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INTERNATIONAL BUSINESS
Case (20 Marks)
M/s Adjani Industries Ltd is
working out for import of turbine shaft for a steam turbine at the rate of USD
4600 per unit on C&F Mumbai port basis. Following data is given for
calculation purpose: (a) Landing Charges @ 1% of CIF (b) Exch. Rate: 1 USD = Rs
60.00 (c) BCD 7.5%, CVD 8.24 %, SAD 4% (d) Assessable Value = CIF value +
Landing charges (e) Marine Insurance 1% of C& F (f) Ocean freight 3% of FOB
You may assume any data if required. Answer the following question.
Q1. Calculate Basic Customs
Duty (BCD)
Q2. Calculate SAD
Q3. Calculate CIF values in Rs
Q4. Calculate Total assessable value in Rs
Case (20 Marks)
Progressive Chemical Industries
Ltd, is engaged in Manufacturing and export of specialty chemicals, having
turnover of Rs 300 crores. The Company
is growing and having good export orders. The CEO is in mood to expand the
business and aiming to reach turnover of Rs 1000(thousand) crores in next 5
(five) yrs. The CEO is worried about the increase in input costs and workers demands. Union has threatened to go on
strike indefinitely. Union has demanded 50% increase in salary and other
benefits, But is not agreeing to link
it to productivity. It has also raised issues like unsafe, hazardous working
conditions, leakage of poisonous gases affecting the health of workers. The
consultant has advised the CEO to be strict and take strict action against the
erring employees and be ready to
declare lockout if situation warrants.
Answer the following question.
Q1. Prepare a draft agreement
for the above situation which could be acceptable for Management and Union.
Q2. As a HR Head how would you convince the
Union and workers?
Q3. Do you feel management policies/practices
are right?
Q4. What are the various laws which could be
applicable in the above problems?
Case (20 Marks)
Strategic R & D by TNCs in
Developing Countries TNCs have had long units in developing host countries for
adapting products and processes to the local conditions, and in a few cases, to
products for local markets. Since the min1980s, however, they have also started locating strategic R & D centers
in some developing countries, for developing generic technologies and products
for regional or global markets. The main incentives for this are : (a) access
to highly qualified scientists as shortages of research personnel emerge in certain fields in industrialized
countries, (b) Cost differentials in research salaries between developing and
industrialized countries, and (c) rationalization of operations, assigning particular
affiliates the responsibility for developing, manufacturing, and marketing
particular products worldwide. Th new trends are more visible in industries
dealing with new technologies, such as microelectronics, biotechnology, and new
materials. In these technologies, the location of R & D can be
geographically delinked more easily from the location of manufacturing. It is
also possible to separate R & D in core activities from that in
noncore activities. Consequently,
countries like India, Israel, Singapore, Malaysia or Brazil serve TNCs as good
locations for strategic R & D. For instance, Sony
Corporation of Japan has around nine R & D units in Asian developing
countries. It has three units in
Singapore conducting R & D on core components such as optical data
shortage devices, integrated chip design for audio products and CDROM drives, and multimedia and
microchip software. It has three units in Malaysia working on video design,
derivative models and circuit blocks for new TV chases, radio cassettes,
discman and hifi receiver designs. It has one unit in Republic of Korea focusing on the design of compact
discs, radio cassettes, tape recorders, and car stereos. It has one in Taiwan
designing and developing video taperecorders, minidisk players, video CDs, and
duplicators. Finally, it has one unit in Indonesia focusing on the design of
audio products. Such units often work in collaboration with science and
technology institutes in the host country. For instance, Daimler Benz has
established such a unit in Bangalore, India, in collaboration with the Indian
Institute of Science to work on projects
related to its vehicles and avionics business. Current work includes interface
design of avionics landing systems and
smart GPS sensors for use by the group’s business worldwide. Source:
World Investment Report 1999.
Answer the following question.
Q1. Explain why MNCs have
located R & D centers in developing countries?
Q2. Mention the areas where R & D activities
can easily be decentralized.
Case (20 Marks)
NEC, a Japanese computer and
electronics manufacturer, announced it was moving out of Scotland to gain cost
advantages in China. These cost advantages included not only labor, but also
taxes, because the company would be operating within a special Chinese economic
zone. The move stranded its Scottish employees, particularly since other
companies in the area, such as Coats, Motorola, and Mayflower, had recently moved
facilities from Scotland to China as well. Similarly, two U.S. companies, Coast
and Cast Alloys, moved golf club production from Mexico to China to reduce
production costs. Many critics of FDI argue that it is unethical for
governments to lure companies away from existing locations by offering
lucrative incentives. (Incentives are often much greater than the tax breaks
offered by China.) These critics also argue that it is unethical for companies
to accept them. Companies say that their response to more favorable conditions
– such as incentives, taxes, and regulations – is necessary because competitors
are bound to take advantage of these
conditions. Do governments in countries where a company is already located have
any ethical obligations – especially if their policies, such as environmental
regulations or high taxes, burden producers? On the one hand, direct
investment may lead to better global
use of resources and will employ laborers from developing countries who
otherwise may not find work. On the other hand, it is the newly unemployed
workers who suffer if they lose their jobs and cannot easily find new ones. For
these employees, there is little solace in the economic gains that go to
previously unemployed workers abroad or the lower consumer prices or higher corporate earnings
resulting from the foreign production. Some people argue that the plight of
these newly unemployed workers is no
different from the results of technological change, such as when workers in
clothespin factories lost their jobs
with the invention of the electric clothes dryer. Other people argue that
displacement from FDI is different because the workers can seldom move abroad to take advantage of
the new opportunities there and because their employers are responsible for the
job losses. They argue that the company has an ethical obligation to give
employees advance notice of the move and to provide training and help with job searches.
Answer the following question.
Q1. Do you agree that countries
are wrong in luring companies by offering incentives and tax benefits? Give
reasons in support of your answer.
Q2. Who do you feel should be
held responsible for the unemployment created because of relocation of a
company in the given situation – the company itself, the current country, or
the country to which the company is relocating? Discuss
Assignment Solutions, Case study Answer sheets
Project Report and Thesis contact
ARAVIND – 09901366442 – 09902787224
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