Global and Ethical Environment: Globalization, WTO, MNCs/FDI, Business Ethics, CSR and Sustainability (Overview) Questions

Question 1

Define globalization.

Accepted Answer

**Globalization** is the increasing integration of countries through **trade, investment, technology and global supply chains**.

Question 2

What is WTO?

Accepted Answer

**WTO (World Trade Organization)** is an international body that deals with the rules of trade between nations and settles trade disputes.

Question 3

What is an MNC?

Accepted Answer

**MNC (Multinational Corporation)** is a company that operates in more than one country through subsidiaries/branches.

Question 4

What is FDI?

Accepted Answer

**FDI (Foreign Direct Investment)** is long-term foreign investment in a business in another country with intention of control/management.

Question 5

What is business ethics?

Accepted Answer

**Business ethics** are moral principles and standards that guide right behaviour in business.

Question 6

What is CSR?

Accepted Answer

**CSR (Corporate Social Responsibility)** means a business contributes to society’s welfare and sustainable development beyond profit.

Question 7

Explain features of globalization (any three).

Accepted Answer

Features (any three):
- freer flow of **goods and services** across countries
- freer flow of **capital/investment** (FDI)
- greater role of **MNCs** and global supply chains
- faster **technology transfer** and global competition

These features integrate markets at a global level.

Question 8

Explain the impact of globalization on business (any three merits and one demerit).

Accepted Answer

Merits (any three):
- access to larger **markets** and customers
- access to better **technology** and management practices
- improved quality and efficiency due to competition
- more investment and employment opportunities

Demerit (any one):
- intense **competition** can hurt small/local firms and reduce margins.

Question 9

Explain WTO objectives/functions (any three points).

Accepted Answer

WTO objectives/functions (any three):
- promote **free and fair trade** by reducing trade barriers
- provide a platform for trade negotiations
- settle trade disputes through dispute settlement
- monitor trade policies and ensure transparency

Thus, WTO supports rules-based global trade.

Question 10

Explain business ethics and state any three ethical principles.

Accepted Answer

**Business ethics** guide right conduct in business.

Ethical principles (any three):
- **honesty/integrity**
- **fairness** and non-exploitation
- **transparency**
- **accountability**
- respect for law and human rights

Ethical behaviour builds long-term trust and reputation.

Question 11

Explain CSR and give any three examples of CSR activities.

Accepted Answer

**CSR** means contributing to society and sustainable development beyond profit.

Examples (any three):
- education and **skill development** programs
- health camps, sanitation initiatives
- environment projects like tree plantation/waste management
- support for local community development

CSR improves stakeholder relations and reputation.

Question 12

Explain sustainability and state the Triple Bottom Line (any three points).

Accepted Answer

**Sustainability** means meeting present needs without compromising future generations.

Triple Bottom Line (TBL) points:
- **People**: social well-being (employees, community)
- **Planet**: environmental protection (reduce pollution, save resources)
- **Profit**: long-term economic viability

Thus, sustainable business balances social, environmental and economic goals together.

Question 13

Explain globalization, MNCs and FDI and show their relationship using a flowchart/table.

Accepted Answer

### **Globalization, MNCs and FDI (relationship)**

**Globalization** expands cross-border trade and investment. **MNCs** are key players in globalization, and **FDI** is a major way through which MNCs enter and expand in other countries.

| Term | Meaning | Link |
|---|---|---|
| **Globalization** | integration of markets | enables cross-border business |
| **MNCs** | firms operating in multiple countries | major agents of globalization |
| **FDI** | long-term foreign investment with control | common method used by MNCs |

```text
Globalization → Cross-border markets open
        ↓
MNC expansion → FDI (new plants / acquisition / JV)
        ↓
Technology + capital + jobs + competition in host country
```

Thus, globalization increases MNC activity and FDI inflows, impacting the host economy and business environment.

Question 14

Explain business ethics, CSR and sustainability and show how they are connected (use a table/flowchart).

Accepted Answer

### **Business Ethics, CSR and Sustainability (connection)**

**Business ethics** guides what is right/wrong. Ethical thinking leads to responsible decisions. **CSR** is the practical expression of responsibility toward society. **Sustainability** ensures long-term balance of social, environmental and economic goals.

| Concept | Core idea | Focus |
|---|---|---|
| **Ethics** | moral principles | right conduct |
| **CSR** | responsibility toward society | community + environment support |
| **Sustainability** | long-term balance | **People–Planet–Profit** |

```text
Ethics (values) → Responsible decisions → CSR actions → Sustainability (People + Planet + Profit)
```

Therefore, ethics is the foundation, CSR is the action, and sustainability is the long-term outcome.

Question 15

Discuss ethical issues in globalization and suggest measures for ethical global business (use a table/flowchart).

Accepted Answer

### **Ethical Issues in Globalization and Measures**

Globalization expands supply chains and markets, but it also creates ethical risks.

| Ethical issue | Example | Ethical measure |
|---|---|---|
| **Labour exploitation** | low wages/unsafe factories | supplier audits + fair wage policy |
| **Child labour** | illegal employment in supply chain | strict sourcing policy + verification |
| **Environmental harm** | pollution, unsafe waste disposal | green practices + compliance |
| **Data privacy** | misuse of customer data | privacy policy + security controls |

```text
Global operations → Ethical risks → Standards & audits → Responsible sourcing → Sustainable reputation
```

Thus, ethical global business needs strong codes of conduct, transparent supply chains, audits, and sustainability reporting.

Global and Ethical Environment: Globalization, WTO, MNCs/FDI, Business Ethics, CSR and Sustainability (Overview)

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