Ans1. "globalization" is a historical process, the result of human innovation and technological progress.

It refers to the increasing integration of economies around the world, particularly through trade and financial flows. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders. There are also broader cultural, political and environmental dimensions of globalization that are not covered here. At its most basic, there is nothing mysterious about globalization. The term has come into common usage since the 1980s, reflecting technological advances that have made it easier and quicker to complete international transactions both trade and financial flows. It refers to an extension beyond national borders of the same market forces that have operated for centuries at all levels of human economic activity village markets, urban industries, or financial centers. Here are several benefits of globalization that you should know: opportunity costs, trade terms, balance trades, comparative advantages, changes in consumption and production, and how much cheaper it is to purchase than to produce. The United States of America is a primary exporter of agricultural products and raw materials, import large volumes of various services. The market is very efficient when it comes to trading as it concentrates mostly on specialization. Due to concentration, the costs are minimized while profits, production and efficiency are all maximized. Specialization can be achieved whenever participating countries choose to shift their rare resources to creating services and goods where they have comparative advantages over other countries, in turn increasing their goods consumption. When it comes to workers, this might not make a lot of sense, most of all if they lose jobs; however, organizations happen to be in business, so they can make money. Therefore, they understand what needs to be done and how long it would take to breakeven and make these profits. Businesses never intentionally hurt their workers by firing them. They would rather keep their jobs within the United States of America since, by keeping them here, they can save themselves from the hassles of talking to multi-lingual people worldwide and moving there. However, organizations operate businesses as if they were puzzles. For every puzzle, many pieces are required to complete the puzzle. Therefore, going global would be of the utmost essence for the majority of organizations in order to properly compete and control both produce and costs in an efficient manner.

Nothing is created within global trading but winners since selling products creates increase in demand for those products because the foreigners net demand will be added onto the domestic demand. So, with a demand increase, prices will rise. Still, purchasing products will create increases within product supply since net foreign supply will be added onto the domestic supply. Therefore, with this supply increase, the prices will drop. Nobody will lose. It is definitely a win-win situation for every country that participates. Because of technological changes, continuous development and research, the market economy remains to be dynamic. Because of this, people have to keep up with this overall movement and change, as well, by attending seminars and going through training on a regular basis. The traditional kind of static markets is long gone. There are worries regarding exploitation of poorer people within developing countries, however. This even went further as their wages were compared to slave s wages. The truth is: whenever developing countries get the chance to get jobs to earn more than before, improvement happens. A lot of people from these countries happen to be illiterate and have no idea how important education is. Because of this, they send their kids off to work at production plants. Before sending their kids to school, however, they have to be educated on how important education is and stop sending their kids these production plants.

Ans2. Culture is defined as the shared patterns of behaviors and interactions, cognitive constructs, and affective understanding that are learned through a process of socialization. These shared patterns identify the members of a culture group while also distinguishing those of another group. the word "culture" is most commonly used in three basic senses: * Excellence of taste in the fine arts and humanities, also known as high culture * An integrated pattern of human knowledge, belief, and behavior that depends upon the capacity for symbolic thought and social learning

* The set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group

In this new millennium, few executives can afford to turn a blind eye to global business opportunities. Japanese auto-executives monitor carefully what their European and Korean competitors are up to in getting a bigger slice of the Chinese auto-market. Executives of Hollywood movie studios need to weigh the appeal of an expensive movie in Europe and Asia as much as in the US before a firm commitment. The globalizing wind has broadened the mindsets of executives, extended the geographical reach of firms, and nudged international business (IB) research into some new trajectories. One such new trajectory is the concern with national culture. Whereas traditional IB research has been concerned with economic/ legal issues and organizational forms and structures, the importance of national culture broadly defined as values, beliefs, norms, and behavioural patterns of a national group has become increasingly important in the last two decades, largely as a result of the classic work of Hofstede (1980). National culture has been shown to impact on major business activities, from capital structure (Chui et al., 2002) to group performance (Gibson, 1999). For reviews, see Boyacigiller and Adler (1991) and Earley and Gibson (2002).

