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International Business, 8e (Griffin/Pustay)

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?
A) values
B) culture
C) ethics
D) norms
Answer: C
Diff: 1
Skill: Concept
Objective: 1
2) Ethical beliefs are primarily ________ in nature.

A) societal
B) familial
C) individual
1
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D) cultural
Answer: C
Diff: 2
AACSB: Ethical understanding and reasoning abilities
Skill: Concept
Objective: 1
3) Which of the following is most influential on an individual's ethics?

A) occupation
B) peers
C) social trends
D) television
Answer: B
Diff: 1
Skill: Concept
Objective: 1
4) Behavior that fails to conform to generally accepted social norms is considered ________.
A) ethical
B) unethical
C) illegal
D) unregulated
Answer: B
Diff: 1
Skill: Concept
Objective: 1
2
5) When behavior conforms to generally accepted norms, it is referred to as ________ behavior.
A) ethical
B) societal
C) normal
D) unethical
Answer: A
Diff: 1
Skill: Concept
Objective: 1
6) ________ are the things a person feels to be important.

A) Values
B) Ethics
C) Norms
D) Expectations
Answer: A
Diff: 1
Skill: Concept
Objective: 1
7) Which of the following best explains why looting was uncommon in Japan after the country's
2011 earthquake and tsunami?
A) personal religious beliefs
B) individual desires for survival
C) pressures from law enforcement
D) importance of group membership
Answer: D
Diff: 3
Skill: Concept
Objective: 1
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?
A) Individuals have their own personal belief system.
B) Individuals are typically consistent with their beliefs.
C) Individuals can rationalize behavior in various circumstances.
D) Individuals from the same cultural contexts have similar beliefs.
Answer: C
Diff: 3
Skill: Application
Objective: 1
3
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?
A) Personal and business ethics are often rationalized.
B) Gift exchanges are a more important way of doing business in high-context cultures
C) Belonging to a group is important to the Asian culture.
D) Individuals may not always be consistent with their beliefs.
Answer: B
Diff: 3
Skill: Concept
Objective: 2
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?
A) Individuals have their personal belief systems.
B) Culture has the strongest influence on personal ethics.
C) Personal values rarely overlap with global business dealings.
D) Society requires individuals to rationalize ethical inconsistencies.
Answer: A
Diff: 3
Skill: Application
Objective: 1
Learning Outcome: Discuss the role of ethics and social responsibility in international business.
11) BP's program to prepare managers at headquarters for assignments in Russia is an example
of ________.
A) ethics training
B) selection procedures
C) corporate socialization
D) employee orientation
Answer: A
Diff: 1
Skill: Concept
Objective: 2
4
12) Which of the following is most susceptible to ethical variations in international business?
A) advertising
B) working conditions
C) insurance benefits
D) employee skills
Answer: B
Diff: 2
Skill: Concept
Objective: 2
13) Which term refers to a decision that benefits an individual to the possible detriment of the
organization?
A) conflict of interest
B) confidentiality
C) ethical behavior
D) breach of privacy
Answer: A
Diff: 1
Skill: Concept
Objective: 2
14) Braxton Clothing Company most likely forbids its buyers from accepting gifts from potential
suppliers because the firm wants to avoid a(n) ________.
B) strategic breakdown
C) breach of contract
D) trade violation
Answer: A
Diff: 2
Skill: Application
Objective: 2
15) Gift exchanges in a business situation in Japan are best described as ________.
A) common
B) trendy
C) rare
D) illegal
Answer: A
Diff: 1
AACSB: Multicultural and diversity understanding
Skill: Concept
Objective: 2
Learning Outcome: Explain how differences in culture affect the international business
environment
5
16) Gift exchanges are likely to be considered a conflict of interest in a(n) ________ culture.
A) high-context
B) collectivist
C) low-context
D) power-respecting
Answer: C
Diff: 2
Skill: Concept
Objective: 2
environment
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?
A) bringing office supplies from home
B) making business calls during work time
C) padding company expense accounts
D) working overtime
Answer: C
Diff: 1
Skill: Application
Objective: 2
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?
B) honesty
C) confidentiality
D) secrecy
Answer: A
Diff: 1
Skill: Application
Objective: 2
6
19) Which of the following is a common method for encouraging ethical behavior among
employees?
A) codes of ethics
B) promoting religion in the workplace
C) public admonishment
D) highlighting the failures of competitive companies
Answer: A
Diff: 1
Skill: Concept
Objective: 3
20) Which of the following most likely improves the effectiveness of a code of ethics for an
MNE?
A) relevancy to local religions
B) application by new recruits
C) explanation through online training
D) support from organizational practices
Answer: D
Diff: 2
Skill: Concept
Objective: 3
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?
A) Should the code of ethics be globally consistent or tailored to local contexts?
B) What should be addressed by the firm's code of ethics in order to comply with U.S. laws?
C) Should home-country or host-country managers provide training on the firm's code of ethics?
D) What punishment is used by the firm's competitors when employees violate the code of
ethics?
Answer: A
Diff: 3
AACSB: Reflective Thinking
Skill: Critical Thinking
Objective: 3
7
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?
A) multilingual contexts
B) local religious customs
C) local business and ethical practices
D) global marketing methods
Answer: C
Diff: 3
Objective: 3
23) In a survey on the acceptability of bribing officials when doing business in foreign countries,
which country found bribery most unacceptable?
A) Russia
B) Austria
C) Taiwan
D) South Korea
Answer: B
Diff: 2
Skill: Concept
Objective: 3
environment
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?
A) Sweden
B) Australia
C) Switzerland
D) South Korea
Answer: D
Diff: 2
Skill: Concept
Objective: 3
environment
8
25) The term ________ refers to the set of obligations an organization undertakes to protect and
enhance the society in which it functions.
A) organizational ethics
B) social responsibility
C) corporate ethics
D) social values
Answer: B
Diff: 2
Skill: Concept
Objective: 4
26) A company that is socially responsible will most likely ________.

