1. One of the fortunate things about ethical issues in the global market is that they do not affect domestic operations.
a. True
b. False
2. Involving two or more cultures in ethical issues makes their resolution much more difficult.
a. True
b. False
3. Despite the poor economy, there is a backlash against globalization.
a. True
b. False
4. Countries at earlier stages of economic development often do not have a legal or ethical infrastructure in place to help
protect their citizenry.
a. True
b. False
5. MNCs based in the United States and in the European Union have played a key leadership role in world affairs.
a. True
b. False
6. For an MNC to be perceived as legitimate in the eyes of a host country, it must fulfill its social responsibilities.
a. True
b. False
7. Cultural differences between an MNC’s home country and its host country sometimes make it difficult to distinguish
between cultural issues and ethical issues.
a. True
b. False
8. A major ethical challenge of MNCs is that their firms’ cultures and philosophies may differ from that of their host
countries.
a. True
b. False
9. Most of the ethical problems that arise in international markets are very different than the moral issues encountered in
their home countries.
a. True
b. False
10. The ethical issues encountered in underdeveloped countries are often more acute than those found in industrialized
nations.
a. True
b. False
11. The Nestlé infant formula case is one in which a normal business practice in the firm’s home country proved to be
problematic in the host countries.
a. True
b. False
12. One of the ethical issues that is exacerbated by operating in developing countries is that the host nation’s citizens often
do not understand the technology being used, nor do they recognize its potential dangers.
a. True
b. False
13. Cheap labor factories that abuse women, children, and workers are called sweatshops.
a. True
b. False
14. MNCs often pay their employees in underdeveloped countries less than the average local wage.
a. True
b. False
15. The Alien Tort Claims Act has recently been interpreted by the U.S. Supreme Court to apply not only within the U.S.,
but outside it as well.
a. True
b. False
16. Corruption, at its core, is essentially an abuse of power.
a. True
b. False
17. According to Transparency International’s Corruption Perception Index (CPI), underdeveloped countries typically
rank low in corruption.
a. True
b. False
18. Cultural relativism is the best ethical guide for MNCs faced with a moral dilemma in its host country.
a. True
b. False
19. Global codes of conduct seek to establish domestic principles or guidelines by which businesses might follow while
doing business around the world.
a. True
b. False
20. One way to resolve ethical conflicts between an MNC’s home country and host country is to simply stop doing
business in the host country.
a. True
b. False
21. The opposite of cultural relativism is ethical imperialism.
a. True
b. False
22. The FCPA has had a significant impact on the way American firms do business globally.
a. True
b. False
23. International markets must be pursued if firms want to remain
a. competitive.
b. ethical.
c. free from corruption.
d. legitimate.
24. Peter Drucker has labeled the expanded global marketplace the
a. moral free space.
b. hypercompetitive economy.
c. transnational economy.
d. multinational competitive sphere.
25. Which of the following is not a feature of the global economy?
a. international movement of labor
b. more trade in goods than in services
c. international flow of capital
d. international laws governing fair trade
26. Growth of global business as a critical element in the world economy is known as:
a. legitimization.
b. internationalization.
c. market awareness.
d. multinationalism.
27. Economic integration of many formerly national economies into one worldwide economy is called
a. globalization.
b. world-system theory.
c. capitalization.
d. material diversification.
28. The criticism of their use of sweatshops has led MNCs to do all of these things except::
a. work to improve working conditions.
b. establish codes of conduct.
c. perform social or ethical audits.
d. create the Fair Labor Association (FLA).
29. The practice of offering something in order to gain an illicit advantage is called
a. offshoring.
b. bribery.
c. corruption.
d. grease payments.
30. The FCPA differentiates between:
a. domestic and international disputes
b. land ownership and building rental
c. bribes and grease payments
d. entry fees and corporate filing fees
31. Grease payments are used to get minor officials to do all the following except
a. what they are supposed to do.
b. what they are supposed to do, but faster.
c. what the FCPA wants them to do.
d. what they are supposed to do, but better.
32. The philosophy of Western industrialized nations and their MNCs includes all of these factors except:
a. economic growth.
b. decentralization.
c. efficiency.
d. free trade.
33. All of the following are issues that include an ethical dimension and are national security versus profits issues except
a. increasing
b. sweatshops
c. harboring terrorists.
d. mining of the ocean floor.
34. What questions were raised because of the Bhopal tragedy?
a. To what extent should MNCs maintain identical standards at home and abroad regardless of how lax laws are in
the host country?
b. How wise are laws that require plants to be staffed entirely by local employees?
c. Should certain kinds of plants even be located in developing nations?
d. All of these questions.
35. Hypernorms are justified if:
a. there is undisputed consensus the principle is universal.
b. they are supported by NGOs.
c. they are a component of well-known global industry standards.
d. All of these.
36. Ethical issues in the global environment include all of these except:
a. product safety.
b. human resource management.
c. production efficiency.
d. advertising practices.
37. Major strategies MNCs may use to conduct global business, but still maintain an ethical sensitivity include all of these
except:
a. modify or redesign products.
b. link ethics with global strategy.
c. suspend business activities in certain countries.
d. conduct ethical audits.
38. Regarding the infant formula controversy, Nestlé was criticized for all of these actions except:
a. distributing free samples.
b. providing purified water with the formula.
c. promoting bottle-feeding over breast-feeding.
d. the use of so-called “milk nurses.”
39. All of the following groups have criticized MNC labor practices except
a. social activist groups.
b. church groups.
c. labor unions.
d. grassroots organizations.
40. Which of the following is not a characteristic of sweatshops?
a. child labor
b. low pay
c. poor working conditions
d. forced prostitution
41. Which of the following is not an SA8000 standard proposed to improve sweatshop conditions?
a. prohibition on employing workers under a certain age
b. provision of a safe and healthy working environment
c. provision of educational opportunities for workers
d. prohibition of discriminatory practices
42. All of the following are proposed standards for the SA8000 program, to improve sweatshop conditions, except
a. allowing workers to form unions.
b. prohibiting corporal punishment.
c. providing retirement benefits.
d. limiting work to a maximum of 48 hours per week.
43. The Alien Tort Claims Act applies to:
a. actions that occur on foreign soil.
b. actions that occur on U.S. soil.
c. actions that occur in the host country where a U.S. firm is based.
d. actions that occur in a foreign country where a foreign firm is based.
44. U.S. based MNCs are increasingly interested in cases brought under the Alien Tort Claims Act because
a. they could allow the firm to recoup some costs of incorporating overseas.
b. they could allow the firm to sue foreign firms on a reciprocal basis.
c. they provide an insight in the customs of the host country.
d. they are increasingly being named as defendants in tort cases for doing business in countries with repressive
governments.
45. Which of the following is not an example of corruption?
a. bribery
b. paying for political favors
c. negotiating for the lowest price on a contract
d. paying protection money to the police
46. All of the following are arguments in support of bribery except
a. everybody does it.
b. it is normal practice in many countries.
c. it is a form of commission, tax, or compensation for doing business between cultures.