UNIT 1 INTRODUCTION TO INTERNATIONAL BUSINESS ENVIRONMENT Structure 10 Objectives 1 lewoduetin 12 Conept and Relevance of trains Besiness Envrament 121 Mico wel Mo Een 122. Domes Pregnant Erisomet 123 Alar of terse! Donen Eneoamest, 13 Analysis of the Component of Foreign Envsonment | Stour Envionnee 17 Polite Envionment 18 Lap Entonment 19 Belo! Exvrnmert 0 Ler Sum Up EH KeyWord 2 Aatwerso Check You Progress V3 Terminal! Questions 1.0 OBJECTIVES ‘Mer pin srogh wi, shold be abet: * eatin meaning mare an elevane of neratonsl busines envionment + seve the atest fin and lbs dimensions of nematon! busines envtonement sch a suppliers, various sand customers which iealy 1, socio pois legal ‘he frm as well aster actors lehome tiedomesti) entry, \ — oponrphi eres ources end people "economic and financial eaties sper. nastuctre, | Nay ante systems, eeount man's howe bei an, acquired by man as amenber of c1sothe pla gs of svcen plas, anal, people and UNIT2 THEORIES OF INTERNATIONAL TRADE Structure 20. Objectives 21 troduction 22. ObjecivesofTade Theories 23. Rleardian Theory of Trade 231 Latour Ther of Vale 232 Atk Flvion 2213 Arle Advaigs ves Conpantve Advani BAM TrecTine sn Gis fram Trade ns Temaartrae 2k The Neoelasies! Theory of Trade AL Helse Face Antes 242. Fae eens LA “Theasumptos of he Noosa Mott SAA Frode tie Rat ond Fs Pi Rat 24S Thetedsder ble Sanceton (HOS) Them Bk Faris Eqn Theorem 242 Suchen Sole Thre | DAK Renna Theorem 25. Modern Theis of Trade 26 LetUssum Up 27 Key Words 2 Answers to Check You Progrest 29 Temina Questions 0 OBJECTIVES _Nfer saying hs unit, you should be abe + desc the ptrfralises the relative commodity price UNIT 3. BALANCE OF PAYMENTS Structure 30 Object 31 Introduction 32 Definition 33. Underlying Principles and Conceptual Framework 34 Balance of Payment Accounting 45. Components ofthe Balance of Payments 35.1. The Curent Account 352 The Cap Account 153 The Other Account 36 Deficit and Surplus in Balance of Payments 37 Balance of Payment Disequilibrium BB Factors Affecting Balance of Payments BEL The Curent Account 5.82 The Capital Account 39. Methods of Correcting Disequilibrium 310 LetUs Sum Up 311 Key Words BI2 Answers to Check Vour Progress ‘Term QuestionsUNIT 4. INSTRUMENTS OF TRADE POLICY Structure 4.0 Objectives 4.1 Introduction 4.2 A Partial Equilibrium Theory of Trade 43° Non-Tariff Barriers to Trade 44 Quota versus Tarif 45 Exchange Control 4.6 Balance of Payments Adjustments 4.7 Flexible Exchange Rates 4.8 Fixed Exchange Rates 4.9 Let Us Sum Up 4.10 Key Words 4.11 Answers to Check Your Progress 4.12 Terminal Questions 4.0 OBJECTIVESUNIT 5 GLOBALIZATION: AN OVERVIEW Structure 50. Objectives 51 Introduction 52 Whatis Globalization? 53. Major Forces of Globalization 5.3.1 Intemational Trade and Globalization 5.3.2 International Capital Flows 5.3.3 Globalization and Technology 54 Effects of Globalization on the World Economy 55 Globalization at the Firm/Corporate Level 36 Cross Border Mergers and Acquisitions 57 Indian Perspectives 58 Glocalization 59 LetUsSumUp 510 Key Words Sul Answers to Check Your Progress 5.12 Terminal QuestionsUNIT6 INTERNATIONAL INVESTMENT Structure 60 Objectives 61 Introduction 62 Nature and Types of International Investment 63 FDIand Developing Countries 63.1 Advantages 63.2 Limitations 64 Recent Trends in FDI Flows 64.1 Sectoral Distribution of FDI 65 Trade Related Investment Measures (TRIMS) 66 Multilateral Investment