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Chapter 5 MC

44. 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?

A. Sullivan principles

B. The righteous moral system

C. Noblesse oblige

D. Cultural relativism

A. Sullivan principles
45. Identify the INCORRECT statement about environmental regulations.

A. Environmental regulations are often lacking in developing nations.

B. Environmental regulations are similar across developed and developing nations.

C. Developed nations have substantial regulations governing the emission of pollutants, the dumping of toxic chemicals, etc.

D. Inferior environmental regulations in host nations, as compared to home nation, can lead to ethical issues.

B. Environmental regulations are similar across developed and developing nations.
46. The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation.

A. Friedman effect

B. noblesse oblige

C. inequity aversion

D. tragedy of the commons

D. tragedy of the commons
47. An international U.S. based company sets up a production unit in a developing country with poor environmental regulations. This contributes to:

A. the noblesse oblige situation.

B. the inequity aversion.

C. the global tragedy of the commons.

D. the Friedman effect.

C. the global tragedy of the commons.
48. Which of the following observations about the Foreign Corrupt Practices Act is true?

A. The act outlawed the paying of bribes to foreign government officials to gain business.

B. There is enough evidence that it put U.S. firms at a competitive disadvantage.

C. The act originally allowed for “facilitating payments.”

D. The Nike case was the impetus for the 1977 passage of this act.

The act outlawed the paying of bribes to foreign government officials to gain business.
49. Facilitating payments are:

A. a direct violation of the Foreign Corrupt Practices Act.

B. permitted so long as they designed only to gain exclusive preferential treatment.

C. used to secure contracts that would otherwise not be secured.

D. permitted under the amended Foreign Corrupt Practices Act.

D. permitted under the amended Foreign Corrupt Practices Act.
50. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions excludes:

A. bribes made to secure contracts that would otherwise not be secured.

B. grease payments to gain exclusive preferential treatment.

C. facilitating payments made to expedite routine government action.

D. payments to government officials for special privileges.

C. facilitating payments made to expedite routine government action.
51. 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:

A. moral relativism.

B. noblesse oblige.

C. ethical dilemma.

D. social responsibility.

D. social responsibility.
52. Which of the following, in a business setting, is taken to mean benevolent behavior that is the responsibility of successful enterprises?

A. Sullivan’s principles

B. Ethical dilemma

C. Tragedy of the commons

D. Noblesse oblige

D. Noblesse oblige
53. 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 their success possible. BP’s actions are an example of:

A. cultural relativism.

B. the Friedman doctrine.

C. noblesse oblige.

D. the tragedy of the commons.

C. noblesse oblige.
54. A situation in which none of the available alternatives seems morally acceptable is called:

A. an ethical dilemma.

B. noblesse oblige.

C. the tragedy of the commons.

D. the free rider problem.

A. an ethical dilemma.
55. Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of all of the following reasons EXCEPT:

A. they are away from their ordinary social context and supporting culture.

B. they are psychologically and geographically closer to the parent company.

C. they may be based in a culture that does not place the same value on ethical norms important in the manager’s home country.

D. they may be surrounded by local employees who have less rigorous ethical standards.

B. they are psychologically and geographically closer to the parent company.
56. Which of the following refers to the values and norms that the employees of an organization share?

A. Vision statement

B. Cultural relativism

C. Organization culture

D. Power orientation

C. Organization culture
57. According to ____, the social responsibility of business is to increase profits, so long as the company stays within the rules of law.

A. the naive immoralist

B. the righteous moralist

C. cultural relativism

D. the Friedman doctrine

D. the Friedman doctrine
58. According to the Friedman doctrine:

A. ethics are nothing more than the reflection of culture.

B. a multinational’s home-country standards of ethics are inappropriate to follow in foreign countries.

C. businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.

D. if a manager of a multinational sees that firms from other nations are not following environmental legislation in a host nation, that manager should not either.

C. businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.
59. Cultural relativism suggests that:

A. a firm should adopt the ethics of the culture in which it is operating.

B. the only social responsibility of a firm is to increase profits.

C. a firm’s ethical policies should remain the same in all cultures.

D. a multinational should follow its home-country cultural practices in all the host-countries where it has operations.

A. a firm should adopt the ethics of the culture in which it is operating.
60. 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?

A. Righteous moralist

B. Cultural relativism

C. The justice theory

D. The rights theory

B. Cultural relativism
61. 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?

A. The Friedman doctrine

B. Righteous moralist

C. Noblesse oblige

D. Cultural relativism

D. Cultural relativism
62. In its extreme viewpoint, _____ suggests that if a culture supports slavery, it is all right to use slave labor in the country.

A. the Friedman doctrine

B. noblesse oblige

C. righteous moralist

D. cultural relativism

D. cultural relativism
63. The righteous moralist suggests that:

A. ethics are nothing more than the reflection of culture.

B. a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

C. the social responsibility of business is to increase profits, so long as the company stays within the rules of law.

D. 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.

B. a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
64. According to the naive immoralist,

A. a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.

B. the social responsibility of business is to increase profits, so long as the company stays within the rules of law.

C. ethics are nothing more than the reflection of a culture.

D. if firms in a host nation do not follow ethical norms then the manager of a multinational should also not follow ethical norms there.

