Chapter: 2- International Business Management

1. What do you mean by International Business? [2020]

 International Business: International business refers to the trade of goods, services,
technology, capital and/or knowledge across national borders and at a global or
transnational scale. It involves cross-border transactions of goods and services
between two or more countries.
International business encompasses all commercial activities that take place to
promote the transfer of goods, services, resources, people, ideas, and technologies
across national boundaries.
International business relates to any situation where the production or distribution of
goods or services crosses country borders.
International business occurs in many different formats:
 The movement of goods from country to another (exporting, importing, trade);
 Contractual agreements that allow foreign firms to use products, services, and
processes from other nations (licensing, franchising);
 The formation and operations of sales, manufacturing, research and development,
and distribution facilities in foreign markets.
----------------------------------------------------------------------------------------------------
2. Discuss the different nature or characteristics of International Businesses.
[2020]
 The different characteristics of International Businesses are as follows:
1. International Restrictions: In international business, there is a fear of the
restrictions which are imposed by the government of the different countries. Many
country’s governments don’t allow international businesses in their country. They
have trade blocks, tariff barriers, foreign exchange restrictions, etc.
2. Benefits to Participating Countries: It gives benefits to the countries which are
participating in the international business. The richer or developed countries grow
their business to the global level and they get maximum benefits. The developing
countries get the latest technology, foreign capital, employment opportunities,
rapid industrial development, etc.
3. Integration of Economies: International Business combines the economies of many
countries. The companies use the finance, labor, resources, and infrastructure of
the other countries in which they are working.
4. Dominated by Developed Countries: International business is dominated by
developed countries and their MNC’s. Countries like U.S.A, Europe, and Japan all
are the countries that are producing high-quality products, they have people
working for them on high salaries. They have large financial and other resources
like the best technology and Research and Development centers. Therefore, they
 produce good quality products and services at low prices. They help them to
capture the world market.
5. Market Segmentation: International business is based on market segmentation on
the basis of the geographic segmentation of the consumers. The market is divided
into different groups according to the demand of the consumer.
6. Large scale operations: In international business, all the operations are conducted
on a very huge scale. Production and marketing activities are conducted on a large
scale. It first sells its goods in the local market. Then the surplus goods are
exported.
7. Keen competition: International business has to face keen (too much) competition
in the world market. The competition is between unequal partners i.e., developed
and developing countries.
8. The special role of science and technology: International business gives a lot of
importance to science and technology. Developed countries use high technologies.
Therefore, they dominate global business. International business helps them to
transfer such top high-end technologies to the developing countries.
9. Sensitive nature: The international business is very sensitive in nature. Any
changes in the economic policies, technology, political environment, etc. have a
huge impact on it. Therefore, an international business must conduct marketing
research to find out and study these changes.
10. Increased investment opportunities: with globalization companies can move the
capital to whatever country offers the most attractive investment opportunity. This
prevents capital from being trapped in domestic economies earning poor returns.
11. Earn foreign exchange: Countries export their goods and services all over the
world. , This helps to earn valuable foreign exchange. This foreign exchange is
used to pay for imports. Foreign exchange helps to strengthen the economy of its
country.
12. Optimum utilization of resources: International trade makes optimum utilization of
resources. This is because it produces goods on a very large scale for the
international market. International trade utilizes resources from all over the world.
----------------------------------------------------------------------------------------------------
3. What are the reasons for the growth of International Business?
 The prevalence of international business has increased significantly during the last
part of the twentieth century. Some of the significant elements that have advanced
international business include:
1. World Trade Organization: The first reason for the growth of international
business is the formation of the World Trade Organization (WTO) in 1995;
2. Electronic funds transfers: Another reason for the growth of international business
is the inception of electronic funds transfers.
 3. European Union: The introduction of the Euro to the European Union also
influenced to the growth of international business.
4. Technological innovation: Technological innovation that facilitates global
communication and transportation easier to set up international business.
5. Dissolution of communist markets: The dissolution of a number of communist
markets, thus opening up many economies to private business also influenced to
the growth of international business.
6. Reduced Costs: One of the most common reasons is the desire to reduce costs. By
locating plants abroad, firms can be closer to their supply of raw materials.
7. Less Government Regulations: Firms will choose to locate abroad due to less
government regulation in other countries.
8. Knowledge about Market: Locating abroad can enable firms to be closer to their
product markets. It reduces transportation costs and helps firms to learn the unique
characteristics of each market.
9. Growth Opportunities: The international sector can provide access to growth
opportunities that are not available at home.
10. Cheap Labor Forces: Firms also locate facilities abroad to take advantage of labor
force quantity and quality. It is not difficult to find areas where people want to
work and where the local government wants foreign firms to be there to put their
people to work.
11. Reduction of Trade Barriers: Most of the developing economics are now relaxing
their trade barriers and opening doors to foreign multinationals.
----------------------------------------------------------------------------------------------------

