Chapter 03

Question 1

Ethical values

Answer 1

Individuals’ moral judgments about what is right or wrong.

Question 2

Universalism

Answer 2

Perspective that widespread and objective sets of ethical guidelines exist across countries.

Question 3

Cultural relitivism

Answer 3

Perspective that ethical behavior in a country is determined by its own unique culture, laws, and business practices.

Question 4

Examples of ethical obligations for firms conducting international business

Answer 4

UN Universal Declaration of Human Rights
Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises
European Convention on Human Rights
Helsinki Final Act
etc.

Question 5

Corporate Social Responsibility

Answer 5

Is the deliberate inclusion of public interest into corporate decision-making.
Is the attention paid by firms to the so-called triple bottom line: people, planet, and profit.
Is becoming more mainstream and receiving higher priority from top management.
Is more than “a necessary cost of doing business”; it can provide a distinctive and profitable position in the market for a firm.

Question 6

Differences in Moral Reasoning Process

Answer 6

Variations in legal frameworks.
Differing economic environments.
Unique cultural values and persistent ethical attitudes

Question 7

Codes of ethics

Answer 7

European codes focus on employee behaviors and support of government and society.
U.S. codes focus on customer relationships and maintaining arms-length government relations.

Question 8

Foreign Corrupt Practices Act

Answer 8

Are laws making it illegal to pay or offer to pay foreign government officials to gain or increase business.
Distinguishes between bribes and grease payments.
Does not affect U.S. firms’ overseas competitiveness

Question 9

Legal Grease Payments

Answer 9

Are relatively small payments made to officials to facilitate the performance of functions that they ordinarily do as part of their job.
Are not offered to get anything more than that which a business is entitled to anyway.

Question 10

Grease Payment Distinctions

Answer 10

Gifts” that help overcome bureaucratic technicalities that impede business.
“Gifts” given to supplement an environment of low wages, with the gifts acting as gratuities for services performed.
“Gifts” given to facilitate the issuance of permits and equipment that are allotted by way of the extra payments.

Question 11

Social Problems Created by Multinationals

Answer 11

Envrionmental issues, poverty, health issues, child labor

Question 12

Corruption:

Answer 12

An exchange between two partners, the “demander” and the “supplier,” which:
(a) has an influence on the allocation of resources either immediately or in the future, and
(b) involves the use or abuse of public or collective responsibility for private ends

Question 13

Two key factors where corruption arises

Answer 13

Developing or transitional economies that have weak infrastructure, weak legal systems, and inadequate enforcement.
A high level of government involvement with industry and business and a low public sector payment amount

Question 14

Types of corruption practices

Answer 14

Bribery, smuggling, money landering, piracy