Q1. “The study of international business is fine if you are going to work in a large multinational enterprise, but it has no relevance for individuals who are going to work in small firms.” Evaluate...

Q1.
“The study of international business is fine if you are going to work in a large multinational enterprise, but it has no relevance for individuals who are going to work in small firms.”

Evaluate this statement. (Write about 300 – 400 words)

Ans.
I agree with this statement and my reasoning is:

- Small firms need not be concerned with large scale mergers and acquisitions. Even if they are purchased by multinationals, they can learn all they need o know from their local mergers.

- Multi-national firms have to deal with large scale division of work allotment among their different regional and national head offices, but this problem does not arise with small firms

- Rise and fall in global prices, which in turn affect imports and exports, as well as custom duties, is a concern for multi-nationals, but not for local firms, which operate on a small scale only.

- International forecasts and how the economies of various countries affects a company, is an issue with multi-nationals, but not with local firms, which only need to worry about the national economy.

- Small firms do not have to deal with international business practices and regulations, since their primary concern is the local and regional market only.

Q2.
Describe the three (3) main risks of doing business in a country. Provide appropriate examples in

your response. (Write about 300 – 400 words)

Ans.

1. Strategic Risk- Strategic risk arises when a business does not operate according to the business model or plan. A company's strategy becomes less effective over time and it struggles to reach its defined goals. If, for example, Walmart strategically positions itself as a low-cost provider and Target decides to undercut Walmart's prices, this becomes a strategic risk.


2. b. Compliance Risk- The second form is compliance risk. This arises in industries and sectors which are highly regulated with laws. The wine industry, for example, must adhere to the three-tier system of distribution, where a wholesaler is required to sell wine to a retailer, who in turn sells it to consumers. Wineries cannot sell directly to retail stores. However, 17 states do not have this type of distribution system, and compliance risk arises when a brand fails to understand the individual requirements, thus becoming noncompliant with state-specific distribution laws.


3. c. Operational Risk- The third type of business risk is operational risk. This risk arises from within the corporation—when the day-to-day operations of a company fail to perform. HSBC, for example, faced operational risk and a heavy fine when its internal anti-money laundering operations team was unable to adequately stop money laundering in Mexico. Any time a company's reputation is ruined, either by one of the previous business risks or by something else, it runs the risk of losing customers based on a lack of brand loyalty. Going back to HSBC, the company faced the high risk of losing its reputation when the $1.9 billion fine was levied for poor anti-money laundering practices.That unexpected event could be a natural disaster or fire that damages or destroys your physical business. Or, it might involve a server outage caused by technical problems, people, or power cut. Many operational risks are also people-related. An employee might make mistakes that cost time and money.


4. 
   Q3. Describe the role of “education” in culture. Why is education important for a multi-national entity, which is considering expansion into a new host country market? (Write about 300 – 400 words)


5. 
   Ans.
   Culture is the blood stream of a community that requires protection. To aid in the protection of culture or social heritage is an essential feature of education. By its specialist institutions, education aims to inculcate the beliefs, customs, principles, languages, morality, etc. into the pupils' tender minds. In addition to maintaining culture, it is a duty of education to preserve the continuity of culture by transmitting current cultural beliefs, values, rituals, customs, etc. through its various programs and practices from one generation to another. Without this transmission, the survival of the nation may be the hardest challenge and human development can be stifled.


6. In addition to preservation and dissemination, a further essential role of education is to alter current cultural practices in light of significant shifts in society's needs and demands. Such shifts are compounded because of cross-cultural variables. New cultural trends are thus shaped by replacing and reorienting the old outmoded cultural forms to suit the evolving needs of man and time. But society is making ostensible progress. This aspect of education is called educational progressive feature. Education works as such by continually reorganising and reconstructing human experiences for cultural development and enrichment.


7. A connection between institutions of higher education and corporations is necessary for every nation's growth and progress. Corporations are based on the higher education products (graduates). In addition, institutions of higher education depend on the corporate social and financial support they provide. Multinational corporations are especially important for the survival and sustainability of higher education institutions in nations experiencing political and economic change, not just because they travel quickly to the corner of the market, but also because they usually partner or purchase local companies from the nation as a means of rapidly growing their share of the business.


8. 
   
   
   

1. 
   
   Q4.
   Unions in developed nations often oppose imports from low-wage countries and advocate trade barriers to protect jobs from what they often characterise as “unfair” import competition. Is such competition “unfair”? Do you think that this argument is in the best interests of:


2. (a) the local companies
   (b) the workers
   (c) the consumers
   (Write about 300 – 400 words)


3. 
   
