Ethics in International Business: A Comprehensive Guide for MBA Students

Question 1

In international business, which factor is critical for ethical decision-making?

Accepted Answer

Adapting ethics to local context

Answer

Ignoring local customs

Answer

Imposing own ethics

Answer

Ignoring ethics

Question 2

When assessing ethical dilemmas in international business, it is crucial to consider:

Accepted Answer

Both local laws and regulations and universal ethical principles

Answer

Local laws and regulations only

Answer

Universal ethical principles only

Answer

Neither local nor universal perspectives

Question 3

Bribery, extortion, and money laundering are all examples of:

Accepted Answer

Common forms of corruption in international business

Answer

Ethical dilemmas faced by multinational corporations

Answer

Strategies for promoting ethical behavior

Answer

International organizations addressing ethical issues

Question 4

The Foreign Corrupt Practices Act (FCPA) is a landmark legislation that:

Accepted Answer

Prohibits bribery of foreign officials by US companies

Answer

Establishes a code of conduct for multinational corporations

Answer

Sets guidelines for ethical investing

Answer

Defines the role of stakeholders in international business

Question 5

Ethical relativism posits that:

Accepted Answer

Ethics are relative to culture

Answer

Ethics are universally applicable

Answer

Ethics are subjective

Answer

Ethics are objective

Question 6

The Foreign Corrupt Practices Act (FCPA) primarily prohibits US companies from:

Accepted Answer

Bribing foreign officials

Answer

Paying facilitation payments

Answer

Making charitable donations in foreign countries

Answer

Hiring local employees

Question 7

According to the concept of cultural relativism, ethical standards:

Accepted Answer

Vary across cultures

Answer

Are universal and apply everywhere

Answer

Should always be based on religious beliefs

Answer

Are irrelevant in international business

Question 8

Which of the following ethical challenges is prevalent in international business due to differences between nations?

Accepted Answer

Cultural variations

Answer

Political instability

Answer

Economic disparities

Answer

Technological advancements

Question 9

The Foreign Corrupt Practices Act (FCPA) is a law in which country that prohibits companies from bribing foreign officials?

Accepted Answer

United States

Answer

United Kingdom

Answer

China

Answer

European Union

Question 10

In the domain of international business ethics, which principle stands out as foundational?

Accepted Answer

Upholding human rights

Answer

Prioritizing shareholder profits

Answer

Abiding by local customs and regulations

Answer

Avoiding potential conflicts of interest

Question 11

Unethical conduct in international business can lead to a cascade of adverse consequences. Which of the following is a potential outcome?

Accepted Answer

All of the options mentioned

Answer

Erosion of reputation

Answer

Legal repercussions

Answer

Interruptions in business operations

Question 12

How do cultural differences exert an influence on ethical decision-making in international business contexts?

Accepted Answer

All of the options mentioned

Answer

They can lead to misunderstandings and conflicts

Answer

They can shape perceptions of what is considered right and wrong

Answer

They may necessitate adjustments to ethical standards

Question 13

International organizations play a significant role in fostering ethical business practices globally. What is one of their key functions?

Accepted Answer

All of the options mentioned

Answer

Establishing ethical standards

Answer

Monitoring and enforcing ethical conduct

Answer

Providing guidance and training

Question 14

How can ethical decision-making contribute to sustainable business practices?

Accepted Answer

All of the options mentioned

Answer

By safeguarding the environment

Answer

By ensuring social responsibility

Answer

By promoting economic growth and development

Question 15

What are the potential implications of unethical behavior for a company's stakeholders?

Accepted Answer

All of the options mentioned

Answer

Diminished trust and loyalty

Answer

Increased exposure to legal liabilities

Answer

Damage to reputation and brand image

Question 16

Balancing profitability with ethical obligations to respect human rights can be a challenge for companies operating internationally. Which of the following is a strategy for achieving this balance?

Accepted Answer

All of the options mentioned

Answer

Investing in sustainable practices and technologies

Answer

Ensuring fair wages and decent working conditions for employees

Answer

Engaging with local communities and respecting their rights

Question 17

How does technology impact ethical decision-making in international business?

Accepted Answer

Provides real-time information on ethical risks and challenges

Answer

Automates the ethical decision-making process

Answer

Reduces the need for human involvement in ethical decision-making

Question 18

According to the Foreign Corrupt Practices Act (FCPA), which of the following is strictly prohibited?

Accepted Answer

Bribing foreign government officials

Answer

Offering small gifts to potential clients

Answer

Making payments to expedite routine governmental actions

Answer

Maintaining accurate financial records

Question 19

Which ethical theory places emphasis on the inherent dignity and rights of individuals?

