International Business Charles Hill 12e - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below International Business, 12e (Hill) Chapter 5 Ethics, Corporate Social Responsibility, and Sustainability 1) Ethical strategies are the accepted principles of right or wrong governing the conduct of businesspeople. …
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International Business Charles Hill 12e – Test Bank
Instant Download – Complete Test Bank With Answers
Sample Questions Are Posted Below
International Business, 12e (Hill)
Chapter 5 Ethics, Corporate Social Responsibility, and Sustainability
1) Ethical strategies are the accepted principles of right or wrong governing the conduct of businesspeople.
Answer: FALSE
Explanation: An ethical strategy is a strategy, or course of action, that does not violate the accepted principles of right or wrong governing the conduct of businesspeople.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
2) What is considered normal business practice in one country may be considered unethical in other countries.
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 issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
3) The Sullivan principles mandated that GM could operate in South Africa as long as the company did not comply with and promoted the abolition of apartheid laws.
Answer: TRUE
Explanation: GM adopted the Sullivan principles. 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. Second, the company should do everything within its power to promote the abolition of apartheid laws.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
4) Corporations can contribute to the global tragedy of the commons by not pumping pollutants into the atmosphere or dumping them in oceans or rivers.
Answer: FALSE
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 issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
5) International businesses cannot gain economic advantages by making payments to corrupt government officials.
Answer: FALSE
Explanation: There always have been and always will be corrupt government officials. International businesses can and have gained economic advantages by making payments to those officials.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
6) The Foreign Corrupt Practices Act was amended to allow “facilitating payments” to secure contracts that would not otherwise be secured.
Answer: TRUE
Explanation: The Foreign Corrupt Practices Act was later 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, nor are they payments to obtain exclusive preferential treatment.
Difficulty: 2 Medium
Topic: Key Regulations Governing Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
7) The ethical obligations of a multinational corporation toward employment conditions, human rights, environmental pollution, and the use of power are always clear-cut.
Answer: FALSE
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.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-02 Recognize an ethical dilemma.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
8) Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable.
Answer: TRUE
Explanation: Ethical dilemmas are 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 dilemma.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
9) Societal business ethics are divorced from personal ethics.
Answer: FALSE
Explanation: Societal business ethics are not divorced from personal ethics, which are the generally accepted principles of right and wrong governing the conduct of individuals.
Difficulty: 1 Easy
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
10) An individual with a strong sense of personal ethics is less likely to behave in an unethical manner in a business setting.
Answer: TRUE
Explanation: Our personal ethical code exerts a profound influence on the way we behave as businesspeople. An individual with a strong sense of personal ethics is less likely to behave in an unethical manner in a business setting.
Difficulty: 1 Easy
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
11) A firm’s organizational culture refers to the values and norms that are shared among employees of an organization and those outside the organization.
Answer: FALSE
Explanation: The term organizational culture refers to the values and norms that are shared among employees of an organization.
Difficulty: 1 Easy
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
12) The utilitarian approach to ethics is a straw man approach to business ethics that has some inherent value, but is unsatisfactory in important ways.
Answer: FALSE
Explanation: Straw man approaches to business ethics can be characterized as the Friedman doctrine, cultural relativism, the righteous moralist, and the naive immoralist.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
13) Milton 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.
Answer: TRUE
Explanation: The Nobel Prize–winning economist Milton Friedman wrote an article in 1970 that has since become a classic straw man 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.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
14) The Friedman doctrine is the belief that ethics are nothing more than a reflection of culture and therefore, a firm should adopt the ethics of the culture in which it is operating.
Answer: FALSE
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
15) Cultural relativism suggests that even if slavery is culturally acceptable in a country, a foreign firm operating in that country should avoid using slave labor.
Answer: FALSE
Explanation: At its extreme, cultural relativism suggests that if a culture supports slavery, it is okay to use slave labor in a country.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
16) A manager from the United States is sent to Nigeria to supervise the construction of a road. As a righteous moralist, he is likely to learn the ethics and values of Nigeria and follow them, even if they don’t concur with his own.
Answer: FALSE
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
17) Most moral philosophers see value in utilitarian and Kantian approaches to business ethics.
Answer: TRUE
Explanation: In contrast to the straw man approaches to ethics, most moral philosophers see value in utilitarian and Kantian approaches to business ethics.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
18) Utilitarian philosophy takes into consideration the principle of justice.
