What does MNC stand for?

Multipurpose National Corporation

Multinational Organisations

Management and Globalization Global Management Why companies go global How companies for global Global Business environments Global Business Types of global business Pros and cons of global businesses Ethnic Challenges for global business Culture and Global Diversity Cultural intelligence Silent language of culture Tight and loose cultures Values and national cultures Global Management Learning Are management theories universal? Intercultural competencies Global learning goals Key concepts of the challenges of globalisation: Global economy Resources, markets and competition are worldwide in scope Internationalisation The process of increasing involvement in international operations Globalization/Deglobalization Glob- the growing interdependence among elements in the global economy The worldwide interdependence of resource flows, product markets and business competition World 3.0 Different views: World flat vs. round Distance is a metaphor that represents the degree of dissimilarities between countries Balancing cooperation in the global Global Management Global management - managing things in different countries Managing business and organizations with interests in more than one country What do we expect from global Managers Knowing how to adapt Knowing the language Global Manager Is culturally aware and informed on international affairs International Business Conducting for-profit transactions of goods and services across national boundaries International Motive Why do firms internatioalize their activities Cheaper labour Labour tax Natural resources Enrolments to do business Clientele Exclusive materials Personal benefits: Taxes Reasons why businesses go global Customers Suppluers Capital During (1993) - 4 motive 1. Market seeking 2. Efficiency Seeking 3. Resource seeking 4. Strategic Asset Seeking Cuervo Cazurra, Narula and un (2015) - 4 motive s Internationalization Motives A company may also explore the opportunities in different markets in order to take advantage and in some cases extend the product life cycle What is a Market Entry Strategy Involves the sale of goods or services to foreign markets but do not require expensive investments Franchising Exporting and importing Involve the sale of goods or services to foreign markets but do Types of market entry strategies Global sourcing Exporting Importing Licensing agreement Franchising Types of Foreign Direct Investment (FDI) strategies: Joint venture Strategic alliance Owned Subsidiary (sometimes called WOS) How to go abroad What conditions will affect the decisions of firms on how to internationalize their activities? During (1978)- Eclectic paradigm OLI model OLI- Ownership, Location and Internalization Advantages Ownership advantages Resources owned by the organization that can be transferred across locations include trademarks, production techniques and processes, managerial skills and other resources not available to the competitors Location Advantages Represent the implications of choosing to produce or to perform activities in a specific location (country or region) Internalization Advantages: The ability to internalize or to incorporate activities that add value to its business Evolution of Concepts- New Elements Although economic factors are certainly important to explain the formation, growth and expansion of firms within and across national borders, they are not sufficient to explain the additional complexity when a firm decides to expand its activities across national borders Economic factors Investigate the economic elements that affect the internationalization of firms Behavioural Elements Explaining the additional challenges (and perhaps opportunities) a firm faces in foreign host countries when compared to indigenous (local) firms Behavioural theories Johanson and Wiedersheim-Paul (1975) and Johanson and Vahlne (1977) Included the psychic Distance concept (beckerman,1956) to explain the internationalization behaviour of firms The Uppsala internationalization model Psychic distance is: the sum of factors preventing the flow of infomatio from and to the market Psychic Distance is a broad concept that includes several elements such as: language, culture, political systems, level of education, level of industrial development Firms behave in a “Risk Averse” manner It means that when the perceived risk goes down, the firm increase its commitment to the foreign market \ The Haier Group Data Strategy Big DATA and Small DATA The use of small data to satisfy individual customers’ needs, however, the book mentions a huge cultural shock at the plant in Camden, south caroline Ex: top down, hard hat colors and hierarchy Culutral Differnces can have a huge impact on the internationalization of firms Kogut and Singh (1988)- Cultural Distance Index First statsical study on the implication of ciltiral distance to the selection of entry mode When investigating in culturally distant countries, foreign firms can choose to partner with foreign firms in order to gain local knowledge and share the risk associated to the investment (higher commitment = higher risk) How Companies Go Global Global sourcing The process of purchasing materials or services around teh world for local use Exporting Selling locally made products in foreign markets Importing Buying foreign made products and selling them domestically Exports correspond to what percentage of Candain GDP What countries are the major trending partners of Canada Management and Globalization How Companies Go Global Licensing Agreement One firm pays a fee for rights to make or sell another company’s products What are the potential risks associated to licesning The case of new balance in China Franchising A fee is paid for the rights to use another firms name, branding and methods Insourcing Insourcing: refers to local job creation that results from foreign direct investment Types of insourcing Joint ventures: operate in a foreign country through co-ownership by foreign and local partners Strategic alliances: A partnership in which foreign and domestic firms share resources and knowledge for mutual gains Foreign subsidiaries: local operation completely owned by a foreign firm Criteria for choosing a joint venture partner: Familiarity with your firm’s major business String local workforce Values its customers Future expansion possibilities Strong local market for partner’s own products Good Profit potential Sound financial standing Global business environments Legal and poliical systems Trade agreements and trade barriers Regional economic alliances Legal