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AEREN FOUNDATION’S Maharashtra Govt. Reg. No.: F-11724
SUBJECT – INTERNATIONAL MANAGEMENT
CASE STUDY : 1 (20 Marks)
Zhuhai of Shanghai
- 1) Discuss the typicalities of Chinese Industrial system vis-à-vis the Western/global Industrial system.
Answer: China is the most prominent player in a non-Western subgroup’s suboptimisation strategy, which undermines the Western-dominated neoliberal capitalist system, or the Washington Consensus, and liberal democratic values, taken as gospel by Western economists, governments and industry for the past 30 years. While China and other non-Western states are a part of this system, a consequence of their actions within the system, and particularly in the international energy markets, is that they are increasing their relative
- 2) Where does the Chinese system fault?
Answer:By contrast, there is a historical school which Jack Goldstone has dubbed the “English school” which argues that China was not essentially different from Europe, and that many of the assertions that it was are based on bad historical evidence.
Mark Elvin argues that China was in a high level equilibrium trap in which the non-industrial methods were efficient enough to prevent use of industrial methods with high initial capital. Kenneth Pomeranz, in the Great Divergence, argues that Europe and China were remarkably similar in 1700, and that the crucial differences which created
- 3) Is over production and mis-match in marketing leads to poor prices of Chinese products in theInternationalmarket?
Answer:Though China’s economy has expanded rapidly, its regulatory environment has not kept pace. Since Deng Xiaoping’s open market reforms, the growth of new businesses has outpaced the government’s ability to regulate them. This has created a situation where businesses, faced with mounting competition and poor oversight, take drastic measures to increase profit margins, often at the expense of consumer safety. This issue became more prominent in 2007, with a number of restrictions being placed on problematic Chinese exports by the United States.
- 4) If you are offered, views as a top consultant, what would you like to suggest the Chinese Governmentandindustry. Give your reasons.
Answer: Economists have been warning for years that China must decrease its dependence on investment for growth and “rebalance” to allow consumption to play a bigger role. Government officials point out signs of progress — first-quarter GDP was driven upward more by consumption than investment, for instance. But progress is, at best, at a crawl. Private consumption relative to GDP in China is still the lowest among major economies. The government has simply balked at the reforms necessary to change that. Feeble health care and pension systems force households to save; then controls on interest rates keep returns on bank deposits meager, punishing them for saving. If anything, much government policy has
Case-2 (20 Marks)
Toyota Comes to Georgetown
- 1. What is the difference between American production policy and Japanese production policy?
Answer:Although it is somewhat presumptuous to generalize about the characteristics and attitudes of millions of people, some rather basic and important differences between the Japanese and U.S. workers appear to exist.
First, the Japanese concept of self is very different from the American view. In Japan, each person is believed to possess a unique spirit, soul, mind and heart, but the self concept is considered an impediment to growth. The Japanese establish identities that incorporate friends, relatives and coworkers in an open way to share feelings and improve on weaknesses. The workers relationship within the work group is very important
- 2. Where the Japanese Excel?
Answer: Companies which succeed in Japan go to extraordinary lengths to understand the landscape they are about to enter. We can assure you that it’s much better you know your competitors beforehand and work out a strategy how to deal with them, rather than finding out that a few weeks after you proudly open each of your new shops in Japan, a Japanese company you have never heard about before, selling the same products as you do opens a shop accross the road from your new shop offering similar products at much lower prices, and keeps open until midnight, while your shops close at 6pm. Sounds incredible? That’s exactly
- 3. In quality control of Toyota what do you observe?
Answer:Total Quality Administration (TQM) is definitely an approach which seeks to enhance quality as well as performance that will meet or even exceed client expectations. This is often achieved through integrating just about all quality-related features and processes through the company. TQM discusses the general quality measures utilized by an organization including controlling quality style and improvement, quality manage and upkeep, quality enhancement, and high quality assurance. TQM considers all high quality measures taken whatsoever levels as well as involving just about all company workers.
- 4. Can Japanese, be really leader in auto production and marketing, all over the world? Justify your moves.
Answer: The Japanese automotive industry is one of the most prominent and largest industries in the world. Japan has been in the top three of the countries with most cars manufactured since the 1960s, surpassing Germany. The automotive industry in Japan rapidly increased from the 1970s to the 1990s (when it was oriented both for domestic use and worldwide export) and in the 1980s and 1990s, overtook the U.S. as the production leader with up to 13 million cars per year manufactured and significant exports. After massive ramp-up by China
Case -3 (10Marks)
How to Win at Westinghouse
- 1. Describe the ways in which international business has an impact on your life.