A) do as little as possible to address social or environmental problems
B) undertake efforts to protect the society in which it functions
C) conform to regional, national, and international laws
D) follow basic ethical standards of behavior
Answer: B
Diff: 2
Skill: Concept
Objective: 4
27) The term ________ refers to those people and organizations that are directly affected by the
practices and performance of an organization.
A) corporate customers
B) permanent employees
C) community stockholders
D) stakeholders
Answer: D
Diff: 1
Skill: Concept
Objective: 5
28) Which of the following is one of the main groups of stakeholders that firms usually focus
on?
A) competitors
B) customers
C) the government
D) the general public
Answer: B
Diff: 2
Skill: Concept
Objective: 5
9
29) Companies that are socially responsible to their investors do which of the following?
A) provide appropriate information to shareholders and investors
B) fail to use corporate resources judiciously
C) thwart appropriate accounting procedures
D) manipulate stock prices
Answer: A
Diff: 1
Skill: Concept
Objective: 5
30) Firms such as Procter & Gamble that use recycled materials whenever possible are most
likely demonstrating their ________.
A) commitment to environmental protection
B) concern for general social welfare
C) implementation of a code of ethics
D) responsibility to stakeholders
Answer: A
Diff: 2
Skill: Concept
Objective: 5
31) Which of the following statements is most likely true about firms with formal codes of
ethics?
A) Virtually all ethical issues are eliminated from the firm.
B) Ethical training is unnecessary, redundant, and too costly to be effective.
C) Organizational practices and a strong ethical corporate culture are essential.
D) Individual codes must be developed and implemented for each subunit in the firm.
Answer: C
Diff: 3
Skill: Concept
Objective: 3
32) Examples of promoting the general welfare of society include all of the following except
________.
A) making charitable contributions
B) supporting public radio stations
C) becoming involved in local schools
D) using appropriate accounting procedures
Answer: D
Diff: 2
Skill: Concept
Objective: 5
10
33) Which of the following is the most resistant approach to social responsibility?
A) obstructionist stance
B) defensive stance
C) accommodative stance
D) proactive stance
Answer: A
Diff: 2
Skill: Concept
Objective: 5
34) Which of the following is the most responsible approach to social responsibility?
B) defensive stance
D) proactive stance
Answer: D
Diff: 2
Skill: Concept
Objective: 5
35) When an organization does as little as possible to address social or environmental issues, it
has adopted the ________ to social responsibility.
B) defensive stance
D) proactive stance
Answer: A
Diff: 2
Skill: Concept
Objective: 5
36) When an organization does everything it must do from a legal standpoint but nothing more, it
has adopted the ________ to social responsibility.
B) defensive stance
D) proactive stance
Answer: B
Diff: 2
Skill: Concept
Objective: 5
11
37) Alcoa's gift of $112,000 to a small town in Brazil to build a sewage treatment plant is an
example of ________.
A) guanxi
B) philanthropic giving
C) ethical compliance
D) legal compliance
Answer: B
Diff: 2
Skill: Concept
Objective: 5
38) Which of the following is an informal dimension of social responsibility?

