2 Marks question bank

Subject: International Business Management

Unit 1: Introduction
1. What is international business?
Ans: International business may be defined simply as business transactions that take
place across national borders. Nearly all business enterprises, large and small, are
inspired to carry on business across the globe. This may include, purchase of raw
materials, from foreign suppliers, assembling products from components made in
several countries or selling products or services to customers in other nations.

2. What is transnational?
Ans: Transnational companies which “Transcend” or operate across national
borders. Many companies have its presence outside the national borders.

3. Define ‘Cross National agreements’?

Ans: Cross national agreements or regional trade block is the result of economic
integration of various trading areas of different countries and it is also known as
trade blocks, regional trade organizations, and regional groupings. A trade block
(regional trade block/regional grouping) is a type of intergovernmental agreement,
often part of a regional intergovernmental organization, where regional barriers to
trade (tariffs and non-tariff barriers) are reduced or eliminated among the
participating countries.

4. Write a note on India’s foreign trade policy

Ans: Indian government mainly concentrated on reforms on Liberalization,
openness and export sponsorship activity. It is witnessed that foreign Trade of India
has considerably revolutionized export in the Post reforms period.
Foreign trade in India in legal term is the Foreign Trade (Development and
Regulation) Act, 1992. The Act provide with the development and regulation of
foreign trade by assisting imports into, and supplementing exports from India.

5. What is free trade agreement?

Ans: Free trade agreements are agreements between two or
more countries to establish a free trade area where commerce in goods and
services can be conducted across their common borders, without tariffs or
hindrances but (in contrast to a common market) capital or labor may not move
freely. Member countries usually impose a uniform tariff (called common external
tariff) on trade with non-member countries.

6. What is licensing agreement?

Ans: A licensing agreement is a legal contract between two parties, known as the
licensor and the licensee. In a typical licensing agreement, the licensor grants the
licensee the right to produce and sell goods, apply a brand name or trademark, or use
patented technology owned by the licensor.

7. What is trade surplus?

Ans: A Trade surplus is an economic measure of a positive balance of trade, where a
country's exports when its imports exceed. A trade surplus represents a net inflow of
domestic currency from foreign markets, and is the opposite of a trade deficit, which
would represent a net outflow.

8. What is MFN treatment?

Ans: This principle is known as most-favored-nation (MFN) treatment. It is so
important that it is the first article of the General Agreement on Tariffs and Trade
(GATT), which governs trade in goods. It is essentially a method of establishing
equality of trading opportunity among states by making originally bilateral
agreements multilateral.

9. Write short note on Transnational company

Ans: Transnational Corporation: Any corporation that is registered and operates in
more than one country at a time; also called a multinational corporation. A
transnational, or multinational, corporation has its headquarters in one country and
operates wholly or partially owned subsidiaries in one or more other countries.

10. Define globalization

Ans: Globalization implies the opening of local and nationalistic perspectives to a
broader outlook of an interconnected and interdependent world with free transfer of
capital, goods, and services across national frontiers.

11. Write short note on Globalization

Ans: Globalization has several facets, including globalization of markets and
globalization of production:
1. Globalization of market: refers to the merging of historically distinct and separate
national markets into one huge global marketplace.
2. Globalization of production: refers to the sourcing of goods and services from
locations around the globe to take advantage of national difference in the cost and
quality of factors of production.

12. Differentiate between Ethnocentrism and Polycentrism in the context of

international business
Ans: Ethnocentrism – is the tendency of people to evaluate a foreigner’s behavior by
the standards of their own culture and to believe their own culture is superior to
others.
Polycentrism – if ethnocentrism exhibits intolerance to other cultures, polycentrism
advocates tolerance to beliefs and values of other societies

13. What are the factors causing globalization of business?

Ans: 1. more and more companies are seeking to internalize or globalize their
economics for a number of reasons.
2. Developing markets have huge markets
3. Many MNC’s are locating their subsidiaries in low wage countries to take
advantage of low cost production.
4. Changing demographics also adds to increasing globalization
5. Declining trade and investment barriers have vastly contributed to globalization.
6. The most powerful instrument that triggered globalization is technology.

