global 5

What are ethics?

Accepted principles of right and wrong governing individual and organizational behavior.

What is business ethics?

Accepted principles of right and wrong governing businesses and businesspeople.

What is an ethical strategy?

A business strategy consistent with accepted ethical principles.

What is a code of conduct?

A written statement of the standards and behavior expected by an organization.

What is an ethical dilemma?

A situation in which every available choice has possible ethical disadvantages.

Why is international business ethics difficult?

Ethical standards differ across cultures and countries.

What is the universal approach to ethics?

Applying the same ethical standards in every country.

What is ethical imperialism?

Imposing one culture's ethical standards on others as if they were universally superior.

What is cultural relativism?

The belief that ethical standards should be judged according to local culture and circumstances.

Which phrase represents cultural relativism?

When in Rome, do as the Romans do.

What is the danger of cultural relativism?

It can justify harmful practices merely because they are locally accepted.

What are the four major ethical issues for multinational firms?

Employment practices, human rights, environmental pollution, and corruption.

How can multinational employment practices become unethical?

Through child labor, unsafe conditions, excessively long hours, very low wages, or unfair treatment.

How can operating in a repressive country create an ethical problem?

The firm may indirectly support the government through taxes, investment, and foreign-exchange earnings.

What is the global tragedy of the commons?

Shared environmental resources are damaged because firms gain individually while society bears the cost.

What is corruption?

The misuse of entrusted power for private benefit.

What is a bribe?

A payment made to obtain improper or preferential treatment.

What is speed money or a grease payment?

A payment made to accelerate standard treatment that should already be provided.

Payment for exclusive preferential treatment: bribe or speed money?

A bribe.

Payment to receive normal service more quickly: bribe or speed money?

Speed money or a grease payment.

How can unrealistic performance goals cause unethical behavior?

Employees may falsify information or break rules to avoid punishment and meet impossible targets.

How does organizational leadership affect ethics?

Employees often copy the behavior and standards demonstrated by senior leaders.

Why has corporate ethical behavior improved?

Greater transparency, stronger laws, investor pressure, social media, activism, and reputational risk.

How can a company improve ethical behavior?

Through ethical recruitment, leadership, training, codes, compliance systems, monitoring, and reporting.

What is compliance?

Systems and procedures ensuring employees follow laws, regulations, and company standards.

What is corporate social responsibility or CSR?

Voluntary company activities intended to benefit society and stakeholders.

What is a sustainability strategy?

Integrating economic, social, ethical, and environmental responsibility into core operations.

What is the difference between CSR and sustainability?

CSR may involve separate charitable activities; sustainability changes core decisions and long-term operations.

A company moves production overseas because environmental laws are weaker. What issue is this?

Environmental ethics and the pollution-haven problem.

A manager wants detailed rules and dislikes unexpected changes. Which dimension applies?

High uncertainty avoidance.

Employees expect the manager to decide without consultation. Which dimension applies?

High power distance.

Workers avoid disagreement to maintain team harmony. Which dimension applies?

Collectivism.

Employees openly express opinions and expect individual rewards. Which dimension applies?

Individualism.

A country sells government-owned companies to private investors. What is this?

Privatization.

A firm avoids a country because patents are poorly enforced. What risk is this?

Legal risk.

A firm enters a growing market before competitors and builds loyalty. What advantage is gained?

First-mover advantage.

A company applies its home-country ethical rules everywhere. What approach is this?

The universal approach.

A company follows local practices because that is how business is done there. What approach is this?

Cultural relativism.

A manager must choose between low costs and worker safety. What is this?

An ethical dilemma.

A country has private firms but government-controlled healthcare and utilities. What system is this?

A mixed economy.