NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
Q1. Write down the difference between international Vs global business? And
what are the benefits of globalization?
Ans- Global means worldwide or universal, applying to the whole world. On the other
hand, international applies to two or more countries.
We talk about the global economy, to signify world economy and global warming as an
environmental issue that affects all countries of the world.
Global treaties apply to the whole world like emission treaty while international applies to
a few countries of the world.
Global companies are very few, and they have offices and factories in most countries of
the world, whereas international companies are many, but have presence and investment
in few other countries of the world.
Global marketing and advertising means a universal strategy whereas international
marketing and advertising refers to area specific policies and strategies.
The benefits of globalization are:
Increased Wealth-One pro-globalization argument involves how, based on per capita
GDP growth rates, developing countries become wealthier. In the 1960s, non-globalized
economies grew at an annual rate of 1.4% while globalized economies grew at 4.7%.
Another relationship between globalization and GDP was seen in the 1990s when
developing countries had 5.0% annual growth compared to only 2.2% annual growth in
economies that had been globalized for longer. This correlation between globalization and
annual growth demonstrates benefits to international trade, economic development, and
standards of living.
Rise of Political Philosophies-A second argument in favour of globalization involves the
rise of political philosophies, based on the assumption that free markets follow a natural
trajectory towards democratic and capitalistic philosophies. This argument has two key
assumptions, the first being that these political perspectives represent an overall
improvement on standards of living and the second being that the correlation between
globalization and these principles is significant.
Better Quality of Life-Although there is opposition to globalization from religious and
social activists, proponents argue that the widespread availability of global goods, services,
and ideas positively impacts the lifestyles of citizens. Some of the different areas where
advocates claim globalization benefits individuals include:

Better access to external financing some as car and home loans

More opportunities for international travel and tourism

More opportunities to work abroad due to liberal immigrant laws and foreign worker
programs

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management

Greater consumption of worldwide entertainment including music, sports, fads and

pop culture

The rapid spread of consumer products (e.g., food, clothing brands) to other
countries

The development of a global telecommunications infrastructure and greater trans-border

data flow using technologies such as the Internet, communication satellites, and wireless
telephones, are also among the lifestyle benefits cited by globalization supporters.
Availability of Foreign Goods-A final argument supporting globalization's benefits
focuses on how globalization leads to the increased availability of diverse products,
services, and technology. Through pooling knowledge and exchanging more goods and
services, domestic economies expand and benefit from technological and medical
developments. This increase in variety, even in basic goods, allows someone in Spain to
drink Italian wine and eat French cheese while typing on a Chinese keyboard. Global
exchange can allow the best of all worlds through specialization and maximizing various
comparative advantages that involve quality or efficiency.
Combining these arguments, those in favour of globalization theorize that a wider array of
products, services, technologies, medicines, and knowledge will become available and that
these developments will have the potential to reach significantly larger customer bases.
This means larger volumes of sales and exchange, larger growth rates in GDP, and more
empowerment of individuals and political systems through acquiring additional resources
and capital.

Q2. Elaborate in detail comparative study on cultures of Japan, China, Brazil and
France?
Ans- The culture of France and of the French people has been shaped by geography, by
profound historical events, and by foreign and internal forces and groups. France, and in
particular Paris, has played an important role as a centre of high culture since the 17th
century, first in Europe, and from the 19th century on, worldwide. From the late 19th
century, France has also played an important role in cinema, fashion and cuisine. The
importance of French culture has waxed and waned over the centuries, depending on its
economic, political and military importance. French culture today is marked both by great
regional and socioeconomic differences and by strong unifying tendencies.
There are huge differences in life style, socioeconomic status and world view between Paris
and the provinces. The French often use the expression "la France profaned" ("Deep
France", similar to "heartland") to designate the profoundly "French" aspects of provincial
towns, village life and rural agricultural culture, which escape the hegemony of Paris. ("the
French desert") used to describe a lack of acculturation of the provinces. Another
expression, "terror" is a French term originally used for wine and coffee to denote the
special characteristics that geography bestowed upon these products. It can be very
loosely translated as "a sense of place" which is embodied in certain qualities, and the sum

