MS- 97: INTERNATIONAL BUSINESS

ASSIGNMENT

Course Code : MS-97

Course Title : International Business

Assignment Code : 97/TMA/SEM-II/2010

Coverage : All Blocks

Attempt All the Questions.

1. Identify the Central Actors in International Business and discuss the differences between Domestic and International Business.
TRANS-NATIONAL-CORPORATION [ TNC]
 
Company strategies and Government policies each arise from the decision-makers' views of their own bargaining strengths and
those of other relevant actors, as well as their assessments of opportunity costs and their willingness to forego any dealings with the
other party. Among the many actors that are relevant to policymaking,

TNCs constitute a particularly significant group, since they affect employment, generate and distribute income, alter the
balance of payments, assist in regional development, create technology and impinge on other policy areas. Governments are crucial in
affecting company strategies, since they set the rules of the game. These conditions lead to the bargaining relationship between
TNCs and Governments. That relationship can be viewed as a joint maximizing (or mini-max) problem as in the theory of gameswith
each side seeking to pursue its goals constrained by its resources, its dependence on the other party and its relationships
with other actors. Thus, international business outcomes that result from the interaction of TNCs and Governments can be analysed in
the framework of models of the following kind:

Problem: jointly maximize government and TNC objectives, subject to constraints, resources and negotiating abilities.

Given those conditions:

Government objectives: economic efficiency; equity in TNC distribution of benefits; participation in ownership, management,technology,
R&D etc.; stability (economic, political, social); acceptable interdependence, preservation of environment, and so forth.

Objectives of TNCs: access to markets; access to inputs; reduction of risks; freedom of decision-making and operations.

Government constraints: inadequacy of resources; fragmentation of power in a country; pressure to achieve economic goals
more rapidly; relationships with other Governments; lack of information; inexperience in negotiations, and so on.

Constraints of TNCs: dependence on Governments to permit access; activities of competitors; limited resources; lack of information;
and so forth.

The bargaining relationship will lead to outcomes based on the efforts of the two sides to achieve their own goals, constrained by
their own limited resources, on their interdependence and on their relationships with other relevant groups. Those goals and constraints
demonstrate that a Government and a TNC face pressures not only from each other, but also from other participants, such as
local firms and municipalities or state Governments, as well as other foreign firms and foreign Governments
On the basis of this reasoning, testable bargaining models can be established, as follows.

An explicit bargaining model Governments seek economic development and balance-of-payments

stability, for example, and both goals can be pursued by attracting and channelling the activities of foreign TNCs.

TNCs  seek inexpensive sources of raw materials and manufacturing sites as well as markets for selling their products; they can pursue those
objectives by dealing successfully with Governments of host countries, which, by their sovereignty, control access to each of those
factors. The full range of bargaining advantages possessed by companies and Governments cannot be specified, since it depends to
some degree on the idiosyncratic characteristics of specific countries and firms.
A simplified framework for examining bargaining resources that are present for Governments and TNCs
in most contexts.

TNC  offer

1.assistance  in improving  host country internal  balance [ income/ employment]

-proprietary  technology
-access  to  funds for  investment.
-access  to  fund  for  investment  in  the  host  country.
-management/ marketing  skills.
----------------------------------------------
1.LOCAL  GOVERNMENT  OFFER
-control over  access  to  the  host country.
-control  over  accesss to  the  market  in  general
-government  itself  could  be  a  customer.
==================================
The relative resources available to each in the bargaining process set the initial positions. The strength of Governments arises
essentially from control over the two usual targets of foreign TNCs: either the host country market, or host country factors of
production, such as raw materials, inexpensive labour, technology or capital. Those two advantages are fundamental, because without
either a desirable market or a source of supply, the Government of the host country does not generally offer an important
opportunity to foreign TNCs. Similarly, foreign TNCs usually possess several attributes that
attract Governments, and which Governments could not obtain without a much higher cost through some other vehicle. Those
attributes include: assistance in raising host country income and employment through manufacturing, extractive ventures or services,
which use the firm's proprietary technology and/ or managerial knowledge; improvement of the host country's balance of
payments by providing access to foreign markets and sources of supply that the firm has through its own affiliates or through its
own information channels; and/or assistance in achieving the Government's non-economic goals, such as political and social stability.
The importance of each of those factors in a bargaining situation largely determines the shape of the expected outcome of
negotiations between a firm and a Government. A second dimension that influences the outcome of bargaining
situations between a company and a government is the relative importance of the situation to each one  -- the relative stakes that each party
holds in a given situation affect the bargaining outcomes just as do the relative resources of each.

TNC  OFFERS

2.assistance in  improving  the  host country  external  balance

-access to  low cost inputs  from abroad

-access  to  foreign market  for  exports
-replacement  of  imports  through local products.
-----------------------------------------------
2.GOVERNMENT  OFFERS

-control  over access  to  facility of  production

-natural  resources , such as  minerals /metals etc
-low cost production  inputs  such labor
-funding and  investment  opportunities.
etc
=======================================
The  third  dimension  in the  bargaining  relationship  is  the  degree  of  interests.

3.TNC  OFFERS
assistance  in  achieving  host country's  economic   goals
-jobs
-lifestyle  shifts
-availability  of   other  markets
----------------------------------------
3. GOVERNMENT   OFFERS
-other  resources
====================================

WHAT  ARE  THE   RELATIVE   STAKES

TNC
-availability  of  other  markets.
-availability  of  other  resources  from  abroad
-importance  of  negotiation in the  firm's dealing within
own country
-relationship   business
-----------------------------

GOVERNMENT
-government  interests
-important  to  the  business
-overall  relationship.
==============================
THE  CENTRAL  ACTORS   COULD  BE

-TNC
-HOST  GOVERNEMENT
-TNC  SUBSIDIARIES
-TNC  LICENSEE

INTERNATIONAL  CONTRACTORS
-INC  SUPPLIERS
-INC  CUSTOMERS

NGOs
FINANCIAL  INSTITUTIONS
-asian  bank
-import and  export  banks
etc
@@@@@@@@@@@@@@@@@@@@@@@@@@

An international business is a business whose activities are carried out across national borders. This differs from a domestic business because a domestic business is
a business whose activities are carried out within the borders of its geographical location.

