Global Business Today Charles Hill 11e - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below Global Business Today, 11e (Hill) Chapter 5 Ethics, Corporate Social Responsibility, and Sustainability 1) The term ethics refers to accepted principles of right or wrong that govern the …
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Global Business Today Charles Hill 11e – Test Bank
Instant Download – Complete Test Bank With Answers
Sample Questions Are Posted Below
Global Business Today, 11e (Hill)
Chapter 5 Ethics, Corporate Social Responsibility, and Sustainability
1) The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.
Answer: TRUE
Explanation: The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
2) Many of the ethical issues in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation.
Answer: TRUE
Explanation: Many of the ethical issues in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation. What is considered normal practice in one nation may be considered unethical in another.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Remember
AACSB: Ethics; Diversity
Accessibility: Keyboard Navigation
3) The Sullivan principles stem from the beliefs of Leon Sullivan who felt it was not ethical for General Motors to operate in South Africa unless the company participated in apartheid laws for its African operations.
Answer: FALSE
Explanation: Sullivan argued that it was ethically justified for General Motors to operate in South Africa so long as two conditions were fulfilled. First, the company should not obey the apartheid laws in its own South African operations (a form of passive resistance). Second, the company should do everything within its power to promote the abolition of apartheid laws.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
4) The phenomenon known as the tragedy of the commons occurs when multiple companies attempt to produce and sell the same products.
Answer: FALSE
Explanation: 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.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
5) “Facilitating payments” are payments to secure contracts that would not otherwise be secured.
Answer: FALSE
Explanation: Facilitating payments are not payments to secure contracts that would not otherwise be secured, nor are they payments to obtain exclusive preferential treatment.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
6) After it was amended, the Foreign Corrupt Practices Act allowed for “facilitating payments.”
Answer: TRUE
Explanation: Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business. Some U.S. businesses immediately objected that the act would put U.S. firms at a competitive disadvantage. The act was subsequently amended to allow for “facilitating payments.”
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
7) The OECD convention on bribery obliges member states and other signatories to make the bribery of foreign public officials a criminal offense.
Answer: TRUE
Explanation: The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member states and other signatories to make the bribery of foreign public officials a criminal offense.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
8) An ethical dilemma occurs when neither of the choices in a situation seem appropriate or right.
Answer: TRUE
Explanation: That is the nature of ethical dilemmas—situations in which none of the available alternatives seems ethically acceptable.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-02 Recognize an ethical, corporate social responsibility, and/or sustainability dilemma.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
9) An individual’s personal ethical code generally has little influence on their behavior in business.
Answer: FALSE
Explanation: The personal ethical code that guides our behavior comes from a number of sources, including our parents, our schools, our religion, and the media. Our personal ethical code exerts a profound influence on the way we behave as businesspeople.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
10) Unfortunately, it is common in business practices to assume that people from different cultures make ethical decisions using the same process.
Answer: TRUE
Explanation: Two assumptions must be taken into account. First, too often it is assumed that individuals in the workplace make ethical decisions in the same way as they would if they were home. Second, too often it is assumed that people from different cultures make ethical decisions following a similar process.
Difficulty: 2 Medium
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
11) The social rules that provide guidelines for appropriate behavior in a particular situation are known as values.
Answer: FALSE
Explanation: Values are abstract ideas about what a group believes to be good, right, and desirable, while norms are the social rules and guidelines that prescribe appropriate behavior in particular situations.
Difficulty: 1 Easy
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
12) According to the concept of cultural relativism, a firm, while operating in any host country, should adopt the ethics of the culture that is predominant in its home country.
Answer: FALSE
Explanation: Cultural relativism believes 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.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
13) One criticism of the righteous moralist approach to ethics is that adopting home-country standards isn’t always appropriate.
Answer: TRUE
Explanation: A righteous moralist claims that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. This approach is typically associated with managers from developed nations. The main criticism of the righteous moralist approach is that its proponents go too far. While there are some universal moral principles that should not be violated, it does not always follow that the appropriate thing to do is adopt home-country standards.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
14) The utilitarian approaches to ethics are based on the idea that the moral worth of actions is determined by their ultimate consequences.
Answer: TRUE
Explanation: Utilitarian approaches to ethics hold that the moral worth of actions or practices is determined by their consequences.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
15) One concern with the utilitarian approach is that the action that produces the greatest good for the greatest number of people may result in the unjustified treatment of a minority.
Answer: TRUE
Explanation: The second problem with utilitarianism is that the philosophy omits the consideration of justice. The action that produces the greatest good for the greatest number of people may result in the unjustified treatment of a minority.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
16) Kantian ethics is concerned with environmental ethical issues such as manufacturing emissions and polluted waters.
Answer: FALSE
Explanation: Kantian ethics holds that people should be treated as ends and never purely as means to the ends of others. People are not instruments, like a machine. People have dignity and need to be respected as such.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
17) John Rawls argues that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage.
Answer: TRUE
Explanation: John Rawls argues that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
18) According to John Rawls’s veil of ignorance, inequalities are justified if they benefit the position of the least-advantaged person.
Answer: FALSE
Explanation: Rawls’s veil of ignorance follows that it is unjust, and by extension unethical, for companies to pursue actions that contribute toward extensive degradation of important global commons. Thus, it is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas. The difference principle states that inequalities are justified if they benefit the position of the least-advantaged person.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
19) Business leaders should use every relevant opportunity to stress the importance of business ethics and make sure that key business decisions not only make good economic sense but also are ethical.
Answer: TRUE
Explanation: Leaders in the business must give life and meaning to words in a code of ethics by repeatedly emphasizing their importance and then acting on them. This means using every relevant opportunity to stress the importance of business ethics and making sure that key business decisions not only make good economic sense but also are ethical.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
20) In order to create a business culture that places a high value on ethical behavior, a system of incentives and rewards must be in place.
