Q1. “Environment scanning is an important part of international business “. Explain your views on this statement and discuss what factors to be scanned.

Ans. Scanning is the important part is every aspect where as we have to see the various opportunities around the world to get maximum business. In this we have to consider the internal and external factors which play important role in making for company. While scanning every factor of business we have to analysis that it should be perfect as per requirement. So we have to follow the various areas of business aspect which have huge effect. Here we some steps as given below which we have to follow while scanning.

1. Economic environment: National economic policies always depend upon on country’s socio economic and culture background. Every government tries to achieve that some goal in there term like as full employment, high economic growth, a low rate of inflation and deficit balance of payment. In this we have to consider the economic structure, economic stability, market growth, income levels, sector wise trends, international debt, degree of urbanization, budget deficit/surplus.

2. Political environment: Political factors influence the economic and legal environment. So we have to manage the things as per trend. Some time government make amendments in rules and that rules affect the various MNC companies around the country. In this we have to see the national interest, political stability, sovereignty, political risk etc.

3. Demographic environment: Domestic environment also make firms to understand the domestic market culture and trend. As because we have different aspects which we have to think before making any decisions like gender, age, religious, background and ethnicity.

4. Legal environment: Legal environment is the bunch of rules and regulation which we have to follow while making the decision for business. In international business we have to follow the legal system of every country while making export to that country. For example there is Islamic law in Gulf countries there we have to make label on all product certified with HALAL trademark otherwise we cannot export that product.

5. Technology environment: Technology is changing fast. So we have to make changes accordingly to cover the market competition. Like as we have various BPO companies in India who are running call centers and taking calls from USA, UK etc. Everything is changing instantly by help of technology.

Q2. What is green field investment? Why is it considered as the best option for a developing country like India?

Ans. Greenfield investment is refers to the situation when FDI comes into country with the existing facilities. It is very helpful for various countries which are developing or under developing. By implementing of this we have various opportunities for the jobs, business, increase standard of living and transfer technology which help the both countries to get maximum exposure. Here we have brown field investment in which we have to sell the old production units which don’t have demand in that particular time. It is due to the old technology or change in technique of working. Sometimes companies want to change the production units due to any reason it can be machinery or demand of goods or out of technology for the production unit. In these types of selling we have various companies and agencies who want to acquire the unit and make production again after changes of machinery as per their requirement. These types of investment don’t require reconstruction of infrastructure.

In this sometimes expert says that the host country will get employment, goods wages, research facilities and overall growth of that country. In this investing company can have advantage over domestic market players due to his latest technology working equipments and they can get maximum of production turnover and this will make competition in domestic market which can be huge. On the other hand we can say that if investing companies working is not good as per their expectations then if will be losses. This will also make then if company gets profit then it will be shifting to their origin country instead of retaining here in our country. This thing happens generally in MNC companies who have their origin out of country and they operate operation from another country and transfer the funds to their country after getting some amount of profits.

Q3. Regional integration is helping the countries in growing their trade. Discuss this statement. Describe in brief the various types of regional integrations?

Ans. Regional integration refers to making various countries in a particular group that represent them in world like EU, GCC, NAFTA,ASEAN free trade agreement. In recent years there we have seen many changes in the international business towards various countries. In that we have seen different group of country get closer to each other for business and made group which represent them an united in front of whole world. There are some rules and regulation which they have to follow while working that group towards protecting each other’s prospect.

Here we have some types as given below.

1. Preferential trading agreement: In this kind of preferential trading agreement we refers to the countries in which everyone tries to get reduce the tax but not tariffs that’s why this kind of integration is the weakest of all.

2. Free trade zones: This is the second stage of the integration. In this various countries made FTZ zones where they promote business by help of various countries who want to open office or manufacturing units and produce goods and make them export various countries around the world.

3. Custom union: This is the third stage of integration. In this we have various countries are group who are together as a united group and trading their goods to each other without any tax and tariffs. In this here we have condition like that if country apart from the member countries then unregistered country has to pay tax and tariffs as like normal.

4. Common market: In this countries make a particular place where they do business without any problem and make business transactions without any tax and tariffs. Its better place to come to contact of each other and do business properly. These kind of place we can make in our FTZ zones and we can make Free trade agreement with countries so that barriers to be removed instantly.

5. Benefits and costs: In this we have to make single place where every country can go and do business. In that we have proper interaction between customers and suppliers. In this kind of market we can remove the monopolies company out of the market and we can easily access that market price and supply conditions.

