36.
Building an organization culture that places a high value on ethical behavior
requires incentive and reward systems.
TRUE
Building an organization culture that places a high value on ethical behavior
requires incentive and reward systems, including promotions that reward
people who engage in ethical behavior and sanction those who do not.
AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Topic: Implications for Managers
37.
A firm’s internal stakeholders include customers, suppliers, and lenders.
FALSE
Internal stakeholders are individuals or groups who work for or own the
business. External stakeholders are all other individuals and groups that
have some claim on the firm. Typically, this group comprises customers,
suppliers, lenders, governments, unions, local communities, and the general
public.
AACSB: Ethics
38.
To establish moral intent, managers need to stand in the shoes of a
stakeholder and ask how a proposed decision might impact that
stakeholder.
FALSE
Managers need to establish moral intent, to be able to think through ethical
problems. This means the business must resolve to place moral concerns
ahead of other concerns in cases where either the fundamental rights of
stakeholders or key moral principles have been violated.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Topic: Implications for Managers
39.
Moral courage enables managers to walk away from a decision that is
profitable but unethical.
TRUE
It is important to recognize that employees in an international business may
need significant moral courage. Moral courage enables managers to walk
away from a decision that is profitable but unethical.
AACSB: Ethics
40.
Companies can strengthen the moral courage of employees by committing
themselves to not retaliate against employees who exercise moral courage.
TRUE
Companies can strengthen the moral courage of employees by committing
themselves to not retaliate against employees who exercise moral courage,
say no to superiors, or otherwise complain about unethical actions.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Topic: Implications for Managers
Multiple Choice Questions
41.
Which of the following was designed to allow GM to operate ethically in
South Africa as long as the company did not obey the apartheid laws in its
own South African operations?
A.
Sullivan principles
B.
The righteous moral system
C.
Noblesse oblige
D.
GM adopted what came to be called the Sullivan principles, named after
Leon Sullivan, a black Baptist minister and a member of GM’s board of
directors. Sullivan argued that it was ethically justified for GM to operate in
South Africa so long as certain conditions were fulfilled.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
42.
Identify the INCORRECT statement about environmental regulations.
A.
Environmental regulations are often lacking in developing nations.
B.
Environmental regulations are similar across developed and developing
nations.
C.
Developed nations have substantial regulations governing the emission
of pollutants, the dumping of toxic chemicals, etc.
D.
Inferior environmental regulations in host nations, as compared to home
nation, can lead to ethical issues.
Many developed nations have substantial regulations governing the
emission of pollutants, the dumping of toxic chemicals, the use of toxic
materials in the workplace, and so on. Those regulations are often lacking in
developing nations, and according to critics, the result can be higher levels
of pollution from the operations of multinationals than would be allowed at
home.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
43.
The _____ occurs when a resource is shared by all, but owned by no one, is
overused by individuals, resulting in its degradation.
A.
Friedman effect
B.
noblesse oblige
C.
inequity aversion
D.
tragedy of the commons
The tragedy of the commons occurs when a resource held in common by all,
but owned by no one, is overused by individuals, resulting in its degradation.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
44.
An international U.S. based company sets up a production unit in a
developing country with poor environmental regulations. This contributes
to:
A.
the noblesse oblige situation.
B.
the inequity aversion.
C.
the global tragedy of the commons.
D.
the Friedman effect.
In the modern world, corporations can contribute to the global tragedy of
the commons by moving production to locations where they are free to
pump pollutants into the atmosphere or dump them in oceans or rivers,
thereby harming these valuable global commons.
AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
45.
Which of the following observations about the Foreign Corrupt Practices Act
is true?
A.
The act outlawed the paying of bribes to foreign government officials to
gain business.
B.
There is enough evidence that it put U.S. firms at a competitive
disadvantage.
C.
The act originally allowed for “facilitating payments.”
D.
The Nike case was the impetus for the 1977 passage of this act.
The Lockheed case was the impetus for the 1977 passage of the Foreign
Corrupt Practices Act in the United States. The act outlawed the paying of
bribes to foreign government officials to gain business.
AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
46.
Facilitating payments are:
A.
a direct violation of the Foreign Corrupt Practices Act.
B.
permitted so long as they designed only to gain exclusive preferential
treatment.
C.
used to secure contracts that would otherwise not be secured.
D.
permitted under the amended Foreign Corrupt Practices Act.
Sometimes known as speed money or grease payments, facilitating
payments are payments to ensure receiving the standard treatment that a
business ought to receive from a foreign government, but might not due to
the obstruction of a foreign official.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
47.
The Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions excludes:
A.
bribes made to secure contracts that would otherwise not be secured.
B.
grease payments to gain exclusive preferential treatment.
C.
facilitating payments made to expedite routine government action.
