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International Business Management

International Business Management

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Published by gargpriyanka
SMU, MBA-4 Sem
SMU, MBA-4 Sem

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Published by: gargpriyanka on Dec 18, 2010
Copyright:Attribution Non-commercial


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International Business Management
)How has liberalizing trade helped international business?Ans. TRADE REFORM has long been part of the arsenal of policies used to promoteeconomic efficiency, the development of new markets, and growth. Perhapssurprisingly, even after more than fifty years of trade negotiations, there is stillsignificant protection in the world economy and thus scope for further benefits onceprotection is removed. Protection persists because it is a convenient andnontransparent way for governments to direct economic benefits to particular groups.Although trade liberalization raises the average standard of living in the mediumterm, groups that had been favored by protection will see their incomes decline, andthe resulting restructuring of the economy may create economic dislocations in theshort term.There is increasing awareness that some of those who lose from trade reform mightbe the poorest members of society, who have fewer assets to draw on to protectthemselves during hard times, and are thus less able to absorb adjustment costs,than their fellow citizens. Even a transitory loss of income can cause the poor to loseopportunities to acquire human capital through education, health care, and better nutrition and thus can reduce their chances of escaping poverty. The vulnerability of the poor justifies looking more carefully at the effects of trade liberalization on thepoor and asking whether trade liberalization can be designed to minimize its negativeeffects.
Liberalization's effects
Trade liberalization can affect the welfare of the poor 
Changing the prices of tradable goods and improving access to newproducts;
Changing the relative wages of skilled and unskilled labor and the cost of capital, thereby affecting the employment of the poor;
Affecting government revenue from trade taxes and thus the government'sability to finance programs for the poor;
Changing incentives for investment and innovation and affecting economicgrowth; and
Affecting the vulnerability of an economy to negative external shocks.
What are the merits and demerits of international trade?Ans.
Advantages of International Trades Unions:
Increase wages for its members
: Industries with trade unions tend to havehigher wages than non-unionised industries.
Counterbalance Monopsonies
: In the face of Monopsony employers,Trades Unions can increase wages and increase employment. Monopsonyemployers are those who have market power in setting wages and employingworkers. Traditionally, monopsonies occur when there is only 1 firm in a town,or type of employment. However, in modern economies, many employershave a degree of market power (monopsony).
Represent Workers
: Trades Unions can also protect workers fromexploitation, and help to uphold health and safety legislation. Trades unionscan give representation to workers facing legal action.
Productivity deals
: Trades Unions can help to negotiate productivity deals.This means they help the firm to increase output; this enables the firm to beable to afford higher wages. Trades unions can be important for implementingnew working practices which improve productivity.
Important for Service Sector 
: Modern economies have seen a fall in tradeunion power. This is because of a decline in manufacturing and rise in servicesector employment. Service sector jobs tend to more likely to be part timeand temporary; unions are needed to protect workers in these kind of jobs.
Demerits of International Trades Unions:
Create Unemployment
: If labor markets are competitive, higher wages willcause unemployment. Trades unions can cause wages to go aboveequilibrium through the threat of strikes etc. However, when the wage isabove the equilibrium it will cause a fall in employment.
Ignore non Members
: Trades unions only consider the needs of itsmembers; they often ignore the plight of those excluded from the labor markets, e.g. the unemployed.
Lost Productivity
: If unions go on strike and work unproductively (work torule) it can lead to lost sales and output. Therefore their company may go outof business and be unable to employ workers at all.
Discuss the impact of culture on International Business?Ans. International Marketing and Culture: Culture is the way that we do things aroundhere. Culture could relate to a country (national culture), a distinct section of thecommunity (sub-culture), or an organization (corporate culture). It is widely acceptedthat you are not born with a culture, and that it is learned. So, culture includes all thatwe have learned in relation to values and norms, customs and traditions, beliefs andreligions, rituals and artifacts (i.e. tangible symbols of a culture, such as the SydneyOpera House or the Great Wall of China).
Therefore international marketing needs to take into account the local culture of thecountry in which you wish to market.The Terpstra and Sarathy Cultural Framework help marketing managers to assessthe cultural nature of an international market. It is very straight-forward, and useseight categories in its analysis. The Eight categories are Language, Religion, Valuesand Attitudes, Education, Social Organizations, Technology and Material Culture,Law and Politics and Aesthetics.
With language one should consider whether or not the national culture ispredominantly a high context culture or a low context culture (Hall and Hall 1986).The concept relates to the balance between the verbal and the non-verbalcommunication. In a low context culture spoken language carries the emphasis of the communication i.e. what is said is what is meant. Examples include Australia andthe Netherlands.
The nature and complexity of the different religions an internationalmarketer could encounter is pretty diverse. The organization needs to make sure thattheir products and services are not offensive, unlawful or distasteful to the localnation. This includes marketing promotion and branding.In China in 2007 (which was the year of the pig) all advertising which includedpictures of pigs was banned. This was to maintain harmony with the country'sMuslim population of around 2%. The ban included pictures of sausages thatcontained pork, and even advertising that included an animated (cartoon) pig.In 2005 France's Catholic Church won a court injunction to ban a clothingadvertisement (by clothing designers Marithe and Francois Girbaud) based uponLeonardo da Vinci's Christ's Last Supper.
Values and Attitudes:
Values and attitudes vary between nations, and even varywithin nations. So if you are planning to take a product or service overseas makesure that you have a good grasp the locality before you enter the market. This couldmean altering promotional material or subtle branding messages. There may also bean issue when managing local employees. For example, in France workers tend totake vacations for the whole of August, whilst in the United States employees mayonly take a couple of week's vacation in an entire year.In 2004, China banned a Nike television commercial showing U.S. basketball star LeBron James in a battle with animated cartoon kung fu masters and two dragons,because it was argued that the ad insults Chinese national dignity.In 2006, Tourism Australian launched its ad campaign entitled "So where the bloodyhell are you?" in Britain. The $130 million (US) campaign was banned by the BritishAdvertising Standards Authority from the United Kingdom. The campaign featured allthe standard icons of Australia such as beaches, deserts, and coral reefs, as well astraditional symbols like the Opera House and the Sydney Harbour Bridge.
The level and nature of education in each international market will vary.This may impact the type of message or even the medium that you employ. For 

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