Ibm 2 marks question bank

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MADURAI SCHOOL OF MANAGEMENT

NH - 7 Madurai- Dindigul Four Lane Road, T.Vadipatti, Madurai – 625 218

- Prepared by N. Ganesha Pandian, Assistant Professor

2 Marks question bank

Subject: International Business Management

Unit 1: Introduction

1. What is international business?

Ans: International business may be defined simply as business transactions that take

place across national borders. Nearly all business enterprises, large and small, are inspired to carry on business across the globe. This may include, purchase of raw

materials, from foreign suppliers, assembling products from components made in

several countries or selling products or services to customers in other nations.

2. What is transnational?

Ans: Transnational companies which “Transcend” or operate across national

borders.Many companies have its presence outside the national borders.

3. Define ‘Cross National agreements’?

Ans: Cross national agreements or regional trade block is the result of economic

integration of various trading areas of different countries and it is also known as trade

blocks, regional trade organizations, and regional groupings. A trade block (regional

trade block/regional grouping) is a type of intergovernmental agreement, often part of

a regional intergovernmental organization, where regional barriers to trade (tariffs and

non-tariff barriers) are reduced or eliminated among the participating countries.

4. Write a note on India’s foreign trade policy

Ans: Indian government mainly concentrated on reforms on Liberalization,

openness and export sponsorship activity. It is witnessed that foreign Trade of India

has considerably revolutionized export in the Post reforms period.

Foreign trade in India in legal term is the Foreign Trade (Development and

Regulation) Act, 1992. The Act provide with the development and regulation of

foreign trade by assisting imports into, and supplementing exports from India.

5. What is free trade agreement?

Ans: Free trade agreements are agreements between two or

more countries to establish a free trade area where commerce in goods and

services can be conducted across their common borders, without tariffs or hindrances

but (in contrast to a common market) capital or labour may not move freely. Member

countries usually impose a uniform tariff (called common external tariff)

on trade with non-member countries.

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6. What is licensing agreement?

Ans: A licensing agreement is a legal contract between two parties, known as the

licensor and the licensee. In a typical licensing agreement, the licensor grants the

licensee the right to produce and sell goods, apply a brand name or trademark, or use

patented technology owned by the licensor.

7. What is trade surplus?

Ans: A Trade surplus is an economic measure of a positive balance of trade, where a

country's exports when its imports exceeds. A trade surplus represents a net inflow of

domestic currency from foreign markets, and is the opposite of a trade deficit, which

would represent a net outflow.

8. What is MFN treatment?

Ans: This principle is known as most-favoured-nation (MFN) treatment. It is so

important that it is the first article of the General Agreement on Tariffs and Trade

(GATT), which governs trade in goods. It is essentially a method of establishing

equality of trading opportunity among states by making originally bilateral

agreements multilateral.

9. Write short note on Transnational company

Ans: Transnational Corporation: Any corporation that is registered and operates

in more than one country at a time; also called a multinational corporation. A

transnational, or multinational, corporation has its headquarters in one country and

operates wholly or partially owned subsidiaries in one or more other countries.

10. Define globalization

Ans: Globalization implies the opening of local and nationalistic perspectives to a

broader outlook of an interconnected and interdependent world with free transfer of

capital, goods, and services across national frontiers.

11. Write short note on Globalization

Ans: Globalization has several facets, including globalization of markets and

globalization of production:

1. Globalization of market: refers to the merging of historically distinct and separate

national markets into one huge global marketplace.

2. Globalization of production: refers to the sourcing of goods and services from

locations around the globe to take advantage of national difference in the cost and

quality of factors of production.

12. Differentiate between Ethnocentrism and Polycentrism in the context of international

business

Ans: Ethnocentrism – is the tendency of people to evaluate a foreigner’s behavior by

the standards of their own culture and to believe their own culture is superior to others

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Polycentrism – if ethnocentrism exhibits intolerance to other cultures, polycentrism

advocates tolerance to beliefs and values of other societies

13. What are the factors causing globalization of business?

Ans: 1. more and more companies are seeking to internalize or globalize their economics for a number of reasons. 2. Developing markets have huge markets 3. Many MNC’s are locating their subsidiaries in low wage countries to take advantage of low cost production. 4. Changing demographics also adds to increasing globalization 5. Declining trade and investment barriers have vastly contributed to globalization. 6. The most powerful instrument that triggered globalization is technology.