A) acts of philanthropic giving
B) employment applications
C) public relations
D) organizational culture
Answer: D
Diff: 2
Skill: Concept
Objective: 5
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?
A) proactive
B) obstructionist
C) accommodative
D) defensive
Answer: C
Diff: 2
Skill: Application
Objective: 5
40) McDonald's Ronald McDonald House program is an example of a(n) ________ to social
responsibility.
A) accommodative stance
B) proactive stance
C) obstructionist stance
D) defensive stance
Answer: B
Diff: 2
Skill: Concept
Objective: 5
12
41) Firms that view themselves as citizens of society have adopted the ________ to social
responsibility.
B) defensive stance
D) proactive stance
Answer: D
Diff: 2
Skill: Concept
Objective: 5
42) A company taking a proactive approach to social responsibility will most likely ________.
A) exhibit sincere and significant efforts to contribute to society
B) require employees to participate in local charities
C) conform to regional customs and laws
D) provide online ethics training
Answer: A
Diff: 2
Skill: Concept
Objective: 5
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?
A) the obstructionist stance
B) the defensive stance
C) the accommodative stance
D) the proactive stance
Answer: B
Diff: 2
Skill: Application
Objective: 5
44) The Body Shop seeks out opportunities to improve the welfare of individuals all over the
world. It has adopted the ________ to social responsibility.
B) defensive stance
D) proactive stance
Answer: D
Diff: 2
Skill: Application
Objective: 5
13
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?
A) commercial society
B) the state
C) the environment
D) the past
Answer: B
Diff: 2
Skill: Concept
Objective: 6
46) Which term refers to the disclosure by an employee of illegal or unethical conduct on the
part of others within the organization?
A) whistle-blowing
B) acknowledgement
C) conflict of interest
D) organizational communication
Answer: A
Diff: 1
Skill: Concept
Objective: 5
47) Justin is aware that his supervisor used corporate funds to pay for a personal vacation and
reports the offense. This is called ________.
A) whistle-blowing
B) acknowledgement
C) conflict of interest
D) organizational communication
Answer: A
Diff: 2
Skill: Application
Objective: 5
48) The extent to which an organization conforms to regional, national, and international laws is
known as ________.
A) guanxi
B) legal compliance
D) whistle-blowing
Answer: B
Diff: 1
Skill: Concept
Objective: 6
14
49) The extent to which members of an organization follow basic ethical standards of behavior is
________.
A) guanxi
B) legal compliance
D) whistle-blowing
Answer: C
Diff: 1
Skill: Concept
Objective: 6
50) A firm that wants to review the effectiveness of its social responsibility efforts should most
likely conduct a(n) ________.
A) corporate social audit
B) SWOT analysis
C) strategy session
D) HR audit
Answer: A
Diff: 1
Skill: Concept
Objective: 5
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?
A) the state
B) the market
C) civil society
D) competitors
Answer: C
Diff: 1
Skill: Concept
Objective: 6
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 ________.
A) competitive
B) symbiotic
C) supervisory
D) corrupt
Answer: A
Diff: 2
Skill: Concept
Objective: 6
15
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 ________.
A) bargain with labor groups
B) promote social responsibility
C) strive for competitive advantages
D) cooperate closely with the government
Answer: D
Diff: 2
Skill: Concept
Objective: 6
54) According to the model developed by Rob van Tulder and Alex van der Zwart, what is the
key to the Continental European Approach?
A) consumer demands for quality products and services
B) cooperation between labor, business, and government
C) competition to encourage consumer market expansion
D) oversight by nongovernmental organizations
Answer: B
Diff: 2
Skill: Concept
Objective: 6
55) What is the purpose of the Foreign Corrupt Practices Act (FCPA)?
A) It prohibits the offering of bribes to any foreign government official.
B) It protects individuals from human rights abuses.
C) It inspects working conditions of factories in developing countries.
D) It prohibits conflicts of interest among employees of international businesses.
Answer: A
Diff: 3
Skill: Concept
Objective: 7
56) What is the purpose of the Alien Tort Claims Act?

