Chapter 6

Question 1

What is corporate social responsibility

Answer 1

The duty of a company’s management to work in the best interest of the society it relies on for its resources. Work to advance the welfare of society and to act as good global citizens

Question 2

Forms of corporate social responsibility

Answer 2

• making charitable donations
• treating employees ethically
• being environmentally conscious
• ensuring safe working environments
• sponsoring local sports teams
• creating/ promoting diverse workplace

Question 3

Benefits of corporate social responsibility

Answer 3

• marketing tool
• dissuades government from implementing regulations that could interfere w/ business
• helps companies attract/ retain excellent employees

Question 4

Negatives of corporate social responsibility

Answer 4

• costs money, detracts from profit
• uses employees time and energy
• can distract customers from problems a company creates
• may act ethically in one country but not in another

Question 5

Stakeholders analysis

Answer 5

• used to determine which groups interests are most important when a company is faced with an ethical dilemma

Question 6

Primary stakeholders

Answer 6

Directly affect the company and its profitability

Question 7

Secondary stakeholders

Answer 7

Have an impact on the company but do not directly influence its success or contribute to profitability

Question 8

Business ethics

Answer 8

A set of rules/ guidelines that management/individuals follow when making decisions facing their company

Question 9

Guidelines used when making decisions

Answer 9

1. Domestic and international law
2. The company’s code of ethics and corporate governance
3. The personal values of the individual making the decision

Question 10

Test of disclosure: (to solve ethical dilemmas)

Answer 10

1. Am I being honest?
2. Is my choice fair to the company’s stakeholders?
3. Will my choice enhance the reputation of the company?
   4, how would we feel if everyone knew about the decision we made?

Question 11

2 methods of thinking about ethics issues in a global context

Answer 11

1. Ethical imperialism

2. Cultural relativism

Question 12

Ethical imperialism

Answer 12

A view of culture based on the idea that there are certain universal truths or values that are standard across all cultures. If something is wrong in one country it is wrong in all countries

Question 13

Cultural relativism

Answer 13

A view of culture based on the idea that a cultures different values should be respected as the ethics of mine culture is not better than those of another

Question 14

Ethical issues in international business arise in

Answer 14

• environmental issues
• sweatshops
• corporate corruption
• dumping
• poverty

Question 15

Environment issues

Answer 15

• sustainable development (the ability to meet human consumption while maintaining the environment)
• many companies responsible for pollution and resource depletion
• companies and government resist environmental plan that will impede economic growth

Question 16

Sweatshop

Answer 16

Factories in underdeveloped and developing countries in which employees woke in unsafe environments, are treated unfairly, and have no chance to address those issues

Question 17

Why do sweatshops exist? (3)

Answer 17

1. Global competitiveness
2. Corporate greed
3. Consumer expectations of low prices

Question 18

Corporate corruption

Answer 18

The involvement in illegal activity, such as bribery and fraud to further ones business interests

Question 19

Dumping

Answer 19

Selling products in a foreign country below the cost of production or below the price in the home country

Question 20

Predatory dumping

Answer 20

An anti- competitive business practise in which foreign companies price their products below market value to increase sales and force domestic competition out of business then raise their prices

Question 21

Poverty

Answer 21

Over one quarter of the worlds population lives in intense poverty. Accompanied by hunger, lack of shelter, education and medical care, high rates of disease

Question 22

Microcredit

Answer 22

• the granting of very small loans to spur entrepreneurship (one way poverty is being addressed)
• mainly granted to women who use the loans to start small businesses and use their earnings to support their families

Question 23

NGOs

Answer 23

• non government organizations
• non profit
• composed mostly of volunteers
• predominantly funded through charitable contributions
• may centre on trade, education, youth improving, the environment, human rights or other issue