Global Operations:

Question 1:

International Business conducts business transactions all over the world. These
transactions include the transfer of goods, services, technology, managerial
knowledge, and capital to other countries. International business involves exports
and imports.
International Business is also known, called or referred as a Global Business or an
International Marketing.
An international business has many options for doing business, it includes,
1) Exporting goods and services.
2) Giving license to produce goods in the host country.
3) Starting a joint venture with a company.
4) Opening a branch for producing & distributing goods in the host country.
5) Providing managerial services to companies in the host country

Features of International Business:

1) Large scale operations: In international business, all the operations are
conducted on a very huge scale. Production and marketing activities are conducted
on a large scale. It first sells its goods in the local market. Then the surplus goods
are exported.
2) Integration of economies: International business integrates (combines) the
economies of many countries. This is because it uses finance from one country,
labor from another country, and infrastructure from another country. It designs the
product in one country, produces its parts in many different countries and
assembles the product in another country. It sells the product in many countries, i.e.
in the international market.
3) Dominated by developed countries and MNCs: International business is
dominated by developed countries and their multinational corporations (MNCs). At
present, MNCs from USA, Europe and Japan dominate (fully control) foreign trade.
This is because they have large financial and other resources. They also have the
best technology and research and development (R & D). They have highly skilled
employees and managers because they give very high salaries and other benefits.
Therefore, they produce good quality goods and services at low prices. This helps
them to capture and dominate the world market.
4) Benefits to participating countries: International business gives benefits to
all participating countries. However, the developed (rich) countries get the
maximum benefits. The developing (poor) countries also get benefits. They get
foreign capital and technology. They get rapid industrial development. They get
more employment opportunities. All this results in economic development of the
developing countries. Therefore, developing countries open up their economies
through liberal economic policies.
5) Keen competition: International business has to face keen (too much)
competition in the world market. The competition is between unequal partners i.e.
developed and developing countries. In this keen competition, developed countries
and their MNCs are in a favorable position because they produce superior quality
goods and services at very low prices. Developed countries also have many
contacts in the world market. So, developing countries find it very difficult to face
competition from developed countries.
6) Special role of science and technology: International business gives a lot of
importance to science and technology. Science and Technology (S & T) help the
business to have large-scale production. Developed countries use high technologies.
Therefore, they dominate global business. International business helps them to
transfer such top high-end technologies to the developing countries.
7) International restrictions: International business faces many restrictions on
the inflow and outflow of capital, technology and goods. Many governments do not
allow international businesses to enter their countries. They have many trade
blocks, tariff barriers, foreign exchange restrictions, etc. All this is harmful to
international business.
8) Sensitive nature: The international business is very sensitive in nature. Any
changes in the economic policies, technology, political environment, etc. has a huge
impact on it. Therefore, international business must conduct marketing research to
find out and study these changes. They must adjust their business activities and
adapt accordingly to survive changes.

Question 2:

Disadvantages of Globalization:
The following are some of the disadvantages:
(i) Globalization paves the way for redistribution of economic power at the world
level leading to domination by economically powerful nations over the poor nations.
(ii) Globalization usually results greater increase in imports than increase in exports
leading to growing trade deficit and balance of payments problem.
(iii) Although globalization promote the idea that technological change and increase
in productivity would lead to more jobs and higher wages but during the last few
years, such technological changes occurring in some developing countries have
resulted more loss of jobs than they have created leading to fall in employment
growth rates.
(iv) Globalization has alerted the village and small scale industries and sounded
death-knell to it as they cannot withstand the competition arising from well-
organized MNCs.
(v) Globalization has been showing down the process to poverty reduction in some
developing and underdeveloped countries of the world and thereby enhances the
problem of inequality.
(vi) Globalization is also posing as a threat to agriculture in developing and
underdeveloped countries of the world. As with the WTO trading provisions,
agricultural commodities market of poor and developing countries will be flooded
farm goods from countries at a rate much lower than that indigenous farm products
leading to a death-blow to many farmers.
(vii) Implementation of globalization principle becoming harder in many industrially
developed democratic countries to ask its people to bear the pains and
uncertainties of structural adjustment with the hope of getting benefits in future.