Answer: There are several different ways to transport goods globally, of course. Ocean transportation is my area. The container shipping industry has a huge impact on world trade, the environment and history. Not only that, but also it provides valuable support in subject areas such as geography, business studies, economics and commerce. I truly am proud to be a part of this industry. That is why I wanted to gather some simple facts for us all to learn and keep in mind in our daily routines.
As far as history goes, the Egyptian coastal sailing ships were trading as early as around 3,200 BC. Today, maritime transportation is at a stage where
- 2. Pick an Indian corporation with which you are familiar and analyse the reasons why it might be motivated to expand its internationalism.
Answer:Owing to the prevalence of a realist conception in the literature on Chinese engagement with the developing world, the notion of analysing Chinese aid practices according to humane internationalism may at first glance seem a little odd. China, however, has a long history of involvement—one that has undergone shifts in policies and motivations and which has a broad spectrum of aspects often analysed individually rather than as a complete set. These deserve to be analysed under a more objective lens, rather than written off as realist solely because of China’s perceived need to feed its rapidly developing
- 3. What sorts of adjustments might McDonald’s have to make in its operations in India?
Answer: The international fast food chains appear to understand the need for product customization particularly well. A significant number of Indians are vegetarian by choice or for religious reasons, and strict taboos remain on the mingling of vegetarian and non-vegetarian foods in the same kitchen or on the same table. McDonald’s took note of that as far back as 1990, when it began establishing local supplier partners, six years before it opened its first restaurant in India. Working on its first no-beef, no-pork menu, the company ensured that suppliers respected the beliefs of its future customers. Vegetarian products are prepared with
- 4. What do you believe India must do to improve its international competitiveness?
Answer: As economic reforms gain momentum, India’s growth is likely to accelerate towards its high long-run potential. Measures such as a national Goods and Services Tax (GST), accompanied by a dismantling of inter-state check posts, can be transformational and significantly improve the domestic and international competitiveness of Indian manufacturing firms, said the latest India Development Update of the World Bank.
According to its estimates, simply halving the delays due to road blocks, tolls and other stoppages could cut freight times by some 20-30 percent and logistics costs by an even higher 30-40 percent. This alone can go a long way in boosting the competitiveness of India’s key manufacturing sectors by 3 to 4 percent of net sales, thereby helping India return to a high growth path and enabling large scale job creation.
According to the Update, a twice yearly report on
- 5. How do you perceive your managerial career will have an impact by the phenomenon of international business?
Answer:Although the district manager expected only average performance from this group, its productivity increased significantly. This was because the assistant manager in charge of the group refused to believe that she was less capable than the manager of the superstaff or that the agents in the top group had any greater ability than the agents in her group. She insisted in discussions with her agents that every person in the middle group had greater potential than those in the superstaff, lacking only their years of experience in selling insurance. She stimulated her agents to accept the challenge of outperforming the superstaff. As a result, each year
Doing Business with the East—Motorola Style
- 1. Describe some recent changes in your life or in your community that reflects the world’s shift from the West to the East.
Answer:Major shifts of power between states, not to mention regions, occur infrequently and are rarely peaceful. In the early twentieth century, the imperial order and the aspiring states of Germany and Japan failed to adjust to each other. The conflict that resulted devastated large parts of the globe. Today, the transformation of the international system will be even bigger and will require the assimilation of markedly different political and cultural traditions. This time, the populous states of Asia are the aspirants seeking to play a greater role. Like Japan and Germany back then, these rising powers are nationalistic, seek redress of past grievances, and want to claim their place in the sun. Asia’s growing economic power is translating into
- 2. What factors would you suggest are behind the shift from the West to the East?
Answer: Investors today would be wise to view the words above as an appropriate metaphor for how to approach today’s global economic landscape. Western industrialized economies that were once viewed as the drivers of global economic growth are now struggling to recover from the latest economic crisis and subsequent recession. Meanwhile, Asian economies have continued relatively healthy growth and are now surpassing the West as the new drivers of the global economy. The region’s unmatched growth throughout the past decade has attracted investors looking to capitalize on the region’s growing middle class and rising consumption; it has also given rise to a new generation of investors in Asia who have benefited from rising wages and a powerful export-driven economy.
China is undoubtedly the locomotive behind Asian
- 3. Did Japanese management style evolve from the Japanese culture, or did Japanese culture evolve from Japanese management style?
