International Business Environment

1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2013

M.I.B. – I SEMESTER

International Business Environment

Time: 3 hrs                                                                                                         Max.  Marks:100

 

                   Section –A

1. Answer any SEVEN                                                                 (7 x 5 = 35)

 

1. Make a critical assessment of WTO’s assistance to world trade.
2. What are the main objectives of the Foreign Trade Policy (FTP)?
3. Thrust of mercantilism.
4. State the government strategy to achieve the objectives of the Indian Foreign Trade Policy 2004-2009.
5. Special Economic Zone (SEZ) programme in India Boon or Disaster?
6. Indian seller of goods and Chinese buyer agreed that as per the rules of the International Chamber of Commerce (ICC), the arbitration would be held in Singapore. The Chinese buyer, however, filed an application in the Indian High Court seeking an injunction restraining the Indian seller from selling or alienating its goods, property or assets. Indian seller took the objection that, as per the agreement, the place of arbitration was at Singapore. As such, provisions of the Part-I of the Arbitration and Conciliation Act, 1996 were not applicable and the application for interim relief was liable to be dismissed. Decide with reasons in the light of authoritative judgment on the above issue.
7. Discuss in detail the reasons that prompt the companies for doing business globally.
8. Highlight the function of theory of comparative advantage in global business.
9. Critically discuss the various dimensions of technology transfer international business.
10. Write short notes on: (a) GDP         (b) GNP

 

Section – B

1. Answer any THREE                                                          (3 x 15   = 45) 

 

11. Good business are not born, but are made by the combined efforts of all stakeholders, board of directors, government and the society at large.” In the light of this statement, bring out the various responsibilities of business towards different grouping of good corporate social responsibility.

 

12. Make a critical assessment of different approaches to world trade and commerce.

 

13. Explain the various strategies followed at various stages of product life cycle in global business. And discuss the motive for PLC in global trade.

 

14. Enumerate the main motive within social and cultural Environment of global trade.

 

15. Discuss the following technology impact on global business

(a) E-Business                (b) EFT                (c) SWIFT

 

Section – C

• Compulsory Case study                                                             ( 1 x 20 = 20)

 

 India has imposed anti-dumping duties on imports of compact discs recordable (CDRs) from China, Hong Kong, Singapore and Chinese Taipei. The move is expected to give some relief to domestic producers of CDRs. The Central Board of Excise and Customs (CBEC) had notified the imposition of anti-dumping duty in the range of $0.050 to $0.099 per piece. Imposition of duty is expected to level the field for domestic players. The domestic industry had petitioned the government against such imports as these were eroding their margins.

The designated authority – Director General of Anti-Dumping (DGAD) had made a recommendation to the CBEC in this regard. The authority, in its final findings, had concluded that the CDRs had entered Indian market from the identified countries at price less than their normal value in the domestic market.

“The domestic industry had suffered material injury and the injury has been caused to the domestic industry both by volume and price effect of dumped imports of subjected goods originating in or exported from the subject countries”, it had said. The authority maintained that dumping margins of the CDRs imported from these countries were substantial and above the de minims and recommended imposition of definitive anti-dumping duties.

 

Answer the following questions

 

• What is dumping? Illustrate.
• How did Directorate General of Anti dumping and Allied Duties (DGAD) come to the conclusion of dumping of CDRs?
• Under what conditions DGAD would have suspended the investigations?
• With whom the appeal against the order of DGAD may be filed and in how many days?

&&&&&&&&&&&&&&&&&&&&&&&

 

 

END SEMESTER EXAMINATIONS – OCTOBER ’2013

Class: MIB                                                                                                                Semester: I

          Subject: International Business Environment

Time: 3 Hours                                                                                                    Max: 100 Marks

SYNOPSIS OF ANSWER KEYS

 

Section –A                                                                

     Answer any SEVEN questions                                                                                    7 x 5 = 35         

1. Make a critical assessment of WTO’s assistance to world trade

• The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
• The goal is to help producers of goods and services, exporters, and importers conduct their business
• Administers the WTO Agreements and facilitates their operation and implementation

Various assistance of WTO

• Provides a forum for trade negotiations among member states on matters covered by the Agreements and for further liberalization of trade amongst members
• Responsible for the settlement of differences and disputes between members
• Responsible for periodic reviews of the trade policies of members
• In addition provides technical assistance and training for developing countries
• Cooperates with other international organisations on subjects of mutual interest

 

2. What are the main objectives of the Foreign Trade Policy (FTP)?

• Policies are designed to regulate, direct, and protect national activities. The exercise of these policies is the result of national control, which provides a government with the right to shape the environment of the country and its citizens.
• Analyze the most common reasons for countries to protect certain industries. And to discuss the mechanisms used to provide protection.
• Enhance exports of major export.
• Commodities Identify potential export commodities.
• Diversify export destinations.

 

3. Thrust of mercantilism

Mercantilism, which emerged in England in the mid-16^th century, asserted that it is in a country’s best interest to maintain a trade surplus, to export more than it imports.

