4.4 Global Industries & Companies Glossary

Question 1

MNC

Answer 1

Multi National Corporation/Company

Question 2

Reverse engineering

Answer 2

A method of analysing a products design by taking it apart

Question 3

Transfer pricing

Answer 3

A system operated by MNCs. An attempt to avoid relatively high tax rates through the prices which one subsidiary charges another for components and finished goods.

Question 4

FDI

Answer 4

Foreign Direct Investment

Question 5

Repatriated profits

Answer 5

A flow of money away from the host country

Question 6

Ethics

Answer 6

Moral rules or principles of behaviour that should guide members of a profession or organisation and make them deal honestly and fairly with each other and with their stakeholders

Question 7

Institutional frameworks

Answer 7

The system of formal laws, regulations and procedures, and informal conventions customs and norms that shape activity and behaviour.

Question 8

Code of conduct

Answer 8

A set of rules outlining the proper practices of an organisation that contributes to the welfare of key stakeholders and respects the rights of all affected by its operations

Question 9

Stakeholders

Answer 9

Groups or individuals who can affect or be affected by the actions of a business

Question 10

Competition policy

Answer 10

Government policy that exists to promote competition and ensure that firms don’t abuse their market power, do not attempt to fix prices or use pricing strategies to drive out competition, and do not collude against other producers or the consumer.

Question 11

Direct action

Answer 11

The use of demonstrations, protests, strikes or even sabotage to achieve a political or social goal

Question 12

Naming and shaming

Answer 12

Publicising behaviour that is considered to be unethical as widely as possible and thereby threatening a business’s behaviour.

Question 13

Pressure groups

Answer 13

Generally voluntary organisations that operate on all levels of society, including international levels, and aim to change either political or commercial decision-making

Question 14

Taxation policy

Answer 14

Governments use taxation policies to raise revenue to run the country. Corporation tax is currently 20% as is VAT.

Question 15

Tax avoidance

Answer 15

Using legal methods to reduce the amount of tax that a company pays

Question 16

Tax evasion

Answer 16

Using illegal means to avoid paying taxes that are owed

Question 17

Lobbying

Answer 17

The taking of issues directly to government in an effort to influence change.