D. if firms in a host nation do not follow ethical norms then the manager of a multinational should also not follow ethical norms there.
65. 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?

A. Naive immoralist

B. Kantian ethics

C. Righteous moralist

D. Noblesse oblige

A. Naive immoralist
66. The utilitarian approach to business ethics suggests that:

A. people should be treated as ends and never purely as means to the ends of others.

B. the moral worth of actions or practices is determined by their consequences.

C. people have dignity and need to be treated as such.

D. human beings have fundamental rights and privileges that transcend national cultures.

B. the moral worth of actions or practices is determined by their consequences.
67. According to the _____ approach, the best decisions are those that produce the greatest good for the greatest number of people.

A. naive immoralist

B. Friedman doctrine

C. Kantian ethics

D. utilitarian

D. utilitarian
68. The products of Carmen Stores, an international sports apparel chain, are manufactured in sweat 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?

A. The righteous moralist

B. The Friedman doctrine

C. Kantian approach to business ethics

D. Utilitarian approach to business ethics

D. Utilitarian approach to business ethics
69. The Kantian approach to ethics suggests that:

A. human beings have fundamental rights and privileges that transcend national boundaries.

B. the moral worth of actions or practices is determined by their consequences.

C. people should be treated as ends and never purely as means to the ends of others.

D. ethics are nothing more than the reflection of culture.

C. people should be treated as ends and never purely as means to the ends of others.
70. Identify the correct statement about the rights theories.

A. Human beings have fundamental rights and privileges that transcend national boundaries.

B. The moral worth of actions or practices is determined by their consequences.

C. People should be treated as ends never purely as means to the ends of others.

D. The only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

A. Human beings have fundamental rights and privileges that transcend national boundaries.
71. Which of the following persons believed that people should be treated as ends and never purely as means to the ends of others?

A. John Stuart Mill

B. Immanuel Kant

C. Milton Friedman

D. David Hume

B. Immanuel Kant
72. The United Nations Universal Declaration of Human Rights, related to employment, upholds all of the following EXCEPT:

A. just and favorable work conditions.

B. equal pay for equal work.

C. prohibition of trade unions.

D. protection against unemployment.

C. prohibition of trade unions.
73. 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:

A. cultural relativism.

B. Friedman doctrine.

C. the righteous moralist approach.

D. Kantian ethics.

D. Kantian ethics.
74. Which of the following statements is true about the United Nations Universal Declaration of Human Rights?

A. It transcends national borders.

B. It states that human rights are culturally determined.

C. It states that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences.

D. It states that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

A. It transcends national borders.
75. Justice theories of business ethics focus on:

A. the moral worth of actions or practices.

B. minimum levels of morally acceptable behavior.

C. fundamental rights and privileges that transcend national boundaries.

D. the attainment of an equitable distribution of goods and services.

D. the attainment of an equitable distribution of goods and services.
76. According to John Rawls:

A. each person should be permitted the maximum amount of basic liberty compatible with a similar liberty for others.

B. freedom of speech and assembly is the single most important component in a justice system.

C. equal basic liberty is impossible in a pure market economy.

D. ethics is culturally determined.

A. each person should be permitted the maximum amount of basic liberty compatible with a similar liberty for others.
77. Rawls’ philosophy that inequalities are justified if they benefit the position of the least-advantaged person is known as the:

A. inequality principle.

B. equity principle.

C. difference principle.

D. ignorance veil principle.

C. difference principle.
78. According to John Rawls’s difference principle,

A. certain people or institutions are obligated to provide benefits or services that secure the rights of others.

B. fundamental human rights should transcend national borders and cultures.

C. the best decisions are those that produce the greatest good for the greatest number of people.

D. inequalities are justified if they benefit the position of the least-advantaged person.

D. inequalities are justified if they benefit the position of the least-advantaged person.
79. External stakeholders:

A. are individuals or groups who own the business.

B. include all employees, the board of directors, and stockholders.

C. typically comprise customers, suppliers, lenders, etc.

D. are individuals or groups who work for the business.

C. typically comprise customers, suppliers, lenders, etc.
80. Which of the following is NOT an example of internal stakeholders?

A. Employees

B. Customers

C. Stockholders

D. The board of directors

B. Customers
81. _____ means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder.

A. Veil of ignorance

B. Difference principle

C. Moral imagination

D. Noblesse oblige

C. Moral imagination
82. Establishing _____ involves a business to 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.

A. a veil of ignorance

B. a difference principle

C. moral imagination

D. moral intent

D. moral intent
83. Which of the following enables managers to walk away from a decision that is profitable, but unethical?

A. Noblesse oblige

B. Moral courage

C. The difference principle

D. The Friedman doctrine

B. Moral courage
84. What is the term for a company’s formal statement of the ethical priorities it expects all of its employees to follow?

A. Code of ethics

B. Stakeholders pledge

C. Moral courage

D. Difference principle

A. Code of ethics

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