14. What are the entry modes in international business?

Ans: Exporting – exporting goods directly to foreign customers

International sub-contracting – When a firm in host country has surplus

manufacturing capacity

Countertrade – countries exchange goods for goods and like

Management contract – enforceable agreements on trade related activities

15. Compare Domestic business and International business

Ans: Managing an international business is different from managing a domestic

business for the following reasons:

1. Countries are different

2. The problems faced by managers of international firms are wider and complex

compared to that of domestic firms

3. International transactions involve converting money into different currencies

16. List out the factors affecting International business

Ans: Natural resources

Transaction risks

Governmental policies

Foreign exchange

Political changes

17. Why do you think political environment is essential?

Ans: It refers to the influence of the system of government and judiciary in a

nation on international business. The type and structure of government prevailing in a country decides, promotes, fosters, encourages, shelters, directs, and controls the business of that country. A political system is stable, honest, efficient, and dynamic and which ensures political participation to the people and assures personal security to the citizens, is a primary factor for economic development.

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18. Define cultural environment

Ans: Elbert W steward and James A Glynn writes “Culture consists of the thought

and behavioral pattern that members of society learn through language and other

forms of symbolic interaction – their customs, habits, beliefs and values, the common

view points that bind them together as a social entity.

19. Define trade barriers

Ans: A barrier to trade is a government-imposed restraint on the flow of

international goods or services. The most common barrier to trade is a tariff—a tax

on imports. Tariffs raise the price of imported goods relative to domestic goods

(goods produced at home).

20. List out the criteria for assessing country’s attractiveness

Ans: 1. Political risks

2. Economic risks

3. Competitive risks

4. Operational risks

21. List out some of micro risks involved in International business

Ans: Kidnappings, ransom, terrorism

Official dishonesty

Increased taxation

Caps on FDI

22. What are the major classifications of risks in context of International business

Ans: Political risks

Economic risks

Competitive risks

Operations risks

23. What is liberalization?

Ans: In general, liberalization (or liberalisation) refers to a relaxation of

government restrictions, usually in such areas of social, political and economic policy.

In some contexts, this process or concept is often, but not always, referred to as

deregulation

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Unit 2: International trade and investment

1. Define the term International trade

Ans: International trade is the exchange of capital, goods, and services

across international borders or territories, which could involve the activities of the

government and individual. In most countries, such trade represents a significant

share of gross domestic product (GDP).

2. What is meant by International investment?

Ans: International investing is the strategy of selecting globally-based investment

instruments as part of an investment portfolio. International investing includes

such investment vehicles as mutual funds, American Depository Receipts, exchange-

traded funds (ETFs) or direct investments in foreign markets.

3. Name some theories of international trade

Ans: 1. Mercantilism

2. Theory of absolute cost advantage

3. Comparative cost advantage

4. Relative factor endowment theory

5. Country similarity theory

4. What is new trade theory?

Ans: One important motivation for international trade is the efficiency improvements

that can arise because of the presence of economies of scale in production. Although economists wrote about these effects long ago, models of trade developed after the

1980s introduced economies of scale in creative new ways and became known as the

“New Trade Theory.”

5. What is internationalization?

Ans: International business is a term used to collectively describe all commercial

transactions (private and governmental, sales, investments, logistics, and

transportation) that take place between two or more nations. Usually private

companies undertake such transactions for profit; organizations undertake them for

profit for political reasons. A multinational enterprise (MNE) is a company that has a

worldwide approach to markets and production or one with operations in more than a

country.

6. Define global promotion mix

Ans: An organization trying to go global or expand. Then it should be planned how

your business will enter the new market, have developed the right product, and

believe you can offer it for a price that will be profitable. The next component of the

global marketing mix involves communicating its offerings to the customer globally.

It is called global promotion mix

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7. What are multilateral agreements?

Ans: Accord among three or more parties, agencies, or national governments.

Such agreement between two such parties is called bilateral agreement. If such

agreements are between more than two countries is called as multi lateral agreements.

