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Page 1: SMU MBA Solved Assignment MB0053

Master of Business Administration- MBA Semester 4MB0053 –International Business Management -4 Credits(Book ID: B1724)

Q1. The world economy is globalizing at an accelerating pace. What do you mean by globalization? Discuss the merits and demerits of Globalization.

Ans: According to business terminologies, globalization is defined as ‘the worldwide trend of businesses expanding beyond their domestic boundaries’. It is advantageous for the economy of countries because it promotes prosperity in the countries that embrace globalization. In this section, we will understand globalization, its benefits and challenges.

Benefits of globalization The merits and demerits of globalization are highly debatable. While globalization creates Employment opportunities in the host countries, it also exploits labour at a very low cost compared to the home country. Let us consider the benefits and ill-effects of globalization. Some of the benefits of globalization are as follows:

1. Promotes foreign trade and liberalization of economies. 2. Increases the living standards of people in several developing countries through capital investments in developing countries by developed countries. 3. Benefits customers as companies outsource to low wage countries. Outsourcing helps the companies to be competitive by keeping the cost low, with increased productivity. 4. Promotes better education and jobs. 5. Leads to free flow of information and wide acceptance of foreign products, ideas, ethics, best practices, and culture. 6. Provides better quality of products, customer services, and standardized delivery models across countries. 7. Gives better access to finance for corporate and sovereign borrowers. 8. Increases business travel, which in turn leads to a flourishing travel and hospitality industry across the world. 9. Increases sales as the availability of cutting edge technologies and production techniques decrease the cost of production. 10. Provides several platforms for international dispute resolutions in business, which facilitates international trade.

In spite of its disadvantages, globalisation has improved our lives through various fields like communication, transportation, healthcare, and education.Globalization has also been criticized on several grounds. Its opponents do not hesitate to indulge in violence. Workers, peasants, women, students and weaker sections of society have raised their voice against globalization. In their opinion, globalization has benefited the rich and harmed the poor. The harmful effects of globalization save been discussed here.

1. Exploitation of Underdeveloped Countries:MNCs, based in developed countries, purchase at lower rates the raw materials of backward Countries process them in their own countries and sell the manufactured goods with big profit in Backward countries. The huge profit, they make, is taken back to developed, rich countries.Of course, the MNCs have opened branches in backward countries, but the local people who work there are paid much lower salary/wage. These companies hardly spend anything for local development. They victimise poor countries and their people by exploiting their poverty and helplessness.

2. Increase in Unemployment:The MNCs employ machines to reduce the number of employees. Further, the governments of developing countries have started withdrawing investment from industries in the public sector. All this has led to huge unemployment in those countries. The larger the unemployment, the larger the poverty.

3. Widening of Rich-poor Gap:Globalization brings benefits to the rich who are small in number and keeps the vast majority of people in poverty and misery. It is a game of winners and losers. Those who are already rich succeed in taking advantage of privatisation while the poor and weak are doomed to suffer.

4. Adverse Effects on Social Security and Social Welfare:Because of privatisation, governments in many developing countries are withdrawing from the sector of social welfare, and private companies have entered educations, health and other such fields related to development.

As a result of this, poor people are facing a lot of difficulties. They have no access to expensive educational institutions and hospitals. They cannot go for health insurance due to poverty. Social welfare has been in disarray because of globalization.

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5. Harmful Effects on Small Industries and Small Business:In the free economy, the big fish has got license to eat the small fish. Small-scale and cottage industries cannot grow in competition with big ones. Most of them have begun to close. Similarly, small business people cannot compete with big ones.

6. Hostile to Humanism:Globalization would kill humanism. It aims at accelerating economic growth, and economic growth, according to its protagonists, can be quickly attained through privatisation. Pursuit of growth hardly respects human values. Human concerns like equality, justice are sacrificed without raising an eyebrow. Humanism thus falls a prey to globalization.

7. Erosion of Democracy:Globalization has led to the weakening, erosion and even destruction of democracy. Globalization has considerably increased the wealth and power of multinational corporations and they have tended to interfere with and control the economic policy and politics of developing countries.As a result, many developing countries, one time or another, have helplessly watched the fall of their democratic governments and their replacement by one-party governments or military regimes willing to play to the tunes of multinationals and the countries to which they belong.