Agreement (MIA) 6.6.1 Arguments in Favour of a Comprehensive Multilateral Framework 6.62 Various Measures for Consideration for MIA. 663. Incentives Provided by the Government 6.6.4 Mulilateral Investment Guarantee Agency (MIGA) 67 FDIin India 68 Let Us Sum Up 69 Key Words 6.10 Answers to Check Your Progress GAL Terminal Questio | 6.42 Cross-Border Mergers and AcquisitionsUNIT 7 TRANSNATIONAL CORPORATIONS =| = differe They a Structure quarter system 10 Objectives manufa 71 Introduction | betwee' 72 Definition of INCs ©. countri 73° Why Firms Become Transnational? 74 Features of TNCs uNncT: 75 Theories Explaining Emergence of TNCs in World Economy compris 76 Recent Trends in TNCs enterpr 7.7 Issues and Controversies certain 78 The Indian Perspectives Shares. 79 LetUs Sum up one isn 7.10 Key Words central TA Answers to Check Your Progress importa 7.12 Terminal Questions Subsidi ‘owns mUNIT 8 TECHNOLOGY TRANSFER Structure 80 Objectives 7 81 Introduction 82 Rational of Transfer of Technology 7 83 Recent Trends and Current Issues e 84 Transferof Technology, FDI and TNCs 85 Organisational Innovation and Management Practices 86 Non-Equity Forms of Technology Transfer by TNCs and Small and Medium Enter- prises { 87 Vital Components of Contract £8 Intellectual Property Rights 8.8.1 International Agreements for Intellectual Property Rights 882 India and Intellectual Property Rights 883 TRIPS and Devleoping Countries - 89 India and Transfer of Technology 810 Let UsSumUp B11 Key Words 812 Answers to Check Your Progress ‘Terminal QuestionsUNIT 11 REGIONAL ECONOMIC GROUPINGS Structure 11.0 Objectives TL Introduction 112 Overview 113 History 11 Forms U.S Present Postion 16 Rat 1.7 Regionalism vs Multilateralism 18 timpact 11.9 Sutegy U0 LetUs Summ Up WLLL Key Words T12 Answers to Check Your Progress 13 “Tenminal Questionsen Tome Ta ‘ONTI0 MULTILATERAL TRADING ~~ me De SYSTEM oe } = = {190 tn 4 = 101 Iesoduatlon i BS Seer cgrere a EE Bayemheercrag weaoe aan UNIT 12, INTERNATIONAL COMMODITY cs. AGREEMENTS the formation ofa regions grou ce ame 1 regional grouping leads reflected inthe increatd trade with gether and form a single firm. 1222 Tens of Tadeo Penicy Product wil Manas i 1223 Commodiy Muhus and Treas! Comorens ver one or more ater companies. 123° Long-Terms Factors Affecting the Demand for Primary Commodities 124 International Commodity Agreements ws homogenous parts onthe basis of 125 UNCTAD and Commodhis 1281 The Common Fund 1232 Compensutery Faecing Fety ee 125 A Review of Major Intrrational Commodiy Agreements JUR PROGRESS 1241 Inernadonl Raber Agreement ap NaE iE aRISTAGOU 1262 tmeratonl Supa Apreem=nt 1263 ternational Te Agreement mee ne) a 1264 tnematonal con Agrcmnt pe a 1265 termaton! Coles Aareent 1267 _Ieratinal Wiest Ageoment 127 | Let Us Sem Up aaa AE 128 Key Worse the second world war colina 129. Anawers to Check Your Moses ater _ 12.10 Terminal Qoestons ments o USA snc the 80. Now rae Area (NAFTA) with Canda AC ee lopment on the export prospects 2a OBJECTIVES in your anter,ching, export quotas and price ceilings TINTPTTA a TATTEDE AI AHR TERS hich agreements have been signed. UNIT 13. INTERNATIONAL FINANCIAL shih. Common Fond under Integrated 5 only to provide research and develop- INSTITUTIONS ommodites agreements. They ae: agreement, international tin agreement, agreement, internation olive oil, oe 130 Object 1A Induction 132 Intemational Monetary Rand 1321 Brchange Rate Poies 