8. Write any two objectives of WTO

Ans: (1) to set and enforce rules for international trade, (2) to provide a forum for

negotiating and monitoring further trade liberalization, (3) to resolve trade disputes,

(4) to increase the transparency of decision-making processes

9. Write any two principle of WTO

Ans: Non-discrimination

Reciprocity

Binding and enforceable commitments

Transparency

Safety valves

10. Define WTO

Ans: the World Trade Organization (WTO) is the only global international

organization dealing with the rules of trade between nations. At its heart are the WTO

agreements, negotiated and signed by the bulk of the world’s trading nations and

ratified in their parliaments. The goal is to help producers of goods and services,

exporters, and importers conduct their business.

11. What is investment flow?

Ans: Capital flows refer to the movement of money for the purpose of investment,

trade or business production. Capital flows occur within corporations in the form of

investment capital and capital spending on operations and research & development.

12. What is foreign exchange?

Ans: Foreign exchange, or Forex, is the conversion of one country's currency into that

of another. In a free economy, a country's currency is valued according to factors of

supply and demand. The value of any particular currency is determined by market

forces based on trade, investment, tourism, and geo-political risk.

13. What is exchange rate?

Ans: In finance, an exchange rate (also known as a foreign-exchange rate, forex

rate, FX rate between two currencies is the rate at which one currency will be

exchanged for another. It is also regarded as the value of one country’s currency in

terms of another currency.

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14. What is spot rate?

Ans: The settlement price (or rate) is called spot price (or spot rate). A spot contract

is in contrast with a forward contract or futures contract where contract terms are

agreed now but delivery and payment will occur at a future date.

15. Define ‘Multilateral settlements’

Ans: An arrangement among multiple parties that transactions be summed, rather than

settled individually. Multilateral netting not only streamlines the settlement process,

it also reduces risk by specifying that, in the event of a default or some other

termination event, all outstanding contracts is likewise terminated.

16. What is meant by regional trade block?

Ans: A regional trade block is the result of economic integration of various trading

areas of different countries and it is also known as trade blocks, regional trade

organizations, and regional groupings. A trade block (regional trade block/regional

grouping) is a type of intergovernmental agreement, often part of a regional

intergovernmental organization, where regional barriers to trade (tariffs and non-tariff

barriers) are reduced or eliminated among the participating countries.

17. Write short note on Regional trade block

Ans: It implies a reduction or elimination of barriers to trade, and This trade liberalization is discriminatory, in the sense that it applies only to the member countries of the trade block, outside countries being discriminated against in their trade relations with trade block members.

18. Write short note on GATT

Ans: General Agreement on Tariffs and Trade (GATT) was a multilateral

agreement regulating international trade. According to its preamble, its purpose was

the "substantial reduction of tariffs and other trade barriers and the elimination of

preferences, on a reciprocal and mutually advantageous basis."

19. Differentiate between ‘Factors of production’ and ‘Factor Endowments’

Ans: In economics a country's factor endowment is commonly understood as the

amount of land, labour, capital, and entrepreneurship that a country possesses and can

exploit for manufacturing.

Factors of production refer to an economic term to describe the inputs that are used

in the production of goods or services in the attempt to make an economic profit.

The factors of production include land, labour, capital and entrepreneurship.

20. List the features of ‘Free trade area’

Ans: 1. Economic integration and co-operation

2. Gain competitiveness with other countries than free trade area

3. Trade barriers will be liberalized

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21. Define global competitiveness

Ans: Global competition is the services or products provided by competing

companies that serve international customers. Global competition has allowed

companies to buy and sell their services internationally, which opens the door to

increased profits and flattens the playing field in business.

22. Define NAFTA

Ans: NAFTA (North American free trade agreement) is designed to

eliminate tariff barriers and liberalize investment opportunities and trade in services.

NAFTA includes Canada, Mexico, and the United States, where went into effect in

1994. The United States and Canada historically have had various forms of mutual

economic cooperation. They signed the Canada-United States Free Trade

Agreement effective January 1, 1989, which eliminated all tariffs on bilateral trade by

January 1, 1998.

23. What is APEC?

Ans: Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific

Rim member economies that promotes free trade throughout the Asia-Pacific region.

