EXECUTIVE M.B.A. DEGREE EXAMINATION, MAY 2017
First and Second Years
INTERNATIONAL BUSINESS
Time 3 Hours Maximum Marks: 70
SECTION-A × 5 15)
Answer Three questions
Q1) International Trade.
Free trade Vs. protection.
MNCs.
Business negotiations.
LDCs.
International logistics.
SECTION-B × 15 45)
Answer Three questions
Q2) Define international business. Describe its process.
Q3) Critically examine different theories of international trade in brief.
Q4) Examine the significance of strategic planning in international business.
Q5) Describe the role of WTO in strengthening business relations between countries.
Q6) Explain the significance of HRM in MNCs.
Q7) State the factors influencing the culture of multinational corporates.
SECTION-C
Compulsory
Q8) Case study.
The impact of the WTO
China's entry into the WTO in 2001 has made it more active in the field of
international trade through interactions with other LDCs. Long before joining
the WTO, China lowered its tariff rates on several occasions and realized the
need for convertibility of the Chinese currency (RMB). After becoming a
member, it has cut the average tariff level of over 5000 imported goods from
15.3 percent to 12 percent. China is opening its agricultural goods and general
goods markets, as well as services markets. It is expected that all these will boost
foreign investment in China. However, it will not be an unmixed blessing for
China. The import bill now is likely to be much Higher than before. So, if China
is not able to constantly increase its exports, its current account balance of
payment may pose a problem as in other developing countries. The downside of
its entry to the WTO is that there would be an expanded pressure of neo-liberal
globalization and Western influence in China, which may affect its traditional
taboos and culture. China also actively participates in the activities of the Asian-
Pacific Economic Cooperation Organization and plays a very decisive role in all
its policy making processes. China's role in bilateral trade relations with many
developed countries including the USA, the EU, Russia, and Japan are
strengthened every year. India's experience with the WTO is not a happy one.
Before the introduction of agricultural liberalization In India, agricultural
commodity prices were lower than their international market prices. Hence,
exports of farm products from a country like India were rather a lucrative
proposition for the peasants, and as farmers are price-responsive, they used to
increase production for exports. This trend continued in the first phase of
globalization in the 1980s. However, the trend reversed since the 1990s,
particularly after the so-called special and differential treatment of the lessdeveloped
agriculture by the WTO. The typical LDCs studied by the FAO
showed a rise in the export of agricultural products based on their performance
in the phase of globalization of the 1980s; but in the1990s, in spite of the WTO's
special and differential policy, the imports of agricultural products as
a result of subsidy-induced price fall in the international market increased
several times in these developing countries (FAO 2000).
Since the prices of agricultural products have become lower in the international
market, Indian farm products' exporters have become much poorer. This has led
to widespread protests, frustration, and even farmers suicides. The growing
economic problem has now become a human problem (Datta 2004). In India,
agricultural exports as a percentage of total exports went down from 30.7
(1980-81) to 19.4 (1990-91) to 15.4 (1999-2000), to 13.5 (2000-01). The
situation is quite opposite of what was expected. The large amount of imports
has created two adverse problems-export-import imbalance and fall in the prices
of domestic food products. Although exports went up by 83 per cent, the import
of agricultural products in India escalated to 168 per cent. This export-import
imbalance in India has been responsible for a structural adjustment that led to
lower the compound rates of growth of food grains production in India.
However, there has been some sort of apathy towards the agricultural sector, as
it is not remunerative any longer. Kulaks are shifting to other business in the
non-agricultural sector, city-ward migration has been increasing and,
employment in agriculture, mining and quarrying, and community and personal
services has indeed decelerated.
Discussion Questions:
'India's experience with the WTO is not a happy one.' Explain.
What do you think is the likely impact of China's entry in the WTO? Give
reasons for your answer.
How has Indian agriculture been affected by the WTO's policy? Discuss.