Q&A Hero

Q: The argument for unrestricted free trade is that both import controls and export incentives: A. help firms build a competitive advantage that is subsequently difficult to challenge. B. help firms to capture first-mover advantages. C. imply that a laissez-faire stance toward trade is in the best interests of a country. D. are self-defeating and result in wasted resources. E. are not in line with principles of mercantilism.

Q: Salcia is a country that depends heavily on domestic products. The Salcian government decides on the products that can be imported and ensures that any product that can be produced at home is not imported. A major part of Salcia's trade is concentrated on exporting agricultural produce and textiles. Which of the following influences Salcia's approach to international trade? A. Mercantilism B. Leontief's paradox C. Product life-cycle theory D. New trade theory E. Neo-Ricardian trade theory

Q: Which of the following factors is taken into consideration by David Ricardos theory of comparative advantage in order to explain the pattern of international trade? A. Absolute advantage of a country with reference to natural resources B. The proportions in which the factors of production are available C. International differences in labor productivity D. Specialization in the production of particular products E. The ability of firms to capture first mover advantages

Q: Sentoria is an island nation in the Pacific ocean. It's geographical location is advantageous since it has access to a variety of aquatic life forms and also a number of fresh water sources that provide for fisheries. The lack of arable land drives local demand for seafood. The competition in the domestic fishing industry is fierce and enables Sentoria to be one of the major exporters of seafood. Which of the following theories of international trade best explains Sentoria's dominance as an exporter of seafood? A. New trade theory B. Product life-cycle theory C. Mercantilism D. Heckscher-Ohlin theory E. Theory of national competitive advantage

Q: Which of the following terms best represents a situation in which a government does not attempt to influence through quotas or duties what its citizens can buy from another country, or what they can produce and sell to another country? A. Free trade B. Positive-sum game C. Socialism D. Absolute advantage E. Zero-sum game

Q: Porter's theory suggests that it is in the best interest of business for a firm to invest in upgrading advanced factors of production.

Q: Individual firms should invest substantial financial resources in trying to build a first-mover advantage, even if that means several years of losses before a new venture becomes profitable.

Q: Porters theory has been subjected to detailed empirical testing and it is proven that it accurately predicts international trade patterns.

Q: According to Michael Porter, the government can influence each of the four components of Porter's diamondeither positively or negatively.

Q: Michael Porter argues that advanced factors are the most significant for competitive advantage.

Q: Porter argues that an absence of domestic rivalry is vital to the creation and persistence of international competitive advantage in an industry.

Q: The new trade theory suggests that a country may predominate in the export of a good simply because it was lucky enough to have one or more pioneering firms to produce that good.

Q: Factor endowments are unit cost reductions associated with a large scale of output.

Q: The new trade theory emerged from the thought that the ability of firms to attain economies of scale might have important implications for international trade.

Q: While Vernons theory is useful for explaining the pattern of international trade in the modern world, its relevance during the period of American global dominance seemed more limited.

Q: Viewed from an Asian or European perspective, Vernon's argument that most new products are developed and introduced in the United States seems ethnocentric and increasingly dated.

Q: According to the product life-cycle theory, the locus of global production initially switches from developing countries to other advanced nations and then from those nations to the United States .

Q: According to the product life cycle theory, as demand for a product starts to grow in other advanced countries, potential for exports from the U.S. will gradually increase.

Q: Raymond Vernon's product life-cycle theory was based on the observation that for most of the twentieth century a very large proportion of the world's new products were developed by the firms situated in Germany and sold first in the German market.

Q: When the impact of differences of technology on productivity is controlled for, Heckscher-Ohlin theory gains predictive power.

Q: Who are a firm's stake holders? What are the two types of stakeholders?

Q: What are grease payments?

Q: How can companies strengthen the moral courage of employees? A. By opposing whistle-blowing B. By retaliating against employees who complain about unethical actions C. By setting up ethics hotlines D. By setting difficult goals for the employees E. By sanctioning those who adopt the principles of veils of ignorance

Q: When an employee says no to a supervisor because what he/she was asked to do was unethical, it exhibits the employee's: A. moral courage. B. organizational citizenship. C. ethical dilemma. D. cross-cultural literacy. E. cultural relativism.

