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Reg No.

ST.JOSEPH’S COLLEGE OF ENGINEERING CHENNAI-119


MODEL EXAMINATION –I July 2010
SET 1
Subject: International Business Management Code: BA9209
Branch: MBA Semester: III
Duration: 3 Hours Max. Marks: 100
Note: Answer all the Questions
PART A (10 * 2 = 20)
1. Define franchising.
An independent organization called the franchisee operates to business under
the name of another company called the franchisee under this agreement the
franchise pays a fee to the franchisor. The following services like trademarks,
operating systems, product reputations.
2. Define the green field strategy.
It is starting of the operations of a company from scratch in a foreign market, The
company conducts the market survey, selects the location, buys or leases land, creates
the new facilities, erects the machinery, remits or transfers the human resources and
starts the operations and marketing activities.
Eg. Disney land in Paris, Mercedes-Benz in locating automobile assembly plant in
Alabama.

3. What factors make the control more difficult in the international business?
a. Distance –it takes more time & expense to communicate.
b. Diversity- country differences make it hard to compare operations
c. Uncontrollable-there are more dissimilar outside stockholders
&governmental influences.
d. Degree of certainty – there are often rapid changes in the information and
data problems.
4. What is strategic planning?
The process of determining an organisation’s basic mission and long-term
objectives then implementing a plan of action for attaining these goals.
5. What is polycentric predisposition?
A philosophy of management whereby strategic decision are tailored to suit
the cultures of the countries where the MNC operates.

6. Define negotiation.
Bargaining with one or more parties for the purpose of arriving at a solution
acceptable to all

7. Write any five stress reduction program?


Meditation, yoga, flexi working hours, stress toys, laugh therapy
8. Why do companies go global?
• Counter attack the MNC companies in global market
• As a means of expansion
• To tap global Opportunity.
• Diversification
• To increase market share

9. What is minimum efficient scale?


Economies of scale results when plant output expands and unit cost decreases.
However, beyond certain level of output, few additional scale of economies
are available. Thus, the unit cost curve declines with output until a certain
output level is reached, at which point further increase in output realizes little
reduction in unit cost. The level of output at which most plant level scale of
economies are exhausted is called minimum efficient scale of output.
10. Define business ethics.
Ethics refers to good character and morality and to generally accepted human
character tics and behavior considered as a desirable by society. Business
ethics studies the special obligations that a citizen accepts when he becomes a
part of the world of commerce.

PART B (5 * 16 = 80)
11 (a) Elucidate on the strategic planning process of MNEs.
Step 1: external environmental scanning for MNC opportunities and threats
Step 2: International resources analysis of MNC strength and weakness
Step 3: Strategic Planning goals
Step 4: Identifying key factors success
Step 5: Strategic implementation: 1. Location consideration, 2. role of functional
areas.

(OR)
11 (b) What are the strategic choices available to the MNEs?
BCG :

high STAR QUESTION MARK


Relative sales volume

Low CASH COW DOG

high low

Relative market share

GE Matrix/ Mckinsey attractiveness

strong (winner) (winner) (Question mark)


strength

Average (winner)
(Average business) (Loser)
Business
weak (profit (Loser) (Loser)
producer)

High Medium low

Industrial attractiveness

Product/ market life cycle portfolio matrix

development
Industrial life cycle

Growth

Competitive
shakeout
Maturity

Saturation

Decline

Strong Average weak

. Business strength

Michael porter’s strategy: Cost leadership, differentiation, focus.


12 (a) Explain the different entry strategies available in the international business.
Export and import
International Licensing
International Franchising
Turnkey project
Contract manufacturing
Management contract
FDI with alliance: JV, M&A
FDI without alliance: green field strategy.

(OR)
12 (b) Explain the strategic compulsion in the form of standardization and differentiation
strategy.
Standardization differentiation
Follows similar strategy at the Distinct and unique strategy for
global level different markets.
Produces homogenous products Produces heterogeneous products
Cost pressure is high Cost pressure is low
Low national responsiveness High national responsiveness
Followed by global company Followed by multi domestic
company
Economies of scale Cost will be high in the short run

13 (a) What do you mean by performance measurement? Explain the different


performance measurement techniques for the MNCs operations.
Performance measurement is the ongoing monitoring and reporting
accomplishments, particularly progress towards pre established.
Performance measurement techniques:
Financial performance: Profit, ROI
Quality performance: quality control, TQM
Personnel performance: assessment center, performance appraisal,
Production performance: output, productivity, forecasting
(OR)
13 (b) Explain the various major issues in global business ethics.
• Employment practices
• Human rights
• Environment Pollution
• Social Responsibility
• Responsibility to consumer
• Corruption

14 (a) Explain various global selection approach


Ethnocentric approach
Poly centric
Geocentric
(OR)

14 (b) Explain the techniques of cross cultural training


Experimental- simulation, field trips, role play
Analytical- sensitivity training, culture assimilation, class room training, film
Factual- books lecture, area briefing, participation

15 (a) International pricing strategy is an important component of overall International


Marketing mix. Justify?
The pricing Decisions at International market should focus on the following:
• Pricing criteria
• Pricing policies
• Factors affecting International pricing
• Price Quotations
• Dumping
• Counter Trade
(OR)
15 (b) Explain in detail Make or Buy decisions in International business?
Whether to perform certain value creation activity or outsource it. Most manufacturing
firms have done their own final assembly, but have had to decide whether to vertically
integrate or outsource the production.
Outsourcing Decisions are based on criteria:
• Political economies of country
• Exchange rate movement
• Change in relative factor cost.
The Advantages of Make:
Lowering Cost, facilitating specialized Investment, Protecting proprietary product
technology and improving scheduling
The Advantages of Buy:
Strategic flexibility, lower costs, Offsets, Trade offs and strategic Alliance with suppliers.
Reg No.