Answer: TRUE
Explanation: Building an organizational 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.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
21) The first step in an ethical algorithm is to identify those common resources that are not owned by anyone in particular but are used by everybody.
Answer: FALSE
Explanation: In the first step of an ethical algorithm, businesspeople should identify which stakeholders a decision would affect and in what ways.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
22) An external stakeholder includes any individuals and groups that have some type of direct or indirect claim on a company.
Answer: FALSE
Explanation: A firm’s stakeholders are individuals or groups that have an interest, claim, or stake in the company, in what it does, and in how well it performs. They can be divided into internal stakeholders and external stakeholders. Internal stakeholders are individuals or groups who work for or own the business. External stakeholders
are all the other individuals and groups that have some direct or indirect claim on the firm.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
23) Ethics officers act as an internal ombudsperson with responsibility for handling confidential inquiries from employees.
Answer: TRUE
Explanation: Ethics officers act as an internal ombudsperson with responsibility for handling confidential inquiries from employees, investigating complaints from employees or others, reporting findings, and making recommendations for change.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
24) The concept of corporate social responsibility (CSR) refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions.
Answer: TRUE
Explanation: The concept of corporate social responsibility (CSR) 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.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
25) The core idea behind sustainability is for business to NOT exert a negative impact on the ability of future generations to meet their own economic needs.
Answer: TRUE
Explanation: The core idea of sustainability is that the organization—through its actions—does not exert a negative impact on the ability of future generations to meet their own economic needs and that its actions impart long-run economic and social benefits on stakeholders.
Difficulty: 2 Medium
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
26) Business ________ refers to accepted principles of right or wrong that govern the conduct of a businessperson, the members of a profession, or the actions of an organization.
Answer: C
Explanation: The term business ethics refers to accepted principles of right or wrong that govern the conduct of a businessperson, the members of a profession, or the actions of an organization.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
27) The Sullivan principles resulted from Leon Sullivan’s response to
Answer: B
Explanation: The Sullivan principles were named after Leon Sullivan, a black Baptist minister and a member of General Motors’ board of directors. Sullivan argued that it was ethically justified for GM to operate in South Africa so long as two conditions were fulfilled. First, the company should not obey the apartheid laws in its own South African operations (a form of passive resistance). Second, the company should do everything within its power to promote the abolition of apartheid laws.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
28) The apartheid system was based on a violation of
Answer: B
Explanation: Sullivan’s principles promoted the abolition of apartheid laws, and were widely adopted by U.S. firms operating in South Africa. South Africa represents an example that most people can relate to, most likely remember, and is relatively easy to understand (compared with authoritarian populists politicians infringing on human rights, which is often more difficult to understand and see in practice). The apartheid system denied basic political rights to the majority nonwhite population of South Africa, mandated segregation between whites and nonwhites, reserved certain occupations exclusively for whites, and prohibited blacks from being placed in positions where they would manage whites.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
29) Ten years after he proposed what came to be known as Sullivan’s principles, Leon Sullivan concluded that following his principles
Answer: B
Explanation: Ten years after he proposed what came to be known as the Sullivan principles, Leon Sullivan concluded that simply following the principles was not sufficient to break down the apartheid regime and that any American company, even those adhering to his principles, could not ethically justify their continued presence in South Africa.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
30) Due to strict environmental standards in its home nation, Neptune Inc. has shifted its operations to developing nations. The firm has now been able to gain competitive advantage by avoiding costly pollution controls. This strategic move of Neptune Inc. would be considered
Answer: C
Explanation: Regulations differ from nation to nation. Given this, it is unethical for a company to try to escape tight emission limits by moving production to a country with lax regulations.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
31) Which of these companies has adopted unethical practices?
Answer: E
Explanation: 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. While such action may be legal, it is still unethical.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Knowledge Application
Accessibility: Keyboard Navigation
32) BlueLine Boxes moved its entire production operation to a foreign country, where the company was free to dump pollutants into the river located adjacent to the factory. In this scenario, BlueLine Boxes is contributing to
Answer: E
Explanation: 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. While such action may be legal, it is still unethical.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
33) The term global commons refers to
Answer: C
Explanation: The atmosphere and oceans can be viewed as a global commons from which everyone benefits but for which no one is specifically responsible.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
34) Over the past few years, three new factories have been built near Pleasantown. A four-acre area of land lies between these three factories and since no one “owns” this land, all three factories are using it as a landfill to dump waste products. The once-beautiful land is now encased in garbage. What phenomenon does this portray?
Answer: C
Explanation: 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.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
35) In the modern world, corporations often hasten the global tragedy of the commons by
Answer: A
Explanation: 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.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
36) Which company is contributing to the global tragedy of the commons?