Answer: FALSE
Explanation: The 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: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
19) According to Rawls, inequalities are unjust even if the system that produces inequalities is to the advantage of everyone.
Answer: FALSE
Explanation: 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 ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
20) Building an organization culture that places a high value on ethical behavior requires incentive and reward systems.
Answer: TRUE
Explanation: Building an organization culture that places a high value on ethical behavior requires incentive and reward systems, including promotions that reward people who engage in ethical behavior and sanction those who do not.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
21) Social responsibility refers to the idea that businesspeople should favor decisions that have both good economic and social consequences.
Answer: TRUE
Explanation: The concept of social responsibility refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and social consequences.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
22) To establish moral intent, managers need to stand in the shoes of a stakeholder and ask how a proposed decision might impact that stakeholder.
Answer: FALSE
Explanation: Managers need to establish moral intent, to be able to think through ethical problems. This means the business must resolve to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
23) To foster ethical behavior, many businesses draft a code of ethics, which is an informal statement of the ethical priorities the company follows.
Answer: FALSE
Explanation: To foster ethical behavior, businesses need to build an organization that values ethical behavior. To do this, many companies now draft a code of ethics, which is a formal statement of the ethical priorities a business adheres to.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
24) In a business setting, noblesse oblige is taken to mean benevolent behavior that is the responsibility of successful enterprises.
Answer: TRUE
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: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
25) Ethics officers are hired by many businesses to make sure that all employees are trained to be ethically aware and that ethical considerations enter the business decision-making process at all levels of the organization.
Answer: TRUE
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: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
26) The ________ occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation.
Answer: A
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. The phenomenon was first named by Garrett Hardin when describing a particular problem in sixteenth-century England.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
27) The ________ outlawed the paying of bribes to foreign government officials to gain business.
Answer: B
Explanation: The Lockheed case was the impetus for the 1977 passage of the Foreign Corrupt Practices Act in the United States. The act outlawed the paying of bribes to foreign government officials to gain business.
Difficulty: 1 Easy
Topic: Key Regulations Governing Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
28) Facilitating payments are also known as
Answer: C
Explanation: 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.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
29) Which of the following was designed to allow GM to operate ethically in South Africa as long as the company did not obey the apartheid laws in its own South African operations?
Answer: A
Explanation: GM adopted what came to be called the Sullivan principles, named after Leon Sullivan, a black Baptist minister and a member of GM’s board of directors. Sullivan argued that it was ethically justified for GM to operate in South Africa so long as certain conditions were fulfilled.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
30) The ________ obliges member states to make the bribery of foreign public officials a criminal offense and excludes facilitating payments made to expedite routine government action from the convention.
Answer: C
Explanation: In 1997, the OECD adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The convention obliges member states to make the bribery of foreign public officials a criminal offense. The convention excludes facilitating payments made to expedite routine government action from the convention.
Difficulty: 2 Medium
Topic: Key Regulations Governing Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
31) Identify the incorrect statement about environmental regulations.
Answer: B
Explanation: 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.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
32) The ________ occurs when a resource that is shared by all, but owned by no one, is overused by individuals, resulting in its degradation.
Answer: D
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: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
33) An international U.S.-based company sets up a production unit in a developing country with poor environmental regulations. This contributes to the
Answer: C
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 issues faced by international businesses.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
34) Which of the following observations about the Foreign Corrupt Practices Act is true?
Answer: A
Explanation: The Lockheed case was the impetus for the 1977 passage of the Foreign Corrupt Practices Act in the United States. The act outlawed the paying of bribes to foreign government officials to gain business.
Difficulty: 2 Medium
Topic: Key Regulations Governing Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
35) Facilitating payments are
Answer: D
Explanation: Sometimes known as speed money or grease payments, facilitating payments are payments to ensure receiving the standard treatment that a business ought to receive from a foreign government, but might not due to the obstruction of a foreign official.
Difficulty: 1 Easy
Topic: Key Regulations Governing Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
36) The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions excludes
Answer: C
Explanation: The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions excludes facilitating payments made to expedite routine government action from the convention.
Difficulty: 1 Easy
Topic: Key Regulations Governing Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
37) The idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences is known as
Answer: D
Explanation: The concept of social responsibility refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and social consequences.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
38) Which of the following, in a business setting, is taken to mean benevolent behavior that is the responsibility of successful enterprises?