and political systems Differing laws and practices regards Business ownership Negotiation and implementation of contracts Foreign currency exchange Protection of intellectual property rights Counterfeit merchandise Political risk Potential loss in value of foreign investment due to instability and political changes in the host country Political risk analysis (expertise/experience) Forecast political disruptions that threaten the value of a foreign investment Changes in the rules of the game Brexit US Trade Wars-mexico-China Other examples Bolivia, Venezuela, China De-globalization The process of weakening interdependence among nations Trade Agreements and trade Barriers World trade organization Most favourd nation status Tariffs Nontariss barriers (quotes, restrictions, etc.) Protectionism Regional Economic Alliances USMCA (replacment for the NAFTA-North American Free trade Agreement) EU- European Union APEC- Aisa Pacific Economic Copperation ASEAN - Association of Southeast Asian Nationas SADC - Southern Africa Development Community MERCOSUR- Chapter 5- Global Management and Cultural Diversity (part 2) Review Types of global business Global corporation MNE (multinational enterprise) or MNC (multinational corporation) with extensive business operations in more than one foreign country Transnational corporation A global corporation that operates worldwide on borderless basis Some host country complaints about MNCs Host Country companits about MNCs: Excessive profits Interference with local government Domination of local economy Interference with local government Hiring the best local talent Limited technology transfer Disrespect for local customers Examples - War in Ukraine Disruption in global -value chains and increased pressure and interference of MNCs with local government Fertilizer imports in Brazil (one of the major producers of agricultural commodities) We must consider the triple bottom line and the impact in society, the environment and the economy $2.5 billion invest in potash mine in Brazill What about Globalization gap Large multinationals adn industrilizednaitons gaining disporoportinonally form globalization Globalization gap: Large multinational and industrialized nations gaining disproportionally from Globalization Some MNC complaints about host countries MNC Complaints about host countries: Profiit limitations Laws and regulations Overpirce resources Exploitative rules Foreign exchange restriction Failure to uphold contracts Mutual benefits for host countries and multinational companies Mutual benefits for host country and global corporation of MNC: Shared growth opportunities Shared income opportunities Shared learning opportunities Share development opportunities Develop projects together What are some of the ethical challenges for global business Ethincal challenges for global business Child labour Employmnet of children for worl otherwise done by adults Sweatshops Employment of workers at very low wages for long hours in poor working conditions Ex: Nike bad labour prices Unsafe working conditions Corruption Illegal practices that further one’s business interests Corrupiotn of froeign public officials Act makes it illegal for Candain firms and their representatives to engage in corrupt practices overseas Bribes to foreign officials Excessive commissions Non-monetary gifts Sweatshops Conflict materials What is culture Culture : The shared set of beliefs, values, and patterns of behvaiourr common to a group of people Food preferences Values and traditions Language and beliefs Religion Art music Life style Hofstede defines culture as: “The collectiv programing of teh mind distinguishing the members of one group or category of people from others” What is culture shock Culture Shock: Confusion and discoumfert a person experiences in an unfaamiliar culture Stages to adjusting to a new culture Confusion Small vitorires The honeymoon Irritation and anger Reality Cultural Intelligence The ability to adapt and adjust to new cultures What is Ethnocentrism Tendency to consider one’s own culture as superior others Slinet languages of culture Contect Low context High context Space Proxemics Ex: personal space Time Monochronic Polychronic High and low contexts cultures Edward T.Hall (1959) Def: Part of a discourse that surround a word or passage and can throw on its meaning Low context cultures Emphizes communication via spoken or written words Countries like United States, Canada and Germany High context cultures Rely on nonverbal and situational cues as well as on spoken or written works Thailand Malaysia Time Monochronic cultures People tend to do one thing at a time Canda Polychronic cultures Time is used to accomplish many different things at once Egypt Space Proxemics Study of how people use space to communicate In North American people value “personal space’ Many Latin and Asian cultures expect much less personal space Tight and Loose Cultures Cultural tightness-looseness Tight = Strength of norms that govern social behvaviour Japan, Korea, Malaysia Loose = tolerance for any deviation from norms Australia, Brazil, Hungary Values and national cultures (Hofstede) Power distance Uncertainty avoidance Individalism-collectivism Masculinity-femininty Time Orientation Indulgence vs. Restraint Comparative management How management pratices systematically differ among countries and /or cultures Intercultural competencies Skills and personal characteristics that help us be successful in cross cultural situations Global Managers (know how to adapt) Need to successfully apply management functions across interantional boundaries Global Learning goals Not universal Engage critical thinking Look everywhere for new management ideas Always consider culture