Accepted Answer

Ethics of care

Answer

Utilitarianism

Answer

Deontology

Answer

Virtue ethics

Question 20

When conducting international business negotiations, it is advisable to:

Accepted Answer

Be mindful of cultural norms and expectations

Answer

Adopt a one-size-fits-all approach

Answer

Prioritize business objectives over cultural differences

Answer

Demand concessions from the other party

Question 21

Businesses have an ethical obligation to:

Accepted Answer

Protect and promote the interests of all stakeholders

Answer

Maximize profits

Answer

Minimize risk

Answer

Do whatever it takes to achieve business goals

Question 22

To achieve both ethical and financial success in international markets, businesses can:

Accepted Answer

Find ways to create value for both businesses and society

Answer

Prioritize profits over ethics

Answer

Sacrifice profits to act ethically

Answer

Ignore the need for profitability

Question 23

In cross-cultural negotiations, which ethical approach prioritizes aligning with local customs and values?

Accepted Answer

Cultural Relativism

Answer

Universalism

Answer

Ethical Imperialism

Answer

Situational Ethics

Question 24

Which of the following is **NOT** a common ethical challenge in international business?

Accepted Answer

Leadership styles

Answer

Cultural differences

Answer

Corruption

Answer

Human rights concerns

Question 25

The Foreign Corrupt Practices Act (FCPA) is primarily concerned with:

Accepted Answer

Prohibiting bribery of foreign officials

Answer

Governing ethical conduct in international trade

Answer

Setting standards for ethical decision-making in global supply chains

Answer

Establishing a code of conduct for multinational corporations

Question 26

The Foreign Corrupt Practices Act (FCPA) primarily prohibits which of the following actions?

Accepted Answer

Bribery of foreign government officials to secure business

Answer

False or misleading financial reporting to investors

Answer

Insider trading for personal gain

Answer

Violations of antitrust laws

Question 27

The concept of 'stakeholder theory' in international business emphasizes the importance of:

Accepted Answer

Balancing the interests and needs of all stakeholders, including employees, customers, suppliers, and the community

Answer

Prioritizing shareholder value and maximizing profits above all else

Answer

Adhering strictly to legal and regulatory requirements without considering stakeholder concerns

Answer

Minimizing risk and liability by avoiding any potential conflicts of interest

Question 28

The term 'cultural relativism' refers to the idea that:

Accepted Answer

Ethical standards and norms vary significantly depending on cultural and societal contexts

Answer

Moral values are absolute and universally applicable across all cultures

Answer

Businesses should always adapt their ethical practices to local customs, regardless of their own values

Answer

Cultural differences should be disregarded in international business decision-making

Question 29

Which of the following is NOT a recommended strategy for managing ethical risks in international business operations?

Accepted Answer

Ignoring ethical concerns to focus solely on short-term financial gains

Answer

Conducting thorough due diligence on business partners and suppliers

Answer

Establishing a comprehensive code of conduct and ethics policies

Answer

Providing ethics training and awareness programs for employees

Question 30

The concept of 'sustainability' in international business encompasses:

Accepted Answer

Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs

Answer

Maximizing profits and economic growth at the expense of environmental and social considerations

Answer

Adhering strictly to environmental regulations and standards without regard to economic viability

Answer

Focusing solely on short-term financial performance without considering long-term impacts

Question 31

A company is considering investing in a country with a history of human rights abuses. Which of the following considerations should be given the highest priority by the company in its decision-making process?

Accepted Answer

Respecting human rights and ensuring the safety and well-being of employees and local communities.

Answer

Maintaining a strong competitive advantage in the global market

Answer

Maximizing profits for shareholders

Question 32

A company is negotiating a contract with a foreign supplier. The supplier requests a payment beyond the agreed-upon price, indicating that it is a common practice in the country. What is the most ethical course of action for the company?

Accepted Answer

Decline the payment and report the incident to the relevant authorities.

Answer

Negotiate a lower payment with the supplier.

Answer

Accept the payment to secure the contract.

Question 33

A manufacturing company is considering relocating its operations to a country with less stringent environmental regulations. Which ethical principle is most relevant to this decision?

Accepted Answer

Sustainability

Answer

Profit maximization

Answer

Efficiency

Answer

Competitiveness

Question 34

A company is introducing a new product to a foreign market. Which cultural consideration is most important for the company to address during the launch?

Accepted Answer

Understanding and respecting local values, beliefs, and customs related to the product and its marketing.

Answer

Translating the product's marketing materials into the local language.

Answer

Adapting the product's packaging to reflect the local aesthetic preferences.