   Ans.
   low-wage countries (l.w.c) can make same amount of output at cheaper price than developed nations (d.n). in results, d.n usually import goods from l.w.c. this is good for consumers from d.n. But this is bad for businesses from the d.n that produce the same type of goods imported from l.w.c. this may force businesses to close which then lead to unemployment. therefore unions usually oppose imports from l.w.c. and demand for advocate trade barriers. unfair trade competition usually refers to the super-cheap products made by those l.w.c as opposed products by d.n i'll say that there is no such thing as unfair competition and to say 'no' to these goods are just being selfish and foolish. we have to remember that one's import is one's export. if we stop importing these products altogether, unemployment in the l.w.c would increase. they are already receiving low wages in the first place, what would they eat with no jobs at all?


4. what the d.n should do in my opinion is to focus on things that can't be provided by the l.w.c. examples would be services, tourism and so on.


5. again, i'll say there is no such thing as unfair competition. those l.w.c may have advantage on labour, d.n may have advantage on other things. d.n must figure what those advantages are and exploit them. but this is just my opinion, ya? importing 'everything' from l.w.c is not a good thing at all

1. 
   Q5.
   Given the arguments relating to strategic trade policy, how can governments assist businesses in conducting international business and trade? (Write about 300 – 400 words)


2. Ans. Strategic trade policy is defined as government ploicy which attempt to shift excess profit in an oligopolistic international markets towards the home country firms.These policies typically would take the form of subsidies, such as outright grants, loans at lower than market interest rates, promises to purchase a large volume of production, etc.


3. A main idea is that trade policies can raise domestic welfare by shifting profits from foreign to domestic firms. A well known application is the strategic use of export subsidies, but import tariff as well as subsidies to R&D or investment for firms facing global competition can also have strategic effects.


4. The government uses this trade policy by shifting the profit from internationally to the domestic level. The government use this policy to enhance the level of the welfare of the economy.


5. The import and export and the research and development are facing strategic competition in the global market has an effect on the development of the international market.There are significant difficulties in implementing strategic trade policy. A main problem is that strategic trade policy incentives depend very much on the nature of the underlying oligopolistic interaction. In particular, the strategic argument for export subsidies requires that outputs be strategic substitutes, which typically strategic complements under Bertrand competition giving rise to an incentive to tax rather than to subsidise export. Other conditions, such as greater number of domestic relative to foreign firms, can also change optimal policy from a subsidy to a tax.


6. These finding imply that governments need to know a lot about a particular industry in order to correctly identify whether to target export with a subsidy or a tax. As a practical matter, there is also the political economy arguments that government might choose to target unprofitable 'sunset industries' rather than profitable industries.


7. In addition, the argument for subsidies is weakened once we recognise that the marginal cost of raising revenue to pay for a subsidy is increased by the distortionary effects of taxation. However, strategic trade policy that use taxes or tariffs are made more attractive by recognising the full value value of government revenue


8. The strategic trade policy the business are pressuring on the government are as follow :


9. (i) The business should urge the government to adopt the advance technologies for the business and use the subsidies so they get developed and do not face any financial issues.


10. (iii) There is a large competition in the market, so to stand in that market the government should provide the necessary advantages like proper resources and technology that help them to grow and develop in the market.


11. Notwithstanding the various limitations of strategic trade policy, the basic insight that government may have a unilateral incentive to influence the outcome of strategic interactions in international oligopoly remains Also, strategic trade policy has been analysed in a wide range of context and is robust to a range of generalisation These extension include consideration of the effect of unionisation of the industry, dynamic effects on investment and R&D, vertical integration and trade intermediate and final goods, and extension to general equilibrium.


12. GOVERNMENT ROLE IN INTERNATIONAL TRADE


13. International trade plays an important role in the economy of each individual country. It allows to satisfy the needs of the population stimulates the international development of the country . International trade is the exchange of goods and services between countries


14. Government should do what they can to facilitate trade while ensuring that their own citizens are not harmed by it ,also collecting tariffs on foreign goods coming in is easy and invisible to the general citizenry, so some trade must be encouraged.


15. Government can assist international trade by doing following act:


16. (i) The creation of new infrastructure and other facilities to attract foreign investment. An array of services can help promote foreigh investment in a country, ranging from basic services such as the provision of electricity and clean water, to fair and effective resolution system.


17. (ii) Working with developing country governments in particular to help establish more stringent labor and environmental standards to prevent either one from being exploited.


18. (iii) Protecting domestic infant industries only long enough to allow them to become competitive internationally.


19. (iv) The ability of government to prevent reduce financial crisis also has a great impact on the growth of capital flows.Steps to address these crisis include strengthening banking supervision, requiring more transparency in international financial transactions, reducing the risk of moral hazard and and ensuring adequate supervision and regulation of financial market.