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 handmade