Global Business Issues Butler Exam 2 With Error-Free
Solutions
Employment Practice - Correct Answer When workplace standards in the country of
operation are inferior to those in the home country, which standards should apply
Sullivan Principles - Correct Answer ethically justified to operate in a country where
human rights are violated if:
-Companies will not obey local laws
-Company will promote an end to human rights violations
Tragedy of the commons - Correct Answer occurs when resources owned in common
(no single owner) are overused, resulting in degradation
4 categories of ethical issues - Correct Answer -Employment practices
-Human rights
-Pollution
-Corruption
Corruption - Correct Answer Gaining economic advantage through payment to officials
Corporate Social Responsibility - Correct Answer -Business should consider social
consequences of their business objectives
-Businesses should prioritize actions that have both good economic and social
consequences
-CSR implies philanthropic focus
Sustainability - Correct Answer -Addressing the needs of the current generation
without compromising the ability for the future generations to meet their needs
-Balance of 3 Ps: People, Planet, Profit
Phillips and sustainability - Correct Answer healthy people, sustainable planet
Green innovation - Correct Answer products that offer a signifigant improvement of
one or more of the following:
-energy
-packaging
-elimination of restricted substances
Free Trade Controversies - Correct Answer -Macro-benefits/micro-pain
-Is free trade fair trade?
-Global citizens vs national sovereignity
, Mercantilism - Correct Answer -It is in a countries best interest to maintain a trade
surplus (exports>imports)
-Advocated government intervention to achieve a trade surplus
absolute advantage - Correct Answer -What a country does better than their trading
partners
-Specialization: never produce a good locally when you can buy it for a lower cost
elsewhere
Comparative Advantage - Correct Answer -Specialize in the goods and services you
produce the most efficiently
-Import goods a country produces less efficiently, even it can produce the more
efficiently than another country
Principles of International Trade Theory - Correct Answer -free trade is positive for all
countries
-world production
Limitations of International Trade Theory - Correct Answer -not all resources can move
from one product to another
-people in less efficient areas of work will be adversely affected
-Diminishing returns: all resources are not the same quality, the more you need, the
lower quality of incremental resource
Offshoring - Correct Answer the practice of moving certain business activities to
foreign countries as a way to reduce costs, avoid taxes
Outsourcing - Correct Answer obtaining goods or services from an outside supplier of
an internal source
first-mover advantage - Correct Answer Economic and strategic advantages that
accrue to early entrants to an industry
Flattener #6: What happened? - Correct Answer -China joined WTO
Flattener #6: why was China joining WTO signifigant? - Correct Answer -China agreed
to follow the rules for international trade
-All WTO members would be treated equally by the Chinese
Flattener #6: Benefits and Costs of offshoring to China - Correct Answer -Benefits:
access to low cost of labor/overhead, access to the market, global competitiveness,
mitigate trade barriers
-Costs: Loss of IP, unfair competition, management, treated like Chinese
Solutions
Employment Practice - Correct Answer When workplace standards in the country of
operation are inferior to those in the home country, which standards should apply
Sullivan Principles - Correct Answer ethically justified to operate in a country where
human rights are violated if:
-Companies will not obey local laws
-Company will promote an end to human rights violations
Tragedy of the commons - Correct Answer occurs when resources owned in common
(no single owner) are overused, resulting in degradation
4 categories of ethical issues - Correct Answer -Employment practices
-Human rights
-Pollution
-Corruption
Corruption - Correct Answer Gaining economic advantage through payment to officials
Corporate Social Responsibility - Correct Answer -Business should consider social
consequences of their business objectives
-Businesses should prioritize actions that have both good economic and social
consequences
-CSR implies philanthropic focus
Sustainability - Correct Answer -Addressing the needs of the current generation
without compromising the ability for the future generations to meet their needs
-Balance of 3 Ps: People, Planet, Profit
Phillips and sustainability - Correct Answer healthy people, sustainable planet
Green innovation - Correct Answer products that offer a signifigant improvement of
one or more of the following:
-energy
-packaging
-elimination of restricted substances
Free Trade Controversies - Correct Answer -Macro-benefits/micro-pain
-Is free trade fair trade?
-Global citizens vs national sovereignity
, Mercantilism - Correct Answer -It is in a countries best interest to maintain a trade
surplus (exports>imports)
-Advocated government intervention to achieve a trade surplus
absolute advantage - Correct Answer -What a country does better than their trading
partners
-Specialization: never produce a good locally when you can buy it for a lower cost
elsewhere
Comparative Advantage - Correct Answer -Specialize in the goods and services you
produce the most efficiently
-Import goods a country produces less efficiently, even it can produce the more
efficiently than another country
Principles of International Trade Theory - Correct Answer -free trade is positive for all
countries
-world production
Limitations of International Trade Theory - Correct Answer -not all resources can move
from one product to another
-people in less efficient areas of work will be adversely affected
-Diminishing returns: all resources are not the same quality, the more you need, the
lower quality of incremental resource
Offshoring - Correct Answer the practice of moving certain business activities to
foreign countries as a way to reduce costs, avoid taxes
Outsourcing - Correct Answer obtaining goods or services from an outside supplier of
an internal source
first-mover advantage - Correct Answer Economic and strategic advantages that
accrue to early entrants to an industry
Flattener #6: What happened? - Correct Answer -China joined WTO
Flattener #6: why was China joining WTO signifigant? - Correct Answer -China agreed
to follow the rules for international trade
-All WTO members would be treated equally by the Chinese
Flattener #6: Benefits and Costs of offshoring to China - Correct Answer -Benefits:
access to low cost of labor/overhead, access to the market, global competitiveness,
mitigate trade barriers
-Costs: Loss of IP, unfair competition, management, treated like Chinese
