MB0053 - INTERNATIONAL BUSINESS MANAGEMENT

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ASSIGNMENT

DRIVE	WINTER 2015
PROGRAM	MBADS/ MBAFLEX/ MBAHCSN3/ MBA – SEM 4
SUBJECT CODE & NAME	MB0053INTERNATIONAL BUSINESS MANAGEMENT
BK ID	B1724
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.

Question. 1. Why is Comparative Cost Theory considered as an improvement upon Absolute Cost Advantage Theory?

Explain Porter’s Diamond Model

Answer:Comparative Cost Theory as an improvement on Absolute Cost Advantage Theory

The principle of comparative costs is based on the differences in production costs of similar commodities in different countries. Production costs differ in countries because of geographical division of labour and specialisation in production. Due to differences in climate, natural resources, geographical situation and efficiency of labour, a country can produce one commodity at a lower cost than the other.

In this way, each country specialises in the production of that commodity in which its comparative cost of production is the least. Therefore, when a country enters into trade with some other country, it will export those commodities in which its comparative production costs are less, and will import those commodities in which its comparative production costs are high.

The theory of comparative advantage is an economic theory about the work gains from trade for individuals, firms, or nations that arise from

Question. 2. Explain Hofstede’s Cultural dimension.

Answer:You know, dogs are interesting animals. If you have ever watched a group of different breeds of dogs together, you see that there are dogs who are aggressive, those that are mellow, some want to be the alpha male and some are content just playing and having a good time. These different dimensions are very similar to Geert Hofstede's Cultural Dimension theory, a theory that looks at unique aspects of cultures and rates them on a scale for comparison. Now, I am not trying to say dogs to humans are the same, but the way they interact is quite similar.

The Six Different Types of Hoftede's Dimension

Geert Hofstede is a professor who researched how people from different countries and cultures interact based on six different categories of cultural dimensions. Those categories are:

Question. 3. “An economic union comprises of a common market and a custom union.” Explain

Answer: Customs Unions and Single Markets are examples of deeper economic integration between countries

Different stages of economic integration

Different stages of economic integration between countries	No Internal Trade Barriers	Common External Tariff	Factor and Asset Mobility	Common Currency	Common Economic Policy
Free Trade Area	X
Customs Union	X	X
Single Market	X	X	X
Monetary Union	X	X	X	X
Economic Union	X	X	X	X	X

Question. 4. Explain the components of International Financial Management.

Answer: International Financial Management also known as International Finance is a popular concept which means management of finance in an international business environment, it implies, doing of trade and making money through the exchange of foreign currency. The International Financial activities help the organizations to connect with international dealings with overseas business partners- customers, suppliers, lenders etc. It is also used by Government organization and Non-profit institutions.

Components of International Financial systems

·         Money.

·         Banking and Financial Institutions.

·         Financial Instruments.

·         Financial Markets.

·         Central Banks.

Question. 5. What are the differences between International Accounting Standards and Domestic Accounting Standards?

Answer:Different countries whether domestic or international, have different accounting standards. A common belief is that these differences reduce the quality and importance of accounting information. Accounting standards determine the financial reporting quality and provides separately verified information about an organisation's financial performance to investors’creditors.

Differences between International Accounting Standards and Domestic Accounting Standards

Though there are differences in accounting methods, domestic businesses are not affected. The accounting system of a domestic organisation must meet the specialised and regulatory standards of its home country. But, an MNC and its subsidiaries must meet differing accounting and auditing standards of all the countries in which it operates. This leads to a need for comparability between businesses in the group. In order to successfully

Question. 6. Explain the key component of International Strategic management.

Answer:Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.

Strategic management provides overall direction to the enterprise and involves specifying the organization's objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to

Dear students get fully solved assignments

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