D.
payments to government officials for special privileges.
The Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions excludes facilitating payments made to
expedite routine government action from the convention.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
48.
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 is known as:
A.
moral relativism.
B.
noblesse oblige.
C.
ethical dilemma.
D.
social responsibility.
The concept of social responsibility 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.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
49.
Which of the following, in a business setting, is taken to mean benevolent
behavior that is the responsibility of successful enterprises?
A.
Sullivan’s principles
B.
Ethical dilemma
C.
Tragedy of the commons
D.
Noblesse oblige
Noblesse oblige is a French term that refers to honorable and benevolent
behavior considered the responsibility of people of high (noble) birth. In a
business setting, it is taken to mean benevolent behavior that is the
responsibility of successful enterprises.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
50.
BP, one of the world’s largest oil companies, has made it part of the
company policy to undertake “social investments” in the countries where it
does business. There was no economic reason for BP to make this social
investment, but the company believes it is morally obligated to give
something back to the societies that have made their success possible.
BP’s actions are an example of:
A.
cultural relativism.
B.
the Friedman doctrine.
C.
noblesse oblige.
D.
the tragedy of the commons.
Noblesse oblige is a French term that refers to honorable and benevolent
behavior considered the responsibility of people of high (noble) birth. In a
business setting, it is taken to mean benevolent behavior that is the
responsibility of successful enterprises.
AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Topic: Ethical Issues in International Business
51.
A situation in which none of the available alternatives seems morally
acceptable is called:
A.
an ethical dilemma.
B.
noblesse oblige.
C.
the tragedy of the commons.
D.
the free rider problem.
Ethical dilemmas are situations in which none of the available alternatives
seems ethically acceptable.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Recognize an ethical dilemma.
Topic: Ethical Dilemmas
52.
Expatriate managers may experience more than the usual degree of
pressure to violate their personal ethics because of all of the following
reasons EXCEPT:
A.
they are away from their ordinary social context and supporting culture.
B.
they are psychologically and geographically closer to the parent
company.
C.
they may be based in a culture that does not place the same value on
ethical norms important in the manager’s home country.
D.
they may be surrounded by local employees who have less rigorous
ethical standards.
Home-country managers working abroad in multinational firms (expatriate
managers) may experience more than the usual degree of pressure to
violate their personal ethics. They are away from their ordinary social
context and supporting culture, and they are psychologically and
geographically distant from the parent company.
AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Topic: The Roots of Unethical Behavior
53.
Which of the following refers to the values and norms that the employees of
an organization share?
A.
Vision statement
B.
C.
Organization culture
D.
Power orientation
The term organization culture refers to the values and norms that are
shared among employees of an organization.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Topic: The Roots of Unethical Behavior
54.
According to _____, the social responsibility of business is to increase
profits, so long as the company stays within the rules of law.
A.
the naive immoralist
B.
the righteous moralist
C.
cultural relativism
D.
the Friedman doctrine
Friedman’s basic position is that the only social responsibility of business is
to increase profits, so long as the company stays within the rules of law. He
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.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Topic: Philosophical Approaches to Ethics
55.
According to the Friedman doctrine:
A.
ethics are nothing more than the reflection of culture.
B.
a multinational’s home-country standards of ethics are inappropriate to
follow in foreign countries.
C.
businesses should not undertake social expenditures beyond those
mandated by the law and required for the efficient running of a business.
D.
if a manager of a multinational sees that firms from other nations are not
following environmental legislation in a host nation, that manager should
not either.
Friedman 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.
AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Topic: Philosophical Approaches to Ethics
56.
Cultural relativism suggests that:
A.
a firm should adopt the ethics of the culture in which it is operating.
B.
the only social responsibility of a firm is to increase profits.
C.
a firm’s ethical policies should remain the same in all cultures.
D.
a multinational should follow its home-country cultural practices in all
the host-countries where it has operations.
Cultural relativism is the belief that ethics are nothing more than the
reflection of a culture—all ethics are culturally determined—and that
accordingly, a firm should adopt the ethics of the culture in which it is
operating.
AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Topic: Philosophical Approaches to Ethics
57.
Child labor is permitted and widely employed in Country X. A multinational
company entering Country X decides to employ minors in its subsidiary,
even though it is against the multinational’s home-country ethics. Which of
the following approaches to business ethics would justify the actions of the
multinational company?
A.
Righteous moralist
B.
C.
The justice theory
D.
The rights theory
Cultural relativism is the belief that ethics are nothing more than the
reflection of a culture—all ethics are culturally determined—and that
accordingly, a firm should adopt the ethics of the culture in which it is
operating.
AACSB: Ethics
AACSB: Reflective Thinking
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Topic: Philosophical Approaches to Ethics