Globalization

There are quite a number of forces that have combined together to allow business and products to have great influence in our society than any other time. With innovation, business can thrive well in 21st century. These forces are influenced by either demand or supply of the product which determine whether the business will take a negative or positive response. In oil industry the prices for oil are basically determined by supply-demand factors. The last major recession for oil industry was experienced in 1990.

Due to growing demand for oil in all the countries and shorter supplies they have made oil prices to increase drastically (Glomsrod, Osmundsen, 2005). Oil prices can be adjusted and they respond positively or negatively to the change in demand and supply. Therefore, due to low supply and high demand, oil prices are bound to stay high in medium term. Due to these high prices of oil as result of low supply and high demand, recession cannot be possibly avoided since global economy has increased with increasing demand. (Lovris, 2004)

When government pays farmers not to grow crops it boosts the economy since they will use the money given to them by government to purchase their products. When prices are low, government buy crops and put them in government reservoir and sell it to people later when the prices are high. This allows the economy of the country to grow considerably and thus while some countries discourages growing of crops since they can invest in other areas. One of the concepts covered in the discussion that is applicable to current work place is demand.

Demand for teachers in Baltimore city public school system is due to the increased number of students, classes and school. Therefore those who offered to teach in these schools were offered high salaries (Baumol, 2005). In economics, factors such as political, economic, social and change in technology influences the trend of a business greatly either positively or negatively. Efficiency a business leads to company to operate at a low capital and operating cost which consequently increases profit and reduces the use of resources and energy (Beardshaw, 2001).

Therefore, Business in the twenty first century has greatly been influenced by supply and demand. Supply and demand basically determines the marketability of products either positively or negatively. While economic determine the business trend

Reference: Solveig Glomsrod, Peter Osmundsen, (2005), Petroleum Industry Regulations within Stable States, Ash gate, New York. Amory B. Lolins, (2004), Winning OIL endgame, EarthScan, New York. John Beardshaw, (2001), Economics Student Guide, Pentice Hall, New York. William J. Baumol, (2005), Economics, Thomson London,

Doing business is a very complex activity. At first it was known that business is one area where figures, facts and reports would occupy most of the international and national managers time but now a new idea which is fundamentally important for the success of both the organization and the manger is called culture. Thomas and Inkson have particularly carried out a detail analysis over this issue and revealed their findings by giving practical advice to not just local managers but international managers as well in successfully dealing with people from different cultures.

International managers deal with global business therefore they come across various cultures. By being flexible and understanding towards the new culture, will the manager learn from the attributes and thus reshape his/her approach the next time the international manager is made to come across a similar situation of different culture. In effect the international manager carries out work more professionally as cultural framework becomes a part of his/her job specification.

Culture has become so important, particularly for international managers that the book ‘Cultural Intelligence: People Skills for Global Business’ by Thomas and Inkson is organized in two sections. The first part included learning fundamental cultures and the second part concerns application of these fundamental at work place, while providing illustrative examples of how one comes across daily cultural barriers.

Body In today’s linguistic society, world managers are required to do business at all fronts, enabling them to deal with different kinds of culture irrespective of being at home turf or abroad. That is why whether such managers like it or not, they are required to learn about the culture of Developing Cross cultural Capability P 3 the individual or group with whom the manager is going to conduct business.

There are many books or information widely available online to learn how to do business in other countries but it’s not possible for managers to learn each and every detail of the traits and customs that will be followed by different cultures in the path of conducting business. It is solely due to the refinement between different cultures that make it diverse and variable amongst many ethnic groups. That is why it is necessary to have an organized approach towards dealing with many communications that business people have in their everyday routine.

To deal with this matter, a new term was introduced called the Cultural intelligence (CQ). It is defined as the competency that one possesses in understanding unknown background to adjusting to the different or new cultural framework. According to Martha, Cultural intelligence enables a person to look at things from both the business and cultural aspects as a whole, rather than individual heads. Therefore it influences diversity in the organization which is essential for success and prosperity.

It doesn’t necessarily have to be international but also national, corporate and vocational cultures. It helps develop a paradigm which can be used in different countries and the challenges that businessmen come across from around the world. No doubt CQ takes time to develop but through CQ will a manager understand how cultures vary, how it affects the practice of business, associated behavior, attributes in greeting people and a ranger of business skill which only add value to them and their services in conducting work practice. (Source: Cultural Intelligence in International Business Negotiation, Editorial Review, Cultural Intelligence, Managing Diversity in IT department through Cultural Intelligence)

Developing Cross cultural Capability P 4 It is often that cultural intelligence is considered to be the same as emotional intelligence but what people don’t realize is that cultural intelligence starts where emotional intelligence ends. Emotional intelligence makes each human being different from one another while cultural intelligence holds those features that are true for a particular group, leaving the gap between the two known as culture.