Answer: B
Explanation: 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.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Knowledge Application
Accessibility: Keyboard Navigation
37) Speed money, or grease payments, are payments made to
Answer: D
Explanation: The Foreign Corrupt Practices Act was subsequently amended to allow for “facilitating payments.” Sometimes known as speed money, or grease payments, facilitating payments are not payments to secure contracts that would not otherwise be secured and nor are they payments to obtain exclusive preferential treatment. Rather they 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.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
38) In order to build large production units and expedite certain routine government actions related to this, Scorpius Inc. made legal payments to the government officials of the host nation. Such payments are typically referred to as
Answer: B
Explanation: Sometimes known as speed money, or grease payments, facilitating payments are made to expedite routine government action.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
39) The result of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was to
Answer: B
Explanation: The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member states and other signatories to make the bribery of foreign public officials a criminal offense, but excludes facilitating payments made to expedite routine government action from the convention.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
40) SolarCorp. won the bid to build an energy facility for a host country government. However, the execution of the contract has been delayed due to bureaucratic procedures in the less developed nation. In order to legally overcome this problem, SolarCorp. could resort to the payment of
Answer: D
Explanation: Sometimes known as speed money, or grease payments, facilitating payments are made to expedite routine government action.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
41) Financial Resources Inc. paid a sum of $50,000 to an official of a foreign government to ensure that the company obtained exclusive preferential treatment. The $50,000 can be classified as
Answer: D
Explanation: Sometimes known as speed money or grease payments, facilitating payments are made to expedite routine government action. However, such payments are not payments to obtain exclusive preferential treatment. Payments made to obtain exclusive preferential treatment are bribes.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
42) Studies have found that facilitating payments ultimately increase the cost of doing business and as a result some companies have
Answer: C
Explanation: Another study found that firms that paid more in bribes are likely to spend more, not less, management time with bureaucrats negotiating regulations and that this tended to raise the costs of the firm. The demand for speed money creates a genuine ethical dilemma. The argument that corruption feeds on itself strengthens the ethical case for never engaging in corruption, no matter how compelling the benefits might seem. Many multinationals have accepted this argument. The large oil multinational BP, for example, has a zero-tolerance approach toward facilitating payments.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
43) The practice of “gift giving” between the parties to a business negotiation is considered right and proper in many Asian cultures. However, some Westerners view the practice as a form of bribery, and therefore unethical, particularly if the gifts are substantial. This demonstrates that
Answer: C
Explanation: The ethical obligations of a multinational corporation toward employment conditions, human rights, corruption, environmental pollution, and the use of power are not always clear-cut. There may be no agreement about accepted ethical principles. From an international business viewpoint, some argue that what is ethical depends upon one’s cultural perspective.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-02 Recognize an ethical, corporate social responsibility, and/or sustainability dilemma.
Bloom’s: Understand
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
44) Sun-Yip is the manager of an appliance manufacturing facility in a developing country. This facility does not meet the acceptable standards of the manufacturing facility in his home nation. He knows that demanding a better facility will raise the cost of the appliances that are mainly exported to other less-developed countries. However, he also realizes that by not demanding a better facility, the employees who work there are prone to serious health issues. Sun-Yip is facing
Answer: D
Explanation: Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable. Doing the right thing, or even knowing what the right thing might be, is often far from easy.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-02 Recognize an ethical, corporate social responsibility, and/or sustainability dilemma.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
45) Which of these employees is facing an ethical dilemma?
Answer: D
Explanation: An ethical dilemma is a situation in which there is no ethically acceptable solution.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-02 Recognize an ethical, corporate social responsibility, and/or sustainability dilemma.
Bloom’s: Apply
AACSB: Ethics; Knowledge Application
Accessibility: Keyboard Navigation
46) What situation is most likely to lead to unethical behavior in a business setting?
Answer: B
Explanation: Home-country managers working abroad in multinational firms (expatriate managers) may experience more than the usual degree of pressure to violate their personal ethics.
Difficulty: 2 Medium
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Understand
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
47) In a business setting, managers sometimes do not realize they are behaving unethically, primarily because they
Answer: A
Explanation: Several studies of unethical behavior in a business setting have concluded that businesspeople sometimes do not realize they are behaving unethically, primarily because they simply fail to ask, “Is this decision or action ethical?” Instead, they apply a straightforward business calculus to what they perceive to be a business decision, forgetting that the decision may also have an important ethical dimension.
Difficulty: 1 Easy
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
48) One way to reduce the pressure on managers to violate their personal ethics is to
Answer: B
Explanation: 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.
Difficulty: 2 Medium
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
49) Bethany works for FastFashion Inc. which has set the same sales target for all employees in their 550 stores across the globe. The company fails to take into account any environmental constraints which might hamper sales and to avoid being penalized, employees often falsify their sales reports. What is triggering the employees’ unethical behavior?
Answer: A
Explanation: One of the causes of unethical behavior is pressure from the parent company to meet unrealistic performance goals that can be attained only by cutting corners or acting in an unethical manner.
Difficulty: 3 Hard
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
50) Bryan works as a salesman for Jumbo Corp. Last year his sales target was $3 million and this year in an aggressive bid for growth, the company increased the sales quota for all its salespeople to $5 million, although the market for Jumbo Corp’s product has slowed. In order to meet his target, Bryan bribed an official of a potential customer. The roots of his unethical behavior can be traced to
Answer: A
Explanation: One of the causes of unethical behavior is pressure from the parent company to meet unrealistic performance goals that can be attained only by cutting corners or acting in an unethical manner.
Difficulty: 3 Hard
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
51) The CEO of Gold Chip Software engages in corruption and uses his power in the company to enrich himself and his family members. Consequently, his employees also engage in the same behavior. In this case, the roots of unethical behavior can be traced to
Answer: B
Explanation: Leaders help to establish the culture of an organization, and they set the example that others follow. Other employees in a business often take their cue from business leaders, and if those leaders do not behave in an ethical manner, they might not either.
Difficulty: 3 Hard
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
52) When the employees at SuperCars learned that management had failed to pay suppliers for parts, the employees began to add more hours to their time cards even though they hadn’t worked those extra hours. The employees felt that the company was sending a message that unethical decisions were acceptable. In this situation, the unethical choices of the employees are the result of
Answer: E
Explanation: Leaders help to establish the culture of an organization, and they set the example that others follow. Other employees in a business often take their cue from business leaders, and if those leaders do not behave in an ethical manner, they might not either.
Difficulty: 3 Hard
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
53) Within organizational culture, ________ are abstract ideas about what a group thinks is good, right, and desirable.
Answer: C
Explanation: Values are abstract ideas about what a group believes to be good, right, and desirable, while norms are the social rules and guidelines that prescribe appropriate behavior in particular situations.