Answer: D
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: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
39) BP, one of the world’s largest oil companies, has made it part of the company policy to undertake “social investments” in the countries where it does business. There was no economic reason for BP to make this social investment, but the company believes it is morally obligated to give something back to the societies that have made its success possible. BP’s actions are an example of
Answer: C
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: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
40) ________ are the accepted principles of right or wrong governing the conduct of businesspeople.
Answer: B
Explanation: Business ethics are the accepted principles of right or wrong governing the conduct of businesspeople.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
41) In the international business setting, one of the most common ethical issues involves
Answer: C
Explanation: Many of the ethical issues and dilemmas in international business are rooted in the fact that political systems, law, economic development, and culture vary significantly from nation to nation. Therefore, what might be considered a normal business practice in one country may constitute unethical behavior in another country. Managers in a multinational company need to be sensitive to these differences. In the international business setting, the most common ethical issues involve employment practices, human rights, environmental regulations, corruption, and the moral obligation of multinational corporations.
Difficulty: 2 Medium
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
42) Ethical dilemmas exist because many real-world decisions involve
Answer: A
Explanation: 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.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-02 Recognize an ethical dilemma.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
43) Josiah was managing a factory in India, and had a decision to make. The factory used child labor, which he disapproved of, but he knew the families of these children might starve without their income. This situation, in which none of the available alternatives seems morally acceptable, is called
Answer: A
Explanation: Ethical dilemmas are 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 dilemma.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
44) Which of the following is a reason managers working abroad in multinational firms may behave in a manner that is unethical?
Answer: A
Explanation: The causes that contribute to unethical behavior in businesses are very complex. However, a few generalizations can be made. Unethical behavior is rooted in poor personal ethics, societal culture, the psychological and geographical distances of a foreign subsidiary from the home office, a failure to incorporate ethical issues into strategic and operational decision making, a dysfunctional culture, and failure of leaders to act in an ethical manner.
Difficulty: 2 Medium
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
45) Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of which of the following?
Answer: C
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.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
46) Which of the following refers to the values and norms that the employees of an organization share?
Answer: C
Explanation: The term organization culture refers to the values and norms that are shared among employees of an organization.
Difficulty: 1 Easy
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
47) Grady works at a fast food restaurant. One day he noticed a co-worker giving free food to a friend. He was unsure about what to do. Grady most likely decided to follow the example of
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: 1 Easy
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
48) ________ approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate ethical decision making in a multinational enterprise.
Answer: C
Explanation: Straw man 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: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
49) ________ 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.
Answer: D
Explanation: Friedman explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
50) According to the ________ point of view, a firm should adopt the ethics of the culture in which it is operating.
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.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
51) According to the ________, even if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should maintain the standards of the company’s home country.
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.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
52) A British firm that sets up production units in China is accused of releasing untreated chemical waste into water bodies. The manager of the firm defends the firm stating that, factories in China set up by French and American firms also release untreated chemical waste into water bodies. What approach to business ethics is the 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: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
53) Business ethics that either deny the value of business ethics or apply the concept in a very unsatisfactory way are termed
Answer: A
Explanation: Straw man 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 ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
54) The ________ approaches to ethics hold that the moral worth of actions or practices is determined by their consequences.
Answer: D
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
55) ________ recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures.
Answer: A
Explanation: Developed in the twentieth century, 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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
56) According to ________, the social responsibility of business is to increase profits, so long as the company stays within the rules of law.
Answer: D
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
57) According to the Friedman doctrine,
Answer: C
Explanation: Friedman explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
58) Miranda is a cultural relativist, which means she likely believes
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.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
59) Child labor is permitted and widely employed in Country X. A multinational company entering Country X decides to employ minors in its subsidiary, even though it is against the multinational’s home-country ethics. Which of the following approaches to business ethics would justify the actions of the multinational company?
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.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
60) A multinational company is accused of paying bribes to the government of a host country to obtain permission to build a production factory. The public relations manager of the company defends the company’s actions as being ethically sound; he states that in the host country, paying bribes to government officials is the accepted norm and is in keeping with the social practices in the host country. The public relations manager is using which of the following philosophical doctrines to defend the actions of the company?
Answer: D
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.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
61) In its extreme viewpoint, ________ suggests that if a culture supports slavery, it is all right to use slave labor in the country.
Answer: D
Explanation: Cultural relativism does not stand up to a closer look. At its extreme, cultural relativism suggests that if a culture supports slavery, it is okay to use slave labor in a country.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
62) The righteous moralist suggests that
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
63) According to the naive immoralist,
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 ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
64) An American manager in Colombia routinely pays off the local drug lord to guarantee that his plant will not be bombed and that none of his employees will be kidnapped. The manager argues that such payments are ethically defensible because everyone is doing it. The manager’s argument exemplifies which of the following ethical approaches?