A domestic company is one that confines its activities to the local market, be it city, state, or the country it is in. It deals, generally, with one currency, local customs
and cultures, business laws of commerce, taxes and products and services of a local nature.

The international company, on the other hand deals with businesses and governments in one or more foreign countries and is subject to treaties, tariffs. currency
rates of exchange, politics, cultural differences, taxes, fees, and penalties of each country it is doing business in. It may also be conducting business in it's home
country, but the emphasis is on trading in the international marketplace.

The fundamental distinction between domestic and international business is the existence of interventions by Governments
of home and host countries in inter-country business activity, which lead to business reactions.' IB theory must explain the patterns
of exports and imports (rather than the desire to trade, which is not different from domestic trade), the gains from trade, the reasons
for and direction of FDI and of contractual relations, as well as strategies and operations, which result from governmental interventions
(unilaterally or multilaterally), giving rise to multiple sets of rules for IB. (Cultural aspects are also significant, but they lead
to cross-cultural rather than international analysis.) Those interventions are categorically different from interregional or inter-state
variations under governmental policies within countries, because Governments are the sovereign, ultimate rule-makers for activities
coming into and within their jurisdictions.

2. Briefly explain the mechanisms adopted by MNEs for achieving flexible coordination in different countries. Give examples.

COORDINATION  IS  THE SYNCHRONIZATION AND INTEGRATION OF  ACTIVITIES,RESPONSIBILITIES AND  COMMAND  AND  CONTROL  STRUCTURES TO  ENSURE
THAT  THE RESOURCES  ARE USED  MOST  EFFICIENTLY  IN PURSUIT OF THE SPECIFIED OBJECTIVES. ALONG WITH  THE  ORGANIZING, MONITORING , AND
CONTROLLING COORDINATING  IS  ONE  OF  THE  KEY  FUNCTIONS OF  MANAGEMENT.
Co-ordination is the unification, integration, synchronization of the efforts of group members so as to provide unity of action in the pursuit of common goals. It is
a hidden force which binds all the other functions of management. “Co-ordination is orderly arrangement of group efforts to provide unity of action in the
pursuit of common goals”. “Co-ordination is the integration of several parts into an orderly hole to achieve the purpose of understanding”.
Management seeks to achieve co-ordination through its basic functions of planning, organizing, staffing, directing and controlling. That is why, co-ordination is
not a separate function of management because achieving of harmony between individuals efforts towards achievement of group goals is a key to success of
management. Co-ordination is the essence of management and is implicit and inherent in all functions of management.
A manager can be compared to an orchestra conductor since both of them have to create rhythm and unity in the activities of group members. Co-ordination is
an integral element or ingredient of all the managerial functions as discussed below: -
Co-ordination through Planning – Planning facilitates co-ordination by integrating the various plans through mutual discussion, exchange of ideas. e.g. - co-
ordination between finance budget and purchases budget.
Co-ordination through Organizing – Mooney considers co-ordination as the very essence of organizing. In fact when a manager groups and assigns various
activities to subordinates, and when he creates department’s co-ordination uppermost in his mind.
Co-ordination through Staffing – A manager should bear in mind that the right no. of personnel in various positions with right type of education and skills are
taken which will ensure right men on the right job.
Co-ordination through Directing – The purpose of giving orders, instructions & guidance to the subordinates is served only when there is a harmony between
superiors & subordinates. Co-ordination through Controlling – Manager ensures that there should be co-ordination between actual performance & standard
performance to achieve organizational goals.
From above discussion, we can very much affirm that co-ordination is the very much essence of management. It is required in each & every function and at each
& every stage & therefore it cannot be separated.
The four key functions of management are applied throughout an organization regardless of whether it is a business, a government agency, or a church group. In
a business, which will be the focus here, many different activities take place. For example, in a retail store there are people who buy merchandise to sell, people
to sell the merchandise, people who prepare the merchandise for display, people who are responsible for advertising and promotion, people who do the
accounting work, people who hire and train employees, and several other types of workers. There might be one manager for the entire store, but there are other
managers at different levels who are more directly responsible for the people who perform all the other jobs. At each level of management, the four key
functions of planning, organizing, directing, and controlling are included. The emphasis changes with each different level of manager, as will be explained later.
Planning Planning in any organization occurs in different ways and at all levels. A top-level manager, say the manager of a manufacturing plant, plans for different
events than does a manager who supervises, say, a group of workers who are responsible for assembling modular homes on an assembly line. The plant manager
must be concerned with the overall operations of the plant, while the assembly-line manager or supervisor is only responsible for the line that he or she oversees.
Planning could include setting organizational goals. This is usually done by higher-level managers in an organization. As a part of the planning process, the
manager then develops strategies for achieving the goals of the organization. In order to implement the strategies, resources will be needed and must be
acquired. The planners must also then determine the standards, or levels of quality, that need to be met in completing the tasks.
In general, planning can be strategic planning, tactical planning, or contingency planning. Strategic planning is long-range planning that is normally completed by
top-level managers in an organization. Examples of strategic decisions managers make are who the customer should be, what products or services should be sold,
and where the products and services should be sold.
Short-range or tactical planning is done for the benefit of lower-level managers, since it is the process of developing very detailed strategies about what needs to
be done, who should do it, and how it should be done. To return to the previous example of assembling modular homes, as the home is nearing construction on
the floor of the plant, plans must be made for the best way to move it through the plant so that each worker can complete assigned tasks in the most efficient
manner. These plans can best be developed and implemented by the line managers who  oversee  the production process rather than managers who sit in an
office and plan for the overall operation of the company. The tactical plans fit into the strategic plans and are necessary to implement the strategic plans.
Contingency planning allows for alternative courses of action when the primary plans that have been developed don't achieve the goals of the organization. In
today's economic environment, plans may need to be changed very rapidly. Continuing with the example of building modular homes in the plant, what if the
plant is using a nearby supplier for all the lumber used in the framing of the homes and the supplier has a major warehouse fire and loses its entire inventory of
framing lumber. Contingency plans would make it possible for the modular home builder to continue construction by going to another supplier for the same
lumber that it can no longer get from its former supplier.
Organizing : Organizing refers to the way the organization allocates resources, assigns tasks, and goes about accomplishing its goals. In the process of organizing,
managers arrange a framework that links all workers, tasks, and resources together so the organizational goals can be achieved. The framework is called
organizational structure, which is discussed extensively in another article. Organizational structure is shown by an organizational chart, also discussed extensively
in another article. The organizational chart that depicts the structure of the organization shows positions in the organization, usually beginning with the top-level
manager (normally the president) at the top of the chart. Other managers are shown below the president.
There are many ways to structure an organization, which are discussed extensively in the articles referred to previously. It is important to note that the choice of
structure is important for the type of organization, its clientele, and the products or services it provides—all which influence the goals of the organization.
Directing :Directing is the process that many people would most relate to managing. It is supervising, or leading workers to accomplish the goals of the
organization. In many organizations, directing involves making assignments, assisting workers to carry out assignments, interpreting organizational policies, and
informing workers of how well they are performing. To effectively carry out this function, managers must have leadership skills in order to get workers to perform
effectively.
Some managers direct by empowering workers. This means that the manager doesn't stand like a taskmmaster  over the workers barking out orders and
correcting mistakes. Empowered workers usually work in teams and are given the authority to make decisions about what plans will be carried out and how.
Empowered workers have the support of managers who will assist them to make sure the goals of the organization are being met. It is generally thought that
workers who are involved with the decision-making process feel more of a sense of ownership in their work, take more pride in their work, and are better
performers on the job.
By the very nature of directing, it should be obvious that the manager must find a way to get workers to perform their jobs. There are many different ways
managers can do this in addition to  empowerment  , and there are many theories about the best way to get workers to perform effectively and efficiently.
Management theories and motivation are important topics and are discussed in detail in other articles.
Controlling The controlling function involves the evaluation activities that managers must perform. It is the process of determining if the company's goals and
objectives are being met. This process also includes correcting situations in which the goals and objectives are not being met. There are several activities that are
a part of the controlling function.
Managers must first set standards of performance for workers. These standards are levels of performance that should be met. For example, in the modular home
assembly process, the standard might be to have a home completed in eight working days as it moves through the construction line. This is a standard that must
then be communicated to managers who are supervising workers, and then to the workers so they know what is expected of them.
After the standards have been set and communicated, it is the manager's responsibility to monitor performance to see that the standards are being met. If the
manager watches the homes move through the construction process and sees that it takes ten days, something must be done about it. The standards that have
been set are not being met. In this example, it should be relatively easy for managers to determine where the delays are occurring. Once the problems are
analyzed and compared to expectations, then something must be done to correct the results. Normally, the managers would take corrective action by working
with the employees who were causing the delays. There could be many reasons for the delays. Perhaps it isn't the fault of the workers but instead is due to
inadequate equipment or an insufficient number of workers. Whatever the problem, corrective action should be taken.

