San Francisco State University

IBUS 330

International Business, 8e

Chapter 5 Ethics and Social Responsibility in International Business

1)Which term refers to an individual's personal beliefs about whether a decision, behavior, or action is right or wrong?

2. Ethical beliefs are primarily                              in nature.

3. Which of the following is most influential on an individual's ethics?

4. Behavior that fails to conform to generally accepted social norms is considered                                 .

5. When behavior conforms to generally accepted norms, it is referred to as                              

behavior.

6.                        are the things a person feels to be important.

7. Which of the following best explains why looting was uncommon in Japan after the country's 2011 earthquake and tsunami?

8. Mick has been padding his expense account on business trips. However, it seems fair to him because the company refuses to provide him with comp time despite long hours he works on these business trips. Which ethical generalization does this most likely illustrate?

9. Three employees of Martin Enterprises have flown to China to meet a potential business partner. The three employees cannot agree about giving a gift to the potential partner. James, an American manager, believes that gift-giving is an ethical violation. Eun Hee, a South Korean manager, and Evan Lee, a Japanese manager, assert that gift-giving would be appropriate. This situation most likely illustrates which of the following statements?

10. Sonya and Amber work together in the Hong Kong corporate office. Despite having similar backgrounds and education, they cannot agree on whether it is appropriate to offer bribes to Chinese officials for the purpose of expediting business transactions. Which ethical generalization does this most likely illustrate?

11. BP's program to prepare managers at headquarters for assignments in Russia is an example of       .
12. Which of the following is most susceptible to ethical variations in international business?

13. Which term refers to a decision that benefits an individual to the possible detriment of the organization?

14. Braxton Clothing Company most likely forbids its buyers from accepting gifts from potential suppliers because the firm wants to avoid a(n)                                                                  .

15. Gift exchanges in a business situation in Japan are best described as                              .

16. Gift exchanges are likely to be considered a conflict of interest in a(n)                                 culture.

17. HR at APEX Designs, an international architectural firm noticed the following behaviors among employees lately. Which of the following would most likely be considered a problematic ethical situation at APEX?

18. Jack always likes to place orders with Sam's Supply Company because the company sends him a gift certificate for $100 each holiday season. Which ethical issue is this an example of?

19. Which of the following is a common method for encouraging ethical behavior among employees?

20. Which of the following most likely improves the effectiveness of a code of ethics for an MNE?

21. Morton Enterprises manufactures electronic components used in automobiles. The firm is currently based in the U.S. but is planning to expand operations overseas. Morton's new manufacturing facilities in China and Bangladesh are scheduled to open in six months. HR and top executives are working together to revise the firm's code of ethics. Ten of Morton's American managers will be relocated overseas for at least three years to manage international operations alongside locally hired managers. Which of the following questions is most relevant to the current discussion about the firm's code of ethics?

22. Morton Enterprises manufactures electronic components used in automobiles. The firm is currently based in the U.S. but is planning to expand operations overseas. Morton's new manufacturing facilities in China and Bangladesh are scheduled to open in six months. HR and top executives are working together to revise the firm's code of ethics. Ten of Morton's American managers will be relocated overseas for at least three years to manage international operations alongside locally hired managers. Which of the following training topics would most likely prepare expatriate managers for handling ethics issues in China and Bangladesh?
    1. multilingual contexts
    2. local religious customs
    3. local business and ethical practices
    4. global marketing methods

23. In a survey on the acceptability of bribing officials when doing business in foreign countries, which country found bribery most unacceptable?
    1. Russia
    2. Austria
    3. Taiwan
    4. South Korea  

24. According to a survey on the acceptability of bribing officials when doing business in foreign countries, which of the following was the most tolerant of bribery?
    1. Sweden
    2. Australia
    3. Switzerland
    4. South Korea  

25. The term                         refers to the set of obligations an organization undertakes to protect and enhance the society in which it functions.
    1. organizational ethics
    2. social responsibility
    3. corporate ethics
    4. social values  

26. A company that is socially responsible will most likely                                  .
    1. do as little as possible to address social or environmental problems
    2. undertake efforts to protect the society in which it functions
    3. conform to regional, national, and international laws
    4. follow basic ethical standards of behavior

