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MGT 357 Test 1
| Question | Answer |
|---|---|
| Globalization also refers to what? | The world is moving away from self-contained national economies toward an interdependent, integrated global economic system |
| What Is Globalization? | Globalization refers to the shift toward a more integrated and interdependent world economy |
| What Is The Globalization of Markets? | Refers to the merging of historically distinct and separate national markets into one huge global markeplace |
| It no longer makes sense to talk about the “German market” or the “American market” Why? | As trade barriers between countries fall, companies like Ikea, Sony, and Coca-Cola are able to sell their product to a global market where consumers are more and more alike. And because there is instead, just one global market |
| What’s making it easier to sell internationally? | Falling trade barriers for one thing, and, as we already mentioned, the convergence of consumer tastes and preferences. |
| How do firms promote the trend of a global market? | firms promote the trend by offering the same basic products worldwide |
| What Is The Globalization of Production? | Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, and capital |
| With the globalization of production, companies can... | lower their overall cost structure and improve the quality or functionality of their product offering |
| Why Do We Need Global Institutions? | help manage, regulate, and police the global marketplace and to promote the establishment of multinational treaties to govern the global business system |
| Examples of global institutions include... | The General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), the International Monetary Fund (IMF),the World Bank, and the United Nations (UN) |
| What is the WTO? | The World Trade Organization (like its predecessor GATT)polices the world trading system, makes sure that nation-states adhere to the rules laid down in trade treaties, and promotes lower barriers to trade and investment |
| What is the IMF? | The International Monetary Fund (1944) maintains order in the international monetary system |
| What is the World Bank? | The World Bank (1944) promotes economic development |
| What is the UN? | United Nations (1945) maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and in promoting respect for human rights, and is a center for harmonizing the actions of nations |
| What Is Driving Globalization? Factor 1... | The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II. Since 1950, average tariffs have fallen significantly and are now at 4 percent. Countries have opened their markets to FDI. |
| What Is Driving Globalization? Factor 2... | Technological change: microprocessors and telecommunications, the Internet and World Wide Web, and transportation technology |
| What Does Globalization Mean For Firms? | Lower barriers to trade and investment mean firms can: view the world, rather than a single country, as their market, and can base production in the optimal location for that activity |
| What is the role of technological change in the globalization of markets? | lower transportation costs,lower information processing and communication costs,low cost global communications networks, low-cost transportation, and global communication networks and global media |
| The Changing Demographics Of The Global Economy include what 4 trends? | the Changing World Output and World Trade Picture, the Changing Foreign Direct Investment Picture, the Changing Nature of the Multinational Enterprise, and the Changing World Order |
| How has world output and world trade changed? | In 1960, the US accounted for over 40% of world economic activity. By 2008, the US accounted for just over 20% of world economic activity. |
| How else has world output and world trade changed? | A similar trend occurred in other developed countries. The share of world output accounted for by developing nations is rising and is expected to account for more than 60% of world economic activity by 2020 |
| Who is the world’s largest exporter | tThe U.S., despite its decline. However, China has emerged to challenge the U.S. for this position. |
| How Has Foreign Direct Investment Changed Over Time? | In 1960s, U.S. firms accounted for about two-thirds of worldwide FDI flows. Today, the US accounts for less than one-fifth of worldwide FDI flows. |
| How else Has Foreign Direct Investment Changed Over Time? | Other developed countries have followed a similar pattern. In contrast, the share of FDI accounted for by developing countries has risen. Developing countries, especially China, have also become popular destinations for FDI |
| What Is A Multinational Enterprise? | A multinational enterprise (MNE) is any business that has productive activities in two or more countries. Since the 1960s, there has been a rise in non-U.S. multinationals, and a growth of mini-multinationals |
| What is the final change in demographics? | The change in world order. |
| What has occured due to a change in world order? | Many former Communist nations in Europe and Asia are now committed to democratic politics and free market economies. China and Latin America are also moving toward greater free market reforms. |
| How Will The Global Economy Of The 21st Century Look? | The world is moving toward a more global economic system, but globalization is not inevitable-there are signs of a retreat from liberal economic ideology in Russia. |