It was established in 1989 in response to the growing interdependence of Asia-Pacific

economies and the advent of regional trade blocs in other parts of the world; to fears

that highly industrialised Japan (a member of G8) would come to dominate economic

activity in the Asia-Pacific region; and to establish new markets for agricultural

products and raw materials beyond Europe.

24. Define FDI

Ans: FDI refers to the purchase of a significant number of shares of a foreign

company in order to gain certain degree of management control 1. Capital formation

2. Formation of new firms and factories

3. Increase in equity holdings in the existing firms

4. Mergers and acquisition of existing firms and factories

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Unit 3: International strategic management

1. Mentions the different forms of international business

Ans: 1. Exporting

2. International Licensing

3. International franchising

4. International contracting

2. What is international strategic planning?

Ans: International strategic planning is a process of evaluating the internal and external environment by multinational organizations, through which they set their long-term and short-term goals and then they implement a specific plan of action in order to achieve those objectives.

3. What are the stages in International strategic planning?

Ans: The process of strategic planning is sequel and it involves the following steps.

1. Assessment of external environment and internal resources 2. Formulation of global strategy

4. What is meant by strategic compulsions?

Ans: It means that the companies face the compulsion to be global if they want to

gain the global market and more values. But in the modern context strategic management faces many compulsions. The present and future development of the field of strategic

management is likely to be driven by compulsions like contemporary developments in social and economic theory and recent changes in the nature of the business and economic

context.

5. Differentiate between standardization and Differentiation

Ans: According to Levitt, represents local marketing versus global marketing and focus on the central question of whether a standardized (global) or a differentiated (local), country-specific marketing approach.

Perspectives on standardization versus Differentiation: 1) Regional perspective

2) Marketing process prospective

3) Marketing components/marketing mix perspective.

6. What is ‘Balance of trade’?

Ans: Balance of trade (BOT) is the difference between a country's imports and

its exports. Balance of trade is the largest component of a country's balance of

payments. Debit items include imports, foreign aid, domestic spending abroad and

domestic investments abroad. Credit items include exports, foreign spending in the

domestic economy and foreign investments in the domestic economy.

7. Write short note on Strategic management

Ans: Strategic management is the process of systematically analyzing various

opportunities and threats vis-à-vis organizational strengths and weaknesses, formulating

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and arriving at strategic choices through critical evaluation of alternatives and

implementing them to meet the set objectives of the organization.

8. Write short note on Performance evaluation system

Ans: It can be defined as, “the periodic review of operations to ensure that the objectives of the enterprise are being accomplished”. Various performance

indicators:

1) Financial measures

a) Return on investment(ROI) b) Budget as success indicator 2) Non-financial measures.

9. What are the different forms of ‘Joint ventures’?

Ans: 1. Equity joint venture

2. Co-operative joint venture

3. Wholly foreign owned enterprises

4. Foreign investment companies limited by shares

5. Investment companies by foreign investors

10. What is ‘Balanced score card’?

Ans: The balanced scorecard is a strategic planning and management system that

is used extensively in business and industry, government, and nonprofits

organizations worldwide to align business activities to the vision and strategy of the

organization, improve internal and external communications, and monitor

organization performance against strategic goals.

11. Write a short note on strategic options

Ans: Strategic options/choice involves the selection of a strategy or set of strategies that helps in achieving organizational objectives. 1. Global strategy

2. International strategy

3. Transactional strategy

4. Multi-domestic strategy

12. What is global portfolio management?

Ans: Global portfolio investment means the purchase of stocks, bonds, and money

market instruments by foreigners for the purpose of realizing a financial return which

does not result in foreign management, ownership, or control. Portfolio investment is

part of the capital account on the balance of payments statistics. An international

portfolio is designed to give the investor exposure to growth in emerging and

international markets and provide diversification

13. What are the problems of global portfolio management

Ans: 1. Unfavourable exchange rate movement

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2. Frictions in international financial market

3. Manipulation of security prices

4. Unequal access to information

14. Define global entry strategies

Ans: Global entry strategies

Level of involvement:

Wholly-owned

subsidiary Company

acquisition Assembly

operations Joint

venture Strategic alliance

15. What is the main idea of the exporting?

Ans: An export is a function of international trade whereby goods produced in one

country are shipped to another country for future sale or trade. The sale of such goods

adds to the producing nation's gross output. If used for trade, exports are exchanged

for other products or services

16. What is International licensing?

Ans: An international business licensing agreement involves two firms from

different countries, with the licensee receiving the rights or resources to manufacture

in the foreign country. Rights or resources may include patents, copyrights,

technology, managerial skills, or other factors necessary to manufacture the good.