4. What are the Challenges of International Business?

 The Challenges of International Business are as follows:

1. National wealth disparities: Wealth disparities among nations remain vast.

2. Regional diversity according to wealth and population: North America is home to
just 5 percent of the world’s population, yet it controls almost one-third of the
world’s gross domestic product.
3. Cultural/linguistic diversity: There are more than 10,000 linguistic/cultural groups
in the world.
4. Country size and population diversity: There were about 60 countries at the start of
the twentieth century; by 2000, this number grew to more than 200.
5. International company structure: One fundamental consideration is the structure of
international business.
6. Foreign laws and regulations: local laws and regulations such as tax implications
through to trading laws, navigating legal requirements is a central function for any
successful international business.
7. International accounting: Different tax systems, rates, and compliance
requirements can make the accounting function of a multinational organization
significantly challenging.
 8. Cost calculation and global pricing strategy: Setting the price for products and
services can present challenges when doing business overseas and should be
another major consideration of strategy.
9. Universal payment methods: Determining acceptable payment methods and
ensuring secure processing must be a central consideration for businesses who
seeks to trade internationally.
10. Currency rates: Currency rate fluctuation is one of the most challenging
international business problems to navigate.
11. Communication difficulties and cultural differences: Good communication is at the
heart of effective international business strategy. On the other hand cultural
differences can also influence market demand for product or service.
----------------------------------------------------------------------------------------------------
5. Discuss the benefits of International Business.
 International Business is important to both Nation and Business organizations. It
offers them various benefits.
 Benefits to Nation:
1. It encourages a nation to obtain foreign exchange that can be utilized to import
merchandise from the global market.
2. It prompts specialization of a country in the production of merchandise which it
creates in the best and affordable way.
3. Also, it helps a country in enhancing its development prospects and furthermore
make opportunity for employment.
4. International business makes it comfortable for individuals to utilise commodities
and services produced in other nations which help in improving their standard of
life.
 Benefits to Firms:
1. It helps in improving profits of the organizations by selling products in the nations
where costs are high.
2. It helps the organization in utilizing their surplus resources and increasing
profitability of their activities.
3. International business also goes as one of the methods for accomplishing
development in the firms confronting extreme market conditions in the local
market.
4. And it enhances business vision as it makes firms more aggressive, and
diversified.
----------------------------------------------------------------------------------------------------
6. Discuss the types or modes of entry into international business. [2018]
Or, Describe the various modes of entry of a firm to foreign market. [2020]
 All the major international business conducted in the world can come under seven
main types. These can also be termed as modes of business. Let’s look at each in
detail:
1. Imports and Exports: Simplest and most commonly used method, imports and exports
can be seen as the foundation of international business. Imports are an inflow of
goods into the markets of home country for consumption, in contrast, export means
selling of goods to foreign countries. In short, imports mean inflow whereas export
means outflow of goods in any form.
2. Licensing: Licensing is one of the easiest ways to expand a business internationally.
When a company has a standardized product with ownership rights, it can use
licensing to distribute and sell the products in the international market. Licenses come
in many forms, some of which are patent, copyright, trademark, etc. Products such as
books and movies are usually distributed internationally through licensing
agreements.
3. Franchising: A very effective method to expand a business nationally as well as
internationally, franchising is similar to licensing. In this, a parent company gives the
right to another company to conduct business using the parent company’s name/
brand and products. The parent company becomes the franchiser and the receiving
company becomes the franchisee. Many of the biggest restaurant chains in the world
have used the franchisee model to expand internationally. Some examples include –
McDonald, Pizza Hut, Starbucks, Domino’s Pizza and many more.
4. Outsourcing and Off shoring: Outsourcing means giving out contracts to international
firms for certain business processes. For example, giving out accounting function to
an international firm. For example, many developed countries such as the USA,
Australia, the UK, etc. outsource its functions to companies in India, China, etc.
because it is cheaper.
Off shoring is similar to outsourcing in the sense that a function is moved away from
the home country. However, it is different in the sense that the facility is physically
moved to another country but the management stays with the company itself. For
example, Apple Inc. is conducting its manufacturing function in China, however, it is
completely controlled by Apple Inc.
5. Joint Ventures and Strategic Partnerships: A joint venture is a contract between two
parties; one is an international company while another company is local to where the
business has to be conducted. Both parties contribute to the equity and management of
the company. As a result, both share the profit as well. These parties can mutually
decide the percentage of equity and profit sharing.
These types of ventures and partnerships come into existence when both the party has
something to offer. For example, the local company may have the brand name and
network within the country while the international company may have advanced
technology.
6. Multinational Companies: Multinational companies, as the name suggests, are
companies that are conducting business in multiple countries. They actually set up the
whole business in multiple countries. Some such examples are Amazon, Citigroup,
Coca-Cola, etc.
 These companies have independent operations in each country, and each country has
its own set of offices, employees, etc. In fact, even the products and marketing
campaigns are customized as per local needs. For example, Nestle introduced a
Matcha flavor Kit Kat in Japan as the flavor is very popular in that country, however,
they don’t offer the same flavor in India.