27. The term                         refers to those people and organizations that are directly affected by the practices and performance of an organization.
    1. corporate customers
    2. permanent employees
    3. community stockholders
    4. stakeholders  

28. Which of the following is one of the main groups of stakeholders that firms usually focus on?
    1. competitors
    2. customers
    3. the government
    4. the general public

29. Companies that are socially responsible to their investors do which of the following?
    1. provide appropriate information to shareholders and investors
    2. fail to use corporate resources judiciously
    3. thwart appropriate accounting procedures
    4. manipulate stock prices

30. Firms such as Procter & Gamble that use recycled materials whenever possible are most likely demonstrating their                                     .
    1. commitment to environmental protection
    2. concern for general social welfare
    3. implementation of a code of ethics
    4. responsibility to stakeholders

31. Which of the following statements is most likely true about firms with formal codes of ethics?
    1. Virtually all ethical issues are eliminated from the firm.
    2. Ethical training is unnecessary, redundant, and too costly to be effective.
    3. Organizational practices and a strong ethical corporate culture are essential.
    4. Individual codes must be developed and implemented for each subunit in the firm.

32. Examples of promoting the general welfare of society include all of the following except

                     .

1. 1. making charitable contributions
   2. supporting public radio stations
   3. becoming involved in local schools
   4. using appropriate accounting procedures

33. Which of the following is the most resistant approach to social responsibility?
    1. obstructionist stance
    2. defensive stance
    3. accommodative stance
    4. proactive stance

34. Which of the following is the most responsible approach to social responsibility?
    1. obstructionist stance
    2. defensive stance
    3. accommodative stance
    4. proactive stance

35. When an organization does as little as possible to address social or environmental issues, it has adopted the        to social responsibility.
    1. obstructionist stance
    2. defensive stance
    3. accommodative stance
    4. proactive stance

36. When an organization does everything it must do from a legal standpoint but nothing more, it has adopted the                                                  to social responsibility.
    1. obstructionist stance
    2. defensive stance
    3. accommodative stance
    4. proactive stance

37. Alcoa's gift of $112,000 to a small town in Brazil to build a sewage treatment plant is an example of                .
    1. guanxi
    2. philanthropic giving
    3. ethical compliance
    4. legal compliance

38. Which of the following is an informal dimension of social responsibility?
    1. acts of philanthropic giving
    2. employment applications
    3. public relations
    4. organizational culture

39. Logix Manufacturing is a U.S. firm with a factory in Mexico City. Local leaders in Mexico City ask Logix managers to make contributions to a youth sports organization. Logix provides the league with new equipment and uniforms. Which stance towards social responsibility does Logix most likely have?
    1. proactive
    2. obstructionist
    3. accommodative
    4. defensive  

40. McDonald's Ronald McDonald House program is an example of a(n)                                   to social responsibility.
    1. accommodative stance
    2. proactive stance
    3. obstructionist stance
    4. defensive stance

41. Firms that view themselves as citizens of society have adopted the                               to social responsibility.
    1. obstructionist stance
    2. defensive stance
    3. accommodative stance
    4. proactive stance

42. A company taking a proactive approach to social responsibility will most likely

                     .

1. 1. exhibit sincere and significant efforts to contribute to society
   2. require employees to participate in local charities
   3. conform to regional customs and laws
   4. provide online ethics training

43. When tobacco companies make a decision to follow laws regarding the marketing of its products in the United States but market its tobacco aggressively in countries without such regulations, this is an example of which approach to social responsibility?
    1. the obstructionist stance
    2. the defensive stance
    3. the accommodative stance
    4. the proactive stance

44. The Body Shop seeks out opportunities to improve the welfare of individuals all over the world. It has adopted the                                                   to social responsibility.
    1. obstructionist stance
    2. defensive stance
    3. accommodative stance
    4. proactive stance

45. According to the model developed by van Tulder and van der Zwart there are three main actors in the policy formulation process. Which is a main actor?
    1. commercial society
    2. the state
    3. the environment
    4. the past  

46. Which term refers to the disclosure by an employee of illegal or unethical conduct on the part of others within the organization?
    1. whistle-blowing
    2. acknowledgement
    3. conflict of interest
    4. organizational communication

