Course Title: International Management

Topic: Assignment on the reference Q/A

Submitted to-
Dr. Sumayya Begum
Assoc. Prof. Department of Management, BUP
Submitted By-
Name: A S M Sakibur Rahman Shuvo
Roll: 18241044
Section: B
Session: 2017 – 18
Department of Management Studies
Bangladesh University of Professionals

Submission Date: 22/07/20

Question 01- How has globalization affected different world regions? What are
some of the benefits and costs of globalization for different sectors of society
(companies, workers, communities)?
Ans- Globalization has resulted in choosing economic integration among nations through
negotiation and implementation of trade and investment treaties. This has enabled a substantial
reduction in tariff and non-tariff barriers among member countries of these treaties, Set S
general agreement on tariffs and trade GATT and World Trade Organization, WTO.
However, the limited success of this multilateral trade treaties due to differences among
developed and developing countries led to The formation of bilateral and regional trade
agreements. A Discussion of this and original impact follows-
1. Elimination of tariff import and export quotas.
2. Opening of government procurement markets to companies in the other two member
countries.
3. Increase in investment opportunities in the member countries.
4. Removing travel restriction between countries
5. elimination of trade restrictions on products of the agriculture automotive industry and
energy industry.
6. Additional commitments on workforce an environment. This makes it obligatory for
participants in NAFTA to improving conditions at work and pursuing Environmental
Protection activities.
The European Union has 27 countries. That unified market has removed most conditions in
learning trade earlier between the participants. Further, some countries have adopted a single
common currency, the euro. Going forward, that strength has expanded to 27 countries
creating one of the largest unified markets in the world.
Benefits-
 For consumers, it is not possible to make a realistic comparison or price between most
countries. For business firms, the single currency can substantially reduce costs.
 The large MNCs can now access the European pan market due to measurements like
every day custom duties, lifting of restrictions on trade quotas. This has enabled large
MNCs is to achieve economies of scale and reduce costs and increase productivity
Drawback-
Persistence of cultural differences, but the gains overshadow the differences to result in a large
single integrated market
The Association of South Asian Nations- ASEAN-
The most significant benefit was occurring to seven-member countries in that, due to
globalization, these countries have become significant export economies. It also has advanced
trade and economic integration among these economies.
Countries in central and Eastern Europe, which are still outside the EU, Rus, and the former
republic of Soviet Un, are getting to take the benefits of globalization. This is due to their slow
transition from the common economy model to the market economy model.
LT AM Countries realize economic an export-driven growth due to sizable cross border
investments among themselves. Regional trade agreements with the US help these countries to
improve trade, investment services, and working conditions in the region.
Lastly, significant South East AS nations like India and China have been the recipients of
methods of globalization, such as outsourcing and offshoring. Both these practices have led to
substantial foreign direct investments, jobs, and wealth creation and directly led to the creation of
emerging MNCs from this developing country. These MNCs Have evolved in a short time spent
competing well in the global markets.

Question 02- How has NFTA Affected the economies of North America and the
EU affected Europe? What important do these economic parts have for
international managers in North America, Europe, and Asia?
Answer- The US, Canada, and Mexico are the member countries of the North American free-
trade agreement NAFTA. The agreement has created a vast North American market by removing
all trade barriers among the member countries.
Chief effects of the NAFTA-
 Elimination of tariff, import, and export quotas.
 Opening of government procurement markets to companies in the other two member
countries.
 Increase in investment opportunities in the member countries.
 They are removing travel restrictions between countries.
 Elimination of high restriction on products of agriculture, the automotive industry, and
the energy industry.
 Additional commitments on the workforce and environment. This makes it obligatory for
participants in NAFTA to improving conditions at work and pursuing Environmental
Protection activities.
As a result of the above measures, Canadian companies have increased their investment in the
US market substantially, making it the largest trading partner of the US. in turn, the US
companies have increased their investment in Canada multifold. The majority of the largest
foreign-owned companies in Canada are entirely the US-owned. Due to Canada's worst natural
resources like lumber natural gas crude petroleum and Agri products, Canadian companies find a
ready market for these products in the other two members of NAFTA.
Mexico is equally benefiting from NAFTA. Mexican companies can now tap the US market by
replacing goods that were earlier purchased from Asia. Further, their products now highly price
competitive due to low-cost labor proximity to the US market.
The European Union Has 27 member countries. The unified market has removed most conditions
hindering trade earlier between the participants. Further, some countries have adopted a single
common currency that euro the first central bank that has constituted.
Chief effects of EU –
 The nationalized industries have been privatized
 EU has fully emerged as an operational, economic union.
 These countries have typical custom duties and standard industrial and commercial
policies for countries outside the union.
Economy packs are forked between countries to establish a mechanism or a system by which
companies of the member countries can establish their companies in each other's markets. This
entails posting expatriate Managers who need to be equipped with a multicultural research
mindset to learn about customs, cultures, and hard habits of people in target markets.
International managers thus need to know the management styles which will be affected in
running an overseas operation. In other words, an ethnocentric approach to management needs to
be reevaluated and possibly modified to address the ethos and working style of the employees or
workers in the target market. It is thus essential to study international management and learn by
systematical analyzes of primary information as to how managers in target markets behave
towards their employees and their work. Hence adjust working AM managers working in Japan
may need to adopt a collectivistic style of functioning, While a Japanese manager posted in the
United States may need to add up an industrialist style of work to discharge their responsibilities.