Question 35

Which of the following situations represents a 'gray area' ethical dilemma in international business?

Accepted Answer

A company operating in a country with limited access to healthcare considers providing basic healthcare services to its employees.

Answer

A company bribes a government official to secure a contract.

Question 36

What is the primary purpose of a corporate code of ethics in an international business context?

Accepted Answer

To provide guidance and principles for ethical decision-making by employees in a global environment.

Answer

To enhance the company's public image and reputation.

Answer

To ensure compliance with all local laws and regulations.

Question 37

Which of the following is NOT a potential benefit of ethical behavior in international business?

Accepted Answer

Increased legal risks and liabilities.

Answer

Improved brand reputation and customer loyalty.

Answer

Stronger relationships with stakeholders.

Answer

Enhanced employee morale and productivity.

Question 38

A company is under pressure from investors to prioritize maximizing profits over long-term sustainability. Which ethical perspective emphasizes the importance of balancing financial performance with environmental and social responsibilities?

Accepted Answer

Triple Bottom Line

Answer

Shareholder Primacy

Answer

Free Market Capitalism

Answer

Utilitarianism

Question 39

A company operating in a country with a weak legal framework for protecting intellectual property rights is considering using a competitor's patented technology without permission. Which ethical consideration is most relevant to this situation?

Accepted Answer

Respecting intellectual property rights and promoting fair competition

Answer

Adapting business practices to comply with local laws and regulations.

Answer

Maximizing profits by taking advantage of the weak legal framework

Question 40

A multinational corporation is considering outsourcing its manufacturing to a country with lax environmental regulations. Which ethical framework would most likely support this decision, prioritizing shareholder profits over environmental impact?

Accepted Answer

Shareholder Primacy

Answer

Utilitarianism

Answer

Kantian Ethics

Answer

Stakeholder Theory

Question 41

A company is negotiating a contract with a foreign government. The government official demands a bribe in exchange for approving the contract. What should the company do according to the Foreign Corrupt Practices Act (FCPA)?

Accepted Answer

Refuse the bribe and report the incident.

Answer

Ignore the official's request and proceed with the contract.

Answer

Negotiate a lower bribe amount.

Answer

Pay the bribe to secure the contract.

Question 42

A company operates a factory in a country with low wages and poor working conditions. What ethical responsibility does the company have towards its workers?

Accepted Answer

Ensure fair wages, safe working conditions, and respect for workers' rights.

Answer

Follow the local laws and regulations, even if they are below international standards.

Answer

Maintain the same standards as in its home country.

Question 43

A company is considering launching a product in a country where it might face cultural resistance due to religious beliefs. How should the company approach this challenge ethically?

Accepted Answer

Conduct thorough cultural research, adapt its marketing strategy, and respect local sensitivities.

Answer

Force the product on the market regardless of cultural objections.

Answer

Ignore cultural differences and market the product as it is in its home country.

Question 44

A company is facing pressure to lower production costs by using child labor in a developing country. What is the most ethical response for the company?

Accepted Answer

Refuse to use child labor and seek alternative solutions to reduce costs.

Answer

Use child labor only for non-hazardous tasks.

Answer

Justify the use of child labor by arguing that it benefits the local economy.

Question 45

A company is developing a new technology that could have significant environmental benefits but also poses potential risks. How should the company approach the ethical considerations of this technology?

Accepted Answer

Conduct a thorough risk assessment, consider the potential benefits and harms, and engage stakeholders in the decision-making process.

Answer

Focus solely on the potential benefits and ignore the risks.

Question 46

A company is considering investing in a project in a country with a history of human rights abuses. What ethical considerations should the company take into account?

Accepted Answer

Assess the company's potential impact on human rights, consider the risks of complicity in abuses, and engage in efforts to promote human rights.

Answer

Ignore human rights concerns and focus solely on business opportunities.

Question 47

What is the primary purpose of establishing ethical codes of conduct for international business operations?

Accepted Answer

To provide clear guidelines for ethical behavior in diverse contexts and promote responsible business practices.

Answer

To comply with legal requirements in different countries.

Question 48

Which of the following is NOT a common ethical challenge faced by multinational corporations?

Accepted Answer

Lack of competition in global markets.

Answer

Exploitation of workers in developing countries.

Answer

Bribery and corruption in foreign countries.

Answer

Cultural differences in business practices.

Question 49

What is the role of ethical leadership in promoting ethical behavior in international business?

Accepted Answer

To set a strong ethical example, establish clear ethical values, and hold employees accountable for ethical conduct.

Answer

To maximize profits and shareholder value regardless of ethical considerations.