The question “Is it legal?” establishes ethical behavior.
Free trade is the movement of goods and services between nations without political or economic barriers.
McGowan Corporation of Ireland and Enomoto Enterprises based in Japan recently produced a new electric car with rechargeable batteries that can be driven at high speeds for long distances. They have shared the investment, each contributing important technological expertise to the effort. These firms entered into a(n) ____ to build this car.
A joint venture is a partnership in which two or more companies (often from different countries) join to undertake a major project.
Ethical dilemmas in business:
often force us to choose between equally unsatisfactory alternatives.
A whistleblower is a person who:
reports illegal or unethical behavior in the corporation.
Business relationships often present ethical dilemmas that are:
not easily resolved.
The textbook describes an ethical dilemma as a problem without a satisfactory solution. Sometimes you must choose between equally unsatisfactory alternatives. Even for companies and individuals with a strong code of ethics, there are still no easy solutions to ethical problems.
Since 1975, the U.S. has had a(n) __________.
A devaluation of the U.S. dollar would make American goods cheaper to foreign buyers.
Contract manufacturing is a form of outsourcing.
A(n) _______-based ethics code emphasizes the prevention of unlawful behavior by increasing control and penalizing wrongdoers.
In order to enjoy the highest standard of living possible, comparative advantage theory states that all nations should strive to become self-sufficient.
The theory of comparative advantage states that a country should export those goods that it produces most efficiently and import those goods that it cannot produce as efficiently.
China’s one-party political system, its past human rights abuses, and issues related to counterfeiting of products continue to concern some U.S. firms about doing business there.
While global investment and entrepreneurship in China are leading it to wealth and economic interdependence with the rest of the world, China also has a one-party political system, human rights issues, and problems with product piracy and counterfeiting that prevent it from being a free trader’s dream.
The green movement has resulted in a positive impact on U.S. jobs.
Opponents of corporate social responsibility argue that firms which use their profits to promote social causes are not being fair to investors who provided the funds for the purpose of financial gain.
Critics, including the late Milton Friedman, believe that a firm is first and foremost responsible to its owners (investors) who provided the funds for growth and financial gain. Some go so far as to say that the act is essentially ‘stealing from investors.’
__________ is the practice of selling a product in foreign countries for a lower price than the good is sold in the producing country.
A free-trade agreement is likely to result in:
an increase in imported goods and services.
With the reduction of tariffs and nontariff barriers, all participating nations are likely to increase their imports.
Ethical behavior involves the clear and easy choice of right and wrong actions toward others.
In order to be successful, efforts to improve the ethical behavior of businesses must begin with top management’s support of a corporate code of conduct.
A fast-growing form of foreign direct investment is ____________, which are government-controlled investments in foreign companies.
sovereign wealth funds
Employees observe behavior and adopt standards of right and wrong.
People learn their standards of values from observing what others do, but not particularly from hearing what they say.
A joint venture is a partnership in which two or more companies join to undertake a major project. All parties commit financing and risk to the project.
The __________ is the difference between money flowing into a country from exports, and money leaving the country for imports, plus money flows coming from other factors such as tourism, foreign aid, military expenditures, and foreign investment.
balance of payments
While speaking with his sales force, the director of sales explains, “Anyone caught violating a sales law will be fired.” After studying business ethics, you recognize this remark as a reference to the firm’s __________ ethics.
A compliance-based ethics code emphasizes the prevention of unlawful behavior by penalizing wrongdoers.
Corporate social responsibility covers all those social issues outside our businesses that affect customers and the environment, but not internal issues such as employee considerations and work safety. Internal issues are covered by business laws.
Corporate responsibility includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and providing a safe work environment.
U.S. firms that produce sophisticated military hardware are prohibited from exporting that equipment to “unfriendly” governments, such as Iran. This complete ban on exporting sensitive technology to specific countries is an example of a(n):
An embargo is a complete ban on the import or export of certain products.
Utilizing the phrase “the ends justify the means” as a corporate value system can negatively impact company morale and competitiveness.
In a recent study, both managers and workers cited low managerial ethics as a major cause of our competitive woes. Employees reported that they often violate safety standards and goof off as much as seven hours a week.
Since patent and copyright laws are the same in all nations, they are not of much impact to firms that compete globally.
Unfortunately there is no universal set of laws that govern the global market. Companies often must adapt legally market-by-market.
Often it is the threat of negative publicity that pressures businesses to enforce their corporate code of ethics.
One important thing to remember is that it isn’t enough for a company to be right when it comes to ethics and social responsibility. It also has to convince its customers that it’s right.
One responsibility of business is to satisfy customers by offering them goods and services with real value.
Technological differences can prevent some companies from doing business abroad.
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