A) It protects individuals from human rights abuses.
B) It eliminates bribery in international business transactions.
C) It inspects working conditions of factories in developing countries.
D) It prohibits conflicts of interest among employees of international businesses.
Answer: A
Diff: 3
Skill: Concept
Objective: 7
16
57) Individuals convicted under the Anti-Bribery Convention of the Organization for Economic
Cooperation and Development will most likely be required to ________.
A) pay a fine
B) serve time in jail
C) surrender their passport
D) admit to a conflict of interest
Answer: B
Diff: 2
Skill: Concept
Objective: 7
58) The primary purpose of the International Labor Organization (ILO)is to ________.
A) minimize the use of child labor by MNEs
B) eliminate extortion in international business transactions
C) monitor working conditions of factories in developing countries
D) prohibit conflicts of interest among employees of international businesses
Answer: C
Diff: 2
Skill: Concept
Objective: 7
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?
A) Foreign Corrupt Practices Act
B) Helms-Burton Act
C) Alien Tort Claims Act
D) Disclosure of Conflict Act
Answer: A
Diff: 2
Skill: Concept
Objective: 7
60) Which regulation seeks to protect individuals from human rights abuses and holds MNCs
accountable for such abuses?
A) Foreign Corrupt Practices Act
B) Helms-Burton Act
C) Alien Tort Claims Act
D) Disclosure of Conflict Act
Answer: C
Diff: 3
Skill: Concept
Objective: 7
17
61) What organization is the major watchdog for monitoring working conditions in factories in
developing countries?
A) International Labor Organization
B) Human Rights Campaign
C) Organization for Economic Cooperation and Development
D) World Trade Organization
Answer: A
Diff: 2
Skill: Concept
Objective: 7
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?
A) excessive corruption
B) customs procedures
C) environmental violations
D) safe working conditions
Answer: D
Diff: 2
Skill: Application
Objective: 7
63) Which of the following best explains why international factory owners would most likely
want regular ILO inspections?
A) eliminate workplace corruption
B) encourage investments from MNEs
C) comply with World Trade Organization
D) earn reductions in exporting taxes and fees
Answer: B
Diff: 3
Skill: Concept
Objective: 7
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.
Answer: FALSE
Diff: 2
Skill: Concept
Objective: 2
Learning Outcome: Discuss trends in and the debate over globalization
18
65) The fundamental reason for the existence of a business is to create value.
Answer: TRUE
Diff: 2
Skill: Concept
Objective: 1
66) What constitutes ethical behavior varies from person to person.

Answer: TRUE
Diff: 1
Skill: Concept
Objective: 1
67) An individual's personal beliefs regarding whether a decision, behavior, or action is right or
wrong is known as ethics.
Answer: TRUE
Diff: 1
Skill: Concept
Objective: 1
68) Ethics is an organizational concept, not an individual one.

Answer: FALSE
Diff: 2
Skill: Concept
Objective: 1
69) Ethical behavior typically conforms to accepted social norms.

Answer: TRUE
Diff: 2
Skill: Concept
Objective: 1
70) Values influence how individuals define ethical versus unethical behavior.
Answer: TRUE
Diff: 2
Skill: Concept
Objective: 1
71) Circumstances have a significant influence on an individual's behavior.

Answer: TRUE
Diff: 2
Skill: Concept
Objective: 1
19
72) Accepting gifts in a business relationship is unethical behavior in any country.
Answer: FALSE
Diff: 1
Skill: Concept
Objective: 2
73) Low-context cultures are more likely to exchange gifts in a business context.
Answer: FALSE
Diff: 2
Skill: Concept
Objective: 2
environment
74) Codes of ethics are one of the most common methods of addressing appropriate ethical
behavior within organizations.
Answer: TRUE
Diff: 1
Skill: Concept
Objective: 3
75) In some countries small bribes are considered a normal part of doing business.
Answer: TRUE
Diff: 2
Skill: Concept
Objective: 2
environment
76) Studies indicate that despite the widespread nature of bribery in China, the corrupt behavior
has no noticeable impact on the country's GDP.
Answer: FALSE
Diff: 2
Skill: Concept
Objective: 2
20
77) Bribery is common in China and Russia but is considered unacceptable in Kenya and South
Korea.
Answer: FALSE
Diff: 2
Skill: Concept
Objective: 2
environment
78) Social responsibility is the set of obligations an organization undertakes to protect and
enhance the society in which it functions.
Answer: TRUE
Diff: 2
Skill: Concept
Objective: 4
79) Whistle-blowing is generally considered unwelcome by most Japanese firms.

