4.4

Question 1

why the activities of multinationals may need controlling

Answer 1

• to protect against exploitation
• to discourage resource depletion
• to ensure local culture is protected
• to discourage abuse of market power
• to protect domestic businesses

Question 2

ethics

Answer 2

moral guidelines which govern acceptable behaviour

Question 3

Benefits of behaving ethically

Answer 3

• higher revenues
• improved brand and business awareness
• better employee motivation and recruitment
• new sources of finance

Question 4

drawbacks of behaving ethically

Answer 4

• Higher costs i.e. sourcing from fair trade suppliers
• higher overhead
• a danger of building false expectations

Question 5

common ethical issues with MNC’s

Answer 5

• pay and working conditions
• environmental impact
• supply chain management
• marketing