M800S3 Internat|ona| 8us|ness Management

Ass|gnment Set 2
1 What |s W1C? Lxp|a|n |ts ob[ect|ves funct|ons and structure
1he World 1rade CrganlsaLlon (W1C) ls Lhe successor Lo Lhe Ceneral AgreemenL of 1arlffs and 1rade
(CA11) lndla ls one of Lhe founder members of W1C W1C represenLs Lhe laLesL aLLempLs Lo creaLe an
organlsaLlonal focal polnL for llberal Lrade managemenL and Lo consolldaLe a global organlsaLlonal
sLrucLure Lo govern world affalrs W1C has aLLempLed Lo creaLe varlous organlsaLlonal aLLenLlons for
regulaLlon of lnLernaLlonal Lrade W1C creaLed a quallLaLlve change ln lnLernaLlonal Lrade lL ls Lhe only
lnLernal body LhaL deals wlLh Lhe rules of Lrades beLween naLlons
Cb[ecLlves and luncLlons
1he key ob[ecLlve of W1C ls Lo promoLe and ensure lnLernaLlonal Lrade ln developlng counLrles 1he
oLher ma[or funcLlons lnclude
O elplng Lrade flows by encouraglng naLlons Lo adopL dlscrlmlnaLory Lrade pollcles
O 9romoLlng employmenL expandlng producLlons and Lrade and ralslng sLandard of llvlng and
lncome and uLlllslng Lhe world's resources
O nsurlng LhaL developlng counLrles secure a beLLer share of growLh ln world Lrade
O 9rovldlng forum for Lrade negoLlaLlons
O esolvlng Lrade dlspuLes
1he lmporLanL funcLlons of Lhe W1C as sLaLed ln Lhe W1C agreemenL are Lhe followlng
O eve|op|ng trans|t|ona| econom|es Ma[orlLy of Lhe W1C members belong Lo developlng
counLrles 1he developlng counLrles such as lndla Chlna Mexlco 8razll and oLher have an
lmporLanL role ln Lhe organlsaLlon 1he W1C helps ln solvlng Lhe problems of developlng
economles 1he developlng sLaLes are provlded wlLh Lrade and Larl9ff daLa 1hls depends on Lhe
counLry's lndlvldual exporL lnLeresL and Lhelr parLlclpaLlon ln W1C bodles 1he new members
beneflL hugely from Lhese servlces
O 9rov|d|ng he|p for export promot|on Lhe W1C provldes speclallsed help for exporL promoLlon
Lo lLs members 1he exporL promoLlon ls done Lhrough Lhe lnLernaLlonal 1rade CenLer
esLabllshed by Lhe CA11 ln 1964 lL ls operaLed by Lhe W1C and unlLed naLlons 1he cenLer
accepLs requesLs from member counLrles usually developlng counLrles for supporL ln
formulaLlng and lmplemenLlng exporL promoLlon programmes 1he cenLer provldes lnformaLlon
on exporL markeL and markeLlng Lechnlques 1he cenLer also provldes asslsLance ln esLabllshlng
exporL promoLlon and markeLlng servlces 1hrough Lhls W1C proves lLs commlLmenL ln Lhe
upllfLmenL of Lhe world economy
O ooperat|ng |n g|oba| econom|c po||cy mak|ng 1he maln funcLlon of Lhe W1C ls Lo cooperaLe
ln global economlc pollcy maklng ln Lhe Marrakesh MlnlsLerlal MeeLlng ln Aprll 1994 a separaLe
declaraLlon was adopLed Lo achleve Lhls ob[ecLlve 1he declaraLlon speclfles Lhe responslblllLy of
W1C as Lo0 lmprove and malnLaln Lhe cooperaLlon wlLh lnLernaLlonal organlsaLlons such as Lhe
World 8ank lnLernaLlonal MoneLary lund (lMl) LhaL are lnvolved ln moneLary and flnanclal
maLLers W1C analyses Lhe lmpacL of llberallsaLlon on Lhe growLh and developmenL of naLlonal
economles whlch ls Lhe lmporLanL facLor ln Lhe success of Lhe economy
O Mon|tor|ng |mp|ementat|on of the agreement 1he W1C admlnlsLers slxLy dlfferenL
agreemenLs LhaL have Lhe sLaLue of lnLernaLlonal legal documenLs 1he membergovernmenLs
slgn and conflrm all W1C agreemenLs on aLLalnmenL
O 9rov|d|ng forum for negot|at|ons 1he W1C provldes a permanenL forum for negoLlaLlons
among members 1he negoLlaLlons can be on maLLers already ln Lhe W1C agreemenLs or
maLLers noL addressed ln Lhe W1C law
O Adm|n|strat|ng d|spute sett|ement 1he lmporLanL funcLlon of W1C ls Lhe admlnlsLraLlon of
Lhe W1C dlspuLe seLLlemenL sysLem lL helps ln seLLllng mulLllaLeral Lradlng dlspuLe A dlspuLe
arlses when a member counLry adopLs a Lrade pollcy and oLher fellow members conslder lL as a
vlolaLlon of W1C agreemenLs 1he ulspuLe SeLLlemenL 8ody (uS8) ls responslble for Lhe
seLLlemenL of dlspuLes 1he dlspuLe seLLlemenL sysLem ls prohlblLed from maddlng or deleLlng
Lhe rlghLs and obllgaLlons provlded ln Lhe W1C agreemenLs 1he W1C dlspuLe seLLlemenL
sysLem helps Lo
4 9reserve Lhe rlghLs and responslblllLles of Lhe members
4 Clarlfy Lhe currenL provlslons of Lhe agreemenLs
Structure
1he sLrucLure of Lhe W1C conslsLs of Lhe MlnlsLerlal Conference whlch ls Lhe hlghesL auLhorlLy 1hls
body conslsLs of Lhe represenLaLlves from all W1C members 1he W1C members meeL ln every Lwo
years and Lake declslons on all maLLers under Lhe mulLllaLeral Lrade agreemenLs 1he dally acLlvlLles of
Lhe W1C are conducLed by subsldlary bodles and prlnclpally by Lhe Ceneral Councll whlch ls composed
of W1C members 1he members reporL Lo Lhe MlnlsLerlal Conference 1he Ceneral Councll on behalf of
Lhe MlnlsLerlal Conference admlnlsLers as Lhe ulspuLe SeLLlemenL 8ody Lo manage Lhe dlspuLe
seLLlemenL procedures lL also acLs as Lhe 1rade 9ollcy evlew 8ody LhaL conducLs regular revlews of Lhe