Introduction to Hedging Instruments: Forwards, Futures, Options, and Swaps Hedging instruments are financial tools used by businesses and investors to mitigate risk. These instruments help protect against adverse price movements in assets such as commodities, currencies, interest rates, or securities. The four main hedging instruments are forwards, futures, options, and swaps. 1. Forwards A forward contract is a customised agreement between two parties to buy or sell an asset at a predetermined price on a specified future date. Key Characteristics: Over-the-counter (OTC): Traded directly between parties, not on an exchange. Customisation: Can be tailored to suit the needs of the parties involved. Settlement: Occurs at the end of the contract, which may involve physical delivery or cash settlement. Risk: Forwards carry counter-party risk, as there is a possibility one party may default. Example: A company that needs to import raw materials in six months may enter into a forward contract to lock in the current price, avoiding the risk of price increases. 2. Futures A futures contract is similar to a forward, but it is standardised and traded on an exchange. This standardisation eliminates counter-party risk. Key Characteristics: Standardised: Contract size, expiration, and other terms are fixed by the exchange. Mark-to-market: Gains and losses are settled daily. Liquidity: Futures are highly liquid because they are traded on exchanges. Regulation: As they are traded on formal exchanges, they are more regulated than forwards. Example: A wheat farmer may sell futures contracts to hedge against a possible decline in wheat prices before harvest. 3. Options Options provide the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date. There are two types of options: call options and put options. Call Option: Gives the holder the right to buy an asset at a predetermined price. Put Option: Gives the holder the right to sell an asset at a predetermined price. Key Characteristics: Premium: The buyer pays a premium upfront to obtain the option. Limited Risk: The maximum loss is limited to the premium paid. Flexibility: Options can be used for speculative or hedging purposes. Example: An investor holding stocks may buy a put option to protect against potential declines in the stock's price. 4. Swaps A swap is a contract in which two parties agree to exchange cash flows or liabilities over a specific period. The most common types are interest rate swaps and currency swaps. Key Characteristics: Customizable: Like forwards, swaps are often tailored to meet the needs of the parties involved. Counterparty Risk: Swaps are typically OTC instruments, exposing parties to default risk. Common Uses: Used to manage interest rate risk or currency risk. Example: A company with a variablerate loan may enter into an interest rate swap to exchange its variable payments for fixedrate payments, thus locking in stable costs. Hedging instruments are essential for managing financial risk in volatile markets. Each instrument serves different purposes, with varying levels of complexity, risk, and customization. Whether through forwards, futures, options, or swaps, businesses can better plan for the future by reducing exposure to uncertain price fluctuations. Hedging Strategies for Market Risk, Credit Risk, and Currency Risk 1. Hedging Strategies for Market Risk Market risk (also known as systematic risk) arises from fluctuations in asset prices, such as stocks, bonds, commodities, and interest rates, due to economic factors or market volatility. Key Hedging Instruments for Market Risk: Derivatives (Options, Futures, and Forwards): These instruments allow investors to hedge against unfavorable price movements in stocks, commodities, or interest rates. Example: An investor holding a large stock portfolio might buy a put option to protect against a potential market downturn. If the market declines, the put option increases in value, offsetting losses in the portfolio. Short Selling: Investors can sell borrowed assets with the expectation of buying them back at a lower price, profiting from the decline. Example: A fund manager expecting a market decline may short sell stocks to hedge a portfolio against losses. Common Hedging Strategies: Portfolio Diversification: Reducing market risk by spreading investments across various asset classes (stocks, bonds, commodities) and sectors. Using Index Futures: Large portfolios can be hedged using index futures that track the performance of the overall market. If the market declines, profits from the short position in the futures contract will offset losses in the portfolio. Risk Parity: Allocating assets based on the level of risk rather than the dollar amount invested, balancing risk exposure across asset classes. 2. Hedging Strategies for Credit Risk Credit risk refers to the possibility that a borrower will default on a debt obligation. This is especially important for banks, lenders, and institutions dealing with bonds and loans. Key Hedging Instruments for Credit Risk: Credit Default Swaps (CDS): A financial derivative where the buyer of a CDS pays a premium to the seller in exchange for protection against a default on a loan or bond. Example: A bank holding corporate bonds can buy a CDS to ensure they are compensated if the issuing company defaults. Collateralised Debt Obligations (CDOs): These instruments pool together various debt instruments and allow risk to be distributed among multiple investors. Credit Insurance: Companies may use insurance to protect against the risk of a customer defaulting on payments. Common Hedging Strategies: Diversification of Loan Portfolio: Spreading out credit exposures across various industries, geographies, and borrower profiles reduces the overall risk of default. Tightening Lending Standards: Limiting exposure to highrisk borrowers by implementing stringent credit assessments. AssetBacked Securities: Banks can sell loans or bonds packaged as assetbacked securities to reduce their exposure to credit risk. 3. Hedging Strategies for Currency Risk Currency risk (or exchange rate risk) arises from fluctuations in foreign exchange rates, which can affect companies involved in international trade or with investments in foreign countries. Key Hedging Instruments for Currency Risk: Forward Contracts: A firm agrees to exchange a specified amount of currency at a predetermined exchange rate on a future date. Example: A U.S. exporter expecting payment in euros might enter into a forward contract to sell euros and lock in a favorable exchange rate. Currency Options: These give the right, but not the obligation, to buy or sell currency at a specific price. Example: A U.S.based company buying goods from Japan might buy a call option on the yen to hedge against the risk of yen appreciation. Currency Swaps: Two parties exchange interest payments and principal in different currencies to hedge against exchange rate fluctuations. Common Hedging Strategies: Natural Hedging: Companies can offset currency risk by balancing foreign revenue with costs in the same currency. For example, if a company generates revenue in euros, it can also incur expenses in euros, reducing exposure to exchange rate fluctuations. Multi-Currency Invoicing: Firms can invoice in their home currency, shifting the currency risk to the buyer. Currency Diversification: Holding a diversified basket of currencies can reduce exposure to large fluctuations in any one currency. Effective hedging strategies are crucial for managing various types of risks in financial markets. Market risk can be managed using instruments like futures and options, while credit risk can be mitigated through diversification and credit derivatives. Currency risk, often faced by multinational firms, can be hedged using forward contracts, options, or swaps. Each strategy helps firms and investors protect their portfolios, ensure financial stability, and reduce the impact of adverse movements in the financial markets. Portfolio Risk Management Techniques: Diversification, Asset Allocation, and Risk Budgeting Managing risk is a fundamental aspect of portfolio management. Investors use various techniques to control and reduce the risks inherent in investing. Three key techniques used in portfolio risk management are diversification, asset allocation, and risk budgeting. Each of these techniques helps in mitigating potential losses while aiming to achieve the desired return. 