International business case study questions

If we consider how the population of this country, is growing fast, that is another factor to make the demand for construction materials is high and this helps in housing of the large population. JCB opening outlets and working as a venture in this country would mean high sales turnover, for construction products as people keep to construct their own residentials. In addition, the government is working to improve the housing facilities and thus the venture can own long term tenders of supplying material to the government housing projects. • Labor, is part of capability management for any organization and entails the control of recruitment in the organization. Since the demand for construction in this country is high, then the required inputs in the organization will have to be high and include raw materials and employees.

This were costs related to marketing. Any new business is supposed to widely and extensively market its new products to create awareness to the public and help in compacting the competition from other substitutes. This will cost JCB high in marketing its products throughout the extensive country and reaching the periphery market can be challenging. The cost of promoting the products and educating customers about their products will be quite high. Countrywide launching of events will be very high and the organization could incur a lot of expenses, in all these activities. Understanding that JCB had started a fully owned subsidiary in the country, it will have to invest heavily in the department of research and development, to ensure it is using the current technology and competing effectively with all the other organizations in the same, industry and operating within India.

The capacity and operational management of the organization will depend on how effective is field research done. Furthermore, the government legislation, will affect the rate, which the registration costs are remitted and they rise up, this can result in extra charges being since this is public organization. Risks The key risks, which this business organization, is frown to go through include, changes in the rates of taxing, and varying registration fee. This is anticipated in India and thus can affect the net profit of the company. Taking an example from the case, firms like JCB are at risk for giving control of its high-end technology to their partner Escort when they entered into the joint venture. In addition to that, firms are at a disadvantage because not all joint ventures give a firm tight control over subsidiaries and shared ownership arrangement can also lead to conflicting battles between the partnering firms.

In this case study, JCB went into a joint venture with Escort, where initially, JCB controlled 40% of the shares while Escort controlled a whopping 60%. This joint venture however, brought upon several advantaging factors: • Since this was a combination of two businesses, new insights and expertise were employed within the organization. The expertise of both firms promoted new ways of doing things. • High Risks are the key factors which can lead to the downfall of any company. When the associated risk tends to be too high, then the chances of the firm collapsing are high. When the project is a joint one, then the chances of sharing the risks are very high and you can easily handle the problems. When a risk arises or an investment is risky, then the two firms tend to share it according to the proportion of their shares in the joint venture.

In this new venture, the risky activities in India which can lead to downfall of the company will be divided and thus low chances of failure. I think that the whole processes of the new business ventures will be able to embrace, this aspect of flexibility and thus leading to its success. The joint venture is a combination of two known brands and thus the chances of survival, are high. You may not need a lot of promotional and marketing campaigns to start the market. the firms which come together to form the joint venture are well established and thus known brands which can market themselves. The two-business firms for this venture come from different countries and thus, the venture will have a wider market network.

Furthermore, the Modis, reign is encouraging the need for business to work as part of the existing companies in the country and thus the venture will have an easy time in complying with the government regulations. Defying rules of the country will lead to people and political attack of the business which can lead to failure of the business totally. The political wave of business if not good can ruin its reputation and thus people fail to consider the business in making their purchases. Question 3 Culture had been defined by Hofstede in 2011 as the power of differentiating one group from the other. Culture is understood through its lexical meaning in terms of customs, arts, skills, and ideas of the targeted group.

Employees are seen in term of strengths and not cultural differences. It is essential for a business which is working in different cultures to understand the main cultures in that country so that it can cater to the different needs of the people. This process may create complexity and thus managers need to understand how to solve conflicts effectively. Countries may differ due to historical experiences, beliefs, customs, and practices. These values are unique to each country and thus the differences between the two countries will need to clearly understood for a business to prevail well in the two countries. Individualism and collectivism This is the degree to which people are integrated into groups and talk about we versus I. India has a medium score of 48% which means both aspects are practiced as opposed to the United States.

The US is known to be individualistic among other nations in the world and individuals believe in achieving their own goals. American organizations have a hierarchy of order and leadership, whereas this is a common practice for Indians as they are faced with a big challenge of hierarchical organizational structures. This is leading to lack of planned competition in the entire country and some organization may end having higher benefits than others. The Americans believe everything to be possible and aggressively work to achieve that goal. Uncertainty avoidance index Is the social tolerance for ambiguity and helps to show at what extent do we want to control the future. The score for both countries is quite low and this shows they are low on uncertainty avoidance.

This symbolizes that the countries are aggressive to innovate and achieve ready opportunities. These two countries are tolerant of new business ventures entering their borders. Question 4 Floating exchange rate gives autonomy on monetary policy and allows the government to either decrease or increase the supply of money. This rate of exchange does control the trade balance in the country and this help in controlling the high price inflation through money discipline and controls uncertainty and speculation in the market (Shambaugh, 2004). In the international business transactions like the case of JCB venture, floating rate system seem to be effective due to its stability. The rate of exchange will be known through demand and supply and thus less interruptions and intervention. When floating system is used inflation doesn’t occur and thus international business are not adversary affected (Levy-Yeyati, & Sturzenegger, 2003).

Speculation addresses the ability of the business to anticipate future changes in exchange rates. The uncertainty in the exchange rate brings about the concept of certainty in the business organization by ensuring that the monetary system prevails through the reduction of the rates. Balance of trade tries to address the question of relation between rates of exchange and trade balance. On the side of the floating exchange rate, there are two elements. Automatic trade balance and monetary policy adjustment. This is part of capacity management techniques and will help in maximizing the profit through higher revenues. Using this concept will ensure that any imbalance, of the differences in demand and supply, will be corrected automatically and thus strain to the managers.

When the demand, goes down for currency, the value of imported goods will rise due to this low value and thus the demand will be higher for local products. In floating regimes, as we have seen in the above paragraphs, other international financial institutions have the capability of intervening when things go wrong. JCB working in India the central bank will have, power and mandate to intervene to the organization activities to control stability and ensure no inflation. References; Bhatnagar, J. Management of innovation: role of psychological empowerment, work engagement and turnover intention in the Indian context. The International Journal of Human Resource Management, 23(5), 928-951. Hofstede, G. Cultural dimensions. J. O. Doing business in Asia (No. Levy-Yeyati, E. , & Sturzenegger, F. Shambaugh, J.