Global Business Operations and Ethical Considerations

This assignment delves into the intricacies of global business operations, including ethical dilemmas, franchising policies, and subsidiary structures. It covers topics such as outsourcing, working standards and conditions, cultural considerations, and limited liability. The assignment also explores the role of franchising in global business and the legal implications of establishing a subsidiary in a foreign country. With its focus on ethics and responsibility, this assignment provides students with a nuanced understanding of the challenges and opportunities involved in conducting business internationally.

Project mngt
Q1 ( a ) Explain the concept of project quality and importance of TQM in Projects.
ANS. Total Quality Management (TQM) is a popular customer-based methodology of quality control
and improvement derived from Japanese industry since the 1950’s. It offers a unique approach for
managing quality of a product or process while looking to customers as the major source of quality
definition. In other words, TQM principles are based on customer requirements and standards to
establish a continuous and dynamic process for product improvement. The methodology lets create an
effective working environment where every person strives to consistently improve the product or
process.
Because TQM is a customer-oriented methodology it requires every project team member to be
completely involved in the improvement process. Every employee should focus on improvements while
trying to enhance their personal productivity.
Importance of TQM
TQM can have an important and beneficial effect on employee and organizational development. By
having all employees focus on quality management and continuous improvement, companies can
establish and uphold cultural values that create long-term success to both customers and the organization
itself. TQM’s focus on quality helps identify skills deficiencies in employees, along with the necessary
training, education or mentoring to address those deficiencies.
With a focus on teamwork, TQM leads to the creation of cross-functional teams and knowledge sharing.
The increased communication and coordination across disparate groups deepens institutional knowledge
and gives companies more flexibility in deploying personnel.
Q 2 ( c) Discuss the different types of cost estimating in the life cycle of project
ANS. Cost estimation in project management is the process of forecasting the financial and other
resources needed to complete a project within a defined scope . An initial cost estimate can determine
whether an organization greenlights a project, and if the project moves forward, the estimate can be a
factor in defining the project’s scope. If the cost estimation comes in too high, an organization may
decide to pare down the project to fit what they can afford. Once the project is in motion, the cost
estimate is used to manage all of its affiliated costs in order to keep the project on budget.
There are two key types of costs addressed by the cost estimation process:
1. Direct costs: These are the costs associated with a single area, such as a department or this
particular project itself. Examples of direct costs include fixed labor, materials and equipment.
2. Indirect costs: These are costs incurred by the organization at large, such as utilities and quality
control.
Within these two categories, some typical elements that a cost estimation will take into account include:
 Labor: the cost of project team members working on the project, both in terms of wages and time.
 Materials and equipment: The cost of resources required for the project, from physical tools to
software to legal permits.
 Facilities: the cost of using any working spaces not owned by the organization.
 Vendors: the cost of hiring third-party vendors or contractors.
 Risk: the cost of any contingency plans implemented to reduce risk.
Q 2 ( d ) EXPLAIN the team building process in managing projects.
Ans. Bruce Tuckman was a professor whose major field of research was group dynamics. He
categorized the formation of teams into stages of group development.
Envision a company's project to create a website to build a brand and increase its sales. The project
sponsor is the CEO of the company and he assigns the major responsibilities to the project manager. The
project manager puts together a team including a website designer, software developer and the sales
lead. Let us see how this team will go through the various stages of team building according to
Tuckman's stages of group development.
There are formally identified stages of team formation and development. The stages are:

 Forming: People are brought together as a team
 Storming: There are disagreements as people learn to work together
 Norming: Team members begin to build good working relationships
 Performing: The team becomes efficient and works effectively together
 Adjourning: The project ends and the team is disbanded
Q 3 ( d) SHORT NOTE : Pay Back Period (PB) method for project evaluation
ANS. Payback period in capital budgeting refers to the time required to recoup the funds expended in an
investment, or to reach the break-even point. [1] For example, a $1000 investment made at the start of
year 1 which returned $500 at the end of year 1 and year 2 respectively would have a two-year payback
period. Payback period is usually expressed in years. Starting from investment year by calculating Net
Cash Flow for each year: Net Cash Flow Year 1 = Cash Inflow Year 1 - Cash Outflow Year 1. Then
Cumulative Cash Flow = (Net Cash Flow Year 1 + Net Cash Flow Year 2 + Net Cash Flow Year 3, etc.)
Accumulate by year until Cumulative Cash Flow is a positive number: that year is the payback year.
The time value of money is not taken into account. Payback period intuitively measures how long
something takes to "pay for itself." All else being equal, shorter payback periods are preferable to longer
payback periods. Payback period is popular due to its ease of use despite the recognized limitations
described below. See Cut off period.
Q 3 ( d) SHORT NOTE : Project Closing
ANS . According to A Guide To The Project Management Body of Knowledge (PMBOK® Guide) –
Fifth Edition, “The Project Closing Process Group consists of those processes performed to conclude all
activities across all Project Management Process Groups to formally complete the project, phase, or
contractual obligations. This process group, when completed, verifies that the defined processes are
completed within all of the Process Groups to close the project of phase, as appropriate, and formally
establishes that the project or project phase is complete”
In other words, Project Closing is the combination of the following when applied to a project:
1. Assurance that all the work has been completed,
2. Assurance that all agreed upon project management processes have been executed, and
3. Formal recognition of the completion of a project—everyone agrees that it is completed.
At first, the three points above may seem like “de-facto” or natural by-products of the last phase of a
project; however, Exhibit 1 demonstrates how the above may be overlooked on even the simplest of
projects and Exhibit 2 outlines the impact of such oversight.
Disaster mgt
Q1 ( b) Explain Ecosystems and their composition & Structure.
Ans. Ecosystem is a complex in which habitat, plants and animals are considered as one interesting unit,
the materials and energy of one passing in and out of the others”
The concept of ecosystem was first put forth by A.G. Tansley (1935). Ecosystem is the major ecological
unit. It has both structure and functions. The structure is related to species diversity. The more complex
is the structure the greater is the diversity of the species in the ecosystem. The functions of ecosystem
are related to the flow of energy and cycling of materials through structural components of the
ecosystem.Organisms and environment are two non-separable factors. Organisms interact with each
other and also with the physical conditions that are present in their habitats.
Structure of Ecosystem:
The structure of an ecosystem is basically a description of the organisms and physical features of
environment including the amount and distribution of nutrients in a particular habitat. It also provides
information regarding the range of climatic conditions prevailing in the area.
Composition of Ecosystem

1) Abiotic components - Abiotic component of ecosystem includes basic inorganic elements and
compounds, such as soil, water, oxygen, calcium carbonates, phosphates and a variety of organic
compounds (by-products of organic activities or death).
2) Biotic components - The biotic components include all living organisms present in the
environmental system. The biotic components can be grouped into two basic components:
a) Autotrophic components - The autotrophic components include all green plants which fix the
radiant energy of sun and manufacture food from inorganic substances.
b) Heterotrophic components - The heterotrophic components include non-green plants and all
animals which take food from autotrophs.
So biotic components of an ecosystem can be described under the following three heads:
1. Producers (Autotrophic components),
2. Consumers, and
3. Decomposers or reducers and transformers
Q 2 (b) Distinguish between disaster and hazard.
Hazard Disaster
A dangerous situation needing to be heeded
because it can lead to a disaster.
A dangerous situation that has become out of
control and is a disaster
A threat that can be managed by observing
warning signs and keeping in harmony with the
environment.
An international danger and threat to humanity
that needs intervention to bring the situation
under control.
Hazard can be used as a verb and a noun. Disaster is used as a noun.
Hazardous is the adjective derived from hazard Disastrous is the adjective derived from disaster
Hazards are known to have specific warnings
usually man-made to prevent disastrous events
Disasters are the outcomes of hazards when
warning signs were ignored.
Hazards can lead to disasters. A disaster is the result of a hazard but at the same
time is also a hazardous event.
Hazards are not used to describe everyday
mishaps. They are specific occurrences and
danger areas with appropriate warning signs.
Disasters, although in literal terms are more
severe than hazards are used to describe events
that are not literally of a disastrous nature but
rather an idiomatic use of the word.
In simple terms, a hazard is a dangerous situation or event that carries a threat to humans. A disaster is
an event that actually harms humans and disrupts the operations of society. Hazards will be considered
disasters once they affect humans, but if they occur in an unpopulated area, they will remain hazards. A
good example of this is an underwater volcano. If it explodes and humans are not affected, it remains a
hazard. But if it affects a nearby population by destroying food sources and property on a large scale, it
will be seen as a disaster.
Q2 (c) Explain the importance of environment study.
ANS. ENVIRONMENT STUDIES: IMPORTANCE
1. Environment Issues are being of Global:
It has been well recognised that environment issues like global warming and ozone depletion, acid rain,
marine pollution and biodiversity are not merely national issues but are global issues and hence require
international efforts and cooperation to solve them.
2. Development and Environment:
Development leads to Urbanization, Industrial Growth, Telecommunication and Transportation Systems,
Hi-tech Agriculture and Housing etc. However, it has become phased out in the developed world. The
North intentionally moves their dirty factories to South to cleanse their own environment. When the
West developed, it did so perhaps in ignorance of the environmental impact of its activities.
Development of the rich countries of the world has undesirable effects on the environment of the entire
world.
3. Explosive Increase in Pollution
World census reflects that one in every seven persons in this planet lives in India. Evidently with 16 per
cent of the world's population and only 2.4 per cent of its land area, there is a heavy pressure on the

