Q1.

A Ans: A business that is primarily based in a single country but acquires some meaningful share of its resources or revenues (or both) from other countries. International business refers to business activities that involve the transfer of resources, goods, services, knowledge, skills, or information across national boundaries. When business can do this, it can achieve a very good return on investment and useful global operations. Domestic and international enterprises, in both the public and private sectors, share the business objectives of functioning successfully to continue operations. Private enterprises seek to function profitably as well. Why, then, is international business different from domestic? The answer lies in the differences across borders. Nation-states generally have unique government systems, laws and regulations, currencies, taxes and duties, and so on, as well as different cultures and practices. An individual traveling from his home country to a foreign country needs to have the proper documents, to carry foreign currency, to be able to communicate in the foreign country, to be dressed appropriately, and so on. Doing business in a foreign country involves similar issues and is thus more complex than doing business at home. The following sections will explore some of these issues. Specifically, comparative advantage is introduced, the international business environment is explored, and forms of international entry are outlined.

Q1. B Ans: During the 1960s multinational enterprises emerged as a focus of interest (and much controversy) both for economists and for the general public. Much of the literature of that era (leaving aside the important pioneering works of Raymond Vernon, Charles Kindleberger, and John Dunning) provided a very time-bound perspective on this phenomenon. Economists tended to treat multinationals as byproducts of post-World War II international financial integration and improvements in communications and transport technologies. To the broader public, in the United States and elsewhere, they were associated with U.S. economic expansion and indeed were perceived as reflecting a particularly "American" form of business organization. Since that era, the international economy has changed dramatically: multinational enterprises became truly "multinational" as East Asian and European firms expanded (or, perhaps more properly in many instances, reappeared) in global markets and new cross-national "strategic

partnerships" of firms emerged. During the same period, the historiography of multinational enterprise was vastly enriched by scholars such as Mira Wilkins, D. K. Field house, Peter Hertner, Shin'ichiYonekawa, and many others, who not only probed well into the pre-twentieth-century origins of multinational activities, but also linked their work with broader reinterpretations of the dynamics of business evolution and organization.

Q2. A Ans: Law is an instrument of social justice of the state that seeks to provide justice, stability and security in the society. It assures uniform application of the laws by regulating the behavior and interactions of individuals against each other. Law is the command of the sovereign. And its body of rules recognized and enforced by courts of law. . Law is a rule relating to the actions of human beings. All legal systems deal with the same basic issues, but each country categorizes, and identifies its legal subjects in different ways. A common distinction is that between "public law" (a term related closely to the state, and including constitutional, administrative and criminal law), and "private law" (which covers contract, tort and property). In civil law systems, contract and tort fall under a general law of obligations, while trusts law is dealt with under statutory regimes or international conventions. International, constitutional and administrative law, criminal law, contract, tort, property law and trusts are regarded as the "traditional core subjects", although there are many further disciplines which may be of greater practical importance.

Q2. B Ans: The international economy is changing through the alteration and reduction of geographic and political borders. The substantial direct investment increases by companies in foreign countries demands that multinational corporations (MNCs) be aware of the legal, political, and ethical climes of host countries. Need for international codes of conduct Even within a single country, there is always some degree of inconsistency between laws. However, when viewed on a global basis, the level of

inconsistency among countries is more diverse. Companies that have decided to become truly global ethical organizations must analyze, assess, and amalgamate the heterogeneous legal atmospheres in the nations in which those companies do business.