The purpose of this Unit is to provide a state-of-the-art review of several recent advances in culture and IB research, with an eye toward productive avenues for future research. It is not our purpose to be comprehensive; our goal is to spotlight a few highly promising areas for leapfrogging the field in an increasingly boundary-less business world. We first review the issues surrounding cultural convergence and divergence, and the processes underlying cultural changes. We then examine novel constructs for characterizing cultures, and how to enhance the precision of cultural models by pinpointing when the effects of culture are important. Finally, we examine the usefulness of experimental methods, which are rarely employed in the field of culture and IB. A schematic summary of our coverage is given in Table 2.1, which suggests that the topics reviewed are loosely related, and that their juxtaposition in the present paper represents our attempt to highlight their importance rather than their coherence as elements of an integrative framework.

Ans3. Trade Liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between nations. This includes the removal or reduction of both tariff (duties and surcharges) and non-tariff obstacles (like licensing rules, quotas and other requirements). The easing or eradication of these restrictions is often referred to as promoting "free trade." The Benefits of Trade Liberalization Policies that make an economy open to trade and investment with the rest of the world are needed for sustained economic growth. The evidence on this is clear. No country in recent decades has achieved economic success, in terms of substantial increases in living standards for its people, without being open to the rest of the world. In contrast, trade opening (along with opening to foreign direct investment) has been an important element in the economic success of East Asia, where the average import tariff has fallen from 30 percent to 10 percent over the past 20 years. Opening up their economies to the global economy has been essential in enabling many developing countries to develop competitive advantages in the manufacture of certain products. In these countries, defined by the World Bank as the "new globalizers," the number of people in absolute poverty declined by over 120 million (14 percent) between 1993 and 1998. There is considerable evidence that more outward-oriented countries tend consistently to grow faster than ones that are inward-looking. Indeed, one finding is that the benefits of trade liberalization can exceed the costs by more than a factor of 10. Countries that have opened their economies in recent years, including India, Vietnam, and Uganda, have experienced faster growth and more poverty reduction. On average, those developing countries that lowered tariffs sharply in the 1980s grew more quickly in the 1990s than those that did not.

Freeing trade frequently benefits the poor especially. Developing countries can ill-afford the large implicit subsidies, often channeled to narrow privileged interests that trade protection provides. Moreover, the increased growth that results from free trade itself tends to increase the incomes of the poor in roughly the same proportion as those of the population as a whole. New jobs are created for unskilled workers, raising them into the middle class. Overall, inequality among countries has been on the decline since 1990, reflecting more rapid economic growth in developing countries, in part the result of trade liberalization. The potential gains from eliminating remaining trade barriers are considerable. Estimate of the gains from eliminating all barriers to merchandise trade range from US$250 billion to US$680 billion per year. About two-thirds of these gains would accrue to industrial countries. But the amount accruing to developing countries would still be more than twice the level of aid they currently receive. Moreover, developing countries would gain more from global trade liberalization as a percentage of their GDP than industrial countries, because their economies are more highly protected and because they face higher barriers. Although there are benefits from improved access to other countries markets, countries benefit most from liberalizing their own markets. The main benefits for industrial countries would come from the liberalization of their agricultural markets. Developing countries would gain about equally from liberalization of manufacturing and agriculture. The group of low-income countries, however, would gain most from agricultural liberalization in industrial countries because of the greater relative importance of agriculture in their economies. Mistakes: Failure to obtain export counselling and to develop a master international marketing plan before starting an export business: Insufficient commitment to overcome the initial difficulties and financial requirements of exporting: Failure to have a solid agent and or distributor s agreement: Blindly chasing orders from around the world Failure to understand the connection between country risk and the probability of getting export financing

 Failure to understand Intellectual Property Rights (IPR): Insufficient attention to marketing and advertising requirements: Lack of attention to product adaptation and preparation needs Failure to obtain legal advice Failure to understand export licensing requirements

