Mb0053 Solved Assignment 2013 Oscar


Master of Business Administration- MBA Semester 4MB0053 –International Business Management -4 Credits(Book ID: B1315)

arrangements with competitors and to embark on a subsidies race to maintain their holds onagricultural trade. Both these changes undermined the credibility and effectiveness of GATT.


World Trade Organization came into existence in 1995 after the desolation of General Agreement onTariff and Trade (GATT).The WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably. It does thisby:

 Administering trade agreements

 Acting as a forum for trade negotiations

Settling trade disputes

Reviewing national trade policies

 Assisting developing countries in trade policy issues, through technical assistance and trainingprograms

Cooperating with other international organizationsThe WTO has nearly 150 members, accounting for over 97% of world trade. Around 30 others arenegotiating membership. Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all members’parliaments.The WTO’s top level decision-making body is the

Ministerial Conference

which meets at least onceevery two years. Below this is the

General Council

which meets several times a year in the Genevaheadquarters. The General Council also meets as the Trade Policy Review Body and the DisputeSettlement Body. At the next level, the

Goods Council, Services Council and Intellectual Property(TRIPS) Council

report to the General Council.Numerous

specialized committees, working groups


working parties

deal with the individualagreements and other areas such as the environment, development, membership applications andregional trade agreements.The WTO Secretariat, based in Geneva, has around 600 staff and is headed by a director-general. Itsannual budget is roughly 160 million Swiss francs. It does not have branch offices outside Geneva.Since decisions are taken by the members themselves, the Secretariat does not have the decision-making role that other international bureaucracies are given with.


Q.1 What is globalization? What are its benefits? How does globalization help in internationalbusiness? Give some instances?


describes the process by which regional economies, societies, and cultures have become integratedthrough a global network of political ideas through communication, transportation, and trade. The term is mostclosely associated with the termeconomic globalization: the integration of national economies into the internationaleconomy throughtrade,foreign direct investment,capital flows,migration,the spread of technology,andmilitary presence.However, globalization is usually recognized as being driven by a combination of economic, technological,sociocultural, political, and biological factors.The term can also refer to the transnational circulation of ideas,languages, or popular culturethroughacculturation.An aspect of the world which has gone through the process can be said to be


.Against this view, an alternative approach stresses how globalization has actually decreased inter-cultural contactswhile increasing the possibility of international and intra-national conflict.Globalization has various aspects which affect the world in several different ways

Industrial - emergence of worldwide production markets and broader access to a range of foreign productsfor consumers and companies. Particularly movement of material and goods between and within national boundaries.International tradein manufactured goods increased more than 100 times (from $95 billion to$12 trillion) in the 50 years since 1955.China's trade with Africa rose sevenfold during 2000-07 alone.

Financial - emergence of worldwide financial markets and better access to external financing for borrowers.By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily tosupport the expanded levels of trade and investment

Economic - realization of a global common market, based on the freedom of exchange of goods and capital

Job Market- competition in a global job market. In the past, the economic fate of workers was tied to thefate of national economies. With the advent of the information age and improvements in communication,this is no longer the case. Because workers compete in a global market, wages are less dependent on thesuccess or failure of individual economies. This has had a major effect on wages and income distribution

Political - some use "globalization" to mean the creation of a world government which regulates therelationships among governments and guarantees the rights arising from social and economic globalization.Politically, the United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. With the influence of globalization and with the help of the United States’own economy, the People's Republic of China has experienced some tremendous growth within the pastdecade. If China continues to grow at the rate projected by the trends, then it is very likely that in the nexttwenty years, there will be a major reallocation of power among the world leaders. China will have enoughwealth, industry, and technology to rival the United States for the position of leading world power.Most of us assume that international and global business are the same and that any company that deals withanother country for its business is an international or global company. In fact, there is a considerabledifference between the two terms.

International companies

– Companies that deal with foreign companies for their business are considered asinternational companies. They can be exporters or importers who may not have any investments in any other country, apart from their home country.

Global companies

– Companies, which invest in other countries for business and also operate from other countries,are considered as global companies. They have multiple manufacturing plants across the globe, catering to multiplemarkets.The transformation of a company from domestic to international is by entering just one market or a few selectedforeign markets as an exporter or importer. Competing on a truly global scale comes later, after the company hasestablished operations in several countries across continents and is racing against rivals for global market leadership.

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