47. Justin is aware that his supervisor used corporate funds to pay for a personal vacation and reports the offense. This is called                                                  .
    1. whistle-blowing
    2. acknowledgement
    3. conflict of interest
    4. organizational communication

48. The extent to which an organization conforms to regional, national, and international laws is known as       .
    1. guanxi
    2. legal compliance
    3. ethical compliance
    4. whistle-blowing

49. The extent to which members of an organization follow basic ethical standards of behavior is          .
    1. guanxi
    2. legal compliance
    3. ethical compliance
    4. whistle-blowing

50. A firm that wants to review the effectiveness of its social responsibility efforts should most likely conduct a(n)                                                                  .
    1. corporate social audit
    2. SWOT analysis
    3. strategy session
    4. HR audit  

51. According to the model developed by Rob van Tulder and Alex van der Zwart, which of the following best exhibits the cultural values of a nation's citizens?
    1. the state
    2. the market
    3. civil society
    4. competitors  

52. According to the model developed by Rob van Tulder and Alex van der Zwart, Anglo- Saxon countries view the state, the market, and civil society as                                                                          .
    1. competitive
    2. symbiotic
    3. supervisory
    4. corrupt  

53. According to the model developed by Rob van Tulder and Alex van der Zwart, firms that adhere to the Asian Way are more likely to                                                                    .
    1. bargain with labor groups
    2. promote social responsibility
    3. strive for competitive advantages
    4. cooperate closely with the government

54. According to the model developed by Rob van Tulder and Alex van der Zwart, what is the key to the Continental European Approach?
    1. consumer demands for quality products and services
    2. cooperation between labor, business, and government
    3. competition to encourage consumer market expansion
    4. oversight by nongovernmental organizations

55. What is the purpose of the Foreign Corrupt Practices Act (FCPA)?
    1. It prohibits the offering of bribes to any foreign government official.
    2. It protects individuals from human rights abuses.
    3. It inspects working conditions of factories in developing countries.
    4. It prohibits conflicts of interest among employees of international businesses.

56. What is the purpose of the Alien Tort Claims Act?
    1. It protects individuals from human rights abuses.
    2. It eliminates bribery in international business transactions.
    3. It inspects working conditions of factories in developing countries.
    4. It prohibits conflicts of interest among employees of international businesses.

57. Individuals convicted under the Anti-Bribery Convention of the Organization for Economic Cooperation and Development will most likely be required to                                                     .
    1. pay a fine
    2. serve time in jail
    3. surrender their passport
    4. admit to a conflict of interest

58. The primary purpose of the International Labor Organization (ILO)is to                                  .
    1. minimize the use of child labor by MNEs
    2. eliminate extortion in international business transactions
    3. monitor working conditions of factories in developing countries
    4. prohibit conflicts of interest among employees of international businesses

59. Which regulation prohibits the offering of bribes to any foreign government official in order to influence official actions or policies of that official or to gain or retain business?
    1. Foreign Corrupt Practices Act
    2. Helms-Burton Act
    3. Alien Tort Claims Act
    4. Disclosure of Conflict Act

60. Which regulation seeks to protect individuals from human rights abuses and holds MNCs accountable for such abuses?
    1. Foreign Corrupt Practices Act
    2. Helms-Burton Act
    3. Alien Tort Claims Act
    4. Disclosure of Conflict Act

61. What organization is the major watchdog for monitoring working conditions in factories in developing countries?
    1. International Labor Organization
    2. Human Rights Campaign
    3. Organization for Economic Cooperation and Development
    4. World Trade Organization

62. An MNE with a factory in Cambodia is being inspected by the International Labor Organization. What is the most likely focus of the inspection?
    1. excessive corruption
    2. customs procedures
    3. environmental violations
    4. safe working conditions

63. Which of the following best explains why international factory owners would most likely want regular ILO inspections?
    1. eliminate workplace corruption
    2. encourage investments from MNEs
    3. comply with World Trade Organization
    4. earn reductions in exporting taxes and fees

64. Many U.S. firms move production and low-skill jobs to developing countries to reap the benefits of low labor costs, favorable public relations, and clear-cut business practices.

65. The fundamental reason for the existence of a business is to create value.

66. What constitutes ethical behavior varies from person to person.

67. An individual's personal beliefs regarding whether a decision, behavior, or action is right or wrong is known as ethics.

