Chapter 4
Managing Ethical and Social Responsibility Challenges in Multinational Companies
MULTIPLE CHOICE
1. International business ethics
a.
Present problems similar to domestic business ethics.
b.
Pertain to the rules and values that determine actions that companies should follow when
dealing with other companies.
c.
Pertain to those unique ethical problems faced by managers conducting business across
countries.
d.
None of the above
2. Which of the following statements is NOT TRUE regarding social responsibility?
a.
Social responsibility is not linked with business ethics.
b.
Refers to the idea that businesses have certain responsibilities to society beyond making
profits.
c.
Means that a company has to take into consideration various stakeholders when making
decisions.
d.
Is concerned with the ethical consequences of policies and procedures of the company as
an organization.
3. The ethical philosophies that consider actions as good or bad regardless of their outcomes are
a.
The teleological ethical theories.
b.
Utilitarianism.
c.
Deontological theories of ethics.
d.
None of the above
4. Utilitarianism, as a form of ethical philosophy,
a.
Argues that what is good or moral comes from acts that produce the greatest good for the
greatest number of people.
b.
Argues that actions by themselves have a good or bad morality regardless of their
consequences.
c.
Is one form of deontological ethical theory.
d.
Is a moral language proposed by Donaldson.
5. Which of the following statements are true about teleological ethical theories?
a.
The morality of an act comes from its consequences.
b.
Utilitarianism is one of the most popular teleological theory.
c.
Actions by themselves have a good or bad morality regardless of their consequences.
d.
All of the above are true.
6. Stealing a loaf of bread to feed a hungry family can be justified by which ethical theory?
a.
Social responsibility ethical theory
b.
Deontological ethical theory
c.
Moral languages
d.
Utilitarianism
7. Moral languages
a.
Are a form of deontological ethical theory.
b.
Focus on the consequences of actions rather than their worth.
c.
Describe the ways people think about general issues.
d.
Are used to explain ethical choices.
8. Moral languages include all of the following EXCEPT
a.
Virtue and vice.
b.
Self-control.
c.
Avoiding harm.
d.
Being ethical.
9. Multinationals that provide fair wages to their local employees are following which type of moral
language?
a.
Avoiding harm
b.
Ethical behavior
c.
Rights and duties
d.
Social contract
10. According to the text, the United Nations Declaration of Human Rights is an example of which of the
following?
a.
Convenient imperialism
b.
Transnational ethics
c.
European codes
d.
Moral language
11. Written ethical codes may include which of the following?
a.
Contracts
b.
International laws
c.
Laws of a country
d.
All of the above
12. Which of the following statements about bribes or questionable payments are true?
a.
Bribes to expedite government actions or to gain business advantages are common in
international business.
b.
Most countries have formal laws forbidding bribes or questionable payments.
c.
Enforceability of ethics varies in different countries.
d.
All of the above
13. The reason to know provisions of the FCPA is that it
a.
Is the easiest to enforce and observe.
b.
Probably encourages foreign bribery.
c.
Is a tricky component for US companies.
d.
Emphasizes the reasonable person concept.
14. According to the FCPA, U.S. managers are criminally liable
a.
Only for bribes that they pay directly to a foreign official.
b.
Only for bribes paid in the U.S. and not in other countries where it is common practice in
business dealings.
c.
For all bribes by employees or agents of the U.S. company even if the U.S. managers do
not know about them.
d.
For bribes paid by foreign agents, if managers know about them.
15. Which of the following payments would the Foreign Corrupt Practices Act allow?
a.
Payments made under duress to avoid injury or violence
b.
Small payments to encourage officials to do their legitimate and routine jobs
c.
Payments that are considered lawful in the country
d.
All of the above are allowed
16. Ethical dilemmas are usually
a.
Easy to resolve.
b.
Clear and unambiguous.
c.
Unclear and ambiguous.
d.
Removed with a formal code of ethics.
17. Proscriptive rules in codes of conduct:
a.
Tell multinational companies or managers what they should do.
b.
Are forms of moral language.
c.
Tell multinational companies or managers what they cannot do.
d.
All of the above
18. Ethical convergence
a.
Is similar to ethical relativism.
b.
Refers to basic universal moral principles.
c.
Is a form of ethical universalism.
d.
Refers to the growing pressures for multinational companies to follow the same rules in
managing ethical behavior and social responsibility.
19. Pressures for ethical convergence include all of the following EXCEPT
a.
The growth of international trade and trading blocs.
b.
Increased interaction between foreign trading partners.
c.
The need to have unique norms and values to manage their employees differently.
d.
All of the above are true
20. Prescriptive rules in codes of conduct
a.
Tell multinational companies or managers what they should do.
b.
Are forms of moral language.
c.
Tell multinational companies or managers what they cannot do.
d.
All of the above
21. Ethical relativism
a.
Argues that one should impose the home country’s ethical system everywhere.
b.
Implies that ethics are relative to the type of philosophy used.
c.
Means that each society’s view of ethics must be considered legitimate.
d.
Means that the same ethical principles are universal.
22. The argument that there are basic moral principles that transcend cultural and national boundaries is
supported by
a.
Ethical relativism.
b.
Moral languages.
c.
Ethical universalism.
d.
None of the above
23. When companies use the logic of ethical relativism to behave any way they please, this is known as
a.
Prescriptive ethical management.
b.
Proscriptive ethical management.
c.
Convenient relativism.
d.
Universal ethics applications.
