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 priceresponsive,
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.