Lrade pollcles of Lhe lndlvldual W1C members
1he Ceneral Councll delegaLes responslblllLy Lo oLher ma[or bodles 1hey are
O Councll for 1rade ln Coods manages Lhe lmplemenLaLlon and funcLlonlng of all agreemenLs
coverlng Lrade ln goods
O 1rade ln Servlces and 1rade of lnLellecLual 9roperLy lghLs are Lhe Lwo counclls LhaL have
responslblllLy for Lhelr respecLlve W1C agreemenLs and can esLabllsh Lhelr own subsldlary
bodles lf requlred
O 1he CommlLLee on 1rade and uevelopmenL manages lssues relaLlng Lo Lhe developlng counLrles
O 1he CommlLLee on 8alance of 9aymenLs conducLs consulLaLlons beLween W1C members and
counLrles LhaL Lake Lrade resLrlcLlve measures Lo handle balance of paymenLs dlfflculLles
O CommlLLee on 8udge and AdmlnlsLraLlon manages lssues relaLlng Lo flnanclng and budgeL of
W1C
2 Lxp|a|n br|ef|y the nature of ebus|ness and the cha||enges |nvo|ved
Nature of L8us|ness
buslness can be deflned as Lhe use of neLworks and lnformaLlon Lechnology ln order Lo elecLronlcally
deslgn markeL buy sell and dellver producLs and servlces worldwlde" buslness meanlng 'elecLronlc
buslness' deals wlLh appllcaLlon of lnformaLlon and communlcaLlon Lechnologles ln shorL an elecLronlc
medlum ln supporL of all Lhe acLlvlLles of buslness
1he ebuslness malnly sLands for Lhe lnLerneL enables buslness 1here are four enLlLles ln Lhe lnLerneL
enabled
buslness

1he four enLlLles of lnLerneL enabled buslness are explalned as follows
O Informat|on (Access to ata) We ofLen use lnLerneL for reLrlevlng Lhe lnformaLlon 1hls low
cosL daLa access ls provlded for a wlde number of people across Lhe world lor many of Lhe
organlsaLlons Lhe lnLerneL ls requlre3d Lo llsL down Lhe Lhlngs ln Lhe epages 1o flnd any
lnformaLlon on Lhe neL Lhe cusLomer musL use search englnes llke Lhe wellknown and wldely
used Coogle ?ahoo MSn and porLals llke ACL lCoogle MSn8C and neLvlbes
O ommun|cat|on (8| or mu|t||atera| exchange of |nformat|on) lnLerneL ls baslc mode of
communlcaLlon 1he bllaLeral exchange of lnformaLlon lnvolves communlcaLlon beLween Lwo
people wlLh exchange of lnformaLlon 1he mulLllaLeral exchange of lnformaLlon lnvolves one
person communlcaLlng wlLh Lwo or more people 1he mulLllaLeral exchange of lnformaLlon can
be explalned by conslderlng Lhe conference calls LhaL helps Lo communlcaLe wlLh Lwo or many
number of people aL Lhe same Llme 8l or mulLllaLeral exchange of lnformaLlon ls posslble by e
mall based servlces LhaL acL as Lhe cusLomer lnLeracLlon cenLre for Lhe cusLomer quesLlons as
well as Lhe complalnLs lL helps buslness people Lo keep ln Louch wlLh Lhelr buslness parLners
across Lhe world
O ommun|ty (Mutua| support by know|edge transfer) lnLerneL plays an lmporLanL role ln
sharlng knowledge as well 1hls ls helpful for processes llke Lhe research and developmenL of
sysLems developmenL of open source pro[ecLs and also Lhe developmenL of sofLware 1he
members of Lhe communlLy such as Lhe parLlclpanLs ln Lhe open source pro[ecLs wlll help ln Lhe
muLual Lransfer of lnformaLlon
8uslness
Commerce
CommunlLy
CommunlcaLlo
n
lnformaLlon
O ommerce (ontract based transact|ons w|th the customers) 1he lnLerneL helps ln faclllLaLlng
Lhe LransacLlons 1he alm of commerce ls Lo saLlsfy Lhe needs of Lhe cusLomers 1hls furLher
helps Lhe cusLomers Lo pay Lhelr bllls onllne
ln ebuslness Lhe lnlLlal sLages are LenLaLlve and noL very secure As we all know LhaL mosL of Lhe
buslness process work ln an lnsecure envlronmenL Lhe pressure ls more on Lhe base of an organlsaLlon
or Lhe managemenL of an organlsaLlon ln Lhe LradlLlonal buslness Lhe LrusL plays an lmporLanL role wlLh
respecL Lo suppllers and consumers 1rusL ls also lmporLanL for performlng buslness wlLh oLher secLors
As Lhe ebuslness ls growlng rapldly lL ls becomlng dlfflculL Lo esLabllsh and malnLaln Lhe LrusL durlng all
sLages of Lhe buslness process 1here are more changes of loslng LrusL ln ebuslness as lL lacks face Lo
face lnLeracLlon
When lL comes Lo LrusL ln ebuslness uaughLrey (2001) has suggesLed some condlLlons LhaL consumers
expecL whlle performlng ebuslness or purchaslng Lhlngs onllne 1hese condlLlons lnclude
O 1he general repuLaLlon of Lhe company
O 1he expecLaLlons of Lhe cusLomer for securlLy prlvacy and confldenLlallLy
O 1he assurances LhaL Lhe suppller musL provlde llke cerLlflcaLlons guaranLees and so on
O 1he reporLs of Lhe oLher cusLomers and lf Lhe cusLomer has Lhe hlsLory of prevlous LransacLlons
Lhen addlLlonal facLors LhaL are consldered lnclude
4 Accuracy ln fulfllllng Lhe placed order
4 1lmellness of order fulflllmenL
4 1he klnd of lnLeracLlons wlLh cusLomer relaLlons
4 1he resoluLlon for any klnd of problems
4 1he subsequenL communlcaLlons from Lhe suppller
4 1he need for communlcaLlon from Lhe oLher suppller wlLh whom Lhe cusLomer relaLlon