8. Gender-Insensitive:Globalization is gender-insensitive. Women have suffered a lot under globalization. In the privatised economy, the interests and concerns of women, particularly of poor women, have been seriously ignored.

Q2. The international trade theories explain the basics behind international trade. Compare the Absolute and comparative cost advantage theories with the help of example.

Ans: The principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce more of a good or service than competitors, using the same amount of resources. Adam Smith first described the principle of absolute advantage in the context of international trade, using labour as the only input.Since absolute advantage is determined by a simple comparison of labour productivities, it is possible for a party to have no absolute advantage in anything; in that case, according to the theory of absolute advantage, no trade will occur with the other party. [8] It can be contrasted with the concept of comparative advantage which refers to the ability to produce a particular good at a lower

Opportunity cost.The main concept of absolute advantage is generally attributed to Adam Smith for his 1776 publication .An Inquiry into the Nature and Causes of the Wealth of Nations in which he countered mercantilist ideas. Smith argued that it was impossible for all nations to become rich simultaneously by following mercantilism because the export of one nation is another nation’s import and instead stated that all nations would gain simultaneously if they practiced free trade and specialized in accordance with their absolute advantage. Smith also stated that the wealth of nations depends upon the goods and services available to their citizens, rather than their gold reserves. [10] While there are possible gains from trade with absolute advantage, the gains may not be mutually beneficial.

Comparative advantage focuses on the range of possible mutually beneficial exchanges.Examples:Example 1

Party B has the absolute advantage.Party A can produce 5 widgets per hour with 3 employees.Party B can produce 10 widgets per hour with 3 employees.Assuming that the employees of both parties are paid equally, Party B has an absolute advantage over

Party A in producing widgets per hour. This is because Party B can produce twice as many widgets as

Party A can with the same number of employees.Example 2[edit source |You and your friends decided to help with fundraising for a local charity group by printing t-shirts And making birdhouses.Scenario 1: One of your friends, Gina, can print 5 t-shirts or build 3 birdhouses an hour. Your other Friend, Mike, can print 3 t-shirts an hour or build 2 birdhouses an hour. Because your friend Gina is More productive at printing t-shirts and building birdhouses compared to Mike, she has an absolute advantage in both printing t-shirts and building birdhouses.

Scenario 2: Suppose Gina wasn't as agile with the hammer and could only make 1 birdhouse an hour, but she took a sewing class and could print 10 t-shirts an hour. Mike on the other hand takes woodworking and so he can build 5 birdhouses an

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hour, but he doesn't know the first thing about making t-shirts so he can only print 2 t-shirts an hour. While Gina would have the absolute advantage in printing shirts, Mike would have an absolute advantage in building birdhouses.Comparative advantage refers to the ability of a party to produce a particular good or service at a Lower marginal and opportunity cost over another. Even if one country is more efficient in the production of all goods (absolute advantage in all goods) than the other, both countries will still gain by trading with each other, as long as they have different relative efficiencies.For example, if, using machinery, a worker in one country can produce both shoes and shirts at 6 per hour, and a worker in a country with less machinery can produce either 2 shoes or 4 shirts in an hour, each country can gain from trade because their internal trade-offs between shoes and shirts are different. The less-efficient country has a comparative advantage in shirts, so it finds it more efficient to produce shirts and trade them to the more-efficient country for shoes. Without trade, its Opportunity cost per shoe was 2 shirts; by trading, its cost per shoe can reduce to as low as 1 shirt depending on how much trade occurs (since the more-efficient country has a 1:1 trade-off). The more-efficient country has a comparative advantage in shoes, so it can gain in efficiency by moving some workers from shirt-production to shoe-production and trading some shoes for shirts. Without trade, its cost to make a shirt was 1 shoe; by trading, its cost per shirt can go as low as 1/2 shoe depending on how much trade occurs.The net benefits to each country are called the gains from trade.The comparative cost theory can be illustrated by the help of an example. Suppose that there are only two countries — Nepal and Pakistan. Similarly, these countries produce only two goods-X and Y and labour is the only homogenous factor. These countries produce the two goods as shown in the table below.