Answer: TRUE
Diff: 1
Skill: Concept
Objective: 6
80) A company with an defensive stance to social responsibility will do everything that is
required of it legally but nothing more.
Answer: TRUE
Diff: 2
Skill: Concept
Objective: 5
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.
Answer: FALSE
Diff: 2
Skill: Concept
Objective: 5
82) Companies can manage social responsibility using formal and informal tools.
Answer: TRUE
Diff: 2
Skill: Concept
Objective: 5
21
83) Philanthropic giving is an example of an informal tool to manage social responsibility.
Answer: FALSE
Diff: 2
Skill: Concept
Objective: 5
84) Merck Pharmaceuticals has exhibited philanthropy by providing free medication to

individuals in developing countries for the treatment of river blindness.
Answer: TRUE
Diff: 1
Skill: Concept
Objective: 5
85) Whistle-blowing refers to disclosing illegal or unethical conduct on the part of individuals
within an organization.
Answer: TRUE
Diff: 1
Skill: Concept
Objective: 5
86) Firms conduct corporate social audits to assess the ethical values and behaviors of
employees.
Answer: FALSE
Diff: 2
Skill: Concept
Objective: 6
87) The Anglo-Saxon approach to corporate social responsibility views the state, the market, and
civil society as separate, competitive, and antagonistic.
Answer: TRUE
Diff: 3
Skill: Concept
Objective: 6
88) The Anglo-Saxon approach focuses on cooperation between the state, the market, and civil
society.
Answer: FALSE
Diff: 3
Skill: Concept
Objective: 6
22
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.
Answer: FALSE
Diff: 1
Skill: Concept
Objective: 7
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.
Answer: FALSE
Diff: 1
Skill: Concept
Objective: 7
91) To date, the ILO has focused most of its efforts on improving labor conditions in China.
Answer: FALSE
Diff: 1
Skill: Concept
Objective: 7
92) Research indicates that as much as 50% of the world's diamonds are smuggled "conflict
diamonds."
Answer: FALSE
Diff: 1
Skill: Concept
Objective: 4
93) The primary purpose of the Kimberley Process is to eliminate the smuggling and corruption
associated with the South African diamond industry.
Answer: TRUE
Diff: 1
Skill: Concept
Objective: 4
94) Large German firms typically negotiate with labor organizations under the oversight of the
German government.
Answer: TRUE
Diff: 1
Skill: Concept
Objective: 5
23
95) What are ethics? How does culture affect ethics for global organizations?
Answer: Ethics is an individual's personal beliefs about whether a decision, behavior, or action
is right or wrong. What constitutes ethical behavior varies from one person to another. Cultural
differences often create ethical complications for global firms. Acceptable behavior in one
culture may be viewed as immoral in another. Different cultures promote different norms of
behavior. Because generally accepted norms of behavior are considered ethical behaviors, the
culture ultimately determines a component of what is or is not ethical in a business setting.
Diff: 3
Skill: Synthesis
Objective: 1, 2
96) How do multi-national firms manage the ethical behavior of employees and maintain social
responsibility towards organizational stakeholders?
Answer: MNEs use codes of ethics, ethics training, and organizational practices and the
corporate culture to manage ethical behavior. To maintain a socially responsible stance toward
investors, managers should follow proper accounting procedures, provide appropriate
information to shareholders about the financial performance of the firm, and manage the
organization to protect shareholder rights and investments. Organizations that are responsible to
their customers strive to treat them fairly and honestly. They pledge to charge fair prices, to
honor product warranties, to meet delivery commitments, and to stand behind the quality of the
products they sell. Organizations that are socially responsible in their dealings with employees
treat their workers fairly, make them a part of the team, and respect their dignity and basic
human needs.
Diff: 3
Skill: Synthesis
Objective: 3, 4
97) What is a code of ethics? What are the characteristics of an effective code of ethics?
Answer: A code of ethics is a written statement indicating the values and ethical standards that
guide a firm's actions. A code of ethics should be clear and in writing. It should address the
major elements of ethical conduct relevant to the environment and business operations. It must
be adhered to when a problem arises.
Diff: 2
Skill: Application
Objective: 3
24
98) What is social responsibility? What are the three main groups a global firm targets with its
social responsibility efforts?
Answer: Social responsibility is the set of obligations an organization undertakes to protect and
enhance the society in which it functions. Companies focus on stakeholders, natural
environment, and general social welfare.
Diff: 2
Skill: Synthesis
Objective: 4, 5
99) Why is it important for top management to demonstrate ethical behavior?