7. Foreign Direct Investment: Foreign direct investment is an investment made by an

individual or a company located in one country to the business interest located in
another foreign country. In this the investing company usually commits more than
capital, they share management, technology, processes, etc, with the company that
they have invested in. The foreign direct investments can take many forms such as a
subsidiary company, associate company, joint venture, merger, etc.
These are the major types through which people, companies, and government conduct
international business.
----------------------------------------------------------------------------------------------------
7. Why international businesses differ from domestic business? [2020]

----------------------------------------------------------------------------------------------------
8. Discuss the factors to be considered before starting international business
operations.
 One must consider many factors when setting up any business internationally. These
factors include:
1. Geographical Factors: Simple challenges that come with the change in geography
have to be studied when considering international business. There are differences
in storage requirement, supply chain requirements, connectivity issues, etc. from
country to country. Colgate-Palmolive will face a thousand challenges even before
its soaps and shampoos can reach rural areas of India where there is a lack of basic
necessities such as water, electricity, transportation, etc.
2. Social Factors: Social factors are very important in international business. It is very
difficult to set up shops in countries that are politically disturbed or are going
through some tensions. For example, most companies don’t want to expand its
business in Afghanistan, as there is so much disturbance.
3. Legal Policies: Every country has different laws and governing policies. A
company should check all the legal requirements in the country in which it wants
to conduct business. The basic laws that need attention are organization laws,
securities laws, consumer protection laws, employees protection laws, and many
more. The process can be lengthy but it is necessary.
4. Behavioral Factors: Every country has different cultures and beliefs, and people
can be very sensitive to these beliefs. An international company, if not careful, can
land a lot of issues if they don’t take care of the country’s behavioral factors. For
example, McDonald cannot sell its beef burgers in India, else it will have to face
the brunt of the Indian population that is majority Hindu.
5. Economic Forces: These factors include the county’s currency values, market size,
cost, inflation, etc. These are important because it directly affects the profitability
of operations. Every company should consider these factors before expanding
internationally if they want to manage its bottom line.

