Question 1

Which of the following is a drawback of the utilitarian approach to business ethics?

Accepted Answer

It omits the consideration of justice.

Question 2

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:

Accepted Answer

organizational leadership.

Question 3

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?

Accepted Answer

Social responsibility

Question 4

Which of the following is most likely to be considered unethical business behavior?

Accepted Answer

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 5

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:

Accepted Answer

unrealistic performance expectations.

Question 6

The CEO of United Synergy Inc., a company in its embryonic stage, believes that unethical behavior will result in premature decline of the company. In order to ensure that the company starts operating in the most ethical manner, the CEO should:

Accepted Answer

hire employees with strong personal ethics.

Question 7

A multinational corporation that adopts the naive immoralist approach to ethics will most likely:

Accepted Answer

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

Question 8

Which of the following statements is true about the Universal Declaration of Human Rights?

Accepted Answer

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

Question 9

Which of the following is most likely to lead to unethical behavior in a business setting?

Accepted Answer

Expatriate managers working away from their ordinary social context and supporting culture

Question 10

Which of the following is the last step in ethical decision making?

Accepted Answer

Auditing of decisions

Question 11

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?

Accepted Answer

Righteous moralism

Question 12

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:

Accepted Answer

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

Question 13

Justice theories of ethics primarily focus on:

Accepted Answer

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

Question 14

Which of the following statements is true about ethical decision making?

Accepted Answer

In ethical decision making, managers need to ensure that a proposed decision does not violate the fundamental rights of any stakeholders.

Question 15

Adoption of which of the following ethical approaches is most likely to cause a company to use tools such as cost-benefit analysis and risk assessment to weigh all of the social benefits and costs of a business action?

Accepted Answer

Utilitarianism

Question 16

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:

Accepted Answer

an ethical dilemma.

Question 17

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?

Accepted Answer

The Friedman doctrine

Question 18

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?

Accepted Answer

Kantian ethics

Question 19

According to the rights theory of ethics:

Accepted Answer

fundamental human rights and privileges transcend national boundaries and cultures.

Question 20

The Foreign Corrupt Practices Act was subsequently amended to allow for speed money or grease payments, which are payments made to:

Accepted Answer

ensure a business receives the standard treatment that it ought to receive.

Question 21

Turnkey projects being short-term propositions can be disadvantageous for a firm if a country subsequently proves to be a major market for the output of the process that has been exported. The firm can get around this problem by:

Accepted Answer

taking a minority equity interest in the operation.

Question 22

Which of the following is an example of a first-mover advantage?

Accepted Answer

The ability to create switching costs that tie customers into one\'s products or services

Question 23

Which of the following is a drawback of licensing as a mode of entry into foreign markets?

Accepted Answer

Licensing does not give a firm tight control over manufacturing, marketing, and strategy.

Question 24

Which of the following is true of international firms considering foreign expansion?

Accepted Answer

If the firm\'s core competence is based on proprietary technology, entering a joint venture might risk losing control of that technology to the joint-venture partner.

Question 25

According to Christopher Bartlett and Sumantra Ghoshal, how can local companies differentiate themselves from foreign multinationals?

Accepted Answer

By focusing on market niches

Question 26

Which of the following is an advantage of franchising as a mode of entry into foreign markets?

Accepted Answer

The franchiser is relieved of many of the costs and risks of opening a foreign market on its own.

Question 27

When should a firm configure its value chain to maximize value at each stage?

Accepted Answer

When cost pressures are intense

Question 28

If a firm is considering entering a country where incumbents exist, and if the competitive advantage of the firm is based on the transfer of organizationally embedded competencies, skills, routines, and culture, what would be the preferable mode of entry?

Accepted Answer

Greenfield venture

Question 29

Small-scale entrants are more likely to capture first-mover advantages associated with switching costs.

Accepted Answer

False

Question 30

Which of the following is a disadvantage of large-scale entry into a foreign market?

Accepted Answer

Availability of fewer resources to support expansion in other desirable markets

Question 31

Exporting, as a mode of entry into foreign markets, does not help a firm achieve experience curve and location economies.

Accepted Answer

False

Question 32

The optimal mode of entry for a firm wanting to do international business depends on its core competency. A distinction can be drawn between firms whose core competency is in which of the following?

Accepted Answer

Technological know-how and management know-how

Question 33

In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational?

Accepted Answer

Turnkey project

Question 34

Which of the following is a reason why a relatively poor country may be an attractive target for inward investment?

Accepted Answer

Rapid economic growth

Question 35

Which of the following entry modes into a foreign market best serves a high-tech firm?

Accepted Answer

Wholly owned subsidiaries

Question 36

What triggers the conflict of interest over strategy and goals in joint ventures?