| What risks does globalization bring? | The financial crisis that swept through South East Asia in the late 1990s the recent financial crisis that started in the U.S. in 2008, and moved around the world |
| Is An Interdependent Global Economy A Good Thing? | Not necessarily |
| What do supporters of an interdependent global economy say? | Supporters believe that increased trade and cross-border investment mean: lower prices for goods and services, greater economic growth, higher consumer income, and more jobs |
| What do citics of an interdependent global economy say? | Critics worry that globalization will cause: job losses, environmental degradation, the cultural imperialism of global media and MNEs. Anti-globalization protesters now regularly show up at most major meetings of global institutions. |
| How Does Globalization Affect Jobs And Income? What do critics say? | Critics argue that falling barriers to trade are destroying manufacturing jobs in advanced countries |
| How Does Globalization Affect Jobs And Income? What do supporters say? | Supporters contend that the benefits of this trend outweigh the costs. Countries will specialize in what they do most efficiently and trade for other goods—and all countries will benefit |
| How do globalization’s supporters view globalization and labor policies and the environment? | Supporters claim that tougher environmental and labor standards are associated with economic progress. As countries get richer from free trade, they implement tougher environmental and labor regulations |
| How do globalization’s critics view globalization and labor policies and the environment? | Critics argue that firms avoid costly efforts to adhere to labor and environmental regulations by moving production to countries where such regulations do not exist, or are not enforced |
| How Does Globalization Affect National Sovereignty? What do critics say? | Critics argue that unelected bureaucrats have the power to impose policies on the democratically elected governments of nation-states |
| How Does Globalization Affect National Sovereignty? What do supporters say? | Supporters claim that the power of these organizations is limited to what nation-states agree to grant. The power of the organizations lies in their ability to get countries to agree to follow certain actions |
| How Is Globalization Affecting The World’s Poor? What do critics say? | Critics believe that if globalization was beneficial there should not be a divergence between rich and poor nations |
| How Is Globalization Affecting The World’s Poor? What do supporters say? | The best way for the poor nations to improve their situation is to: reduce barriers to trade and investment,implement economic policies based on free market economies, and receive debt forgiveness for debts incurred under totalitarian regimes. |
| How Does The Global Marketplace Affect Managers? | Managing an international business differs from managing a domestic business because: countries are different, the range of problems confronted in an international business is wider and the problems more complex than those in a domestic business. |
| How else Does The Global Marketplace Affect Managers? | Firms have to find ways to work within the limits imposed by government intervention in the international trade and investment system. International transactions involve converting money into different currencies |
| The shift toward a more integrated and interdependent world economy is referred to as... | globalization |
| The merging of historically distinct and separate national markets into one huge global marketplace is known as | the globalization of markets |
| Firms that are involved in international business tend to be | large, small, and medium-sized |
| Which is not a factor of production? | trade |
| The sourcing of good and services from around the world to take advantage of national differences in the cost and quality of factors of production is called | the globalization of production |
| Which organization is responsible for policing the world trading system? | the World Trade Organization |
| What is the single most important innovation to the globalization of markets and production? | the development of the microprocessor |
| The share of world trade accounted for by developing countries is rising or falling? | rising |
| Which of these is not a concern of anti-globalization protesters? | globalization raises consumer income |
| What Is A Political Economy? | The political economy of a nation refers to how the political, economic, and legal systems of a country are interdependent.They interact and influence each other, they affect the level of economic well-being in the nation. |
| What Is A Political System? | Political system refers to the system of government in a nation |
| Political systems are assessed according to what? | the degree to which the country emphasizes collectivism as opposed to individualism and the degree to which the country is democratic or totalitarian |
| What Is Collectivism? | Collectivism stresses the primacy of collective goals over individual goals and can be traced to the Greek philosopher, Plato (427-347 BC) |
| Today, collectivism is equated with... | Socialists (Karl Marx 1818-1883): advocate state ownership of the basic means of production, distribution, and exchange. Manage to benefit society as a whole, rather than individual capitalists |
| In the early 20th century,the socialist ideology split into what two camps. The First is? | Communism – socialism can only be achieved through violent revolution and totalitarian dictatorship: in retreat worldwide by mid-1990s |
