Question 1
Primo is a multinational enterprise based in California that manufactures and sells affordably-priced athletic shoes in retail stores around the world. A Primo manufacturing subsidiary in China employs over 20,000 locals. Primo executives recently learned of human rights violations at the firm's China subsidiary. Workers had been forced to work more than 60 hours each week, and minimum wage laws were regularly ignored. As a result, Primo executives need to decide whether to continue operations in China. Which of the following is MOST relevant to the decision by Primo to remain in China?
A. The extent of effect that bribery has on decisions made by Primo's global managers in China
B. The methods of dealing with the hazardous waste created by Primo's China manufacturing facility
C. The benefits that the local Chinese community might have
D. The changes that need to be made by Primo managers to show more respect for the Chinese culture
Question 2
If MNCs want to take the lead in dealing with ecological interdependence, then they most likely need to:
A. comply with international environmental regulations.
B. incorporate sustainability goals into strategic planning.
C. invest all profits into recycling and renewing resources around the world.
D. work with foreign governments to draft global environmental protection legislation.
Question 3
Under __________ law, it is assumed a contract reflects promises that will be enforced without specifying the details in the contract.
A. contract
B. federal
C. state
D. civil
Question 4
In which of the following groups of trade blocs does most of today's world trade take place?
A. Middle East, China, and India
B. North America, Africa, and Canada
C. Saudi Arabia, Western Europe, and the Gulf
D. Western Europe, Asia, and the Americas
Question 5
The checklist approach relies on a few easily measurable and timely criteria believed to reflect or indicate changes in the __________ of the country.
A. creditworthiness
B. dynamics
C. quality
D. trust
Question 6
Which type of country is most likely to use its investment laws to acquire appropriate technology?
A. Post-industrial country
B. Newly industrializing country
C. Less-developed country
D. Highly developed country
Question 7
In recent years, which of the following has lessened the criticisms of MNCs?
A. Increasing economic differences among countries
B. Greater emphasis on social responsibility by MNCs
C. Limited emphasis on social responsibility and ethical behavior
D. Dissolution of MNCs in developing countries
Question 8
According to the international codes of conduct, MNEs should:
A. resolve disputes according to the domestic law of the home country.
B. dominate the capital markets in which their operations are based.
C. use inexpensive, imported sources for components and raw materials.
D. conduct research and development activities in developing countries.
Question 9
Emerson is a global manufacturing company headquartered in St. Louis, Missouri. The company employs almost 130,000 workers at its 250 manufacturing facilities located on five different continents. Emerson manufactures a wide range of products including air-conditioning compressors, garbage disposers, and automotive parts. Emerson's Asian operations employ over 50,000 people at manufacturing facilities in Asia. Emerson needs to build a new manufacturing facility to produce automotive parts for cars manufactured in Detroit. Emerson executives are considering whether to build the new facility in China or in the U.S. Which of the following, if true, supports the argument to build a new Emerson facility in China?
A. The Chinese courts recently ruled in favor of an MNC in an intellectual property rights lawsuit.
B. The Chinese Commonwealth network is investing large amounts of capital in China.
C. China has increased Internet controls and blocked most international search sites.
D. China is revoking its membership from the World Trade Organization.
Question 10
Experts suggest that firms wanting to globalize through e-commerce must first localize, which means firms need to:
A. use local suppliers, vendors, and distributors to manufacture products for the local market.
B. modify their products and services to meet the needs and interests of local cultures.
C. sell their products in a brick-and-mortar store before selling them through an e-market.
D. test their products and services in local markets before selling them over the Internet.
Question 11
Which of the following concepts requires that an industrial system be viewed not in isolation from its surrounding systems, but in concert with them?
A. Industrial ecology
B. Industrial engineering
C. Ecological succession
D. Ecological shadow
Question 12
Which of the following is dedicated to monitoring issues of data privacy in Europe?
A. The Telecommunications Data Protection directive
B. The EU Data Retention Directive
C. The EU Directive of Data Protection
D. The Privacy and Electronic Communications EC Directive
Question 13
Which of the following best describes nationalization?
A. Outsourcing of governmental functions to private entities
B. Hiring preferences given to locals rather than expatriates
C. Government's gradual and subtle actions against a firm
D. Forced sale of an MNC's assets to local buyers
Question 14
McDonald's, a fast food chain headquartered in the United States, applies the morality it practices in the United States to all foreign countries in which it operates. McDonald's is adhering to:
A. moral universalism.
B. ethical relativism.
C. geocentrism.
D. ethnocentrism.
Question 15
Which of the following is the main reason why companies dispose hazardous waste in less developed countries?
A. International agreements
B. Weak regulations and low costs
C. Advanced waste disposal plants
D. Large amounts of available land
Question 16
Which of the following creates shared value?
A. Creating social value by creating economic value
B. Reconceiving products and markets
C. Disabling local cluster development
D. Creating economic value by creating social value
Question 17
Which of the following significantly increases the complexity of social responsibility and ethical behavior of MNCs?
A. Distance between the headquarters and the subsidiaries
B. Difficulties posed in training managers from different cultures
C. Additional stakeholders associated with the firm's activities
D. International laws, regulations, and moral principles
Question 18
Which of the following best explains why many foreign companies find operating in China a difficult experience from a business perspective?
A. China lacks the financial and legal systems needed to support the country's foreign trade.
B. China's local market is not large enough to support its extensive exporting to the U.S.
C. China's government mandates that workers receive high wages and benefits.
D. China's exchange rate changes too frequently for U.S. businesses to compete.
Question 19
Political risks are best described as any governmental actions or politically motivated events that:
A. suggest the firm is legally responsible for specific wrongdoings.
B. negatively affect the firm's long-run profitability or value.
C. interfere with the personal safety of the firm's employees.
D. harm the firm's capacity to meet consumer demands.
Question 20
Robert is a technology officer in an Umerian firm and he manages the firm's operations at its facility in Elador. Robert is considering the idea of installing new technology in the facility that would significantly improve productivity and reduce labor costs. Which of the following undermines the argument that Robert should install the new technology?
A. Elador's government leaders encourage firms to install the most modern machinery available.
B. The high school graduation rate in Elador is higher than in neighboring countries.
C. Elador is currently experiencing a very high rate of unemployment.
D. The firm's competitors recently installed the same technology.