MS-97 International Business

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ASSIGNMENT

Course Code                                                      :                               MS-97

Course Title                                                       :                               International Business

Assignment Code                                            :                               97/TMA/SEM-II/2014

Coverage                                                             :                               All Blocks

Note: Attempt all the questions and submit this assignment on or before 31st October, 2014 to the coordinator of your study centre.

Q. 1. Select any two trade theories and analyze the applicability of these theories in today’s context.

Answer:International business began with international trade operations, facilitated by the lasses faire in the world economy. It improved the well-being of many nations, and the imposition of trade barriers reduced the gains from trade, giving rise to the search for alternate avenues to exporting. The latter resulted in the established of subsidiaries in foreign countries through FDI. In this context, it is pertinent to understand the determinants of and the effects of international trade and FDI on the trade trading partners, international operations of multinationals and the economies of the home and hose countries. Several theories have been formulated, from time to time which form the bases of international trade and FDI.

Theory of Absolute Cost Advantage: The theory of

Q. 2.Describe the main features of MNCs. Critically evaluate the relationship between MNCs and host countries.

Answer:Multinational Companies (MNCs) are also known as Transnational Corporations (TNCs).There is, however, according to some, a difference between the MNCs and the TNCs. According to some experts, MNCs produce commodities/products for domestic consumption of the countries in which they operate. The TNCs, on the other hand, concentrate on producing products/commodities to meet the markets of third countries. This difference is not normally made while referring to either MNCs or TNCs. Therefore, an MNC can also be called TNC. In this paper we

Q. 3. Analyse the issues and objectives on the code of conduct of Transnational Corporations (TNCs).

Answer:Issues Involved in the Negotiations:The main concern of the developed countries in the code negotiations was the establishment of a regime of minimum standards for the treatment of transnational corporations. Increased reliance on foreign investment flows was promoted consistently by the developed countries as a means to achieving efficient allocation of resources worldwide and contributing to economic growth. Some developed countries made promotion of foreign investment through the transnational corporations as a major component of there foreign economic policies. In view of the emphasis in the promotion of the transnational corporations, these countries argued for a favourable climate for foreign investments

Q. 4. Discuss the impact of FDI inflows in developing countries and the implications of FDI on National Income and employment in the host economies.

Answer:FDI inflows, generally, have important direct and indirect implications for the national income (output), employment, balance of payments, technological capability, market structure, and other parameters of development in the host economies.FDIs comprise inflow of productive resources, such as, capital and foreign exchange are, generally, accompanied by flow of entrepreneurial and managerial skills and technology. FDIs complement the domestic savings in financing the capital formation in the host country. Thus FDIs contribute to the generation of output and employment. The foreign exchange inflow augments the supply of foreign exchange,

Q. 5. Discuss how the MNEs try to develop and maintain commitment of individual managers. Give examples.

Answer: There are two related processes involved in the growth of a domestic firm to an international one. These are: geographic dispersion of corporate resources and corresponding changes in organizational development. One can classify the evolutionary pattern of MNEs from purely domestic company to a transnational corporation into five types. A company gets into foreign MARKETS by starting export sales to other countries. The growth in international business evolves from the export department to the international division, world-wide produ

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