1322. ‘The Conen Sysen of Exchange Ree Detention ne either lie proces o value addition, 1323. Exehange Restitons 1324 Final Resooes and Poices = bought bya given quantity of a 1323 Fnancll Asisance 13.26 Spell Drawing Rigs 1327 Omer Acie 1d managed by naonalsin diferent 1328 Sinuture nd Monger 133 The World Bank 1331. Fines! Operon 132 Teemial Ariane Programes 134 International Finance Corporation 135 Intemational Development Association 136 Regional Development Banks 13.61 lier American Development Bank 13462 The Arian Developmen Bk 1.63 The Afton Development Beak eration designed wo stabilize and ease aiinaeaenas 18 KeyWords ata 139 Answer t Check Your Progress buffers stocking operations. eg Saar eco pment (UNCTAD): A UN body that hs ips baween developing and ler Ua lies stockes of commodities UR PROGRESS OBJECTIVE!ER UNIT 9 WORLD TRADE Structure 9.0 Objectives 9.1 Introduction 9.2 Overview of World Trade 93 94 95 9.6 9.7 9.8 99 9.2.1 Commodity Composition 9.2.2 — Region-wise Trade 9.23 Major Trading Nations 924 Direction of Trade ‘ Trade in Services Export Basket of Developing Countries Problems of Developing Countries Let Us Sum Up Key Words Answers to Check Your Progress Terminal QuestionsUNIT 15 THE PROPER LAW OF THE CONTRACT OR THE LEX CAUSAE Structure 150 Objectives 151 Introduction 152 The Proper Law of the Contract ‘When Choice of Law Clause Existing or Present in the Contract 153 The Proper Law of the Contract ‘When Choice of Law Clause not Existing or Absent in the Contract 154 Qualifications of the Proper Law 155 Application of Lex Causae to Sale of Goods 156 Standardised Export Sales Contract 15.6.1 Concept and Elements of Export Sales Contract 15.62 Principal Provisions of ESC 15.6.3 Model or Standardised Export Sales Contract 157 Let Us Sum ‘up 158 Key Words na ur Jay ticei Oe UNIT 16 SETTLEMENT OF INTERNATIONAL TRADE j I Objectives DISPUTES Tiwodveton ‘Ares of etenatonl Trade Diptes ‘Metods of etement of Intron! Trade Disputes (1632 tien Legon | 1632, Typeetomneil Aizon | 1633 Aine Cha Aareenet | 1834 erate Dit eon (AD) al Cneion | 164 Role of OC fe Arbitration and Colston 16.5 Major Issues in Setement of Iteration] Trade Disputes 1] 16.5 Overview of Indian Arbivation and Conlon Act 1996 Relevant fr lteme- ‘ioral Commercial Arbiaton snd Coneiltion 167 Lats Sum Up 168 Key Words 169. Anowerst Chock Your Progress | 16.10 Terminal Questions leona tem om Sips or irene re thee ruc for the pees or when he Spica formal sonable on Sebo, Diputes, whether appar cue of iteratonal ade ts (deme scope for ade dpa nt ade disputes, the major {lnm ate dats and an ver ‘Svan fo eration emer 16.2_AREAS OF INTH Brondly, the commercial disputes a} rision by the partes to the cont ‘cotati. they bégome unable 0 ‘outrocs. The areas of disputes apy light some ofthe most important paris 1) Disputes arise when the con-UNIT 14 LEGAL FRAMEWORK OF FOREIGN TRADE 42 us 148 | i 146 147 i 9 ( | Structure Mo wa 14.0 OBJECTIVES Objectives Introduction Legal Framework of Foreign Trade When the Relationship of the Parties is Contractual Legal Framework of Foreign Trade When the Relationship ofthe Parties is Non-Contratual ‘An Overview of Indian Contract Act 1872 T4A.1 Structure ofthe Law of Contract 1482 Special Feaures ofthe Law of Contact 1443 Essential Elements of « Valid Conroe 1444 Clasiieation of Contracts Sale of Goods Act 1930 — An Overview 145.1 Structure ofthe Law of Sale of Goods 14.52. Special