Ans4. Product Life Cycle Theory

Life cycle theory has been used since the 1970s to describe the behaviour of a product or service from design to obsolescence. The typical pattern of a product is represented by a curve divided into four distinct phases: introduction, growth, maturity, and decline. Recent research in the area has focused on its use in decision making in areas ranging from those as broad as overall strategy to those as narrow as equipment replacement. But does the product life cycle, or PLC, really tell the entire story? Consider the Ford Mustang. Since its 1964 introduction, the automobile has undergone several changes. Performance was increased with the addition of the 428 CobraJet in 1968 and Mach I styling in 1969. Another substantial change took place in 1971 with the introduction of the high-performance Boss 351. Then a true muscle car, the Mustang was detuned in 1974, when oil prices forced a more fuel-efficient redesign, called Mustang II. The fourth generation Mustang, introduced as the 1994 model, has been further refined and is more aerodynamic than its immediate predecessor. Yet it still shares roots with earlier models. A 302 V-8 is still offered, the wheelbase is similar, and if one looks closely enough, one can see its genesis in the 1964 model. The pattern evidenced by the life of the Mustang, then, is several curves of introduction, growth, maturity, and decline.

. Conventional Life Cycle Theory In the introductory phase, sales are slow. The strategy is to create widespread awareness. Costs are incurred in building distribution and increasing awareness through heavy promotion. It is hoped that the investments made in new product introduction pay off and the product or service moves to the growth phase. The firm may either build market share or profitability in the growth phase. Strategies here are to make differential changes that add value to the product and to target new markets. Marketing moves away from promotion through personal selling toward more mass media advertising. Just as predators react to attractive targets, competition begins to build as awareness increases and sales momentum builds. Unit manufacturing costs begin to fall as fixed costs are spread over more production units and workers move down the learning curve. The firm attempts to stay in the growth stage as long as possible. Sales growth slows at maturity and the firm moves to defend market position. This is where marketing managers must pay the most attention. Promotion costs increase significantly. Cost reduction is crucial as competitors begin to lower prices and introduce improved versions of the product. With the lower prices come lower profits, and competitors begin to drop out. This is typically the longest lasting stage, with some market leaders holding their position over several decades. The final stage is decline. Here the firm may continue to market the product hoping that competitors will discontinue their products. Other strategies are to maximize profit by eliminating as many product costs as possible as sales slow, or else to eliminate the product altogether.

Life Cycle Elements Design engineering, process engineering, product marketing, and production have been recurring elements in each stage of the product life cycle. In addition, end-of-life (EOL) issues must be addressed when the product approaches obsolescence. These elements vary in importance as the product or service moves through its life, thus creating waves of activity. The fact that they change in importance and magnitude requires that they be

closely managed. Let s begin our discussion of the individual elements with design engineering.

Design Engineering Design engineering is involved in the five phases of the new product introduction (NPI) process. Idea validation is first. Engineers take informal ideas and study the market for needs that are not being met by products currently being offered or planned. Technology, manufacturing capabilities, competition, and potential revenues are analyzed in the review.

Process Engineering The process engineering function is responsible for the production system. To that end, process engineers specify the type of system, equipment, tooling, layout, and flow used in manufacturing or service operations. Their task is to ensure the efficient production of each part or component. Traditionally, the first step is a review of the end item bill of materials, which identifies all the separate parts that make up the product or service to be produced in, or to flow through, the operation area. Once the bill of materials analysis is completed, the problem of which type of production system to employ may be tackled.

Production Production activity follows demand for the product or service; both are linked by manufacturing planning and control systems. Activity begins in earnest during production ramp-up. Equipment processes, and trained production personnel must be in place. Targets for product cost, conformance to specification, and overall quality must be met. As customer sales begin to speed up production, overhead per-unit costs decrease and direct costs increase.

Relationships

Design engineering, process engineering, and production are all related. The purpose of presenting the traditional relationship here is to facilitate later comparisons with the five-element wave. The model is illustrated in Figure 3, which shows that traditional product engineering follows a linear path. The first step is design engineering, in which the good or service is taken from concept and detail design to prototyping. The product moves to process engineering, where technologies and production methods are evaluated as a system is set into motion. Finally, the product flows to production, where down-stream manufacturing activities, such as production planning and scheduling, take place. This is known as the over-the-wall method of product design and development, with each stage separate from the next.

Product Marketing New products are usually supported with high advertising budgets to build awareness and encourage an initial purchase. If the target is the entire market, a typical first strategy is to attack it with one theme. When resources are relatively limited, the business may choose to identify smaller, more homogenous concentrations within the market and tailor the advertising to those groups. Once the product becomes established, fewer advertising dollars per sales unit are required to encourage demand.