was shared
1here are some facLors LhaL bulld a good LrusL LhaL lnclude good medla brand name and logo Many of
Lhe companles have become successful organlsaLlons because of Lhe new buslness envlronmenL LhaL
Lhey have adopLed speclally wlLh Lhe elecLronlc and Lechnologlcal developmenL 1he companles become
successful due Lo Lhe consumer LrusL 1here are some slLuaLlons where Lhere ls a lack of LrusL ln Lhe e
buslness secLor and someLlmes lL ls consldered as Lhe secure sysLem 1he Lransfer of paymenL
lnformaLlon onllne ls more secure Lhan sendlng Lhe cheques and money orders as onllne LransacLlons
lnclude Lhe acLlons llke encrypLlon and developlng Lhe dlglLal cerLlflcaLes whlch adds Lhe securlLy
1here are many rlsks LhaL are assoclaLed wlLh onllne LransacLlon hence can be mlnlmlsed by Lechnlcal
process llke encrypLlon and developlng Lhe dlglLal cerLlflcaLes
1he ha||enges of L8us|ness
As Lhe ebuslness ls growlng Lhere are many Lechnlcal and buslness Lrends LhaL are assoclaLed wlLh lL
Some lmporLanL Lrends ln ebuslness are explalned below
buslness ls cruclal Lo buslness success Many companles come ouL wlLh changes LhaL are necessary for
ebuslness Lo become proflLable 1he process of ebuslness ls long lasLlng Lhan LhaL or Lhe re
englneerlng 1here are some lmporLanL Lrends ln Lhe ebuslness LhaL are descrlbed as follows
O 1echno|ogy focus |s on ebus|ness 1he hardware sofLware and neLwork vendors focus on
provldlng Lhe Lools for ebuslness 1he ebuslness ls malnly Lhe exLenslon of Lhe producLs and
servlces
O Lbus|ness produces cumu|at|ve effect|ves 8uslness ls long lasLlng 1he relaLlonshlp wlLh
cusLomers suppllers and employees changes as we lmplemenL ebuslness
O L 8us|ness |mp|ementat|on effects success and fa||ure of a bus|ness 1here wlll be boLh Lhe
success and Lhe fallures LhaL are assoclaLed wlLh any klnd of buslness 1he fallures become
dramaLlc wlLh ebuslness as lL ls more vlslble exLernally
1here are some ma[or success facLors for ebuslness 1hese facLors lnclude Lhe sLraLeglc facLors
sLrucLural facLors and Lhe managemenL orlenLed facLors 1hese facLors are explalned as follows
O SLraLeglc facLors
4 1he Lechnologles relaLed Lo Lhe lnLerneL are used as a complemenL for Lhe exlsLlng
Lechnologles
4 1he basls of compeLlLlon LhaL ls noL shlfLed from LradlLlonal compeLlLlve advanLages
such as cosL proflL quallLy servlce and feaLures
4 1he new compeLlLors and markeL shares are Lracked
4 1he web cenLrlc markeLlng sLraLegy
4 1he sLraLeglc poslLlon of Lhe company ln Lhe markeL has sLrengLhened
4 1he frequenL revlew of Lhe dlsLrlbuLlon and supply chaln model ls done ln order Lo
maxlmlse Lhe company's galn
4 1he buyer's behavlor and Lhe cusLomer personallsaLlon
4 1he flrsL mover advanLage and qulck Llme Lo sLarL
4 1he ebuslness offered good producLs and servlces
4 1he lnnovaLlon was allowed when rlsks are low
4 1he cusLomer's and parLner's expecLaLlons from Lhe well managed
O SLrucLural facLors
4 CorrecL dlglLal lnfrasLrucLure
4 Cood ebuslness educaLlon and Lralnlng Lo employees managemenL and cusLomers
4 CurrenL sysLems expanded Lo cover enLlre supply chaln
4 Cood cosL conLrol
O ManagemenL orlenLed facLors
4 1he organlsaLlon wlde commlLmenL Lo ebuslness leadershlp
4 1he necessary supporL for ebuslness from Lhe Lop managemenL
4 1he awareness and undersLandlng of capablllLles of Lechnology by execuLlves
4 1he Lop managemenL has Lo communlcaLe abouL Lhe value of Lhe ebuslness LhroughouL
Lhe organlsaLlon
1he ebuslness ls faclng challenges malnly ln Lhe areas of Lechnology loglsLlcs and legal lssues 1hese
areas are explalned ln Lhe followlng secLlons
1echno|ogy
1he Lechnology plays a ma[or role ln Lhe concepL of new economy 1he Lechnology has Lwo dlmenslons
one ls Lhe shlfL from manufacLurlng Lo servlces and second ls Lhe shlfL from physlcal resources Lo Lhe
knowledge resources 1here are so many mechanlsms for Lechnology lnnovaLlon and dlffuslon boLh
wlLhln Lhe ouLslde Lhe counLrles Many of Lhe organlsaLlons wlll lnclude dlfferenL Lechnologles boLh for
quanLlLaLlve and quallLaLlve Lerms
Small scale enLerprlses play a vlLal role ln Lhe lmplemenLaLlon of new Lechnologles 1hey have added
more value ln Lerms of populaLlon employmenL and servlces LhaL Lhey are offerlng lnLerneL also plays
a vlLal role as lL helps Lhe small and medlum enLerprlses ln provldlng Lhe cosL effecLlve posslblllLles Lo
adverLlse Lhelr producLs lnLerneL also provldes Lhe conLacLs Lo buyers and suppllers on Lhe global basls
buslness helps Lhe radlcal LransformaLlon ln Lhe way LhaL Lhe buslness ls done 1he lnLroducLlon of
Lechnologles llke common daLabase elecLronlc neLworks and value added servlces are helpful for
speedlng up Lhe LransacLlons and Lhese are fundamenLal aL Lhe lndusLrlal level 1he ebuslness has Lo