Q: Which of the following is most likely to a function of ethics officers in firms? A. Auditing decisions to make sure they are consistent with the companies moral principles B. Identifying the ethical principles followed by competing companies C. Ensuring that the economic interests of the stakeholders is given prime importance D. Training managers to avoid moral imagination and veil of ignorance E. Informing external stakeholders about the moral intent of a decision

Q: Which of the following steps in ethical decision-making is most likely to help businesspeople know if their decision process is working and if changes should be made to ensure greater compliance with a code of ethics? A. Judging the ethics of the proposed decision B. Auditing past decisions C. Establishing a moral intent D. Involving in moral imagination E. Identifying the concerned stakeholders

Q: Which of the following is the last step in ethical decision-making? A. Judging the ethics of the proposed decision B. Establishing moral intent C. Auditing of decisions D. Engaging in ethical behavior E. Identifying the stakeholders a decision would affect

Q: Which of the following practices should be avoided by a company to ensure ethical decision-making? A. Auditing past decisions made in the company B. Protecting the fundamental rights of stakeholders C. Taking care of the interests of external stakeholders D. Placing its economic interests before its moral principles E. Adopting the moral principles specified in the code of ethics of the company

Q: Which of the following statements is true about ethical decision-making? A. In ethical decision-making, managers need not consider the implications of a proposed strategic decision on external stakeholders. B. In ethical decision-making, It is illegal to apply the moral principles articulated in any company document other than the code of ethics. C. Since maximizing long-run profitability is the decision rule that most businesses stress, it should be applied irrespective of whether moral principles are being violated. D. Companies should place their narrow economic interests before the interests of stakeholders. E. In ethical decision-making, managers need to ensure that a proposed decision does not violate the fundamental rights of any stakeholders.

Q: The process of ethical decision-making or ethical algorithm typically begins with: A. identifying which stakeholders a decision would affect and in what ways. B. judging the ethics of the proposed strategic decision. C. managers establishing a moral intent. D. auditing a decision to check for its consistency with ethical principles. E. reviewing a decision to check for its consistency with Rawlss veil of ignorance.

Q: Which of the following terms means standing in the shoes of a stakeholder and asking how a proposed decision might impact that stakeholder? A. Corporate espionage B. Ethical dilemma C. Cultural relativism D. Moral imagination E. Moral courage

Q: People who work for or own the company such as employees, board of directors, and investors are commonly referred to as: A. external stakeholders. B. internal stakeholders. C. category captains. D. boundary spanners. E. idea champions.

Q: Elephas Inc. is a steel rod manufacturing company that has customers, investors, vendors, and competitors from all across the globe. Of the following business associates, who would fall into the category of internal stakeholders? A. Ace Globe Inc., a firm that supplies machinery to Elephas Inc. B. Matt, a prominent member of the top management of Elephas Inc. C. Gamma Creators, a competing firm that produces same quality steel rods D. The Government of the home country of Elephas Inc. E. Wendy, a major buyer of Elephas steel rods

Q: _____ fall into the category of external stakeholders of an organization. A. Employees B. Customers C. Trustees D. Board of directors E. Stockholders

Q: Which of the following approaches to ethics helps to provide a moral compass to managers? A. John Rawlss theory of justice B. The Friedman doctrine C. Cultural relativism D. Naive immoralism E. The tragedy of the global commons

Q: In a business setting, which of the following practices is most likely to be considered as unethical? A. Allowing managers within a company who act in accordance with the rights theories B. Promoting employees who engage in ethical behavior and penalizing those who do not C. Hiring independent auditors to ensure that subcontractors used by the company are living up to its code of conduct D. Making sure that key business decisions make good economic sense irrespective of their social costs and risks E. Informing prospective employees about the ethical climate in the organization

Q: The code of ethics of a company draws heavily upon documents such as the UN Universal Declaration of Human Rights, which itself is grounded in Kantian and rights-based theories of moral philosophy. In the context of this information, this company is most likely to: A. restrict its employees from joining a trade union. B. set unrealistic performance goals for its employees. C. promote employees on the sole basis of their particular characteristics such as race, sex, nationality, and class. D. make its employees work under unfavorable working conditions. E. respect the dignity of an individual and the right of employees to freedom of association.

Q: Businesses can make sure that they are hiring individuals with strong personal ethics by: A. employing only those people who have very high intelligence quotient. B. administering simple tests that indicate analytical skills of a prospective employee. C. asking for letters of references from the prospective employees. D. hiring only those people who are relatives of current employees. E. spying on prospective employees.