The table shows that Nepal needs 4 units of labour for production of commodity X and 2 units of labour for commodity Y. On the other hand, Pakistan needs 6 units of labour for production of commodity X and 12 units of labour for commodity Y. Hence, Nepal can produce both commodities in lower labour cost than Pakistan. If labour would have been completely mobile between different countries, all commodities would have been produced in that country where cost is lower in absolute sense. But since the labour is immobile between countries, this cannot happen.Nepal has absolute advantage in the production of both X and Y commodities. Because and 2<12. But Nepal has more absolute advantage in the production of Y than X. Because, 2 / 6. In other words, Nepal needs 2 units of labour and Pakistan needs 12 units of labour to produce one unit of Y. Or Nepal needs 2/12 (about 17 percent) of labour quantity that is required by Pakistan to produce the Same quantity of commodity Y. On the other hand, Nepal needs 4/6 (about 67 percent) of labour Quantity that is required by Pakistan to produce the same quantity of commodity X Hence, Nepal has more advantage in the production of Y than in X. This implies that Nepal has comparative advantage in the production of Commodity X and comparative disadvantage in the production of X.

Similarly, Pakistan has absolute disadvantage in the production of both X and Y commodities. But it has fewer disadvantages in the production of X than in Y. Because, 6/4<12 / 2. It means that Pakistan has comparative advantage in the production of X and comparative disadvantage in the production of Y.

In conclusion, according to the Law of Comparative Advantage, if each country specializes in the production of commodity having comparative advantage, the total world output of each commodity increases.

Q3. Culture is more often a source of conflict than synergy. As an Indian manager, what management style and corporate culture you should be aware of while travelling to Japan and to USA?

Ans: JAPANESE firms are an insular lot. Executives typically stick with one company for life and bosses are promoted from within. This makes the decision by U-Shin, a mid-sized maker of car parts, to look outside for a new president, all the more radical. The company believes it needs a young, English-speaking boss to replace its current president (who has been in place for more than 30 years). Not only is U-Shin looking for candidates from outside the company, but it is taking the highly unusual step of running newspaper adverts to attract them.

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It is symbolic of a big shift in corporate Japan. In recent years a few very large companies like Nissan and Sony have named bosses not only from outside the company but outside the country, to push though tough reforms and globalise its operations. However, U-Shin's atypical move suggests that the need to break with tradition and internationalise management is beginning to be recognised down at the level of medium-sized business, the very heart of Japanese industry. U-Shin, a stock market-listed firm with around $650m of annual sales, seeks a director who not only understands Japanese culture, but also has a firm grasp of the company's place in the global market. This could either be a foreigner, or a Japanese executive with managerial experience abroad. The salary is around ¥35m ($400,000).

The need for globally-minded bosses is finally being understood in Japanese boardrooms. In the past, being sent overseas was usually the corporate kiss of death: those marked for the top were kept in Tokyo for grooming. However, this year there has been a string of appointments of company bosses with substantial international experience. Meanwhile, companies like Toyota and Unable, a clothing brand, are promoting more foreign managers, and firms like Nomura, a stockbroker, and Rakutenchi, an e-commerce site, are holding executive meetings in English.

Yet despite having all the right intentions, the implementation is sometimes wanting. U-Shin plans to Run its adverts in the July 25th editions of the Nikkei and Yomiuri newspapers—in Japanese, not English.

The US business culture is unique in many ways. While not an exhaustive list, the following areas are among the most important and the ones most frequently asked about by foreign business people. Realization of anticipated operational efficiencies adopting the brand vs. generic caulis. Publication of the journal Annals of Internal Medicine, surprised they online penjual dalam cialis katalog of untuk viagra dan tore the tablets in the glass container at room temperature, far from moisture and warmth cialis custo.