Difficulty: 2 Medium
Topic: The Roots of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers as they relate to business, corporate social responsibility, or sustainability.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
54) Straw men approaches to ethics refer to those that are
Answer: A
Explanation: Straw men approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision making in a multinational enterprise.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
55) The ________ is a straw man approach to business ethics.
Answer: A
Explanation: Straw men approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision making in a multinational enterprise. Four such approaches to business ethics are commonly discussed in the literature. These approaches can be characterized as the Friedman doctrine, cultural relativism, the righteous moralist, and the naive immoralist.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
56) According to Milton Friedman, the only social responsibility of business is to
Answer: A
Explanation: 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.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
57) CopperTech Inc. believes that the sole purpose of its existence is to maximize profits for its stockholders. The firm has often been criticized for not engaging in any social investments. However, the firm has been praised for abiding by the laws while earning profits. Which philosophical approach to ethics does this demonstrate?
Answer: A
Explanation: 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. Friedman’s belief is that a firm should maximize its profits because that is the way to maximize the returns that accrue to the owners of the firm, its stockholders. If stockholders then wish to use the proceeds to make social investments, that is their right, according to Friedman, but managers of the firm should not make that decision for them.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
58) The phrase “when in Rome, do as the Romans” is associated with
Answer: A
Explanation: Cultural relativism is the belief that ethics are nothing more than the reflection of a culture—all ethics are culturally determined—and accordingly, a firm should adopt the ethics of the culture in which it is operating. This approach is often summarized by the maxim “when in Rome, do as the Romans.”
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
59) After TurboAir opened a facility in a foreign country, it learned that child labor was acceptable in that nation and agreed to hire a group of 15-year-old children as full-time employees. Which philosophical approach to ethics is TurboAir using?
Answer: A
Explanation: 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. This approach is often summarized by the maxim “When in Rome do as the Romans.”
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
60) Green Quantum Inc. has research and production units all across the globe. The company expects its expatriate managers to adopt the ethics propagated by the culture in which they operate their respective units. Even in situations when others consider certain actions as unethical, the company allows its managers to pursue such actions if they are permitted in the host nation. Green Quantum is following
Answer: E
Explanation: Cultural relativism believes 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.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
61) Rapid Removal Inc. operates in three different countries, and the CEO believes that the best approach to ethics is cultural relativism. How will this ethical approach affect the actions of Rapid Removal Inc.?
Answer: C
Explanation: Cultural relativism believes 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.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Knowledge Application
Accessibility: Keyboard Navigation
62) Three Torque Inc., a U.S.-based multinational company, allows its managers to make facilitating payments in host countries to expedite government formalities. However, in countries where such payments are considered as unethical, the company restricts its managers from indulging in such activities. This behavior of the company illustrates the straw man approach of
Answer: B
Explanation: While dismissing cultural relativism in its most sweeping form, some ethicists argue there is residual value in this approach. Societal values and norms do vary from culture to culture, customs do differ, so it might follow that certain business practices are ethical in one country, but not in another.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
63) In its home country, Barat’s Boxes routinely uses grease payments to local officials to expedite overseas shipments. It has decided to open a plant in the United States and has determined that it would not offer any facilitating payments to U.S. officials. Barat’s Boxes behavior illustrates the straw man approach of
Answer: B
Explanation: 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. While dismissing cultural relativism in its most sweeping form, some ethicists argue there is residual value in this approach. Societal values and norms do vary from culture to culture, customs do differ, so it might follow that certain business practices are ethical in one country, but not in another.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
64) A righteous moralist is most likely to claim that
Answer: A
Explanation: Righteous moralism is the belief that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
65) The straw man approach of righteous moralism is typically associated with managers from
Answer: D
Explanation: Righteous moralism is the belief that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. This approach is typically associated with managers from developed nations.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
66) Jonathan is the expatriate manager of his company’s facility in Indonesia. He expects the exact same standards of working conditions, wages, and labor management in the Indonesian facility as practiced by the corporate office in the United States. His policy does not always lead to profits because of the vast cultural differences between the two nations. What straw men approach to ethics is Jonathan using?
Answer: C
Explanation: Righteous moralism is the belief that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. This approach is typically associated with managers from developed nations.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
67) Silver Meteorite Inc. is a multinational company whose home country considers grease payments illegal and unethical. The company has a zero-tolerance approach toward grease payments irrespective of any of its host nations’ perspectives toward such payments. In this context, Silver Meteorite Inc. is following the approach to ethics known as
Answer: B
Explanation: A righteous moralist claims that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. This approach is typically associated with managers from developed nations.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
68) The biggest criticism of the righteous moralist approach to an ethical situation is that it
Answer: D
Explanation: The main criticism of the righteous moralist approach is that its proponents go too far. While there are some universal moral principles that should not be violated, it does not always follow that the appropriate thing to do is adopt home-country standards.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
69) A multinational corporation that adopts the naive immoralist approach to ethics will most likely
Answer: D
Explanation: A naive immoralist asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
70) An American manager of a multinational company who is working in one of the company’s production plants located in a foreign country, employs child labor at the manufacturing unit he oversees. When criticized as unethical, the manager argues that such actions are ethically defensible because every company in the country is doing it. What ethical approach is this manager using?
Answer: C
Explanation: A naive immoralist asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
71) Johan is the manager of CycleUp and has agreed to build a new manufacturing plant in Argentina. He realizes this decision will cause him to shut down a small plant in Ohio, but he decides that since the new facility will cut his operating costs in half, that is worth more than closing a plant employing ten people. Which philosophical approach to ethics does this demonstrate?