undergo loL of challenges ln lmplemenLlng Lhe Lechnologles LhaL are helpful for Lhe organlsaLlon slnce
many of Lhe people ln Lhe organlsaLlon wlll noL be lnLeresLed Lo shlfL Lo Lhe new Lechnology and learn
Lhe new skllls
Log|st|cs
1he loglsLlcs ls deflned as Lhe plannlng framework for malnLalnlng Lhe maLerlal lnformaLlon and caplLal
flow 1he loglsLlcs lncludes Lhe complex lnformaLlon communlcaLlon and conLrol sysLems requlred ln
Lhe buslness envlronmenL 1he loglsLlcs presenLs ebuslness wlLh challenges LhaL exceeds Lhe
expecLaLlons of Lhe cusLomers wlLh a reasonable cosL now days aLLempL has been made Lo reduce Lhe
lnvenLory cosLs ln order Lo meeL Lhe hlgh expecLaLlons of Lhe cusLomers an ebuslness needs Lhe
speclal lnfrasLrucLure for Lunlng and managlng Lhe lnLeracLlons 1he lnLeracLlons can be ln beLween Lhe
shlppers loglsLlc provlders shlpplng companles and also Lhe cusLomers
Lega| oncerns
As Lhere ls Lremendous usage of lnLerneL lL ls beLLer Lo conslder Lhe legal concerns behlnd Lhe lnLerneL
1hls ls because whaLever ls prlnLed on Lhe neL wlll be accessed by publlc LhroughouL Lhe world We also
have an opLlon of golng back and seelng Lhe baslcs of LhaL lnformaLlon now a day wlLh Lhe help of
wlreless phones 9ersonal ulglLal AsslsLanLs (9uAs) lnLerneL can be accessed from anywhere ln Lhe
world As a resulL Lhe cusLomers musL be provlded proper securlLy and prlvacy Lo access lnLerneL lL
becomes very dlfflculL Lo LrusL Lhe acLual wlLh Lhe uneLhlcal lllegal lnLerneL markeLlng and adverLlslng
frauds and ebuslness emall scams and hence one musL be careful whlle performlng ebuslness
lL ls necessary Lo concern Lhe prlvacy and legal maLLers whlle wrlLlng a copy and malnLalnlng Lhe cllenL's
ebuslness
1here are uncerLalnLles ln ebuslness when compared wlLh dlrecL buslness 1he uncerLalnLles are relaLed
Lo Lhe securlLy prlvacy credlL and deblL card handllng 1he securlLy ls Lhe prlmary concern ln ebuslness
1he 9Cl uaLa SecurlLy sLandard (9Cl uSS) needs Lo be followed by one who handles Lhe credlL card
lnformaLlon buslness ls all abouL Lhe LrusL beLween buyer and Lhe seller so one musL be careful whlle
deallng wlLh Lhe LransacLlons whlch lnvolve Lhe handllng of credlL and deblL cards
1here wlll also be copyrlghL lssues LhaL ls copylng someLhlng from oLher slLes and presenLlng Lhe same
conLenL as Lhelr won lL ls lmporLanL Lo check for plaglarlsm when Lhe company ls publlshlng Lhelr own
arLlcles When some concepLs are copyrlghL Lhen lL ls necessary Lo credlL Lhe orlglnal auLhors ulsclalmer
noLlce ls requlred aL Lhe sLarL of any buslness webslLe
lf Lhe webmasLers lnclude some uneLhlcal lnformaLlon abouL Lhe cllenL Lhen LhaL can cause everlasLlng
negaLlve consequences for Lhe cllenL 1he legal acLlon ls Laken agalnsL Lhe false adverLlsemenLs also
1he rlsks assoclaLed wlLh conducLlng ebuslness over Lhe lnLerneL are explalned as follows
O ur|sd|ct|on ConLracLlng over Lhe cyberspace ls a challenge for Lhe webslLe owners and Lhe
lnLerneL ls Lhe form of communlcaLlon LhaL rlses above Lhe spaLlal boundarles 1here ls a
[urlsdlcLlon problem ln Lhe dlspuLes beLween Lhe buyer and Lhe seller regardlng where Lhe
conLracL was formed and whlch sLaLe law applles for Lhe conLracL
O ontract va||d|ty 1he emerglng lssue ls Lhe legal valldlLy of web wrap or cllck on conLracLs
1hls Lype of conLracL ls malnly found on Lhe web slLe LhaL offers goods and servlces for Lhe sale
1hls ebuslness creaLes Lhe legal relaLlonshlp beLween Lhe seller and buyer
O ontract |nformat|on 1he advenL of Lhe ebuslness over Lhe neL ls responslble for varlous
legal lssues regardlng Lhe formaLlon of Lhe elecLronlc conLracLs
1here ls a need for maLchlng boLh Lhe ecusLomers and emerchanLs wlLh Lhe legally responslble parLles
ln Lhe real world 1here ls a need for crypLographlc meLhods for reduclng Lhe rlsks assoclaLed wlLh Lhe
ldenLlflcaLlon and auLhenLlcaLlon 1he crypLographlc meLhods for ellmlnaLlng Lhe rlsks Lhose are
assoclaLed wlLh Lhe nonrepudlaLlon and securlLy
3 Ment|on the re|evance of these terms |n Internat|ona| bus|ness Letter of cred|t 8||| of Lad|ng and
Iactor|ng
LeLLer of CredlL
1he leLLer of credlL ls Lhe mosL secure lnsLrumenL avallable for lnLernaLlonal Lraders 1hls ls Lhe
commlLmenL made by Lhe bank ln favor of Lhe buyer LhaL Lhe paymenL wlll be made Lo Lhe exporL lf Lhe
Lerms and condlLlons are meL 1he Lerms and condlLlons of Lhe paymenL are explalned ln Lhe requlred
documenLs
lnLernaLlonal Lrade ls affecLed by dlsLance laws pollLlcal lnsLablllLy and lack of famlllarlLy by Lhe parLles
who LransacL LeLLer of CredlL assumes slgnlflcance slnce lL can be used Lo mlLlgaLe rlsk 1he leLLer of
credlL ls a documenL LhaL ls lssued by Lhe bank LhaL guaranLees paymenL Lo a beneflclary 1he leLLer of
credlL ls wrlLLen by Lhe flnanclal lnsLlLuLlon ln favor of Lhe lmporLed of goods Lo Lhe seller ln Lhe leLLer