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
of the effects that the local environment (especially the "soil") has had on the growth of
the product. The use of the term has since been generalized to talk about many cultural
products. In addition to its metropolitan territory, France also consists of overseas
departments made up of its former colonies of Guadeloupe, Martinique and French Guiana
in the Caribbean, and Mayotte and Reunion in the Indian Ocean. (There also exist a
number of "overseas collectivises" and "overseas territories". For a full discussion, see
administrative divisions of France. Since 1982, following the French governments policy of
decentralisation, overseas departments have elected regional councils with powers similar
to those of the regions of metropolitan France. As a result of a constitutional revision which
occurred in 2003, these regions are now to be called overseas regions.) These overseas
departments have the same political status as metropolitan departments and are integral
parts of France, (similar to the way in which Hawaii is a state and an integral part of the
United States), yet they also have specific cultural and linguistic traditions which set them
apart. Certain elements of overseas culture have also been introduced to metropolitan
culture (as, for example, the musical form the beguine).
The culture of Japan has evolved greatly over the millennia, from the country's
prehistoric Jimson period, to its contemporary modern culture, which absorbs influences
from Asia, Europe, and North America. Japanese is the official and primary language of
Japan. Japanese is relatively small[citation needed] but has a lexically distinct pitch-accent
system.
The culture of Brazil is primarily Western, but presents a very diverse nature showing
that an ethnic and cultural mixing occurred in the colonial period involving mostly
Indigenous peoples of the coastal and most accessible reverie areas, Portuguese people
and African peoples. In the late 19th and early 20th centuries, together with further waves
of Portuguese colonization, Italians, Spaniards, Germans, Levantine Arabs, Nipponese,
Poles, Helvetians and Ukrainians settled in Brazil, playing an important role in its culture as
it started to shape a multicultural and multiethnic society.[1]
As consequence of three centuries of colonization by the Portuguese empire, the core of
Brazilian culture is derived from the culture of Portugal. The numerous Portuguese
inheritances include the language, the predominant religion and the colonial architectural
styles. These aspects, however, were influenced by African and Indigenous American
traditions, as well as those from other Western European countries.Some aspects of
Brazilian culture are contributions of Italian, German and other European
immigrants.Amerindian people and Africans played a large role in the formation of Brazilian
language, cuisine, music, dance and religion.
The official language of Brazil is Portuguese. It is spoken by about 99% of the population,
making it one of the strongest elements of national identity There are only some
Amerindian groups and small pockets of immigrants who do not speak Portuguese
The culture of Brazil is primarily Western, but presents a very diverse nature showing that
an ethnic and cultural mixing occurred in the colonial period involving mostly Indigenous

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
peoples of the coastal and most accessible reverie areas, Portuguese people and African
peoples. In the late 19th and early 20th centuries, together with further waves of
Portuguese colonization, Italians, Spaniards, Germans, Levantine Arabs, Nipponese, Poles,
Helvetians and Ukrainians settled in Brazil, playing an important role in its culture as it
started to shape a multicultural and multiethnic society. As consequence of three centuries
of colonization by the Portuguese empire, the core of Brazilian culture is derived from the
culture of Portugal. The numerous Portuguese inheritances include the language, the
predominant religion and the colonial architectural styles. These aspects, however, were
influenced by African and Indigenous American traditions, as well as those from other
Western European countries. Some aspects of Brazilian culture are contributions of Italian,
German and other European immigrants. Amerindian people and Africans played a large
role in the formation of Brazilian language, cuisine, music, dance and religion. The official
language of Brazil is Portuguese. It is spoken by about 99% of the population, making it
one of the strongest elements of national identity.] There are only some Amerindian groups
and small pockets of immigrants who do not speak Portuguese. Brazil was a colony of
Portugal for over three centuries.
The Culture of China -The Chinese refer to their country as the Middle Kingdom, an
indication of how central they have felt themselves to be throughout history. There are
cultural and linguistic variations in different regions, but for such a large country the
culture is relatively uniform. However, fifty-five minority groups inhabit the more remote
regions of the country and have their own unique cultures, languages, and customs.
Location and Geography. China has a land area of 3,691,502 square miles (9,596,960
square kilometres), making it the world's third largest nation. It borders thirteen countries,
including Russia and Mongolia to the north, India to the southwest, and Myanmar, Laos,
and Vietnam to the south. To the east, it borders the Yellow Sea, the South China Sea, and
the East China Sea. The climate is extremely diverse, ranging from tropical in the south to
subarctic in the north. In the west, the land consists mostly of mountains, high plateaus,
and desert. The eastern regions are characterized by plains, deltas, and hills. The highest
point is Mount Everest, on the border between Tibet and Nepal, the tallest mountain in the
world.
The Yangtze, the longest river in the country, forms the official dividing line between north
and south China.." The country is divided into two regions: Inner China and Outer China.
Historically, the two have been very separate. The Great Wall, which was built in the
fifteenth century to protect the country against military invasions, marks the division.. The
country is home to several endangered species, including the giant panda, the golden
monkey, several species of tiger, the Yangtze alligator, and the red-crowned crane etc .