It was evidenced in a test where an American immigrant manager was mentioning his ideas to two German engineers, who dint pay a heed to his thoughts thus leaving the manager to conclude that Germans are offensive and belligerent. If the expatriate manager had even a small amount of cultural intelligence he would have been able to distinguish the real issue rather than making such a remark and being emotionally driven (emotional intelligent). This is because Germans were simply being themselves while the expatriate manager presented his ideas in a way he would usually do, which is not in line with the Germans.

Had the manager realized the cultural difference, he would have been able to present the idea in a different manner but making the same point across them. One important element here which relates both cultural intelligence and emotional intelligence is the susceptibility to postpone the judgment so that one is able to think before acting, according to psychologist Daniel Goleman. That is why a person with high cultural intelligence will start registering quickly than from a low culturally intelligent person.

It is only once the person is able to digest different patterns of attitude and behavior which enables him/her to predict the next step and effectively make the conversation much more meaningful. (Source: Cultural Intelligence and Emotional Intelligence) Conventionally, the understanding of culture with respect to international business has been influenced by certain number of factors. Firstly the cultural distance that exists in different countries in which the business is being carried out. It is possible that the same business being

Developing Cross cultural Capability P 5 carried out in one country might be difficult to be carried out in another. Secondly the direct impact culture of the entities business on different departments such as marketing rather than on corporate finance. And thirdly where a firm is dominated by workforces who are emigrants, the entity will be required to give particular attention to the recruitment, selection and training of those employees so that they are able to not just adapt to the cultural environment but also excel in their careers.

This can be evidenced by the observation of Mike Vizard, Editorial Director for Ziff-Davis Enterprise that Russians and Indians like to work alone, while Caucasian workforces create their own groups based on sex, age and civilization. Asians on the other hand form their groups on national and ancestral basis and now Afro-Americans have started their own circle. Therefore it is imminent that cultural intelligence is related to the organization and international managers in one way or the other. (Source: Cultural Intelligence: Put it (High) on the Asian HRM Agenda, Managing Diversity in IT department through Cultural Intelligence)

Cultural Intelligence is important on certain obvious moments particularly when conducting business with foreign clients. It can be with respect to communication barrier, be it verbally or non-verbally, or a hold up in having the same outlook in understanding the way one is dealing with another with different cultural background. Therefore managers will realize that they require some sort of information which will help bridge this gap and hence make the communication process of sending signals with the client easier to digest.

Cultural Intelligence is also important when dealing and negotiating terms with a prospective joint venture international partner. This is because no simple relationship exists as a long term relationship is expected to be materialized therefore the risks and Developing Cross cultural Capability P 6 rewards are a lot higher than before. Issues and motion between the set parties is significantly raised as possible misunderstandings due to cross cultural differences exist.

This is why it is usually expected that international joint ventures will most probably fall, whose reasons are closely related to deficiency in cultural intelligence between the parties. (Source: Cultural Intelligence: Put it (High) on the Asian HRM Agenda) Quite often international managers are required to have professional relationships with emigrant and local contemporaries. That is why it is now understood for expatriates to have high level of cultural intelligence in order for them to achieve the desired results.

Also firms often send employees abroad for training purpose and in order to work successfully with both the local and emigrant workers, it is necessary that training in cultural variety needs to be addressed on an ongoing basis. (Source: Cultural Intelligence: Put it (High) on the Asian HRM Agenda) Cultural intelligence also acts as a source of motivation for both local and expatriates co-workers as different things motivate different people. Most international managers are familiar with the fact that rewards have to be tailored to meet the requirements of the local workers.

There are however a difference in the compensation that expatriates receive than that of locals therefore in order for locals to have that level of benefits then it is necessary for them to have a high level of cultural intelligence. (Source: Cultural Intelligence: Put it (High) on the Asian HRM Agenda) Cultural intelligence also helps resolve intercultural issues. Hall pointed out that cultures of different context require different ways of dealing with them. High context culture use indirect means to resolve disputes, usually by involving a third party, whereas Developing Cross cultural Capability P 7 those of low cultural context use direct methods (confrontation) of settling differences.