Q: The primary purpose for which managers use a moral compass is to: A. help them navigate through difficult ethical dilemmas. B. maximize stockholders wealth. C. legally justify their unethical behavior. D. identify new markets that have the best growth potential. E. establish political imperialism in host countries.

Q: John Rawls argues that inequality in basic social goods is to be allowed only if: A. such inequalities benefit everyone. B. a country adopts a totalitarian government system. C. a nation opposes market-based economies and free trade. D. a country ranks high on the Human Development Index. E. a country is facing a balance of payment crisis.

Q: Which of the following terms, developed Rawls, indicates that inequalities are justified if they benefit the position of the least-advantaged members of society? A. Difference principle B. The tragedy of the global commons C. The theory of private equity D. Unity of command E. Laws of equivalent trade

Q: According to Rawls, which of the following principles would be unanimously accepted by people under the veil of ignorance? A. People should be discriminated on the basis of cast and class. B. Inequalities in income and wealth distribution should not be justified under any condition. C. The political and economic freedom of people should be highly restricted in order to promote collective goals. D. Each person should be permitted the maximum amount of basic liberty that is compatible with a similar liberty for others. E. All the properties should be owned by the government and people should not have the freedom or right to hold personal property.

Q: Under John Rawls' concept of veil of ignorance, people are imagined to be ignorant of their: A. fundamental duties. B. fundamental rights. C. particular characteristics such as race, sex, and nationality. D. political and economic freedom. E. social responsibilities.

Q: According to the concept of _____, developed by John Rawls, everyone is imagined to be oblivious to all of his or her particular characteristics, such as, race, sex, intelligence, nationality, family background, and special talents. A. tragedy of the commons B. naive immoralism C. Universal Declaration of Human Rights D. veil of ignorance E. difference principle

Q: The veil of ignorance, a conceptual device designed by John Rawls, supports: A. impartiality in justice. B. oppression of people by totalitarian governments. C. economic suppression of people. D. apartheid laws. E. cultural relativism.

Q: According to _____, all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage. A. John Rawls B. Leon Sullivan C. Garrett Hardin D. Milton Friedman E. Carol Gilligan

Q: Justice theories primarily focus on: A. minimizing the amount of political liberty permitted to each person. B. the attainment of fair and equitable distribution of economic goods and services. C. the attainment of maximum business profits. D. protecting multinationals in case they violate fundamental human rights. E. minimizing the amount of economic freedom permitted to each person.

Q: In business ethics, the term "_____" refers to a fair and equitable distribution of economic goods and services. A. global commons B. zero-level distribution C. normal distribution D. just distribution E. global equity

Q: Moral agents primarily focus on: A. maximizing stockholders' wealth. B. facilitating the achievement of collective goals. C. providing benefits or services that secure the rights of others. D. maximizing business profits. E. spreading communism across the globe.

Q: What does Article 29 of Universal Declaration of Human Rights convey? A. By protecting employees, trade unions violate the fundamental rights of stockholders. B. It is ethical to pay less than subsistence wages, if that happens to be practice in some countries. C. Multinationals can compensate for the violation of fundamental rights by taking up social expenditures. D. Everyone has duties to the community in which alone the free and full development of a person is possible. E. Nations should vary the fundamental rights granted to their citizens based on their respective cultures.

Q: Article 23 of Universal Declaration of Human Rights implies that it is unethical to employ child labor in sweatshop settings and pay less than subsistence wages, even if that happens to be common practice in some countries. This is in contrast to: A. Kantian ethics. B. cultural relativism. C. rights theories. D. Marxism. E. Justice theories.

Q: In stating that all human beings are born free and equal in dignity and rights and that they are endowed with reason and conscience and should act towards one another in a spirit of brotherhood, Article 1 of the Universal Declaration of Human Rights echoes: A. the Friedman doctrine. B. naive immoralism. C. cultural relativism. D. Kantian ethics. E. teleological theory.

Q: Which of the following statements is true about Universal Declaration of Human Rights? A. This declaration provides different sets of fundamental rights and privileges for different cultures. B. According to this declaration, it is unethical to employ child labor in sweatshops even if that happens to be common in some countries. C. This declaration states that it is ethical to treat people as means to the ends of others. D. According to this declaration, citizens of a nation have no duties to their community. E. According to this declaration, people do not have a right to join trade unions for the protection of their interests.