1. Diversification Diversification is a risk management strategy that involves spreading investments across different assets, sectors, or geographic regions to reduce exposure to any single risk. The idea is that different assets perform differently under various market conditions, so losses in one investment can be offset by gains in others. Key Benefits of Diversification: Reduction of Unsystematic Risk: Unsystematic risk, which is unique to a specific company or industry, can be reduced by holding a variety of investments that respond differently to market conditions. Improved Stability: A diversified portfolio is less volatile, as the negative performance of one asset can be balanced by the positive performance of others. Methods of Diversification: Across Asset Classes: Investing in a mix of asset classes such as stocks, bonds, commodities, and real estate. Example: A portfolio with 60% equities, 30% bonds, and 10% commodities is more diversified than one solely consisting of stocks. Within Asset Classes: Diversifying within a single asset class (e.g., holding stocks from different sectors like technology, healthcare, and energy). Geographic Diversification: Investing in assets across various countries or regions to mitigate country-specific risks. Example: Holding U.S. stocks along with emerging market equities can reduce risks related to a downturn in one country's economy. 2. Asset Allocation Asset allocation refers to the process of dividing investments among different asset classes (such as stocks, bonds, and cash) to align with an investor's risk tolerance, time horizon, and financial goals. Asset allocation plays a crucial role in portfolio risk management by determining the overall risk-return profile of the portfolio. Key Elements of Asset Allocation: Strategic Asset Allocation: A longterm approach that involves setting target allocations for different asset classes based on financial goals and risk tolerance. Example: A young investor with a longterm horizon might allocate 70% to stocks, 20% to bonds, and 10% to cash. Tactical Asset Allocation: A more active approach that involves adjusting the asset mix in response to short-term market conditions. Example: If the investor expects an economic downturn, they might temporarily reduce exposure to equities and increase exposure to bonds. Types of Asset Allocation Models: Conservative: Focuses on preserving capital with a larger allocation to bonds and cash (e.g., 20% stocks, 80% bonds). Balanced: A moderate risk approach with an equal focus on growth and income (e.g., 50% stocks, 50% bonds). Aggressive: Targets higher returns by investing predominantly in equities, accepting higher risk (e.g., 80% stocks, 20% bonds). Example of Asset Allocation: A 40 year old investor with moderate risk tolerance may allocate their portfolio as follows: 50% equities, 40% bonds, and 10% in alternative investments such as real estate or commodities. The equities provide growth potential, while the bonds and alternative assets offer stability and income. 3. Risk Budgeting Risk budgeting is a method of allocating risk across different components of a portfolio, rather than focusing solely on returns. The goal is to optimise the portfolio’s risk-return profile by distributing risk in a way that aligns with the investor’s objectives and risk tolerance. Key Concepts of Risk Budgeting: Risk Contribution: Each asset class or investment in the portfolio contributes a certain amount of risk (measured by metrics such as volatility or Value at Risk). Risk budgeting ensures that no single asset class dominates the overall risk of the portfolio. Example: A portfolio may contain 60% stocks and 40% bonds, but if the stocks are highly volatile, they may contribute 90% of the portfolio's risk. Target Risk: Investors set a maximum acceptable level of risk (e.g., a portfolio volatility of 10%) and allocate investments so that the total risk remains within this target. Techniques in Risk Budgeting: Risk Parity: Allocates risk evenly across asset classes, rather than allocating capital based solely on return expectations. Example: In a risk-parity portfolio, both bonds and stocks might be balanced in such a way that they contribute equally to the overall portfolio risk, even though the dollar investment in bonds may be larger due to their lower volatility. Value at Risk (VaR): This technique measures the potential loss in a portfolio over a specific time period, under normal market conditions, at a given confidence level. The risk budget ensures that the potential loss stays within acceptable limits. Example of Risk Budgeting: An investor targets an overall portfolio risk of 8% volatility. After analyzing the risk contribution of each asset class, they determine that equities, which currently make up 60% of the portfolio, contribute 70% of the risk. To adhere to the risk budget, the investor may reduce their equity exposure and increase their allocation to bonds or other less volatile assets. Diversification, asset allocation, and risk budgeting are complementary techniques used in portfolio risk management. Diversification reduces unsystematic risk by spreading investments across various assets. Asset allocation ensures that investments align with an investor's goals and risk tolerance. Risk budgeting focuses on managing the contribution of risk from each asset class to create a balanced and efficient portfolio. Together, these strategies help investors achieve a balance between risk and return, ensuring longterm portfolio stability. Risk Mitigation Through Insurance, Securitisation, and Other Financial Engineering Techniques Risk mitigation is a core objective in financial management, and various strategies can be employed to reduce or manage risks. Three major approaches are insurance, securitisation, and financial engineering techniques. Each of these methods helps firms and individuals transfer, reduce, or eliminate certain financial risks. 