3. ‘An effective evaluation system must start from the beginning of the life cycle of the investment.’ Why? Explain with reference to Project Performance
Evaluation.

The Project Life Cycle refers to a logical sequence of activities to accomplish the project’s goals or objectives. Regardless of scope or complexity, any project goes
through a series of stages during its life. There is first an Initiation or Birth phase, in which the outputs and critical success factors are defined, followed by a
Planning phase, characterized by breaking down the project into smaller parts/tasks, an Execution phase, in which the project plan is executed, and lastly a
Closure or Exit phase, that marks the completion of the project. Project activities must be grouped into phases because by doing so, the project manager and the
core team can efficiently plan and organize resources for each activity, and also objectively measure achievement of goals and justify their decisions to move
ahead, correct, or terminate. It is of great importance to organize project phases into industry-specific project cycles. Why? Not only because each industry sector
involves specific requirements, tasks, and procedures when it comes to projects, but also because different industry sectors have different needs for life cycle
management methodology. And paying close attention to such details is the difference between doing things well and excelling as project managers.

Diverse project management tools and methodologies prevail in the different project cycle phases. Let’s take a closer look at what’s important in each one of
these stages:
1) Initiation
In this first stage, the scope of the project is defined along with the approach to be taken to deliver the desired outputs. The project manager is appointed and in
turn, he selects the team members based on their skills and experience. The most common tools or methodologies used in the initiation stage are Project
Charter, Business Plan, Project Framework (or Overview), Business Case Justification, and Milestones Reviews.
*developing  a  business  case.
*undertake  a  feasibility   study
*establish the project charter
*appoint  a  project  team
*set up  a  project  office
*performance  phase  review.
-------------------------------------------------
2) Planning
The second phase should include a detailed identification and assignment of each task until the end of the project. It should also include a risk analysis and a
definition of a criteria for the successful completion of each deliverable. The governance process is defined, stake holders identified and reporting frequency and
channels agreed. The most common tools or methodologies used in the planning stage are Business Plan and Milestones Reviews.

*create a  project  plan.

*create a resource  plan.
*create a financial  plan
*create a  quality  plan
*create a  risk  plan
*create a  acceptance  plan
*create a  communications  plan
*create a  procurement  plan
*contract  the  supplier
*define  the  tender  process
*issue  a  statement  of works
*issue a  request for  information
*issue a request  for  proposals
*create  a  supplier  contract
*perform phase reviews
---------------------------------------------------
3) Execution and controlling
The most important issue in this phase is to ensure project activities are properly executed and controlled. During the execution phase, the planned solution is
implemented to solve the problem specified in the project's requirements. In product and system development, a design resulting in a specific set of product
requirements is created. This convergence is measured by prototypes, testing, and reviews. As the execution phase progresses, groups across the organization
become more deeply involved in planning for the final testing, production, and support. The most common tools or methodologies used in the execution phase
are an update of Risk Analysis and Score Cards, in addition to Business Plan and Milestones Reviews.

*build   deliverables.
*monitor  and  controls.
*perform  time  management
*perform  cost  management
*perform  quality management
*perform  change  management
*perform risk  management
*perform  issues  management
*perform  procurement  management
*perform acceptance  management
*perform  communications  management
-------------------------------------------------------------
4) Closure
In this last stage, the project manager must ensure that the project is brought to its proper completion. The closure phase is characterized by a written formal
project review report containing the following components: a formal acceptance of the final product by the client, Weighted Critical Measurements (matching
the initial requirements specified by the client with the final delivered product), rewarding the team, a list of lessons learned, releasing project resources, and a
formal project closure notification to higher management. No special tool or methodology is needed during the closure phase.