| In the early 20th century,the socialist ideology split into what two camps. The Second is? | Social democrats – socialism is achieved through democratic means: retreating as many countries move toward free market economies. State-owned enterprises have been privatized |
| What Is Individualism? | Individualism refers to philosophy that an individual should have freedom in his own economic and political pursuits |
| Individualism can be traced to who.. | can be traced to Greek philosopher, Aristotle (384-322 BC), who argued that individual diversity and private ownership are desirable |
| What are the groud rules for individualism? | individual economic and political freedoms are the ground rules on which a society should be based |
| What does individualism imply | implies democratic political systems and free market economies |
| What Is Democracy? | Democracy refers to a political system in which government is by the people, exercised either directly or through elected representatives |
| Democracy is usually associated with... | individualism |
| What is pure democract based on? | the belief that citizens should be directly involved in decision making |
| most modern democratic states practice representative democracy, which is? | where citizens periodically elect individuals to represent them |
| What Is Totalitarianism? | Totalitarianism is a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties |
| What is Communist totalitarianism? | found in states where the communist party monopolizes power |
| What is Theocratic totalitarianism? | found in states where political power is monopolized by a party, group, or individual that governs according to religious principles |
| What is Tribal totalitarianism? | found in states where a political party that represents the interests of a particular tribe monopolizes power |
| What is Right-wing totalitarianism? | permits some individual economic freedom, but restricts individual political freedom |
| What are the three types of economic systems? | Market economies, commance economies, and mixed economies |
| What are Market economies? | all productive activities are privately owned and production is determined by the interaction of supply and demand. Government encourages free and fair competition between private producers |
| What are Command economies? | government plans the goods and services that a country produces, the quantity that is produced, and the prices as which they are sold. All businesses are state-owned, and governments allocate resources for “the good of society.” |
| Because there is little incentive to control costs and be efficient, command economies tend to? | stagnate |
| What are Mixed economies? | Certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning. Governments tend to own firms that are considered important to national security |
| What Is A Legal System? | The legal system of a country refers to the rules that regulate behavior along with the processes by which the laws are enforced and through which redress for grievances is obtained |
| What are the three types of legal systems? | 1. Common law - based on tradition, precedent, and custom 2. Civic law - based on detailed set of laws organized into codes 3. Theocratic law - law is based on religious teachings |
| What is a contract? | a document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved |
| Contract law | the body of law that governs contract enforcement Under a common law system, contracts tend to be very detailed with all contingencies spelled out |
| Under a civil law system, contracts tend to be | much shorter and less specific because many issues are already covered in the civil code |
| Many countries have ratified the United Nations Convention on Contracts for the International Sale of Goods (CIGS) which | establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between buyers and sellers who have their places of business in different nations |
| Property rights | refer to the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource |
| Property rights can be violated through | 1. Private action – theft, piracy, blackmail 2. Public action - legally - ex. excessive taxation or illegally - ex. bribes or blackmailing |
| High levels of corruption reduce what? | high levels of corruption reduce foreign direct investment, the level of international trade, and the economic growth rate in a country |
| The Foreign Corrupt Practices Act makes it illegal for | U.S. companies to bribe foreign government officials to obtain or maintain business over which that foreign official has authority |
| Which Countries Are Most Corrupt? | Finland and New Zealand and the United Kingdom |
| Intellectual property | property that is the product of intellectual activity |
| Inyellectual property can be protected using | patents, copyrights, and trademarks |
| Patents | exclusive rights for a defined period to the manufacture, use, or sale of that invention |
| Copyrights | the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit |
| Trademarks | design and names by which merchants or manufacturers designate and differentiate their products |
| How Can Intellectual Property Be Protected? | Protection of intellectual property rights differs from country to country: World Intellectual Property Organization, Paris Convention for the Protection of Industrial Property |
| To avoid piracy, firms can | stay away from countries where intellectual property laws are lax, file lawsuits, and lobby governments for international property rights agreements and enforcement |