natural resources including land. Agricultural experts have recognized soil health problems like
deficiency of micronutrients and organic matter, soil salinity and damage of soil structure.
4. Need for an Alternative Solution
It is essential, specially for developing countries to find alternative paths to an alternative goal. We need
a goal as under:
 A true goal of development with an environmentally sound and sustainable development.
 A goal common to all citizens of our planet earth.
 A goal distant from the developing world in the manner it is from the over-consuming wasteful
societies of the “developed” world.
It is utmost important for us to save the humanity from extinction because of our activities constricting
the environment and depleting the biosphere, in the name of development.
5. Need for Wise Planning of Development
Our survival and sustenance depend on resources availability. Hence Resources withdraw, processing
and use of the products have all to be synchronised with the ecological cycle. In any plan of
development our actions should be planned ecologically for the sustenance of the environment and
development.
Q 3 ( c ) SHORT NOTE : Effects of land slide
Ans. A landslide is defined as the movement of a mass of rock, debris, or earth down a slope. Landslides
are a type of "mass wasting," which denotes any down-slope movement of soil and rock under the direct
influence of gravity. The term "landslide" encompasses five modes of slope movement: falls, topples,
slides, spreads, and flows. These are further subdivided by the type of geologic material (bedrock,
debris, or earth). Debris flows (commonly referred to as mudflows or mudslides) and rock falls are
examples of common landslide types.
Almost every landslide has multiple causes. Slope movement occurs when forces acting down-slope
(mainly due to gravity) exceed the strength of the earth materials that compose the slope. Causes include
factors that increase the effects of down-slope forces and factors that contribute to low or reduced
strength. Landslides can be initiated in slopes already on the verge of movement by rainfall, snowmelt,
changes in water level, stream erosion, changes in ground water, earthquakes, volcanic activity,
disturbance by human activities, or any combination of these factors. Earthquake shaking and other
factors can also induce landslides underwater. These landslides are called submarine landslides.
Submarine landslides sometimes cause tsunamis that damage coastal areas.
Q 3 ( d ) SHORT NOTE : Life Style Diseases .
Ans. Lifestyle diseases are defined as diseases linked with the way people live their life. These are non-
communicable diseases. This is commonly caused by lack of physical activity, unhealthy
eating, alcohol, drugs and smoking. Diseases that mostly have an effect on our lifestyle are heart disease,
stroke, obesity and type II diabetes.[1] The diseases that appear to increase in frequency as countries
become more industrialized and people live longer can include Alzheimer's
disease, arthritis, atherosclerosis, asthma, cancer, chronic liver disease or cirrhosis, chronic obstructive
pulmonary disease, colitis, irritable bowel syndrome, type 2 diabetes, heart
disease, hypertension, metabolic syndrome, chronic kidney
failure, osteoporosis, PCOD, stroke, depression, obesity and vascular dementia.
Some commenters maintain a distinction between diseases of longevity and diseases of civilization or
diseases of affluence.[2] Certain diseases, such as diabetes, dental caries and asthma, appear at greater
rates in young populations living in the "western" way; their increased incidence is not related to age, so
the terms cannot accurately be used interchangeably for all diseases.
SALES AND DISTRIBUTION MANAGEMENT
Q 1 (b) What is channel information system? Discuss its role & importance for the success of a
corporate retail outlet.
ANS. Channel information systems comprise an information database and the hardware and networks
that help in the collection, processing and transmission of information. The hardware, software and

networks vary depending on the application requirements of channel members. They vary for business-
to-business applications, retailing applications, business to consumer applications and interactive
applications for consumers.
Channel Information Systems (CIS) have influenced the way in which different channel functions are
performed. It has streamlined operations leading to improved channel flow. CIS has also changed the
order in which different functions are performed. CIS has influenced the physical distribution of
products or distribution flow. Transaction flow, promotion flow, inventory flow and negotiation flow
have improved with the advent of information technology in channel management.
Role & Importance for the success of a corporate retail outlet.
 Customer Convenience: Perhaps the most important role of bringing the ready to be consumed goods
to the doorstep of the consumer is performed by the retail community. Consumers benefit from
retailing as retailers perform marketing functions that makes it possible for customers to have access to
a broad variety of products and services. Retailing also helps to create place, time and possession
utilities.
 Accessibility: Products and services have no value for consumers until they are acquired and used by
the customers. Retailers acquire products and services from different places and. assort them at a single
point as per the needs of the consumers and thus facilitate customers' access.
 Convenience of Size: Retailers break bulk and serve the products in quantities and sizes as desired by
the customer. For example, shampoo is available in small sachets. The retailer helps consumer by
providing appropriate products, service and advice in the packing and quantities desired by them.
 Associated Services: A vibrant retail sector benefits the consumers by providing range of products and
services efficiently. Retailing can be done in either fixed locations or online. Retailing includes
subordinated services, such as delivery.
 Supply Chain: Retailers are part of an integrated system called the supply-chain. A retailer purchases
goods or products in large quantities from manufacturers or directly through a wholesaler, and then
sells smaller quantities to the consumer for a profit. Retailers participate in the sorting process by
collecting an assortment of goods and services from a wide variety of suppliers and offering them for
sale.
Q 2 (d) What are the channel conflict? What are their sources? How can a company resolve
conflicts in distribution channels?
ANS. Channel conflict can be explained as any dispute, difference or discord arising between two or
more channel partners, where one partner’s activities or operations affect the business, sales,
profitability, market share or similar goal accomplishment of the other channel partner.
In the process of the constant supply of products in the market, several channel partners and
intermediaries join the supply chain of the brand. Any clash and disturbance among these trading
partners can be considered as a channel conflict.
SOURSES OF CHANNEL CONFLICT
 Role Ambiguity: The uncertain act of an intermediary in a multi-channel arrangement may lead to
disturbance in the channel of distribution and cause conflict among the intermediaries.
 Incompatible Goals: When the manufacturer and the intermediaries do not share the same objectives,
both work in different directions to meet their ends, this results in channel conflict.
 Marketing or Strategic Mis-Alignment: Sometimes, two-channel partners promote the manufacturer’s
product in a different manner, which created two different images of the same product in the
consumers’ mindset, which creates conflicting brand perception.
 Difference in Market Perception: The manufacturer’s understanding of the potential market and
penetration into a specific region or territory, may vary from the perception of the intermediaries,
which can create conflict and reduce the intermediary’s interest in capturing that particular market.
 Change Resistant: When the channel leader plans to modify the distribution channel, the intermediaries
may or may not accept this change. Thus, it may result in a condition of discord or non-cooperation.
RESOLVING OF CONFLICT :

 Co-optation :The manufacturer should hire an expert who has already gained experience in managing
the channel conflicts in other organizations, as a member of the grievance redressal committee or board
of directors, for addressing such conflicts.
 Superior Goals :Establishing a supreme goal of the organization and aligning it with the individual goals
or objectives of the channel partners, may reduce the channel conflicts.
 Legal Procedure : When the conflict is critical and uncontrollable by the channel leader, the aggrieved
party can seek legal action, by filing a lawsuit against the accused party.
 Fair Pricing : Most of the channel conflicts are a result of the price war, and therefore, these can be
resolved by ensuring that products are equally priced in all the territories and a fair margin is provided
to the channel partners.
Q 2 ( c) Explain various types of channels of distribution. How does a marketing manager select a
distribution channel in case of a consumer durable firm?
ANS. Types of Distribution Channels :
A. Direct Channel:
1. Producer → Consumer…. (Zero Level/No Intermediary)
Example – Eureka Forbes
B. Indirect Channel:
1. Producer Retailer → Consumer…… (One Level/Intermediary)
Example – Specialty products like Washing Machines, TVS, Refrigerators, or industrial products are
sold
2. Producer → Wholesaler → Retailer → Consumer (Two Level/Intermediaries)
Example – Goods like food items drugs etc., small manufacturers’ goods which are widely sold to
consumers
3. Producer Agent → Wholesalers → Retailer → Consumer (Three Level/Intermediaries)
Example – Items like cloth, grocery where producer wishes to totally pass on the burden of distribution
to intermediaries.
CONSUMER DURABLES - Consumer durables are a category of consumer products that do not have
to be purchased frequently because they last for an extended period of time (typically more than three
years).
EXAMPLE - A washing machine is an example of a consumer durable good. It takes many years and
multiple uses to wear it out
One Level Channel
One-level Channel Only one intermediary between producer and consumers is present here. It may be a
retailer or a distributor. In case the intermediary is a distributor, this type of channel is used for specialty
products like washing machines, refrigerators or industrial products.
This channel of distribution involves one intermediary to transfer goods from the manufacturer to the
customer. In this, the title and risk transfers from manufacturers to retailers who in turn sell goods to
customers. This distribution channel enables manufacturers to retain control and approach large number
of potential customers.
Therefore , marketing manager should select One Level Channel distribution channel in case of a
consumer durable firm
Q 3 ( d ) SHORT NOTE : Sales quotas
Ans. A sales quota refers to a time-bound sales target set by management for a particular region, sales
team, or individual rep. Sales quotas are often attached to a daily, monthly, or quarterly period.