*perform  project  closure

*perform  project  completion.

==============================================
In project management field, there are few things that can cause a project to
require the control performance, costs or time.

Performance:
− Unexpected technical problems arise.
− Insufficient resources are available when needed.
− Insurmountable technical difficulties are present.
− Quality or reliability problems occur.
− Client requires changes in system specifications.
− Inter functional complications arise.
− Technological breakthroughs affect the project.

Cost:
− Technical difficulties require more resources.
− The scope of the work increases.
− Initial bids or estimates were too low.
− Reporting was poor or untimely.
− Budgeting was inadequate.
− Corrective control was not exercised in time.
− Input price changes occurred.

Time:
− Technical difficulties took longer than planned to solve.
− Initial time estimates were optimistic.
--Task sequencing was incorrect.
− Required inputs of material, personnel, or equipment were unavailable when
needed.
− Necessary preceding tasks were incomplete.
− Customer-generated change orders required rework.
− Governmental regulations were altered.

And these are only a few of the relatively “mechanistic” problems that project
control can occur. Actually, there are no purely mechanistic problems on projects.

All  problems have a human element, too. For example,

-humans, by action or inaction, set in

motion a chain of events that leads to a failure to budget adequately, creates a quality problem, leads the project down to a technically difficult path, or fails to
note a change in government regulations.

-If, by chance, some of these or other things happen (as a result of human action or not), humans are affected by them.

Frustration, pleasure, determination,hopelessness, anger and may other emotions arise during the course of a project. They
affect the work of the individuals who feel them – for better or worse. It is over this welter of confusion, emotion, fallibility, and general cussedness that the PM
tries to exert control.

All of these problems, always combinations of the human and mechanistic, call for intervention and control by the project manager. There are infinite “slips”
especially in projects where the technology or deliverables are new and unfamiliar, and project managers, like most managers, find control is a difficult function
to perform. There are several reasons why this is so. One of the main reasons is that project managers, again like
most managers, do not discover problems. In systems as complex as projects, the task of defining the problems is formidable, and thus knowing what to control is
not a simple task.

Another reason control is difficult is because, in spite of an almost universal need to blame some person for any trouble, it is often almost impossible to know if a
problem resulted from human error or from the random application of Murphy’s Law.

Project managers also find it tough to exercise control because the project team, even on large projects, is an “in-group”. It is “we” while outsiders are “they”. It
is usually hard to criticize friends, to subject them to control. Further, many project managers see control as an ad-hoc process. Each need to exercise control is
seen as a unique event, rather than as one instance of an ongoing and recurring process.  Projects are drifting out of control if the achievement of milestones is
threatened.

THIS  IS WHY  THE   PROJECT  EVALUATION  AND  CONTROL IS APPLIED  AT  ALL THE  STAGES  OF  THE   PROJECT LIFE  CYCLE.

Because control of projects is such a mixture of feeling and fact of human and mechanism, of causation and random chance, we must approach the subject in an
extremely orderly way. This why we start by examining the general purposes of control. Then we
consider the basic structure of the process of control. We do this by describing control theory in the form of a cybernetic control loop. While most projects offer
little opportunity for the actual application of automatic feedback loops, the system provides us with a comprehensive
but reasonably simple illustration of all the elements necessary to control any system. From this model, we then turn to the types of control that are most often
applied to projects. The design of control systems is discussed as are the impacts that various types of controls tend
to have on the humans being controlled. The specific requirement of “balance” in a control system is also covered, as are two special control problems: control of
creative activities, and control of change.

The process of controlling a project (or any system) is far more complex than simply waiting for something to go wrong and the, if possible, fixing it. We must
decide at what points in the project we will try to exert control, what is to be controlled, how it will be
measured, how much deviation from plan will be tolerated before we act, what kinds of interventions should be used, and how to spot and correct potential
deviations before they occur. In order to keep these and other such issues sorted out, it is helpful to begin a
consideration of control with a brief exposition on the theory of control, No matter what our purpose in controlling a project, there are three basic types of
control mechanisms we can use: cybernetic control, go/no-go control and post-control.

4. Discuss the approaches adopted by multinational enterprises to meet its manpower requirements.
THE  BROAD  APPROACH.

MNEs need managers who, by playing boundaries spanning roles, can bring about the needed coordination and integration between the subsidiary concerned
and the headquarters. For their international operations, they need managers who have global outlook and who can work in more challenging and somewhat
unfamiliar conditions. The recruitment and retention of and development of human resources is therefore critical to a multinational enterprise.

In relation to human resource management, an MNE may be guided by any one of the four kinds of policies: Ethnocentric, Polycentric, Rigiocentric and
Geocentric.

1.Ethnocentric approach implies managing of all senior positions by home country nationals. This policy however may cause alienation in the country in which a
subsidiary operates.
2.In Polycentric approach the host country nationals are preferred for local position - whether senior or junior. Though this approach may be,
favourably viewed by locals, the subsidiary management may get alienated from the mainstream, especially if this policy is carried to the extreme.
3.Regiocentric approach implies recruiting people from the entire region rather than a particular country. This approach helps in developing a regional
perspective especially when the interdependent activities or operations of the MNE extend to a certain region. The

4.Geocentric approach rests on global outlook and no distinction is made between home and host countries, between one region and the other, insofar as
selection,- placement and promotion of the employees is concerned.

While following any  particular policy, and MNE has to take into account legal requirements of the country  in which it is operating.
Management practices and policies are influenced by the socio-economic and cultural variables of each country. These variables should be considered and
examined thoroughly before introducing new ideas or approaches. This would reduce the
incidence of failure. Depending upon the circumstances and the local constraints, MNEs may meet their
manpower requirements either from the home country or the host country or the third countries, or from a combination of any of these. It is not uncommon for
most of the MNEs to recruit home country people in the early stages of internationalisation. As
the business expands and MNEs -gain more confidence they may depend more on the local manpower, both for workers and managers. Through a judicious
transfer policy with regard to managerial personnel, an MNE can develop a pool of managerial and technical expertise which may be helpful in furthering its
objective of globalisation.