14. What are the entry modes in international business?

Ans: Exporting – exporting goods directly to foreign customers
International sub-contracting – When a firm in host country has surplus
manufacturing capacity
Countertrade – countries exchange goods for goods and like
Management contract – enforceable agreements on trade related activities

15. Compare Domestic business and International business

Ans: Managing an international business is different from managing a domestic
business for the following reasons:
1. Countries are different
2. The problems faced by managers of international firms are wider and complex
compared to that of domestic firms
3. International transactions involve converting money into different currencies

16. List out the factors affecting International business

Ans: Natural resources
Transaction risks
Governmental policies
Foreign exchange
Political changes

17. Why do you think political environment is essential?

Ans: It refers to the influence of the system of government and judiciary in a
nation on international business. The type and structure of government prevailing in
a country decides, promotes, fosters, encourages, shelters, directs, and controls the
business of that country. A political system is stable, honest, efficient, and dynamic
and which ensures political participation to the people and assures personal security
to the citizens, is a primary factor for economic development.

18. Define cultural environment

Ans: Elbert W steward and James A Glynn writes “Culture consists of the thought
and behavioral pattern that members of society learn through language and other
forms of symbolic interaction – their customs, habits, beliefs and values, the
common view points that bind them together as a social entity.

19. Define trade barriers

Ans: A barrier to trade is a government-imposed restraint on the flow of
international goods or services. The most common barrier to trade is a tariff—a tax
on imports. Tariffs raise the price of imported goods relative to domestic goods
(goods produced at home).

20. List out the criteria for assessing country’s attractiveness

Ans: 1. Political risks
2. Economic risks
3. Competitive risks
4. Operational risks

21. List out some of micro risks involved in International business

Ans: Kidnappings, ransom, terrorism
Official dishonesty
Increased taxation
Caps on FDI

22. What are the major classifications of risks in context of International business
Ans: Political risks
Economic risks
Competitive risks
Operations risks

23. What is liberalization?

Ans: In general, liberalization (or liberalisation) refers to a relaxation of
government restrictions, usually in such areas of social, political and economic
policy.
In some contexts, this process or concept is often, but not always, referred to as
deregulation
Unit 2: International trade and investment
1. Define the term International trade
Ans: International trade is the exchange of capital, goods, and services
across international borders or territories, which could involve the activities of the
government and individual. In most countries, such trade represents a significant
share of gross domestic product (GDP).

2. What is meant by International investment?

Ans: International investing is the strategy of selecting globally-based investment
instruments as part of an investment portfolio. International investing includes such
investment vehicles as mutual funds, American Depository Receipts, exchange-
traded funds (ETFs) or direct investments in foreign markets.

3. Name some theories of international trade

Ans: 1. Mercantilism
2. Theory of absolute cost advantage
3. Comparative cost advantage
4. Relative factor endowment theory
5. Country similarity theory

4. What is new trade theory?

Ans: One important motivation for international trade is the efficiency
improvements that can arise because of the presence of economies of scale in
production. Although economists wrote about these effects long ago, models of trade
developed after the 1980s introduced economies of scale in creative new ways and
became known as the “New Trade Theory.”

5. What is internationalization?
Ans: International business is a term used to collectively describe all commercial
transactions (private and governmental, sales, investments, logistics, and
transportation) that take place between two or more nations. Usually private
companies undertake such transactions for profit; organizations undertake them for
profit for political reasons. A multinational enterprise (MNE) is a company that has
a worldwide approach to markets and production or one with operations in more
than a country.

6. Define global promotion mix

Ans: An organization trying to go global or expand. Then it should be planned how
your business will enter the new market, have developed the right product, and
believe you can offer it for a price that will be profitable. The next component of the
global marketing mix involves communicating its offerings to the customer globally.
It is called global promotion mix

7. What are multilateral agreements?

Ans: Accord among three or more parties, agencies, or national governments.
Such agreement between two such parties is called bilateral agreement. If such
agreements are between more than two countries is called as multi lateral
agreements.