| Product safety laws | set certain standards to which a product must adhere |
| Product liability | involves holding a firm and its officers responsible when a product causes injury, death, or damage |
| When product safety laws are stricter in a firm’s home country than in a foreign country, or when liability laws are more lax, what does the firm have to decide? | the firm has to decide whether to adhere to home country or host country standards |
| What are the two ways to measure levels of economic development | Gross national income (GNI)-per person and Purchasing power parity (PPP)-involves adjusting GNI by purchasing power |
| Why are GNI measures misleading, thus we adjust the numbers by purchasing power? | GNI measures can be misleading because they don’t take into account cost of living differences |
| Are there other ways to measure economic development? Nobel-prize winning economist Amartya Sen thinks so! What does she argue? | economic development should be seen as a process of expanding the real freedoms that people experience. |
| Amartya Sen also believes... | the removal of major impediments to freedom like poverty, tyranny, and neglect of public facilities and the presence of basic health care and basic education |
| What Determines A Country’s Level Of Economic Development? | The United Nations used Sen’s ideas to develop the Human Development Index (HDI) |
| Human Development Index (HDI) is based on what | life expectancy at birth, educational attainment, and whether average incomes are sufficient to meet the basic needs of life in a country |
| What are the engines of long-run economic growth | Innovation and entrepreneurship |
| Innovation and entrepreneurship require what type of economy? | a market economy and strong property rights |
| What is more conducive to long-term economic growth than dictatorships, even the benevolent kind | Democratic regimes |
| Subsequent economic growth leads to | the establishment of democratic regimes |
| Countries with favorable geography are more likely to | engage in trade, and so, be more open to market-based economic systems, and the economic growth they promote |
| Countries that invest in education have higher what? | growth rates because the workforce is more productive |
| How Is The Political Economy Changing? | Since the late 1980s, two trends have emerged: 1. Democratic revolution and 2. A move away from centrally planned and mixed economies |
| Democratic revolution (late 1980s and early 1990s) | totalitarian regimes failed to deliver economic progress to populations, new info & communication technologies have broken down ability of state to control access to uncensored info, economic advances led to middle & working classes who pushed for reform |
| A move away from centrally planned and mixed economies means | more countries have shifted toward the market-based model |
| The shift toward a market-based system involves what? | deregulation, privatization, and the creation of a legal system to safeguard property rights |
| deregulation | removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate |
| privatization | transfers the ownership of state property into the hands of private investors |
| What Does The Changing Economy Mean For Managers? | Markets that were formerly off-limits to Western business are now open |
| By identifying and investing early in a potential future economic stars, firms may be able to gain first mover advantages or | first mover advantages (advantages that accrue to early entrants into a market) and establish loyalty and experience in a country ex. China -1.2 billion people and India – 1.1 billion people |
| It can be more costly to do business in countries with | dramatically different product, workplace, and pollution standards, or where there is poor legal protection for property rights |
| With a changing economy, managers must consider what three things? | political, economic, and legal risks |
| Political risk | the likelihood that political forces will cause drastic changes in a country's business environment that adversely affects the profit and other goals of a business enterprise |
| Economic risk | the likelihood that economic mismanagement will cause drastic changes in a country's business environment that adversely affects the profit and other goals of a business enterprise |
| Legal risk | the likelihood that a trading partner will opportunistically break a contract or expropriate property rights |
| The overall attractiveness of a country as a potential market and/or investment site for an international business depends on | balancing the benefits, costs, and risks associated with doing business in that country |
| Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in | politically stable developed and developing nations that have free market systems and no dramatic upsurge in either inflation rates or private sector debt |
| A political system that stresses the primacy of collective goals over individual goals is called | collectivism |
| _____ believe(s) that socialism can only be achieved through violent revolution and totalitarian dictatorship. | communists |
| A form of government in which one person or political party exercises complete control over all spheres of human life and prohibits opposing political parties is | totalitarianism |
| ______ is found in states where political power is monopolized by a party according to religious principles. | theocratic totalitarianism |