In addition to professional competence, knowledge and skills which are required of all jobs, adaptability is the most important criterion in the selection of
managers for foreign assignments/postings. Other attributes required are : open mindedness,
tolerance and respect for the culture and environments of other countries. Some techniques have been devised to assess the adaptiveness, of potential
candidates. The adaptability of the spouse also matters in foreign posting.

Since the operations of an MNE extend beyond the borders of nations, developing a broader and cross-cultural outlook may be felt necessary. The training
programme may, therefore be geared to impart this outlook. And this, of course, would be in addition to sensitising the managerial personnel about the
organisational goals and improving their adaptiveness. The training programmes may differ from company to
company, and form time to time even within the same company. Further; the training programmes may be internally-oriented or externally-oriented. Internally-
oriented programmes are specific to the needs of the job and the organisation. Externally- oriented programmes focus on broadening the manager's horizon
beyond the job and the organisation. The latter types of programmes in International Business
Management which may either be of general nature or tailored to the specific needs of a large MNE. The candidates may be sponsored to one of these
programmes/courses which may be supplemented from time to time by in-house training programmes.

Transfers from headquarters or home country office to foreign subsidiaries or vice- versa may be felt necessary or desirable. However, this may entail
inconveniences of varying nature of the incumbents. Financial compensation is one of the may to mitigate the likely hardships. The magnitude of transfers would
depend upon a number of factors, the important one being the need to develop managers who have global orientation. Linked with transfers is the repatriation
problem for which also a well thought-out policy is required. Depending upon the objectives and outlook of the MNE, promotional policy may be either country
bound or it may extend beyond a national boundary. Several factors, such is legal constraints; ownership patterns, the nature of the enterprise and the
availability of competent people would influence promotion policy.

The compensation policy of an MNE is influenced by a number of variables that may be specific to, a particular country, though the compensation policy may
have an element of uniqueness. Productivity levels, cost of living, supply and demand, compensation offered by similar local firm and, MNEs are some factors
which may influence- the compensation policy.

Most MNEs -expect their subsidiary managers to play a pivotal role by interpreting local opportunities and threats, and by building local resources and capability,
and by actively contributing and participating in the global strategy. The top managers of the subsidiaries today are planning a- far greater role' than in the past
in the formulation of their organisational policies and strategies.

The labour management policies of the MNEs are, to a large extent, governed by local conditions. By paying somewhat more generous wages and by a more
professional management of labour force, MNEs generally I have better industrial climate in their companies than most of the local enterprises. In any labour
relation policies, local legal framework are important factors reckon with.

=======================
MANPOWER  PLANNING  IS   A PRODUCT  OFHUMAN RESOURCE PLANNING
1   Right number of people with right skills at right place at right time to implement organizational strategies in order to achieve organizational objectives
2   In light of the organization’s objectives, corporate and business level strategies, HRP is the process of analyzing an organization’s human resource needs and
developing plans, policies, and systems to satisfy those needs
3   Setting human resource objectives and deciding how to meet them
4   Ensuring HR resource supply meets human resource demands.

HRP Process
1   Interfacing with strategic planning and scanning the environment
2   Taking an inventory of the company’s current human resources
3   Forecasting demand for human resources
4   Forecasting the supply of HR from within the organization and in the external labor market
5   Comparing forecasts of demand and supply
6   Planning the actions needed to deal with anticipated shortage or overages
7   Feeding back such information into the strategic planning process.

1.Basic Human Resources Planning Model

2.Organizational Objectives
3.Human Resource Requirements
4.Human Resource Programs
5.Feasibility Analysis

Strategic Human Resource Planning

-Links 1 & 5: HR objectives are linked to organizational objectives and planning
-Designed to insure consistency between organization's strategic planning process and HRP.
-So objectives of strategic plan are feasible and
-HR programs are designed around what organizational objectives and strategies require in terms of human resource goals

Operational Human Resource Operation  Planning  model.

-Steps 2,3, & 4
-Ensure HRP programs are coordinated and allows the organization to meet its human resource requirements.

HR PLANNING

Link 1: Determine Demand

(labor requirements)
1   How many people need to be working and in what jobs to implement organizational strategies and attain organizational objectives.
2   Involves forecasting HR needs based on organizational objectives
3   Involves consideration of alternative ways of organizing jobs (job design, organizational design or staffing jobs)
4   Example - Peak production could be handled by temporary workers or assigning overtime. Machine breakdowns assigned to maintenance department or
handled by machine operators.

Link 2: Determine HR Supply (availability)

1   Choose HRM programs (supply)
2   Involves forecasting or predicting effect of various HR programs on employee flowing into, through and out various job classifications.
3   First determine how well existing programs are doing then forecast what additional programs or combination of programs will do
4   Need to know capabilities of various programs and program combinations.

Determine Feasibility
Links 3 & 4
1   Capable of being done
2   Requires knowledge of programs, how programs fit together and external environmental constraints (e.g., labor force, labor unions, technology created skill
shortages) and internal environmental constraints (skill shortages within the organization, financial resources, managerial attitudes, culture)
3   Do the benefits outweigh the costs
4   Difficulty in quantifying costs and benefits.
  
  
  Revise Organizational Objectives and Strategies Link 5
  If no feasible HR program can be devised, the organization must revise strategic plans.
  
  HRP should be:
5   Done to guide and coordinate all HR activities so they work together to support the overall strategy
6   Responsive to internal and external environment
7   Planning - done in advance
8   Strategic - linked with higher level planning.

Human Resource Forecasting

1   Process of projecting the organization’s future HR needs (demand) and how it will meet those needs (supply) under a given set of assumptions about the
organization’s policies and the environmental conditions in which it operates.
2   Without forecasting cannot assess the disparity between supply and demand nor how effective an HR program is in reducing the disparity.

Forecasting as a Part of Human Resource Planning

DEMAND FORECASTING / SUPPLY FORECASTING
-Determine organizational objectives
-Demand forecast for each objective
-Aggregate demand forecast
-Does aggregate
-supply meet
-aggregate
-demand?
-Go to feasibility analysis steps

Choose human resource programs

External programs
1   Recruiting
2   External selection
3   Executive exchange
Internal programs
1   Promotion
2   Transfer
3   Career planning
4   Training
5   Turnover control
Internal supply forecast
External supply forecast

Aggregate supply forecast

Internal Supply Forecasting Information
1   Organizational features (e.g., staffing capabilities)
2   Productivity - rates of productivity, productivity changes
3   Rates of promotion, demotion, transfer and turnover.

