Chapter 7

Managing Diversity and Ethical Dilemmas in an International Context

Multiple-Choice Questions

1. Managing complex and sensitive diversity issues in a cross-cultural context requires managers to do which of the following?
   1. Assess the impact of homogeneity in national, cultural, and ethnic backgrounds on employee morale, cohesiveness, and communication
   2. Determine how to best promote minorities and their careers in the workforce
   3. Build a corporate culture where various types of diversity are ignored
   4. Establish bias-free human resource management systems
2. Managers working with women or other potential expatriates who might encounter diversity-related issues should not do which of the following?
   1. Take advantage of stereotypical assumptions when choosing expatriates
   2. Make sure potential expatriates have already received appropriate training
   3. Leverage expatriates as role models
   4. Complete company support with adequate predeparture training
3. A company can provide ongoing support to women expatriates overseas in several ways. Which of the following is not recommended?
   1. Include accompanying spouses and family members in training
   2. Conclude training prior to a foreign posting
   3. Introduce new diverse expatriates in positive terms to local employees and officials
   4. Provide mentors and a support network of other expatriates
4. Which of the following would not be considered a potential benefit of diversity for multinationals?
   1. Better understanding of local staff and customers
   2. Greater openness to new ideas
   3. Better understanding of home country culture
   4. Expanded perspectives and interpretations
5. Which of the following three approaches to managing cultural diversity is correctly matched with how frequently the approach is used?
   1. Parochial: very frequently
   2. Parochial: comparatively rare
   3. Ethnocentric: very frequently
   4. Ethnocentric: comparatively rare
6. Although communication is more difficult in multicultural teams, in the long run these teams are likely to display which of the following characteristics?
   1. Make better decisions and develop better ideas
   2. Relate more easily to home-country clients and customers
   3. Greater adherence to rules and regulations
   4. Increased difficulty with language issues
7. Which of the following is not a common difficulty associated with diverse teams?
   1. Problems setting up an effective structure
   2. Problems with communication within the team
   3. Problems relating to foreign clients and customers
   4. More difficulty building unit cohesion
8. How does having national diversity on top management teams impact strategic choices when entering foreign markets?
   1. Greater preference for more collaborative and complex forms of entry with shared ownership
   2. Makes it more difficulty to grasp and manage complexities associated with entry choices involved with shared ownership
   3. National diversity on top management teams has no impact on strategic choices
   4. Greater preference for more individualistic and simple forms of entry with shared ownership
9. Which of the following is not an appropriate guideline for managing diverse multicultural teams?
   1. Choose members of a multicultural team based solely on their ethnicity or cultural background
   2. Minimize or overlook cultural differences
   3. Give members frequent feedback
   4. Give members infrequent feedback
10. International managers must juggle many conflict-provoking issues. Which of the following is not likely to be a conflict-provoking issue?
    1. Dealing with foreign labor unions
    2. Negotiating with home-country vendors
    3. Convincing employees with conflicting cultural perspectives to work together
    4. Negotiating with foreign vendors
11. An account is an explanation a manger can use to smooth over a perceived slight or to mitigate problems resulting from diverse perspectives; it is an important way to cope with conflicts resulting from cultural diversity. Which of the following types of accounts are accurately defined?
    1. Mitigating accounts: aimed at negotiating a compromise to lower tensions caused by an initial action
    2. Justification account: involves denying admission that an offensive action occurred
    3. Concession accounts: basically the same as justification accounts
    4. Ideological account: involves owning up to actions taken and admitting it was not legitimate to do so given the circumstances
12. Which of the following statements accurately describes some of the differences between China and the United States regarding work–family conflicts?
    1. Americans put self-interest (family time) below collective interest (work)
    2. Chinese tend to see careers as a way to bring prosperity and honor to their families and are not willing to work long hours
    3. Family demands appear to cause more work conflicts in the United States than in China
    4. Americans tend to view their careers in terms of a sacrifice made for the family not personal ambition
13. Which of the following countries is correctly matched with the type of account most likely to be used with conflicts based on concern with face?
    1. United States: Justifications
    2. Sweden: Ideological
    3. Thailand: Refusals/denials
    4. Mexico: Refusals/denials
14. What do critics contend is a problem inherent in the notion of corporate social responsibility (CSR)?
    1. CSR supports the fundamental profit-making role of business
    2. CSR detracts from the fundamental profit-making role of business
    3. CSR encourages substantive efforts to keep watchdog groups happy
    4. CSR provides an opportunity for CEOs to excel
15. Bribery has a long history in international business and is relatively common in much of the world. Which of the following terms is equivalent to what would be considered bribery in the United States?
    1. Bustarella, meaning “little envelope” in Italian
    2. Baksheesh, referring to a questionable payoff in Mexico
    3. La mordida, meaning “the bite” in France
    4. Pot au vin, or “jug of wine” in Germany
16. The Foreign Corrupt Practices Act (FCPA) was passed in 1977 in response to scandals regarding payoffs or bribes to foreign companies. Which of the following are important provisions of the FCPA?
    1. Foreign companies whose stock is traded on U.S. exchanges are not subject to the FCPA
    2. Penalties for violators can include hefty fines and imprisonment
    3. It does not distinguish between bribes to gain business and facilitating payments designed to “grease the wheels” of business
    4. Penalties for violators can include having to close their business
17. Which of the following would not be considered a “grease” payment under FCPA?
    1. Giving “gifts” to overcome bureaucratic red tape
    2. Making small payments to facilitate the issuing of paperwork needed to conduct business
    3. Bribes to land new business
    4. Making modest payments to supplement poorly paid officials’ low salaries in exchange for services performed
18. Because of the FCPA, managers at many American firms have developed clear guidelines about illegal payments and have communicated them to employees. Which of the following is an example of how American firms have responded?
    1. Caterpillar gives vague advice about what payments are permitted and which are not
    2. IBM allows managers to make the facilitating payments permitted under the FCPA
    3. Most companies have developed guidelines that are vague and tend to advise managers about what they should not do rather than what they should
    4. Most corporate guidelines have taken a strong ethical stance