Lhe bank promlses LhaL lL wlll honor Lhe drafLs drawn on lL lf Lhe seller conflrms Lo Lhe speclflc condlLlons
LhaL are seL forLh ln Lhe leLLer of credlL We can say LhaL Lhe leLLer of credlL ls Lhe flnanclal conLracL
beLween Lhe lssulng bank and Lhe deslgnaLed beneflclary
1he followlng are Lhe elemenLs of Lhe leLLer of credlL
O 1he paymenL underLaklng glven by Lhe lssulng bank
O 1he lssulng bank makes agreemenL on behalf of Lhe buyer
O 1he leLLer of credlL ls used Lo pay a seller for a glven amounL of money
O 1he presenLaLlon of Lhe speclfled documenLs LhaL shows Lhe supply of goods
O 1he Llme llmlLs for Lhe paymenL are speclfled
O 1he documenL needs Lo conflrm Lhe Lerms and condlLlons LhaL are seL ln Lhe leLLer of credlL
O 1he documenLs need Lo be presenLed aL Lhe speclfled place
8||| of |ad|ng
1he legal documenL LhaL ls glven by Lhe shlpplng agency for Lhe goods LhaL are shlpped from one
desLlnaLlon Lo Lhe oLher desLlnaLlon ls called as Lhe blll of ladlng 1he blll of ladlng ls slgned by Lhe
represenLaLlves of Lhe carrylng vessel lL conLalns Lhe deLalls of Lype quanLlLy and desLlnaLlon of Lhe
goods LhaL are belng carrled
Several Llmes Lhe blll of ladlng ls lssued as a seL of Lwo Lhree or more 1he number presenL on each blll
of ladlng ls Lo ensure securlLy 1he blll of ladlng has Lo be slgned by Lhe shlpplng company or lLs agenL
and lL should also show Lhe number of slgned orlglnals
1he blll of ladlng lndlcaLes wheLher Lhe cosL of carrlage ls pald or noL 1hls wlll be of Lhe followlng Lwo
Lypes
O lrelghL prepald 1hls ls pald for Lhe shlpper
O lrelghL collecL 1hls ls Lo be pald by Lhe buyer aL Lhe porL of dlscharge
1o be accepLable by Lhe buyer Lhe blll of ladlng should
O Carry on Lhe board of noLaLlon LhaL shows Lhe correcL daLe of shlpmenL
O ave Lhe noLaLlon of Lhe shlpplng company Lo Lhe effecL LhaL Lhe goods are damaged
1he maln parLles LhaL are lnvolved ln Lhe blll of ladlng are menLloned below
O Shlpper 9erson sendlng Lhe goods
O Conslgnee person who dellvers Lhe goods
O noLlfy parLy person usually Lhe lmporLer Lo whom Lhe shlpplng company lnforms on Lhe
arrlval of goods
O Carrler Lhls can be a person or company who has ended up ln conLracL wlLh Lhe shlpper for
conveyance of Lhe goods
1he blll of ladlng has Lo meeL Lhe followlng requlremenLs of Lhe credlL
O 1he exacL shlpper conslgnee and Lhe noLlfylng parLy need Lo be known
O 1he carrylng vessel and porLs of Lhe loadlng and release need Lo be sLaLed
O 1he descrlpLlon of Lhe goods needs Lo be conslsLenL wlLh Lhe oLher as shown on Lhe documenLs
O 1he measures need Lo maLch wlLh Lhe measures LhaL are on Lhe oLher documenLs
O 1he shlpplng marklngs and numbers need Lo maLch wlLh Lhe numbers LhaL are shown on Lhe
oLher documenLs
O 1he blll of ladlng has Lo sLaLe wheLher Lhe goods are pald or lf lL needs Lo be pald aL Lhe
desLlnaLlon
O 1he blll of ladlng has Lo sLaLe before Lhe lasL daLe for Lhe shlpmenL LhaL ls speclfled ln Lhe credlL
O 1he blll of ladlng has Lo sLaLe acLual name of Lhe carrler
Iactor|ng
1he Lerm facLorlng ls Lhe flnanclal LransacLlon ln whlch Lhe facLorlng organlsaLlon buys Lhe exporLer's
forelgn accounLs recelvable aL a dlscounL ln Lhls Lhe facLor assumes all Lhe credlL and pollLlcal rlsks LhaL
are presenL wlLh Lhe lmporLer ln Lhe perspecLlve of Lhe exporLer facLorlng ls advanLageous as lL serves
Lo help Lhe flrm reallse cash lmmedlaLely
1he followlng are Lhree ways ln whlch facLorlng dlffers from bank loan
O lacLorlng malnly focuses on Lhe value of Lhe recelvables buL noL on Lhe worLh of Lhe
organlsaLlon's credlL
O lacLorlng ls Lhe purchase of Lhe flnanclal asseL whlch refers Lo Lhe recelvable buL lL ls noL a loan
O WhllsL bank lnvolves [usL Lwo parLles for a loan facLorlng lnvolves Lhree parLles whlch lnvolve
Lhe seller debLor and facLor

4 a) Lxp|a|n the ro|e p|ayed by LkIM bank
OlM 8ank
1he OlM bank ls Lhe exporL lmporL bank LhaL has been seL up by Lhe CovernmenL of lndla 1hls ls seL up
Lo perform many funcLlons Lo flnance promoLe and develop Lhe Lrade 1hls was esLabllshed on !an 1
1982 1hls has Lhe power Lo borrow from 8l as well as from abroad 1hls plays an lmporLanL role ln
exporL flnanclng 1hls bank provldes Lhe flnanclal asslsLance for promoLlng lndlan exporLs 1hls provldes
Lhe flnanclal asslsLance Lhrough Lhe dlrecL flnanclal asslsLance abroad lnvesLmenL flnance preshlp
credlL buyer's llnes exporL bllls dlscounLlng and so on 1hls also exLends Lhe help Lhrough Lhe non
funded faclllLy for Lhe exporLers ln Lhe form of guaranLees 1hls alms aL exporL of Lhe manufacLured
goods exporL of Lechnology exporL of sofLware
1he flnanclng programs of Lhe xlm bank are Lhe mosL comprehenslve among Lhe exporL credlL agencles
across Lhe globe
b) What are 828 and 28 bus|ness mode|s?