Q: While making a business decision, a manager who believes in rights theories is most likely to focus on: A. respecting fundamental human privileges. B. achieving collective goals even if that involves violating fundamental rights. C. propagating home-country standards of ethics. D. weighing the associated social benefits, costs, and risks. E. maximizing stockholders' wealth and profits.

Q: According to the theory of rights: A. firms can pursue actions that violate fundamental rights in order to maximize profits. B. collective good forms the basis for the moral compass that managers should use when making ethical decisions. C. fundamental human rights and privileges transcend national boundaries and cultures. D. people should be treated as means and never purely as ends. E. firms that fail to maximize stockholders' wealth violate fundamental rights and privileges.

Q: Which of the following is a violation of ethics according to Kantian philosophy? A. Employing people to work at sweatshops B. Treating people as ends rather than as means C. Practicing superior standards of employment in the host country D. Empowering people with fundamental rights and privileges E. Treating employees as conscious moral beings

Q: Some contemporary moral philosophers view Kant's ethical philosophy as incomplete because his system has no place for: A. basic human rights. B. human respect. C. moral emotions and sentiments. D. just and fair treatment of a minority. E. human dignity.

Q: Which of the following philosophies of ethics holds that people should be treated as ends and never purely as means to the ends of others? A. Kantian ethics B. The Friedman doctrine C. Cultural relativism D. Righteous moralism E. Naive Immoralism

Q: Which of the following is a drawback of the utilitarian approach to business ethics? A. It omits the consideration of justice. B. It fails to consider the benefits, costs, and risks of a course of action. C. It advocates moral imperialism and ethnocentrism. D. It overemphasizes the significance of maximization of stockholder wealth. E. It recognizes that actions have multiple consequences.

Q: Adoption of which of the following ethical approaches is most likely to cause a company to use tools such as costbenefit analysis and risk assessment to weigh all of the social benefits and costs of a business action? A. Naive immoralism B. Friedman doctrine C. Ethnocentrism D. Utilitarianism E. Righteous moralism

Q: The best decisions, from a utilitarian perspective, are those that: A. maximize a firm's profit. B. maximize stockholders' wealth. C. have greater social costs than benefits. D. produce the greatest good for the greatest number of people. E. result in the justified treatment of a minority.

Q: The _____ approach to ethics holds that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences. A. ethnocentric B. utilitarian C. cultural relativist D. naive immoralist E. righteous moralist

Q: The utilitarian philosophy for business ethics primarily focuses on: A. applying home-country standards of ethics in foreign countries. B. adopting the ethics of the culture in which a business operates. C. maximizing business profits by increasing employee productivity. D. ensuring justified treatment of any minority. E. weighing the benefits, costs, and risks associated with a course of action.

Q: Which of the following statements is true about the utilitarian approach to business ethics? A. It holds that an action is judged desirable if it leads to the maximization of stockholders' wealth. B. The best decisions, from a utilitarian perspective, are those that produce the greatest profits for businesses. C. It recognizes that a business should pursue only those actions where the social benefits outweigh the costs. D. It asserts that managers should not follow ethical norms if they see that others firms are also not following them. E. It fails to consider the idea that actions have multiple consequences.

Q: An American manager of a multinational company who is working in one of the company's production plants located in the country of Cadmia, employs child labor at the manufacturing unit he is in charge of. On being criticized as unethical, the manager argues that such actions are ethically defensible because everyone in Cadmia is doing it. Which of the following straw men approaches to ethics is most likely demonstrated by the manager? A. Utilitarianism B. The righteous moralist C. The naive immoralist D. Kantian Ethics E. Ethnocentrism

Q: A multinational corporation that adopts naive immoralist approach to ethics will most likely: A. lack cultural sensitivity. B. demonstrate moral imperialism. C. be highly ethical in its business in a host nation irrespective of the ethical standards followed by other corporations in that host nation. D. believe that, in a host country, any action is ethically justified if everyone is doing it. E. demonstrate a high degree of ethnocentrism.

Q: Maverick Stars Inc., a U.S. based multinational company, applies its home-country standards of employment and production in its manufacturing facilities located in some less-developed host nations. In this context, the company is most likely to be criticized for: A. applying low standards of business ethics in its host nations. B. exploiting the national differences in factors of production. C. opposing ethnocentrism and righteous moralism. D. nullifying the reasons for investing in those countries. E. adopting cultural relativism as its approach to ethics.

