SHUBHAM/ MBA-IB

ANSWER-1
Technology includes the tools both machine (hard technology) and ways of thinking (soft technology)
available to solve problems and promote progress. Since the end of World War II, the world has seen
major advances in communication, information processing, and transportation technology, including
the explosive emergence of the Internet and World Wide Web.
• J. K. Galbraith defines technology as a systematic application of scientific or other organized
knowledge to particular tasks”.
• The type of technology in use, the level of technological developments, the speed with which
new technologies are adopted and diffused, the type of technologies that are appropriate, the
technology policy etc. are important to business to survive in global market.

Importance of Technology in International Business

• Telecommunications: it is one of the important dimensions of technological environment

being faced by international business.
• Transportation: the development of commercial jet aircraft and super freighters and the
introduction of containerization, which simplifies transhipments from one mode of transport
to another.
• Globalization of Production: A satellite-based communications system allows MNC’s to
coordinate on a global scale; its production planning, cost accounting, financial planning,
marketing, customer service and human resource
• Globalization of Markets: Low-cost global communications networks such as the World
Wide Web are helping to create electronic global market places.
• E-Commerce: Because of the low entry costs of the Internet it has permitted firms with low
capital resources to become global marketers
• Technology Transfer: is a process that permits the flow of technology from a source to a

The technology redefined the global business through its developments like internet, www
sites, e-mail, cyberspace, information super highways. Computer Aided Design (CAD), Computer
Aided Production (CAP) and on-line transactions brought significant development to the global
business.
• These facilities, help the global companies in:
• Reducing the size of inventories
• Reducing delivery time
• Reducing unproductive waiting time
• Reducing the incidents of stock-outs and lost sales

For example: use of MIS (Management Information Systems)

MIS is a collection of systems, hardware, procedures and people that all work together to process,
store, and produce information that is useful to the organization.
• Responding to market changes at a faster rate
• Reducing rush orders.
• Cutting down over production
• Reducing unnecessary movements of forwarding and back-tracking
• Reducing paper work and wasteful process (ERP)
• Planning production levels accurately
• Reducing/avoiding physical movement of employees, suppliers, and customers.
 SHUBHAM/ MBA-IB

ANSWER-2

Corporate Social Responsibility (CSR) allows businesses large and small to enact positive change.
When companies choose to do what is right not only for their bottom line but also benefit financially
while building trust with consumers.
Consumers feel that when they use a product or service of a socially responsible company, they are
doing their part. The more socially responsible the company, the more supportive the community and
consumers become Corporate social responsibility helps build trust, raise awareness, and encourage
social change. Although there are tens of thousands of companies doing their part, large global
corporations’ efforts have far-reaching results that can impact major world issues from hunger and
health to global warming. Here are examples of how some major brands are doing CSR successfully.

Corporate social responsibility comes in many forms. Even the smallest company impacts social
change by making a simple donation to a local food bank. Some of the most common examples of
CSR include:
• Reducing carbon footprints
• Improving labour policies
• Participating in Fairtrade
• Charitable giving
• Volunteering in the community
• Corporate policies that benefit the environment
• Socially and environmentally conscious investments

EXAMPLE
1. Coca-Cola’s massive fleet of delivery trucks contributed 3.7 million metric tons of greenhouse
gases to the world. They have made major changes to their supply chain practices including
investing in new alternatively fueled trucks. Their initiatives are intended to create a 25%
reduction in their carbon footprint by 2020.
2. An excellent example of CSR is global giant Johnson & Johnson. They have focused on reducing
their impact on the planet for three decades. Their initiatives range from leveraging the power
of the wind to providing safe water to communities around the world. Its purchase of a
privately-owned energy supplier in the Texas Panhandle allowed the company to reduce
pollution while providing a renewable, economical alternative to electricity. The company
continues to seek out renewable energy options with the goal to procure 35% of their energy
needs from renewable sources.
 SHUBHAM/ MBA-IB

ANSWER-3
Entering a new market is always a risky business, with a big potential of failure. The options of entry
strategy can help in determine which strategy to use. The major question that the company face in
today’s changing environment t is what is the most suitable and appropriate way for a company to go
global, go beyond its border and enter unpractised territories on foreign sand. When a company is
going global, these are the various areas that needs to be addressed. These are also the issues that
every company has to tackle when it puts its strategy to enter a new market.
Entry methods or strategies can be broadly classified into two categories:
1. Strategic alliances
2. Standalone entries

There are cases where a company are forced to form strategic alliances while entering new market.
This is because of inadequacy of resources, that is required to successfully service the markets and
derive profits from it.
Entry modes can be broadly classified into three groups.
The first group is entering new markets through export modes and that include indirect and direct
exporting, direct agent/distribution, and direct branch subsidiary and other.
The second group is contractual entry modes; licensing, franchising, technical agreements, service
contracts, management contracts, construction/turnkey contracts, co-production contracts and
other.
For the last one that is called investment entry mode includes sole venture or acquisition and joint
venture.

TRADE RELATED INVESTMENT

CONTRACTUAL
ENTRY

MERGERS AND
EXPORTING FRANCHISING
ACQUISITIONS

MANAGEMENT JOINT
INDIRECT
CONTRACTS VENTURES

WHOLLY-
DIRECT LICENSING OWNED
SUBSIDIARIES

PIGGY- STRATEGIC
BACKING ALLIANCE
 SHUBHAM/ MBA-IB

ANSWER-4
The agreement establishing WTO provides that it should perform the following four functions:
• First, it shall facilitate the implementation, administration and operation of the Uruguay
Round legal instruments and of any new agreements that may be negotiated in the future.
• Second, it shall provide a forum for further negotiations among member countries on matters
covered by the agreements as well as on new issues falling within its mandate.
• Third, it shall be responsible for the settlement of differences and disputes among its member
countries.
• Fourth, it shall be responsible for carrying out periodic reviews of the trade policies of its
member countries.
ANSWER-6

The IMF was conceived at a United Nations conference which was convened in Bretton Woods, New
Hampshire, United States, in July 1944. The governments of 44 countries at the Bretton Woods
conference unanimously represented on a fact that a framework should be established at a world
level so that the economies do not get trapped in a vicious circle of devaluation of their currencies
due to depression in economies. All agreed to support and increase economic co-operations in order
to boost world trade, dipping living standard of people leading to dropping of the world trade to a
great extent. In 1944 at Bretton Woods an agreement was done to establish a new international
monetary system.
The basic objective to establish IMF was to
• Promote/ foster International Financial Stability and
• To extend and encourage Monetary cooperation among nations
These two objectives were established with a vision to promote, contribute, encourage and
achieve the following
a) Increased International trade
b) High level of Employment opportunities in countries
c) Achieve sustainable economic growth
d) Reduce the level of poverty worldwide
e) Reduced trade barriers