Answer: In smaller companies, an entirely different corporate culture developed. Similar to the Meister system of Germany, new recruits are placed under skilled senior specialists and spend years learning every technique that they have. They are trained to develop deeper understanding of specific areas of skills instead of the broader and less deep training that those in a larger corporation receive. They learn to produce work of high quality using few simple tools and few or no advanced industrial tools.
The Japanese term “hourensou” (also rendered as “Ho-Ren-So”) refers to frequent reporting, touching base and discussing — important attributes that are said to characterize collaboration and information flow within effective Japanese corporate culture. “GenchiGenbutsu” refers to “getting your hands dirty”, to identify or solve immediate
- 4. Describe the business-government ties that result in Japanese trade barriers.
Answer: Government-business relations are conducted in many ways and through numerous channels in Japan. The most important conduits in the postwar period are the economic ministries: the Ministry of Finance and the Ministry of Economy, Trade and Industry (METI, formerly the Ministry of International Trade and Industry, known as MITI). The Ministry of Finance has operational responsibilities for all fiscal affairs, including the preparation of the national budget. It initiates fiscal policies and, through its indirect control over the Bank of Japan, the central bank, is responsible for monetary policy as well. The Ministry of Finance allocates public investment, formulates tax policies, collectes taxes, and regulates foreign exchange.
- 5. Which of the Four Tigers of Asia do you believe has the greatest potential for long-term economic growth? Why?
Answer: The “four tigers” of Asia—Hong Kong, Singapore, South Korea, and Taiwan—built strong market economies in the absence of truly democratic practices. Every country in the world faces profound dislocations in the years ahead. Nothing will remain the same, and there is no way to escape the new forces unleashed by the accumulation of technology, changing tastes, and productivity. Every region of every country is becoming more and more interdependent with the rest of the nation, its neighbors, and the world. This presents major consequences, both good and bad. There is a clear dividend in terms of increased output per person. But can the process be dealt with in a way that permits some management of
- 6. What must China do to realise the magnitude of economic success earned by the Japanese?
Answer: China’s economic system before the late-1990s, with state ownership of certain industries and central control over planning and the financial system, has enabled the government to mobilize whatever surplus was available and greatly increase the proportion of the national economic output devoted to investment.
Analysts estimated that investment accounted for about 25 percent of GNP in 1979, a rate surpassed by few other countries. Because of the comparatively low level of GNP, however, even this high rate of investment secured only a small amount of resources relative to the size of the country and the population. In 1978, for instance, only 16 percent of
- 7. Outside of Singapore, which of the other ASEAN nations holds potential for economic success? Why?
Answer:Labor-force expansion and productivity improvements drive GDP growth—and ASEAN is making impressive strides in both areas. Home to more than 600 million people, it has a larger population than the European Union or North America. ASEAN has the third-largest labor force in the world, behind China and India; its youthful population is producing a demographic dividend. Perhaps most important, almost 60 percent of total growth since 1990 has come from productivity gains, as sectors such as manufacturing, retail, telecommunications, and transportation grow more efficient.
ASEAN has dramatically outpaced the rest of the world on growth in GDP per capita since the late 1970s. Income growth has remained strong since 2000,
Case -5 (10 Marks)
Winning with Bureaucracy at McDonald’s
QUESTIONS (any 5)
- 1. Discuss the advantages and disadvantages of the various forms of departmentalization?
Answer:Departmentalization involves dividing an organization into different departments, which perform tasks according to the departments’ specializations in the organization. Departmentalization as a means of structuring an organization can be found in both public and private organizations. An organization can structure itself into departments in the following ways.
Functional Departmentalization: In functional departmentalization, an organization is organized into departments based upon the respective functions each performs for the organization. For example, a manufacturing company may create a production department, sales and marketing department, an accounting department, and a human resources
- 2. What are the strengths and weaknesses of a bureaucratic organisation?
Answer:Bureacracies are normally accused of terrible inefficiency and rigidness. I read an article once by a guy who said that bureaucracies are actually very efficient and people complain because they have to have all their ducks in a row in order to accomplish anything. Income tax might be a good example. Organizational structure provides a backbone upon which all of a company’s operational policies and work processes are built. Managerial reporting relationships and the flow of ideas, decisions and information are formally laid out by a company’s organizational structure. Structures can be relatively flat or tall; taller structures tend
- 3. How does downsizing make firms more competitive in the global arena?
