Faculty of Agricultural Sciences

International Food Business in

FBM32043

Assignment

Dilrukshi W.S.
15AGF1188
Date of Submission:
30.02.2021
01.International Business
Ecuador's valentine rose industry
1.How does participation in the international rose trade help Ecuador's economy & its people?
2.How has the rise of Ecuador as a center for rose rowing benefited consumers in developed
nations who purchase roses?
3.What do the answers to these questions tell you about the benefits of international trade?

02. National Differences in Political Economy

1.Free market economies stimulate greater economic growth, whereas state-directed economies
stifle growth. Discuss
2.A democratic political system is an essential condition for sustained economic growth. Discuss
3. What is the relationship between corruption in a country (i.e. bribe taking by government
officials) & economic growth? Is corruption always bad?
4. Neo liberalism and the world.
Neo-liberalism is simultaneously applied to market-oriented reform policies such as "deregulation of
capital markets, regulation of capital markets, reduction of trade barriers" and, in particular, reduction of
state influence in the economy through privatization and austerity.
Human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills
within an institutional framework characterized by strong private property rights, free markets, and free
trade. The ‘neo’ of ‘neoliberalism’ consists in ‘extending and disseminating market values to all
institutions and social action, even as the market itself remains adistinctive player
Neoliberalism is generally associated with policies like cutting trade tariffs and barriers. Its influence
has liberalized the international movement of capital, and limited the power of trade unions. It’s broken
up state-owned enterprises, sold off public assets and generally opened up our lives to dominance by
market thinking.
The impact of the neo-liberal concept in a country and its limitations can be seen here.
 It is often successful in creating macroeconomic stability
 In some cases, there was economic growth and in others it was declining.
 Poor distribution of the benefits of economic growth
 The necessary reduction in government social spending often led to a decline in population
health and education.
 Increasing poverty
 The lesser role of the state led to an increase in the role of NGOs / CSOs to fill the gap.
 Often with political repression e.g. Chile
 It misinterprets the important role that the state can play in development. Taiwan, Japan, South
Korea, Bhutan
5. Study the world’s top Indian richest billionaires.
 Mukesh Ambani chairs and runs $88 billion (revenue) Reliance Industries, which has interests
in petrochemicals, oil and gas, telecom and retail.
 Ports tycoon Gautam Adani controls Mundra Port in his home state of Gujarat. His $13 billion
(revenue) Adani Group's interests include power generation and transmission, edible oil, real
estate and defence.
 Indian IT pioneer Shiv Nadar cofounded HCL in a garage in 1976 to make calculators and
microprocessors.
 Veteran Mumbai investor Radhakishan Damani became India's retail king after the March
2017 IPO of his supermarket chain Avenue Supermart. Damani got into retailing in 2002 with
one store in suburban Mumbai. Today he has 214 DMart stores across India.Today, he chairs
HCL Technologies, a $9.9 billion (revenue) company, which is India's third-largest software
services provider by market cap.
 Four siblings, Srichand, Gopichand (pictured), Prakash and Ashok, control multinational
conglomerate the Hinduja Group. Their group's businesses range from trucks and lubricants to
banking and cable television.
 Son of a horse breeder, Cyrus Poonawalla founded Serum Institute of India in 1966 and built it
into the world's largest vaccine maker (by doses). Serum produces over 1.5 billion doses
annually of a range of vaccines, including for measles, polio and flu.
 Reclusive tycoon Pallonji Mistry controls Mumbai-headquartered engineering and construction
giant, the 155-year-old Shapoorji Pallonji Group. The family's biggest asset is an 18.4% stake in
Tata Sons, holding outfit of the $113 billion (revenue) Tata Group, a conglomerate of 30
companies.
 Spurning his family's trading business, Uday Kotak started a finance firm in 1985 then went on
convert it into a bank in 2003. His Kotak Mahindra Bank is now among India's top four banks in
the private sector, boosted by its 2014 acquisition of ING Bank's Indian operations.