| In which type of economic system are all productive activities privately owned? | a market economy |
| Which type of law is based on tradition, precedent, and custom? | common law |
| Which country is not among the most corrupt countries in the world? | Indonesia |
| Design and names by which merchants or manufacturers designate and differentiate their products are called | trademarks |
| Which is not a primary determinant of a nation’s rate of economic development? | its currency |
| What Is Cross-Cultural Literacy? | Cross-cultural literacy is an understanding of how cultural differences across and within nations can affect the way in which business is practiced. A relationship may exist between culture and the costs of doing business in a country or region |
| What Is Culture? | Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living |
| What are values? | are abstract ideas about what a group believes to be good, right, and desirable |
| What are norms? | are the social rules and guidelines that prescribe appropriate behavior in particular situations |
| What is a Society? | A society refers to a group of people who share a common set of values and norms |
| What do values provide? | Values provide the context within which a society’s norms are established and justified and form the bedrock of a culture |
| What do norms include? | 1. folkways - the routine conventions of everyday life 2. mores - norms that are seen as central to the functioning of a society and to its social life |
| How Are Culture, Society, And The Nation-State Related? | The relationship between a society and a nation state is not strictly one-to-one. Nation-states are political creations and can contain one or more cultures. A culture can embrace several nations |
| What Are The Determinants Of Culture? | The values and norms of a culture evolve over time and are a function of a number of factors at work in a society |
| The determinants of a culture include what? | religion, political and economic philosophies, education, language, and social structure |
| What Is A Social Structure? | Social structure refers to a society’s basic social organization |
| What elements are there to consider for a social structure? | The degree to which the basic unit of social organization is the individual, as opposed to the group. The degree to which a society is stratified into classes or castes |
| What is a group? | A group is an association of two or more people who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behavior |
| In Western societies there is a focus on what? | The individual. And, individual achievement is common, dynamism of the U.S. economy, high level of entrepreneurship |
| The focus on the individual also leads to a lot of managerial mobility, and so, there is a lack of... | company loyalty and failure to gain company specific knowledge. Also, competition between individuals in a company instead of team building. Also, less ability to develop a strong network of contacts within a firm. |
| In many Asian societies, the _____ is the primary unit of social organization | group |
| In Asian societies, the group does what? | discourages job switching between firms, encourages lifetime employment systems, leads to cooperation in solving business problems, and might also suppress individual creativity and initiative |
| All societies are stratified on a hierarchical basis into social categories, or | social strata |
| While all societies are stratified to some extent, they differ by: | 1. The degree of mobility between social strata 2. The significance attached to social strata in business contracts |
| What is the degree of social mobility? | the extent to which individuals can move out of the strata into which they are born |
| What is a caste system? | closed system of stratification in which social position is determined by the family into which a person is born. change is usually not possible during an individual's lifetime |
| What is a class system? | form of open social stratification position a person has by birth can be changed through achievement or luck |
| In regards to social stratfication, what two things must you consider? | 1. The degree of social mobility 2. The significance attached to social strata in business contacts |
| What is class consciousness? | is a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others |
| What is Religion? | is a system of shared beliefs and rituals that are concerned with the realm of the sacred |
| Religion and what are often closely intertwined? | ethics |
| Which four religions dominate society? | 1.Christianity 2.Islam 3.Hinduism 4.Buddhism |
| What is important in influencing behavior and culture in many parts of Asia | Confucianism |
| What are Ethical systems? | are a set of moral principles, or values, that are used to guide and shape behavior |
| What Is Christianity? | the world’s largest religion |
| Where is Christianity found? | found throughout Europe, the Americas, and other countries settled by Europeans |
| What is the Protestant work ethic (Max Weber, 1804) | hard work, wealth creation, and frugality is the driving force of capitalism |
| What Is Islam? | With its 1 billion followers, Islam is the second largest religion in the world. |
| Islam extends... | the underlying roots of Christianity to an all-embracing way of life that governs one's being |
| Islamic fundamentalism is associated where? | associated in the Western media with militants, terrorists, and violent upheavals, but in fact Islam teaches peace, justice, and tolerance |