Q3.Write a short note on Advantages of foreign direct investment and types of

foreign direct investment?
Ans -FOREIGN DIRECT INVESTMENT IN INDIA (FDI) -Under Foreign Exchange
Management (Transfer or Issue of Security by Persons Resident Outside India) Regulations,
2000 (notification No.FEMA 20/2000-RB dated May 3, 2000) the Indian Companies are
allowed to raise funds from overseas investors. An Indian company which is not engaged

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
in any activity or in manufacturing of item included the List A and List B appended may
issue fresh shares subject to the condition and sect oral cap as indicated under Foreign
Direct Scheme, subject to the terms and condition specified . WHO CAN INVEST IN INDIA
There are following categories of person resident outside India who may invest in the
capital of Indian Company: 1. A non-resident entity (other than citizen of Pakistan or an
entity incorporated in Pakistan) 2. A citizen or entity of Bangladesh under Government
Route. 3. NRI resident as well as citizen of Nepal and Bhutan on repatriation basis. 4.
Erstwhile OBCs as incorporated non-resident entities. 5. An FII under the Portfolio
Investment Scheme 6. SEBI registered FIIs or NRIs through a registered broker on
recognized India Stock Exchange. 7. SEBI registered Foreign Venture Capital Investor
(FVCI) An FII may invest in the capital of an Indian Company under the Portfolio
Investment Scheme which limits the Individual holding of an FII to 10% of the capital of
the company and the aggregate limit for FII investment to 24% of the capital of the
company. The aggregate limit of 24% can be increased to the sectoral cap/statutory ceiling
as approved by RBI time to time. (i) An Indian Company (ii) Partnership Firm (iii)
Proprietary Concern (iv) Indian Venture Capital Undertaking(ICVF) (v) Ventures Capital
Fund (VCF)
Advantages of FDI
Access to markets: FDI can be an effective way for you to enter into a foreign market.
Some countries may extremely limit foreign company access to their domestic markets.
Acquiring or starting a business in the market is a means for you to gain access.
Access to resources: FDI is also an effective way for you to acquire important natural
resources, such as precious metals and fossil fuels. Oil companies, for example, often
make tremendous FDIs to develop oil fields.
Reduces cost of production: FDI is a means for you to reduce your cost of production if
the labor market is cheaper and the regulations are less restrictive in the target foreign
market. For example, it's a well-known fact that the shoe and clothing industries have
been able to drastically reduce their costs of production by moving operations to
developing countries.
FDIs can be broadly classified into two types: outward FDIs and inward FDIs. This
classification is based on the types of restrictions imposed, and the various prerequisites
required for these investments. An outward-bound FDI is backed by the government
against all types of associated risks. This form of FDI is subject to tax incentives as well as
disincentives of various forms. Risk coverage provided to the domestic industries and
subsidies granted to the local firms stand in the way of outward FDIs, which are also
known as "direct investments abroad." Different economic factors encourage inward FDIs.
These include interest loans, tax breaks, grants, subsidies, and the removal of restrictions
and limitations. Factors detrimental to the growth of FDIs include necessities of differential
performance and limitations related with ownership patterns. Other categorizations of FDI
exist as well.
Vertical Foreign Direct Investment