6. Economic union: In this we have proper and particular monetary policies and rules and regulations to be same for all countries who are the member of that group. The best example is for the European Union, in this we have particular interest rate and particular currency which can be accessible with various countries and their policies related inflation would be same which can help them to get maximum growth.

7. Political union: in this group of various countries make one policy which shall applicable on all of the countries members and they have to follow that same.

Q4. A Foreign subsidiary structure.

Ans. In this kind of structure we have structure where foreign subsidiary company can directly reports to the headquarter and convey information related to the business. In this there are no barriers of other regional headquarter to be there. Every foreign office can contact to the headquarter directly. This thing makes the work so proper and work so fast. Otherwise we have seen that many companies have regional office and manager we have to approach them first then final message receive from the headquarter which we can’t approach directly. For example we have headquarter in India like as Tata group and they have various offices around the world America, UK and other countries also. This makes the foreign subsidiary structure. Here below we have shown levels which are working around this structure.

Q4. B International matrix structure.

Ans. In this we have matrix structure where we have to follow that while working in the company there is head of the particular department who controls all operation around the world for different offices of company. We can also say this it is like team which work united with proper coordination and proper cooperation in this every person to be involve who is looking for other office related to that particular topic. In this every person is contact of each other that are in different part of the work and make proper contact related to the work and get thing done properly.

Headquaters Global HR Global finance Global marketing Global production

India Manager

America ManagerUK Manager

Q5. Explain the top-down and bottom-up approach of planning?

Ans. Top-down is refers to the level communication where we have top level management which includes various directors and top official management person and making decision for the company’s future prospects. So that everything can be going good in company while doing

UKAustraliaAmericaNetherlandsBrazil

other operation of company. Sometimes we have to include some people who are representing the lower level of company also. Because we need to motivate them and get some new ideas from them to implement on that work place of company. This will help us to make proper coordination between top management and lower level management. However if we include them then we have to encourage them and make a feeling the company thinks about them also. It make feel good for every employee who work in company and they always think that company really doing something for them and treating on priority and recognizing them as their important element. It will benefit for the management to choose the best people from their company and get the motivated and give them various opportunities around the companies prospective which can generate more profits as well as more wealth.

Bottom-up is refers to the level from where the work starts in every company. In this we have start planning from the bottom part of company. In this employee of lower level makes plan and let it know to their upper level. So that they can approve from them and do their work in proper way as they wanted to do. In this every department makes coordination between each other and make thing in a particular sequent and make it work in systematic way. So that everyone can do work and operation of company properly and correctly. Because employees are the important factor which plays essential role in working of company. In this every department suggest their own views and make a proper report so that every department suggest their own views and get them recognize in front of top level management. So that everyone can understand the points of every department requirement. It is very good for every company to use it and get new ideas from the employee and implement on the operations. So that we can get maximum utilization of resources.

Q6. Discuss the importance of ethics in international business?

Ans. Business ethics are the most important thing which we have to consider while working. As far as the principles of company we have to follow side by side business ethics. Every company have proper procedure to follow while procuring product and selling them into market and after that then we have give proper customer service to the customers. So that they can recognize us in future as well and they can give us give better business opportunities in future. Here are some importance of business ethics as given below.

1. Public image: Whenever companies work properly and give satisfactions to their customers then everyone will praise for company that company’s work and product is as good as company’s name. This will make public image good in society where everyone talks to each other and let their ideas know to each other.

2. Management’s credibility with employees: In this everyone feel good when company work better for their employee and thinks about their needs and recognize them as

their credibility. After doing this every employee feels proud and feels better when they noticed by people around them as because they are working in that company.

3. Better decision making: Decision which made by the management in interest of company. It would be better as because company is following the proper business ethics and working as per principles of company and this thing make better image around the companies who are working against them and everyone who are in touch with company related work.

4. Profit maximization: In this everyone know that if company make good product and provide good services to customers and it would be beneficial to them in long run instead of short term. Because everyone wants to get maximum profit. So there would be some loses in short term but we have to look at long term profit.

5. Protection of society: We have to make always decision as per the needs of society. Because sometimes government makes some rules changes in that effect society have to suffer from that. So we should always consider the society while making any decision related to them. As because every decision taken by the government it does not mean that it will be in favor of society. Hence there should be some precaution to be taken by company side to protect the society’s need and essential requirement of their products.