treat people as means to the ends of others.    D. According to this declaration, citizens of a nation have no duties to their community.    E. According to this declaration, people do not have a right to join trade unions for the protection of their interests.

Accepted Answer

B. According to this declaration, it is unethical to employ child labor in sweatshops even if that happens to be common in some countries.

Question 53

In stating that all human beings are born free and equal in dignity and rights and that they are endowed with reason and conscience and should act toward one another in a spirit of brotherhood, Article 1 of the Universal Declaration of Human Rights echoes:    A. the Friedman doctrine.    B. naive immoralism.    C. cultural relativism.    D. Kantian ethics.    E. teleological theory.

Accepted Answer

D. Kantian ethics.

Question 54

Justice theories primarily focus on:    A. minimizing the amount of political liberty permitted to each person.    B. the attainment of fair and equitable distribution of economic goods and services.    C. the attainment of maximum business profits.    D. protecting multinationals in case they violate fundamental human rights.    E. minimizing the amount of economic freedom permitted to each person.

Accepted Answer

B. the attainment of fair and equitable distribution of economic goods and services.

Question 55

Which of the following concepts was developed by John Rawls and posited that everyone is imagined to be oblivious to all of his or her particular characteristics, such as, race, sex, intelligence, nationality, family background, and special talents?    A. Tragedy of the commons    B. Naive immoralism    C. The Universal Declaration of Human Rights    D. Veil of ignorance    E. Difference principle

Accepted Answer

D. Veil of ignorance

Question 56

Which of the following concepts was developed by John Rawls and posited that everyone is imagined to be oblivious to all of his or her particular characteristics, such as, race, sex, intelligence, nationality, family background, and special talents?    A. Tragedy of the commons    B. Naive immoralism    C. The Universal Declaration of Human Rights    D. Veil of ignorance    E. Difference principle

Accepted Answer

D. Veil of ignorance

Question 57

Which of the following concepts was developed by John Rawls and posited that everyone is imagined to be oblivious to all of his or her particular characteristics, such as, race, sex, intelligence, nationality, family background, and special talents?    A. Tragedy of the commons    B. Naive immoralism    C. The Universal Declaration of Human Rights    D. Veil of ignorance    E. Difference principle

Accepted Answer

D. Veil of ignorance

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