Q3. A Ans: International Operations management and corporate strategy: Operations management of an International business needs to be integrated with the firms corporate strategy. The central role of operations management is to create the potential for achieving superior value for the firm. If operations management takes Rs. 100 worth of inputs and brings out product worth Rs. 150, it has created considerable value for the firm. However, if it requires Rs. 140 worth of inputs to obtain the same output, value creation does take place, but is very little. Therefore, the way in which the firm structures and manages its operations management function both influences and is influenced by strategies. Sourcing and vertical integration: Sourcing, also called producing. Refers to a series and processes of a firm uses to acquire the different components it needs to produce its own goods and services. Country factors: Several features of countries can influence their attraction as sites for locating International facilities. Resource availability is one such factor. The availability and cost of resources is a primary factor which determines whether a country is suitable for location or not. As advocated by classical trade theorists countries that enjoy large low cost endowments of a factor of production will attract firms needing that factor of production. The trend now being witnessed is the physical proximity between the just-in-time manufacturing techniques. Because of this trend, US firms are reconsidering decisions to locate offshore. Technological Factors: The type of technology a firm uses in its production process can be decisive in location decisions. Technological constraints may render it feasible to perform certain manufacturing activities in only one location and serve the world market from there. Fixed costs of setting up a manufacturing plant are so high that a firm must serve the world market form a single location or from very few locations. For example, it can cost more than $1 billion to setup a plant to manufacture semiconductor chips. In

such cases, a single plant makes sense. Product Factors: Product related factors may also influence the location decision. Among the more important of these are the products values to weight ratio and if it is serving universal needs. Q3. B Ans.A brand name is a specific notation, or word for a product or service. It is a trademark that identifies a brand. It comes under the proprietary rights of a company. In fact if a company is expanding internationally then it becomes necessary for the company to adopt such a brand name and logo which can prove an excellent identity for the company. After the invention of advertising, in 1930 the concept of brand name emerged. Have you ever noticed that people who are brand conscious always love to use branded products which have a brand name on it. Importance of a brand name in advertisement is also clear if you think for a while that whenever the name of fast food comes you think about McDonald, and Subways. After making a strong brand positioning, brand name of the company becomes its identification and a tool of marketing and promotion.

Q4.A Ans: Technology is very important in determining the size and scope of an industry. Home countries oppose export of technology because this would provide their trade secrets to other countries. Technology defines the quality of a product manufactured. Exporting the technology used in home country is not viable because this way the countries lose their comparative advantage to other firms. When other countries would have the same technology they would be able to make the same products. This way there would be less and less demand of products made by home country because it would be readily available in the market. That is why technology is considered as the barrier to entry in an industry. The international market is very demanding and complex. It is not very easy to understand its mechanism. Product decisions are made considering

various different things such as technology, level of similar products internationally, product quality, international standards compliance etc. Q4.B Ans: Four factors influence the product design decisions of international marketers: preferences, cost, laws & regulations, and compatibility. International product mix is a set of all product lines & items meant for sale in overseas markets. The issues that need to be addressed while taking decisions on the international product mix are, the number of product lines, the degree of consistency in these product lines, and their length and depth. The major characteristics of services are intangibility, inseparability, heterogeneity, and perish ability. Many factors, such as innovation, excellence in customer service, and efficient operations contribute to the success of an organization at the global level. Before entering a foreign country, a service organization needs to check if it has sufficient resources to venture into the market, whether the mode of entry is appropriate, the demand in the market is adequate, the management style is appropriate, and it has the right people to deal with suppliers and the local authorities. Takeovers, Joint ventures, and Contractual agreements are some of the ways in which international R&D capabilities can be acquired. International diffusion process involves shifting of products to overseas markets. Several factors influence the speed with which diffusion takes place. These are: nature of the product, characteristics of the overseas markets, strategy of the firm, competition, degree of product adaptation necessary, and propensity of consumers to change from the current pattern of consumption to a new pattern of consumption. A product suitable for one market may not be suitable for other markets. Factors that encourage or restrain product adaptation in different countries are: different use conditions, other market factors, and influence of government. International Product Life Cycle describes international trade and production patterns. According to this concept, products have to go through a trade cycle where a country is initially an exporter, then loses its export markets, and then becomes an importer of the product. Q5. A Ans: Law is an instrument of social justice of the state that seeks to provide justice, stability and security in the society. It assures uniform application of the laws by regulating the behavior and interactions of individuals against