8. Write any two objectives of WTO

Ans: (1) to set and enforce rules for international trade, (2) to provide a forum for
negotiating and monitoring further trade liberalization, (3) to resolve trade disputes,
(4) to increase the transparency of decision-making processes

9. Write any two principle of WTO

Ans: Non-discrimination
Reciprocity Binding and enforceable commitments
Transparency
Safety valves

10. Define WTO

Ans: the World Trade Organization (WTO) is the only global international
organization dealing with the rules of trade between nations. At its heart are the
WTO agreements, negotiated and signed by the bulk of the world’s trading nations
and ratified in their parliaments. The goal is to help producers of goods and services,
exporters, and importers conduct their business.

11. What is investment flow?

Ans: Capital flows refer to the movement of money for the purpose of investment,
trade or business production. Capital flows occur within corporations in the form of
investment capital and capital spending on operations and research & development.

12. What is foreign exchange?

Ans: Foreign exchange, or Forex, is the conversion of one country's currency into
that of another. In a free economy, a country's currency is valued according to
factors of supply and demand. The value of any particular currency is determined by
market forces based on trade, investment, tourism, and geo-political risk.
13. What is exchange rate?
Ans: In finance, an exchange rate also known as a foreign-exchange rate, forex
rate, FX rate between two currencies is the rate at which one currency will be
exchanged for another. It is also regarded as the value of one country’s currency in
terms of another currency.
14. What is spot rate?
Ans: The settlement price (or rate) is called spot price (or spot rate). A spot contract
is in contrast with a forward contract or futures contract where contract terms are
agreed now but delivery and payment will occur at a future date.
15. Define ‘Multilateral settlements’
Ans: An arrangement among multiple parties that transactions be summed, rather
than settled individually. Multilateral netting not only streamlines the settlement
process, it also reduces risk by specifying that, in the event of a default or some
other termination event, all outstanding contracts is likewise terminated.

16. What is meant by regional trade block?

Ans: A regional trade block is the result of economic integration of various trading
areas of different countries and it is also known as trade blocks, regional trade
organizations, and regional groupings. A trade block (regional trade block/regional
grouping) is a type of intergovernmental agreement, often part of a regional
intergovernmental organization, where regional barriers to trade (tariffs and non-
tariff barriers) are reduced or eliminated among the participating countries.

17. Write short note on Regional trade block

Ans: It implies a reduction or elimination of barriers to trade, and
This trade liberalization is discriminatory, in the sense that it applies only to the
member countries of the trade block, outside countries being discriminated against in
their trade relations with trade block members.

18. Write short note on GATT

Ans: General Agreement on Tariffs and Trade (GATT) was a multilateral
agreement regulating international trade. According to its preamble, its purpose was
the "substantial reduction of tariffs and other trade barriers and the elimination of
preferences, on a reciprocal and mutually advantageous basis."

19. Differentiate between ‘Factors of production’ and ‘Factor Endowments’

Ans: In economics a country's factor endowment is commonly understood as the
amount of land, labour, capital, and entrepreneurship that a country possesses and
can exploit for manufacturing.
Factors of production refer to an economic term to describe the inputs that are used
in the production of goods or services in the attempt to make an economic profit.
The factors of production include land, labour, capital and entrepreneurship.

20. List the features of ‘Free trade area’

Ans: 1. Economic integration and co-operation
2. Gain competitiveness with other countries than free trade area
3. Trade barriers will be liberalized
21. Define global competitiveness
Ans: Global competition is the services or products provided by competing
companies that serve international customers. Global competition has allowed
companies to buy and sell their services internationally, which opens the door to
increased profits and flattens the playing field in business.

22. Define NAFTA

Ans: NAFTA (North American free trade agreement) is designed to
eliminate tariff barriers and liberalize investment opportunities and trade in services.
NAFTA includes Canada, Mexico, and the United States, where went into effect in
1994.

23. What is APEC?

Ans: Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific
Rim member economies that promotes free trade throughout the Asia-Pacific region.
It was established in 1989 in response to the growing interdependence of Asia-
Pacific economies and the advent of regional trade blocs in other parts of the world.