Question 7:

The major difference between Chinese and Western culture is that China is an
oriental country, and its traditional culture is completely different from western
heritage. Chinese culture is older than 5000 years, and Chinese people have
developed their own music, musical instruments, painting techniques, traditional
Chinese medicine, and not to forget, cooking methods etc. completely different
and unique when compared to Western culture. Chinese believe in healthy eating,
and have a holistic approach towards health. The Western culture is more advanced,
and loves adventure and exploration. The Chinese focus more on collective gain
instead of individual gain by making the right decisions, and believe in adopting a
middle way to avoid extremism.

Westerners find the Chinese culture complex, and hard to understand, as the
Chinese culture has its own values, background and belief system. The Chinese are
very friendly and helpful to a stranger, compared to Westerners who would never
entertain a stranger. Western culture has a wealthy and luxurious lifestyle, but
Chinese mostly have a modest way of living, for example, on average, the Chinese
may have no more than 40 sq. feet of living space. Chinese use sir names, and are
strictly moral to avoid public displays of affection. The Western culture has the
freedom to express them freely. When compared to Western culture, the Chinese
culture differs a lot, as they value relationships more than their Western
counterparts.

There is a vast difference between the major philosophies of eastern and western
life. Westerners believe in self dedication to achieve their goals of success and
happiness etc., whereas the Chinese have behavioral ethics, and are dependent on
their inner world and perceptions of eternal recurrence. The Western approach is to
search outside of yourself, whereas the Chinese prefer to adopt a systematic
approach, and search within themselves.

The real happiness in Western society is based upon a materialistic approach,

whereas the Chinese believe that true happiness is achieved by inner intervention,
as the truth is the key to eternal bliss and happiness. The Western society believes
in individualism, whereas the Chinese culture has faith in collectivism and
fundamental connections with others. A Westerner is overwhelmed by pragmatic,
materialistic and emotional approaches in comparison to the Chinese, who have a
more missionary and spiritual approach towards life. The Westerner analyzes and
the Chinese meditate. The Chinese believe in virtues and Westerners believe in
value ethics.

Summary:
1. Westerners believe in individualism, and Chinese believe in collectivism.
2. The Western culture has the freedom to express affection freely, whereas the
Chinese culture is puritanical.
3. Western and Chinese philosophies are unique and entirely different to each other.
4. The Chinese believe in relationships, and searching for inner bliss and happiness
through meditation.
5. The Western culture believes in a materialistic approach, and has a pragmatic
and emotional attitude.

Section B:

Question 1:

Cultures change and cultural diversity is created, maintained and lost over time.
Social learning and choosing, acquiring and assimilating and rejecting information
and knowledge is a necessary aspect of the formation of cultural repertoire.

Human culture is the inevitable result of the way our species acquires its behavior.
Expertise in exploiting our environment, values about what matters in life are,
among other things, what constitute culture.

We are very adept at transmitting cultural information to others, sometimes through

frank teaching but also through the constant social interaction characteristic of
human life. This social interaction means not just person-to-person contacts but, in
the contemporary world, involves the mass media as a whole as a super source of
information and knowledge.

So information exchange and spread is the backbone of the process of formation

and evolution of cultures, and this very information is disseminated and exchanged
through the gigantic network of the mass media in modern times. The network is
such that it has made its influence felt in every sphere of life; moreover, it is now
backed by such advanced technology that the process of information exchange and
communication of the information has become quicker and more sophisticated than
ever before.

Cultural diversity inevitably develops in the course of cultural transmission. This

happens when members of the same culture and sub-culture share a large
proportion of their information.

The sharing of cultural information allows groups of humans to interact and

cooperate effectively, so it is essential that some processes act to limit diversity. If
such processes did not exist, human societies could not function as they do.
Languages and dialects are the common examples of shared cultural information.
Genetic evidence reveals how closely related all modern humans are.

This suggests that we are descended from a relatively small population with limited
individual and sub-cultural variation. How did such diversity in peoples, societies
and communities come about? How did all this massive diversity of cultures we see
today come about? It was, at least partly, a result of communication and
information transmission.

There are many elements that make up the vast body of information comprising a
populations culture. Culture and cultural change is best viewed as a population
level phenomenon. Single individuals are largely prisoners of the culture they inherit
but the decisions they makebased on the information and knowledge they have,
or acquire to reinforce or reject, or choose to ignore at the outsetand the
outcomes of those decisions are what drive cultural revolution.

Summed over a population of individuals and over a span of time, some culturally
characteristic behaviors, beliefs and values become more common in the
population, some become less common and some disappear altogether. New
cultural characteristics arise and either survives and spread through the population,
or they fade away.