Sales quotas can be measured in a number of different ways, including by profits, sales, or rep activity.
It’s hard to make progress without first setting a clearly defined goal. After all, benchmarks give us
something to strive for and help us recognize when we’re improving.
For sales team, sales quotas act as a benchmark and can provide the motivation reps need to perform
their best and support the business’ goals. Many sales teams thrive with the help of quotas. The key is to
set quotas that are both challenging and attainable.
Q 3 ( b ) SHORT NOTE : Personal Selling
Ans. Personal selling is also known as face-to-face selling in which one person who is the salesman tries
to convince the customer in buying a product. It is a promotional method by which the salesperson uses
his or her skills and abilities in an attempt to make a sale.
Personal selling is a face-to-face selling technique by which a salesperson uses his or her interpersonal
skills to persuade a customer in buying a particular product. The salesperson tries to highlight various
features of the product to convince the customer that it will only add value. However, getting a customer
to buy a product is not the motive behind personal selling every time. Often companies try to follow this
approach with customers to make them aware of a new product.
The company wants to spread awareness about the product for which it adopts a person-to-person
approach. This is because selling involves personal touch, a salesperson knows better how to pitch a
product to the potential customer. Personal selling can take place through two different channels –
through retail and through direct-to-consumer channel. Under the retail channel, a sales person interacts
with potential customers who come on their own to enquire about a product. The job of the salesperson
is to make sure that he understands the need of the customers and accordingly shows various products
that he keeps under that category. Under the direct channel, a salesperson visits potential customers in an
attempt to make them aware about a new product that the company is launching or it may have a new
offer which the customers may not get from the open market.
INTEGRATED MARKETING COMMUNICATION
Q1 ( b) Explain the Various advertising appeal through various stages of PLC.
ANS. When it comes to advertising a product, the advertising life cycle is made up of four primary
stages. These stages are the introduction, growth, maturity and decline stages. Each stage is associated
with how the product sells, but each stage has its own set of advertising guidelines businesses should
abide by so companies can plan to address the advertising challenges a product faces as it moves through
each stage of the product life cycle.
1. Determine the potential customers of the product. Before you can create an advertising plan or
campaign, you first have to know to whom you are advertising the product. Identify the potential
customer by describing their gender, their age, where they live, what their household income is and how
they benefit from using the product.
2. Determine where your product is in the life cycle. Learn the traits of each stage of the product life
cycle so you can determine which stage of the cycle is where your product is. Determining the stage
helps guide you in what you need to focus on in your advertising efforts. If you are just introducing your
product, then advertising efforts generally focus on bringing awareness of the product to customers,
while products in the growth stage are performing advertising efforts that sets its product apart from the
competition. Products in the mature stage use advertising as reminders to buy the product by offering
coupons or special sales to existing customers. Companies with products in the decline stage generally
cut back spending on advertising.
3.. Choose an advertising technique. Choose one form of advertising, based on where the product is in
the life cycle. For example, you may offer coupons to save money on the purchase of the product. Send
the coupons using different mediums, such as email, in-store displays on the business website and
sending coupons in the mail.

4. Measure response results. Track the responses to the advertising campaign. For coupons, a
promotional code on the coupon helps to determine where the coupon came from. If orders are placed by
phone or online, promotional codes can also be used, or company representatives can ask where the
buyer heard of the product. if the advertisement is successful, then you can mimic the advertisement in
future efforts. If not, you can tweak the advertising effort to try to increase the response rate.
5. Introduce a new advertisement. Companies often find that a combination of advertising efforts work
to promote the product. In addition to the original advertisement, add a new type of advertising to your
efforts, such as giving out free samples.
6. Repeat Steps 3 to 5. Continue to add and take away advertising efforts until you create a combination
of advertising techniques that seem to sell the product the best.
Q 2 ( a) What is internet advertising? Explain it’s advantage.
Ans. Online advertising, also known as online marketing, Internet advertising, digital advertising or web
advertising, is a form of marketing and advertising which uses the Internet to
deliver promotional marketing messages to consumers. Many consumers find online advertising
disruptive[1] and have increasingly turned to ad blocking for a variety of reasons.
When software is used to do the purchasing, it is known as programmatic advertising.
Advantages of internet advertising
 Easy global coverage. Nowadays, people have a habit of searching for information about
products and services via search engines like Google, Bing, and others. Internet advertising is a
way to demonstrate your offers in front of over 4.3 billion web users around the globe. You can
easily target the entire world via the Internet.
 Affordable for any budget. According to Seriously Simple Marketing, the minimum cost to reach
an audience of 2,000 is three times cheaper than traditional advertising methods, so any company
from a small family business to a huge enterprise can utilize online ads and get the most out of
their financial resources.
 Drives traffic to a website. The more visitors you get to the site, the more potential customers
you have, which will result in increased sales. Internet advertising aims to attract users’ attention
and send them to your website. The offers displayed in the digital ads should arouse curiosity and
give people a good reason for clicking through your site.
 Allows targeting. Unlike traditional marketing media that advertises to everyone without
filtering, internet advertising tailors the message to a specifically targeted audience — people
who are most likely to convert into customers.
 It is measurable. Unlike offline marketing, where the cost and effectiveness are somewhat
approximate, you can precisely track the return on your efforts and internet marketing efficiency
with web analytics platforms like Google Analytics.
Q 2 ( b) Explain the steps involved in development of media plan in detail.
Ans. Steps involved in development of media plan :
 Market analysis
 Establishing the media objective
 Setting the strategy
 Implementation
 Evaluation and follow-up
Market Analysis
Performing a market analysis involves determining who your audience is. The audience is the number
and type of people your advertising targets. The audience can be classified according to age, sex,
income, occupation, etc. Performing this analysis will help you to project costs and determine the right
media for your campaign.
Establishing the Media Objective
The media objective is the goal of the media plan. To establish this objective, you must determine your
goal for reach, frequency, circulation, cost, and penetration. Reach is the amount of people the message
is in front of over a period of time. Frequency is the average number of times the message is in front of
those people. Circulation is used for printed advertisements. This is the number of prints that are

produced and sent out. Cost is broken down into two different sections: cost per thousand (CPM) and
cost per person (CPP). It is important to understand the cost as you are budgeting. The cost will tell you
which form of media is the best option for your business. Penetration is the number of audience
members reached by the advertising. The company must determine if it wants to take over a market or
just reach a certain group prior to setting the penetration goals and strategies.
Setting the Strategy
Now that you understand who you are marketing to and how much it will cost you, you will need to
make a decision about what type of media you will use. Some options include Internet, television, radio,
newspaper, consumer and business publications, and interactive media platforms. Which option reaches
the largest audience? How often will it reach the audience? Does it fit in your budget?
Implementation
Now you have a plan. Now it's time to set it in motion. This is when you buy media. Media buying is the
purchasing of the space in the selected media. This involves committing to the media provider,
submitting the ad, and paying the bill. This is the exciting part. You see all your hard work come
together.
Evaluation and Follow-up
After everything is said and done, it is time to see how successful your media plan was. To do so, you
need to follow-up and evaluate the results. The success of this media plan will determine future .
Q 3 ( c ) SHORT NOTE : Green marketing
Ans. Green marketing is the marketing of environmentally friendly products and services. It is becoming
more popular as more people become concerned with environmental issues and decide that they want to
spend their money in a way that is kinder to the planet.
Green marketing can involve a number of different things, such as creating an eco-friendly product,
using eco-friendly packaging, adopting sustainable business practices, or focusing marketing efforts on
messages that communicate a product’s green benefits.
This type of marketing can be more expensive, but it can also be profitable due to the increasing
demand. For example, products made locally in North America tend to be more expensive than those
made overseas using cheap labor, but they have a much smaller carbon footprint because they don’t have
to fly across the globe to get here. For some consumers and business owners, the environmental benefit
outweighs the price difference.
Q 3 ( c ) SHORT NOTE : Surrogate advertising
Ans. Surrogate advertising is a form of advertising which is used to promote banned products,
like cigarettes and alcohol, in the disguise of another product. This type of advertising uses a product of
a fairly close category, as: club soda, mineral water in case of alcohol, or products of a completely
different category (for example, music CD's or playing cards) to hammer the brand name into the heads
of consumers. The banned product (alcohol or cigarettes) may not be projected directly to consumers but
rather masked under another product under the same brand name, so that whenever there is mention of
that brand, people start associating it with its main product (the alcohol or cigarette). In India there is a
large number of companies doing surrogate advertising, from Bacardi Blast music CD's, Bagpiper Club
Soda to Officers Choice playing cards.
Social media marketing
Q1 (a) Elaborate Social Media Marketing Concepts.
Ans. Social media marketing is the use of social media platforms to connect with your audience to build
your brand, increase sales, and drive website traffic. This involves publishing great content on your
social media profiles, listening to and engaging your followers, analyzing your results, and running
social media advertisements.
The major social media platforms (at the moment) are Facebook, Instagram, Twitter, LinkedIn,
Pinterest, YouTube, and Snapchat.
There are also a range of social media management tools that help businesses to get the most out of the
social media platforms listed above. For example, Buffer is a platform of social media management