Both of these aspects require the use of cultural intelligence while international managers are specially required to possess such skills. (Source: Cultural Intelligence: Put it (High) on the Asian HRM Agenda) But with the recent trend towards globalization, cultural differences pertaining to national level are now seen to reduce as now more and more emphasis is being given for better understanding of different cultures.

Globalization will further enhance the level of interactions with people in different cultures, giving rise to further cultural differences. Gaining the knowledge about another culture will give a basic understanding of cultural intelligence and yet another effective competency in dealing with international business affairs. Further training will be required for cultural intelligence as more and more challenging international tasks will push the managers in search for new horizons.

In line with this phenomenon quite a few government have created opportunities for developing the local communities by innovating their existing culture with policies of multi-culture. Thereby creating national identities who will stand out in an international level and continue to sustain the international competition in this age of globalization. (Source: Abstract, Managing Diversity in IT department through Cultural Intelligence, International Cultural Difference) In Asia, this is more problematic as less importance and value is given to cultural skills by both the local and foreign firms, which is vastly seen in local workforce.

That is why a serious threat is posed as their performance is being compromised. For success, it would be a lot better if such organizations and individual as well, possess this collective Exploring the Legal Profession P 8 intellect as it would enable them to force their way through every barrier related to culture. No doubt this will be a difficult act but being mindful (one of the components of cultural intelligence) will definitely separate an individual (even an organization) from the crowd.

Therefore as globalization continues to get in the root of labor, those who will harness the way to communicate and be culturally sensitive will definitely prosper. That is why international managers are not just required to have knowledge of cultural intelligence but also focus on the repercussions for human resource management. (Source: Abstract, Managing Diversity in IT department through Cultural Intelligence) People with the diverse backgrounds can productively and effectively contribute in organizational operations for which management is required to create a culture in an organization.

Instead of just diversifying superficially example skin color, training programs offered by the HR management will help in collaborating diverse employees to make the most of them. Even though managers might not be so fond of it but by making it mandatory in the policies of the company, managers will be forced to follow for the betterment of the organization. By keeping such attitude the productivity level will most certainly fall of the manager therefore it is in his/her own self interest to actively pursue cultural intelligence so that not only does the entity progress but one’s skills also enhance.

(Source: Managing Diversity in IT department through Cultural Intelligence) Experience, like in any other case, counts heavily as well as in cultural intelligence. Managers with more business practice are likely to have a higher level of cultural intelligence as they become familiar and as a routine deal with culturally diverse workforce. As talented and educated a lower level manager is, he/she cannot handle such situations as cultural intelligence is Exploring the Legal Profession P 9 not innate rather, it’s nurtured and ingrained by practice and experience.

That is why higher level managers are expected to already have this quality since in some organizations; it used to be known as ‘global business practices’. (Source: Echeat) Conclusion Epitomizing, in is highly dynamic environment and global market where mergers and take over have become really common, it is important for an international manager to amalgamate easily in new cultures. Proper planned strategies are being laid down to recruit and train managers with this global aspect as a part of administrating business.

Therefore cultural intelligence assists not just managers but organizations as well. By halting the initial perception about their culture and learn to pay attention to the fine details in a creative manner, this will enable them to send and receive the right signals thereby achieving the quality of making the right form of communication at a given situation. An effective international manager is one who is culturally intellect, therefore connecting with people of different culture with fairly ease and buoyancy.

This is because an international manager can easily understand what and why a particular activity is taking place in all sorts of environment. This gives considerable competitive advantage and those ignoring this fact are certainly taking a big risk (Professor Hong Hai). Decision making will become more effective, negotiating skills will further enhance across different cultures and hence be lead and motivate by example in cultural diverse environment in order to administer their international career in a positive manner. (Source: People Skills for Global Business, Center for Leadership and Cultural Intelligence)

 Introduction

The journey of insurance liberalization process in India is now several years old. The first major milestone in this journey has been the passing of Insurance Regulatory and Development Authority Act, 1999. This along with amendments to the Insurance Act 1983, LIC and GIC Acts paves the way for the entry of private players and possibly the privatization of the hitherto public monopolies LIC and GIC. Opening up of insurance to private sector including foreign participation has resulted into various opportunities and challenges.