Answer: C
Explanation: Utilitarian approaches to ethics hold that the moral worth of actions or practices is determined by their consequences. Utilitarianism recognizes that actions have multiple consequences, some of which are good in a social sense and some of which are harmful. As a philosophy for business ethics, utilitarianism focuses attention on the need to weigh carefully all of the social benefits and costs of a business action and to pursue only those actions where the benefits outweigh the costs.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
72) The utilitarian philosophy for business ethics primarily focuses on
Answer: E
Explanation: Utilitarianism recognizes that actions have multiple consequences, some of which are good in a social sense and some of which are harmful. As a philosophy for business ethics, it focuses attention on the need to weigh carefully all of the social benefits and costs of a business action and to pursue only those actions where the benefits outweigh the costs.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
73) The ________ approach to ethics holds that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences.
Answer: B
Explanation: Utilitarian approaches to ethics hold that the moral worth of actions or practices is determined by their consequences. An action is judged desirable if it leads to the best possible balance of good consequences over bad consequences.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
74) According to the utilitarian perspective, the best decisions are those that
Answer: C
Explanation: As a philosophy for business ethics, utilitarianism focuses attention on the need to weigh carefully all of the social benefits and costs of a business action and to pursue only those actions where the benefits outweigh the costs. The best decisions, from a utilitarian perspective, are those that produce the greatest good for the greatest number of people.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
75) Jaxon Furnishings Company is considering logging opportunities in Alaska to obtain wood for their products. The market analysis team is busy comparing the benefits of increased wood production to the costs of deforestation and resulting environmental conditions. The company is using the ________ approach to make this ethical decision.
Answer: D
Explanation: As a philosophy for business ethics, utilitarianism focuses attention on the need to weigh carefully all of the social benefits and costs of a business action and to pursue only those actions where the benefits outweigh the costs. The best decisions, from a utilitarian perspective, are those that produce the greatest good for the greatest number of people. Many businesses have adopted specific tools such as cost-benefit analysis and risk assessment that are firmly rooted in a utilitarian philosophy.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
76) What is a drawback of the utilitarian approach to business ethics?
Answer: A
Explanation: One of the problems with utilitarianism is that the philosophy omits the consideration of justice. The action that produces the greatest good for the greatest number of people may result in the unjustified treatment of a minority.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
77) According to ________, people should be treated as ends and never purely as means to the ends of others.
Answer: A
Explanation: Kantian ethics holds that people should be treated as ends and never purely as means to the ends of others. People are not instruments, like a machine. People have dignity and need to be respected as such.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
78) Some contemporary moral philosophers view Kant’s ethical philosophy as incomplete because his system has no place for
Answer: C
Explanation: Although contemporary moral philosophers tend to view Kant’s ethical philosophy as incomplete—for example, his system has no place for moral emotions or sentiments such as sympathy or caring—the notion that people should be respected and treated with dignity still resonates in the modern world.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
79) Kantian philosophy would view ________ as an ethical violation.
Answer: A
Explanation: Employing people in sweatshops, making them work long hours for low pay in poor work conditions, is a violation of ethics, according to Kantian philosophy, because it treats people as mere cogs in a machine and not as conscious moral beings that have dignity.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
80) While Kyle realized that his company was allowed to conduct a 12-hour workday in the overseas facility he managed, he instead implemented two 8-hour shifts because he felt it was fundamentally the right thing to do. A rights theorist would say that Kyle is using ________ to make this choice.
Answer: C
Explanation: Developed in the twentieth century, rights theories recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures. Moral theorists argue that fundamental human rights form the basis for the moral compass that managers should navigate by when making decisions that have an ethical component. More precisely, they should not pursue actions that violate these rights.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
81) While making a business decision, a manager who believes in rights theories is most likely to focus on
Answer: A
Explanation: One well-known definition of a fundamental right construes it as something that takes precedence over or “trumps” a collective good. Moral theorists argue that fundamental human rights form the basis for the moral compass that managers should navigate by when making decisions that have an ethical component. More precisely, they should not pursue actions that violate these rights.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
82) The Universal Declaration of Human Rights would agree that
Answer: B
Explanation: The notion that there are fundamental rights that transcend national borders and cultures was the underlying motivation for the United Nations Universal Declaration of Human Rights. Article 23 of the Universal Declaration of Human Rights implies that it is unethical to employ child labor in sweatshop settings and pay less than subsistence wages, even if that happens to be common practice in some countries. These are fundamental human rights that transcend national borders.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
83) In stating that all human beings are born free and equal in dignity and rights, and that they are endowed with reason and conscience and should act toward one another in a spirit of brotherhood, Article 1 of the Universal Declaration of Human Rights echoes
Answer: D
Explanation: Echoing Kantian ethics, Article 1 of the Universal Declaration of Human Rights states: All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
84) Article 23 of the Universal Declaration of Human Rights implies that it is unethical to employ child labor in sweatshop settings and pay less than subsistence wages, even if that happens to be common practice in some countries. This is in contrast to
Answer: B
Explanation: According to the United Nations Universal Declaration of Human Rights, fundamental human rights transcend national borders and cultures. However, cultural relativism implicitly rejects the idea that universal notions of morality transcend different cultures.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
85) Renata believes that it is the obligation of the state government to provide food and shelter for every citizen. Renata believes that government should act as
Answer: D
Explanation: Within the framework of a theory of rights, certain people or institutions are obligated to provide benefits or services that secure the rights of others. Such obligations also fall on more than one class of moral agent (a moral agent is any person or institution that is capable of moral action such as a government or corporation).
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
86) Straight Arrow unloaded two tankers worth of toxic waste at a port in a foreign nation. Two hundred men and boys worked two days in their shorts and sandals to unload the barrels from the tankers for $5 a day. They were not told about the content of the barrels. Some observers felt that it was the obligation of not just the government, but also of Straight Arrow to ensure that no harm was done to the workers. These observers are most likely
Answer: D
Explanation: Rights theories recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures. Rights establish a minimum level of morally acceptable behavior.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
87) Justice theories primarily focus on
Answer: B
Explanation: Justice theories focus on the attainment of a just distribution of economic goods and services. A just distribution is one that is considered fair and equitable.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
88) Who asserts that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage?