tools, which can help you achieve success with your social media marketing. Whether you want to build
a brand or grow your business, we want to help you succeed.
Social media marketing first started with publishing. Businesses were sharing their content on social
media to generate traffic to their websites and, hopefully, sales. But social media has matured far beyond
being just a place to broadcast content.
Nowadays, businesses use social media in a myriad of different ways. For example, a business that is
concerned about what people are saying about its brand would monitor social media conversations and
response to relevant mentions (social media listening and engagement). A business that wants to
understand how it’s performing on social media would analyze its reach, engagement, and sales on
social media with an analytics tool (social media analytics). A business that wants to reach a specific set
of audience at scale would run highly-targeted social media ads (social media advertising).
As a whole, these are often also known as social media management.
The Five Core Pillars of Social Media Marketing
 Strategy
 Planning and Publishing
 Listening and Engagement
 Analytics and Reporting
 Advertising
Q 2 ( c) Define the steps involved in Social marketing campaigns.
Ans. 1. Define Your Audience
When developing a social marketing campaign or plan, it can be tempting to target a large section of the
population as your market
Unfortunately, your campaign will never be successful if you are talking to that large of an audience.
Instead, break down that audience into segments and focus on the most the section that seems most
important.To reduce energy use in your town, you may choose to focus on young professionals and
homeowners
2. Understand the Barriers
If we’re looking to convert commuters from drivers to cyclists in our city, we may assume the only
barrier to this conversion is the lack of owning a bike or having an unsafe route to take. However,
owning a working bike, owning biking gear, having the necessary skill and fitness level to ride are all
additional one-time barriers to entry when deciding to bike to work. Repetitive barriers, or barriers that
will pop up each day the person is considering biking to work, include the weather, what clothes they
have available to wear, and whether they will need to shower after the bike ride.
3. Speak to Their Values
Each audience requires a different message that is aligned with their values. For example, homeowners
may respond well to a message touting how energy efficiency is a way to save money on utility bills,
while millennials may respond better to the environmental benefits of energy efficiency.
Having a strong understanding of your audience’s values will allow you to craft effective, engaging, and
meaningful messages that will inspire lasting behavior change.
4. Tap into Influencers
Choosing relevant, trustworthy messengers to spread a campaign is imperative, experts say. Customers
acquired through influencers have a 37 percent higher retention rate than those who were not. Fresh
Empire, an initiative by Rescue Agency (a B Corp) and the Food and Drug Administration to prevent
teen tobacco use, tapped into hip hop icons who are tobacco-free. Teenagers in their target demographic
look up to these influencers, and their involvement helps the message resonate with an audience that
may not be unlikely to listen to a public service announcement from the government.
Social marketers who work to bring positive change to the world are an encouraging addition to the
marcomm community.
Q 2 ( a) Explain digital marketing on various Social media platforms.
Ans. Digital Marketing Platform

Modern marketing relies on technology to analyze the comprehensive performance of a marketing
campaign, and help guide future strategies and decision making. The best way to define a digital
marketing platform is to break it down into its two parts: digital marketing and digital business
platforms.
Social Media Platforms
Todays’ consumers are highly reliant on social media platforms such as Instagram, Facebook,
LinkedIn, and Snapchat. This is why it is essential that brands are active across accounts. Consider
these stats:
 On average users have about 8 social media accounts.
 An average of 2 hours and 22 minutes are spent on social per person per day.
 Out of the 5.11 billion people who have a phone, 3.26 billion access social media using it.
 People spend about 1/7th of their waking time on social platforms.
Social media platforms allow marketers to reach their prospects in a myriad of ways. First,
marketing teams can use these channels to distribute paid ads and sponsored content. Each
platform has a way for marketing teams to create paid ad campaigns and segment users so these
ads appear on the feeds of target audience members. While each platform is different, most have
capabilities that allow marketing teams to place ads based on location, job title, interests, age, etc.
Social media is also a great way to promote products or resources organically to your followers,
and engage with consumers. Chances are, people that follow your brand on social media have
likely purchased from you in the past. Interacting with them on social media or answering
customer service-oriented questions is a great way to ensure continued engagement with the brand
and cultivate positive experiences and customer loyalty.
Finally, marketing teams can use social media to build their brand and establish a voice that can
make them popular to follow and share. For example, Wendy’s flippant and funny tone has made
them exceptionally popular on Twitter, commonly earning likes, retweets, and responses.
Q 3 ( b) Short Note : Segmentation and Targeting
Ans. Market segmentation and targeting refer to the process of identifying a company’s potential
customers, choosing the customers to pursue, and creating value for the targeted customers. It is
achieved through the segmentation, targeting, and positioning (STP) process.
Segmentation is the first step in the process. It groups customers with similar needs together and then
determines the characteristics of those customers. For example, an automotive company can split
customers into two categories: price-sensitive and price-insensitive. The price-sensitive category may be
characterized as one with less disposable income.
The second step is targeting, in which the company selects the segment of customers they will focus on.
Companies will determine this base on the attractiveness of the segment. Attractiveness depends on the
size, profitability, intensity of competition, and ability of the firm to serve the customers in the segment.
The last step is positioning or creating a value proposition for the company that will appeal to the
selected customer segment. After creating value, companies communicate the value to consumers
through the design, distribution, and advertisement of the product. For example, the automotive
company can create value for price-sensitive customers by marketing their cars as fuel-efficient and
reliable.
Q 3 ( c ) Short Note : Ethical issues in social marketing
Ans. Many social marketers assume that because they are focusing on positive behaviour change they
may expect fewer ethical issues arising from their work than conventional, commercial marketing.
However, such a view is sadly too simplistic. This chapter focuses on the ethical issues facing social
marketing. It argues that social marketers face an even greater potential for ethical issues and gives
examples of these by focusing on targeting, stigmatization, victim blaming, coercion, and the use of
financial incentives, among others. Recognizing the manifold potential for ethical challenges, and the
lack of a decisive manner in which to resolve them easily, it then discusses ethical frameworks which
can aid social marketers in formulating a response to potential issues and arriving at a considered

decision. The chapter concludes by discussing the potential role of a professional code of ethics, and
how this can aid future ethical decision-making.
Corporate finance
Q1 (a) Explain the causes and remedial measures of Capitalisation.
Ans. capitalisation
Capitalisation is a simple shorthand formula that enables investors to work out the current market value
of a company. In finance a traditional definition of capitalisation is the dollar value of a company’s
outstanding shares. It is calculated by multiplying the number of shares by their current price.
Over-Capitalisation : The phrase ‘over-capitalisation’ has been misunderstood with abundance of
capital. In actual practice, overcapitalized concerns have been found short of funds. Truly speaking,
over- capitalisation is a relative term used to denote that the firm in question is not earning reasonable
income on its funds.
Causes of Over-Capitalisation:
(i) Rate of interest on borrowings might be higher than the rate of earnings of the company.
(ii) Wrong estimate of the earnings of the company. If future earning is over-estimated, the market value
of shares will fall below the purchase price because shareholders will not get what they had been
promised by the company.
(iii) Floating the company under inflationary conditions will lead to over-capitalisation because of
purchase of assets at high prices.
(iv) Payment of high promotional expenses, i.e., if the remuneration paid to promoters etc., is very high.
Remedial Measures to Correct Over-Capitalization:
(i) All avoidable costs should be avoided e.g., purchase of new vehicles, air-conditioners, sophisticated
office furniture etc.
(ii) Wastage and extravagance should be avoided.
(iii) Earning capacity should be increased by minimizing scrap and by increasing efficiency of workers.
Under-Capitalization of a Company:
Under-capitalization is reverse of the over-capitalization. A corporation may be under-capitalized when
the rate of profits it is making on the total capital is exceptionally high, in relation to the return enjoyed
by similar situated companies in the same industry, OR, When it has insufficient or too little capital to
conduct its business.
Causes of Under-Capitalization:
(1) A company which is floated during depression will find itself under-capitalized during boom period.
The reason being that the assets were acquired at lower cost and the return during inflation will be high.
(2) If the company is working at a high degree of efficiency it will earn more profits which will push up
the real value of the shares in the market, indicating under-capitalisation.
(3) The promoters of the company at the time of preparing financial plan may under estimate future
earnings or make under-estimation of capital requirements.
(4) The company may follow a conservative dividend policy (i.e., moderate rate of dividend) thereby
leading to enough funds for business expansion, machinery replacement etc. This will lead to higher
rates of earnings and hence under-capitalisation.
Remedial Measures to Control Under-Capitalization:
(1) The shares may be splitted up. It has the effect of reducing the dividend per share. In other words, the
par value of shares may be reduced by sub-dividing the shares.
(2) The management may issue bonus shares to equity shareholders. This measure shall capitalize the
earnings/products, thus increase the capitalisation and the number of shares. Dividend per share and rate
of earnings will be reduced.
(3) To remove the state of under-capitalisation, fresh (more) shares and debentures may be issued.
Q 2 ( b) Explain the techniques of Inventory Control.
Ans. Techniques of Inventory Control
 ABC ANALYSIS