Q: Silver Meteorite Inc. is a multinational company whose home country, Palumbia Republic, considers grease payments as both illegal and unethical. Hence, the company has a zero-tolerance approach toward grease payments irrespective of any of its host nations' perspectives toward such payments. In this context, Silver Meteorite Inc. is following the _____ approach to ethics. A. naive immoralist B. righteous moralist C. cultural pluralist D. cultural relativist E. ethnocentric

Q: Jonathan is the manager of his company's facilities in the Philippines. He believes in ensuring the exact same standards of working conditions, wages, and labor management in the Philippines as practiced by the company's corporate office in its home country, the United States. This policy of Jonathan does not always lead to profits because of the vast cultural differences between the two nations. Which of the following straw men approaches to ethics is most likely being adopted by Jonathan? A. Naive immoralism B. Cultural relativism C. Righteous moralism D. Sullivan principle E. Just distribution

Q: The straw man approach of righteous moralism is typically associated with managers from: A. third world countries. B. totalitarian nations. C. BRIC nations. D. developed nations. E. war-torn countries.

Q: A righteous moralist is most likely to claim that: A. a multinationals home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. B. a firm should adopt the ethics of the culture in which it is operating. C. people should be treated as ends and never purely as means to the ends of others. D. human beings have fundamental rights and privileges that transcend national boundaries and cultures. E. inequalities are justified if they benefit the position of the least-advantaged person.

Q: Three Torque Inc., a U.S. based multinational company, allows its managers to make facilitating payments in its home country to expedite government formalities. However, in countries where such payments are considered as unethical, the company restricts its managers from indulging in such activities. This behavior of the company illustrates the straw man approach of: A. righteous moralist. B. cultural relativism. C. ethnocentrism. D. just distribution. E. cultural convergence.

Q: Neon Synergy Inc. operates in three different countries, and is headed by a CEO who believes that best approach to ethics is cultural relativism. In this context, which of the following statements is most likely to be true regarding Neon Synergy? A. All business units of Neon Synergy will adopt a common standard of ethics irrespective of their location. B. Business decisions made by managers of Neon Synergy will be solely based on the goal of maximization of societal good. C. The business units of Neon Synergy will be empowered to adopt the standards of ethics followed in their respective host nations. D. Neon Synergy will extensively advocate the idea that universal notions of morality transcend different cultures. E. Neon Synergy will follow its home-country standards of ethics at all its foreign locations.

Q: Green Quantum Inc. has research and production units all across the globe. The company expects its expatriate managers to adopt the ethics propagated by the culture in which they operate their respective units. Even in situations when others consider certain actions as unethical, the company allows its managers to pursue such actions if they are permitted in the host nation. Green Quantum is most likely following: A. the Friedman's doctrine. B. Sullivan's principles. C. righteous moralism. D. the Kantian ethics. E. cultural relativism.

Q: _____ implicitly rejects the idea that universal notions of morality transcend different cultures. A. Just distribution B. Cultural relativism C. The Kantian ethic D. Utilitarianism E. Sullivan principle

Q: Which of the following straw men approaches to business ethics is best summarized by the maxim "When in Rome, do as the Romans?" A. Cultural relativism B. Just distribution C. Kantian ethics D. Righteous moralist E. Sullivan principle

Q: _____ advocates that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate. A. Cultural pluralism B. Friedman's doctrine C. Cultural relativism D. Ethnocentrism E. Cultural convergence

Q: Cadmium Technologies Inc. believes that the sole purpose of its existence is to maximize profits for its stockholders. The firm has often been criticized for not engaging in any social investments. However, the firm has been appreciated for abiding by the laws while earning profits. According to this information, which of the following approaches to ethics is most likely being adopted by Cadmium Technologies? A. Friedman doctrine B. Utilitarianism C. Kantian ethics D. Sullivan's principles E. Naive immoralist

Q: Which of the following statements is true about the Friedman doctrine? A. Milton Friedman explicitly rejects the idea that businesses should behave in an ethical manner. B. According to Friedman, managers should weigh the social benefits and costs of an action before deciding whether to pursue it. C. The best decisions, from Friedman's perspective, are those that produce the greatest good for the greatest number of people. D. According to Friedman, managers of a firm should not make decisions about social investments for its stockholders. E. Friedmans basic position is that the only social responsibility of business is to increase profits even if that involves breaking the rules of law.

Q: According to _____, the only social responsibility of business is to increase profits, so long as the company stays within the rules of law. A. Milton Friedman B. Leon Sullivan C. Karl Marx D. Immanuel Kant E. David Hume