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Chapter 04
Ethics in International Business

True / False Questions

1. (p. 127) Many of the ethical issues that arise when companies do business in different nations manifest because of differences such as is found in the economic development of those nations. TRUE

AACSB: Ethics; Reflective thinking
BT: Knowledge
Difficulty: Easy
Learning Objective: 4-1
Topic: Ethical Issues in International Business

2. (p. 127) The course of action that a business opts to take and which does not violate accepted principles or business ethics is known as an ethical strategy. TRUE

AACSB: Ethics; Reflective thinking
BT: Knowledge
Difficulty: Easy
Learning Objective: 4-1
Topic: Ethical Issues in International Business

3. (p. 128) Rights that we take for granted in developed countries, such as freedom of speech, are universally accepted. FALSE

AACSB: Ethics; Reflective thinking
BT: Comprehension
Difficulty: Medium
Learning Objective: 4-1
Topic: Ethical Issues in International Business

4. (p. 129) One of the conditions necessary for General Motors to abide by, as indicated within the Sullivan Principles, was that the company should not obey the apartheid laws in its own South African operations. TRUE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Medium
Learning Objective: 4-1
Topic: Ethical Issues in International Business

5. (p. 129-130) After 10 years, Leon Sullivan concluded that simply following the Sullivan Principles was not sufficient to break down the apartheid regime and that any American company, even those adhering to his principles, could not ethically justify a continued presence in South Africa. TRUE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Medium
Learning Objective: 4-1
Topic: Ethical Issues in International Business

6. (p. 130) Unfortunately, inward investment by a multinational cannot be a force for social progress that ultimately improves the rights of people in repressive regimes. FALSE

AACSB: Reflective thinking
BT: Comprehension
Difficulty: Medium
Learning Objective: 4-1
Topic: Ethical Issues in International Business

7. (p. 130) Royal Dutch Shell has been repeatedly criticized for contributing to human rights violations in Nigeria. TRUE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Easy
Learning Objective: 4-1
Topic: Ethical Issues in International Business

8. (p. 130) Although human rights often question China's human rights record, many justify investment in China on the grounds that continuing inward investment will help boost economic growth and raise standards of living. TRUE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Medium
Learning Objective: 4-1
Topic: Ethical Issues in International Business

9. (p. 130) Myanmar has one of the worst human rights records in the world. TRUE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Easy
Learning Objective: 4-1
Topic: Ethical Issues in International Business

10. (p. 131) Ethical issues do not arise even if environmental regulations in host countries are inferior to those in the home nation. FALSE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Easy
Learning Objective: 4-1
Topic: Ethical Issues in International Business

11. (p. 131) The tragedy of commons occurs when a resource, owned by the host country, is overused by all individuals. FALSE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Medium
Learning Objective: 4-1
Topic: Ethical Issues in International Business

12. (p. 131) The atmosphere and oceans are not viewed as global commons by industrialized nations of the world. FALSE

AACSB: Reflective thinking
BT: Knowledge
Difficulty: Medium
Learning Objective: 4-1
Topic: Ethical Issues in International Business

13. (p. 131) The tragedy of commons phenomenon was first named so by Garrett Hardin. TRUE

AACSB: Reflective thinking...
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