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 andthose of other relevant actors, as well as their assessments of opportunity costs and their willingness to forego any dealings with theother 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 thebalance of payments, assist in regional development, create technology and impinge on other policy areas. Governments are crucial inaffecting company strategies, since they set the rules of the game. These conditions lead to the bargaining relationship betweenTNCs and Governments. That relationship can be viewed as a joint maximizing (or mini-max) problem as in the theory of gameswitheach side seeking to pursue its goals constrained by its resources, its dependence on the other party and its relationshipswith other actors. Thus, international business outcomes that result from the interaction of TNCs and Governments can be analysed inthe 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 goalsmore 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 bytheir own limited resources, on their interdependence and on their relationships with other relevant groups. Those goals and constraintsdemonstrate that a Government and a TNC face pressures not only from each other, but also from other participants, such aslocal firms and municipalities or state Governments, as well as other foreign firms and foreign GovernmentsOn the basis of this reasoning, testable bargaining models can be established, as follows.

An explicit bargaining model Governments seek economic development and balance-of-paymentsstability, 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 thoseobjectives by dealing successfully with Governments of host countries, which, by their sovereignty, control access to each of thosefactors. The full range of bargaining advantages possessed by companies and Governments cannot be specified, since it depends tosome degree on the idiosyncratic characteristics of specific countries and firms. A simplified framework for examining bargaining resources that are present for Governments and TNCsin 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 arisesessentially from control over the two usual targets of foreign TNCs: either the host country market, or host country factors ofproduction, such as raw materials, inexpensive labour, technology or capital. Those two advantages are fundamental, because withouteither a desirable market or a source of supply, the Government of the host country does not generally offer an importantopportunity to foreign TNCs. Similarly, foreign TNCs usually possess several attributes thatattract Governments, and which Governments could not obtain without a much higher cost through some other vehicle. Thoseattributes 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 ofpayments by providing access to foreign markets and sources of supply that the firm has through its own affiliates or through itsown 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 ofnegotiations between a firm and a Government. A second dimension that influences the outcome of bargainingsituations between a company and a government is the relative importance of the situation to each one -- the relative stakes that each partyholds 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 OFFERSassistance 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

NGOsFINANCIAL INSTITUTIONS-asian bank-import and export banksetc@@@@@@@@@@@@@@@@@@@@@@@@@@

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 Governmentsof home and host countries in inter-country business activity, which lead to business reactions.' IB theory must explain the patternsof exports and imports (rather than the desire to trade, which is not different from domestic trade), the gains from trade, the reasonsfor 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 leadto cross-cultural rather than international analysis.) Those interventions are categorically different from interregional or inter-statevariations under governmental policies within countries, because Governments are the sovereign, ultimate rule-makers for activitiescoming 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) InitiationIn 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) PlanningThe 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 controllingThe 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) ClosureIn 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 torequire 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 whenneeded.− 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 projectcontrol 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 inmotion 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. Theyaffect 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 likemost 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 weconsider 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 comprehensivebut 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 tendto 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 bemeasured, 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 aconsideration 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 ofcontrol 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 programs1 Recruiting 2 External selection 3 Executive exchange Internal programs1 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 resourceschanges 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 peopleor 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 pressureon HR to recruit more.

-sales / production decreases in business, puts pressureon 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 culturechange, 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 techniquessolicit estimates from a group of managers, until the estimates converge.============================================2.TREND PROJECTIONS-extrapolationsextending past rates of change into the future.

----------------------------------------------------------------------------------indexationmatching employment growth with , say, sales.-----------------------------------------------------------------------------------statistical analysis=================================================3. OTHERS-planning and budgeting systems based on strategic and corporate plannings/ budgeting.----------------------------------------------------------------------------------------new venture analysismaking comparisons with similar operations.--------------------------------------------------------------------------------------computer modelsusing multiple variables.=================================================

INTERNAL DISCUSSIONS

Discuss with the various other departments like sales/ production/distribution/accounting/ IT etc about their requirements-for manpower-recruitments-replacements-trainingetc 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 planningetc.

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 PLANNINGetc

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 TRADEin 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 invisiblesGenerally 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 environmentEnvironmental 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 trendsGovernment• 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 flowsLegal• 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 investmentTechnology• 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 powerEcology• 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 productSocio-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 requirementsStakeholders• Lobbyists • Shareholders • Employees • PartnersScanning 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.ResponsesWhen 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 / ̍ ɑ ːsi. ɑ ːn/ AH-see-ahn,[2] occasionally / ̍ ɑ ːzi. ɑ ːn/ 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 PURPOSESAs 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; andTo 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 PRINCIPLESIn 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 COMMUNITYThe 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  COMMUNITY2.ASEAN ECONOMIC  COMMUNITY3.ASEAN  SOCIO-CULTURAL  COMMUNITYEach pillar has its own Blueprint.

ASEAN CHARTERThe 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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