each other. Law is the command of the sovereign. And its body of rules recognized and enforced by courts of law. . Law is a rule relating to the actions of human beings. All legal systems deal with the same basic issues, but each country categorizes, and identifies its legal subjects in different ways. A common distinction is that between "public law" (a term related closely to the state, and including constitutional, administrative and criminal law), and "private law" (which covers contract, tort and property). In civil law systems, contract and tort fall under a general law of obligations, while trusts law is dealt with under statutory regimes or international conventions. International, constitutional and administrative law, criminal law, contract, tort, property law and trusts are regarded as the "traditional core subjects", although there are many further disciplines which may be of greater practical importance. Q5. B Ans: The international economy is changing through the alteration and reduction of geographic and political borders. The substantial direct investment increases by companies in foreign countries demands that multinational corporations (MNCs) be aware of the legal, political, and ethical climes of host countries. Need for international codes of conduct Even within a single country, there is always some degree of inconsistency between laws. However, when viewed on a global basis, the level of inconsistency among countries is more diverse. Companies that have decided to become truly global ethical organizations must analyze, assess, and amalgamate the heterogeneous legal atmospheres in the nations in which those companies do business.

Q6. A Ans: The social responsibility actions of business are limited by cost, efficiency, relevance, and scope. As result of these constraints, social responsibility actions fall short of public expectations. 1. Cost Social responsibility costs money. Whether a firm desires to adopt a village, donate to college or school, built a hospital or undertake relief operations in times of calamity, it costs money and the money could be used for welfare of employees for improving business. As worthy as some social action may be, they do impose costs either on the business or on some groups in society, or both.

2. Efficiency The cost of social responsibility can reduce a firm's efficiency and affect its ability to compete in the market place. For example, if a firm is pressured by a local community to keep an outmoded, inefficient plant in operation because closing it would mean loss to local people, while its competitors close their old plants and move operations to other countries to take advantage of lower wages there, the business would not survive at all. The mangers, which place interests of local employees before the firm's survival, cannot face more efficient competitors. 3. Relevance According to several critics and as stated earlier, business has no obligations to society. The only obligation is to run the business successfully. Social responsibility is irrelevant. "There is only and only one social responsibility of business: to use its resources and energy in activities designed to increase its profits so long as it stays within the rules of the game & engages in open and free competition, without deception". In short, business should produce goods and services efficiently and leave the solution of social problems to the concerned individuals and government agencies. 4. Scope and complexity Society's problems are too massive, and too deep-seated to be solved by even the most socially conscientious company or even by all companies acting together. The problems - such as environmental pollution - acid rain, ozone depletion, destruction of rain forests; health problems - AIDS, drug and tobacco use; racial discrimination; and the like defy solutions however conscientious one might be. Each of these constraints influences and is influenced by other limits. All the constraints impact CSR and are influenced by corporate social responsibility. Q6. B Ans: ENVIRONMENTAL SCANNING MEANS Environmental scanning is the internal communication of external information about issues that may potentially influence an organization's decision making process. Environmental scanning focuses on the identification of emerging issues, situations, and potential pitfalls that may affect an organization's future. The information gathered, including the events, trends, and relationships that are external to an organization, is provided to key managers within the organization and is used to guide management in future plans. It is also used to evaluate an organization's strengths and weaknesses in response to external threats and opportunities. In essence, environmental scanning is a method for identifying, collecting, and translating information about external influences into useful plans and decisions. Environmental scans must be conducted on an ongoing basis in order to effectively monitor external forces that are likely to impact an organization; issues for each of the external environments should be explored. A comprehensive environmental scanning

process will keep a watchful eye on the potential impacts of the following different environments: * Industry/Market: Because the industry/market environment generally seems to be the most significant, it is useful to examine the structure of the industry and identify the key competition in the industry. Understanding the role of the competitors in the market and their relationship with each other, their customers, and their suppliers will provide useful information on trends and potential problems for competing organizations. * Technology: The emergence of new technologies can impact organizations' overall business and production processes. It is useful, therefore, to monitor changes in technologies, particularly those that influence business efficiencies, changes in production, existing infrastructures (e.g., energy, transportation, and communication), and the rise of new products or services. Regulatory: Changes in laws and regulatory guidelines may also have a significant impact on the organization.