True or False Questions

1. Some of the thorniest diversity challenges that international managers face involve teams of employees from a variety of cultures and countries.
2. Regardless of whether they are working in their home country or are posted abroad, one of the biggest mistakes that managers can make is to automatically assume that everyone in a team will eventually behave similarly and share the same attitudes.
3. The benefits of team diversity also take longer to manifest, partially because diversity increases the time that teams need to function effectively and make decisions; however, in the long run, teams that are culturally diverse should make better decisions, develop better ideas, and relate more easily to foreign clients and customers.
4. A company can provide ongoing support to women expatriates overseas by providing mentors and a support network of other expatriates.
5. A company can provide ongoing support to women expatriates overseas by concluding training prior to a foreign posting and introducing them in positive terms to local employees and officials.
6. The parochial approach to managing cultural diversity is used very frequently.
7. Having problems relating to foreign clients and customers is a common difficulty associated with diverse teams.
8. Having national diversity on top management teams impacts strategic choices when entering foreign markets by making it easier to grasp and manage complexities associated with entry choices involved with shared ownership.
9. Managers working with women or other potential expatriates who might encounter diversity-related issues should avoid stereotypical assumptions when choosing expatriates.
10. Critics contend that corporate social responsibility (CSR) detracts from the fundamental profit-making role of business and encourages superficial efforts to keep watchdog groups happy.
11. One of the biggest mistakes that managers can make is to automatically assume that everyone in a team will eventually behave similarly and share the same attitudes.
12. Making modest payments to supplement poorly paid officials’ low salaries in exchange for services performed would be considered a “grease” payment under the FCPA.
13. Because of FCPA most companies have developed strict, specific guidelines that advise managers about what they should and should not do.
14. Foreign companies whose stock is traded on U.S. exchanges are not subject to the FCPA, only U.S. companies.
15. Better understanding of local staff and customers, greater openness to new ideas, and expanded perspectives and interpretations are all potential benefits of diversity for multinationals.

Short-Answer Questions

1. Explain what is meant by a “homogeneity perspective” when managers work with teams of employees from different cultures and countries.
2. What are potential benefits that might be expected to result from diversity within multinational companies?
3. Explain what is meant by a “grease payment” and give two examples.
4. Define corporate social responsibility (CSR) and provide at least one benefit and one problem.
5. Give at least two advantages to having national diversity on top management teams when firms are considering entering foreign markets.
6. Why is automatically assuming that everyone in a team will eventually behave similarly and share the same attitudes one of the biggest mistakes that managers can make?
7. What are three actions a company can take to provide ongoing support to women expatriates overseas?
8. Provide at least three examples of differences between China and the United States regarding work–family conflicts.
9. List the four specific accounts between mitigating and aggravating that a manger can use to smooth over a perceived slight or to mitigate problems resulting from diverse perspectives and cultural diversity.

Essay Questions

1. How should multinationals deal with demands for bribes abroad? What about other questionable practices? Do you agree with the basic tenets of the FCPA? Explain your position.
2. What role does universalism and relativism play for international managers? Which approach to ethics makes the most sense in your view? Why?
3. Discuss the primary challenges and possible solutions to managing cultural diversity in teams.