International Business: The Challenges of Globalization, 7e (Wild)

Chapter 3 Politics, Law, and Business Ethics

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26) Which of the following political ideologies states that every aspect of people's lives must be
controlled for a nation's political system to be effective?
A) totalitarianism
B) capitalism
C) anarchism
D) pluralism

27) Under a(n) ________ political system, the state reigns supreme over institutions such as
family, religion, business, and labor.
A) pluralistic
B) totalitarian
C) democratic
D) anarchist

28) Totalitarian political systems include authoritarian regimes such as ________.

A) democracy and theocracy
B) anarchism and pluralism
C) communism and fascism
D) capitalism and secularism

29) ________ is the belief that only individuals and private groups should control a nation's
political activities.
A) Pluralism
B) Anarchism
C) Theocracy
D) Totalitarianism

30) ________ is the belief that both private and public groups play important roles in a nation's
political activities.
A) Totalitarianism
B) Capitalism
C) Anarchism
D) Pluralism

31) ________ political systems include democracies, constitutional monarchies, and some
aristocracies.
A) Totalitarian
B) Anarchist
C) Fascist
D) Pluralistic

32) Konesia is a country whose political leaders do not tolerate opposing viewpoints and often
suppress or punish dissidents. The lives of Konesians are tightly controlled by its rulers. Which
of the following political systems prevails in the country?
A) totalitarianism
B) democracy
C) anarchism
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D) pluralism

33) Which of the following is a characteristic of totalitarian governments?

A) Political dissidents can oppose the government with no repercussions.
B) Citizens are guaranteed civil, property, and minority rights.
C) The means of production are owned by the people who use them.
D) Leaders rule without the explicit approval of the people.

34) A ________ is a political system in which a country's religious leaders serve as its political
leaders.
A) democracy
B) theocracy
C) plutocracy
D) septocracy

35) Renzi belongs to a country in which religion governs all aspects of his life, whether personal
or public. He has to abide by a strict, rigid, code that dictates everything from the clothes he
wears to the food he eats. Breaking away from these traditions is not an option since religion
plays an important role in the functioning of the nation. What political system prevails in his
country?
A) communist totalitarianism
B) left-wing totalitarianism
C) right-wing totalitarianism
D) theocratic totalitarianism

36) ________ is a political system in which political leaders rely on military and bureaucratic
power to support their rule.
A) Secular totalitarianism
B) Secular anarchism
C) Theocratic totalitarianism
D) Theocratic pluralism

37) Which of the following terms refers to an economic system in which the government owns
and controls all types of economic activity?
A) socialism
B) sovereign nationalism
C) political bureaucracy
D) pluralism

38) Robert believes that social and economic equality can be obtained only by establishing an
economic system in which the government owns and controls all types of economic activity.
However, he does not think of himself as a communist, but as a socialist. Which of the following
statements about Robert is true?
A) Robert does not believe that a violent revolution is needed to seize control over resources.
B) Robert does not think that political dissidents should go unpunished.
C) Robert believes that the pricing of goods should be left to the discretion of laborers.
D) Robert believes that the means of production should be owned by the people who use them.
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39) Both Pat and Terry believe that social and economic equality can be obtained only by
establishing an economic system in which the government owns and controls all types of
economic activity. Which of the following statements proves that Pat is a communist and Terry
is a socialist?
A) Unlike Terry, Pat believes that the government should decide the prices at which goods are
sold.
B) Unlike Pat, Terry does not believe in the elimination of political opponents.
C) Unlike Terry, Pat believes that the means of production should be owned only by the public.
D) Unlike Pat, Terry believes that a violent revolution is necessary to seize control over
resources.

40) What do communists and socialists have in common?

A) Both believe in the elimination of political opponents.
B) Both believe that the government should control all types of economic activity.
C) Both believe that the pricing of goods should be the responsibility of individuals.
D) Both believe that a violent revolution is necessary to seize control over resources.

41) Under ________ the government endorses private ownership of property and a market-based
economy but grants little or no political freedom.
A) left-wing totalitarianism
B) theocratic totalitarianism
C) secular totalitarianism
D) right-wing totalitarianism

42) Which of the following terms is also used to refer to communism?

A) tribal totalitarianism
B) right-wing totalitarianism
C) left-wing totalitarianism
D) civil totalitarianism

43) Which of the following is an advantage of conducting business in totalitarian nations?

A) International companies are less likely to face local political opposition to their activities.
B) Government deals are always straightforward and transparent.
C) Laws regarding the resolution of contractual disputes are clearly defined.
D) International companies run no risk of their public image being tarnished.

44) Which of the following is a disadvantage of conducting business in totalitarian nations?

A) Laws regarding the resolution of contractual disputes are rigid and inflexible.
B) Companies have to contend with the interference of local political opposition.
C) A refusal to pay a bribe can result in the forfeiture of investments in the country.
D) The government has little power over the economic activities of the nation.

45) A ________ is a political system in which government leaders are elected directly by the
wide participation of the people or by their representatives.
A) democracy
B) theocracy
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C) plutocracy
D) autocracy

46) Which of the following statements about representative democracies is true?

A) All citizens participate freely and actively in political processes.
B) Leaders of representative democracies can stay in power indefinitely.
C) Citizens elect individuals from political groups to act on their behalf.
D) Representative democracies across the world share identical features.

