Chapter 05Ethics in International Business True / False Questions 1. The term ethics refers to accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization. True False 2. Many of the ethical issues in international business are rooted in the fact that politicalsystems, law, economic development, and culture vary significantly from nation to nation. True False 3. Leon Sullivan argued that it was ethically justified for Western businesses to operate in South Africa so long as the companies obeyed the apartheid laws. True False 4. The Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business. True False 5. Facilitating payments are payments to secure contracts that would not otherwise be secured. True False 6. The Foreign Corrupt Practices Act does not allow for “facilitating payments.” True False 7. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions obliges member-states and other signatories to make the bribery of foreign public officials a criminal offense. True False 5-1© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distributionin any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.8. The concept of social responsibility refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions. True False 9. The power of a multinational corporation is constrained not only by laws and regulations, but also by the discipline of the market and the competitive process. True False 10. Noblesse oblige is a French term referring to those multinationals that have unethically used their power for private gain. True False 11. Ethical dilemmas are situations in which only one of the available alternatives seems ethically acceptable. True False 12. Societal business ethics are not divorced from personal ethics. True False 13. Our personal ethical code exerts a profound influence on the way we behave as businesspeople. True False 14. The term organization culture refers to the values and norms that are shared among employees of an organization. True False 15. An organizational culture that requires all decisions to be purely economic allows unethical behavior to flourish and persist. True False 16. Enterprises headquartered in a country which scores high on masculinity and power distance measures are more likely to behave ethically than enterprises headquartered in a culture where individualism and uncertainty avoidance are strong. True False 5-2© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distributionin any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.17. According to Friedman doctrine, the only social responsibility of business is to increase profits, so long as the company stays within the rules of law. True False 18. According to Milton Friedman, businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business. True False 19. According to the concept of cultural relativism, a firm, while operating in any host country, should adopt the ethics of the culture that is predominant in its home country. True False 20. A righteous moralist claims that a while operating in a host country, a multinational company should follow the ethical standards of that host country. True False 21. The righteous moralist approach to ethics is typically associated with managers from developed nations. True False 22. Kantian ethics assert that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either. True False 23. The action that produces the greatest good for the greatest number of people can result in the unjustified treatment of a minority. True False 24. Multinational corporations do not qualify to act as moral agents within the framework of rights theories. True False 25. John Rawls argues that all economic goods and services should be distributed equallyexcept when an unequal distribution would work to everyone’s advantage. True False 5-3© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distributionin any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.26. According to John Rawls difference principle, wide variations in income and wealth can be considered just if the market-based system that produces this unequal distribution also benefits the least-advantaged members of society. True False 27. John Rawls's veil of ignorance is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas. True False 28. Business leaders should use every relevant opportunity to stress the importance of business ethics and make sure that key business decisions not only make good economic sense but also are ethical. True False 29. Customers, suppliers, and lenders constitute the internal stakeholders of an organization. True False 30. Internal stakeholders of a company do not have an exchange relationship with the company. True False 31. The first step in an ethical algorithm is to identify those common resources that are not owned by any one in particular but are used by everybody. True False 32. External stakeholders are individuals or groups who have no interest, claim, or stake in a company. True False 33. Firms now have ethics officers to penalize those employees who exercise moral courage. True False 34. To strengthen the moral courage of employees, companies should not retaliate against those employees who complain about unethical actions. True False 5-4© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distributionin any manner. This document may not be copied,