| Fundamentalists, who demand rigid commitment to religious beliefs and rituals, have gained political power in many Muslim countries, and blame who? | the West for many social problems |
| In Islam people do not own property, but act as what for God? | act as stewards for God. People must take care of that which they have been entrusted with |
| How does Islam affect business? | The Koran,the sacred book for Islam like the Bible for Christianity, supports free enterprises & legitimate profits, & the right to protect private property, but advocates using profits in a righteous socially- beneficial manner. |
| What Is Hinduism? | Hinduism is the oldest religion in the world, and goes back about 4,000 years. |
| Hinduism is primarily practiced where? | practiced primarily on the Indian sub-continent |
| Hinduism focuses on what? | focuses on the importance of achieving spiritual growth and development, which may require material and physical self-denial |
| Hindus are valued by | their spiritual rather than material achievements |
| Many Hindus believe that the way to achieve nirvana is through | material and physical self-denial. |
| For Hindus, what may not be important and infeasible due to the employee's caste? | promotion and adding new responsibilities may not be important, or may be infeasible due to the employee's caste |
| What Is Buddhism? | stresses spiritual growth and the afterlife, rather than achievement while in this world |
| Buddhism has how many followers? | has about 350 millions followers |
| Buddhism does not empahsize what? | does not emphasize wealth creation |
| In Buddhism what is not stressed? | entrepreneurial behavior is not stressed |
| Buddhism does not support what? | does not support the caste system, individuals do have some mobility and can work with individuals from different classes |
| What Is Confucianism? | teaches the importance of attaining personal salvation through right action. High morals, ethical conduct, and loyalty to others are stressed |
| Confucianism is mainly pracitced where? | ideology practiced mainly in China |
| What are the three key teachings of Confucianism? | loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in Confucian societies |
| What Is The Role Of Language In Culture? | Language - the spoken and unspoken (nonverbal communication such as facial expressions, personal space, and hand gestures ) means of communication. |
| What is one of the defining characteristics of culture? | language |
| countries with more than one language often have | more than one culture |
| What is the most widely spoken language in the world? | English |
| What is the mother tongue of the largest number of people? | Chinese |
| What is also becoming the language of international business? | English |
| What is still beneficial, and in some cases, critical for business success? | knowledge of the local language |
| failing to understand the nonverbal cues of another culture can lead to what? | communication failure |
| What Is The Role Of Education In Culture? | Formal education is the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society |
| What is important in determining a nation’s competitive advantage? | Education in culture |
| What can be a good index for the kinds of products that might sell in a country? | general education levels |
| Its important for companies to understand how a society’s culture affects what? | workplace values |
| What must be adapted to culturally-determined work-related values? | Management processes and practices |
| Who identified four dimensions of culture? | Geert Hofstede |
| What is Power distance? | how a society deals with the fact that people are unequal in physical and intellectual capabilities |
| What is Uncertainty avoidance? | the relationship between the individual and his fellows |
| What is Individualism versus collectivism? | the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity |
| What is Masculinity versus femininity? | the relationship between gender and work roles |
| Hofstede later expanded added a fifth dimension called what? | Confucian dynamism |
| What is Confucian dynamism? | captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors |
| Hofstede’s work has been criticized because | made the assumption there is a one-to-one relationship between culture and the nation-state, study may have been culturally bound, used IBM as sole source of information, and because culture is not static – it evolves |
| Does Culture Change? | Culture evolves over time and changes in value systems can be slow and painful for a society |
| What is Social turmoil? | an inevitable outcome of cultural change |
| as countries become economically stronger, what is particularly common? | cultural change |
| Why is it important to develop cross-cultural literacy? | Companies that are ill informed about the practices of another culture are unlikely to succeed in that culture. Managers must beware of ethnocentric behavior, or a belief in the superiority of one's own culture |
| There is a connection between culture and national competitive advantage. What does this suggest and what implications are there? | suggests which countries are likely to produce the most viable competitors. Has implications for the choice of countries in which to locate production facilities and do business |
| Abstract ideas about what a group believes to be good, right, and desirable are called | values |
| The basic social organization of a society is its | social structure |
| The group is the primary unit of social organization in | Japan |