1. Insurance as a Risk Mitigation Tool Insurance is a traditional risk transfer method that protects against financial losses by shifting the risk to an insurance company in exchange for premium payments. It is widely used to mitigate various forms of risk, such as operational, liability, and property risks. Key Aspects of Insurance for Risk Mitigation: Risk Transfer: The insurer takes on the risk in exchange for a premium, thus protecting the insured party from unexpected financial losses. Indemnity: In the event of a loss, the insurance policy compensates the insured based on the terms of the contract. Customisable Coverage: Insurance policies can be tailored to address specific risks, such as property damage, business interruption, liability, or cyber risks. Types of Insurance for Businesses: Property and Casualty Insurance: Covers physical assets like buildings, machinery, and inventory from risks like fire, theft, or natural disasters. Liability Insurance: Protects businesses against legal liabilities arising from accidents, negligence, or professional errors. Business Interruption Insurance: Compensates for lost income if a business has to halt operations due to unforeseen events. Credit Insurance: Shields companies from losses due to the nonpayment of trade receivables. 2. Securitisation as a Risk Mitigation Technique Securitisation is a financial engineering process that involves pooling various financial assets (such as loans, mortgages, or receivables) and converting them into marketable securities. This process allows firms to transfer risk to investors, thereby reducing their exposure. Key Elements of Securitisation: Risk Transfer: By securitising assets, companies can transfer the risk of default or nonpayment to investors who purchase the securities. Liquidity Creation: Securitisation converts illiquid assets (like mortgages or loans) into liquid, tradeable securities, improving cash flow for the originating firm. Diversification of Risk: Pooling assets with different risk profiles reduces the impact of individual defaults, spreading the risk across multiple investors. Common Forms of Securitisation: MortgageBacked Securities (MBS): Pools of mortgages are bundled and sold as securities to investors, transferring the risk of mortgage defaults. Example: A bank that issues home loans can bundle those loans into MBS and sell them to investors, transferring the credit risk of potential defaults. Asset-Backed Securities (ABS): Similar to MBS, but backed by other types of assets like credit card receivables, auto loans, or student loans. Collateralised Debt Obligations (CDOs): Structured financial products that pool different types of debt, such as loans and bonds, and sell them as securities with varying risk levels. Example: A bank may issue a portfolio of auto loans and then pool these loans into an assetbacked security (ABS). The ABS is sold to investors, who take on the risk of loan defaults. By securitising the loans, the bank reduces its exposure to credit risk and generates immediate cash flow. 3. Financial Engineering Techniques for Risk Mitigation Financial engineering involves the use of complex financial instruments, derivatives, and structured products to manage or mitigate financial risks. These techniques allow firms to hedge against specific risks, optimize capital structure, and improve financial stability. Common Financial Engineering Techniques: Derivatives: Financial instruments like futures, forwards, options, and swaps are used to hedge against price fluctuations, interest rate changes, or currency movements. Example: A company with significant foreign exchange exposure may use currency forwards or options to hedge against exchange rate fluctuations, ensuring predictable cash flows. Options and Futures: Options: Provides the right (but not the obligation) to buy or sell an asset at a predetermined price, allowing firms to hedge against unfavorable price movements. Example: An airline company can buy options on jet fuel to hedge against rising fuel prices. Futures: Standardized contracts to buy or sell an asset at a set price on a future date, commonly used to hedge commodities or financial assets. Example: A wheat producer may use futures contracts to lock in a favorable price for its crop, hedging against a potential price drop. Swaps: These involve the exchange of cash flows between two parties, often used to manage interest rate risk or currency risk. Interest Rate Swaps: Firms can exchange floatingrate interest payments for fixedrate payments to hedge against rising interest rates. Currency Swaps: Used to hedge exchange rate risk in crossborder transactions by exchanging principal and interest payments in different currencies. Example: A company with a variablerate loan may enter into an interest rate swap to exchange its variable payments for fixedrate payments, locking in stable costs. Structured Products: These are customised financial instruments designed to achieve specific riskreturn objectives. They often combine derivatives with other securities to create tailored risk exposures. Example: A structured note that combines a bond with an embedded option, offering downside protection while allowing for potential upside linked to the performance of an equity index. Credit Derivatives: Tools like credit default swaps (CDS) allow investors to transfer credit risk to other parties. Example: A bondholder worried about a company’s potential default may purchase a CDS, which pays out in case of a default event. Example: A company may issue a bond with an embedded call option, allowing it to repurchase the bond if interest rates decline. This financial engineering tool enables the company to mitigate the risk of rising interest rates, reducing future borrowing costs. Risk mitigation through insurance, securitisation, and financial engineering offers businesses a variety of tools to manage and transfer risks. Insurance allows for the direct transfer of risk to an insurer, while securitisation helps companies offload risk by packaging and selling assets as securities. Financial engineering techniques, including derivatives, swaps, and structured products, provide sophisticated ways to hedge market, interest rate, and currency risks. Each approach helps organizations improve financial stability, enhance liquidity, and manage potential losses in a volatile market environment.