8us|ness to 8us|ness (828) Mode|
1he buslness Lo 8uslness (828) model descrlbes Lhe LransacLlons beLween Lhe buyers suppllers
manufacLures resellers dlsLrlbuLors and Lradlng parLners 1hls lnvolves Lhe LransacLlons LhaL lnvolve
Lhe producLs servlces and Lhe lnformaLlon lnLerneL based ebuslness ls carrled ouL Lhrough Lhe
lndusLry sponsored markeLplaces and prlvaLe exchanges LhaL are conducLed by Lhe large companles 1he
828 model ls shown below

1he above dlagram lndlcaLes dlrecL buslness Lo buslness model ln Lhls dlrecL buslness Lhe selllng
enLerprlse lncludes wholesaler reLaller or manufacLurers who sell Lo Lhe buyers of oLher buslness
1he maln reason behlnd lnLroduclng Lhls 828 model ls Lo overcome Lhe problems meL by lndusLry
sponsored markeLplaces ln approachlng buyers and sellers MosL of Lhe companles do noL wanL Lo genL
cusLomlsed deslgns Lhrough markeLplaces as Lhey do noL wanL Lo expose proprleLary lnformaLlon on a
slLe LhaL ls shared by compeLlLors 1herefore companles use such markeLplaces malnly Lo purchase
producLs manage Lhelr supply chalns and conducL lndlrecL procuremenL LransacLlons as Lhese are noL
relaLed Lo Lhelr core buslness
828 ecommerce dlffers from buslness Lo consumer ecommerce ln many ways 8uslness Lo consumer
merchanLs sells on a flrsL come flrsL serve basls MosL 828 LransacLlons are done Lhrough negoLlaLed
conLracLs LhaL allow Lhe seller Lo Lhlnk and plan for how much Lhe buyer ls llkely Lo purchase ln mosL of
Lhe cases 828 model malnly focus on malnLalnlng relaLlonshlp wlLh Lhe buslness parLners
onsumer to 8us|ness (28) Mode|
A consumer Lo buslness (C28) model ls Lhe elecLronlc buslness model ln whlch Lhe consumers offer
producLs and servlces Lo Lhe enLerprlses 1hls ls called as Lhe lnverLed buslness model slnce Lhe process
operaLes compleLely ln Lhe opposlLe dlrecLlon of Lhe LradlLlonal ebuslness model ln whlch Lhe
organlsaLlons offer Lhe goods and servlces Lo Lhe consumers
1he C28 model lnvolves consumers Lhemselves presenLlng as a group and provldes Lhe goods and
servlces Lo Lhe enLerprlse lor example wwwspeakouLcom 1hls slLe provldes consumers markeL
sLraLegles and buslnesses and lL also makes Lhem famlllar wlLh Lhe requlremenLs of Lhe varlous
buslnesses A concreLe example of Lhls ls when compeLlng alrllnes glves a Lraveler besL Lravel and LlckeL
offers ln response Lo Lhe Lraveler's posL
1hls C28 model ls advanLageous because of Lhe followlng reasons
8uslness 8uslness
8uyers from one buslness 9urchase
goods or servlces from oLher
O ln connecLlng large group of people by bldlrecLlonal neLwork Many of Lhe LradlLlonal medla ls of
unldlrecLlonal buL Lhe lnLerneL ls Lhe bldlrecLlonal medla
O lndlvlduals Lo access Lhe Lechnologles LhaL were once avallable only for Lhe large companles

S What k|nd of |mpact w||| g|oba||zat|on and |nternat|ona| bus|ness env|ronment create on Ind|an
bus|nesses?