| Which of the following is not characteristic of individualism? | low managerial mobility |
| Which religion promotes the notion that a moral force in society requires the acceptance of certain responsibilities called dharma? | Hinduism |
| The most widely spoken language in the world is | English |
| _______ focuses on how society deals with the fact that people are unequal in physical and intellectual capabilities. | power distance |
| What Is Ethics? | Ethics refers to accepted principles of right or wrong that govern: the conduct of a person, the members of a profession, and the actions of an organization |
| What are Business ethics? | are the accepted principles of right or wrong governing the conduct of business people |
| What is an Ethical strategy? | is a strategy, or course of action, that does not violate these accepted principles |
| The most common ethical issues in business involve what? | 1. employment practices 2. human rights 3. environmental regulations 4. corruption 5. the moral obligation of multinational companies |
| Suppose work conditions in a host nation are clearly inferior to those in the multinational’s home nation Which standards should apply? | home country standards, host country standards, and something in between |
| Basic human rights are taken for granted in developed countries. Rights including: | freedom of association, freedom of speech, freedom of assembly, and freedom of movement |
| What is the tragedy of the commons? | occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation |
| What is the U.S. Foreign Corrupt Practices Act? | The U.S. Foreign Corrupt Practices Act outlawed the practice of paying bribes to foreign government officials in order to gain business |
| What is the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions? | adopted by the Organization for Economic Cooperation and Development (OECD), obliges member states to make the bribery of foreign public officials a criminal offense |
| What is Social responsibility? | refers to the idea that managers should consider the social consequences of economic actions when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and good social consequences. |
| Advocates argue that businesses need to recognize their noblesse oblige. Which is? | honorable and benevolent behavior that is the responsibility of successful companies. Give something back to the societies that have made their success possible |
| What Are Ethical Dilemmas? | Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable |
| The ethical obligations of a multinational corporation toward WHAT are not always clear cut? | The ethical obligations of a multinational corporation toward employment conditions, human rights, corruption, environmental pollution, and the use of power are not always clear cut |
| Ethical issues arise when... | when environmental regulations in host nations are far inferior to those in the home nation |
| Environmental questions take on added importance because ... | some parts of the environment are a public good that no one owns, but anyone can despoil |
| Several factors contribute to unethical behavior including: | 1. Personal ethics 2. Decision-making processes 3. Organizational culture 4. Unrealistic performance expectations 5. Leadership |
| What are Personal ethics? | the generally accepted principles of right and wrong governing the conduct of individuals. |
| expatriates may face pressure to violate their personal ethics because? | they are away from their ordinary social context and supporting culture |
| managers fail to question whether a decision or action is ethical, and instead... | rely on economic analysis when making decisions |
| Decision-making processes? | the values and norms that are shared among employees of an organization |
| An organization culture that does not emphasize business culture encourages what? | unethical behavior |
| Define Organizational culture | organizational culture can legitimize unethical behavior or reinforce the need for ethical behavior |
| Define Unrealistic performance expectations | encourage managers to cut corners or act in an unethical manner |
| Define Leadership | helps establish the culture of an organization, and set the examples that others follow. when leaders act unethically, subordinates may act unethically, too |
| What is the Straw Men approach to The Philosophical Approaches To Ethics? | Straw men approaches deny the value of business ethics or apply the concept in an unsatisfactory way. Offers inappropriate guidelines for ethical decision making in a multinational enterprise |
| Others approaches to the Philosophical Approaches To Ethics are favored by what? | Others approaches are favored by moral philosophers and are the basis for current models of ethical behavior |
| What are the four common straw men approaches? | 1. Friedman doctrine 2. Cultural relativism 3. Righteous moralist 4. Naïve immoralist *All approaches offer inappropriate guidelines for ethical decision making |
| What is the Friedman doctrine? | the only social responsibility of business is to increase profits, so long as the company stays within the rules of law |
| What is Cultural relativism? | ethics are culturally determined and firms should adopt the ethics of the cultures in which they operate. “When in Rome, do as the Romans do” |
| Righteous moralist? | a multinational’s home country standards of ethics should be followed in foreign countries |
| Naïve immoralist? | 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 |