47) In a ________ government, the strongest political parties share power by dividing
government responsibilities among themselves.
A) coalition
B) bilateral
C) totalitarian
D) theocratic

48) Democracies try to preserve peaceful coexistence among groups of people with diverse
cultural, ethnic, and racial backgrounds. These rights are known as ________ rights.
A) indirect
B) central
C) subcapital
D) minority

49) The segment of the economic environment comprising independently owned firms that seek
to earn profits is called the ________.
A) political sector
B) private sector
C) democratic sector
D) public sector

50) Which of the following philosophies asserts that ownership of the means of production
belongs in the hands of individuals and private businesses?
A) capitalism
B) communism
C) tribalism
D) socialism

51) Which of the following terms refers to the forced transfer of assets from a company to the
government without compensation?
A) expropriation
B) nationalism
C) nationalization
D) confiscation

52) ________ is the forced transfer of assets from a company to the government with
compensation.
A) Expropriation
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B) Nationalization
C) Confiscation
D) Localization

53) ________ refers to the takeover of an entire industry by the government.

A) Decentralization
B) Globalization
C) Nationalization
D) Automatization

54) Which of the following is a disadvantage of local requirement laws to foreign companies?
A) They do not foster local business activity and increase regional and national unemployment.
B) They make it necessary for the government to resort to expropriation and confiscation.
C) The companies are forced to bring in raw material and workers from their own countries.
D) Companies required to hire local personnel might be forced to take on inadequately trained
workers.

55) The U.S. legal system is largely based on ________.

A) common law
B) social law
C) civil law
D) theocratic law

56) Under ________ law, the justice system decides cases by interpreting the law on the basis of
tradition, precedent, and usage.
A) civil
B) international
C) common
D) theocratic

57) ________ is a legal system which is based on a detailed set of written rules and statutes that
constitute a legal code.
A) International law
B) Civil law
C) Tribal law
D) Common law

58) A legal tradition based on religious teachings is called ________ law.

A) democratic
B) common
C) civil
D) theocratic

59) A ________ is a right granted to the inventor of a product or process that excludes others
from making, using, or selling the invention.
A) patent
B) trademark
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C) watertight
D) copyright

60) ________ are words or symbols that distinguish a product and its manufacturer from
competitors.
A) Patents
B) Trademarks
C) Watermarks
D) Copyrights

61) Shimmer and Sparkle is an American jewellery store which discovers that several shops in
developing countries are selling counterfeited necklaces under their name and label. Which of
the following problems are they facing?
A) patent expiration
B) trademark infringement
C) copyright expiration
D) monopolization

62) Which of the following is an example of a trademark infringement?

A) manufacturers who sell different versions of their own products in different countries
B) manufacturers who sell counterfeit products under the names and logos of more famous
brands
C) a company which exports factory rejects to developing countries
D) a company which sells products at half the price of their competitors

63) Which of the following functions does a copyright perform?

A) It protects the trade secrets of an organization, including its business plans.
B) It prevents a company from monopolizing an invention.
C) It distinguishes the product and manufacturers from competitors through distinct words and
symbols.
D) It give creators of original work the freedom to publish or dispose of them as they choose.

64) Which of the following do governments impose upon people to help pay for the
consequences of using a particular product?
A) income taxes
B) consumption taxes
C) property taxes
D) value-added taxes

65) Product liability laws are those which ________.

A) provide consumers with a wide variety of products at fair prices
B) add value to a product throughout its production and distribution
C) protect people from defective products
D) define the taxation on locally manufactured products

66) Laws designed to prevent companies from fixing prices, sharing markets, and gaining unfair
monopoly advantages are called ________.
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A) antitrust laws
B) theocratic laws
C) anarchist laws
D) bilateral laws

67) ________ is the layer of corporate social responsibility whereby a corporation donates
money and, perhaps, employee time toward a specific social cause.
A) Risk management
B) Strategic CSR
C) Socialist CSR
D) Traditional philanthropy

68) ________ is the layer of corporate social responsibility whereby a company develops a code
of conduct that it will follow in its global operations and agrees to operate with greater
transparency.
A) Strategic CSR
B) Risk management
C) Traditional philanthropy
D) Task orientation

69) ________ is the layer of corporate social responsibility in which a business builds social
responsibility into its core operations to create value and build competitive advantage.
A) Risk management
B) Traditional philanthropy
C) Strategic CSR
D) Political polity

70) Horizon Ltd. is a software company that, over the last year, incorporated social responsibility
into its core operations to create value and build competitive advantage. Which layer of
corporate social responsibility does Horizon Ltd. function at?
A) risk management
B) traditional philanthropy
C) strategic CSR
D) political CSR

71) Which of the following philosophies maintains that a company's sole responsibility is to
maximize profits for its owners?
A) utilitarian view
B) righteous moralist view
C) Friedman view
D) cultural relativist view

72) The ________ view states that a company should adopt local ethics wherever it operates
because all belief systems are determined within a cultural context.
A) Friedman
B) cultural relativist
C) righteous moralist
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D) utilitarian

73) The ________ view says that a company should maintain its home-country ethics wherever it
operates because the home-country's view of ethics and responsibility is superior to others'
views.
A) Friedman
B) righteous moralist
C) cultural relativist
D) utilitarian

74) Which of the following philosophies maintains that a company should maximize "good"
outcomes and minimize "bad" outcomes wherever it operates?
A) Friedman view
B) righteous moralist view
C) cultural relativist view
D) utilitarian view

75) ________ is the environmental impact of greenhouse gases (measured in units of carbon
dioxide) that results from human activity.
A) Carbon footprint
B) Greenhouse log
C) Carbon cycle
D) Greenhouse check