Features ofthe Law of Sale of Goods 1453 Conditions and Warraties in a Contract of Sale 1454. Transfer of Property inthe Goods 1455 Transfer of Tite to Goods Let Us Sum Up Key Words Answers to Check Your Progress ‘Terminal QuestionsUNIT 17 INTERNATIONAL TRADE AND ENVIRONMENT Structure 0 ne (mic, te oan efni eon i SS Een Cit nr #3 Steal Asc ete 1G Rise, iis Reiter 6 Hakala Sc 1 Rida te htc Bac Coat ti Heer, vis sine Sy Rotting a Saencaen settle tran Ten Eee ee rms rt Aree 17.0 OBJECTIVES, After staying this wit, you shouldbe abe to: 1 describe the growing importance ofthe enentiation. i A ee UNIT 18 INTERNATIONAL TRADE IN SERVICES Structure 18.0 Objectives 18.1 Introduction | {82 Trade in Services: Conceptual Aspects 183. Rote of Trade in Services in Eoonomi Development 184 Revent Trends in World Trade in Services and Prospects 184.1 Overall Teds 1842. Dirceton of Trae In Servis ( {843 Composition of rte in Services et Fane Trade Prospects 185 Indian Perspective i 18 LatUs Sum Up 18.7 Key Words i RB Answers to Check Your Progress 189. Terminal Questions pe 18.0 OBJECTIVES ‘After studying this unit, you should be abet ade in service: | 9 describe the concept of capa the ole of trade in series in economic devlonnens fe describe changes in value and patternUNIT 19 INTERNATIONAL BUSINESS ETHICS Structure 19.0 Objectives 19.1 Introduction 19.2 The Concept of Ethics 19.3 Approaches to Ethical Management 19.4. Frameworks for Resolving Ethical Dilemmas 19.5 Ethics and International Management 19.6 Ethical Systems of Belief 19.7 Foreign Corrupt Practices Act of USA 19.8 Ethical Issues in International Trade 19.8.1 Ethical vfs Unethical Activities 19.82 Code of Ethics for International Marketing 19.9 Business and Social Responsibility 19.9.1 Areas of Social Responsibii 19.9.2. Approaches to Social Responsi 19.93 Institutionalising Social Responsibility 19.10. Let Us Sum Up 19.11 Key Words 19.12 Answers to Check Your Progress 19.13 Terminal Questions atise in any ex ‘hat can provi ()Ifasingle the conflicting by companies, adrug AZT th of $3,000 for ¢ is that it has ke investors and for the drug, it impairing the | A person whos the price shoul repay sharehol more appropri pulled by cont Ethical Dile The ethical iss ethical lapses. sides. The pro ethical dilemm them to advert Examples of suLL UNIT 20 ELECTRONIC COMMERCE 28 BUSINESS poe ‘We are living in the information age.” ‘and services has been steadily increas their products and transactions will su customers. To handle information eff information technology (17) infrastruc the reach of most companies, they can network service providers. Structure 20.1 Objectives 202 Intredvetion 20.3 Emerging Directions in fnternatonal Business 204 Electronic Commerce (EC) 205 Thelnteret Ae neta 20.7 The World Wide Web (WWW) Ph pep ar rents 208 Electtonic Data Interchange (EDI) sis taspllee und cusoiners sequin Beene rte Satine Be Baha iou caren ee Bod cence mee si a Srey aia an 20.9.2. Electronic Trading Opportunities (ETO) Systems a 20:10 Commerce Nest Mass customization is an emerging trer ‘20,11 Business Issues version may not be accepted by individ 20.12 Let Us Sum Up ‘customized products within a m: ini Sea Seca BB seman pC Yor boone Soe re 20.15 Terminal Questions Information — A Valuable Res (Our main objective isto create an aware 204_OBSECTIVES Sevier tc ofits careinbictend erin cecer ‘After studying this unit, you shouldbe able to: Pech treba alone