CloballsaLlon ls Lhe process of lncreaslng connecLlvlLy and lnLerdependence of Lhe world's markeL and
buslnesses lL ls a way of lnLeracLlng among counLrles Lo develop global economy CloballsaLlon ls Lhe
lnLegraLlon of economles of Lhe world Lhrough Lrade and muLual exchange of Lechnology and
knowledge ln lndla globallsaLlon refers Lo Lhe openlng up of Lhe economy Lo forelgn dlrecL lnvesLmenL
by offerlng faclllLles Lo forelgn companles Lo lnvesL ln varlous areas of economlc acLlvlLy CloballsaLlon
had a sLrong lmpacL ln all secLors and buslness ln lndla CloballsaLlon has helped lndla ln Lhe followlng
ways Lo
O Cpen up lndlan economy Lo forelgn dlrecL lnvesLmenLs and Lo faclllLaLe forelgn companles Lo
lnvesL ln dlfferenL secLors of economlc acLlvlLles
O nable lndlan companles Lo enLer lnLo forelgn collaboraLlon
O emove resLrlcLlons for Lhe enLry of mulLlnaLlonal companles
O ave a dlrecL and lndlrecL lmpacL on lndlan currency and enable lnflow of forelgn exchange lnLo
lndla
Lvo|ut|on |n Ind|a
lor lndla globallsaLlon ls noL someLhlng new Cne of Lhe flrsL lnsLances of globallsaLlon ln lndla was ln
1647 Au when Lhe klnds ln lndla had a forelgn collaboraLlon wlLh asL lndla Company owever Lhe
lncldenLs LhaL occurred posL Lhe forelgn collaboraLlon unLll lndla aLLalned lndependence ln 1947 ls an
example of collaboraLlon wlLhouL any sufflclenL conLrol uurlng 1947 lndla had placed resLrlcLlons on
lorelgn ulrecL lnvesLmenLs (lul) whlch resLrlcLed Lhe flow of lul ln lndla
CloballsaLlon wlLh respecL Lo lndla was seen ln Lerms of how Lhe governmenL of lndla allowed Lhe
forelgn buslness enLlLles Lo operaLe ln lndla and Lhe amounL of forelgn dlrecL lnvesLmenLs enLered lndla
CloballsaLlon ln lndla became promlnenL afLer 1991 1he early pollcles from 1962 Lo 1977 were malnly
drlven by Lhe needs of Lhe local lndusLry and economy lrom 1978 Lhe pollcles promoLed llberallsaLlon
of Lhe economy and several sLeps were Laken Lo lmplemenL Lhese pollcles Cver a perlod of Llme Lhe
whole enLrepreneurlal ablllLles of Lhe people were resLrlcLed wlLh a seL of regulaLlons and llcenses and
Lhe lndlan economy was called a Llcense a[" ln Lhe year 1991 a ma[or resLrucLurlng of Lhe lndlan
economy called L9C (LlberallsaLlon 9rlvaLlsaLlon and CloballsaLlon) was welcomed
L|bera||sat|on of economy |n 1991
LlberallsaLlon ls Lhe process Lo reduce unnecessary resLrlcLlons on buslness unlLs LhaL are lmposed by
Lhe governmenL 8efore 1991 Lhe governmenL had lmposed many resLrlcLlons and conLrols on Lhe
economy such as lmporL llcense forelgn exchange conLrol and lndusLrlal llcenslng sysLem and so on
1hese resLrlcLlons dlscouraged enLrepreneurs Lo esLabllsh new lndusLrles 1he economlc llberallsaLlon ln
lndla began ln !uly 1991 whlch paved way for a rapld progress ln lndla 1rade llberallsaLlon provlded
flexlble exchange raLe LlberallsaLlon of pollcles Lowards forelgn dlrecL lnvesLmenLs (lul) helped ln
openlng up Lhe economy 1he reforms broughL changes ln Lhe oplnlon abouL Lhe role of publlc secLor
1he areas LhaL were reserved excluslvely for publlc secLor were now open Lo Lhe prlvaLe secLor
example LelecommunlcaLlons alr LransporL sLeel peLroleum and so on
Slnce 1991 Lhe CovernmenL of lndla Look many pollcy measures Lo brlng Lhe counLry ouL of economlc
crlsls and Lo acceleraLe Lhe growLh of Lhe economy 1he lmporLanL pollcy measures are Lhe followlng
O educlng conLrols and promoLlng llberallsaLlon
O ncouraglng prlvaLe secLor
O 9romoLlng forelgn dlrecL lnvesLmenL
O lnLroduclng lmproved Lechnology
O lnLroduclng changes ln Lrade and moneLary pollcy
varlous pollcy measures were underLaken slnce !uly 1991 Lo lncrease Lhe producLlvlLy and efflclency of
Lhe economy
ln addlLlon Lo llberallslng Lhe economlc pollcles Lhe oLher ma[or change LhaL occurred ln Lhe leglslaLlon
fronL was Lhe repeallng of lorelgn xchange egulaLlon AcL (1973) lA Lo lorelgn xchange
ManagemenL AcL (1999) lMA ln case of oLher laws everyLhlng ls allowed unless speclflcally
prohlblLed under lA noLhlng was permlLLed unless speclflcally permlLLed lA was more of
regulaLlon of Lhe forelgn exchange conLalnlng sLrlcLer rules and pollcles 1he nforcemenL ulrecLoraLe
LhaL operaLed under lA had enormous powers Lo order lmprlsonmenL for mlnor offences owever
Lhe scenarlo was changed afLer 1999 when lMA was passed lMA was more of forelgn exchange
managemenL leglslaLlon wlLh less sLrlngenL rules when compared Lo lA

6 |scuss any 3 reg|ona| trad|ng agreements and |ts effect on |nternat|ona| bus|ness
ASLAN Iree 1rade Area (AI1A)
Al1A ls a Lrade agreemenL formulaLed by Lhe SouLheasL Aslan naLlons assoclaLlon LhaL supporLs local
manufacLurlng ln all Lhe ASAn counLrles
1he Al1A agreemenL was slgned ln Slngapore ln 28
Lh
!anuary 1992 lnlLlally when Al1A agreemenL was
slgned ASAn comprlsed of slx members llke 1halland Slngapore 9hlllpplnes Malaysla lndonesla and
8runel 1hen vleLnam [olned Lhe Al1A agreemenL ln 1993 followed by Myanmar and Laos ln 1997 and
Cambodla ln 1999 now Al1A conslsLs of Len ASAn counLrles 1he four laLecomers had Lo slgn Lhe
Al1A agreemenL Lo [oln ASAn owever Lhey were glven longer Llme duraLlon Lo meeL Lhe Larlff
reducLlon obllgaLlons of Al1A
1he Al1A's prlmary goals seek Lo
O nhance Lhe compeLlLlve edge of ASAn as a producLlon base ln world markeL by ellmlnaLlng
Lhe ASAn's nonLarlff and Larlff barrlers