Corporate Culture

Americans often take a “business-first” approach, with personal relationships playing a smaller role than in many other cultures. This is reflected in common phrases like “business is business” (meaning personal considerations shouldn’t be taken into account when making a business decision) and “it’s just business, it’s not personal” (meaning that negative consequences from a business decision are not meant to be personally hurtful or insulting). Americans will generally do business with the company they think gives them the highest value for the lowest price, not based on personal relationships.Americans believe that being direct is a virtue. Americans ask for what they want, say what they Mean, and expect you to do the same. “Yes” usually means yes, “no” usually means no and “maybe” Usually means the person hasn’t decided and wants to think more about the question. Americans Expect you to get to the point, to tell them why your product or service is better, and to do so in a Way that is easy to understand and meaningful to them. Being shy, unassertive or extremely deferential is often seen as weakness. Americans do not mind direct questions because they do not Hesitate to say no. Americans expect all business interactions to be polite and professional. It is considered extremely Rude to shout in a business context, even when two people strongly disagree. Likewise, it is Considered rude to interrupt someone (even a junior person), or to make personal comments (e.g. “You’re an idiot”).Americans expect you to be positive about yourself, your products, and your capabilities. American’s tend to take information at face value, so being self-effacing or downplaying the capabilities of a product or service can be seen as evidence of poor quality. Americans commonly exchange business cards but they are very casual about it and there is no ritual or “right way” of doing so.Americans appreciate and expect persistence. It may take 10 or 15 attempts to get a response, especially from a potential customer. Americans expect you to ask questions if you don’t understand something. Americans are not embarrassed to ask questions if they don’t understand something, and they expect you to ask questions as well. If you do not ask questions, Americans will assume that you understand whatever is being discussed.Be on time to appointments as Americans consider it rude to be late in business settings. “On time” In America usually means five minute early. Being up to five minutes late is acceptable, but requires a short apology for making the other person wait. Being more than 5 minutes late requires a phone call to warn the other person of the delay and to apologize. Americans value numbers and using figures and statistics to support your position will help you persuade them. Americans expect meetings to be as short as possible, and do not consider a meeting a success unless it results in a tangible action or decision. Q4. Regional integration is the bonding between nations and states through political, cultural and economic cooperation. A whole range of regional integration exists today. Discuss these 6 types in brief.

Ans: Regional integration is a process in which states enter into a regional agreement in order to enhance regional cooperation through regional institutions and rules. The objectives of the agreement could range from economic to political to environmental, although it has typically taken the form of a political economy initiative where commercial interests have been the focus for achieving broader socio-political and security objectives, as defined by national governments. Regional integration has been organized either via supranational institutional structures or through intergovernmental decision-making, or a combination of both.

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Past efforts at regional integration have often focused on removing barriers to free trade in the region, increasing the free movement of people, labour, goods, and capital across national borders, reducing the possibility of regional armed conflict (for example, through Confidence and Security-Building Measures), and adopting cohesive regional stances on policy issues, such as the environment, climate change and migration.

Regional integration has been defined as an association of states based upon location in a given geographical area, for the

In short, regional integration is the joining of individual states within a region into a larger whole. The degree of integration depends upon the willingness and commitment of independent sovereign states to share their sovereignty. Deep integration that focuses on regulating the business environment in a more general sense is faced with many difficulties.Regional integration initiatives, according to Van Langenhove, should fulfil at least eight important functions:

the strengthening of trade integration in the region the creation of an appropriate enabling environment for private sector development the development of infrastructure programmes in support of economic growth and regional integration the development of strong public sector institutions and good governance; the reduction of social exclusion and the development of an inclusive civil society contribution to peace and security in the region the building of environment programmes at the regional level the strengthening of the region’s interaction with other regions of the world.[4]

Types of Regional Integration Agreements

Types of the regional integration agreements (RIAs) are mainly defined according to the different instruments which identified and limited the scope of regional economic integration. These instruments include preferential access for specified products, internal tariff elimination, determination of common external tariff (CET), free factor mobility, harmonization of economic policies and harmonization of political policies. The classification depicted in Table 2.1 shows that there is a hierarchical order between each type of regional integration agreement. For this reason, each subsequent type of the RIA covers the content of the previous type in addition to its own requirements. Accordingly, it is possible to distinguish six different types of integration. These types are:

1. Preferential trade area (PTA) which gives preferential access to certain products from the participating countries. This can e called as a limited or sector based free trade area.

2. Free trade area (FTA) that include the reciprocal removal of tariffs on member countries’ goods. In an FTA, each member is free within the limits specified by the GATT/WTO system on deciding the level of external tariffs that will be applied to non members. As there is flexibility on the interactions with the third countries, the members in an FTA are free to establish or join other FTAs. The leading examples are North American Free Trade Area (NAFTA), ASEAN Free Trade Area (AFTA) and European Free Trade Association (EFTA).