Answer: A
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. The classic example to illustrate the approach is known as the drug lord problem.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
65) The utilitarian approach to business ethics suggests that
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
66) Mahatma Gandhi felt the best decisions are those that produce the greatest good for the greatest number of people. This demonstrates the ________ perspective.
Answer: D
Explanation: The best decisions, from a utilitarian perspective, are those that produce the greatest good for the greatest number of people.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
67) The products of Carmen Stores, an international sports apparel chain, are manufactured in sweatshop factories in China. According to the company president, using sweatshop labor offers a means of livelihood to children and young adults, as well as supplies good quality apparel to customers at a lower cost. She asserts that the actions of the company are justified because it results in the benefit of the maximum number of people. The company president’s argument is based on which of the following ethical viewpoints?
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.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics; Reflective Thinking
Accessibility: Keyboard Navigation
68) The Kantian approach to ethics suggests that
Answer: C
Explanation: Kantian ethics hold that people should be treated as ends and never purely as means to the ends of others.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
69) Identify the correct statement about the rights theories.
Answer: A
Explanation: Developed in the twentieth century, rights theories recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
70) Which of the following persons believed that people should be treated as ends and never purely as means to the ends of others?
Answer: B
Explanation: Kantian ethics are based on the philosophy of Immanuel Kant (1724–1804). Kantian ethics hold 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 ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
71) The United Nations Universal Declaration of Human Rights, related to employment, upholds which of the following?
Answer: D
Explanation: Article 23 of the United Nations Universal Declaration of Human Rights states: Everyone has the right to work, to free choice of employment, to just and favorable conditions of work, and to protection against unemployment.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
72) Article 1 of the United Nations Universal Declaration of Human Rights states: All human beings are born free and equal in dignity and rights. This best echoes
Answer: D
Explanation: Echoing Kantian ethics, Article 1 of the United Nations 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 toward one another in a spirit of brotherhood.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
73) Which of the following statements is true about the United Nations Universal Declaration of Human Rights?
Answer: A
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, which has been ratified by almost every country on the planet and lays down basic principles that should always be adhered to irrespective of the culture in which one is doing business.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
74) Justice theories of business ethics focus on
Answer: D
Explanation: A just distribution is one that is considered fair and equitable. 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 ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
75) According to John Rawls,
Answer: A
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. One such principle is that each person be permitted the maximum amount of basic liberty compatible with a similar liberty for others.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
76) Rawls’ philosophy that inequalities are justified if they benefit the position of the least-advantaged person is known as the
Answer: C
Explanation: John Rawls formulated what he called 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 ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
77) According to John Rawls’s difference principle,
Answer: D
Explanation: John Rawls formulated what he called 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 ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
78) A ________ 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.
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
79) Any person or institution that is capable of moral action such as a government or corporation is a
Answer: A
Explanation: A moral agent is any person or institution that is capable of moral action such as a government or corporation.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
80) Under the veil of ignorance, everyone is imagined to be ignorant of
Answer: A
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: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
81) The veil of ignorance was developed by ________ as part of his approach to justice theories.
Answer: B
Explanation: The veil of ignorance was developed by John Rawls as part of his approach to justice theories. 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 the veil of ignorance. Under the veil of ignorance, everyone is imagined to be ignorant of all of his or her particular characteristics. Under these conditions everyone would agree that (1) each person be permitted the maximum amount of basic liberty compatible with a similar liberty for others, and (2) once basic liberty is assured, inequality in basic social goods is to be allowed only if such inequalities benefit everyone.
Difficulty: 1 Easy
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
82) ________ enables managers to walk away from a decision that is profitable but unethical.
Answer: D
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.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
83) A firm’s ________ include customers, suppliers, and lenders.
Answer: C
Explanation: Internal stakeholders are individuals or groups who work for or own the business. External stakeholders are all other individuals and groups that have some claim on the firm. Typically, this group is composed of customers, suppliers, lenders, governments, unions, local communities, and the general public.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
84) External stakeholders
Answer: C
Explanation: External stakeholders are all other individuals and groups, other than internal stakeholders, that have some claim on the firm. Typically, this group is composed of customers, suppliers, lenders, governments, unions, local communities, and the general public.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
85) Which of the following is an example of an external stakeholder?