Question 03- Why does Russia and Eastern Europe of interest to international
managers? Identify and describe some reasons for such interest and risks
associated with doing business in these regions.
Ans- Europe is always considered as a safer option for investment because of its sound
communication and technological advancement and favorable policies. However, apart from
that, many countries have different policies, and investors need to be aware of these before
considering an investment there.
One of the significant events on the economy of modern Europe occurred in 1991 when the
countries in the Soviet Union decided to get separated themselves. As a result, different countries
took different policies to cope up with that.
In recent times, the economy of Russia has progressed, and the number of middle-class families
has expended than ever before. All because of their relationship with the International Monitory
Policy (IMF). As a result of that, their GDP is enjoying growth, and their economy is turning into
a market-based economy.
One pervasive site on the Russian economy is a persistent crime, corruption, and lack of public
security. As a result, many foreigners do not feel safe to deal with business in Russia. Russia is
such a large market, however, and has so much potential for the future that many MNCs feel
they must get involved, especially with a promising rise in GDP. There also has been a
movement toward teaching Western-style business courses, as well as MBA programs, in all the
Central European countries, creating a more significant preparation for trends in globalization.
In the case of Hungary, the state-owned resources and hotels have been privatized, and as a
result, more and more investments from private sectors are giving their attention towards the
country. Apart from that, a vast number of skilled laborers are also having a significant influence
on their growth. So, MNC's are beginning to invest in these areas more than ever before.

In Poland, it was one of the most engaged communist states. Moreover, their first general
election was held only in 1989. Still, their political environment has not achieved stability. Apart
from that, the country has a high rate of inflation and the unemployment rate. Despite all these,
their economy is continuously enjoying growth in their GDP.
The key for Albania and the other Eastern European countries is to maintain the
social order, establish the rule of law, rebuild the collapsed infrastructure, and get factories and
other value-added, job-producing firms up and running. Foreign investment must be forthcoming
for these countries to join the global economy. A key challenge for Albania and the other "have-
not" Eastern European countries will be to make themselves less risky and more attractive for
international business.