3. Customs union (CU) which is a type of agreement that include determination of the common external tariff (CET), in addition to the elimination of the internal tariff rates. Generally, determination of the CET is done through taking an average of all partners’ before union tariff levels. For member countries, such cooperation While these six types depict that how regional agreements can diversify and extend its limits, this kind of classification mainly resembles to the evolution of the European Union (EU). The antecedent of the EUwhich is now at the level of EMU was the European Coal and Steel Community (ECSC, 1951) which can be counted as an intermediate agreement between free trade area and customs union (Dam, 1963, p.638). in external tariffs can only be attained through the loss of autonomy in foreign economic policies. The examples include Andean Community, the CUs of EU with Andorra, San Marino and Turkey, and Southern African Customs Union (SACU).

4. Common market (CM), in which there is free factor mobility –capital, investment and labor– in addition to the customs union requirements that determine free flows of goods and services. This integration requires governments to employ coordinated actions in order to ensure the equal treatment for all factors in the member countries of the CM. Caribbean Community and Common Market (CARICOM) is one of the examples of this type.

5. Economic and monetary union (EMU) which results from the enlargement of a common market with the additional requirement of the harmonization of economic policies, both monetary and fiscal. It further involves the creation of an independent regional central bank that has control over exchange rate policy and inflation rates. The only example that arrived to this level of integration is the European Union (EU).

6. Complete (political) integration (CI) is a type of agreement which includes the harmonization of economic and political policies, and so as to become a single state. This kind of integration necessitates the loss of sovereignty and the creation of domestic institutions on the international level.

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Q5. The decision of a firm to compete internationally will be strategic. While formulating global marketing strategies, how should a firm deal with segmentation, market positioning and international product policy?

Ans : SEGMENTATION Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs, and then designing and implementing strategies to target their needs and desires using media channels and other touch-points that best allow to reach them.Market segments allow companies to create product differentiation strategies to target them.

Criteria for segmenting[edit sourceAn ideal market segment meets all of the following criteria:It is possible to measure.It must be large enough to earn profit.It must be stable enough that it does not vanish after some time.It is possible to reach potential customers via the organization's promotion and distribution channel.It is internally homogeneous (potential customers in the same segment prefer the same product qualities).It is externally heterogeneous, that is, potential customers from different segments have different quality preferences.It responds consistently to a given market stimulus.It can be reached by market intervention in a cost-effective manner.It is useful in deciding on the marketing mix.Methods for segmenting consumer markets[edit source

Geographic segmentation[edit source Marketers may segment according to geographic criteria—nations, states, regions, countries, cities, Neighborhoods or postal codes. The geo-cluster approach combines demographic data with Geographic data to create a more accurate or specific profile. With respect to region, in rainy Regions merchants can sell things like raincoats, umbrellas and gumboots. In hot regions, one can sell Summer wear. In cold regions, someone can sell warm clothes. A small business commodity store may target only customers from the local neighbourhood, while a larger department store can target its marketing towards several neighbourhoods in a larger city or area, while ignoring customers in other continents.

Behavioural segmentationBehavioural segmentation divides consumers into groups according to their knowledge of, attitude Towards, use of or response to a product. Segmentation by occasions Segmentation according to occasions relies on the special needs and desires of consumers on various occasions - for example, for products for use in relation with a certain holiday. Products such as Christmas decorations or Denali lamps are marketed almost exclusively in the time leading up to the related event, and will not generally be available all year round. Another type of occasional market segments are people preparing for a wedding or a funeral, occasions which only occur a few times in a person's lifetime, but which happen so often in a large population that ongoing general demand makes for a worthwhile market segment.Segmentation by benefits Segmentation can take place according to benefits sought by the consumer or according to Perceived benefits which a product/service may provide.Using segmentation in customer retention

The basic approach to retention-based segmentation is that a company tags each of its active Customers with three values: Is this customer at high risk of cancelling the company's service?One of the most common indicators of high-risk customers is a drop off in usage of the company's Service. For example, in the credit card industry this could be signaled through a customer's decline in spending on his or her card.