ABC analysis stands for Always Better Control Analysis. It is an inventory management technique
where inventory items are classified into three categories namely: A, B, and C. The items in A category
of inventory are closely controlled as it consists of high-priced inventory which may be less in number
but are very expensive. The items in B category are relatively lesser expensive inventory as compared to
A category and the number of items in B category is moderate so control level is also moderate. The C
category consists of a high number of inventory items which require lesser investments so the control
level is minimum.
 JUST IN TIME (JIT) METHOD
In Just in Time method of inventory control, the company keeps only as much inventory as it needs
during the production process. With no excess inventory in hand, the company saves the cost of storage
and insurance. The company orders further inventory when the old stock of inventory is close to
replenishment. This is a little risky method of inventory management because a little delay in ordering
new inventory can lead to stock out situation. Thus this method requires proper planning so that new
orders can be timely placed.
 MATERIAL REQUIREMENTS PLANNING (MRP) METHOD
Material Requirements Planning is an inventory control method in which the manufacturers order the
inventory after considering the sales forecast. MRP system integrates data from various areas of the
business where inventory exists. Based on the data and demand in the market, the manager would
carefully place the order for new inventory with the material suppliers.
 ECONOMIC ORDER QUANTITY (EOQ) MODEL
Economic Order Quantity technique focuses on taking a decision regarding how much quantity of
inventory should the company order at any point of time and when should they place the order. In this
model, the store manager will reorder the inventory when it reaches the minimum level. EOQ model
helps to save the ordering cost and carrying costs incurred while placing the order. With the EOQ model,
the organization is able to place the right quantity of inventory.
 MINIMUM SAFETY STOCKS
The minimum safety stock is the level of inventory which an organization maintains to avoid the stock-
out situation. It is the level when we place the new order before the existing inventory is over. Like for
example, if the total inventory in an organization is 18,000 units, they place a new order when the
inventory reaches 15,000 units. Therefore, the 3,000 units of inventory shall form part of the minimum
safety stock level.
 VED ANALYSIS
VED stands for Vital Essential and Desirable. Organizations mainly use this technique for controlling
spare parts of inventory. Like, a higher level of inventory is required for vital parts that are very costly
and essential for production. Others are essential spare parts, whose absence may slow down the
production process, hence it is necessary to maintain such inventory. Similarly, an organization can
maintain a low level of inventory for desirable parts, which are not often required for production.
 FAST, SLOW & NON-MOVING (FSN) METHOD
This method of inventory control is very useful for controlling obsolescence. All the items of inventory
are not used in the same order; some are required frequently, while some are not required at all. So this
method classifies inventory into three categories, fast-moving inventory, slow-moving inventory, and
non-moving inventory. The order for new inventory is placed based on the utilization of inventory.
Q 2 ( d) Explain the significance of P/E Ratios.
Ans. The PE ratio is the current price of the stock divided by the reported earning per share of the stock.
As a result the PE of a stock is subject to daily change. Since, the future earnings of a company are often
built into the price of a stock, the PE ratio signifies to what extent the price is valued at the earning of
the share of the past year. It is essentially the price you are willing to pay for Re 1 of a company's
earnings. Given that future earnings of a company are uncertain, robust companies are able to extract a
premium for their earnings. It has little to do with the returns that a stock could deliver. As a result you
cannot use it as a means to forecast future performance, to elucidate further; PE of 18.50 times does not
mean that the stock price will essentially grow to 18.50 times. It only means that investors are valuing
the stock at 18.50 times of its earnings.

Price to book value ratio (PB) compares a stock's market value to its book value (book value is assets
minus liabilities). A lower PB could either mean that the stock is undervalued or that there is something
fundamentally wrong with the company. PE and PB are used more as tool for comparison between
stocks belonging to a certain peer group as stand alone PE does not signify anything.
Q 3 ( a ) Short Note : EPS Analysis
Ans. Earning per share (EPS), also called net income per share, is a market prospect ratio that measures
the amount of net income earned per share of stock outstanding. In other words, this is the amount of
money each share of stock would receive if all of the profits were distributed to the outstanding shares at
the end of the year.
Earnings per share is also a calculation that shows how profitable a company is on a shareholder basis.
So a larger company’s profits per share can be compared to smaller company’s profits per share.
Obviously, this calculation is heavily influenced on how many shares are outstanding. Thus, a larger
company will have to split its earning amongst many more shares of stock compared to a smaller
company.
EPS Analysis
Earning per share is the same as any profitability or market prospect ratio. Higher earnings per share is
always better than a lower ratio because this means the company is more profitable and the company has
more profits to distribute to its shareholders.
Although many investors don’t pay much attention to the EPS, a higher earnings per share ratio often
makes the stock price of a company rise. Since so many things can manipulate this ratio, investors tend
to look at it but don’t let it influence their decisions drastically.
Q 3 ( a ) Short Note : Joint Venture
Ans. A joint venture (JV) is a business arrangement in which two or more parties agree to pool their
resources for the purpose of accomplishing a specific task. This task can be a new project or any other
business activity.
In a joint venture (JV), each of the participants is responsible for profits, losses, and costs associated
with it. However, the venture is its own entity, separate from the participants' other business interests.
Joint ventures, although they are a partnership in the colloquial sense of the word, can take on any legal
structure. Corporations, partnerships, limited liability companies (LLCs), and other business entities can
all be used to form a JV.1 Despite the fact that the purpose of JVs is typically for production or for
research, they can also be formed for a continuing purpose. Joint ventures can combine large and smaller
companies to take on one or several big, or little, projects and deals.
There are three main reasons why companies form joint ventures:
 Leverage Resources
 Cost Savings
 .Combined Expertise
International Financial Management
Q 1 (b) What are India’s financial sector reforms after globalization?
Ans. The term Globalisation refers to the integration of the economy of the nation with the world
economy; it is a multifaceted aspect. It is a result of the collection of multiple strategies that are directed
at transforming the world towards greater interdependence and integration. It includes the creation of
networks and pursuits transforming social, economic and geographical barriers. Globalisation tries to
build links in such a way that the events in India can be determined by events happening distances away.
To put it in other words, Globalisation is the method of interaction and union among people,
corporations and governments universally.
India is one of the countries that succeeded significantly after the initiation and implementation of
Globalisation. The growth of foreign investment in the field of corporate, retail, and the scientific sector
is enormous in the country. It also had a tremendous impact on the social, monetary, cultural, and
political area. In recent year, Globalisation has increased due to improvements in transportation and

information technology. With the improved global synergies comes the growth of global trade, doctrines
and culture.
Indian society is changing drastically after urbanisation and Globalisation. Economic policies have had a
direct influence in forming the basic framework of the economy. Economic policies established and
administered by the government also performed an essential role in planning levels of savings,
employment, income, and investments in society.
Cross country culture has one of the critical impact of Globalisation on Indian society. It has
significantly changed several aspects of the country, including cultural, social, political, and economical.
However, economic unification is the main factor that contributes maximum to a country’s economy
into an international economy.
Q2(a) Give the distinction between Domestic and International Finance.
Ans. The major differences between domestic finance and international finance are as follows −
Domestic finance
 The currency exposure has no impact.
 It is exposed to same economic and political environments.
 It is exposed to same tax laws and regulations.
 Stakeholders are of same beliefs, languages etc.
 Knowledge of foreign exchange derivatives is not required.
 Challenges are limited.
 Maintenance of separate books are not required.
International finance
 The currency exposure has impact.
 It is exposed to different economic and political environments.
 It is exposed to different tax laws and regulations.
 Stakeholders are of different beliefs, languages etc.
 Knowledge of foreign exchange derivatives are required.
 Challenges are limitless.
 Maintenance of separate books are required as per GAAP/AS.
Q 2 (b) What are the factors influencing exchange rates?
Ans. Some of the factors that are influencing exchange rates are :-
1. Inflation Rates
Changes in market inflation cause changes in currency exchange rates. A country with a lower inflation
rate than another's will see an appreciation in the value of its currency. The prices of goods and services
increase at a slower rate where the inflation is low. A country with a consistently lower inflation rate
exhibits a rising currency value while a country with higher inflation typically sees depreciation in its
currency and is usually accompanied by higher interest rates
2. Interest Rates
Changes in interest rate affect currency value and dollar exchange rate. Forex rates, interest rates, and
inflation are all correlated. Increases in interest rates cause a country's currency to appreciate because
higher interest rates provide higher rates to lenders, thereby attracting more foreign capital, which causes
a rise in exchange rates
3. Country’s Current Account / Balance of Payments
A country’s current account reflects balance of trade and earnings on foreign investment. It consists of
total number of transactions including its exports, imports, debt, etc. A deficit in current account due to
spending more of its currency on importing products than it is earning through sale of exports causes
depreciation. Balance of payments fluctuates exchange rate of its domestic currency.
4. Government Debt
Government debt is public debt or national debt owned by the central government. A country with
government debt is less likely to acquire foreign capital, leading to inflation. Foreign investors will sell
their bonds in the open market if the market predicts government debt within a certain country. As a
result, a decrease in the value of its exchange rate will follow.
5. Terms of Trade

Related to current accounts and balance of payments, the terms of trade is the ratio of export prices to
import prices. A country's terms of trade improves if its exports prices rise at a greater rate than its
imports prices. This results in higher revenue, which causes a higher demand for the country's currency
and an increase in its currency's value. This results in an appreciation of exchange rate.
Q 3 ( a ) Short Note : International Trade
Ans. International trade is the exchange of capital, goods, and services across international borders or
territories because there is a need or want of goods or services.
In most countries, such trade represents a significant share of gross domestic product (GDP). While
international trade has existed throughout history (for example Uttarapatha, Silk Road, Amber
Road, scramble for Africa, Atlantic slave trade, salt roads), its economic, social, and political importance
has been on the rise in recent centuries.
Carrying out trade at an international level is a complex process when compared to domestic trade.
When trade takes place between two or more nations factors like currency, government policies,
economy, judicial system, laws, and markets influence trade.
To smoothen and justify the process of trade between countries of different economic standing, some
international economic organisations were formed, such as the World Trade Organization. These
organisations work towards the facilitation and growth of international trade. Statistical services of
intergovernmental and supranational organisations and national statistical agencies publish official
statistics on international trade.
Q 3 ( c ) Short Note : International finance
Ans. International finance, sometimes known as international macroeconomics, is the study of monetary
interactions between two or more countries, focusing on areas such as foreign direct investment and
currency exchange rates.
International finance deals with the economic interactions between multiple countries, rather than
narrowly focusing on individual markets. International finance research is conducted by large
institutions such as the International Finance Corp. (IFC), and the National Bureau of Economic
Research (NBER). Furthermore, the U.S. Federal Reserve has a division dedicated to analyzing policies
germane to U.S. capital flow, external trade, and the development of global markets.
International finance analyzes the following specific areas of study:
 The Mundell-Fleming Model,
 International Fisher Effect
 The optimum currency area theory
 Purchasing power parity
 Interest rate parity
Mgt control system
Q 1 ( b) How is Management Audit Plan prepared?
Ans. Management audit is a new concept in auditing. Area of Management audit is beyond conventional
audit; it reviews all aspects of management. It is an audit of overall performance of management. It
covers planning, organizing, co-ordination and control, etc. Management audit detects and diagnoses the
problem and suggests various means to avoid and solve the problems.
Audit Program means the planning of the outlines for the whole process and procedures of management
audit from the beginning to the end. Following examples depict the outline of an Audit Program −
 Study about the organizational structure.
 Study to see whether the principles of a good organization have been followed or not.
 Detailed discussion with the top management about the objectives and the plans.
 Study of current policies adopted to achieve the desired objectives and also to study if there is
any chance to improve them for better results.
 To decide the area of improvement whether it is planning or its implementation or both.
 Recommendations for improvements.
 To study whether the control system of an organization is adequate and effective.