End of Life This element considers what happens when sales decline to the point at which revenues drop to a level that supposedly precludes continued production of a good by the firm. One strategy is to cease production and allow inventory levels to drop to zero. An alternative tactic is to attempt to give new life to the product and risk succumbing to what is known as "The Thomas Lawson Syndrome."

Ans5. The Heckscher Ohlin theorem is one of the four critical theorems of the Heckscher Ohlin model. It states that a country will export goods that use its abundant factors intensively, and import goods that use its scarce factors intensively. In the two-factor

case, it states: "A capital-abundant country will export the capital-intensive good, while the labor-abundant country will export the labor-intensive good." The critical assumption of the Heckscher Ohlin model is that the two countries are identical, except for the difference in resource endowments. This also implies that the aggregate preferences are the same. The relative abundance in capital will cause the capital-abundant country to produce the capital-intensive good cheaper than the laborabundant country and vice versa. Initially, when the countries are not trading:


the price of capital-intensive good in capital-abundant country will be bid down relative to the price of the good in the other country, the price of labor-intensive good in labor-abundant country will be bid down relative to the price of the good in the other country. Once trade is allowed, profit-seeking firms will move their products to the markets that have (temporary) higher price. As a result:

 

the capital-abundant country will export the capital-intensive good, the labor-abundant country will export the labor-intensive good. The Leontief paradox, presented by Wassily Leontief in 1951, found that the U.S. (the most capital-abundant country in the world by any criterion) exported laborintensive commodities and imported capital-intensive commodities, in apparent contradiction with Heckscher Ohlin theorem. However, if labor is separated into two distinct factors, skilled labor and unskilled labor, the Heckscher-Ohlin theorem is more accurate. The U.S. tends to export skilled-labor-intensive goods, and tends to import unskilled-labor-intensive goods.

Ans6.

Yes I think WTO is Helpful &WTO is helpful for promoting international business in the following ways:

1. The system helps to keep the peace This sounds like an exaggerated claim, and it would be wrong to make too much of it. Nevertheless, the system does contribute to international peace, and if we understand why, we have a clearer picture of what the system actually does.

2. The system allows disputes to be handled constructively As trade expands in volume, in the number of products traded, and in the numbers of countries and companies trading, there is a greater chance that disputes will arise. The WTO system helps resolve these disputes peacefully and constructively.

3. A system based on rules rather than power makes life easier for all The WTO cannot claim to make all countries equal. But it does reduce some inequalities, giving smaller countries more voice, and at the same time freeing the major powers from the complexity of having to negotiate trade agreements with each of their numerous trading partners

4. Freer trade cuts the cost of living We are all consumers. The prices we pay for our food and clothing, our necessities and luxuries, and everything else in between, are affected by trade policies.

5. It gives consumers more choice and a broader range of qualities to choose from Think of all the things we can now have because we can import them: fruits and vegetables out of season, foods, clothing and other products that used to be considered exotic, cut flowers from any part of the world, all sorts of household goods, books, music, movies, and so on.

6. Trade raises incomes

Lowering trade barriers allows trade to increase, which adds to incomes national incomes and personal incomes. But some adjustment is necessary.

7. Trade stimulates economic growth and that can be good news for employment Trade clearly has the potential to create jobs. In practice there is often factual evidence that lower trade barriers have been good for employment. But the picture is complicated by a number of factors. Nevertheless, the alternative protectionism is not the way to tackle employment problems.

8. The basic principles make the system economically more efficient, and they cut costs Many of the benefits of the trading system are more difficult to summarize in numbers, but they are still important. They are the result of essential principles at the heart of the system, and they make life simpler for the enterprises directly involved in trade and for the producers of goods and services.

9. The system shields governments from narrow interests The GATT WTO system which evolved in the second half of the 20th Century helps governments take a more balanced view of trade policy. Governments are better placed to defend themselves against lobbying from narrow interest groups by focusing on trade offs that are made in the interests of everyone in the economy

10. The system encourages good government Under WTO rules, once a commitment has been made to liberalize a sector of trade, it is difficult to reverse. The rules also discourage a range of unwise policies. For businesses, that means greater certainty and clarity about trading conditions. For governments it can often mean good discipline.