Is this customer worth retaining?This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer.[3][4]What retention tactics should be used to retain this customer?For customers who are deemed worthy of saving, it is essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing special customer discounts to sending customers communications that reinforce the value proposition of the given service.

POSITIONINGPositioning is a concept in marketing which was first introduced by Jack Trout ( "Industrial Marketing" Magazine- June/1969) and then popularized by Al Ries and Jack Trout in their bestseller book "Positioning - The Battle for Your Mind." (McGraw-Hill 1981)This differs slightly from the context in which the term was first published in 1969 by Jack Trout in the paper "Positioning" is a game people play in today’s me-too market place" in the publication

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Industrial Marketing, in which the case is made that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumers mind. It was then expanded into their ground-breaking first book, "Positioning: The Battle for Your Mind," in which they define Positioning as "an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances" (p. 19 of 2001 paperback edition).What most will agree on is that Positioning is something (perception) that happens in the minds of the target market. It is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category. It will happen whether or not a company's management is proactive, reactive or passive about the on-going process of evolving a position. But a company can positively influence the perceptions through enlightened strategic actions.A company, a product or a brand must have positioning concept in order to survive in the competitive marketplace. Many individuals confuse a core idea concept with a positioning concept. A Core Idea Concept simply describes the product or service. Its purpose is merely to determine whether the idea has any interest to the end buyer. In contrast, a Positioning Concept attempts to sell the benefits of the product or service to a potential buyer. The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service. A successful positioning concept must be developed and qualified before a "positioning statement" can be created.

The positioning concept is shared with the target audience for feedback and optimization; the Positioning Statement (as defined below) is a business person's articulation of the target audience qualified idea that would be used to develop a creative brief for an agency to develop advertising or a communications strategy.Differentiation in the context of business is what a company can hang its hat on that no other business can. For example, for some companies this is being the least expensive. Other companies credit themselves with being the first or the fastest. Whatever it is a business can use to stand out from the rest is called differentiation. Differentiation in today’s over-crowded marketplace is abusiness imperative, not only in terms of a company’s success, but also for its continuing survival.Brand positioning process.Effective Brand Positioning is contingent upon identifying and communicating a brand's uniqueness, differentiation and verifiable value. It is important to note that "me too" brand positioning contradicts the notion of differentiation and should be avoided at all costs. This type of copycat brand positioning only works if the business offers its solutions at a significant discount over the other competitor(s).Generally, the brand positioning process involves:

Product positioning process

Generally, the product positioning process involves:-Defining the market in which the product or brand will compete (who the relevant buyers are)Identifying the attributes (also called dimensions) that define the product 'space'Collecting information from a sample of customers about their perceptions of each product on the relevant attributesDetermine each product's share of mindDetermine each product's current location in the product spaceDetermine the target market's preferred combination of attributes (referred to as an ideal vector)Examine the fit between the product and the market.Positioning concepts[edit source

More generally, there are three types of positioning concepts:Functional positionsSolve problemsProvide benefits to customersGet favorable perception by investors (stock profile) and lendersSymbolic positionsSelf-image enhancementEgo identificationBelongingness and social meaningfulnessAffective fulfillmentExperiential positionsProvide sensory stimulationProvide cognitive stimulation

Product Policy

Our product is, of course, the encyclopedia, and this is the most important of the three. Based upon certain founding principles, we all work towards creating and improving our encyclopedia.The foremost important principle here is be bold. Wikipedia has a lot of rules and guidelines, but you don't have to know all of them. If you have something interesting to