Answer: A
Explanation: John Rawls argues that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage. According to Rawls, valid principles of justice are those with which all persons would agree if they could freely and impartially consider the situation.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
89) The veil of ignorance, a conceptual device designed by John Rawls, supports
Answer: A
Explanation: According to John Rawls, valid principles of justice are those with which all persons would agree if they could freely and impartially consider the situation. Impartiality is guaranteed by a conceptual device that Rawls calls the veil of ignorance. Under the veil of ignorance, everyone is imagined to be ignorant of all of his or her particular characteristics, for example, race, sex, intelligence, nationality, family background, and special talents.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
90) The ________ supports the idea that everyone is imagined to be oblivious to all of his or her particular characteristics, such as, race, sex, intelligence, nationality, family background, and special talents.
Answer: D
Explanation: Under the veil of ignorance, everyone is imagined to be ignorant of all of his or her particular characteristics, for example, race, sex, intelligence, nationality, family background, and special talents.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
91) Under John Rawls’s concept of the veil of ignorance, people are imagined to be ignorant of their
Answer: C
Explanation: According to Rawls, valid principles of justice are those with which all persons would agree if they could freely and impartially consider the situation. Impartiality is guaranteed by a conceptual device that Rawls calls the veil of ignorance. Under the veil of ignorance, everyone is imagined to be ignorant of all of his or her particular characteristics, for example, race, sex, intelligence, nationality, family background, and special talents.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
92) Rawls would agree with the idea that inequalities can be justified if they
Answer: D
Explanation: Rawls’s first principle of justice is that each person be permitted the maximum amount of basic liberty compatible with a similar liberty for others. The second principle is that once equal basic liberty is assured, inequality in basic social goods—such as income and wealth distribution, and opportunities—is to be allowed only if such inequalities benefit everyone.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
93) The ________, developed by Rawls, indicates that inequalities are justified if they benefit the position of the least-advantaged members of society.
Answer: A
Explanation: John Rawls accepts that inequalities can be just if the system that produces inequalities is to the advantage of everyone. More precisely, he formulates what he calls the difference principle, which is that inequalities are justified if they benefit the position of the least-advantaged person.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
94) A moral compass is used by managers to
Answer: A
Explanation: Managers need a moral compass to help them find an acceptable solution to the dilemma. Thus, Rawls’s veil of ignorance is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
95) One way businesses can make sure they are hiring individuals with strong personal ethics is by
Answer: C
Explanation: In order to avoid hiring people who subsequently turn out to have poor personal ethics, businesses can give potential employees psychological tests to try to discern their ethical predisposition, and they can check with prior employees regarding someone’s reputation (e.g., by asking for letters of reference and talking to people who have worked with the prospective employee). The latter is common and does influence the hiring process.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
96) The code of ethics of a company draws heavily upon documents such as the UN Universal Declaration of Human Rights, which itself is grounded in Kantian and rights-based theories of moral philosophy. In the context of this information, this company is most likely to
Answer: E
Explanation: Often, the code of ethics draws heavily upon documents such as the UN Universal Declaration of Human Rights, which itself is grounded in Kantian and rights-based theories of moral philosophy. For example, the food and consumer products multinational Unilever has a code of ethics that includes the following point: We respect the dignity of the individual and the right of employees to freedom of association.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
97) In a business setting, which of these practices is most likely to be considered unethical?
Answer: D
Explanation: Leaders in a business must give life and meaning to ethical behavior by repeatedly emphasizing their importance and then acting on them. This means using every relevant opportunity to stress the importance of business ethics and making sure that key business decisions not only make good economic sense but also are ethical.
Difficulty: 2 Medium
Topic: Causes of Unethical Behavior
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Apply
AACSB: Ethics; Knowledge Application
Accessibility: Keyboard Navigation
98) A(n) ________ is considered an external stakeholder of an organization.
Answer: B
Explanation: The internal stakeholders of a company are individuals or groups who work for or own the business. They include all employees, the board of directors, and stockholders. 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.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
99) GreenPlace is a manufacturing company that makes plant fertilizers. It has customers, investors, vendors, and competitors from all across the globe. Which of these GreenPlace business associates would be an internal stakeholder?
Answer: B
Explanation: The internal stakeholders of a company are individuals or groups who work for or own the business. They include all employees, the board of directors, and stockholders. 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.
Difficulty: 3 Hard
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Apply
AACSB: Ethics; Knowledge Application
Accessibility: Keyboard Navigation
100) The term ________ can be described as standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder
Answer: D
Explanation: Stakeholder analysis involves a certain amount of what has been called moral imagination. This means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
101) When thinking through an ethical issue, the first step you should take is to
Answer: A
Explanation: A five-step process has been recommended to think through ethical problems (this is another example of an ethical algorithm). In step 1, businesspeople should identify which stakeholders a decision would affect and in what ways.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
102) Kendrik would like to hire just one company to construct the new highway overpass in Phoenix, but he can’t imagine asking such a small crew to work many months in the hot conditions of the Arizona summer. Kendrik is relying on ________ to make his decision.
Answer: E
Explanation: Stakeholder analysis involves a certain amount of what has been called moral imagination. This means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
103) What practice should a company avoid to ensure ethical decision making?