Answer: Strong ethics are important because employees follow the actions of their leadership.
Diff: 2
Skill: Application
Objective: 3
100) How do organizations that are socially responsible treat their workers? What international
organizations monitor the treatment of workers?
Answer: Organizations that are socially responsible treat their workers fairly, make them part of
the team, and respect their dignity and basic human needs. The International Labor Organization
(ILO)has become a major watchdog for monitoring working conditions in factories in developing
countries.
Diff: 3
Skill: Synthesis
Objective: 5, 7
101) What is the obstructionist stance to social responsibility?

Answer: The obstructionist approach means that the organization does as little as possible to
address social or environmental concerns.
Diff: 2
Skill: Concept
Objective: 6
102) What is the defensive stance to social responsibility?

Answer: The defensive approach refers to a situation in which an organization does only what is
legally required.
Diff: 2
Skill: Concept
Objective: 6
25
103) What is the accommodative stance to social responsibility?
Answer: The accommodative approach refers to the idea that an organization does what is legal
and does more when asked.
Diff: 2
Skill: Concept
Objective: 6
104) What is the proactive stance to social responsibility?

Answer: The proactive approach is an approach taken by organizations that seek out
opportunities to make positive social and environmental change.
Diff: 2
Skill: Concept
Objective: 6
105) What is legal compliance? What laws and regulations ensure that the business practices of
global firms are legal?
Answer: Legal compliance is the extent to which the organization conforms to regional,
national, and international laws. The Foreign Corrupt Practices Act prohibits U.S. firms, their
employees, and agents acting on their behalf from paying or offering to pay bribes to any foreign
government official in order to influence the official actions or policies of that individual to gain
or retain business. The Alien Tort Claims Act was passed in the United States in 1789 but has
recently emerged as a potentially significant law affecting U.S. multinational corporations.
Under some recent interpretations of this law, U.S. multinationals may be responsible for human
rights abuses by foreign governments if the companies benefited from those abuses.
Diff: 3
Skill: Synthesis
Objective: 6, 7
106) What is ethical compliance? How can global firms improve the ethical compliance of their
employees?
Answer: Ethical compliance is the extent to which members of the organization follow basic
ethical and legal standards of behavior. Organizations have increased their efforts in this area-
providing training in ethics and developing guidelines and codes of conduct, for example. These
activities serve as vehicles for enhancing ethical compliance.
Diff: 3
Skill: Synthesis
Objective: 3, 6
26
107) What is philanthropic giving? Provide an example of a firm that is philanthropic.
Answer: Philanthropic giving is the awarding of funds or gifts to charities or other social
programs. For example, Alcoa gave $112,000 to a small town in Brazil to build a sewage
treatment plant.
Diff: 2
Skill: Application
Objective: 6
108) What is whistle-blowing? What risks might a whistle-blower face?

Answer: Whistle-blowing means to report an unethical or illegal behavior of another employee
or of the company to the proper officials. Whistle-blowers risk being penalized for their lack of
loyalty.
Diff: 2
Skill: Application
Objective: 5
109) What is the purpose of the Foreign Corrupt Practices Act?

Answer: It prohibits U.S. firms, their employees, and agents acting on their behalf from paying
or offering to pay bribes to any foreign government official in order to influence the official
actions or policies of that official to gain or retain business.
Diff: 2
Skill: Application
Objective: 7
110) What is the purpose of the Alien Tort Claims Act?

