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BUSA 4000 FINAL EXAM STUDY QUESTIONS
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BUSA 4000 FINAL EXAM STUDY QUESTIONS
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BUSA 4000 FINAL EXAM STUDY QUESTIONSVertical Integration - Answers-The firm owns, or seeks to own, multiple stages of a value
chain for producing, selling, and delivering a product. E.g., Toyota owns some Toyota
car dealerships around the world. Ford once owned steel mills that produced steel used
to make Ford cars
Horizontal Integration - Answers-Arrangement whereby the firm owns, or seeks to own,
the activities involved in a single state of its value chain. E.g., Microsoft acquired a
Montreal-based firm that makes software used to create movie animation.
Foreign Direct Investment (FDI) - Answers-Strategy in which the firm establishes a
physical presence abroad by acquiring productive assets such as capital, technology,
labor, land, plant, and equipment.
International Collaborative Venture - Answers-A cross-border business alliance in which
partnering firms pool their resources and share costs and risks of a venture.
joint venture - Answers-a form of collaboration between two or more firms to create a
new, jointly owned enterprise
Examples of FDI - Answers-Volkswagen spent $1 billion to build a factory in Poland to
manufacture delivery vans.
Examples of FDI - Answers-The British pharmaceutical firm GlaxoSmithKline purchased
the global Vaccines division of Switzerland's Novartis for $5.25 billion.
Examples of FDI - Answers-Denmark's Lego Group spent more than 100 million euros
to build a toy factory in China
Examples of FDI - Answers-Japan's Toshiba formed a joint venture with the U.S. firm
United Technologies to establish R&D centers in Europe and India to support joint
innovation in the heating and air conditioning industry
Organizing Framework - Answers-Corporate Governance -> Ethics, Corporate Social
Responsibility, Sustainability
The Pyramid of Ethical Behavior - Answers-1. corporate social responsibility
2. ethical behavior
3. complying with laws and regulations
Ethics - Answers-are moral principles and values that govern the behavior of people,
firms, and governments, regarding right and wrong
, corruption - Answers-the practice of obtaining power, personal gain, or influence through
illegitimate means, usually at others' expense. The abuse of power to achieve
illegitimate personal gain.
A major or severe concern in the global activities of a large proportion of MNE's.
Bribery - Answers-refers to offering, giving, receiving, or soliciting anything of value to
influence the actions of a government official or a corporate manager.
is common and may take the form of grease payments, small inducements intended to
expedite decisions and transactions or gain favors.
The U.S Federal Corrupt Practices Act of 1977
Improper Ethical Behavior May Result When: - Answers-•Top management sets goals
and incentives aimed at promoting good outcomes (e.g., profits) that instead encourage
bad behaviors.
•Employees overlook unethical behavior in others because of peer pressure or self-
interest.
•Managers tolerate lower ethical standards in value-chain activities performed by
suppliers or third-party firms.
•Unethical practices are allowed to accumulate in the firm slowly over time.
The Value of Ethical Behavior - Answers-•Ethical behavior is simply the right thing to do.
•Often prescribed within laws and regulations.
•Demanded by customers, governments, and the news media. Unethical firms risk
attracting unwanted attention.
•Ethical behavior is good business, leading to enhanced corporate image and selling
prospects. The firm with a strong reputation is advantaged in hiring and motivating
employees, partnering, and dealing with foreign governments.
ethical standards - Answers-vary from country to country
Relativism - Answers-belief that ethical truths are not absolute but differ from group to
group; according to this perspective, a good rule is, "When in Rome, do as the Romans
do."
Normativism - Answers-The belief that ethical behavioral standards are universal, and
firms and individuals should seek to uphold them around the world.
Corporate Social Responsibility (CSR) - Answers-Operating a business to meet or
exceed the ethical, legal, commercial, and public expectations of customers,
shareholders, employees, and communities.
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