| What is the Utilitarian Approache To Ethics? | the moral worth of actions or practices is determined by their consequences |
| Utilitarian actions are desirable if... | actions are desirable if they lead to the best possible balance of good consequences over bad consequences |
| Utilitarian ethics are difficult to measure what? | it is difficult to measure the benefits, costs, and risks of an action |
| Utilitarian ethics fails to consider what? | the approach fails to consider justice |
| What is Kantian ethics? | (Immanuel Kant) - people should be treated as ends and never purely as means to the ends of others |
| What Are Rights Theories? | Rights theories - human beings have fundamental rights and privileges which transcend national boundaries and cultures. Establish a minimum level of morally acceptable behavior |
| The Universal Declaration of Human Rights specifies what? | the Universal Declaration of Human Rights specifies the basic principles that should always be adhered to irrespective of the culture in which one is doing business |
| Moral theorists argue that ... | fundamental human rights form the basis for the moral compass that managers should navigate by when making decisions which have an ethical component |
| What Are Justice Theories? | Justice theories focus on the attainment of a just distribution of economic goods and services |
| A just distribution is one that... | a just distribution is one that is considered fair and equitable |
| John Rawls argued that all economic goods and services should be? | distributed equally except when an unequal distribution would work to everyone’s advantage |
| According to John Rawls, impartiality is guaranteed by the veil of ignorance . Which is? | everyone is imagined to be ignorant of all his or her particular characteristics |
| To encourage ethical decision making, firms should (the first 2) | 1. Hire and promote people with a well grounded sense of personal ethics 2. Build an organizational culture that places a high value on ethical behavior |
| How Can Managers Make Ethical Decisions? | refrain from promoting individuals who have acted unethically. Prospective employees should find out as much as they can about the ethical climate in an organization prior to taking a position |
| What other ways Can Managers Make Ethical Decisions? | articulate values that place a strong emphasis on ethical behavior. Implement a system of incentives and rewards that recognize people who engage in ethical behavior and sanction those who do not |
| Managers can make ethical decsions by emphasizing the importance of a code of ethics, defined as... | formal statement of the ethical priorities a business adheres to |
| To encourage ethical decision making, firms should (numbers 3 and 4) | 3. Make sure that leaders within the business articulate the rhetoric of ethical behavior and act in a manner that is consistent with that rhetoric 4. Develop moral courage |
| To encourage ethical decision making, firms should (the last one) | 5. Put decision making processes in place that require people to consider the ethical dimension of business decisions |
| Developing moral courage enables managers to | enables managers to walk away from a decision that is profitable, but unethical |
| Developing moral courage gives an employee the strength to say | no to a superior who instructs her to pursue actions that are unethical |
| Developing moral courage gives employees the | the integrity to go public to the media and blow the whistle on persistent unethical behavior in a company |
| When putting decision making processes in place that require people to consider the ethical dimension of business decisions ask whether: | decisions fall within the accepted values of standards that typically apply in the organizational environment, decisions can be communicated to all stakeholders affected by it, and if colleagues would approve of decisions |
| Managers can also use a five step process to think through ethical problems. Name the five steps. | 1:Identify which stakeholders 2:Determine whether proposed decision would violate fundamental rights of any stakeholders 3:Establish moral intent 4:Engage in ethical behavior 5:Audit decisions & review to make sure are consistent with ethical princ |
| Who are stakeholders? | (the individuals or groups who have an interest, stake, or claim in the actions and overall performance of a company) |
| internal stakeholders? | are people who work for or who own the business such as employees, the board of directors, and stockholders |
| external stakeholders? | are the individuals or groups who have some claim on a firm such as customers, suppliers, and unions |
| What does an Ethics Officer ensure? | all employees are trained in ethics, ethics is considered in the decision-making process, and the company’s code of conduct is followed |
| All of the following except ____ contribute to unethical behavior by international managers | National culture |
| According to ________, a company’s home country standards of ethics are the appropriate ones to follow in foreign countries. | the righteous moralist |
| ________ recognize that human beings have fundamental rights and privileges which transcend national boundaries and cultures. | Rights theories |
| The _____ suggests that everyone is imagined to be ignorant of all his or her particular characteristics. | veil of ignorance |
| What is a company’s formal statement of ethical priorities called? | Code of ethics |
| Which is not an area where multinational firms are concerned about ethics? | Trade regulations |
Created by:
ericarea