 Study of the manufacturing process to locate the factors which are hindering the maximization
of production.
 Study of personnel departments about policies, training, motivational schemes adopted currently
for employees of the organization and what can be done further to improve the relations
between employees and department.
 Study about the optimum utilization of the space available and also of the physical equipment.
Q 2( b) Discuss the advantages and limitations of Budgetary Control.
Ans. Advantages of Budgetary Control :
1. The most important advantage of a budgetary control is to enable management to conduct business in
the most efficient manner because budgets are prepared to get the effective utilisation of resources and
the realisation of objectives as efficiently as possible.
2. It is helpful in reviewing current trends in the business and in determining further policy of the
business because current and future trends are studied in the preparation of the budget.
3. Budget acts as a measure of efficiency of departments and persons working in the organisation
because budgets provide a yardstick against which actual performance of departments and employees
can be compared.
4. Budgetary control creates conditions for setting up a system of standard costing.
5. It ensures effective utilisation of men, materials, machines and money because production is planned
according to the availability of these items.
Limitations of budgetary control :
1. Correlation and coordination of various budgets is expensive; so small organisations cannot afford the
employment of budgetary control as a cost control technique.
2. In rapidly changing conditions it may not be possible to achieve the budgeted targets. Budgets may
have to be revised from time to time, but frequent revisions may prove to be a costly affair.
3. Budgets may serve as constraints on managerial initiative because every executive tries to achieve the
budgeted targets. It tends to bring about rigidity in control.
Q 2 ( d) What are the limitations of Standard Costing?
Ans. Limitations of Standard Costing :
1. Setting of standards is a very difficult task. It requires a lot of scientific studies such as time-study,
motion- study, fatigue study etc. and therefore it is very costly. Small firms may find it very difficult to
operate such system.
2. Normally the system is strongly opposed by managers and others as they see it as a threat to their
freedom of action. Standards may sometimes create adverse psychological effects on managers and
workers, who are operating the system.
3. The utility of variance analysis depends much more on the standards set. While a loosely set standard
may be ridiculed, the very high standards may create frustration in the minds of workers. At the same
time setting of correct standards is also very difficult.
4. It is not suitable for industries producing non-standardized products. It is of little value in job or
contract costing. Also it is difficult to apply this system when production takes more than one
accounting period.
5. Fixation of responsibility to a particular person, process or production becomes very difficult as it
may not be possible to identify the controllable and non-controllable factors easily.
Q 3 ( b ) Short note : Transfer price
Ans. Transfer price is the price at which related parties transact with each other, such as during the trade
of supplies or labor between departments. Transfer prices are used when individual entities of a larger
multi-entity firm are treated and measured as separately run entities. It is common for multi-entity
corporations to be consolidated on a financial reporting basis; however, they may report each entity
separately for tax purposes. A transfer price can also be known as a transfer cost.
 Transfer prices that differ from market value will be advantageous for one entity, while lowering
the profits of the other entity.

 Multinational companies can manipulate transfer prices in order to shift profits to low tax
regions.
 To remedy this, regulations enforce an arm's length transaction rule that requires pricing to be
based on similar transactions done between unrelated parties.
Q 3 ( c ) Short note : Cost Center
Ans. A cost center is a department or function within an organization that does not directly add to profit
but still costs the organization money to operate. Cost centers only contribute to a company's
profitability indirectly, unlike a profit center, which contributes to profitability directly through its
actions. Managers of cost centers, such as human resources and accounting departments are responsible
for keeping their costs in line or below budget.
 A cost center is a function within an organization that does not directly add to profit but still
costs money to operate, such as the accounting, HR, or IT departments.
 The main use of a cost center is to track actual expenses for comparison to budget.
 A cost center indirectly contributes to a company’s profit via operational excellence, customer
service, and enhanced product value.
 The manager for a cost center is only responsible for keeping costs in line with budget and does
not bear any responsibility regarding revenue or investment decisions.
PERSONAL COST AND COMPENSATION MANAGEMENT
Q 1 ( b ) What do you mean by job based pay, Skill based pay and competency based pay?
Ans. Job-based pay models are familiar to most people. In this model, management identifies a job by
a name that identifies the primary tasks to be performed ("floor supervisor," "clerk-typist," "machine
operator") and assigns a pay scale to that job, which reflects the estimated education and experience
needed to perform the job. The wages of supervisory jobs might also take into account the number of
employees being supervised. Raises based on time spent on the job are another characteristic of job-
based pay models.
Skill-based pay refers to a pay system in which pay increases are linked to the number or depth of skills
an employee acquires and applies and it is a means of developing broader and deeper skills among the
workforce. Such increases are in addition to, and not in lieu of, general pay increases employees may
receive. The pay increases are usually tied to three types of skills:
 horizontal skills, which involve a broadening of skills in terms of the range of tasks
 vertical skills, which involve acquiring skills of a higher level
 depth skills, which involve a high level of skills in specialised areas relating to the same job.
Skill-based pay differs in the following respects from traditional pay systems which reflect skills
differences in a structure consisting of rates of pay for unskilled, semi-skilled and skilled workers
Competency-based pay is a pay structure that compensates employees on their skill set, their knowledge,
and their experience. Competency-based pay is an alternative to pay based on job title and position.
Competency-based pay is meant to encourage employees to contribute to the company by improving
upon their skills.
A competency-based pay plan is a tool used to measure an employee’s skill level, knowledge of their
job, and their past experiences. Employees are then paid based on their merits. It does away with the
normal hierarchical way that business is traditionally done and encourages employees to take charge of
their own work. It motivates them to reach the pay-rate that they desire.
Q 2 (c) What are the various elements of executive compensation? Explain
Ans. The components of an executive compensation plan vary widely across companies. How incentive
vehicles are structured and implemented vary even more widely. Below are the most common
components of an executive compensation plan:
 Base Salary - The standard wage paid to an executive that typically is the largest share of an
annual compensation package.
 Bonuses (Short-term incentives) - Distributions for annual milestones or reaching incentivized
goals that are typically cash-based.

 Long-term incentives - Vehicles used to share long-term value creation with employees. These
are often tied to equity or enterprise value.
 Benefits - Non-cash compensation provided to an employee on an annual basis. These typically
include elements like health and life insurance, defined benefit or contribution plans, and paid
vacations.
 Perquisites - Privileged grants to employees in addition to their other compensation. These can
include everything from a company car to a business-paid cell phone.
Q2(d) What do you mean by compensation structure? What are the components of modern
compensation structure?
Ans. compensation structure (or salary structure) is a hierarchal group of jobs that are assigned to salary
ranges within an organization. Salary structures are composed of pay grades that reflect the value of a
job within both the internal organization and external job market.
Compensation structures help simplify fair pay and market pricing analyses, making it easier to evaluate
pay across job groups. As the market changes, HR professionals can adjust their compensation structures
to assure that employees within the same pay structure are paid equitably compared to their peers.
There are several types of compensation structures. Knowing how each compensation structure works
and when it’s appropriate to use each will help you manage pay and assure employees are paid equitably
over time.
Components of modern compensation structure
 Salary and wages
 Bonuses
 Federal/state pay requirements
 Providing a competitive package
 Long-term incentives
 Health insurance
 Life and/or disability insurance
 Retirement plan
 Time off
 Miscellaneous compensation
Q 3 ( c ) Short note : Wage Incentives
Ans. Wage incentive refers to performance linked compensation paid to improve motivation and
productivity. It is the monetary inducements offered to employees to make them perform beyond the
acceptance standards.
Objectives of Wage Incentive Schemes:
(i) To use wage incentives as a useful tool for securing a better utilisation of manpower, better
productivity scheduling and performance control, and a more effective personnel policy.
(ii) To improve the profit of a firm through a reduction in the unit costs of labour and materials or both.
(iii) To increase a worker’s earning without dragging the firm into a higher wage rate structure
regardless of productivity.
(iv) To avoid additional capital investment for the expansions of production capacity.
Q 3 ( d ) Short note : Labour Turnover
Ans. Labour turnover, also known as staffing turnover, refers to the ratio of a number of employees
who leave a company through attrition, dismissal or resignation to the total number of employees on the
payroll in that period.
Labor turnover, also known as staffing turnover, refers to the ratio of a number of employees who leave
a company through attrition, dismissal or resignation to the total number of employees on the payroll in
that period. It's used for measuring employee retention.
Types of turnovers
1. Voluntary: when an employee leaves the organization on his/her own.
2. Involuntary: when the employees get terminated from his/her services.
3. Functional: when low performing employees are dent from the company in order to enhance the
overall performance.