24. When companies use the logic of moral universalism and impose their views on the rest of the world,
________________ occurs.
a.
Ethical divergence
b.
Ethical convenience
c.
Cultural imperialism
d.
None of the above
25. The form of analysis where the prime interest is what is the best decision for a company’s profit is
a.
Legal analysis.
b.
Ethical analysis.
c.
Social responsibility analysis.
d.
None of the above
26. In an economic analysis
a.
The manager considers the best decision for a company’s profits.
b.
The manager focuses on meeting the laws of a country.
c.
The manager goes beyond profits and analyzes the ethical consequences of decisions.
d.
None of the above
27. When facing an ethical question, the manager who uses legal analysis criteria
a.
Is primarily interested in the decision that is best for the company’s profits.
b.
Focuses on only meeting the laws of the country in which the company is operating.
c.
Focuses on meeting the needs of other constituents beyond stakeholders.
d.
Focuses on doing the right things.
28. In an ethical analysis of a problem, a manager must
a.
Focus on meeting the laws of the country in which the company is operating.
b.
Focus on what is the best decision for a company’s profits.
c.
Focus on the decisions with the best consequences.
d.
None of the above
29. The first duty of a multinational manager faced with a decision is
a.
To consider whether the decision makes business sense.
b.
To consider whether the decision meets the legal standard in the country.
c.
To consider whether the decision is ethical.
d.
To refer to the written codes of ethics.
30. Ethical decision making of multinational managers preferably should
a.
Be based solely on home country ethical principles.
b.
Go beyond legal constraints and respect the local cultural norms.
c.
Be primarily profitable for the multinational.
d.
None of the above
31. A multinational manager decides that it would be unethical to close a foreign plant as employees in
that plant are not being treated with dignity. Which ethical theory is the manager using to reach that
conclusion?
a.
Teleological ethical theory
b.
Utilitarian ethical theory
c.
Deontological ethical theory
d.
None of the above
32. A multinational manager decides to allow hiring of children for a foreign plant as such practices are
accepted in the country. Which ethical principle is she basing her decision on?
a.
Ethical universalism
b.
Convenient ethical universalism
c.
Ethical relativism
d.
None of the above
33. A multinational manager is considering closing a plant in China as wages have increased considerably
in China. The manager considers the implications of laying off people and closing the plant on the
profits of the company. Which form of analysis is the manager doing?
a.
Legal analysis
b.
Profit making analysis
c.
Ethical analysis
d.
None of the above
34. Which act was proposed by the Securities Exchange Commission in reaction to the accounting
scandals at companies like Enron and Worldcom?
a.
Sarbanes-Oxley
b.
WTO
c.
Corruption Perception Index
d.
The Ethisphere Institute
35. Which of the following statements regarding the Foreign Corrupt Practices Act (FCPA) is NOT
TRUE?
a.
Bribes or payments made under duress to avoid injury or violence are acceptable.
b.
Small payments to encourage officials to do their legitimate and routine jobs are
acceptable.
c.
Payments or gifts to foreign government officials for the sake of gaining or retaining
business are acceptable.
d.
In an unstable political environment, payments made to local officials to avoid harassment
of employees are acceptable.
36. Which of the following statements is TRUE regarding cultural relativism as an approach in
international business ethics?
a.
What is right or wrong depends on the culture.
b.
A guide for what is legal and appropriate is the local culture.
c.
Companies should follow the moral norms of the local culture.
d.
All of the above statements are true.
37. Deontological ethical theories
a.
Argue that the morality of an act comes from this consequences.
b.
Would provide justification for closing a plant and laying off workers to reduce costs.
c.
Is most typically represented by cost and benefit analyses.
d.
Argue that actions by themselves have a good or bad morality irrespective of the
consequences.
38. According to the text, which of the following is NOT a consequence of corruption?
a.
Companies typically make up the bribe by increasing the contract price.
b.
Companies use poorer quality materials to make up for the bribe.
c.
Companies devote some of the bribe to socially responsible causes.
d.
Corruption can also result in collusions among firms.
39. The world seems to be moving towards transnational ethics because:
a.
Globalization dramatically increases contact among people from different ethical and
cultural systems.
b.
This contact creates pressure for the development of new transnational agreements
regarding business practices.
c.
International trade and trading blocs such as the EU and NAFTA are growing.
d.
All of these reasons.
40. Which of the following ethical dilemmas is addressed by the Sarbanes Oxley Act?
a.
Competition
b.
Auditor responsibility and independence
c.
Sourcing of cheap labor
d.
Company strategy
ESSAY
1. Discuss some of the issues that make international business ethics more complex than domestic
business ethics.
2. Do laws always reflect a community’s ethics? Give an example to explain your answer.
3. Discuss the difference between teleological and deontological theories of ethics. Give examples of
how an international manager might appeal to either type of theory when faced with the opportunity to
offer a bribe.
4. How do social institutions and culture affect the practice of business ethics in different countries?
5. Compare and contrast ethical relativism and ethical universalism. What are some of the dangers of
adopting either ethical relativism or ethical universalism when making decisions?
6. Describe the U.S. FCPA, what makes it challenging for U.S. firms, and how they deal with that
challenge.
ANS:
7. What are moral languages? How can moral languages help multinational become more ethical?
8. Discuss some of the pressures for ethical convergence. What are some implications for multinational
management?
9. Compare and contrast prescriptive codes of ethics with proscriptive codes.