Question 1 Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with

a powerful logic (Rugman, 1981, 1985), it is still deficient in some respect as a general theory of the MNE given it focuses primarily on one mode of hierarchy i.e. the wholly owned subsidiaries. Yet, there a number of other modes which firms can and do adopt to deal with imperfections in international markets including licensing, management contracts, sub-contracting, joint ventures etc. Moreover, firms often employ different modes simultaneously in addressing the needs of a particular foreign market (Contractor, 1985; Davidson and McFetridge, 1985). Hence, the internalisation theory should also encapsulate an economic rationale for the other modes (Hennart, 1985) and specify the conditions under which each would provide efficiency gains over wholly owned subsidiaries and the market. Discuss. Section B Question 2 For nearly 50 years, member countries have sought to fulfil, first in the GATT and now in the WTO, the objectives reflected in the preamble to the WTO Agreement of conducting our trade relations with a view to raising standards of living worldwide. The rise in global trade facilitated by trade liberalization within the rules-based system has created more and better-paid jobs in many countries. The achievements of the WTO during its first two years bear witness to our desire to work together to make the most of the possibilities that the multilateral system provides to promote sustainable growth and development while contributing to a more stable and secure climate in international relations. Discuss

Question 3 The eclectic paradigm combines elements of quite different approaches to international production, and so it should not be misunderstood as itself another general theory: precisely because of its generality, the eclectic paradigm has only limited power to explain or predict particular kinds of international production; and even less the behaviour of individual enterprises,(Dunning, 1988a). Discuss Question 4 It should be obvious that simply the signing of a treaty to remove barriers to trade does not have any effect on the intra-group trade if the prospective partners do not demand each others exports. In this context, the only effect of regional integration would be indirect and related to the new level of protection of the group towards the outside world compared to the level of protection in each country prior to integration. Disregarding this effect and abstracting from intra-industry trade, in a two-good model, trade integration will have the usual trade creation/trade diversion effects when the prospective partners each have comparative advantage in the production and export of a different good while both goods are consumed by all countries. In other words, the difference in partners factor endowments makes them natural trading partners. Discuss. Question 5. Although it is one of the most important drivers of globalisation, it may nevertheless be argued that technology has widened the poverty gap. Developing and less developing countries inability to adopt new technologies entails that they are unable to compete against their developed countries counterparts. Discuss.

Question 6. It was argued that the WTO and GATT Uruguay Round Agreements have functioned principally to pry open markets for the benefit of transnational corporations at the expense of national and local economies; workers, farmers, indigenous peoples, women and other social groups; health and safety; the environment; and animal welfare. In addition, the WTO system, rules and procedures are undemocratic, un-transparent and non-accountable and have operated to marginalize the majority of the world's people. Discuss. Question 7. [We] are culturally all conditioned. We see the world in the way we have learned to see it. Only to a limited extent can we, in our thinking, step out of the boundaries imposed by our cultural conditioning, (Hofstede, 1995). What are the implications of this view for the study and practice of international management? Discuss Question 8 The benefits of trying to eliminate trade barriers in smaller groups of countries is facilitated through RTAs i.e. it can be easier to gain consensus among the relatively few members of a regional agreement as opposed to among all the member countries in the WTO. While RTAs are signed for a variety of reasons, the impact on trade, growth, and employment seems crucial in determining the extent to which broader objectives are achieved. It is difficult to identify arrangements that have advanced wider political objectives, without having first achieved progress in enhancing trade, and having this seen reflected in higher rates of sustainable growth and employment creation. Thus, it appears that the willingness to accept trade liberalization and

the accompanying economic adjustments is a first step that may be indicative of progress than can be made in other areas. Discuss.

Question 9 In the 1970s and 1980s, it became fashionable to search for general theories of international production which encompassed all the contributions of earlier writers thought to be significant. These were sometimes advanced as general theories of the multinational corporation, the main institutional agent of international production, or general theories of foreign direct investment, the major means by which international production is financed. When confronted with evidence on certain types of international production that their general theories did not seem to explain, the proponents of such theories all too frequently seemed to respond by either dismissing the relevance of the evidence or by adapting their terminology to accommodate it. To the extent they succeeded, their theories became increasingly cumbersome and less operational (Cantwell, 1988). Discuss. Question 10 The reality of global business today is that only few companies possess all of the competitive advantages which will enable them to compete successfully. As a result, firms are now seeking to complement their strengths through alliances/joint ventures with other firms. Discuss

Question 11

Although it is one of the most important drivers of globalisation, it can nevertheless be argued that technology has widened the poverty gap. Developing and less developing countries inability to adopt new technologies entails that they are unable to compete against their developed countries counterparts. Discuss.

Question 12 To the classical economists, trade was seen as an engine of growth as it facilitated the exploitation of comparative advantage. But, by the 1950's, it was obvious trade was not having the expected propulsive effects because of imperfections in international trading systems, such as oligopolistic competition, discriminatory pricing, product differentiation and high tariff barriers. As a result, many nations adopted an import-substitution strategy in a bid to reduce their import dependency. Discuss.