24. Define FDI

Ans: FDI refers to the purchase of a significant number of shares of a foreign
company in order to gain certain degree of management control
1. Capital formation
2. Formation of new firms and factories
3. Increase in equity holdings in the existing firms
4. Mergers and acquisition of existing firms and factories
Unit 3: International strategic management
1. Mentions the different forms of international business
Ans: 1. Exporting
2. International Licensing
3. International franchising
4. International contracting

2. What is international strategic planning?

Ans: International strategic planning is a process of evaluating the internal and
external environment by multinational organizations, through which they set their
long- term and short-term goals and then they implement a specific plan of action in
order to achieve those objectives.

3. What are the stages in International strategic planning?

Ans: The process of strategic planning is sequel and it involves the following steps.
1. Assessment of external environment and internal resources
2. Formulation of global strategy

4. What is meant by strategic compulsions?

Ans: It means that the companies face the compulsion to be global if they want to
gain the global market and more values. But in the modern context strategic
management faces many compulsions. The present and future development of the
field of strategic management is likely to be driven by compulsions like
contemporary developments in social and economic theory and recent changes in the
nature of the business and economic context.

5. Differentiate between standardization and Differentiation

Ans: According to Levitt, represents local marketing versus global marketing and
focus on the central question of whether a standardized (global) or a differentiated
(local), country-specific marketing approach.
Perspectives on standardization versus Differentiation:
1) Regional perspective
2) Marketing process prospective
3) Marketing components/marketing mix perspective.

6. What is ‘Balance of trade’?

Ans: Balance of trade (BOT) is the difference between a country's imports and
its exports. Balance of trade is the largest component of a country's balance of
payments. Debit items include imports, foreign aid, domestic spending abroad and
domestic investments abroad. Credit items include exports, foreign spending in the
domestic economy and foreign investments in the domestic economy.

7. Write short note on Strategic management

Ans: Strategic management is the process of systematically analyzing various
opportunities and threats vis-à-vis organizational strengths and weaknesses,
formulating and arriving at strategic choices through critical evaluation of
alternatives and implementing them to meet the set objectives of the organization.
8. Write short note on Performance evaluation system
Ans: It can be defined as, “the periodic review of operations to ensure that the
objectives of the enterprise are being accomplished”. Various performance
indicators:
1) Financial measures
a) Return on investment(ROI)
b) Budget as success indicator

2) Non-financial measures.

9. What are the different forms of ‘Joint ventures’?

Ans: 1. Equity joint venture
2. Co-operative joint venture
3. Wholly foreign owned enterprises
4. Foreign investment companies limited by shares
5. Investment companies by foreign investors

10. What is ‘Balanced score card’?

Ans: The balanced scorecard is a strategic planning and management system that is
used extensively in business and industry, government, and nonprofits
organizations worldwide to align business activities to the vision and strategy of the
organization, improve internal and external communications, and monitor
organization performance against strategic goals.

11. Write a short note on strategic options

Ans: Strategic options/choice involves the selection of a strategy or set of strategies
that helps in achieving organizational objectives.
1. Global strategy
2. International strategy
3. Transactional strategy
4. Multi-domestic strategy

12. What is global portfolio management?

Ans: Global portfolio investment means the purchase of stocks, bonds, and money
market instruments by foreigners for the purpose of realizing a financial return
which does not result in foreign management, ownership, or control. Portfolio
investment is part of the capital account on the balance of payments statistics. An
international portfolio is designed to give the investor exposure to growth in
emerging and international markets and provide diversification

13. What are the problems of global portfolio management

Ans: 1. Unfavorable exchange rate movement
2. Frictions in international financial market
3. Manipulation of security prices
4. Unequal access to information

14. Define global entry strategies

Ans: Global entry strategies
Level of involvement:
Wholly-owned
subsidiary Company
acquisition
Assembly operations
Joint venture
Strategic alliance
15. What is the main idea of the exporting?
Ans: An export is a function of international trade whereby goods produced in one
country are shipped to another country for future sale or trade. The sale of such
goods adds to the producing nation's gross output. If used for trade, exports are
exchanged for other products or services

16. What is International licensing?

Ans: An international business licensing agreement involves two firms from
different countries, with the licensee receiving the rights or resources to manufacture
in the foreign country. Rights or resources may include patents, copyrights,
technology, managerial skills, or other factors necessary to manufacture the good.

