68) ________ is the layer of corporate social responsibility whereby a company develops a code
of conduct that it will follow in its global operations and agrees to operate with greater
transparency.
A) Strategic CSR
B) Risk management
C) Traditional philanthropy
D) Task orientation
69) ________ is the layer of corporate social responsibility in which a business builds social
responsibility into its core operations to create value and build competitive advantage.
A) Risk management
B) Traditional philanthropy
C) Strategic CSR
D) Political polity
70) Horizon Ltd. is a software company that, over the last year, incorporated social responsibility
into its core operations to create value and build competitive advantage. Which layer of
corporate social responsibility does Horizon Ltd. function at?
A) risk management
B) traditional philanthropy
C) strategic CSR
D) political CSR
71) Which of the following philosophies maintains that a company’s sole responsibility is to
maximize profits for its owners?
A) utilitarian view
B) righteous moralist view
C) Friedman view
D) cultural relativist view
72) The ________ view states that a company should adopt local ethics wherever it operates
because all belief systems are determined within a cultural context.
A) Friedman
B) cultural relativist
C) righteous moralist
D) utilitarian
73) The ________ view says that a company should maintain its home-country ethics wherever it
operates because the home-country’s view of ethics and responsibility is superior to others’
views.
A) Friedman
B) righteous moralist
C) cultural relativist
D) utilitarian
74) Which of the following philosophies maintains that a company should maximize “good”
outcomes and minimize “bad” outcomes wherever it operates?
A) Friedman view
B) righteous moralist view
C) cultural relativist view
D) utilitarian view
75) ________ is the environmental impact of greenhouse gases (measured in units of carbon
dioxide) that results from human activity.
A) Carbon footprint
B) Greenhouse log
C) Carbon cycle
D) Greenhouse check
76) ________ measures the indirect carbon dioxide emissions from the whole life cycle of
products—from their manufacture to eventual breakdown.
A) Primary footprint
B) Secondary footprint
C) Tertiary footprint
D) Internalized footprint
77) Which of the following does the secondary footprint measure?
A) the burning of fossil fuels
B) direct energy consumption
C) indirect carbon dioxide emissions
D) emissions caused by natural forces
78) On a recent trip to Hong Kong, a group of tourists found several Prada bags being sold on the
pavement. They cost only a few dollars and were clearly fake; though they bore the Prada
trademark. This is an example of ________.
A) piracy
B) monopolization
C) ethnocentrism
D) nationalization
Scenario: Susan Goes Global with Grape Fizz
Susan is the CEO of Grape Fizz, a global drinks-manufacturing company. She wishes to set up
production facilities in other countries and has been advised to assess the political system of each
country before she does so.
79) Susan decides not to set up production facilities in Konesia because its business laws are
vague and are often interpreted according to the convenience of the government. Bribery is a
common feature in conducting business deals there and a refusal to pay up is not an option. What
kind of government does Konesia have?
A) democratic
B) theocratic
C) totalitarian
D) pluralist
80) Susan thinks that it would be easiest setting up production facilities in a country whose
government leaders are elected directly by the wide participation of the people or by their
representatives. Which of the following political systems should the country have?
A) anarchist
B) democratic
C) theocratic
D) facist
81) Susan also decides not to set up production facilities in Margazo, a country which functions
by a strict set of religious tenets, because some of them contradict her company’s work policy.
Expecting potential employees to break away from these traditions is not an option since religion
plays an important role in the functioning of the nation. What kind of political system prevails in
Margazo ?
A) pluralistic
B) theocracy
C) tribal totalitarian
D) democracy
82) Susan is worried that San Tarino’s demand that she must use locally available raw material
and employ local workers might interfere with the quality and efficiency of her business. San
Tarino, on the other hand, views this as a way to foster local business activity and lessen regional
unemployment. What are these laws called?
A) local content requirements
B) antitrust laws
C) nationalization laws
D) internalization policies
83) Susan finally settles upon Valmira because it has a stable business environment. Which of
the following factors, if true, proves her decision to be a good one?