Answer: D
Explanation: Although maximizing long-run profitability is the decision rule that most businesses stress, it should be applied subject to the constraint that no moral principles are violated—that the business behaves in an ethical manner.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
104) The last step in ethical decision making involves
Answer: C
Explanation: Step five, the last step in a stakeholder analysis, requires the business to audit its decisions, reviewing them to make sure they were consistent with ethical principles, such as those stated in the company’s code of ethics.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
105) The ________ step in ethical decision making helps businesspeople know if their decision process is working and if changes should be made to ensure greater compliance with a code of ethics.
Answer: B
Explanation: Step five, the last step in a stakeholder analysis, requires the business to audit its decisions, reviewing them to make sure they were consistent with ethical principles, such as those stated in the company’s code of ethics. This final step is critical and often overlooked. Without auditing past decisions, businesspeople may not know if their decision process is working and if changes should be made to ensure greater compliance with a code of ethics.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
106) Jalen is the ethics officer at TurboLife. His responsibilities would include
Answer: A
Explanation: To make sure that a business behaves in an ethical manner, a number of firms now have ethics officers. These individuals are responsible for making sure that all employees are trained to be ethically aware, that ethical considerations enter the business decision-making process, and that the company’s code of ethics is followed.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
107) When an employee says no to a supervisor because what he or she was asked to do was unethical, it exhibits the employee’s
Answer: A
Explanation: 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. Moral courage gives an employee the strength to say no to a superior who instructs her to pursue actions that are unethical. Moral courage gives employees the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
108) ________ is 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.
Answer: D
Explanation: The concept of corporate 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.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
109) In a business setting, the term noblesse oblige refers to
Answer: A
Explanation: 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.
Difficulty: 2 Medium
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
110) Describe how violation of the apartheid laws by Western businesses helped improve human rights in South Africa.
Answer: Despite the odious nature of the apartheid system, Western businesses operated in South Africa. By the 1980s, however, many argued that inward investment by foreign multinationals, by boosting the South African economy, supported the repressive apartheid regime. Several Western businesses started to change their policies in the late 1970s and early 1980s. General Motors, which had significant activities in South Africa, was at the forefront of this trend. GM adopted what came to be called the Sullivan principles, which argued that it was ethically justified for GM to operate in South Africa so long as two conditions were fulfilled. First, the company should not obey the apartheid laws in its own South African operations. Second, the company should do everything within its power to promote the abolition of apartheid laws. Sullivan’s principles were widely adopted by U.S. firms operating in South Africa. Their violation of the apartheid laws was ignored by the South African government, which clearly did not want to antagonize important foreign investors. However, after 10 years, Leon Sullivan concluded that simply following the principles was not sufficient to break down the apartheid regime and that any American company, even those adhering to his principles, could not ethically justify their continued presence in South Africa. Over the next few years, numerous companies divested their South African operations. These divestments, coupled with the imposition of economic sanctions from the U.S. and other governments, contributed to the abandonment of white minority rule and apartheid in South Africa and the introduction of democratic elections in 1994. Thus, adopting an ethical stance was argued to have helped improve human rights in South Africa.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
111) Discuss how ethical choices and social responsibility issues come up because of differing environmental regulations.
Answer: Ethical issues arise when environmental regulations in host nations are inferior to those in the home nation. 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. Regulations differ from nation to nation. It is unethical for a company to try to escape tight emission limits by moving production to a country with lax regulations, given that doing so will contribute to global warming. Again, many would argue that doing so violates basic ethical principles.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
112) Describe the global tragedy of the commons and provide an example of this situation.
Answer: No one owns the atmosphere or the oceans, but polluting both, no matter where the pollution originates, harms all. The atmosphere and oceans can be viewed as a global commons from which everyone benefits but for which no one is specifically responsible. In such cases, a phenomenon known as the tragedy of the commons becomes applicable. 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. The phenomenon was first named by Garrett Hardin when describing a particular problem in sixteenth-century England. 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. Such actions seem to violate basic societal notions of ethics and corporate social responsibility. This issue is taking on greater importance as concerns about human-induced global warming move to center stage.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
113) Describe the relationship between corrupt practices and grease payments.
Answer: Sometimes known as speed money or grease payments, facilitating payments are not payments to secure contracts that would not otherwise be secured nor are they payments to obtain exclusive preferential treatment. Rather they 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.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical, corporate social responsibility, and sustainability issues faced by international business.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
114) Define an ethical dilemma and describe a hypothetical situation in which a manager faces an ethical dilemma while working in a host country.
Answer: Student examples will vary. An ethical dilemma is a situation in which there is no ethically acceptable solution. That is the nature of ethical dilemmas—they are situations in which none of the available alternatives seems ethically acceptable. Managers often confront very real ethical dilemmas where the appropriate course of action is not clear. It is important to note that ethical dilemmas exist because many real-world decisions are complex, difficult to frame, and involve first-, second-, and third-order consequences that are hard to quantify. Doing the right thing, or even knowing what the right thing might be, is often far from easy. The ethical obligations of a multinational corporation toward employment conditions, human rights, corruption, environmental pollution, and the use of power are not always clear-cut.
Difficulty: 3 Hard
Topic: Ethical Decision Making
Learning Objective: 05-02 Recognize an ethical, corporate social responsibility, and/or sustainability dilemma.
Bloom’s: Apply
AACSB: Ethics; Knowledge Application
Accessibility: Keyboard Navigation
115) Discuss any two straw men approaches to business ethics.
Answer: Straw men approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision making in a multinational enterprise. These approaches can be characterized as the Friedman doctrine, cultural relativism, the righteous moralist, and the naive immoralist.
Economist Milton Friedman wrote an article that has become a classic straw man example that business ethics scholars outline only to then tear down. 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. His arguments suggest that improving working conditions beyond the level required by the law and necessary to maximize employee productivity will reduce profits and are therefore not appropriate. His belief is that a firm should maximize its profits because that is the way to maximize the returns that accrue to the owners of the firm, its shareholders. If shareholders then wish to use the proceeds to make social investments, that is their right, according to Friedman, but managers of the firm should not make that decision for them.