All these above-mentioned factors play an important role in how successful or

unsuccessful an entity will be in its international business adventures. All these
factors should be considered in the research and planning stage to get maximum
benefit out of it.
----------------------------------------------------------------------------------------------------
9. What do you mean by International Business Management?
 International Business Management: International management is the management
of business operations in an organization serving markets and operating in more than
one country. It requires knowledge and skills beyond normal business expectations,
such as familiarity with local market and competitive conditions, the legal and
financial environment, the capability to do multicurrency transactions and managing
across borders.
It is defined as a process of accomplishing the global objectives of a firm by
effectively coordinating the procurement, allocation, and utilization of the human,
 financial, intellectual, and physical resources of the firm within and across national
boundaries.
----------------------------------------------------------------------------------------------------
10. Define International Business Environment concerned to MNCs? [2019]
 International Business Environment: International business refers to trading services and
goods in a worldwide market. It can also be recognized as the globalization of trade. An
International Business Environment (IBE) refers to the surroundings in which international
companies carry on their businesses globally. It plays a critical role in the development and
growth of a country.
An International Business Environment (IBE) involves different aspects like political risks,
cultural differences, exchange risks, and legal and taxation issues. Thus, it is mandatory for
the people at the managerial levels to work on factors comprising the international business
environment as it is crucial for a country’s economy.
------------------------------------------------------------------------------------------------------------
11. Discuss the impact upon War and International Business basically for MNCs.
[2019]
 We've been experiencing some regional wars in the last decades, nothing like total wars, and
nothing to serious harm the international business environment.
 Changes in economic structures of countries: World war or any regional war leads to
changes in economic structures of countries, to the subsequent changes in trade policies,
and to the changes of established trade patterns with impact on position of countries in
international trade system.
 Nationalization of companies: The impact of global wars on international business
would be enormous, depending on the quantity of countries involved in the war, we
would see nationalization of companies and some factories would be forced to produce
war equipment.
 Reducing the labor force: Manpower would be redirected to the defense forces,
reducing the labor force available for the industries. This is the worst scenario.
 Defense industry can thrive: Some business sectors can be seriously damaged by wars,
while others like the defense industry can thrive during these times.
 Increase on the price of a commodity or material: The impact of regional wars in
International business could be the following: an increase on the price of a commodity or
material that one of the participating countries produce or sanctions (reducing the level of
foreign transactions), etc.
---------------------------------------------------------------------------------------------------------------------
12. Compare and contrast between the changing nature of international
business and the changing nature of multinational enterprise.
 Changing nature of international business: International business relates to any
situation where the production or distribution of goods or services crosses country
borders. The changing nature of international business are as follows:
1. Every country is involved at some stage or other international business and allied
operations.
 2. According to the radical (closed economy) view, multi-national companies
(MNCs) control technology and provide key management jobs to their home
country national and they can never be forces of economic development.
3. According to the free market view, foreign investment is essential to ensure
production of goods in the most efficient locations, and so all the barriers to trade
and investment have to be removed.
4. No country has embraced either the radical view or the free market view in
totality. Most countries have taken best-of-both-worlds approach.
5. Countries try to maximize the benefits of foreign direct investment (FDI) and
minimize its negative effects on the domestic industry and economy.
6. Some home country governments encourage outward FDI by:
 Providing insurance covers to MNCs to protect them against risks of
nationalization, war, etc.
 Providing double taxation relief.
 Persuading the host country to relax norms for inward FDI.
7. However, most home country governments, including those that have a free
market economy (like the U.S. and the U.K.), impose some restraints on the
outward FDI. Differential tax treatment for earnings from domestic operations is
one of the ways in which they impose a restraint on outward FDI.
8. Host country governments offer tax incentives, attractive financing, and good
infrastructure to attract FDI.
9. However, many host countries also place restrictions in the shareholding pattern in
the domestic subsidiary to ensure that resource transfer benefits are maximized for
the host country like in the case of United Arab Emirates (U.A.E.)