Thus, the all-important population level phenomena of cultural evolution are a result
of the aggregation of myriad events and decisionsat the individual and societal
levels. This involves learning from information and accumulation of knowledge.

Question 2:
Question 3:
Negotiating contracts is a skill that every organization and business owner will need
at one time or another.

Whether it is the decision to outsource a service, or negotiate the price for new
office equipment, business leaders will need to fine tune their negotiation skills.

Most of us dont have the natural ability to negotiate so the trick is to use a
systematic and unbiased approach to negotiate vendor contracts.

12 Steps to Contract Negotiations

1. Identify a Need

Whether you are looking for help cleaning your building, repairing an HVAC unit or
identifying the right IT company to help with some strategic initiatives, you need to
understand what your need is before you can look for a vendor to help you. Take
some time to educate yourself so that you will be able to define the problem with a
vendor.

Vendors always have their own language to make sure you understand what all of
the lingo means before you sit down with them!

2. Identify Team

Identify a team of employees who can help identify the need, research the industry
and interview the vendor. This team will be your think tank to make sure every
aspect of the agreement is thought through. You only need a few people for this but
it is always beneficial to have several eyes and brains on this type of project.

3. Research Vendors
Once you know what the need is, have your team help research vendors that
specialize in the particular area you need help with. Talk to friends and others in
your field for referrals.

The internet is a great resource and many organizations have ratings on their
services. Use these resources and read customer comments. You can learn a lot
from just doing a little online research and listening to their customers.

4. Use BBB as a Resource

Check with the BBB on the vendors you pick and see if they have any prior
unresolved customer issues. This can also be done online and is a great resource
not only for finding a good vendor but also if you make Charity Donations.

You want to do this type of checking before you ask for a proposal so you wont be
wasting your time negotiating a bid only to find out the vendor has unresolved
customer issues.

5. Identify Three Vendors

Whether it is the decision to outsource a service, or negotiate the price for new
office equipment, business leaders will need to fine tune their negotiation skills.
Identify three vendors that look the best to you. Think about the big name vendors
that do a lot of advertising.

You can expect to pay a little more for them so make sure you list at least one
vendor that does not have the big name recognition. Smaller vendors that have not
been around as long are hungry and might be able to do a really good job for you at
a lower cost.

6. Request for Proposal

Once you have your three vendors chosen, contact them, describe what your needs
are and ask for a formal proposal or otherwise called a request for proposal (RFP).
Ask the vendor to include a list of customer references with their proposal.

7. Vendor Interview

Have the vendor come in and present the proposal to the team. Allow the team to
ask questions and clarify any uncertainties. This is when you make sure the
proposal is written to meet all of your needs and criteria.

8. Review Terms of Agreement

Once you have all three proposals, review each of them side by side to make sure
they are comparable. Call the vendor and get clarification on anything that does
not make sense or may need further clarification.

Things to look at are duration of agreement, payment cycle, termination clause,

liability for both sides, scope of services, what they will and will not do, etc. Look at
what their approach is to cost control, quality of product or service and their
customer service commitments.

9. Negotiate Differences

Once you have a good understanding of the proposed agreements, go back and
negotiate any sticking points that might hold you back. Everything is negotiable so
dont hesitate to ask if you think it is something important to the agreement.

10. Check References

Once you are settled on an agreement, start calling the list of references and ask
questions like:

How long have you used this vendor?

Have there been any issues?
If yes, how did the vendor address the issues?
How is the customer service of the vendor?
How would you rate the vendor employees?
If there was anything you could improve with the vendor, what would it be?

11. Solicit a Second Opinion on the Agreement

Once you feel comfortable with an agreement, have another set of eyes look at it to
see if there are any outstanding things that may be missing. This should be another
person who is familiar with looking at contracts.

Tell them how you came up with the list of vendors, what your criteria was and why
you have chosen this one. Then let them pick it apart. Dont take any questions
personally, just allow the process to work. This step may save you from signing
something you regret later.

12. Sign

Ok, now is when you sign the agreement and agree on a start date. Take the
agreement and tickle your calendar or the appropriate persons calendar with
anything you may be responsible for in the agreement ie; payment schedule,
auditing process, inspections, etc.

MCQ:
https://www.scribd.com/doc/91023453/The-International-Marketing-Manager