4. Dysfunctional: when skillful, good performing employees leave the company leaving the company in
a bad shape.
PERFORMANCE MGT SYSTEM
Q1 (b) Explain the objective and advantages of Performance Appraisal.
ANS. Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure, salaries
raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be justified by
following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed or
demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance Appraisal tries
to give worth to a performance. Compensation packages which includes bonus, high salary
rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal.
The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It also
helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity
and importance of the selection procedure. The supervisors come to know the validity and
thereby the strengths and weaknesses of selection procedure. Future changes in selection
methods can be made in this regard.
5. Motivation: Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a person’s efficiency can be determined if the targets are achieved.
This very well motivates a person for better job and helps him to improve his performance in the
future.
Q 2 ( a) In what way measures to improve performance management system.
Ans. Here are 5 ways to help your PMS become a differentiator:
1. Combining strategy with technology
Most companies have their PMS, integral and individual, with their own sets of rubrics and
recommendations. However, what’s needed is to connect organizational culture, employee behavior,
weekly/monthly employee performance reviews, and long-term targets with the PMS. This will help
create short-term tasks, leading to long-term value, and the sustained completion of that fiscal year’s
desired outcomes.
2. Only a few objectives, but each equally vital
Often, a PMS has a varied spectrum of goals offered as a cascade, creating a certain misalignment and
disengagement. The smartest organizations will outline a few clear objectives as part of the

performance management process and stay focused on the same, building momentum, pushing
productivity, and ensuring employee involvement.
3. Tagging employee metrics to enterprise targets
Sometimes, a company’s year-on-year target is too far away from an employee’s performance driver
tenets and metrics. It’s important to create a compendium of work assignments, primary metrics,
divisional goals, and pan-enterprise outcomes. This will make each element of the performance
management process work as a conjoined lever, propelling an engine that’s growth-oriented and
dissonance-free.
4. Recognizing employee effort and interest
A PMS that only skims the surface and offers unreliable superficialities, without generating a detailed
employee performance review, is hardly of any value. Remember, a company that really believes in
investing in the future will connect the PMS with business performance, and larger HRMS systems.
This will lead to genuine incentivization, an air of trust of collaboration, encouraging those who feel a
sense of oneness, helping them grow as they endorse organizational goals.
6. Making the PMS adaptable & intuitive
Like most other systems in the modern working environment, the performance management process
isn’t an idea set in stone, final and unwavering. Over time and with experience, it must be updated and
reorganized, in order to keep it practical, growth-oriented, sensitive to employee needs as well as their
expectations from employee performance reviews, while being conscious of organizational values.
Above all, it must create a holistic view of the operating environment, the value attached to human
capital, and any influencing systemic or financial factors.
Q 2( d) Explain how you can use Balance Scorecard method for effective performance management system?
Ans. Balance Scorecard (BSC) is widely used as strategic business management and planning tool to
analyze critical areas of business. BSC helps organizations to set the desired performance benchmark
which would enable them to achieve pre determined Strategic Targets and gain competitive edge over the
peers. Today, Balance Scorecard (BSC) Performance Management System is widely used by Organization
for Strategic Management Planning.
Earlier, only the Financial perspectives were taken into consideration to understand the position of the
business. However, concentration on just one aspect of business would never really give a true picture of
the entire business. Moreover, modern business practices have turned more complex with short term
objective not necessarily being effective without a sound long term plan. Thus Balance Scorecard is not
essentially a substitute of financial factors rather it is the aggregate of the Business objectives.
BSC is designed and used as Strategic Tool by the organizations to;
1.) Communicate the Objectives of the Organization to the Stakeholders.
2.) Alignment of the Individuals Output with Organizational Goals.
3.) Evaluation of the Strategy and Performance Setting
4.) Measurement of Performance, Feedback, Gaps, Achievements

Balance Scorecard (BSC) has not only found relevance as Strategic Business Management System rather it
is evolved into a comprehensive Performance Management Tool which is simple yet effective to evaluate
the performance of the Individuals. The BSC is effective in aligning the Business Strategy with the
Individual’s Goals to remove ambiguity and drive towards Common Objectives and Vision. The Balance
Scorecard helps to monitor the performance against the given benchmarks to ascertain the Individuals
contribution to the organization. The Balance Scorecard may seem complicated but it is one of the most
simple and cost effective performance management tool. BSC is typically a comprehensive Performance
Management tool which takes a holistic view of the Business Operation and Individual’s role in the same.
Q 3 (b ) Short Note : Team Performance
Ans. Team performance is often what makes or breaks a business – especially a small business or startup. Often
managers can be so focused on the mechanics of the business, but we forget that the people behind it are
what’s driving everything. More importantly, the performance of your team has a huge impact on your
enjoyment of work. When everyone feels as though they’re making progress towards something important and
worthwhile, it creates an enormous sense of satisfaction and pleasure in work – both for your team members,
and for you.
Q 3 (c ) Short Note : Role of Line Managers
Ans. A line manager is responsible for managing employees and resources to achieve
specific functional or organizational goals. Some of these include:
 Recruiting and hiring talent to fill team positions
 Providing training and support to new hires
 Cross-training employees to ensure job rotation and minimize assignment
coverage gaps
 Providing coaching and performance feedback to all team members
 Communicating and ensuring understanding of functional or departmental goals
 Measuring individual and team metrics and performance against targets and
monitoring progress
 Identifying the need for corrective actions when necessary
 Ensuring quality standards for all processes on their team
 Evaluating overall team and individual performance and delivering performance
reviews
 Engaging and coordinating with other line managers across the organization
 Providing reports on productivity and other performance indicators to senior
management
A bit part of a line manager's job is ensuring that the employees reporting them are doing their jobs effectively
and efficiently. Important skills for line managers to have include effective communication, active listening, the
ability to prioritize and delegate tasks, leadership, and organization.
International marketing
Q 1 (a) How would you go about selecting a few possible markets internationally for auto components?
Ans. an initial global market selection process using the following criteria:

1. Environment and market analysis
Put together a short list of countries that present a good concentration or potential concentration of your
target market.
Analyse the variables for each country:
 GDP growth – including the country’s growth prospects for infrastructure and the demand for tourism
products
 country risk – including political or social unrest, insecurity and currency devaluations
 political factors – including the degree of political intervention in business decisions, political and social
stability, and possible alliances or trade agreements with your country of origin
 other factors – including geographic proximity, and the similarity to your source market in terms of business
and social culture
In this first stage of pre-selection, consider countries that interest you or have good market potential. Next,
rank the countries in order of:
 market appeal – including the demand for your product and the risks associated with it
 possible operational difficulties – including market legislation, state-level protectionism, the ease of doing
business, procedures for starting a business, taxes, administrative costs, and the intensity of local
competition
2. Analysis of the competition
To analyse competition in your market:
 identify your main competitors and describe them
 analyse their economic evolution and sales over the last 3 years
 detect their distinguishing factors – including prices, channels, market maturity, financial position,
development potential and plans and/or expansion strategies
3. Distribution channels
There are a number of possible distribution channels:
 international distribution from your own market
 a local distributor in the target market
 your own commercial agent
 the internet
 a subsidiary or delegated company
 the creation of a joint venture with a local partner
4. Demand analysis
You will need to analyse the current and potential demand of your product in its source market, as well as its
profile and expected evolution. This information should confirm that your pre-selection process was
successful and that your chosen markets are suitable for your product.
Q 2 (b) Explain the concept of international product Life Cycle. (IPLC) with appropriate examples. Can you
identify and describe a few market situation where IPLC is not valid?
Ans. International product life cycle concepts combine economic principles, such as
market development and economies of scale, with product life cycle marketing and
other standard business models.

The four primary elements of the international product life cycle theory are
 The structure of the demand for the product,
 manufacturing,
 international competition and
 marketing strategy of the company that invented or innovated the product.
These elements are categorized depending on the product’s stage in the
traditional product life cycle.
 Stage one (Introduction)
In this stage, a new product is launched in a target market where the intended consumers are
not well aware of its presence. Customers who acknowledge the presence of the product may
be willing to pay a higher price in the greed to acquire high quality goods or services. With this
consistent change in manufacturing methods, production completely relies on skilled laborers.
 Stage two (Growth)
An effectively marketed product meets the requirements in its target market. The exporter of
the product conducts market surveys, analyze and identify the market size and composition.
In this stage, the competition is still low. Sales volume grows rapidly in the growth stage. This
stage of the product lifecycle is marked by fluctuating increase in prices, high profits and
promotion of the product on a huge scale.
 Stage three (Maturity)
In this level of the product lifecycle, the level of product demand and sales volumes increase
slowly. Duplicate products are reported in foreign markets marking a decline in export sales.
In order to maintain market share and accompany sales, the original exporter reduces prices.
There is a decrease in profit margins, but the business remains tempting as sales volumes
soar high.
 Stage four (Decline)
This is the final stage of the product lifecycle. In this stage sales volumes decrease and many
such products are removed or their usage is discontinued. The economies of other countries
that have developed similar and better products than the original one export their products to
the original exporter's home market. This has a negative impact on the sales and price
structure of the original product. The original exporter can play a safe game by selling the
remaining products at discontinued items prices.
The Product life cycle model is inefficient when dealing with Brands or Services.
Brands are not products but do have a life cycle of their own, and products
belonging to a certain brand will experience a very different life cycle than the
brand itself.
Q2 ( c) Carry out a brief analysis of secret trends in India's foreign trades.