 Changing nature of multinational enterprise: A multinational enterprise is any

business that has productive activities in two or more countries. The changing nature
of the Multinational Enterprise:
1. The major trends in MNCs are the rise of non-US MNCs particularly Japanese
Multinationals.
A number of large multinationals are now non-U.S. based, and many are
recognizable brand names in the worldwide (e.g. Sony, Philips, Toshiba, Honda,
and BMW).
2. The second is the growth of mini multinationals. The new large multinationals are
not only are originating in other developed countries, but there are an increasing
number of multinationals based in developing countries.
The country focus on Korea’s new multinationals clearly illustrates the growth of
developing country multinationals. An increasing number of small firms are
becoming global leaders in their field, giving rise to the mini-multinationals.
 Although most international trade and investment are still conducted by large
firms, many medium sized and small.
------------------------------------------------------------------------------------------------------------
13. Differentiate between a global, transnational, international and
multinational company.
 We tend to read the following terms and think they refer to any company doing
business in another country.
 International;
 Multinational;
 Global;
 Transnational.
1. International companies: International companies are importers and exporters,
they have no investment outside of their home country.
2. Multinational companies: Multinational companies have investment in other
countries, but do not have coordinated product offerings in each country. More
focused on adapting their products and service to each individual local market.
3. Global companies: Global companies have invested and are present in many
countries. They market their products through the use of the same coordinated
image/brand in all markets. Generally one corporate office that is responsible for
global strategy. Emphasis on volume, cost management and efficiency.
4. Transnational companies: Transnational companies are much more complex
organizations. They have invested in foreign operations, have a central corporate
facility but give decision-making, R&D and marketing powers to each individual
foreign market.
---------------------------------------------------------------------------------------------
14. Explain the concept of World Trading System.
 World Trading System: The term 'world trading system' refers to the various
contemporary arrangements of trading relations between countries, and particularly
the system of multilateral rules following two great wars and a worldwide economic
depression.
This discusses the important role of trade in the transition from the ancient to the
modern world. It deals with the main purpose of the general agreement on tariffs and
trade (GATT) to establish a legal mechanism for tariff negotiations, and to provide
rules that would deter countries from reinstating protectionism through non-tariff
means.
------------------------------------------------------------------------------------------------------------
15. What are the reasons behind interest growing in World Trading System?
 The reasons behind interest growing in World Trading System:
1. Pace and scope of globalization: The world economy is globalizing rapidly
through international trade and the flow of foreign direct investment.
Revolutionary changes in transport and communications make it possible even for
 small manufacturers in developing countries to look for markets in countries
thousands of miles away.
2. Shifting economic and trade policies: Communism's collapse paved the way for
gradual adoption of market-oriented policies in most countries where production
and trade were nationally controlled. These countries, which in the past traded
primarily among them, are increasingly trading on a worldwide basis. Many
developing countries have replaced import substitution policies with export-
oriented policies, under which they seek to promote economic growth by
exporting more and more of their products.
3. Global sourcing: Firms increasingly obtain components and intermediate
products from countries where costs are lower, and establish production facilities
there. Thus, the products available on the market today - whether consumer items
like ready-made garments, consumer durables such as refrigerators, or capital
goods - often result from production processes undertaken in more than one
country.
---------------------------------------------------------------------------------------------
16. What are the Benefits of World Trading System? [2020]
 Benefits to exporters:
 Security of access: Binding provides secure access to markets, enabling exporting
industries to make investment and production plans under greater conditions of
certainty.
 Stability of access: The system provides stability of access to export markets, as all
countries are required to apply the uniform set of rules in the various Agreements.
 Benefits to importers: Exporters thus have some assurance that they can obtain their
requirements without delay and at competitive costs. Tariff bindings also assure
importers that their importing costs will not be increased by higher customs duties.
------------------------------------------------------------------------------------------------------------
17. Discuss the World Trading System. [2019]
