Which of the following is a reason managers working abroad in multinational firms may behave in a manner that is unethical?

a) psychological and geographical distances of a foreign subsidiary from the home office

b) pressure from an ethical leader

c) confusion between personal ethics and business ethics

d) incorporating ethical issues into strategic and operational decision making

Letter A is correct. Psychological ang geographical distances of a foreign subsidiary from the home office.

Explanation:

Psychological and geographical distances are factors that directly influence the adoption of ethical or unethical behavior. When a subsidiary is established in another, often developing, country, multinational managers will face some challenges, such as cultural relativism, which relativizes unethical behaviors according to the culture of a given place, which can influence and enhance the practice of behaviors. corrupt and harmful.

In many countries there is no regulation necessary to prohibit such abuses of power and security, so it would be ideal for multinationals to adopt in foreign countries ethical standards of conduct equally used in their home country that would prohibit abuse and illegality.

a. Recording of transactions:

May 7, Accounts Receivable (Dr.) $900

Sales Revenue (Cr.) $900

May 15, Customer service Expense (Dr.) $360

Sales Allowance (Cr.) $360

May 20, Cash (Dr.) $495

Cash Discount (Dr.) $45

Sales Allowance (Dr.) $360

Accounts receivable (Cr.) $900  

Explanation:

b. Net Sales :

Total Quote ($180 * 5 ) = $900

Less : Cash Discount 5% = 45

Less : Sales Allowance 40% = 360

Net Sales = $495

c. Outdoor expo will record sales after deducting the cash discount. This discount is availed by customer as repayment is made within 15 days. The sales allowance is subtracted from the gross sales as the compensation is made from the outdoor expo due to mistake from their guide on tour. The net sales reported in Income statement will be $495.