External Supply Forecasting

Information
1   External labor market factors (retirements, mobility, education, unemployment)
2   Controllable company factors on external factors (entry-level openings, recruiting, compensation]

Demand Forecasting
Information
1   Organizational and unit strategic plans
2   Size of organization
3   Staff and Managerial Support
4   Organizational design

Considerations in Establishing a Forecasting System

1   How sophisticated
2   Appropriate time frame
3   Subjective versus objective forecasting methods.

System Sophistication
1   Organizational size
2   large organizations require more complex forecasting systems and likely to have the required skilled staff
3   Organizational complexity
4   complex career paths and diverse skill requirements lead to more complex forecasting systems
5   Organizational objectives
6   the greater the gap between current HR situation and desired HR situation the more sophisticated the system
7   Organizational plans and strategies
8   the complex the plans are the more complex the forecasting system.
  
  Forecasting Time Frame
  Depends on degree of environmental uncertainty
  Factors creating uncertainty (shortening time frame)
9   many new competitors, changes in technology, changes in social, political and economic climate, unstable product demand
  Factors promoting stability (longer time frame)
10   strong competitive position, slowly developing technology, stable product demand.
  
  
  Subjective VS. Objective Forecasting
  Objective is inappropriate when:
11   Lack expertise to use objective methods
12   Lack the historical data or HR data base is inadequate
13   Forecasting horizon is too long for the available objective method.

Demand Forecasting Methods

1   Delphi Method
2   Staffing Table Approach
3   Regression Analysis
4   Time Series Analysis
5   Linear Programming.

Supply Forecasting Methods

1   Skills Inventory
2   Replacement Charts
3   Succession Planning
4   Flow Modeling/Markov Analysis
5   Computer Simulations
THE  DIFFICULT  factors, YOU MUST  KEEP  IN  MIND  WHILE  ''HR  PLANNING''.
FACTORS  COULD  INCLUDE --- GOVERNMENT/ ECONOMIC/LEGAL/SOCIAL
**************************************************************************************
-as  the  economy  grows/declines, the  demand  for  HR resources
changes  not  only  in  quantity   but  also  in  quality/ types.

-social  pressure  to  provide the right environment  for  employees.

-political  pressure  to employ  local  population, irrespective

 of  skills/ knowledge.

-legal  challenges  to  recruitment /  compensation  on   

 discrimination .

-technology  changes  means  getting  right  type of  people

or  provide  the  right  type  of training.

-competitive  pressure  to  get  the  right  talent at the  right

 compensation.

-CORPORATE  strategic  planning  seeks  strategic  HR  planning.

-BUDGET  constraint  put  pressure  on  HR  to get  the

best  resources  for  the  least.
-sales / production  increases  in  business, puts  pressure
on  HR    to  recruit  more.

-sales / production  decreases  in  business, puts  pressure

on  HR    to  rationalise  recruitment.

-new  venture means  demand  for  new  type of  skills/ knowledge.

-acquisitions /  mergers  means  rationalization  of  HR.

-Organization  development   means  HR  implementing  new

structure, new  culture, new  systems  etc.

-Job  redesign  means  HR  implementing  new

 methods, new   process, new  systems  etc.

-Globalization  means   managing  HR  diversity, new  culture

change, new  training  etc.

-HR    challenges /  difficulties  include  

*managing  retirement
*managing  voluntary  retirement  schemes
*managing  terminations
*managing  leave  of  absence.
*managing  part time  workers/ causals.
*managing  layoffs

-Balancing  the INTERNAL SUPPLY ESTIMATES  AND  

 EXTERNAL  SUPPLY  ESTIMATES.

*INTERNAL  SUPPLY  ESTIMATES

-staff  skills  inventories
-management  inventories
-replacements  requirements
-transition  requirements

*EXTERNAL  SUPPLY  ESTIMATES

-labor  market  supply
-community  attitude
-demographic  trends

*MANAGING  WORK  OPTIONS

-shorter  weeks
-flexitime
-telecommuting
-virtual  organizations.
==================================
**********************************************************************************
DEMAND /  SUPPLY  OF  HUMAN  RESOURCES

1.EXPERT
-informal  internal  surveys.
managers  prepare  their  own estimates based  on  workload.
-------------------------------------------------------------------------------------
-formal  external  surveys.
planners  survey  managers, using  questionnaires  or  
or  focused  discussion.
----------------------------------------------------------------------------------
-delphi  techniques
solicit  estimates from  a  group  of  managers, until  the
estimates   converge.
============================================
2.TREND  PROJECTIONS
-extrapolations
extending  past rates  of  change  into  the  future.
---------------------------------------------------------------------------------
-indexation
matching  employment  growth with , say,  sales.
----------------------------------------------------------------------------------
-statistical  analysis
=================================================
3. OTHERS
-planning  and  budgeting  systems  
based  on  strategic  and  corporate  plannings/ budgeting.
---------------------------------------------------------------------------------------
-new  venture  analysis
making  comparisons  with similar  operations.
-------------------------------------------------------------------------------------
-computer  models
using  multiple  variables.
=================================================

INTERNAL  DISCUSSIONS

Discuss  with  the  various  other departments  like sales/ production/

distribution/accounting/  IT  etc  about  their  requirements
-for manpower
-recruitments
-replacements
-training
etc etc

Once  you  get  their  departmental  requirements,  HRM  develops

*INTERNAL  SUPPLY  ESTIMATES   FOR  EACH  DEPARTMENT/TOTAL

-staff  skills  inventories
-management  inventories
-replacements  requirements
-transition  requirements

*MANAGING  WORK  OPTIONS  FOR  EACH DEPARTMENT / TOTAL

-shorter  weeks
-flexitime
-telecommuting
-virtual  organizations.