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write, write it. A related principle is ignore all rules. This is sometimes misunderstood as "you can do whatever you like", but that is not what it says. You can only do whatever you like as long as you can demonstrate that it improves the encyclopedia.There are four other important principles that people should know about, although it is more important to know the general idea than to read into the details. The first is to strive towards the neutral point of view, and the second is to remember that Wikipedia is an encyclopedia. The third principle is to cite sources, and the fourth is to not violate copyright laws.Most incidents in Wikipedia are not new, and have been thoroughly discussed in the past. Through experience, we have a pretty good idea what the preferred style and layout of a page is, or when it is acceptable to delete pages, or under what circumstances people should be blocked from editing.As such, policy and guidelines serve to show our experience on what works and does not work, and to streamline process by not repeating discussions we've already concluded in the past. Discussion is important, but many things have already been discussed and can already be acted upon. For instance, most criteria for speedy deletion stem from an issue being debated extensively in our articles for deletion and similar processes. Centralized discussion often brings together opinions on common issues that might otherwise be debated over and over.An important principle here is that consensus can change. Since the policy is a result of process and practice (instead of the other way around) it is quite possible that policy changes as a result of practice changing. Another important principle is that Wikipedia is not a bureaucracy. Policy is subservient to product, not the other way around.The result of this setup is that policy pages are often a step or two behind process. Whenever the result of process does not correspond with policy, it means that the policy is outdated. When we encounter a new situation, we are not required to base our discussion on policy. Rather, we base a new policy on the process of discussion. A corollary of this fact is that we, as a rule, do not vote on new policy or guideline pages. Frequently, we simply write down what already happens. Anything that describes the usual outcome of a common process is a good guideline for the future.

Q6. Global sourcing industry is on a growth run as there are sound business reasons to it. Discuss these reasons with examples.

Ans : Globalization of the world economy under the WTO has opened abundant opportunities of cost cutting, gaining competitive advantage and saving time for industries worldwide. Indian industries have experienced such developments as India is a member of the WTO since its inception in 1995. ‘Global sourcing’ is described as ‘the practice of sourcing cost effective and best goods and services across geopolitical boundaries in order to cater to global markets’. Global sourcing strategy is aimed at exploiting ‘global efficiencies’ in all areas of manufacturing, trading and services to enable offering clients and customer the best possible product or service. Usually, efficiencies that prompt firms for global sourcing are low cost skilled labor, low cost raw material, proximity to key markets, time zone differences and other economic factors such as tax exemption and low trade tariffs. Indian industries have successfully levered global sourcing strategies in their global trade operations and sourcing has been the driving force behind the development and expansion of Indian foreign trade in the recent past. Global sourcing strategy has made Indian industry more globalised as buyers from all over the world are bidding for Indian goods, particularly services, to enable executing their contracts on time, reduce prices and generate efficiency in the system through increased competition. Indian industries, in order to reap the benefits of sourcing opportunities, has opened global offices and subsidiaries to tap opportunities on all fronts, i.e., manufacturing, trading, skilled services and call centers. As we know, manufacturing costs vary from country to country due to factors such as currency conversion and cost of living. Due to different factor endowments of countries, the costs of labor and materials may differ, for example, labour cost is far lower in developing countries like India than in North America and Europe. For companies that have labour intensive work, this difference in costing results into significant savings in terms of salaries, wages, post retirement benefits, fringe benefits and other benefits. India is emerging as a global hub in gems and jewellery, oil refining, engineering equipments, textiles, sports goods, auto components, etc. In a globalised set up, trade and commerce of skilled services such as IT enabled services, software development and testing, purchasing, engineering and integrated chip designing, knowledge process outsourcing (KPO), offshoring and home shoring is growing much faster than trade in merchandise. India, with its demographic dividends has been benefitted from all such developments as the level of skill and knowledge held by Indian professional allows them to provide high quality services to their clients in developed countries. For example, India has been successful in software development, BPO services, KPO services and in the recent past in areas like Engineering Process Outsourcing, Analysis Process Outsourcig, content development and website designing. The main reasons for skills sourcing to India is represented pictorially as under: Global sourcing has both benefits and risks for the Indian industry. Global sourcing has helped Indian companies in the generation of additional revenue and profits, precious foreign exchange, scalable business operations and employment. There are spillover effects of outsourcing to India and its economy has grown additionally by emerging as lower cost suppliers of merchandise and services.

Brand India is widely recognized in the ‘silicon valley’ and the Indian government’s bargaining power has increased due to the dependence of many countries for Indian services. Living standards of the people has improved, higher wages, improved working conditions and learning transferable skills has helped thousands of Indians. Risks from global sourcing such as cultural and language related issues, withdrawal of tax benefits, accent problems, high labour attrition, diversification of business

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operations across different countries, increased business travel and local management issues are present. In addition to this, there also come the risks related to logistics and transportation.