Or, Describe the world trading system of international business. [2020]
 World Trading System: The term 'world trading system' refers to the various
contemporary arrangements of trading relations between countries, and particularly
the system of multilateral rules following two great wars and a worldwide economic
depression.
 The reasons behind interest growing in World Trading System:
1. Pace and scope of globalization: The world economy is globalizing rapidly
through international trade and the flow of foreign direct investment.
2. Shifting economic and trade policies: Communism's collapse paved the way for
gradual adoption of market-oriented policies in most countries where production
and trade were nationally controlled.
 3. Global sourcing: Firms increasingly obtain components and intermediate
products from countries where costs are lower, and establish production facilities
there.
 Benefits of World Trading System:
 Benefits to exporters:
a. Security of access: Binding provides secure access to markets, enabling
exporting industries to make investment and production plans under greater
conditions of certainty.
b. Stability of access: The system provides stability of access to export markets, as
all countries are required to apply the uniform set of rules in the various
Agreements.
 Benefits to importers: Exporters thus have some assurance that they can obtain
their requirements without delay and at competitive costs. Tariff bindings also
assure importers that their importing costs will not be increased by higher customs
duties.
------------------------------------------------------------------------------------------------------------
18. Write Short notes on WTO, GATT, The Doha Round.
 WTO: The World Trade Organization (WTO) is an intergovernmental organization
that is concerned with the regulation of international trade between nations. The WTO
officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by
123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade
(GATT), which commenced in 1948. It is the largest international economic
organization in the world. The overarching goal of the WTO is to eliminate all global
trade barriers. These include tariff barriers to trade (especially customs duties) and
non-tariff barriers to trade (e.g. technical standards and regulations or time-consuming
bureaucratic hurdles). Another goal is to ensure that trade policies are predictable and
transparent.
The overarching goal of the WTO is to eliminate all global trade barriers. These
include tariff barriers to trade (especially customs duties) and non-tariff barriers to
trade (e.g. technical standards and regulations or time-consuming bureaucratic
hurdles). Another goal is to ensure that trade policies are predictable and transparent.
 GATT: The General Agreement on Tariffs and Trade (GATT) is a legal agreement
between many countries, whose overall purpose was to promote international trade by
reducing or eliminating trade barriers such as tariffs or quotas. 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."
The GATT was first discussed during the United Nations Conference on Trade and
Employment and was the outcome of the failure of negotiating governments to create
the International Trade Organization (ITO). It was signed by 23 nations in Geneva on
30 October 1947, and took effect on 1 January 1948. It remained in effect until the
 signature by 123 nations in Marrakesh on 15 April 1994, of the Uruguay Round
Agreements which established the World Trade Organization (WTO) on 1 January
1995. The WTO is the successor to the GATT,
 The Doha Round: The Doha Round is the latest round of trade negotiations among the
WTO membership. Its aim is to achieve major reform of the international trading
system through the introduction of lower trade barriers and revised trade rules. The
work programme covers about 20 areas of trade. The Round is also known semi-
officially as the Doha Development Agenda as a fundamental objective is to improve
the trading prospects of developing countries.
The Round was officially launched at the WTO’s Fourth Ministerial Conference in
Doha, Qatar, in November 2001. The Doha Ministerial Declaration provided the
mandate for the negotiations, including on agriculture, services and an intellectual
property topic, which began earlier.
In Doha, ministers also approved a decision on how to address the problems
developing countries face in implementing the current WTO agreements.
------------------------------------------------------------------------------------------------------------
19. What are the implications of International Business Management for
business, socio, political and cultural environment? [2020]
 The implications of international business management for business, socio,
political and cultural environment are as follows:
 Social or Cultural environment: Culture consists the thought and behavioral
patterns that members of a society learn through language and other forms of
symbolic interaction. Their customs, habits, beliefs and values, the common
viewpoints that bind them together as a social entity.
The social environment of a given region can have a significant impact on success.
Food companies are highly impacted by this because certain cultures prefer certain
types of foods.
 Geographical Environmental: Geographical environment also influence on
international business management. For example, skiing equipment may not do so
well in regions without snow or mountains. Oil companies can only source oil