HR    Planning  includes

CURRENT  SITUATION/ ANALYSIS  OF  COMPANY  HR

1.Assessment / Audit  of  the  current  manpower  profile

-numbers
-skills
-ages
-flexibility
-sex
-experience
-capabilities
-character
-potential

and  also

-normal turnover,
-staff  movements  planned
-retirements
-succession planning
etc.

2. KEY  SUCCESS FACTORS  OF HR

3. HR [ SWOT ]  ANALYSIS
-STRENGTHS
-WEAKNESSES
-THREATS
-WEAKNESSES

4. HR  MARKET  [ DEMAND/SUPPLY]
   -SKILL   AVAILABILITY
====================================

1.HR  OBJECTIVES

2.HR  STRATEGY

3. HR  PLANNING

YOU  DERIVE   THE  MANPOWER  PLANNING

These  include

-Recruitment/ Selection  PLAN

-Induction / Orientation PLAN
-Training  / Developement  PLAN
-Compensation  PLAN
-Salary  administration  PLAN
-Payroll  Administration  PLAN
-Performance  Appraisal  PLAN
-Performance  Management  PLAN
-Industrial  Relations  PLAN
-Promotions  PLAN [ IF  ANY ]
-Terminations  PLAN
-Transfers  PLAN
-Staff  amenities. PLAN
-retraining  plan
-early retirement  plan
-redundancy  plan
-changes in  workforce utilization  plan
-career  path  plan
-succession  plan.
-personnel  and  career  plans
--------------------------------------------------------------------------
FROM  THE  ABOVE,  WE  DERIVE
-total  staff  by department
-no. of  managerial  staff.
===========================================
LASTLY   BASED  ON THE  ABOVE  PLANS,
YOU  DEVELOP  HR  BUDGET.

The elements  in  HR  department  budget  would  vary  with

-company  policy
-budget  process
-company  accounting  system
-nature of  the business operation
-HR  PLANNING
etc

5. Indicate the impact of FDIs on LDCs in terms of technology transfer and local technological capability.

THE  FORCES  THAT  STIMULATE  FDI  FLOW  ARE

-strong  stable  political  situation.

-progressive  government   policies.
-liberal  economic  polices
-strong  economic  growth
-high  productivity
 -demand  for  technology
-transfer  of   technology
-abundant  availability of  resources.
-abundant  availability  of labor  force.
-abundant   availability  of  cheap  skilled  labor.

-opportunities  for  mergers.

-opportunities  for  acquisitions
-adaptable  labor force
-large  domestic demand
-availability  of  innovations.
etc

==========================================

In addition to capital, FDI inflows include production technology, organizational and managerial skills, marketing know-how and market access through
marketing networks of multinational enterprises (MNEs).
A traditional view of FDI inflows expects them to primarily produce a number of favorable economic effects on the recipient countries, which in turn may
stimulate economic growth by generating a number of positive externalities and spillovers. In particular, FDI inflows are positively related to domestic
investment, trade and competitiveness, employment, technology, skills of the local labor force, and the environment. Although these effects are assumed to
be beneficial, there exists a significant number of empirical studies suggesting that this issue is rather more complex and question the benefits of FDI inflows
for the host country
====================
•   2 types of FDI:
  -GREENFIELD INVESTMENT
  -MERGERS AND ACQUISITIONS
  GREENFIELD INVESTMENT
•   direct investment in new facilities or the expansion of existing facilities
•   Increase competition in the market.
EX: Hyundai Motor Company goes ahead with a major greenfield investment in Nošovice in the Moravia-Silesia region of the Czech Republic.
MERGER AND ACQUISITIONS
•   Transfer of existing assets from local firms to foreign firms.
•   Assets and operation of firms from different countries are combined to establish a new legal entity.
GTL- REDINGTON

6. Write short notes on

a) Visible and Invisible Trade

VISIBLE  TRADE
in economics, exchange of physically tangible goods between countries, involving the export , import  and re-export of goods at various stages of
production. It is distinguished from invisible  trade , which involves the export and import of physically intangible items such as services.
Countries lacking various raw  materials   will import needed substances such as coal or crude  oil  from nations able to export such materials. Sometimes
raw materials will be partially processed or converted into producer  goods  within the country from which they originate. Goods may also be processed into
consumer  goods  prior to export or import and prior

Types of invisibles
Generally speaking, the term 'invisibles' refers to both; international payments for services (as opposed to goods) as well as movements of money for which
there is no contra transaction (i.e. money is not exchanged for either a good or a service). These non-exchange payments are often referred to either as
'transfer payments' or 'remittances' and may include money sent from one country to another by an individual, business, government or ngo  (non-
governmental oganisations – often charities).
An individual remittance may include money sent to a relative overseas. Business transfers may include profits sent by a foreign subsidiary to a parent
company or money invested by a business in a foreign country. Bank loans to foreign countries are also included in this category, as are license fees paid for
the use of patents and trademarks. Government transfers may involve loans made, or official aid given to, foreign countries while transfers made by NGO's
include money used for charitable work in foreign countries.