68. Ethics is an organizational concept, not an individual one.

69. Ethical behavior typically conforms to accepted social norms.

70. Values influence how individuals define ethical versus unethical behavior.

71. Circumstances have a significant influence on an individual's behavior.

72. Accepting gifts in a business relationship is unethical behavior in any country.

73. Low-context cultures are more likely to exchange gifts in a business context.

74. Codes of ethics are one of the most common methods of addressing appropriate ethical behavior within organizations.

75. In some countries small bribes are considered a normal part of doing business.

76. Studies indicate that despite the widespread nature of bribery in China, the corrupt behavior has no noticeable impact on the country's GDP.

77. Bribery is common in China and Russia but is considered unacceptable in Kenya and South Korea.

78. Social responsibility is the set of obligations an organization undertakes to protect and enhance the society in which it functions.

79. Whistle-blowing is generally considered unwelcome by most Japanese firms.

80. A company with an defensive stance to social responsibility will do everything that is required of it legally but nothing more.

81. Firms that view themselves as citizens in a society and are proactive about finding ways to contribute to it are taking an accommodative stance towards social responsibility.

82. Companies can manage social responsibility using formal and informal tools.

83. Philanthropic giving is an example of an informal tool to manage social responsibility.

84. Merck Pharmaceuticals has exhibited philanthropy by providing free medication to individuals in developing countries for the treatment of river blindness.

85. Whistle-blowing refers to disclosing illegal or unethical conduct on the part of individuals within an organization.

86. Firms conduct corporate social audits to assess the ethical values and behaviors of employees.

87. The Anglo-Saxon approach to corporate social responsibility views the state, the market, and civil society as separate, competitive, and antagonistic.

88. The Anglo-Saxon approach focuses on cooperation between the state, the market, and civil society.

89. Under the Foreign Corrupt Practices Act, American firms are permitted to pay bribes only in those countries where bribery is considered a normal part of business.

90. Under the Anti-Bribery Convention of the Organization for Economic Cooperation and Development, those convicted of paying bribes do not face jail time, only fines.

91. To date, the ILO has focused most of its efforts on improving labor conditions in China.

92. Research indicates that as much as 50% of the world's diamonds are smuggled "conflict diamonds."

93. The primary purpose of the Kimberley Process is to eliminate the smuggling and corruption associated with the South African diamond industry.

94. Large German firms typically negotiate with labor organizations under the oversight of the German government.

95. What are ethics? How does culture affect ethics for global organizations?

96. How do multi-national firms manage the ethical behavior of employees and maintain social responsibility towards organizational stakeholders?

97. What is a code of ethics? What are the characteristics of an effective code of ethics?

98. What is social responsibility? What are the three main groups a global firm targets with its social responsibility efforts?

99. Why is it important for top management to demonstrate ethical behavior?

100. How do organizations that are socially responsible treat their workers? What international organizations monitor the treatment of workers?

101. What is the obstructionist stance to social responsibility?

102. What is the defensive stance to social responsibility?

103. What is the accommodative stance to social responsibility?

104. What is the proactive stance to social responsibility?

105. What is legal compliance? What laws and regulations ensure that the business practices of global firms are legal?

106. What is ethical compliance? How can global firms improve the ethical compliance of their employees?

107. What is philanthropic giving? Provide an example of a firm that is philanthropic.

108. What is whistle-blowing? What risks might a whistle-blower face?

109. What is the purpose of the Foreign Corrupt Practices Act?

110. What is the purpose of the Alien Tort Claims Act?

111. What is the mission of the International Labor Organization?

112. What is the Anti-Bribery Convention of the Organization for Economic Cooperation and Development?

113. Consider the use of child labor from the perspective of a person from a developed country and from the perspective of person from a developing country. How might the two views differ? Why?

114. Why is gift exchange in business relationships more common in high-context, power- respecting cultures than in low-context, power-tolerant cultures?

115. Explain the four general approaches a firm can take with regard to social responsibility.

116. Compare and contrast the stereotypical behaviors of the van Tulder and van der Zwart approach to managing corporate social responsibility.

117. What activities are undertaken by an organization when it performs a corporate social audit?

118. What are the primary regulations that attempt to address issues of international ethics and social responsibility? Summarize the purpose of each regulation.