Another straw man often raised by business ethics scholars is cultural relativism, which 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. This approach is often summarized by the maxim when in Rome, do as the Romans.
A righteous moralist claims that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. This approach is typically associated with managers from developed nations. While this seems reasonable at first blush, the approach can create problems. The main criticism of the righteous moralist approach is that its proponents go too far. While there are some universal moral principles that should not be violated, it does not always follow that the appropriate thing to do is adopt home-country standards.
A naive immoralist asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either. The objection to naive immoralism is twofold. First, to say that an action is ethically justified if everyone is doing it is not sufficient. Second, a large multinational must recognize that it does have the ability to change the prevailing practice in a country. It can use its power for a positive moral purpose.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
116) Compare and contrast cultural relativism and righteous moralism.
Answer: Cultural relativism believes 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. This approach is often summarized by the maxim “when in Rome do as the Romans.” Cultural relativism implicitly rejects the idea that universal notions of morality transcend different cultures. A righteous moralist claims that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. This approach is typically associated with managers from developed nations. The main criticism of the righteous moralist approach is that its proponents go too far. While there are some universal moral principles that should not be violated, it does not always follow that the appropriate thing to do is adopt home-country standards.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
117) Discuss the utilitarian approach to business ethics and examine its weaknesses.
Answer: Utilitarian approaches to ethics hold that the moral worth of actions or practices is determined by their consequences. An action is judged desirable if it leads to the best possible balance of good consequences over bad consequences. As a philosophy for business ethics, it focuses attention on the need to weigh carefully all of the social benefits and costs of a business action and to pursue only those actions where the benefits outweigh the costs. The best decisions, from a utilitarian perspective, are those that produce the greatest good for the greatest number of people.
Utilitarian philosophy does have some serious drawbacks as an approach to business ethics. One problem is measuring the benefits, costs, and risks of a course of action. The second problem with utilitarianism is that the philosophy omits the consideration of justice. The action that produces the greatest good for the greatest number of people may result in the unjustified treatment of a minority. Such action cannot be ethical, precisely because it is unjust.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
118) Describe how the veil of ignorance plays a role in John Rawls’s principles of justice.
Answer: According to John Rawls, valid principles of justice are those with which all persons would agree if they could freely and impartially consider the situation. Impartiality is guaranteed by a conceptual device that Rawls calls the veil of ignorance. Under the veil of ignorance, everyone is imagined to be ignorant of all of his or her particular characteristics, for example, race, sex, intelligence, nationality, family background, and special talents. Rawls then asks what system people would design under a veil of ignorance. Under these conditions, people would unanimously agree on two fundamental principles of justice. The first principle is that each person be permitted the maximum amount of basic liberty compatible with a similar liberty for others. Rawls takes these to be political liberty (e.g., the right to vote), freedom of speech and assembly, liberty of conscience and freedom of thought, the freedom and right to hold personal property, and freedom from arbitrary arrest and seizure. The second principle is that once equal basic liberty is assured, inequality in basic social goods—such as income and wealth distribution, and opportunities—is to be allowed only if such inequalities benefit everyone. Rawls accepts that inequalities can be just if the system that produces inequalities is to the advantage of everyone. More precisely, he formulates what he calls the difference principle, which is that inequalities are justified if they benefit the position of the least-advantaged person.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to business ethics that apply globally.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
119) Discuss some steps an international business and its managers can take to make sure ethical issues are considered in business decisions.
Answer: Many of the most vexing ethical problems arise because there are very real dilemmas inherent in them and no obvious correct action. Nevertheless, managers can and should do many things to make sure that basic ethical principles are adhered to and that ethical issues are routinely inserted into international business decisions. The seven things that an international business and its managers can do to make sure ethical issues are considered in business decisions are: (1) favor hiring and promoting people with a well-grounded sense of personal ethics; (2) build an organizational culture and exemplify leadership behaviors that place a high value on ethical behavior; (3) put decision-making processes in place that require people to consider the ethical dimension of business decisions; (4) institute ethical officers in the organization, (5) develop moral courage; (6) make corporate social responsibility a cornerstone of enterprise policy; and (7) pursue strategies that are sustainable.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Remember
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
120) Discuss the link between the concept of sustainability and the tragedy of the commons.
Answer: A company pursuing a sustainable strategy would not adopt business practices that deplete the environment for short-term economic gain because doing so would impose a cost on future generations. In other words, international businesses that pursue sustainable strategies try to ensure that they do not precipitate or participate in a situation that results in a tragedy of the commons Thus, for example, a company pursuing a sustainable strategy would try to reduce its carbon footprint (CO2 emissions) so that it does not contribute to global warming. The core idea of sustainability is that the organization—through its actions—does not exert a negative impact on the ability of future generations to meet their own economic needs and that its actions impart long-run economic and social benefits on stakeholders.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
121) Explain corporate social responsibility and describe how the concept of noblesse oblige factors into this concept.
Answer: The concept of corporate social responsibility (CSR) 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. In its purest form, corporate social responsibility can be supported for its own sake simply because it is the right way for a business to behave. Advocates of this approach argue that businesses, particularly large successful businesses, need to recognize their noblesse oblige and give something back to the societies that have made their success possible. 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. This has long been recognized by many businesspeople, resulting in a substantial and venerable history of corporate giving to society, with businesses making social investments designed to enhance the welfare of the communities in which they operate.
Difficulty: 2 Medium
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how global managers can incorporate ethical considerations into their decision making in general and for corporate social responsibility and sustainability initiatives.
Bloom’s: Understand
AACSB: Ethics; Analytical Thinking
Accessibility: Keyboard Navigation
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
