Test # 1

Question 0

Expropriation

Answer 0

When a local government seizes and provides inadequate compensation for the foreign-owned assets of an MNC; when no compensation is provided, it is confiscated.

Question 1

Ethnocentric Approach

Answer 1

A company applies the morality used in its home country regardless of the host country’s system of ethics.

Question 2

Micropolitical Risk Event

Answer 2

An event that affects one industry or company or only a few companies.

Question 3

Polycentric Management

Answer 3

The culture of the country in which the firm is located.

Question 4

Ethnocentric Management

Answer 4

When a firm is located in 1 or more country and all it’s sales are in the same country. It does not account for cultural differences in the workforce.

Question 5

Intercultural Communication

Answer 5

Communication between persons of different cultures.

Question 6

Enculturation

Answer 6

The socialization process you go through to adapt to your society.

Question 7

Macropolitical Risk Event

Answer 7

An event that affects all foreign firms doing business in a country or region.

Question 8

Intracultural Communication

Answer 8

Communication between and among members of the same culture.

Question 9

Acculturation

Answer 9

The process of adjusting and adapting to a new and different culture.

Question 10

Culture

Answer 10

The structure through which the communication is formed and interpreted. Deals with the way people live.

Question 11

Ethnocentrism

Answer 11

Belief that your own cultural background, including way of analyzing problems, values, beliefs, language, and verbal and nonverbal communication is correct. They believe that other cultures are incorrect, defective, or quaint.

Question 12

Steps to an Ethical Decision

Answer 12

1. ) Consult the laws of both the home and the host countries.
2. ) Consult the International Codes of Conduct for MNE’s.
3. ) Consult the company’s code of ethics if there is one and established norms.
4. ) Consult your superiors if you still need clarification.
5. ) Weigh stakeholders rights.
6. ) Follow your own conscience and moral code.

Question 13

Ethical Relativism

Answer 13

Adopts the moral code of whatever country in which it is operating.

Question 14

Foreign Direct Investments

Answer 14

Investors in 1 country who are working to invest in another country other then theirs. Your money to invest.

Question 15

International Social Responsibility

Answer 15

Includes the exception that MNC’s concern themselves with the social and economic effects of their decisions.

Question 16

Political Risks

Answer 16

Any governmental action or politically motivated event that could adversely affect the long-run profitability or value of a firm.

Question 17

Stakeholders

Answer 17

Anyone that has contact with this company. I.g. Stockholders, employees, environment.

Question 18

Nationalization

Answer 18

The forced sales of an MNC’s assets to local buyers, with some compensation to the firm, perhaps leaving a minority ownership with the MNC. For sale of, you lose control.