from resource-rich regions.
 Political Environment: 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.
  Legal environment: The legal system refers to the rules and laws that regulate
behavior of individuals and organization. Some countries have high barriers to
entry, complex tax rates, and/or unclear legislative practices. Ease of doing
business is critical here.
 Economic Environment: It can help international managers, to predict how
trends and events might affect performance of foreign business. The standard of
living is different from region to region, and recognizing the value of a given
market in terms of spending power, currency, and market size is critical to
deciding upon expansion.
 Technological Environment: Access to internet, electricity, clean water and a
variety of other technological dependencies must be considered prior to entry if
the organizational operations rely on easy access.
------------------------------------------------------------------------------------------------------------
20. How do socio-cultural factors and demography affect business? [2018]
 Socio-cultural factors and demography affect business by the following ways:
 Social-cultural Factors: Culture consists the thought and behavioral patterns that
members of a society learn through language and other forms of symbolic
interaction. Their customs, habits, beliefs and values, the common viewpoints that
bind them together as a social entity.
The social environment of a given region can have a significant impact on success.
Food companies are highly impacted by this because certain cultures prefer certain
types of foods.
 Demography: Demographic issues including size of population, spatial
distribution, age and sex composition and components of population dynamics
(fertility, mortality, migration) as enhancing and inhibiting factors engendering
conflict in e-business promotion. Finally, it proffers solutions to the inherent
conflicts arising from these inhibitive tendencies.
------------------------------------------------------------------------------------------------------------
21. What are the components of socio, political and cultural environment?
(2018)
 Components of socio-cultural environment:
 Population growth rate and age profile;
 Population health, education and social mobility, and attitudes to these;
 Population employment patterns, job market freedom and attitudes to work;
 Press attitudes, public opinion, social attitudes and social taboos;
 Lifestyle choices and attitudes to these;
 Socio-Cultural changes.
 Components of political environment:
 Government type and stability;
 Freedom of press, rule of law and levels of bureaucracy and corruption;
  Regulation and de-regulation trends;
 Social and employment legislation;
 Tax policy, and trade and tariff controls;
 Environmental and consumer-protection legislation;
 Likely changes in the political environment.
---------------------------------------------------------------------------------------------------------------------
22. What are the elements of political environment facing international business?
[2019]
Or, Discuss the various Political Environment related factors & elements
affecting international business.
Or, How is international business affected by Political factors?
 Political Factors which affect the business environment: There are various factors which
affect political environment:
1. Taxation policies and economics: Change in tax rate is one of the best examples of how
a political environment can affect the business. The government may increase or decrease
the tax of a particular industry or change the percentage of taxes on all businesses for
many reasons.
2. Political stability: This is one of the most important factors. The stability of political
environment is very conducive to the economy and business in general. If a country is not
stable and government keeps changing frequently, the country can never be economically
stable as well. The GDP, stock exchange index all would go down leading to a vicious
circle.
3. Foreign Trade Regulations: Every business expects to expand its own company to
another country. The political background of that country could impact this. The
government controls almost everything right from tax policies to prices of the products.
4. Employment Laws: The employment laws are made and implemented by the
government so that the rights of employees are protected. It includes every aspect of
employer and employee business relations.
5. Other elements of political environment:
 Freedom of press, rule of law and levels of bureaucracy and corruption;
 Regulation and de-regulation trends;
 Social and employment legislation;
 Environmental and consumer-protection legislation;
------------------------------------------------------------------------------------------------------------
23. What are the international trade barriers?
Or, What are the barriers of Bangladeshi companies to go international?
[2020]
 Trade barriers are government-induced restrictions on international trade. Man-made
trade barriers come in several forms, including:
 Tariffs;
 Non-tariff barriers to trade;
 Import licenses;
 Export licenses;
  Import quotas;
 Subsidies;
 Voluntary Export Restraints;
 Local content requirements;
 Embargo;
 Currency devaluation;
 Trade restriction
-------------------------------------------------------------------------------------------------------------------------------