20. Ang unang yugto sa pagbuo ng Community-Based Disaster Risk Reduction Management (CBDRRM) Plan ay tinatawag na ________. A. pagtugon sa sakuna B. paghahanda sa pagtugon C. pagsasaayos at pagbangon D. pagtataya ng panganib at paghahanda ANSWER: D 21. Ang gawaing ito ay isinasagawa upang maging handa ang komunidad at maiwasan ang malawakang pinsala nito sa pamamagitan ng aktibong pakikibahagi ng mamamayan. Ito ay nakapaloob sa _______. A. Philippine Disaster Risk Management B. Philippine Disaster Risk Reduction Management Council C. Community Preparedness and Risk Management Approach D. Community-Based Disaster Risk Reduction Management Approach ANSWER: D 22. Bahagi ng rehabilitasyon at pagbawi mula sa kalamidad ang mga hakbang at gawain na nakatuon sa pagsasaayos ng mga nasirang pasilidad at estruktura. Ano ang pangunahing gampanin ng yugtong ito? A. Mabigyan ng sapat na proteksiyon ang mga nasalanta ng kalamidad. B. Manumbalik sa dating kaayusan at normal na pamumuhay ang mga nasalantang komunidad. C. Makapagbigay ng mga inaasahang serbisyong panlipunan at paglilingkod sa pamahalaan. D. Maipagkaloob sa mga nasalantang komunidad ang mga pangunahing pangangailangan at gamot. ANSWER: B 23. Alin sa sumusunod na mga sitwasyon ang nagpapakita ng Top-Down Approach sa pagbuo ng Disaster Risk Reduction and Management (DRRM) Plan? A. Pinamunuan ni Kerwin, isang lider ng Non-Government Organization (NGO) ang pagtukoy sa mga kalamidad na maaaring maranasan sa kanilang komunidad. B. Ipinatawag ni Kapitan Capin ang kaniyang mga kagawad upang bumuo ng plano kung paano magiging ligtas ang kaniyang nasasakupan mula sa panganib ng paparating na bagyo. C. Hinikayat ni Albert ang kaniyang mga kapitbahay na maglinis ng estero upang maiwasan ang pagbara nito na maaaring magdulot ng malalim at matagalang pagbaha sa darating na tag-ulan. D. Nakipag-usap si Kelly sa mga may-ari ng malalaking negosyo sa kanilang komunidad upang makalikom ng pondo sa pagbili ng mga first aid kit at iba pang proyekto bilang paghahanda sa iba’t ibang kalamidad. ANSWER: B 24. Bakit mahalaga ang pagkakaroon ng community engagement o kolaborasyon sa pamayanan at iba pang katuwang na sektor? A. Makatutulong ito upang makalikom ng mas maraming pondo. B. Magiging makabuluhan ang plano kung ang gagawa nito ay ang mamamayan. C. Malaki ang posibilidad na maging matagumpay ang proyekto kapag pinagplanuhan. D. Mas magiging komprehensibo at matagumpay ang plano kung binubuo ito ng iba’t ibang sektor. ANSWER: D 25. Sa pagbuo ng CBDRRM Plan, ano ang PINAKAMABISA mong nararapat gawin bilang mamamayan ng isang lugar upang maging handa sa pagdating ng iba’t ibang panganib at kalamidad? A. Maging aktibong kabahagi sa pagbubuo ng plano para sa buong pamayanan. B. Makibahagi sa gawaing panrehabilitasyon at tulungan ang mga naapektuhan. C. Magsagawa ng personal plan para matugunan ang pangangailangan ng lipunan. D. Magkaroon ng planong pampinansiyal upang matustusan ang pangangailangan ng mga tao. ANSWER: A 26. Ang pinuno ng mga bansang kasapi ng organisasyon ay nagpupulong-pulong upang magtulungan para sa kapakanan ng kanilang pangangailangan. Anong anyo ng globalisasyon ang tinutukoy nito? A. ekonomiko B. kultural C. politikal D. teknolohikal ANSWER: C 27. Alin sa sumusunod ang buhay na manipestasyon ng globalisasyon? A. ekonomiko B. OFWs C. sosyo-kultural D. teknolohikal ANSWER: B 28. Ang brain drain ay tumutukoy sa mga propesyonal na manggagawa, samantalang ang brawn drain ay tumutukoy sa ___________. A. construction workers B. domestic workers C. overseas workers D. skilled workers ANSWER: A 29. Alin sa sumusunod ang negatibong epekto ng paglitaw ng maraming multinational companies at transnational companies? A. pagkakaloob ng hanapbuhay B. pagbaba ng presyo ng produkto C. pagdami ng produkto at serbisyo D. pagkalugi ng multinational companies at transnational companies ANSWER: D 30. “Ang globalisasyon ay laganap na noon pa man at naging mas malawak sa kasalukuyang panahon.” Ang mahihinuha natin sa pahayag na ito ay _______. A. ugnayan ng mga bansa sa daigdig na walang pagitan o hadlang B. suliraning panlipunan na pumipigil sa kaunlaran ng mga bansa sa daigdig C. bagong anyo ng malayang kalakalan, pagpapalitan ng produkto, impormasyon at tao, dahil sa pag-unlad ng teknolohiya sa komunikasyon at transportasyon D. isyung panlipunan na tumatalakay sa pamahalaan, ekonomiya, relihiyon, teknolohiya, kapaligiran, komunikasyon at kultura ng mga bansa sa daigdig ANSWER: C 31. Alin sa dalawang pahayag ang nagsasaad ng PINAKAANGKOP na konsepto ng globalisasyon? I. Ang globalisasyon ay proseso ng mabilisang pagdaloy o paggalaw ng tao, bagay, impormasyon at