Accepted Answer

Shifts in relative bargaining power of venture partners

Question 37

In international business, an advantage of being a late entrant in a foreign market is the ability to:

Accepted Answer

ride on an early entrant\'s investments in learning and customer education.

Question 38

In terms of the various modes of entry into a foreign market, franchising is employed primarily by service firms, whereas licensing is pursued primarily by manufacturing firms.

Accepted Answer

True

Question 39

Spring, an American firm, recently acquired another company, Tazel Inc., in Indonesia. The high-level managers at Tazel quit because they could not cope with the domineering and straightforward approach of their American counterparts. This illustrates how acquisitions may fail because:

Accepted Answer

there is a clash between the cultures of the acquired and the acquiring firm.

Question 40

Which of the following is an advantage of acquisitions as a means of entering foreign markets?

Accepted Answer

They are quick to execute and help firms to rapidly build their presence in the target foreign market.

Question 41

Which of the following strategies is most likely to be pursued by a firm when there are strong pressures for cost reductions and demands for local responsiveness are minimal?

Accepted Answer

Global standardization strategy

Question 42

Which of the following refers to cost savings that come from acquiring knowledge from doing a task?

Accepted Answer

Learning effects

Question 43

Pressures for cost reduction are intense in firms:

Accepted Answer

in which consumers face low switching costs.

Question 44

Which of the following conditions is most favorable to reap gains from global scale economies?

Accepted Answer

Low demand for local responsiveness

Question 45

A global car manufacturer wants to start production in China. While catering to local responsiveness, what can the firm do to get scale economies?

Accepted Answer

Use common vehicle platforms and components across many different models.

Question 46

Cost reduction pressures tend to be particularly intense in industries that:

Accepted Answer

create products that serve universal needs.

Question 47

Which of the following strategies focuses on increasing profitability by customizing the firm\'s goods or services so that they provide a good match to tastes and preferences in different national markets?

Accepted Answer

Localization strategy

Question 48

Which of the following refers to the reductions in unit cost achieved by producing a large volume of a product?

Accepted Answer

Economies of scale

Question 49

A localization strategy involves some duplication of functions and smaller production runs.

Accepted Answer

True

Question 50

Which of the following is most likely to necessitate the delegation of marketing functions to national subsidiaries?

Accepted Answer

Differences in distribution channels

Question 51

The experience curve refers to systematic increases in production costs that have been observed to occur over the life of a product.

Accepted Answer

False

Question 52

Which of the following strategies is a firm most likely to pursue when it simultaneously faces both strong cost pressures and strong pressures for local responsiveness?

Accepted Answer

Transnational strategy

Question 53

If a value creation activity of a firm can take place in Mexico most effectively, then that activity of the firm must be based in Mexico. Firms that pursue such a strategy are most likely to realize:

Accepted Answer

location economies.

Question 54

Which of the following refers to a cooperative agreement between potential or actual competitors?

Accepted Answer

Strategic alliance

Question 55

According to Michael Porter, what are the two basic strategies for creating value and attaining a competitive advantage in an industry?

Accepted Answer

Differentiation and low-cost

Question 56

Firms that compete in the global marketplace typically face two types of competitive pressure:

Accepted Answer

pressures for cost reductions and pressures to be locally responsive.

Question 57

The value of a product to an average consumer is V, the average price that the firm can charge a consumer for that product is P, and the average unit cost of producing that product is C. For this scenario, which of the following is true?

Accepted Answer

The consumer surplus per unit is equal to V - P.

Question 58

One of the principal risks associated with a strategic alliance is that:

Accepted Answer

a firm can give away more than it receives.

Question 59

Xerox had a monopoly on photocopiers for several years as the technology underlying the photocopier was protected by strong patents. As it served a universal need, this favorable position led Xerox to pursue a(n):

Accepted Answer

international strategy.

Question 60

A firm\'s profitability is maximized when it:

Accepted Answer

ensures that it has the right organization structure in place to execute its strategy.

Question 61

On which of the following observations was Raymond Vernon\'s product life-cycle theory based?

Accepted Answer

The United States developed a very large proportion of the world\'s new products for most of the twentieth century and sold them first in the U.S. market.

Question 62

Which of the following is most likely an explanation for the Leontief paradox observed in the case of the United States?

Accepted Answer

The United States has a special advantage in producing new products made with innovative technologies.

Question 63

The difference between Ricardo\'s theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory:

Accepted Answer

argues that the pattern of international trade is determined by differences in national factor endowments.

Question 64

Which of the following is true of the relationship between trade and economic growth?

Accepted Answer

Countries open to international trade display higher growth rates than those that close their economies to trade.

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