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
Vertical Foreign Direct Investment takes place when a multinational corporation owns
some shares of a foreign enterprise, which supplies input for it or uses the output
produced by the MNC.
Horizontal foreign direct investments
Horizontal foreign direct investments happen when a multinational company carries out a
similar business operation in different nations. Foreign Direct Investment is guided by
different motives. FDIs that are undertaken to strengthen the existing market structure or
explore the opportunities of new markets can be called "market-seeking FDIs." "Resourceseeking FDIs" are aimed at factors of production which have more operational efficiency
than those available in the home country of the investor. Some foreign direct investments
involve the transfer of strategic assets. FDI activities may also be carried out to ensure
optimization of available opportunities and economies of scale. In this case, the foreign
direct investment is termed as "efficiency-seeking."
Q4 What are the key objectives and function of World Trade organization?

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 worlds trading nations and ratified in their
parliaments. The goal is to help producers of goods and services, exporters, and
importers conduct their business.
Objectives of WTO
Important objectives of WTO are mentioned below:
(i) to implement the new world trade system as visualised in the Agreement;
(ii) to promote World Trade in a manner that benefits every country;
(iii) to ensure that developing countries secure a better balance in the sharing of the
advantages resulting from the expansion of international trade corresponding to their
developmental needs;
(iv) to demolish all hurdles to an open world trading system and usher in international
economic renaissance because the world trade is an effective instrument to foster
economic growth;
(v) to enhance competitiveness among all trading partners so as to benefit consumers
and help in global integration;

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
(vi) to increase the level of production and productivity with a view to ensuring level of
employment in the world;
(vii) to expand and utilize world resources to the best;
(viii) to improve the level of living for the global population and speed up economic
development of the member nations.
Functions of WTO
The former GATT was not really an organisation; it was merely a legal arrangement.
On the other hand, the WTO is a new international organisation set up as a permanent
body. It is designed to play the role of a watchdog in the spheres of trade in goods,
trade in services, foreign investment, intellectual property rights, etc. Article III has
set out the following five functions of WTO;
(i) The WTO shall facilitate the implementation, administration and operation and
further the objectives of this Agreement and of the Multilateral Trade Agreements, and
shall also provide the frame work for the implementation, administration and
operation of the plurilateral Trade Agreements.
(ii) The WTO shall provide the forum for negotiations among its members concerning
their multilateral trade relations in matters dealt with under the Agreement in the
Annexes to this Agreement.
(iii) The WTO shall administer the Understanding on Rules and Procedures Governing
the Settlement of Disputes.
(iv) The WTO shall administer Trade Policy Review Mechanism.
(v) With a view to achieving greater coherence in global economic policy making, the
WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and
with the International Bank for Reconstruction and Development (IBRD) and its
affiliated agencies.

Q5.Explain in detail about international regulatory bodies?

Ans - International business is the process of conducting business in multiple countries.

Multinational corporations (MNCs) and international business companies (IBCs) conduct

business between different countries. After World War II, the Western leaders did not want to
repeat economic isolationism that played a major part in leading to the war. The leaders
decided to establish an international trade organisation that helped to create new international
political and economic institutions which encouraged and preserved peaceful international

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
relations . Trade liberalisation is influenced by institutions like GATT (General Agreement of
Tariffs and Trade) and IMF (International Monetary Fund). The influence of these
international institutions depends on economic conditions of the debtors or on changing
domestic preferences of trade.
The support system institutions for international business include WTO (World Trade
Organisation), World Bank, and International Monetary Fund (IMF). Regional trade
institutions have an ambiguous effect on the multilateral system whereas some institutions
such as NAFTA (North American Free Trade Agreement) and ASEAN (Association of
Southeast Asian Nations) have a positive effect on lowering trade barriers. These institutions
have different effects on the countries trade policies. The major support systems for
international business are:
1.The IMF is an international organisation of 187 countries. It ensures the
stability of the international monetary and financial system.
2. The World Trade Organization (WTO) is an international organisation with 153
members which deals with the rules of trade between countries.
3. World Bank is an international financial institution that provides leveraged
loans to developing countries for major projects.
4. United Nations Conference on Trade and Development (UNCTAD), the
permanent body of the United Nations General Assembly was set up in 1964 to
deal with trade and development issues.