Answer: B
Explanation: Internal stakeholders 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 is composed of customers, suppliers, lenders, governments, unions, local communities, and the general public.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
86) ________ is a French term that refers to honorable and benevolent behavior, considered the responsibility of people of high (noble) birth.
Answer: D
Explanation: Noblesse oblige is a French term that refers to honorable and benevolent behavior considered the responsibility of people of high (noble) birth.
Difficulty: 1 Easy
Topic: Ethical Issues in International Business
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
87) ________ means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder.
Answer: C
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: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
88) Which of the following enables managers to walk away from a decision that is profitable, but unethical?
Answer: B
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.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
89) Companies can strengthen the ________ of employees by committing themselves to not retaliate against employees who complain about unethical actions.
Answer: A
Explanation: Companies can strengthen the moral courage of employees by committing themselves to not retaliate against employees who exercise moral courage, say no to superiors, or otherwise complain about unethical actions.
Difficulty: 1 Easy
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
90) Establishing ________ involves a business resolving to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated.
Answer: D
Explanation: Moral intent implies that a business must resolve to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
91) What is the term for a company’s formal statement of the ethical priorities it expects all of its employees to follow?
Answer: A
Explanation: Many companies explicitly articulate values that emphasize ethical behavior by drafting a code of ethics, which is a formal statement of the ethical priorities a business adheres to.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
92) It is in the best interest of prospective employees to find out all they can about the
Answer: B
Explanation: Not only should businesses strive to identify and hire people with a strong sense of personal ethics, but it also is in the best interest of prospective employees to find out as much as they can about the ethical climate in an organization.
Difficulty: 1 Easy
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
93) Often, the code of ethics draws heavily upon documents such as the ________, which itself is grounded in Kantian and rights-based theories of moral philosophy.
Answer: B
Explanation: A code of ethics is a formal statement of the ethical priorities a business adheres to. 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.
Difficulty: 2 Medium
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
94) Discuss how companies such as Exxon, Kodak, and IBM helped improve human rights in South Africa.
Answer: During the 1980s, many American companies doing business in South Africa realized that following the Sullivan principles of not obeying apartheid laws and trying to promote their abolition was not a sufficiently ethical strategy. Consequently, many companies divested their holdings in the nation. At the same time, the U.S. government and other nations imposed economic sanctions on the country. Together, these actions helped bring about democratic elections in the nation in 1994, and an end to white minority rule.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
95) Should a multinational feel free to pollute in a developing nation?
Answer: This question is designed to stimulate classroom discussion or the personal opinion of the student. Issues that might emerge include whether there is any danger that a moral management might move production to a developing nation precisely because costly pollution controls are not required; the notion that the environment is a public good that no one owns, but that anyone can despoil; human-induced global warming; and legality of various actions.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
96) In your opinion, are bribes ever acceptable? Why or why not?
Answer: This question is designed to allow students to explore the idea of bribery as possibly resulting in a positive rather than a negative outcome. Some economists have suggested that corruption might in fact improve efficiency and help growth. Others, however, argue that corruption simply reduces the returns on business investment and leads to low economic growth.
Difficulty: 3 Hard
Topic: Ethical Issues in International Business
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
97) Discuss the notion of social responsibility. What does it mean for corporations?
Answer: The concept of social responsibility refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and social consequences. In a business setting, social responsibility means that benevolent behavior is the responsibility of successful enterprises.
Difficulty: 3 Hard
Topic: Ethics and Social Responsibility
Learning Objective: 05-01 Understand the ethical issues faced by international businesses.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
98) What are ethical dilemmas? Why do they exist?
Answer: Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable. 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. To deal with these situations, managers need a moral compass to guide them through the dilemma to find an acceptable solution.
Difficulty: 3 Hard
Topic: Ethical Decision Making
Learning Objective: 05-02 Recognize an ethical dilemma.
Bloom’s: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
99) Why are expatriate managers at a greater risk of violating their personal code of ethics?
Answer: 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. They may be based in a culture that does not place the same value on ethical norms important in the manager’s home country, and they may be surrounded by local employees who have less rigorous ethical standards. The parent company may pressure expatriate managers to meet unrealistic goals that can only be fulfilled by acting unethically. For example, to meet centrally mandated performance goals, expatriate managers might give bribes to win contracts. Local managers might encourage the expatriate to adopt such behavior. Due to its geographical distance, the parent company may be unable to see how expatriate managers are meeting goals, or may choose not to see how they are doing so, allowing such behavior to flourish and persist.