b) Environmental Scanning

Environmental scanning is a process of gathering, analyzing, and dispensing information for tactical or strategic purposes. The environmental scanning
process entails obtaining both factual and subjective information on the business environments in which a company is operating or considering entering.
There are three ways of scanning the business environment:
•   Ad-hoc scanning - Short term, infrequent examinations usually initiated by a crisis
•   Regular scanning - Studies done on a regular schedule (e.g. once a year)
•   Continuous scanning (also called continuous learning) - continuous structured data collection and processing on a broad range of environmental factors.
In today's turbulent business environment the best scanning method available is continuous scanning because this allows the firm to act quickly, take
advantage of opportunities before competitors do and respond to environmental threats before significant damage is done.
Macro environment
Environmental scanning usually refers just to the macro environment, but it can also include industry, COMPETITOR ANALYSIS, MARKETING RESEARCH
(consumer analysis), NEW PRODUCT DEVELOPMENT (product innovations) or the company's internal environment.
Macro environmental scanning involves analyzing:
Economy
•   GDP per capita
•   economic growth
•   unemployment rate
•   inflation rate
•   consumer and investor confidence
•   inventory levels
•   currency exchange rates
•   merchandise trade balance
•   financial and political health of trading partners
•   balance of payments
•   future trends
Government
•   political climate - amount of government activity
•   political stability and risk
•   government debt
•   budget deficit or surplus
•   corporate and personal tax rates
•   payroll taxes
•   import tariffs and quotas
•   export restrictions
•   restrictions on international financial flows
Legal
•   minimum wage laws
•   environmental protection laws
•   worker safety laws
•   union laws
•   copyright and patent laws
•   anti- monopoly laws
•   Sunday closing laws
•   municipal licences
•   laws that favour business investment
Technology
•   efficiency of infrastructure, including: roads, ports, airports, rolling stock, hospitals, education, healthcare, communication, etc.
•   industrial productivity
•   new manufacturing processes
•   new products and services of competitors
•   new products and services of supply chain partners
•   any new technology that could impact the company
•   cost and accessibility of electrical power
Ecology
•   ecological concerns that affect the firms production processes
•   ecological concerns that affect customers' buying habits
•   ecological concerns that affect customers' perception of the company or product
Socio-cultural
•   demographic factors such as:
•   population size and distribution
•   age distribution
•   education levels
•   income levels
•   ethnic origins
•   religious affiliations
•   attitudes towards:
•   materialism, capitalism, free enterprise
•   individualism, role of family, role of government, collectivism
•   role of church and religion
•   consumerism
•   environmentalism
•   importance of work, pride of accomplishment
•   cultural structures including:
•   diet and nutrition
•   housing conditions
 Potential suppliers
•   Labour supply
•   quantity of labour available
•   quality of labour available
•   stability of labour supply
•   wage expectations
•   employee turn-over rate
•   strikes and labour relations
•   educational facilities
•   Material suppliers
•   quality, quantity, price, and stability of material inputs
•   delivery delays
•   proximity of bulky or heavy material inputs
•   level of competition among suppliers
•   Service providers
•   quantity, quality, price, and stability of service facilitators
•   special requirements
Stakeholders
•   Lobbyists
•   Shareholders
•   Employees
•   Partners
Scanning these macro environmental variables for threats and opportunities requires that each issue be rated on two dimensions. It must be rated on its
potential impact on the COMPANY , and rated on its likeliness of occurrence. Multiplying the potential impact parameter by the likeliness of occurrence
parameter gives a good indication of its importance to the firm.
Responses
When an issue is detected, there are generally six ways of responding to them:
•   opposition strategy - try to influence the environmental forces so as to negate their impact - this is only successful where you have some control over the
environmental variable in question
•   adaptation strategy - adapt your MARKETING  PLAN  to the new environmental conditions
•   offensive strategy - try to turn the new influence into an advantage - quick response can give you a competitive advantage
•   redeployment strategy - redeploy your assets into another industry
•   contingency strategies - determine a broad range of possible reactions - find substitutes
•   passive strategy - no response - study the situation further

c) ASEAN

The Association of Southeast Asian Nations,[1] commonly abbreviated ASEAN (generally pronounced /ˈɑːsi.ɑːn/ AH-see-ahn,[2] occasionally /ˈɑːzi.ɑːn/ AH-zee-
ahn[3] in English, the official language of the bloc),[4] is a geo-political and economic organization of 10 countries located in Southeast Asia, which was formed on 8
August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand.[5] Since then, membership has expanded to include Brunei, Burma (Myanmar),
Cambodia, Laos, and Vietnam. Its aims include the acceleration of economic growth, social progress, cultural development among its members, the protection of the
peace and stability of the region, and to provide opportunities for member countries to discuss differences peacefully. [6]

ASEAN spans over an area of 4.46 million km2 with a population of approximately 580 million people, 8.7% of the world population. In 2009, its combined nominal
GDP had grown to more than USD $1.5 trillion.[7] If ASEAN was a single country, it would rank as the 9th largest economy in the world in terms of nominal GDP.

The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN  DECLARATION
(Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand.
Brunei Darussalam then joined on 8 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, making up
what is today the ten Member States of ASEAN.

AIMS AND PURPOSES

As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:
To accelerate the economic growth, social progress and cultural development in the region through joint endeavors in the spirit of equality and partnership in order to
strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations;
To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the
principles of the United Nations Charter;
To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields;
To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres;
To collaborate more effectively for the greater utilisation of their agriculture and industries, the expansion of their trade, including the study of the problems of
international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples;
To promote Southeast Asian studies; and
To maintain close and beneficial cooperation with existing international and regional organisations with similar aims and purposes, and explore all avenues for even
closer cooperation among themselves.

FUNDAMENTAL PRINCIPLES
In their relations with one another, the ASEAN Member States have adopted the following fundamental principles, as contained in the TREATY  OF  AMITY  AND
COOPERATION  IN  SOUTH  EAST  ASIA [TAC ]of 1976:
Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations;
The right of every State to lead its national existence free from external interference, subversion or coercion;
Non-interference in the internal affairs of one another;
Settlement of differences or disputes by peaceful manner;
Renunciation of the threat or use of force; and
Effective cooperation among themselves.

ASEAN COMMUNITY
The ASEAN Vision 2020, adopted by the ASEAN Leaders on the 30th Anniversary of ASEAN, agreed on a shared vision of ASEAN as a concert of Southeast Asian
nations, outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development and in a community of caring societies.
At the 9th ASEAN Summit in 2003, the ASEAN Leaders resolved that an ASEAN Community shall be established.
At the 12th ASEAN Summit in January 2007, the Leaders affirmed their strong commitment to accelerate the establishment of an ASEAN Community by 2015 .

The ASEAN Community is comprised of three pillars, namely the

1.ASEAN  POLITICAL-SECURITY  COMMUNITY
2.ASEAN ECONOMIC  COMMUNITY
3.ASEAN  SOCIO-CULTURAL  COMMUNITY
Each pillar has its own Blueprint.

ASEAN CHARTER
The ASEAN Charter serves as a firm foundation in achieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also
codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance.
The ASEAN Charter entered into force on 15 December 2008. A gathering of the ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark
this very historic occasion for ASEAN.
With the entry into force of the ASEAN Charter, ASEAN will henceforth operate under a new legal framework and establish a number of new organs to boost its
community-building process.
In effect, the ASEAN Charter has become a legally binding agreement among the 10 ASEAN Member States.
Map Of ASEAN

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Symbol