Objective are:
The international institutions provide information about other countries behaviour, forum for
dispute resolution and a common framework for sustaining trade flows. A strong international
financial system is required to support growing international trade. It helps to reduce the risk of
payment imbalances and financial crisis. The international institutions work together to provide
a strong system for international trade which is open to all countries. This kind of system is
essential for supporting economic growth, reducing poverty and raising the standard of living
around the globe.
The main objective of IMF is to facilitate the expansion and balanced growth of international
trade and provide exchange stability.
1)

The WTO helps in the smooth flow of international trade and provides countries with a
constructive platform for dealing with disputes over trade issues.

2)

The main objective of UNCTAD is to formulate policies regarding trade, finance and
technology. It is a specialised agency that performs three main functions:

3)

Provides a forum for intergovernmental discussions.

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
4)

Undertakes research, data collection and policy analysis for debates of government
representatives and experts.

5)

Provides technical assistance to the specific requirements of developing countries.

These are international bodies.

Q6 - What are the various export promotion schemes offered by government in

order to promote export from the country?
Ans - Export Promotion Schemes
Software Technology Parks (STPs)
Special Economic Zones (SEZ) Scheme :After the economic reforms of 1991-92,
liberalization of external trade, elimination of duties on imports of information technology
products, relaxation of controls on both inward and outward investments and foreign
exchange and the fiscal measures taken by the Government of India and the individual
State Governments specifically for IT and ITES have been major contributory factors for
the sector to flourish in India and for the country to be able to acquire a dominant position
in offshore services in the world. The major fiscal incentives provided by the Government
of India have been for the Export Oriented Units (EOU), Software Technology Parks (STP),
and Special Economic Zones (SEZ).
Software Technology Parks (STPs):For the promotion of Software exports from the
country, the Software Technology Parks of India was set up in 1991 as an Autonomous
Society under the Department of Electronics and Information Technology. The services
rendered by STPI for the Software exporting community have been statutory services,
data communications servers, incubation facilities, training and value added services. STPI
has played a key developmental role in the promotion of software exports with a special
focus on SMEs and start up units. The STP Scheme which is a 100% export oriented
scheme has been successful in fostering the growth of the software industry. The exports
made by STP Units have grown over the years.
The STP scheme allows software companies to set up operations in convenient and
inexpensive locations and plan their investment and growth driven by business needs.
Over 2500 units are registered under STP Scheme.
Benefits under STP Scheme:
Customs Duty Exemption in full on imports.

NAME NIKHIL GOGIA

Roll No -1411000968
Subject Code- MB0053 /Subject Name - International Business
Management
Central Excise Duty Exemption in full on indigenous procurement.
Central Sales Tax Reimbursement on indigenous purchase against from C.
All relevant equipment / goods including second hand equipment can be imported (except
prohibited items).
Equipment can also be imported on loan basis/lease.
100% FDI is permitted through automatic route.
Sales in the DTA up to 50% of the FOB value of exports permissible.
Use of computer imported for training permissible subject to certain conditions.
Depreciation on computers at accelerated rates up to 100% over 5 years is permissible.
Indian Government, at all levels, announces Welfare Schemes for a cross section of the
society from time to time. These schemes could be either Central, State specific or a joint
collaboration between the Centre and the States. In this section, we have attempted to
provide you an easy and single point access to information about several welfare schemes
of the Government and their various aspects including eligible beneficiaries, types of
benefits, scheme details etc. Guidelines for Integrated Development of Commercial
Floriculture Scheme Social defence schemes of Ministry of Social Justice and Empowerment
Schemes and programmes for differently baled by Ministry of Social Justice etc.