17. Define International franchising

Ans: International franchising is a strategic way to reduce dependence on domestic
demand and grow new, future revenue and profit centers worldwide. Extending a
brand globally through franchising involves a low risk, requires minimal investment
and offers a huge upside potential on scaling capabilities

18. Define acquisitions

Ans: Acquisition:
It is process of acquiring and purchasing an existing venture. It is one of the easy
means of expanding a business by entering new markets or new product areas.

19. What are the different types of performance evaluation system?

Ans: Budget programming
Management Audit
PERT (Program evaluation review technique)
Management information system
20. Define Global portfolio investments
Ans: A grouping of investment assets that focuses on securities from foreign markets
rather than domestic ones. An international portfolio is designed to give the investor
exposure to growth in emerging and international markets and provide
diversification.

21. What are the factors affecting in designing organizational structure?

Ans: Environment, strategy, technology, size, and people are all contingency factors
influencing organizational design. Certain environments lend themselves to more
vertical and mechanistic organizational
designs. Uncertain environments require more horizontal and adaptive
organizational designs.
Technology -- including the use of knowledge, equipment, and work methods in the
transformation process, is an important consideration in organizational design.
22. What are the methods of control system?
Ans: Control systems in international business are established through four basic
steps:
1. Set Control standards for performance
2. Measure actual performance
3. Compare performance against standards
4. Respond to deviations

23. Write some approaches to organizational design

Ans: Five common approaches –
1. Functional approaches
2. Divisional approaches
3. Matrix approaches
4. Team approaches
5. Networking approaches
Unit 4: Production, Marketing, Financial, and Human resource
management of global business
1. What do you mean by international market selection?
Ans: Market selection is based on a thorough evaluation of different markets with
reference to certain well defined criteria, given the company resources and
objectives. It may be noted that many of information contained in the market profile
are collected for the purpose of evaluation of the markets for market selection.

2. What is global production?

Ans: Production can be integrated globally, while the marketing is multi-domestic,
reflecting cultural and consumer preferences differences. The goal is therefore to
better answer the needs of every market.

3. What is meant by global supply chain management?

Ans: A "supply chain" refers to the collection of steps that a company takes to
transform raw material components into a final product that is delivered to
customers. Typically, supply chain management has five stages: plan, make, source,
deliver and return

4. What are the issues in global supply chain?

Ans: Supply chain management (SCM) is "the systemic, strategic coordination of
the traditional business functions and the tactics across these business functions
within a particular company and across businesses within the supply chain, for the
purposes of improving the long term performance of the individual companies and
the supply chain as a whole.
5. How to categories the quality standards
Ans: 1. Engagement Models
2. Service Level Agreements (SLAs)
3. Mobilization
4. Integration with other third party service providers
5. Communication

6. Identify the threats of globalization of markets

Ans: 1. Exploitation of resources
2. Environmental hazards
3. Clash of Power of nations

7. List some of the major investment decisions for international business.

Ans: Foreign direct investment (FDI)
Foreign institutional investment (FII)
8. Write short note on Quality
Ans: In manufacturing, a measure of excellence or a state of
being free from defects, deficiencies and significant variations. It is brought about
by strict and consistent commitment to certain standards that achieve uniformity of a
product in order to satisfy specific customer or user requirements.
9. Write short note on make or buy decision
Ans: The act of choosing between manufacturing a product in-house or purchasing it
from an external supplier. In a make-or-buy decision, the two most important factors
to consider are
1. Cost and
2. Availability of production capacity

10. What do you understand by ‘vertical marketing system’?

Ans: Vertical marketing system comprises the producer, wholesaler, and retailer,
acting as a unified system. There are three types of VMS
1. Corporate VMS
2. Administered VMS
3. Contractual VMS

11. Define ‘Wholly owned subsidiaries’

Ans: A wholly owned subsidiary is a company whose common stock is
100% owned by another company, called the parent company. A company can
become a wholly owned subsidiary through acquisition by the parent company or
spin off from the parent company.