A) Valmira does not enforce any product liability laws.
B) Valmira’s legal system protects individual property rights satisfactorily.
C) The business laws of Valmira are flexible and can be interpreted according to the comfort of
government officials.
D) The government of Valmira does not allow the private sector to flourish.
Scenario: Risky Business
Global Trading LLC is a distributor of computer software and hardware, steel and copper scrap,
and telephone equipment. Involved in three very different types of industries, the company faces
many types of risks in its global business.
84) Global Trading just learned that the government of one country in which it does business has
taken over the entire electric utility industry. The government’s actions are an example of
________.
A) confiscation
B) globalization
C) expropriation
D) nationalization
85) Had the government taken over (with compensation) the assets of Global Trading but not
those of any other company, the government’s actions would be an example of ________.
A) expropriation
B) nationalization
C) confiscation
D) communism
86) Had the government taken over the assets of Global Trading without compensation, and not
taken over the assets of any other company, the government’s actions would be an example of
________.
A) expropriation
B) nationalization
C) confiscation
D) communism
Scenario: Common and Civil Law
Wayne’s Computer Corporation is considering the possibility of building a new manufacturing
facility in a foreign country in order to lower labor and production costs. The legal department of
Wayne’s has been evaluating Paribo and Kirawi—the two countries which are the top contenders
for the new facility—carefully.
87) Which of the following factors should the legal experts of Wayne’s consider while evaluating
the legal systems of Paribo and Kirawi?
A) the profits made by local companies in the countries
B) the prevalence of crime in the two countries
C) the resolution of contractual dispute with local vendors
D) the profits made by international companies in other countries
88) Which of the following statements is true of Kirawi, a democratic nation whose legal system
is based on common law?
A) The law is based on religious teachings and is enforced by the country’s religious leaders.
B) The law is inflexible and is applied the same way in all situations.
C) The law is based on a detailed set of written rules that constitute a legal code.
D) The law is interpreted on the basis of tradition, precedent and usage.
89) Which of the following statements is true of Paribo, a democratic nation whose legal system
is based on civil law?
A) The law is based on religious teachings and is enforced by the country’s religious leaders.
B) The law is flexible and its interpretations differ with situations.
C) The law is based on a detailed set of written rules that constitute a legal code.
D) The law is interpreted on the basis of tradition, precedent and usage.
90) Which of the following, if true, demonstrates that Kirawi has an unstable business
environment?
A) Its business laws are inflexible and cannot be intrepreted according to the comfort of
government officials.
B) Its government does not enforce product liability laws or protect individual property rights.
C) Its activities are bound by several multilateral agreements conducted with neighboring
countries.
D) Its private sector comprises independently owned firms that exist to make profits.
91) Compare and contrast the world’s three main political ideologies: anarchism, totalitarianism,
and pluralism.
92) Briefly explain each of the three main methods companies use to manage political risk.
93) Explain the three types of property seizure. Why might property seizure be a risk for a
business operating in a totalitarian nation?
94) Explain each of the four means of incorporating risk into business strategies when companies
employ an adaptation strategy.
95) Compare and contrast two prevalent political systems: totalitarianism and democracy, and
explain how a country’s political system influences its legal system.
96) Describe the importance of a nation’s legal system, and identify the main differences between
the three main types of legal systems.
97) Explain the risk-management method of “adaptation.” Why would it most likely be less
costly and time-consuming to pursue this method in a nation that practices civil law rather than
in a nation that practices common law?
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98) Explain each of the following terms, giving examples of each: patent, trademark, and
copyright.
99) Explain the benefits and drawbacks of a value-added tax.
100) Explain the purpose of antitrust laws. How would the Friedman philosophy of corporate
social responsibility most likely support a decision by a company to expand internationally into a
country with weak antitrust laws? Include a description of the Friedman philosophy in your
answer.
101) Describe the Foreign Corrupt Practices Act, and explain how it relates to corporate social
responsibility.
102) Describe four corporate responsibility issues and explain how these issues can impact a
company’s international relations.