IB0012 – Management of Multinational Corporations

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ASSIGNMENT

DRIVE FALL	2013
PROGRAM	MBADS – (SEM 3/SEM 5) / MBAN2 / MBAFLEX – (SEM 3) / PGDIB – (SEM 1)
SUBJECT CODE & NAME	IB0012 – Management of Multinational Corporations
BK ID	B1200
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

1 Discuss the meaning, objectives and difficulties of international business.

Answer : International business is a term used rarely to describe all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their political boundary. Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc.

There are many Problems in International Business. The restraining forces slow down the progress of companies that take up International Business. The restraining forces are :

1)      First Main Problem in International Business is

2 What is the impact of Globalization on world economy? What are the devices of globalization?

Answer : Industrialization required raw materials and industrialized countries could not always supply all of those raw materials themselves. They therefore turned to other countries, including underdeveloped countries, for raw materials. This created a pattern of every increasing globalization. As globalization produced a world economy in the 18th, 19th, and 20th centuries, local economies around the world changed the way they produced and distributed raw materials. They specialized in the things they were best at, imported everything they needed to import, and shared ideas and technology.

3 What do you understand by multinational corporations? Analyze the types of MNCs.

Answer : A multinational corporation (MNC) is a business enterprise that manages production or delivers services in more than one country.

·         Multinational corporations affect local and national policies by causing governments to compete with each other to be attractive to multinational corporation investment in their country.

·         Multinational corporations often hold power over local and national governments through a monopoly on technological and intellectual property.

4 Enumerate the factors which affect the organizational structure of an international firm. Explain the merits and drawbacks of matrix structure.

Answer : The organizational structure of your business provides a foundation for lines of communication, responsibility and tasks. As the framework for your business, the organizational structure you select dictates the number of management layers, how your business is functionally divided and the overall reporting structure. Multiple organizational designs can be used to enhance your business’s strategy including simple, functional, matrix, hybrid or a self-designed structure.

·         Geography

Companies that manufacture products, maintain multiple business offices or sell products in different geographic locations may need a different

6 Write short notes on:

a)International technology transfer

Answer : Technology Transfer, also called Transfer of Technology (TOT) and Technology Commercialisation, is the process of transferring skills, knowledge, technologies, methods of manufacturing, samples of manufacturing and facilities among governments or universities and other institutions to ensure that scientific and technological developments are accessible to a wider range of users who can then further develop and exploit the technology into new products, processes, applications, materials or services. It is closely related to (and may arguably be considered a subset of) knowledge transfer.

b)Licensing

Answer : This term refers to a written agreement entered into by the contractual owner of a property or activity giving permission to another to use that property or engage in an activity in relation to that property. The property involved in a licensing agreement can be real, personal or intellectual. Almost always, there will be some consideration exchanged between the licensor and the licensee.

A license may be granted by a party ("licensor") to another party ("licensee") as an element of an agreement between those parties. A shorthand definition of a license is "an authorization (by the licensor) to use the licensed material (by the licensee)."

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