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Agrestal Cosmetics, Inc

question 43

Multiple Choice

Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
-Agrestal's use of hedging is a way for the company to guard against ________ risks.

Definitions:

Censoring Information

The practice of selectively suppressing or withholding information deemed objectionable, sensitive, or inconvenient by certain bodies or individuals.

Gathering Information

The process of collecting data, facts, and details from different sources to increase knowledge or make informed decisions.

Groupthink

A psychological phenomenon where the desire for harmony or conformity in a group results in an irrational or dysfunctional decision-making outcome.

Ingratiation

A psychological technique used by an individual to make oneself more likable or attractive to others, often through flattery or other forms of manipulation.