ST.JOSEPH’S COLLEGE OF ENGINEERING CHENNAI-119


MODEL EXAMINATION –II OCTOBER 2010
SET 2
Subject: International Business Management Code: BA9209
Branch: MBA Semester: III
Duration: 3 Hours Max. Marks: 100

Note: Answer all the Questions

PART A (10 * 2 = 20)


1. What is geocentric predisposition?
A philosophy of management whereby the company tries to integrate a global systems
approach to decision making.

2. Define key factor for success.


It is a factor that is necessary for a firm to compete effectively in a market niche. For
example, a KFS for an airline is safety, price and service. The elements for KFS are
people and resource that help to develop and sustain the necessary KFS.

3. What are the external control factors of MNCs?


External control often are flexible attitude, willing to compromise & keep the peace.
The focus is on others such as customers, partners & colleagues.

4. State any five control mechanisms for MNCs.


a. planning
b. organizational structure
c. location of decision making
d. control mechanisms
e. special situations ( acquisition, shared ownership)

5. What are the indicators to measure the performance of MNCs?


Benchmarking, balance scorecard, productivity, 360 degree, six-sigma
6. Define self- efficacy
Combination of Self confidence, self esteem and mental hygene
7. Write any two needs for training and development for Global jobs
Understand organizational complexity; meet the challenges of technological
advance and familiar with language customer and tradition

8. Define- Repatriate
Return to one’s home country from an overseas management assignments

9. Define Market segmentation?


Division of heterogeneous market into homogenous sub groups who share similar
characteristics. Market segmentation is helpful for preparing marketing mix
strategy.
10. Explain JIT?
Just in time technique is the method of maintaining zero inventory, that is no
buffer stock. As and when the stock is needed it is ordered. JIT is mostly used in
assembly line industries.

PART B (5 * 16 = 80)
11 (a) Elucidate on the strategic control process of the MNEs.
Step 1: identify the area for control
Step 2: Determine the standard
Step 3: Measure the actual performance
Step 4: compare the standard with the actual performance
Step 5: If the standard is not met , take corrective action by adjusting the standard
Step 6 : if the standard is met , recognize the result and go for higher standard by
adjusting it .
(OR)
11 (b) Explain the different forms of international trade in detail.
Different forms of international trade are :
1. Domestic company,
2. international company,
3. multinational company ,
4. global company and
5. transnational company.

.
12 (a) Discuss the OECD guidelines for controlling multi national enterprises operations.
1. Concept and principles
2. General policies
3. Disclosures
4. Employment and industrial relations
5. Environment
6. Combating bribery
7. Consumer interests
8. Science and technology
9. competition
10. taxation
(OR)
12 (b) Explain the Organizational Structure of MNEs.
1. Initial division structure
2. International division structure
3. Global structural arrangement :
• Global product division
• Global area division
• Global functional division
4. Mixed organizational structure
5. Transnational network structure

13 (a) Discuss the i) Corporate level strategy, ii) Business level strategy, and iii)
functional level strategy of MNEs.
Corporate level strategy
Concentration, product modification, market modification, diversification,
joint venture, merger& acquisition, turnaround, retrenchment, harvesting, disinvestment,
liquidation.
Business level strategy:
Cost leadership, differentiation, and focus, BCG,
Functional level strategy: production: JIT,TQM, EOQ
Marketing: five P’s
HR: recruitment, selection, compensation, training
Finance: sources, costing , auditing

(OR)
13 (b) Explain ethical decision-making Process?
1. Identify the problem:
• Be alert and sensitive to morally charge situation
• Gather more information before jumping to conclusion
• State the case briefly with relevant fact
• Be alert to the actual or potential conflict of interest
• Consider the context of decision making
2. Specify the feasible alternative:
State option at each stage of decision
Analyze the consequences of various decisions
Account the good and bias
Be honest at your own stake
Use ethical resources to identify ethically significant factor.
3. Propose the best possible resolution
4. Analyze impact of the ethical performance on others
Implement the course of action

14 (a) Write contents and types of expatriate training


Contents- Information of fact oriented training, attribution training, cultural
awareness training, cognitive behavior modification training and experimental training
Types - Experimental- simulation, field trips, role play
Analytical- sensitivity training, culture assimilation, class room training, film
Factual- books lecture, area briefing, participation

(OR)
14 (b) Write the various problems faced by expatriate manager in the new international
environment
International adjustment- honeymoon stage, culture shock, adjustment to learn and
Mastery
Dimensions of international adjustment- Adjustment to work place
Adjustment – interact with host nationals
Adjustment to general environment

15 (a) How to develop new product in International Market?


• Idea generation
• Screening of ideas
• Business Analysis
• Development of product by lab, technical and production personnel
• Test marketing
• Realizing the product full scale
• Then the following decisions are to be made : Market segmentation, positioning
and product adoption.
• Other product decisions include: product life cycle, branding and packaging.

(OR)
15 (b) Explain in detail a number of factors to be considered for firm contemplating
International production?
Global production decisions involves interrelated issues focusing on
1. Where to locate production activates
2. what should be long-term strategic role
3. should the firm own foreign production or outsource
4. How should a globally dispersed supply chain be managed
5. Should the firm manage global logistics itself or outsource it?

There are four factors that must be considered for contemplating International
Production:
1. Country factor- political economy, culture and relative factor, Location
economies
2. Technological factor- level of fixed cost, minimum efficient scale and flexibility
of technology
3. Product factor – Value to weight ration, whether the product serves universal
needs