Question 04- Many MNCs Have secured a foothold in Asia, and many more are
looking to develop business there. Why does this region of the world hold such
an interest in international management? Identify and describe some reasons
for such interest.
Ans- For this discussion, a few key areas of Asia shall be discussed by their attractiveness of
MNCs, the reason being that many countries comprise the content.
Japan MNCs interest in the Japanese market teams from certain fundamental factors aiding their
business interests. Some of them are –
 Japan's recognition as world leaders in manufacturing and consumer goods triggered
significant investment from developed economies.
 The Japanese government initiative, ministry of international Trade and Industry, has
streamlined national commercial pursuits and determined the distribution of national
resources accordingly. As a result, automation, biotechnology, computers, and data
processing industries have generated immense wealth. The MNCs are viewed in this
sector as strategic business investments.
 The concept of "Keiretsus" As employed by Japanese companies, has big vertically
reintegrated companies to supply and the same time receives assistance in providing
goods and services to end-users. These concepts help them to reduce lead time and
achieve profitability in comparison to international competitors. This practice has become
 a source of international management study for global managers and multinational
companies.
China initiated structured reforms in its economy to attract the attention of large companies.
To start with, it offered sizable tax breaks to companies from developed economies to set
up shops in China. This made it a lovely market, as MNCs were offered the opportunity to
produce high-quality products at a lower cost. Second, the sheer size of China market
ensured profitable volumes of business. Lastly, the Chinese economy has clocked
consistent growth in its GDP peaking at 11.1 percent at the beginning of 2007.
In South Korea, the management of Korean companies owing to their university education in
the West is well versed with the culture, customs, and the language of all those countries. Its
managers are thus able to able to harness this information to build competitive international
strategies. Further, the government has encouraged privatization and withdrawn foreign
ownership restrictions. The option has led to the Korean economy registering moderate
growth, moderate inflation, export surplus, and equitable income distributions. All these
conditions contribute to the immense interest shown by the MNCs in South Korea.
Taiwan's transition from labor intense economy toward a technology-driven economy,
including industries from banking, power, petroleum, refining computer hardware, has
attracted substantial foreign direct investments.
Other South Asian economies like Thailand, Indonesia, and even Vietnam have made
economic gains due to inexpensive labor, social stability, and export-driven focus. As such,
they will continue to attract global investments.
In India, though India is a less developed country, it is started to attract large Evans is from
1992. After the initiation of the liberalization of its economy. It has become one of the most
integrated economies due to the following reasons.
 Its ability to offer ID software and it enables services through outsourcing by
multinational companies.
 Its GDP's expansion to a level conducive to inviting significant FDI.
 A large pool of English educated workforce expertise in advanced IT.
 Our telecommunication market is expanding and will require significant capital
expenditure. These investments have high returns. Thus, companies can harness this
business opportunity.
It is thus observed that all markets in Asia hold potential for large multinational companies to
explore and harness. Most of the economies are witnessing the developing states an offer natural
advantages in terms of factors of productions.
Question 05- Why would MNCs be interested in South Asia, India, The
Middle East, and Central Asia, Africa and the less developed and emerging
countries of the world? Would MNCs be better of focusing their efforts on
more industrialized regions?
Ans- The multinational companies from the developed world have shown up the propensity to
invest in developing less developed countries. LDCs for several business reasons. These reasons
not only determined their existence and growth but also contributes to the globalization and
integration of the target markets. The companies realized that the next wave of expansion could
come from developing countries. The premise is based on reasons which are explained below-
 Economists estimate that based on the purchasing power parity method by 2020, China
would become the largest economy in the world, surpassing the developed United States.
India occupies the third position. Nevertheless, this sizeable Asian economy does need to
factor in the growth plans of multinational companies from developed countries. Both
countries will be the most populated in the world and thus become the largest market for
the product and services of the multinational companies.
 African markets are being farmed up of prices of commodities, such as oil and gas,
agricultural products, and mineral and mining products. As a result. Income and wealth of
African countries are showing an upward trajectory. Companies would be inclined to tap
the business opportunities arising out of this growth in the core sector of these emerging
economies.
 Many developing countries in Central Asia received more or equal FDI compared to
developed economies in the West in the first decade of this century. It shows the shifting
balance of economic influence among developed and developing countries.
 South American countries are registering commendable business growth due to
regionalization. It entails bilateral and regional free trade agreements like NAFTA with
America. Both the United States and South American countries have benefited from this
due to measures like the elimination of tariffs, export, and import quotas. The opportunity
cost of ignoring these free trade agreements will thus be counterproductive to the
multinational companies
 The LDC of the Middle East, with oil as their largest asset and natural resource, play a
significant role in the commercial business area. The organization of petroleum exporting
countries, OPC has members, both from the Middle East and South America.
Industrialized nations, with their eminences, rely on imported oil from OPEC countries,
to sustain their operations. Multinational companies hoping to set up businesses in these
countries for the oil industry need to have a working knowledge of the customs, culture,
and management policies prevailing in these markets.
For a reason given above, it can be inferred that multinational companies need to consider the
business potential of developing, LDC emerging economies to take forward the process of
globalization and integration. This does not mean that multinational companies can ignore other
developed markets. After all, they will continue to be a source of sustained revenue. The
enormous trading partners post to the developed countries will continue to remain strategic
business partnerships. However, to avoid stagnation and saturation in business revenues.
Multinational companies from the developed world will have to explore other markets to see
growth.

Question 06- MNCs from emerging markets (India, China, Brazil) are
beginning to challenge the dominance of the developed multinational
companies. How might MNCs from North America, Europe, and Japan
Respond to these challenges?
Ans- The advent of globalization has seen the rise of emerging MNCs from developing countries
competing with the established immense is from the developed world. Cost is there not the only
point of difference. Quality is equally taken care of.
The competition from these emerging multinational companies for many products and services is
our reality in the global markets. It becomes imperative for the established multinational
companies to safeguard their business interests by adopting strategies that address the crucial
matters. A discussion on these strategies follows –
1.Respect for a new competition-
a) It is essential to identify the size of the domestic markets in foreign territory.
b) Equally vital is to recognize the product segment in which the emerging multinational
companies is reliable and what is the size of the segment in the domestic market?
c) Inputs from A&B given important information for addressing the product segments, both
in domestic and foreign territories.
d) Increase research and development in higher-end product segments for large customers in
key markets and also expand production in these markets.
2. Acquire potential companies before the competition does. The strategy ensures market share
either at home or abroad because it prevents competition from being building operational skill
and efficiency recovered to conduct business in these other markets.
Three strategies can also tackle emerging companies in the domestic markets:
 targeting the B2B business and winning large orders from large corporations-this ensures
Hi return on investment and shorter break-even time to recoup the investments.
 Investing strategically in domestic tech startups -this ensures faster market penetration as
a startup offer innovation in the marketplace, something which can be productively
harnessed by the established multinational companies.
 It was fogging a tie-up with a local rival of the domestic MNC.
4. Joining that emerging MNC-the strategy if he says is working with the local M&C to benefit
in mutual areas of interest, for example, initiating a joint venture to produce and export goods.
That emerging M&C is thirst treated as an opportunity, not as competition.
Most MNC work on the overhead lines to address competition from the emerging multinational
companies, although variations may be seen. However, adopting one of the above strategies is a
combination that is a necessity to stay relevant in the global business markets.

References-
 https://www.mheducation.com/highered/product/international-management-culture-
strategy-behavior-luthans-doh/M9781259705076.html
 https://en.wikipedia.org/wiki/Economy_of_Poland
 https://www.worldbank.org/en/country/russia/publication/rer
 https://www.journals.elsevier.com/journal-of-asian-economics