17. Define International franchising

Ans: International franchising is a strategic way to reduce dependence on domestic

demand and grow new, future revenue and profit centres worldwide. Extending a

brand globally through franchising involves a low risk, requires minimal investment

and offers a huge upside potential on scaling capabilities

18. Define acquisitions

Ans: Acquisition: It is process of acquiring and purchasing an existing venture. It is one of the easy means of expanding a business by entering new markets or new product areas.

19. What are the different types of performance evaluation system?

Ans: Budget programming

Management Audit

PERT (Program evaluation review technique)

Management information system

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20. Define Global portfolio investments

Ans: A grouping of investment assets that focuses on securities from foreign markets

rather than domestic ones. An international portfolio is designed to give the investor

exposure to growth in emerging and international markets and provide diversification.

21. What are the factors affecting in designing organizational structure?

Ans: Environment, strategy, technology, size, and people are all contingency factors

influencing organizational design.

Certain environments lend themselves to more vertical and mechanistic organizational

designs. Uncertain environments require more horizontal and adaptive organizational

designs.

Technology -- including the use of knowledge, equipment, and work methods in the

transformation process, is an important consideration in organizational design.

22. What are the methods of control system?

Ans: Control systems in international business are established through four basic steps:

1. Set Control standards for performance

2. Measure actual performance

3. Compare performance against standards

4. Respond to deviations

23. Write some approaches to organizational design

Ans: Five common approaches –

1. Functional approaches

2. Divisional approaches

3. Matrix approaches

4. Team approaches

5. Networking approaches

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Unit 4: Production, Marketing, Financial, and Human resource

management of global business

1. What do you mean by international market selection?

Ans: Market selection is based on a thorough evaluation of different markets with

reference to certain well defined criteria, given the company resources and objectives.

It may be noted that many of information contained in the market profile are collected

for the purpose of evaluation of the markets for market selection.

2. What is global production?

Ans: Production can be integrated globally, while the marketing is Multi-domestic,

reflecting cultural and consumer preferences differences. The goal is therefore to

better answer the needs of every market.

3. What is meant by global supply chain management?

Ans: A "supply chain" refers t o the collection of steps that a company takes to

transform raw material components into a final product that is delivered to customers.

Typically, supply chain management has five stages: plan, make, source, deliver and

return

4. What are the issues in global supply chain?

Ans: Supply chain management (SCM) is "the systemic, strategic coordination of

the traditional business functions and the tactics across these business functions

within a particular company and across businesses within the supply chain, for the

purposes of improving the long term performance of the individual companies and the

supply chain as a whole.

5. How to categories the quality standards

Ans: 1. Engagement Models

2. Service Level Agreements (SLAs)

3. Mobilization

4. Integration with other third party service providers

5. Communication

6. Identify the threats of globalization of markets

Ans: 1. Exploitation of resources

2. Environmental hazards

3. Clash of Power of nations

7. List some of the major investment decisions for international business.

Ans: Foreign direct investment (FDI)

Foreign institutional investment (FII)

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8. Write short note on Quality

Ans: In manufacturing, a measure of excellence or a state of

being free from defects, deficiencies and significant variations. It is brought about by

strict and consistent commitment to certain standards that achieve uniformity of

a product in order to satisfy specific customer or user requirements. ISO 8402-

1986 standard defines quality as "the totality of features and characteristics of a

product or service that bears its ability to satisfy stated or implied needs."

9. Write short note on make or buy decision

Ans: The act of choosing between manufacturing a product in-house or purchasing it

from an external supplier. In a make-or-buy decision, the two most important factors

to consider are

1. Cost and

2. Availability of production capacity

10. What do you understand by ‘vertical marketing system’?

Ans: Vertical marketing system comprises the producer, wholesaler, and retailer,

acting as a unified system. There are three types of VMS

1. Corporate VMS

2. Administered VMS

3. Contractual VMS

11. Define ‘Wholly owned subsidiaries’

Ans: A wholly owned subsidiary is a company whose common stock is

100% owned by another company, called the parent company. A company can

become a wholly owned subsidiary through acquisition by the parent company or

spin off from the parent company.