Answer: In a greater competitive marketplace, speed or response time is critical. How organizations response to customers and other stakeholders or be the first to market may make a significant difference as time is at a premium. Organizations that can develop new technologies faster or can adapt to changes in the market faster are the ones that will survive the competition. To maximize response time, organizations have been flattening their hierarchies and structures, in addition to other initiatives such as downsizing and networking. Flat organizations make decisions more quickly because each person is closer to the ultimate decision-makers. There are fewer levels of management, and workers are empowered to
- 4. Compare and contrast bureaucratic control with clan control. Which is better?
Answer:Bureaucratic Control:Bureaucratic control is the use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms to influence employee behavior and assess performance. Bureaucratic control can be used when behavior can be controlled with market or price mechanisms.
Clan Control: Clan control represents cultural values
- 5. Discuss the strengths and weaknesses of budgeting?
Answer:A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or events in measurable terms.A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms.
- 6. How can a manager make control systems more effective?
Answer:Companies achieve their goals by developing strategic plans and implementing control systems to make sure their operations are proceeding according to plan. Such control systems are effective when they limit deviations from the strategic plan and alert management when deviations are large enough to endanger the plan. Effective control systems also ensure that company activities comply with legal and regulatory requirements and internal standards. This is especially important for small businesses where practices may be more informal.
CASE 6: (10Marks)
Political Risk Assessment and Euro Disney
- 1. Describe the major conflicts that arise between the host country and the MNC.
Answer: Although the Multinational Corporations (MNCs) has no power over the host government, if may have considerable power under that government. By being able to influence certain factors, the MNC has the opportunity to help or harm national economics; in this sense, it may be said to have power against host governments. Critics of the MNC perceive these powers as potential perils to host societies. The strategic aspects of a host country’s national policy that are subject to the influence of the MNC include:
- 2. Discuss the major conflicts that arise between the home country and the MNC.
Answer:1. Extract excessive profits because of their general monopolistic advantages:
Some multinational companies are involved in a product which does not have any competition in the host country either because of technological sophistication or patents. This results in monopoly with price controls in the hands of the MNCs. This was the major complaint of the government of India against Coca Cola Company which prompted the company to cease operations there. Similarly, companies like IBM may have a price
- 3. What role does ideology play in the manifestation of political risk?
Answer:Political risk has been a significant factor in international business since the end of World War Two. Some challenges have been nearly continuous throughout this period, and can be regarded in some respects as ‘background noise’ at the global level, even if the political landscape might shift dramatically in specific locations. We will address these routine issues here and explain their effect on international businesses.
There have also been signiicant discontinuities in the global political landscape, especially in the last two decades. These macro-shifts have not necessarily changed the array of risks facing international business, but they have changed the character of
- 4. Evaluate both the good and bad features of international law as it impacts international business.
Answer: International law is the set of rules generally regarded and accepted as binding in relations between states and between nations.It serves as a framework for the practice of stable and organized international relations. International law differs from state-based legal systems in that it is primarily applicable to countries rather than to private citizens. National law may become international law when treaties delegate national jurisdiction to supranational tribunals such as the European Court of Human Rights or the International Criminal Court. Treaties such as the Geneva Conventions may require national law to conform to respective parts.
Much of international law is consent-based gove
- 5. Speculate the main reasons behind the various forms of host country intervention?
Answer:In recent years, the efforts of host governments to maintain control over their own national economies have increasingly restricted the freedom of MNC managers in deploying economic resources. Of equal importance, host governments have often interfered with the autonomous process of MNC strategy formulation.
Managers who are or who are likely to be faced with such restrictions may find it useful to distinguish between these two different kinds of government intervention. The first, which sets the fiscal and regulatory ground rules for an MNC’s
- 6. Give recent examples of international situations in which MNCs have been at severe risk due to host country Instability?
Answer: Foreign business operations and investments are affected by societal actions and policies, as well as, governmental regulations and restrictions; thus, making MNC particularly vulnerable. Societal actions, which have increased, include war, revolutions, terrorism, and civil unrest. MNC must be conscious of political unrest, instability, and the disposition of the government of a current or future foreign market. Political instability is the most detrimental risk due to its element of instability. When political turmoil exists, so does social and economic unrest. For example, some Latin American countries welcome private
- 7. Review the various forms of protection from political risk that are available to MNCs?
Answer:In general, there are two types of political risk, macro risk and micro risk. Macro risk refers to adverse actions that will affect all foreign firms, such as expropriation or insurrection, whereas micro risk refers to adverse actions that will only affect a certain industrial sector or business, such as corruption and prejudicial actions against companies from foreign countries. All in all, regardless of the type of political risk that a multinational corporation faces, companies usually will end up losing a lot of money if they are unprepared for these adverse situations. For example, after Fidel Castro’s government took control of Cuba in 1959
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