Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the international arena, it chose Russia as its main market. Although Russia has been in transition for years, Cleanshot managers believe their company has tremendous opportunities there.
-Given the lack of available hard currency,Russian businesses often use goods and services as payment for other products they buy from abroad.This practice is referred to as ________.

Question

Quizplus · Accepted Answer

Barter is the practice of exchanging goods or services without using money. It is common in countries with economic instability or currency fluctuations. Given the lack of available hard currency in Russia, it is likely that Russian businesses would utilize barter as a means of payment for foreign goods and services. Letter of credit is a payment method where a bank guarantees payment to the seller on behalf of the buyer. Fiat money is a currency that has value only because of government regulation or law. Guanxi is a Chinese term referring to the use of personal connections and relationships for business purposes. None of these options accurately describe the situation in Russia.