12. What are the steps in global marketing?

Ans: 1. Partner

2. Network

3. Market

4. Travel

5. Build

6. Research

13. Define global marketing mix

Ans: International marketing mix strategy involves use of

different marketing instruments to achieve positive financial results by company

operating on international or global markets. These instruments include:

product, price, distribution and promotion. International marketing mix strategy

should take into account legal and socio-cultural circumstances in every country to

which it is directed.

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14. Define distribution channel management

Ans: A distribution channel is the network of individuals and organizations

involved in getting a product or service from the producer to the

customer. Distribution channels are also known as marketing channels or

marketing distribution channels.

15. Define investment decisions

Ans: The investment decision relates to the selection of assets in which funds will be

invested by a firm. The assets which can be acquired fall into two broad categories:

1. Long term assets

2. Short term assets

16. Write a short note on capital budgeting

Ans: Capital budgeting refers to the total process of generating, evaluating,

selecting, and following up on capital expenditure alternatives. The firm locates or

budgets financial resources to new investment proposals

17. What are the features of foreign exchange markets?

Ans: 1. foreign currency transactions are sensitive to fluctuations in the exchange

rate.

2. A price you agree with a customer or supplier on one day could rise or fall if

the exchange rate changes. 3. This is especially true in the current economic climate where currency is

fluctuating on a daily basis, making it more difficult to keep track of exchange

rates

18. Define FOREX

Ans: Foreign exchange, or Forex, is the conversion of one country's currency into

that of another. In a free economy, a country's currency is valued according to factors

of supply and demand. The value of any particular currency is determined by market

forces based on trade, investment, tourism, and geo-political risk.

19. List out the methods of exchange risk rate management

Ans: There are many methods of exchange risk rate management

Forward rate method

Spot rate method

20. What is meant by expatriate?

Ans: An expatriate (often shortened to expat) is a person temporarily or

permanently residing in a country other than that of the person's upbringing.

The word comes from the Latin terms ex ("out of") and patria ("country, fatherland").

In common usage, the term is often used in the context of professionals or skilled

workers sent abroad by their companies, rather than for all 'immigrants' or 'migrant

workers'

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21. What are economies of scale?

Ans: Economies of scale can be classified into two main types:

1. Internal – arising from within the company; and

2. External – arising from extraneous factors such as industry size.

22. Name some sources of funds.

Ans: Angel equity

Smart leases

Bank loans

SBA loans

Local and state economic development organizations

Customers

Vendors

Friends and family members

Small Business Innovation Research (SBIR) grants

Tax Increment Financing

23. What is value at risk?

Ans: Practitioners have advanced and regulators have accepted a financial risk

management technique called value at risk (VaR), which examines the tail end of a

distribution of returns for changes in exchange rates to highlight the outcomes with

the worst returns.

24. Define Hedging

Ans: Hedging: It means insuring against the price of currency moving against you in

the future. There are many different types of currency hedging and your bank should

be able to help you with the best solutions for your business.

25. What are the three types of international trainings?

Ans: 1, Preparatory training for expatriates

2, Post-arrival training for expatriates

3, Training for host-country nationals (HCNs) and third-country nationals (TCNs)

26. What is exchange risk?

Ans: It is also known as FX risk, exchange rate risk or currency risk is a financial

risk that exists when a financial transaction is denominated in a currency other than

that of the base currency of the company

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Unit 5: Conflict management and ethics in International business management

1. Define conflicts

Ans: Conflicts arise between the foreign companies and host country and foreign

companies and domestic companies. Global companies also have the conflicts with

the home country companies and governments.

