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1. ABC Inc. is a multinational corporation that operates in
several countries. It has a code of conduct that outlines its
ethical standards and values. However, some of its
subsidiaries in developing countries have been accused of
violating human rights, environmental laws, and anticorruption regulations. What should ABC Inc. do to
address these issues?
A) Ignore the allegations and continue its business as usual.
B) Conduct an internal investigation and take appropriate
disciplinary actions against the violators.
C) Hire a third-party auditor to verify the compliance of its
subsidiaries with the code of conduct and local laws.
D) Withdraw from the markets where the violations
occurred and focus on other regions.
Answer: C
Rationale: C is the best option because it shows that ABC
Inc. is committed to upholding its ethical standards and
values, and respects the laws and norms of the countries
where it operates. Hiring a third-party auditor can also
enhance its credibility and reputation among its
stakeholders. A is not a good option because it can damage
ABC Inc.'s image and expose it to legal risks and sanctions.
B is not enough because it may not address the root causes
of the violations and prevent them from happening again. D
is not advisable because it can result in significant losses of
revenue and market share, and harm its relationships with
its customers and partners.
2. XYZ Ltd. is a small business that sells handmadeÂÂ
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