Thrust Areas

• Promotion of National wealth and power
• Importance of trade surpluses
• Trade surplus leads to a net gold inflow, and thereby to greater national wealth and power
• correlation between nations and households
• Encourage domestic production and exports, discourage imports

 

4. State the government strategy to achieve the objectives of the Indian Foreign Trade Policy 2004-2009.

Objective: Simplifying procedures and bringing down transaction costs

• Transaction costs are incurred at the pre and post-production stages, and arise out from several procedural complexities associated with administrative processes, availability of finance and transportation problems.
• For enhancing the growth of exports it is important to reduce the transaction costs involved.
• Simplified and less stringent bureaucratic procedures like single window clearance and business friendly approach
• Better technology due to higher levels of foreign investment, faster loading/unloading methods
• Flexible labour laws and Cheap availability of power and raw materials

 

5. Special Economic Zone (SEZ) programme in India Boon or Disaster?
   • Political Influence / Interference
   • Strict Policy
   • Setting up of new infrastructure
   • Resettlement and rehabilitation policy
   • Slow on approval for IT SEZ’s
   • Problem of alienation and discrimination.

 

6. Indian seller of goods and Chinese buyer agreed that as per the rules of the International Chamber of Commerce (ICC), the arbitration would be held in Singapore. The Chinese buyer, however, filed an application in the Indian High Court seeking an injunction restraining the Indian seller from selling or alienating its goods, property or assets. Indian seller took the objection that, as per the agreement, the place of arbitration was at Singapore. As such, provisions of the Part-I of the Arbitration and Conciliation Act, 1996 were not applicable and the application for interim relief was liable to be dismissed. Decide with reasons in the light of authoritative judgment on the above issue.

Based on Negotiation, Agreement – Consider Arbitration and Conciliation. Without affecting two countries bilateral relationship.

7. Discuss in detail the reasons that prompt the companies for doing business globally.

• Greater integration and interdependency of national economies; leading to freer movement of goods, services, capital, and knowledge
• Rise of regional economic integration coalition
• Growth of global investment and financial flows
• Convergence of consumer lifestyles and preferences
• Globalization of production
• Exchange of products and services across national borders; typically through exporting and importing.

 

 

8. Highlight the function of theory of comparative advantage in global business.

Theory of comparative advantage

It makes sense for a country to specialize in the production of those goods that it produces most efficiently.

• According to the law of comparative advantage, a country must specialize in those products that it can produce relatively more efficiently than other countries.
• Superior features provide good products
• Unique benefits in global competition
• Beneficial for two countries to trade even if one has absolute advantage in the production of all products.

 

9. Critically discuss the various dimensions of technology transfer international business.

• Defines the concept as ‘‘the movement of know-how, technical knowledge, or technology from one organizational setting to another’’.
• Analyze an astonishingly wide range of organizational and institutional interactions involving some form of technology-related exchange.

Dimension Technology Transfer

• Transfer agent
• Transfer medium-
• Transfer object
• Transfer recipient
• Demand Environment

 

10. Write short notes on

(a) GDP- The total value of all goods and services produced within a nation’s borders over one year, no matter whether domestic or foreign-owned companies make the product.

(b) GNP- The income generated both by total domestic production as well as the international production activities of national companies.

 

     Answer any THREE questions                                                                               3 x 15   = 45 

 

11. Good business are not born, but are made by the combined efforts of all stakeholders, board of directors, government and the society at large.” In the light of this statement, bring out the various responsibilities of business towards different grouping of good corporate social responsibility.

 

Responsibilities towards various groups

• Owners / shareholders
• Employees
• Consumers
• Government
• Community and Society At Large

 

 

12. Make a critical assessment of different approaches to world trade and commerce.

 

 

13. Explain the various strategies followed at various stages of product life cycle in global business. And discuss the motive for PLC in global trade.

• It’s important for marketers to understand how to move their product through the different stages by manipulating the marketing mix. A product life cycle consists of the introductory, growth, maturity and decline stages.
• These stages need to be supported with correct pricing, promotion and distribution to reach the target market.

 

 

 

 

 

 

 

 

 

 

 

14. Enumerate the main motive within social and cultural Environment of global trade.

 

 

 

 

15. Discuss the following technology impact on global business

(a) E–Business

• Reduction in physical boundaries and distance;
• Serve larger customer base more efficiently;
• Target specific customer groups;
• The Internet is an interactive marketing medium;
• More detailed information on customer transactions; and
• Improved transaction efficiency.

 

 (b) EFT

• EFT Global provide an efficient, safe and effective method to accept or make payments by EFT/ACH methods reducing administrative overheads and adding process efficiencies to your business.
• Electronic fund transfers (EFT’s) are processed using the worldwide payment networks. EFT is a paperless system that provides for the inter-bank clearing of electronic entries for participating financial institutions
• With the global emergence of electronic payments replacing paper based transaction methods it is now more important than ever for businesses to process transactions fast, efficient and accurately; enhancing business capabilities, reducing administrative overheads and allowing you concentrate on core business functions.

 

          (c) SWIFT- Society for Worldwide Interbank Financial Telecommunications

• Quick and cheap
• Secure and reliable
• Standardized forms
• Speed-More Reliable and Fast, Accurate
• Costs- Cheaper
• Volume – Manage Large
• Security – More Authentic service
• Uniform Formats