12. What are the steps in global marketing?

Ans: 1. Partner
2. Network
3. Market
4. Travel
5. Build
6. Research

13. Define global marketing mix

Ans: International marketing mix strategy involves use of
different marketing instruments to achieve positive financial results by company
operating on international or global markets. These instruments include:
product, price, distribution and promotion. International marketing mix strategy
should take into account legal and socio-cultural circumstances in every country to
which it is directed.

14. Define distribution channel management

Ans: A distribution channel is the network of individuals and organizations
involved in getting a product or service from the producer to the
customer. Distribution channels are also known as marketing channels or
marketing distribution channels.

15. Define investment decisions

Ans: The investment decision relates to the selection of assets in which funds will be
invested by a firm. The assets which can be acquired fall into two broad categories:
1. Long term assets
2. Short term assets

16. Write a short note on capital budgeting

Ans: Capital budgeting refers to the total process of generating, evaluating,
selecting, and following up on capital expenditure alternatives. The firm locates or
budgets financial resources to new investment proposals

17. What are the features of foreign exchange markets?

Ans: 1. foreign currency transactions are sensitive to fluctuations in the exchange
rate.
2. A price you agree with a customer or supplier on one day could rise or fall if
the exchange rate changes.
3. This is especially true in the current economic climate where currency is
fluctuating on a daily basis, making it more difficult to keep track of exchange
rates

18. Define FOREX

Ans: Foreign exchange, or Forex, is the conversion of one country's currency into
that of another. In a free economy, a country's currency is valued according to
factors of supply and demand. The value of any particular currency is determined by
market forces based on trade, investment, tourism, and geo-political risk.

19. List out the methods of exchange risk rate management

Ans: There are many methods of exchange risk rate management
Forward rate method
Spot rate method

20. What is meant by expatriate?

Ans: An expatriate (often shortened to expat) is a person temporarily or
permanently residing in a country other than that of the person's upbringing.
The word comes from the Latin terms ex ("out of") and patria ("country,
fatherland"). In common usage, the term is often used in the context of professionals
or skilled workers sent abroad by their companies, rather than for all 'immigrants' or
'migrant workers'

21. What are economies of scale?

Ans: Economies of scale can be classified into two main types:
1. Internal – arising from within the company; and
2. External – arising from extraneous factors such as industry size.

22. Name some sources of funds.

Ans: Angel equity
Smart leases
Bank loans
SBA loans
Local and state economic development organizations
Customers
Vendors
Friends and family members
Small Business Innovation Research (SBIR) grants
Tax Increment Financing

23. What is value at risk?

Ans: Practitioners have advanced and regulators have accepted a financial risk
management technique called value at risk (VaR), which examines the tail end of a
distribution of returns for changes in exchange rates to highlight the outcomes with
the worst returns.

24. Define Hedging

Ans: Hedging: It means insuring against the price of currency moving against you in
the future. There are many different types of currency hedging and your bank should
be able to help you with the best solutions for your business.
25. What are the three types of international trainings?
Ans: 1, Preparatory training for expatriates
2, Post-arrival training for expatriates
3, Training for host-country nationals (HCNs) and third-country nationals (TCNs)

26. What is exchange risk?

Ans: It is also known as exchange rate risk or currency risk is a financial
risk that exists when a financial transaction is denominated in a currency other than
that of the base currency of the company

Unit 5: Conflict management and ethics in International business management

1. Define conflicts
Ans: Conflicts arise between the foreign companies and host country and foreign
companies and domestic companies. Global companies also have the conflicts with
the home country companies and governments.

2. What are the sources of conflicts in international business?

Ans: Conflicts arises mostly due to the conflicts in interests of global companies
with those of:
1. Host country’s companies
2. Host country’s government
3. Host country’s customers
4. Host country’s society
5. Host country’s government

3. What are the classifications of conflicts?

Ans: Intra-organization conflict
Intra-group conflict
Intergroup conflict
Interpersonal conflict
Intrapersonal conflict
Inter-organization conflict

4. What are the characteristics of business negotiations?

Ans: 1. the objective of business negotiation is to obtain financial interest
2. The core of business negotiation is price
3. Its principle is equality and mutual benefit
4. Items of contract should keep strictly accurate and rigorous.