O lasclnaLe more overseas dlrecL lnvesLmenL Lo ASAn
Common ffecLlve 9referenLlal 1arlff (C91) scheme ls Lhe prlme source for aLLalnlng Lhe goals
menLloned above 1he C91 scheme esLabllshed a schedule for lLs lnlLlaLlon ln 1992 wlLh Lhelr self
descrlbed goal Lo enhance Lhe compeLlLlve advanLage of Lhe reglon as a producLlon base for world
markeL
1he ASAn ls an economlc and geopollLlcal organlsaLlon of Len counLrles slLuaLed aL SouLheasL Asla 1he
ASAn organlsaLlon alms Lo acceleraLe culLural developmenL soclal progress economlc growLh among
Lhelr members proLecLlon of sLablllLy and peace of Lhe reglon and offer opporLunlLles for member
counLrles for dlscusslng dlfferences peacefully
ASAn spans across 446 mllllon kllo meLers area Lhree per cenL of Lhe overall land area of Lhe earLh
wlLh a populaLlon of 600 mllllon approxlmaLely LhaL ls 88 percenLage of Lhe world's populaLlon lf
ASAn was Lhe only counLry lL would rank as Lhe nlnLh largesL economy worldwlde and Lhlrd largesL ln
Asla as per nomlnal Cu9
As|a 9ac|f|c Lconom|c ooperat|on (A9L)
1he Asla9aclflc conomlc CooperaLlon (A9C) ls Lhe besL forum for asslsLlng Lhe lnvesLmenL Lrade
cooperaLlon and economlc growLh ln Asla 9aclflc reglon A9C ls Lhe sole lnLergovernmenLal grouplng
ln Lhe world funcLlonlng on Lhe basls of equal respecL open dlalogue and nonblndlng commlLmenLs for
Lhe vlews of Lhe parLlclpanLs unllke W1C and Lhe oLher mulLllaLeral Lrade bodles A9C does noL have
any LreaLy obllgaLlon for Lhelr parLlclpanLs 1he declslons wlLhln A9C are flnallsed by commlLmenLs and
consensus underLaken on volunLary basls
1he 21 Member conomles of A9C are vleLnam unlLed SLaLes of Amerlca 1halland Chlnese 1alpel
Slngapore 1he usslan lederaLlon 1he epubllc of 9hlllpplnes 9eru 9apua new Culnea new Zealand
Mexlco Malaysla epubllc of korea !apan lndonesla Chlna ong kong 9eople's epubllc of Chlna
Chlle Canada 8runel uarussalam and AusLralla
A9C came lnLo exlsLence ln 1989 Lo furLher enhance Lhe prosperlLy and economlc growLh of Lhe reglon
and Lo uphold and Asla9aclflc communlLy lrom lLs lnlLlaLlon A9C has worked Lo brlng down Lhe Larlffs
and oLher klnds of Lrade barrlers around Asla9aclflc reglon 1hey have also worked Lowards lncreaslng
Lhe exporLs dramaLlcally and for creaLlng efflclenL domesLlc economles 1he key Lo achleve A9C's vlslon
ls whaL ls referred Lo as 8ogor Coals' of free and open Lrade and lnvesLmenL ln Asla9aclflc by 2010 for
lndusLrlallsed economles and 2020 for developlng economles ln facL Lhese goals were embraced by Lhe
leaders ln Lhelr meeLlng ln lndonesla and 8ogor ln 1994
LeL us conslder more abouL 8ogor Coals ln 1994 Leaders' ueclaraLlon 1he free and open Lrade
lnvesLmenL asslsLs economles Lo grow generaLes [obs and offers greaLer prospecLs for lnLernaLlonal
lnvesLmenL and Lrade ln conLrasL Lo Lhls proLecLlonlsm malnLalns hlgher prlce Lags and fosLers
lnefflclencles ln few lndusLrles lree and open buslness asslsLs ln lowerlng Lhe producLlon cosLs and ln
reduclng Lhe prlces of servlces and goods whlch ls a dlrecL advanLage for everyone
A9C also funcLlons Lo creaLe a safe and efflclenL envlronmenL for Lhe movemenL of people servlces and
goods across Lhe borders wlLh Lhe help of Lechnlcal and flnanclal collaboraLlon and pollcy allgnmenL
ln order Lo meeL 8ogor Coals Lhe A9C funcLlons ln Lhree prlme areas
O 1echnlcal and flnanclal collaboraLlon
O 1rade asslsLance
O lnvesLmenL and buslness llberallsaLlon
South As|an Iree 1rade Area (SAI1A)
SouLh Aslan lree 1rade Area (SAl1A) agreemenL was lnlLlaLed ln Lhe 12
Lh
SAAC summlL on 6
Lh
!anuary
2004 ln 9aklsLan 1hls agreemenL envlsaged Lhe creaLlon of a free Lrade zone model ln lLs seven member
naLlons 1he seven member naLlons conslsL of nearly 14 bllllon people from varlous counLrles llke nepal
Maldlves 8huLan 8angladesh 9aklsLan and lndla
WSAl1A agreemenL was formulaLed Lo levy zero cusLoms duLy for Lradlng producLs by 2012 1hls
agreemenL was lmplemenLed afLer conflrmlng lLs compllance by governmenLs of seven member naLlons
Also Lhe agreemenL mlghL faclllLaLe healLhy Lrades and lnvesLmenL relaLlonshlp across borders Lo brlng
abouL several sLrucLural reforms ln economy of seven counLrles 8uL Lhere are few obsLacles LhaL hlnder
Lrade across Lhe SouLh Aslan counLrles Lhereby Lhe Lrade across Lhe SouLh Aslan borders accounLs for
[usL flve percenLage of overall Lrade ln facL Lhe reason could be aLLrlbuLed Lo Lhe followlng Lwo
promlnenL facLors
O 9o||t|ca| auses uurlng laLe 1940s mosL of Lhe naLlons of Lhe SouLh Asla were a parL of Lhe
8rlLlsh lndla uurlng Lhls perlod Lhere was conslderable Lrade happenlng beLween many SouLh
Aslan counLrles 8uL ln 1947 when 9aklsLan and lndla became lndependenL 9aklsLan sLarLed
lmporLlng mosL of Lhelr lmporLanL arLlcles from lndla 9aklsLan also exporLed many of Lhelr
commodlLles Lo lndla 8ecause of confllcLs happenlng ln varlous spheres Lhe Lrade acLlvlLles
sLarLed decllnlng sharply beLween 9aklsLan and lndla
O 9rotect|on|sm AlmosL all Lhe SouLh Aslan counLrles sLarLed sLresslng on Lhe lmporL acLlvlLles
raLher Lhan promoLlng Lhe exporL acLlvlLles Such a Lendency lowered Lhe producLlvlLy ln varlous
secLors of economy owever Lhlngs are noL Lhe same now 1he varlous economles have
sLarLed cooperaLlng among Lhemselves whlch ls evldenL from Lhe facL LhaL boLh lndla and
9aklsLan lowered Lhelr Lrade Larlffs ln 2003