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Chapter 09
Ethics and Globalization
True / False Questions
1. A less-developed nation is a country that lacks the economic, social, and technological
infrastructure of a developed nation.
2. A developed nation is a country that enjoys a high standard of living as measured by
economic, social, and technological criteria.
3. For organizations, international markets represent new customers as well as sources of
cheaper materials and cheap labor.
4. Utilitarianism is a theory in ethics that advocates making choices that offer the greatest
good for the greatest number of people.
5. According to the principles of utilitarianism, there is no accountability for individual actions
when one focuses on doing the greatest good for the greatest number of people.
6. The term "globalization" refers to the phenomenon that divided the world into two
opposing factions during the Cold War.
7. The term "globalization" has applications in commercial, economic, social, and political
environments.
8. Globalization refers to the expansion of international trade to a point where, across the
globe, regional trade blocs have overtaken national markets.
9. A multinational corporation is a company that provides and sells products and services
across multiple national borders.
10. Multinational corporations are also known as intranational corporations.
11. Multinational corporations include those corporations that generate products and/or
services in multiple countries and implement operational policies (marketing, staffing, and
production) that go beyond national boundaries.
12. The growth of multinational corporations, as a global phenomenon, has raised no ethical
issues.
13. Ethical relativism refers to a philosophy that dictates that individuals must only make
such choices that offer the greatest good for the greatest number of people.
14. Ethical relativism arises when a multinational company comes up against a policy that is
banned both in its own country and in the country with which it's doing business.
15. Globalization benefits corporations from economically advanced nations because access
to resources in developing nations enables lower production costs that equate to lower prices
and higher income standards for their customers.
16. The downside of globalization is that corporations are free to take full advantage of less
restrictive legal environments in developing countries.
17. Moving the ethical commitment of an organization to a global stage requires nothing
more than increasing the scale of the policies and procedures.
18. If there are no clear local ethical standards, companies find themselves tempted to take
maximum advantage of the less stringent laws and regulations of local markets.
19. The European Economic Community is an example of a regional trade bloc.
20. The financial strength of the Western nations has made developing nations more
amenable to accepting general standards of business practice.
21. In the guidelines he set down for organizations doing business in other countries, Richard
DeGeorge stated that it was acceptable for a company to harm the host country only if it served
the greatest good for the greatest number of people.
22. Richard DeGeorge fails to emphasize the importance of working with the local culture in
the guidelines he set down for organizations doing business in other countries.
23. According to Richard DeGeorge's guidelines for organizations doing business in other
countries, multinationals are responsible for redesigning the transfer of hazardous technologies
so that such technologies can be safely administered in host countries.
24. The global code of conduct is a general standard of business practice that can be applied
only to undeveloped countries in accordance with their local customs and social norms.
25. The guidelines set down by Richard DeGeorge for organizations doing business in other
countries were criticized because they only dealt with the issues of bribery, false advertising, and
the use of sweatshops in the production process.
26. Enforcing a global ethical standard would require all parties involved to agree on
acceptable standards of behavior and appropriate consequences for failing to abide by those
standards.
27. The UN Global Compact represents a commitment on the part of its members to promote
good corporate citizenship.
28. The UN Global Compact is a set of mandatory rules to which multinational corporations
are expected to adhere. Companies that fail to comply with these rules are blacklisted by the U.S.
Government.
29. The UN Global Compact is a voluntary corporate citizenship initiative endorsing 10 key
principles that focus on four key areas of concern: the environment, anticorruption, the welfare of
workers around the world, and global human rights.
30. The UN Global Compact deals exclusively with two key areas of concern: fair pricing and
customer satisfaction.
31. The UN Global Compact actively polices the behavior of multinational corporations.
32. The UN Global Compact relies on public accountability, transparency, and the enlightened
self-interest of companies, labor, and civil society to initiate and share substantive action in
pursuing the principles on which the Global Compact is based.
33. The UN Global Compact, which encourages organizations to make a voluntary
commitment to corporate citizenship, is widely recognized as the world's largest initiative of its
kind.
34. As per the labor standards of the UN Global Compact, businesses should uphold the
freedom of association and the effective recognition of the right to collective bargaining.
35. As per the UN Global Compact, businesses should support a precautionary approach to
environmental challenges.
36. The Organization for Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises represents a less governmental approach to the same issues featured
in the UN's nongovernmental Global Compact.
37. The guidelines set down by the Organization for Economic Cooperation and Development
are legally binding.
38. The principles and standards of organizational behavior set down by the UN Global
Compact cover more issues than the Organization for Economic Cooperation and Development
(OECD) Guidelines for Multinational Enterprises.
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39. The Organization for Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises were criticized because they failed to address consumer interests.
40. The Organization for Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises do not address the issue of taxation.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 09-05 Explain the OECD Guidelines for Multinational Enterprises.
Multiple Choice Questions
9-15
41. Less-developed nations are countries which:
42. _____ refers to ethical choices that consider the greatest good for the greatest number of
people.
43. Which of the following statements is true of utilitarianism?
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 09-01 Understand the ethical issues arising in global business.
44. Which of the following statements is true of globalization?
45. How has globalization affected the economy?
46. Globalization raises concerns about the:
47. Multinational companies are also known as _____.
48. _____ is a gray area in which a person's ethical principles are defined by the traditions of
his or her society, personal opinions, and the circumstances of the present moment.
49. Which of the following philosophical positions is adopted by multinational corporations
when working in countries whose laws and regulations are less restrictive than the one in their
own country?
50. A multinational company working in a less-developed nation will face ethical relativism
when:
51. Which of the following is an advantage of globalization?