Answer: This law holds MNCs responsible for human rights violations.
Diff: 2
Skill: Application
Objective: 7
111) What is the mission of the International Labor Organization?

Answer: The ILO is a watchdog for monitoring working conditions in factories in developing
countries.
Diff: 2
Skill: Application
Objective: 7
27
112) What is the Anti-Bribery Convention of the Organization for Economic Cooperation and
Development?
Answer: The Anti-Bribery Convention of the Organization for Economic Cooperation and
Development is an attempt to eliminate bribery in international business transactions.
Diff: 2
Skill: Application
Objective: 7
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?
Answer: A person from a developed country will probably suggest that it is unethical for a
business to outsource production to an offshore factory that relies on child labor. However, for a
person from an undeveloped country, the wages the child makes might be the difference between
food and no food. The person from the developed country might also take the view that the child
will work, and that the job at the factory might be superior to other jobs that are available.
Diff: 3
Objective: 2
114) Why is gift exchange in business relationships more common in high-context, power-
respecting cultures than in low-context, power-tolerant cultures?
Answer: The gift exchange is not viewed in high-context cultures as a bribe. Rather it is viewed
as a token of appreciation for past loyalty or favors or as an expression of gratitude or loyalty.
Consequently, the act of gift exchange works to develop the relationship between the businesses.
Because high-context cultures emphasize strong and loyal relationships in business, gift
exchange is more common.
Diff: 3
Objective: 2
28
115) Explain the four general approaches a firm can take with regard to social responsibility.
Answer: The possible approaches to social responsibility are the obstructionist stance, the
defensive stance, the accommodative stance, and the proactive stance. Firms taking an
obstructionist stance do as little as possible to address social or environmental problems. Firms
that take a defensive approach will do all that is required legally, but nothing more. Firms that
take an accommodative approach will do all that is required legally and will do more when
approached with some opportunity. Firms that take a proactive stance view themselves as
citizens of society. They seek out opportunities to be socially responsible.
Diff: 3
Objective: 6
116) Compare and contrast the stereotypical behaviors of the van Tulder and van der Zwart
approach to managing corporate social responsibility.
Answer: The model develops three stereotypical behaviors. One, the Anglo-Saxon approach
views the state, the market, and civil society as separate, competitive, and antagonistic. The
second, the Asian approach, develops a close relationship between the private sector and the
government. Finally, the Continental European approach focuses on cooperation among the state,
the market, and civil society.
Diff: 3
Objective: 6
117) What activities are undertaken by an organization when it performs a corporate social
audit?
Answer: During a corporate social audit, a firm will clearly define its social goals, analyze the
resources it devotes to each goal, determine how well it is achieving the various goals, and make
recommendations about which areas need additional attention.
Diff: 2
Skill: Application
Objective: 6
118) What are the primary regulations that attempt to address issues of international ethics and
social responsibility? Summarize the purpose of each regulation.
Answer: The Foreign Corrupt Practices Act prohibits the offering of bribes to any foreign
government official in order to influence the official actions or policies of that official to gain or
retain business. The Alien Tort Claims Act seeks to protect individuals from human rights
abuses. The Anti-Bribery Convention of the Organization for Economic Cooperation and
Development seeks to eliminate bribery in international business transactions.
Diff: 3
Objective: 7
29

International Business A Managerial Perspective 8th Edition Griffin Test Bank 1

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International Business A Managerial Perspective 8th Edition Griffin Test Bank 1

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International Business A Managerial

Perspective 8th Edition Griffin Test Bank

Test Bank: https://testbankpack.com/p/test-bank-for-

Solution Manual: https://testbankpack.com/p/solution-manual-

International Business, 8e (Griffin/Pustay)

2) Ethical beliefs are primarily ________ in nature.

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

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

26) A company that is socially responsible will most likely ________.

38) Which of the following is an informal dimension of social responsibility?

56) What is the purpose of the Alien Tort Claims Act?

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

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

69) Ethical behavior typically conforms to accepted social norms.

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

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

84) Merck Pharmaceuticals has exhibited philanthropy by providing free medication to

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

101) What is the obstructionist stance to social responsibility?

102) What is the defensive stance to social responsibility?

104) What is the proactive stance to social responsibility?

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?

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