Difficulty: 3 Hard
Topic: Causes of Unethical Behavior
Learning Objective: 05-03 Identify the causes of unethical behavior by managers.
Bloom’s: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
100) Explain the Friedman doctrine. Who developed the philosophy? How well does this approach hold up ethically?
Answer: In 1970, Milton Friedman suggested 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 business should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business. Friedman does state that businesses should behave in an ethical manner and not engage in deception and fraud; however, most economists believe that his approach to ethics does not hold up well. For example, even though child labor may not be against the law in a particular country, it is still unethical to use child labor.
Difficulty: 2 Medium
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
101) Discuss the cultural relativism approach to business ethics. What is the connection between this approach and the phrase “When in Rome do as the Romans do”? How well does this approach hold up ethically?
Answer: The cultural relativism approach is the belief that ethics are nothing more than the reflection of a culture 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 do.” Cultural relativism does not stand up well to business ethics because it suggests that if a culture allows slavery, then it is acceptable for a firm to use slaves as well. Cultural relativism implicitly rejects the idea that universal notions of morality transcend different cultures; however, some universal notions of morality are found across cultures.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
102) Discuss the naive immoralist’s approach to business ethics. What are the criticisms of this approach?
Answer: The 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. This approach has been criticized with the argument that simply accepting an action as being ethically justified just because everyone is doing it is not sufficient. Moreover, the multinational company does have the ability to change the prevailing practice in the country.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
103) Discuss the utilitarian approach to business ethics. When was this approach developed? What are its drawbacks?
Answer: The utilitarian approach to business ethics was developed in the eighteenth and nineteenth centuries by philosophers such as David Hume, Jeremy Bentham, and John Stuart Mill. The utilitarian approach to ethics holds that the moral worth of actions or practices is determined by their consequences. An action is judged to be desirable if it leads to the best possible balance of good consequences over bad consequences. The best decisions are those that produce the greatest good for the greatest number of people
This approach has certain limitations. One serious drawback of the utilitarian approach is that it is difficult to measure the benefits, costs, and risks of a course of action. A second problem is that the philosophy omits the consideration of justice.
Difficulty: 3 Hard
Topic: Philosophical Approaches to Ethics
Learning Objective: 05-04 Describe the different philosophical approaches to ethics.
Bloom’s: Analyze
AACSB: Ethics
Accessibility: Keyboard Navigation
104) What are the ways in which international business and its managers can ensure that ethical issues are considered in business decisions?
Answer: An international business and its managers can take several steps to make sure ethical issues are considered in business decisions. Some of these are: (1) favor hiring and promoting people with a well-grounded sense of personal ethics; (2) build an organizational culture that places 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: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
105) Describe the five-step process that businesses can use to think through ethical problems.
Answer: Some experts on ethics have recommended a five-step process to think through ethical problems. In step 1, businesspeople should identify which stakeholders a decision would affect and in what ways. Stakeholder analysis involves a certain amount of moral imagination. Step 2 involves judging the ethics of the proposed strategic decision, given the information gained in step 1. Managers need to determine whether a proposed decision would violate the fundamental rights of any stakeholders. Step 3 requires managers to establish moral intent. This means the business must resolve to place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholders or key moral principles have been violated. Step 4 requires the company to engage in ethical behavior. Step 5 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: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
106) Why do organizations appoint an ethics officer?
Answer: 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. Ethics officers may also be responsible for auditing decisions to make sure they are consistent with this code. In many businesses, 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: 2 Medium
Topic: Ethics and Social Responsibility
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
107) How can companies strengthen the moral courage of employees?
Answer: Companies can strengthen the moral courage of employees by committing themselves to not retaliate against employees who exercise moral courage, say no to superiors, or otherwise complain about unethical actions. Companies can also set up ethics hotlines, which allow employees to anonymously register a complaint with a corporate ethics officer.
Difficulty: 2 Medium
Topic: Ethical Decision Making
Learning Objective: 05-05 Explain how managers can incorporate ethical considerations into their decision making.
Bloom’s: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
108) Explain the concept of moral imagination as it relates to a company’s stakeholders.
Answer: All stakeholders are in an exchange relationship with the company. Each stakeholder group supplies the organization with important resources (or contributions), and in exchange each expects its interests to be satisfied by inducements. 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 managers can incorporate ethical considerations into their decision making.
Bloom’s: Apply
AACSB: Ethics
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.