3. Differences in Culture
1. Choose 2 countries that appear to be culturally diverse. Compare the cultures of those countries
& then indicate how cultural differences influence;
a. The costs of doing business in each country
b. The likely future economic development of that country
c. Business practices
2. Outline why the culture of a country might influence the costs of doing business in that
country. Illustrate your answer with examples.
Sometimes cultural differences between countries can have a negative impact on free market
transactions. McDonald's, for example, produces a wide variety of fast food. They often make products
using different meats to suit their customers' needs. In our country we have several ethnic groups and
they believe in different religions. Their religious views are diverse. Muslims in particular never use ork
meat for their consumption. Hindus do not eat beef. Considering these facts, McDonald's does not like to
use that meat to produce food for this religious group. It greatly affects business operations, revenue,
and so on.
Sri Lanka is a Buddhist country. Many people believe in Buddhist philosophy. There are different
opinions according to this view. Gambling is one of the most lucrative businesses in the world. This
business can earn more without spending money. But according to Buddhist culture, it is immoral.
Religious leaders do not want to run this kind of movement and they strongly reject it. So as a country
we have to face many obstacles. Although gambling like casinos is unethical, banning it will affect the
country's revenue. Also, the breakdown of investor confidence, the decline in foreign investment, could
adversely affect the country's business sector.
3. Japan presents an interesting example of how culture can influence competitive advantage.
The Japanese they take very seriously about having their own corporations run their country. It is very
difficult for outsiders to go business there. Japan has a very large IT distribution sector and the largest
IT distribution corporation that generates $40 billion in revenues headquartered in America is not able to
set-up shop in that country. Japanese culture simply believes that it is best if their corporation, their
employees and their stock-holders benefit from doing business within. It is very interesting because
Japan does an amazing job at selling its products and technology outside. As a matter of fact, they have
already successfully started robotics assistance for the elderly. Something that the rest of the world will
slowly catch-up on.
4. Ethics in International Business
1. A visiting American executive finds that a foreign subsidiary in a poor nation has hired a 12-year –old
girl to work on a factory floor, in violation of the company’s prohibition on child labor. He tells the local
manager to replace the child and tell her to go back to school. The local manager tells the American
executive that the child is an orphan with no other means of support, and she will probably become a
street child if she is denied work. What should the American executive do?
2. Is it ethical to test an experimental drug on children in emergency settings in the developing world
where the overall standard of health care is much lower than in the developing world, and where proper
protocols might not be followed?
3. Is corruption always bad?
05. International Trade Theory
01. Mercantilism is a bankrupt theory that has no place in the modern world. Discuss.
Mercantilism is a bankrupt theory that encourages exports but discourages imports. It is based on the
concept that revenue is earned through exports but resources and income are traded for imported goods.
According to the theory, by restricting imports and increasing exports, a country can accumulate trade
surplus and gain wealth and power as its counterpart wealth. However, this theory is wrong, because
over time the inflow of money into the trading country will lead to inflation. These high prices will
discourage trade from other countries to buy exports, and over time, trade countries' revenue streams
will stagnate.
02. Is free trade fair? Discuss.
Free trade is fair because it is legal, profitable and can be approved by every country. It exists in trade
agreements between countries that sign on a voluntary basis. The specialized agency monitors trade
relations and ensures the execution of all agreements.
Free trade focuses on reducing barriers and policies that are favorable to certain countries or industries.
However, fair trade seeks to improve workers' rights, improve working conditions and eliminate wage
inequality from country to country. Trade is free as long as there are no restrictions on subsidies,
sanctions or imports. If it does not, there will be no free trade.
03. Unions in developed nations often oppose imports from low-wage countries and advocate trade
barriers to protect jobs from what they often characterize as “unfair” import competition. Is such
competition “unfair”?

4 a. Is there a difference between the transference of high-paying white-collar jobs, such as

computer programming and accounting to developing nations, and low-paying blue-collar jobs? If
so, what is the difference?
b. should the government of developed country do anything to stop the flow of white-collar jobs to
countries like India?
5. The world’s poorest countries are at a competitive disadvantage in every sector of their
economies. Free trade cannot possibly be in the interest of such nations. Discuss.

06. The Political Economy of International Trade

You are an employee of a U S firm that produces personal computers in Thailand and then
exports to the U S and other countries for sale. The personal computers were originally produced
in Thailand to take advantage of relatively low labor costs and skilled workforce. Other possible
locations considered at the time were Malaysia and Hong Kong. The U S government decides to
impose punitive 100 per cent ad valorem tariffs on imports of computers from Thailand to punish
the country for administrative trade barriers that restrict U S exports to Thailand.
How should your firm respond?
What does this tell you about the use of targeted trade barriers?