Ans.
1. Huge Growth in the Value of Trade:
during the period from 1950-51 to 1970-71 total value of trade
rose by only 60.9 percent. Again during the period 1970-71 to
1980-81, total value of foreign trade rose significantly by 597 per
cent, i.e., by nearly 6 times. But during the period 1980-81 to
1990-91, total value of trade rose by 293.3 per cent, i.e., by
nearly 4 times. In 2008-09 the value of trade recorded an
increase of 32.79 per cent over the previous year.
2. Higher Growth of Imports:
The factors which were largely responsible for this phenomenal
increase in imports include: huge import of industrial inputs,
regular import of food grains under P.L. 480 rising anti-
inflationary imports, liberal imports of non-essential items,
periodic hike on oil prices and the initiation of liberal import
policy by the government during 1985-86 to 1991-92. In 2008-09,
the value of imports rose significantly to Rs. 13,74,436 crore,
showing a growth rate of 33.77 per cent over the previous year.
3. Inadequate Growth of Exports:
It is quite disturbing to note that India’s share in world trade was
1.78 per cent in 1950 and in-spite of all the efforts made it has
come down to 0.61 per cent in 1994. Immediately after
liberalization, there were positive signs up to 1995 but in 1996
and 1997 there had been a reversal of the trend. But during the
current period, i.e., in 2001-02 and 2002-03, the export has
recorded a growth rate of 19.7 per cent respectively. In-spite of
the constraints and inadequacies faced by the exporters it was
heartening to note that the exporting community, as observed by
the survey, was optimistic about the future scenario.
4. Mounting Trade Deficit: Deficit in the Balance of Trade:
In 1992- 93 the extent of trade deficit again rose to Rs. 9,687
crore due to huge increase in import. But during 1993-94, the
extent of trade deficit declined to Rs. 3,350 crore due to
considerable increase in exports. But during 2008-2009, the
extent of trade deficit again rose to Rs. 5,33,681 crore. Again
during 2009- 2010, the extent of trade deficit further rose to Rs.
2,31,110 crore (April-Sept.).
Q3 ( b ) Short Note : Franchising

Ans. The franchise system can be defined as follows: "A system in which semiindependent business owners
(franchisees) pay royalties and royalties to a parent company (franchisor) to identify with their brand and sell
their products or services. , And often uses Format and trading system. "
Compared to licensing agreements, franchise agreements tend to be longer and the franchisor offers a wider
range of rights and resources, including in general:
 Equipment,
 Management systems
 How to use
 initial training,
 Building permit and
 All necessary support for the franchisee to run his business in the same way as the franchisor.
For example McDonald is the most famous franchise worldwide
There are three types of deductibles.
• Trade sizes franchise
• Product Franchise
• Franchise manufacturer
Q3 ( d ) Short Note : Licensing
Ans. LICENSE : The approval is a contractual agreement in which one company gives permission to another
company to make your product for a specific payment . The license includes permission for other companies to
use patents, trademarks, copyrights, designs and other intellectual property rights. License management enables
the licensee to immediately leverage the existing production, distribution and marketing systems that other
companies have developed over decades. In return, the licensor typically receives one-time payments, technical
fees and royalties (usually calculated as a percentage of sales). For example, about 90 percent of the $160
million a year in sales at Calvin Klein Inc. comes from licensing the designer's name to makers of underwear,
jeans and perfume. The only merchandise the New York-based company makes itself, in fact, are its women's
apparel lines. Many large corporations, such as the Walt Disney Co., generate less significant proportions of their
revenue from licenses. IBM, after energizing its efforts to license its thousands of technology patents a few years
ago, now attributes $1 billion a year of its corporate sales to licensing.
GLOBAL BUSINESS STRATEGIES
Q 1 ( b) Explain the problem pursuit inn global collaboration and suggest ways to overcome it.
Ans. PROBLEMS OF COLLABORATIVE ARRANGEMENTS
• The many positive attributes of networks are often featured. The capacity to solve problems, govern shared
resources, create learning opportunities, and address shared goals?
• and a literature focused on the challenges networks pose for managers seeking to realize these net work
attributes is developing.
• A commitment to governance with government to govern within the rules yet think creatively
• A commitment to network as mutual-aid partnerships with society
• An acceptance that an agent can be someone without an official government portfolio

• An understanding of the intrinsic inseparability of performance and accountability in wicked problem settings •
A persistent commitment to the collaborative process A Commit
To innovate such collaborative arrangements :
• Organizational success in achieving alliance learning objectives depends on several dimensions of knowledge
and organizational structure. In particular, both organizations’ absorptive capacities--their interwoven human
resources, finance capital, social capital, and organizational belief systems--constrain their effective information
processing, acquisition of partner expertise, and adoption of innovations.
• In a survey with high-tech firms, the most significant determinant of knowledge transferability was tacitness,
defined as knowledge “which cannot be easily communicated and shared, is highly personal and deeply root in
action and in an individual’s involvement with a specific context” (Simonin 1999:469). Moreover, the impacts of
partner cultural distance, asset specificity, and past experience on knowledge ambiguity were moderated by
alliance duration, firm size, and collaborative experience.
Q 2 (b) Explain the role of third party intermediaries in Global Business.
Ans. In international business relationships the intermediary can be named for example distributor, agent or
subsidiaty. This means that, if we looked for a business enterprise talled intermediary, we would probably not
find any. The use of the word “intermediary” indicates a need to focus on the specific character of some entities
in business settings. This character involves something different from selling and buying, even though these two
activities may be included. In other words, when an entity can be characterised as an intermediary, it is
supposed to perform an “intermediary role”. In the following, different ways to define this role Will be
discussed. As mentioned previously, position can be seen as something occupied by someone and role as the
behavioural aspect of the position. Thus, there is a connection between the tasks of the intermediary, i.e. work
that the intermediary is supposed to do, and the role. The tasks may vary between different business
relationships and also between different points of time in one relationship. The position of the intermediary can
be said to involve one specific role which can be seen as a collection of its tasks. Another way to view the
comrection between the tasks and the role is to say that the intermediary performs several roles each of them
involving specitic tasks.
The conclusion is that “the role of the intermediary” can be defined in several different ways, and that, if one
looks solely at the separate dyadic exchanges which take place between the parties, there is a risk that
something important Will be overlooked concerning the role of some intermediaries. Thus, a study of the role of
the intermediary which also considers the possibility that some business relationships can be more like a triad
than a dyad, could reveal the different roles intermediaries may have. Thus, 1 propose that an increased
understanding of international business relationships can be achieved, when “the party in the middle” is studied
as a party of its own together with the seller and the buyer parties of business relationships.
Q2 (c) Explain the role of legal structures in control strategies.
Ans. ROLE OF LEGAL STRUCTURES IN CONTROL STRATEGIES
When operating in a host country, companies may choose among legal forms that affect their
decision-making, taxes, maintenance of secrecy and legal liability. Most choose a
subsidiary form for which there are additional legal alternatives that vary by country.
A. Branch and Subsidiary Structures
A foreign branch is a foreign operation not legally separate from the parent company.
Branch operations are possible only if the parent holds 100 percent ownership. A foreign
subsidiary, however, is a separate legal entity, established through foreign direct
investment; the parent may or may not own all of the voting stock. Because a subsidiary is
legally separate from its parent, legal authorities generally limit liability to the subsidiary’s
assets. This concept of limited liability is a major factor in the choice of the subsidiary

form. With few exceptions, claims against a firm for its actions are settled by courts either
where the actions occur or where the subsidiary is legally domiciled.
B. Types of Subsidiaries and Their Effects on Control Structures
When establishing a subsidiary in a foreign country, a firm can usually choose from among a
number of alternative legal forms. In addition to differences in liability, forms vary in terms
of: the ability of the parent to sell its ownership the number of stockholders required to establish a subsidiary the percentage of foreigners allowed to serve on a board of directors the amount of required public disclosure whether equity may be acquired by non-capital contributions the types of eligible businesses the minimum capital requirements for establishing a subsidiary.
Q 3 ( a ) Short Note : Ethical Dilemma in Global Business
Ans. Some of the most common ethical issues in international business include outsourcing,
working standards and conditions, workplace diversity and equal opportunity, child labor, trust
and integrity, supervisory oversight, human rights, religion, the political arena, the environment,
bribery and corruption. Businesses trading internationally are expected to fully comply with
federal and state safety regulations, environmental laws, fiscal and monetary reporting statutes
and civil rights laws.
Cultural considerations can also make or break a company conducting business globally.
Every culture and nation has its own history, customs, traditions and code of ethics. Cultural
barriers include language, which often means a company must rely on translators when
speaking to business contacts and customers. Gender can be an issue in countries where
women do not have the same rights as men. Religious holidays and other cultural events can
prohibit trade at certain times. Acting in accordance with ethical and cultural values is crucial
for a multinational company to win clients’ support and business and to achieve a competitive
advantage in a particular market.
Q 3 ( d ) Short Note : Franchising policy in Global business
Ans. Franchising is the practice of using another firm’s successful business model. For
the franchiser, the franchise is an alternative to building “chain stores” to distribute goods that
avoids the investments and liability of a chain. The franchiser’s success depends on the
success of the franchisees. The franchisee is said to have a greater incentive than a direct
employee because he or she has a direct stake in the business. Essentially, and in terms of
distribution, the franchiser is a supplier who allows an operator, or a franchisee, to use the
supplier’s trademark and distribute the supplier’s goods. In return, the operator pays the
supplier a fee.
Franchise agreements carry no guarantees or warranties, and the franchisee has little or no recourse to
legal intervention in the event of a dispute. Franchise contracts tend to be unilateral contracts in favor
of the franchiser, who is generally protected from lawsuits from their franchisees because of the non-
negotiable contracts that require franchisees to acknowledge, in effect, that they are buying the
franchise knowing that there is risk, and that they have not been promised success or profits by the
franchiser. Contracts are renewable at the sole option of the franchiser. Most franchisers require
franchisees to sign agreements that mandate where and under what law any dispute would be
litigated.