5. Define organizational conflict

Ans: Organizational conflict, or workplace conflict, is a state of discord caused by
the actual or perceived opposition of needs, values and interests between people
working together

6. What are conflict resolution actions in international business?

Ans: Conflict resolution, otherwise known as reconciliation, is conceptualized as
the methods and processes involved in facilitating the peaceful ending
of conflict and retribution. Committed group members attempt to resolve group
conflicts by actively communicating information about their conflicting motives or
ideologies to the rest of the group (e.g., intentions; reasons for holding certain
beliefs), and by engaging in collective negotiation.

7. What are the agencies participate in negotiation process?

Ans: International chamber of commerce (ICC)
world trade organization (WTO)
United Nations code of conduct for transnational corporation (UNCTAD)

8. What is corruption?
Ans: Corruption is the outcome of lack of an honest, transparent and accountable
governance system. In curse of time corruption will be deep rooted and the
concerned governments would lose control and order which lead to institutional
breakdown.
9. What are the factors affecting conflicts in International business?
Ans: 1. Insecure and inequitable access to resources
2. Incompatibility between groups with distinct value system
3. Abundant resources in particular area
4. Competition between social groups for political power
5. Personal differences in global issues

10. Write short note on Win-win strategy

Ans: A win–win game is a game which is designed in a way that all participants can
profit from it in one way or the other. In conflict resolution, a win–win strategy is a
conflict resolution process that aims to accommodate all disputants

11. What are the problems in ethical decision making?

Ans: 1. Favor hiring and promoting people with a well grounded sense of personal
ethics
2. Build an organizational culture that places high value on ethical behavior.

12. State the importance of International business ethics?

Ans: 1. Perception of people about an organization will be good
2. The moral and social considerations are real motivating factors
3. Law and government can’t regulate all activities. But organizations can take
measure to provide healthy life to society

13. What are the problems in international business?

Ans: The important problem in international business includes:
1. Political factors
2. Huge foreign indebtedness
3. Exchange instability
4. Entry requirements
5. Tariffs, quotas and Trade barriers
6. Corruption

14. Define Ethics

Ans: The term ‘Ethics’ refers to accepted principles of right or wrong that govern
the conduct of a person, the members of a profession, or the actions of an
organization. Business ethics are the accepted principle of right or wrong governing
the conduct of business people

15. What are the determinants of ethical behaviour

Ans: 1. Personal ethics
2. Decision making process
3. Leadership
4. Organizational culture
5. Unrealistic goal performance

16. What are the areas covered under conflicts and negotiations?
Ans: Marketing areas
Finance areas
Human resource areas
Social and Ethical areas
Environmental issues and
Competing Areas

17. How to solve individual level conflict?

Ans: Interpersonal conflict
Between two or more people
Differences in views about what should be done
Efforts to get more resources
Differences in orientation to work and time in different parts of an organization
Intrapersonal conflict - Occurs within an individual
Threat to a person’s values
Feeling of unfair treatment
Multiple and contradictory sources of socialization
Related to the Theory of Cognitive Dissonance and negative inequity

18. Write short note on Ethical decision making

Ans: Ethical decision-making refers to the process of evaluating and choosing
among alternatives in a manner consistent with ethical principles. In making ethical
decisions, it is necessary to perceive and eliminate unethical options and select the
best ethical alternative

19. Differentiate between ‘Functional Vs. ‘Dysfunctional conflicts’

Ans: Functional conflict: works toward the goals of an organization or group
Dysfunctional conflict: blocks an organization or group from reaching its goals

20. How ‘salami tactics’ as a negotiation technique helps to resolve conflicts.

Ans: Salami tactics, also known as the salami-slice strategy, is a divide and conquer
process of threats and alliances used to overcome opposition. With it, an aggressor
can influence and eventually dominate a landscape, typically political, piece by
piece.