D080 Managing in a Global Business Environment - Set 2 - Part 1

Correct Answer: Offshoring

Offshoring involves relocating business processes or production to a foreign country where labor costs are lower to reduce overall costs.

Correct Answer: Price skimming

Price skimming sets an initially high price to maximize profit from customers willing to pay a premium, then gradually lowers the price as demand decreases.

Correct Answer: Glocalization

Glocalization is a blend of global and local strategies, allowing companies to adapt their offerings to local preferences while maintaining a global identity.

Correct Answer: Quota

A quota is a trade restriction that limits the number or value of goods that can be imported into a country, protecting domestic industries from foreign competition.

Correct Answer: Dumping

Dumping occurs when a company exports goods at a price lower than their cost of production or lower than in their domestic market to gain market share abroad.

Correct Answer: Perfect competition

In a perfectly competitive market, no single buyer or seller can influence the price, and firms sell identical products with easy entry and exit.

Correct Answer: Floating exchange rate

A floating exchange rate allows currency values to fluctuate based on market conditions, such as supply and demand, without direct government intervention.

Correct Answer: Foreign direct investment

Foreign direct investment FDI occurs when a company makes a substantial investment in a foreign country, either by acquiring assets or setting up operations.

Correct Answer: Tariff

A tariff is a tax imposed on imported goods to raise their price and protect domestic industries from foreign competition.

Correct Answer: World Trade Organization

The World Trade Organization oversees global trade agreements, facilitates negotiations, and resolves trade disputes between member countries.

Correct Answer: Civil law

Civil law systems rely on comprehensive written legal codes, and judges apply these laws to individual cases rather than relying on past judicial decisions.

Correct Answer: Market economy

A market economy allows businesses and individuals to make production and pricing decisions based on supply and demand with minimal government intervention.

Correct Answer: NAFTA

The North American Free Trade Agreement (NAFTA) was established to reduce trade barriers between the United States, Canada, and Mexico, facilitating freer trade.

Correct Answer: To protect creative and innovative works

Intellectual property rights, including patents and copyrights, are designed to protect the creators of original works by granting them exclusive rights to their use.

Correct Answer: Comparative advantage

Comparative advantage theory argues that countries should specialize in producing goods where they have a lower opportunity cost, leading to more efficient global trade.

Correct Answer: Subsidy

A subsidy is financial assistance provided by governments to domestic industries, reducing their production costs and allowing them to compete more effectively on a global scale.

Correct Answer: Currency futures contract

A currency futures contract locks in an exchange rate for the purchase or sale of a currency on a future date, helping companies manage risks associated with currency fluctuations.

Correct Answer: Product structure

A product structure organizes a company's operations around its product lines, with each product having its own resources and team to manage production and sales.

Correct Answer: Process automation

Process automation uses digital tools and software to automate routine, repetitive tasks, freeing up employees to focus on higher-value activities.

Correct Answer: Paris Agreement

The Paris Agreement is a global climate accord aimed at limiting the increase in global temperatures by reducing greenhouse gas emissions from participating countries.