produkto sa iba’t ibang direksiyon na nararanasan sa iba’t ibang panig ng daigdig. II. Ang globalisasyon ay may iba’t ibang pagkakakilanlan tulad ng ekonomiko, teknolohikal, sosyo-kultural at politikal. A. Mali ang nilalaman ng una at ikalawang pahayag. B. Tama ang nilalaman ng una at ikalawang pahayag. C. Tama ang nilalaman ng una at mali ang ikalawang pahayag. D. Mali ang nilalaman ng una at tama ang ikalawang pahayag. ANSWER: B 32. Alin sa sumusunod na mga pahayag ang nagsasaad ng dahilan sa pag-usbong ng globalisasyon? A. pagbuti ng mga lokal na kompanya sa presyo at kalidad ng serbisyo at produkto upang maging kompetitibo laban sa mga banyagang kompanya B. pagpapalitan ng impormasyon at teknolohiya at paggalaw ng mga tao dulot ng migrasyon C. pagbaba ng sahod ng mga manggagawa at pagdami ng mga taong walang trabaho dahil nalulugi ang maliliit na negosyo D. paglaganap ng biological weapons dulot ng mabilis na pagkalat ng impormasyon sa iba’t ibang panig ng mundo at pagdami ng pamilihan ng materyales na ginagamit dito ANSWER: B 33. Alin sa mga sektor ng manggagawa ang madalas nakararanas ng pang-aabuso at hindi pantay na oportunidad sa pagtratrabaho? A. agrikultura B. industriya C. pamahalaan D. serbisyo ANSWER: A 34. Ano ang tawag sa anyo ng subcontracting kung saan ang mga subcontractor ay may sapat na puhunan para maisagawa ang trabaho ng mga manggagawang ipinasok nila? A. iskemang subcontractor B. job mismatch C. job contracting D. labor-only contracting ANSWER: C 35. Bakit hindi maitaas ang pasahod, maipagkaloob ang kasiguraduhan sa trabaho, at madagdagan ang benepisyo ng mga manggagawa sa bansa? Ito ay dahil_____ A. sa sistema ng kontraktuwalisasyon. B. puro regular na ang mga manggagawa. C. mataas na ang pasahod sa ating manggagawa. D. marami ang benepisyong natatanggap ng ating manggagawa. ANSWER: A 36. Bilang tugon sa suliraning nararanasan ng mga manggagawa, mayroon silang karapatang hindi dapat malabag upang masabi na sila ay may disente at marangal na hanapbuhay. Alin sa sumusunod ang HINDI kabilang sa mga karapatan ng manggagawa? A. Karapatan sa pantay na suweldo para sa parehong trabaho. B. Karapatang sumali sa marahas at mapanganib na uri ng unyon. C. Karapatang maging ligtas at malayo sa panganib ang kalagayan ng pagtatrabaho. D. Karapatan na makatanggap ng sapat at karapat-dapat na suweldo para sa makataong pamumuhay. ANSWER: B 37. Halos mapudpod na ang sapatos ni Justin sa paghahanap ng trabaho ngunit hindi pa rin siya natatanggap. Maraming job fairs na rin ang kaniyang pinuntahan ngunit bigo siyang makakuha ng trabaho. Bakit kaya ito nangyayari kay Justin? A. Kulang pa ang kaniyang lakas ng loob. B. Kulang siya sa aspekto ng personal relations kaya hindi siya nagugustuhan. C. Hindi kaaya-aya ang kaniyang pisikal na kaanyuan kaya hindi siya natatanggap sa trabaho. D. Biktima si Justin ng job mismatch kung saan hindi tugma ang kaniyang kakayahan at kasanayan na hinahanap ng mga kompanya. ANSWER: D 38. Ayon sa tala ng Department of Labor and Employment (DOLE), maraming job fairs noong 2010 ngunit kakaunti lamang ang mga natanggap na kalipikadong aplikante mula sa maraming bilang ng mga nag-apply. Alin ang HINDI angkop na dahilan nito? A. Ang mga aplikante ay hindi interesado sa mga trabaho sa bansa. B. Kapansin-pansin ang patuloy na paglaki ng bilang ng job skills mismatch ng mga aplikante sa bansa. C. May patuloy na mismatch sa kasanayan at kakayahan mula sa tinapos na kurso at sa hinihinging kalipikasyon ng mga employer. D. Maraming kurso sa higher education institutions sa bansa ang hindi na tumutugon sa pangangailangan ng mga pribadong kompanya na nagtatakda ng mga pamantayan sa pagpili ng mga manggagawa. ANSWER: A 39. Alin ang angkop na salita na tumutukoy sa sitwasyon kung saan inaako na ng lalaki ang mga gawain sa tahanan dulot ng migrasyon? A. helper B. house boy C. house father D. house husband ANSWER: D 40. Ang sumusunod ay mga ahensiya ng pamahalaan na nangangalaga sa kapakanan ng migrante MALIBAN sa __________________. A. Commission of Filipino Overseas B. Philippine Overseas Labor Offices C. Department of Labor and Employment D. Department of Science and Technology ANSWER: D 41. Isang epekto ng migrasyon ay ang pagtanggap o pagpapadala ng mga lakas-paggawa sa ibang bansa. Alin sa sumusunod ang HINDI nagpapakita ng magandang benepisyo ng brain gain? A. Malaki ang posibilidad ng promotion ng manggagawa. B. Gastusin ng kompanya ang pagpapadala ng manggagawa sa ibang bansa. C. Maaaring magtrabaho sa ibang bansa ang empleadong ipinadala upang matuto. D. Magiging asset ang migranteng manggagawa sa nagpapadala at tumatanggap na bansa kahit saan man sa mundo. ANSWER: B 42. Matagal na naghanapbuhay si Ginoong Pascual sa Australia, kaya sa kaniyang pag-uwi sa pamilya ay hindi siya pinansin ng kaniyang mga anak at nagtago ang mga ito sa kuwarto. Ano ang iyong mahihinuha rito? A. Malaki ang takot ng mga anak sa kanilang ama. B. Walang pasalubong si Ginoong Pascual sa mga anak. C. Hindi kilala si Ginoong Pascual ng kaniyang mga anak. D. Nagkakahiyaan ang mag-aama sa kanilang pagkikita. ANSWER: C 43. Paano nakaaapekto ang pangingibang-bansa sa estado ng ekonomiya ng bansa? A. Madaragdagan ang populasyon ng bansa. B. Mapananatiling matatag ang palitan ng piso at dolyar. C. Mahihirapan ang mga Pilipino na makisama sa mga dayuhan. D. Mas maraming papasok sa bansa na mga imported na produkto. ANSWER: B 44. Marami sa mga OFW na nasa Middle East ang napag-alamang nakararanas ng mga pang-aabuso mula sa kanilang mga amo tulad sa Saudi Arabia. Kung ikaw ang ambassador ng Pilipinas sa Saudi, alin ang pinakamabisa mong gagawin upang matulungan at maprotektahan sila? A. Pababayaan sila hanggang matapos ang kanilang kontrata. B. Maglulunsad ng rally sa embahada ng Saudi Arabia sa Pilipinas. C. Hihingi ng tulong pinansiyal at pauuwiin ang mga manggagawa sa Saudi. D. Maglilikom ng mga ebidensiya ng mga pang-aabuso at isusuplong ang mga amo sa kinauukulan. ANSWER: D 45. Alin sa sumusunod ang konseptong tumutukoy sa slavery? A. pang-aalipin B. sitwasyong payapa C. sapilitang pagtatrabaho D. pagpupuslit ng mga tao ANSWER: A 46. Kung ikaw ay opisyal ng pamahalaan na nangangalaga sa kapakanan ng mga OFW, alin sa sumusunod ang dapat mong gawin sa mga kaso ng pang-aabuso sa mga Pilipino? A. Pauuwiin ang lahat ng OFW at bibigyan na lamang ng trabaho sa Pilipinas. B. Pababayaan na lamang ang mga OFW dahil isolated cases lang naman ang mga ito. C. Ipauubaya na lamang ang mga gagawing aksiyon sa pamahalaan ng bansa kung saan nagtatrabaho ang mga OFW. D. Magtatatag ng mga mekanismo upang ma-monitor ang kalagayan ng mga OFW at gagawa ng kaukulang hakbang kung may pang-aabuso. ANSWER: D 47. Bilang isang mag-aaral sa kasalukuyan, alin sa sumusunod ang maaari mong magawa upang masigurong makaaangkop ka sa pangangailangan ng ating bansa na umunlad sa kabila ng globalisasyon? A. Magpalipas ng panahon at umasa na lamang sa pamilya. B. Tumigil sa pag-aaral at magtrabaho na upang kumita ng pera. C. Magsumikap sa pag-aaral upang makatapos at magkatrabaho. D. Maging layunin ang makapagtrabaho sa ibang bansa upang yumaman. ANSWER: C 48. Alin sa sumusunod na mga pangungusap ang tumutukoy sa konsepto ng fair trade? A. Itinatakda ng mga bansa ang pamantayan ukol sa mga kakayahan ng mga manggagawa. B. Ang mayayamang bansa ay nagbibigay ng tulong sa pinakamahihirap na tao sa mundo lalo na sa Aprika at Asya. C. Sinisiguro ng mga bansa ang patas o pantay na kalakalan gaya ng pagbabantay sa tamang presyo ng mga produkto. D. Ang pamahalaan ay nakikialam sa kalakalang panlabas na may layong protektahan ang mga lokal na namumuhunan. ANSWER: C 49. Marami sa mga pamilya ng OFWs ay nakararanas ng pangungulila sa kanilang kaanak na humahantong sa pagkawasak nito. Paano kaya sila matutulungan? A. Makisimpatiya sa kanila. B. Bigyan sila ng sulat isa-isa. C. Bigyan sila ng load pantawag sa kanilang kaanak. D. Magtayo ng isang samahan ng mga pamilya ng OFW upang gumabay sa kanila. ANSWER: D 50. Sa Pilipinas ay marami ang nangangarap na mangibang-bansa dulot ng kahirapan sa buhay. Nangangamba naman ang mga ekonomista dahil naaapektuhan ng brain drain at brawn drain ang ekonomiya. Bilang ekonomista, ano ang maaari mong gawin upang masolusyunan ang isyung ito? A. Pigilan ang mga nais mangibang-bansa. B. Hayaang umalis ang mga nais na magtrabaho sa ibang bansa. C. Bigyan ng suportang pinansiyal ang mamamayan na walang trabaho. D. Gumawa ng isang development plan na tutugon sa mga isyu ng migrasyon. ANSWER: D

multinational 2 wages 3 conditions 4 textiles 5 outsource 6 offshore 7 import

Multinational Corporation

Google LLC is an American multinational technology company that focuses on search engine technology, online advertising, cloud computing, com

The term "business" refers to the organized effort of individuals to produce and sell goods or services for profit. It encompasses a wide range of activities, including production, marketing, sales, finance, and management. Businesses can vary in size from small sole proprietorships to large multinational corporations, and they operate in various sectors such as retail, technology, manufacturing, and services. At its core, the purpose of a business is to create value for customers, generate income, and sustain operations over time.

Related quizzes

Related quizzes