2. What are the sources of conflicts in international business?

Ans: Conflicts arises mostly due to the conflicts in interests of global companies

with those of:

1. Host country’s companies

2. Host country’s government

3. Host country’s customers

4. Host country’s society

5. Host country’s government

3. What are the classifications of conflicts?

Ans: Intra-organization conflict

Intra-group conflict

Intergroup conflict

Interpersonal conflict

Intrapersonal conflict

Inter-organization conflict

4. What are the characteristics of business negotiations?

Ans: 1. the objective of business negotiation is to obtain financial interest

2. The core of business negotiation is price

3. Its principle is equality and mutual benefit

4. Items of contract should keep strictly accurate and rigorous.

5. Define organizational conflict

Ans: Organizational conflict, or workplace conflict, is a state of discord caused by

the actual or perceived opposition of needs, values and interests between people

working together

6. What are conflict resolution actions in international business?

Ans: Conflict resolution, otherwise known as reconciliation, is conceptualized as

the methods and processes involved in facilitating the peaceful ending

of conflict and retribution. Committed group members attempt to resolve group

conflicts by actively communicating information about their conflicting motives or

ideologies to the rest of the group (e.g., intentions; reasons for holding certain

beliefs), and by engaging in collective negotiation.

7. What are the agencies participate in negotiation process?

Ans: International chamber of commerce (ICC)

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World trade organization (WTO)

United Nations code of conduct for transnational corporation (UNCTAD)

8. What is corruption?

Ans: Corruption is the outcome of lack of an honest, transparent and accountable

governance system. In curse of time corruption will be deep rooted and the concerned

governments would lose control and order which lead to institutional breakdown.

9. What are the factors affecting conflicts in International business?

Ans: 1. Insecure and inequitable access to resources

2. Incompatibility between groups with distinct value system

3. Abundant resources in particular area

4. Competition between social groups for political power

5. Personal differences in global issues

10. Write short note on Win-win strategy

Ans: A win–win game is a game which is designed in a way that all participants can

profit from it in one way or the other. In conflict resolution, a win–win strategy is a

conflict resolution process that aims to accommodate all disputants

11. What are the problems in ethical decision making?

Ans: 1. Favor hiring and promoting people with a well grounded sense of personal

ethics

2. Build an organizational culture that places high value on ethical behavior

12. State the importance of International business ethics

Ans: 1. Perception of people about an organization will be good

2. The moral and social considerations are real motivating factors

3. Law and government can’t regulate all activities. But organizations can take

measure to provide healthy life to society

13. What are the problems in International business?

Ans: The important problem in international business includes:

1. Political factors

2. Huge foreign indebtedness

3. Exchange instability

4. Entry requirements

5. Tariffs, quotas and Trade barriers

6. Corruption

14. Define Ethics

Ans: The term ‘Ethics’ refers to accepted principles of right or wrong that govern

the conduct of a person, the members of a profession, or the actions of an

organization.

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Business ethics are the accepted principle of right or wrong governing the conduct of

business people

15. What are the determinants of ethical behaviour

Ans: 1. Personal ethics

2. Decision making process

3. Leadership

4. Organizational culture

5. Unrealistic goal performance

16. What are the areas covered under conflicts and negotiations?

Ans: Marketing areas

Finance areas

Human resource areas

Social and Ethical areas

Environmental issues and

Competing Areas

17. How to solve individual level conflict?

Ans: Interpersonal conflict Between two or more people Differences in views about what should be done

Efforts to get more resources Differences in orientation to work and time in different parts of an organization Intrapersonal conflict - Occurs within an individual Threat to a person’s values

Feeling of unfair treatment Multiple and contradictory sources of socialization Related to the Theory of Cognitive Dissonance and negative inequity

18. Write short note on Ethical decision making

Ans: Ethical decision-making refers to the process of evaluating and choosing

among alternatives in a manner consistent with ethical principles. In making ethical

decisions, it is necessary to perceive and eliminate unethical options and select the

best ethical alternative

19. Differentiate between ‘Functional Vs. ‘Dysfunctional conflicts’

Ans: Functional conflict: works toward the goals of an organization or group

Dysfunctional conflict: blocks an organization or group from reaching its goals

20. How ‘salami tactics’ as a negotiation technique helps to resolve conflicts.

Ans: Salami tactics, also known as the salami-slice strategy, is a divide and conquer

process of threats and alliances used to overcome opposition. With it, an aggressor

can influence and eventually dominate a landscape, typically political, piece by piece.

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