Concept of insurance

In our daily life, whenever there is uncertainly there is an involvement of risk. The instinct of security against such risk is one of the basic motivating forces for determining human attitudes. As a sequel to this quest for security, the concept of insurance must have been born. The urge to provide insurance or protection against the loss of life and property must have promoted people to make some sort of sacrifice willingly in order to achieve security through collective co-operation. In this sense, the story of insurance is probably as old as the story of mankind.

Life Insurance

In particular provides protection to household against the risk of premature death of its income earning member. Life insurance in modern times also provides protection against other life related risks such as that of longevity (i. e. risk of outliving of source of income) and risk of disabled and sickness (health insurance). The products provide for longevity are pensions and annuities (insurance against old age). Non-life insurance provides protection against accidents, property damage, theft and other liabilities. Non-life insurance contracts are typically shorter in duration as compared to life insurance contracts.

The bundling together of risk coverage and saving is peculiar of life insurance. Life insurance provides both protection and investment. Insurance is a boon to business concerns. Insurance provides short range and long range relief. The short-term relief is aimed at protecting the insured from loss of property and life by distributing the loss amongst large number of persons through the medium of professional risk bearers such as insurers. It enables a businessman to face an unforeseen loss and, therefore, he need not worry about the possible loss. The long-range object being the economic and industrial growth of the country by making an investment of huge funds available with insurers in the organized industry and commerce.

General Insurance

Prior to nationalizations of General insurance industry in 1973 the GIC Act was passed in the Parliament in 1971, but it came into effect in 1973. There was 107 General insurance companies including branches of foreign companies operating in the country upon nationalization, these companies were amalgamated and grouped into the following four subsidiaries of GIC such as National Insurance Co. Ltd. , Calcutta; The New India Assurance Co. Ltd. , Mumbai; The Oriental Insurance Co. Ltd. , New Delhi and United India Insurance Co. Ltd. , Chennai and Now delinked. General insurance business in India is broadly divided into fire, marine and miscellaneous GIC apart from directly handling Aviation and Reinsurance business administers the Comprehensive Crop Insurance Scheme, Personal Accident Insurance, Social Security Scheme etc.

The GIC and its subsidiaries in keeping with the objective of nationalization to spread the message of insurance far and wide and to provide insurance protection to weaker section of the society are making efforts to design new covers and also to popularize other non-traditional business.

Liberalization of Insurance

The comprehensive regulation of insurance business in India was brought into effect with the enactment of the Insurance Act, 1983.

It tried to create a strong and powerful supervision and regulatory authority in the Controller of Insurance with powers to direct, advise, investigate, register and liquidate insurance companies etc. However, consequent upon the nationalization of insurance business, most of the regulatory functions were taken away from the Controller of Insurance and vested in the insurers themselves. The Government of India in 1993 had set up a high powered committee by R. N. Malhotra, former Governor, Reserve Bank of India, to examine the structure of the insurance industry and recommend changes to ake it more efficient and competitive keeping in view the structural changes in other parts of the financial system on the country. Malhotra Committee’s Recommendations The committee submitted its report in January 1994 recommending that private insurers be allowed to co-exist along with government companies like LIC and GIC companies. This recommendation had been prompted by several factors such as need for greater deeper insurance coverage in the economy, and a much a greater scale of mobilization of funds from the economy, and a much a greater scale of mobilization of funds from the economy for infrastructural development.

Liberalization of the insurance sector is at least partly driven by fiscal necessity of tapping the big reserve of savings in the economy. Committee’s recommendations were as follows: Raising the capital base of LIC and GIC up to Rs. 200 crores, half retained by the government and rest sold to the public at large with suitable reservations for its employees.  Private sector is granted to enter insurance industry with a minimum paid up capital of Rs. 100 crores.  Foreign insurance be allowed to enter by floating an Indian company preferably a joint venture with Indian partners. Steps are initiated to set up a strong and effective insurance regulatory in the form of a statutory autonomous board on the lines of SEBI.  Limited number of private companies to be allowed in the sector. But no firm is allowed in the sector. But no firm is allowed to operate in both lines of insurance (life or non-life). Tariff Advisory Committee (TAC) is delinked form GIC to function as a separate statuary body under necessary supervision by the insurance regulatory authority. All insurance companies be treated on equal footing and governed by the provisions of insurance Act.

No special dispensation is given to government companies. Setting up of a strong and effective regulatory body with independent source for financing before allowing private companies into sector.

Competition to Government Sector

Government companies have now to face competition to private sector insurance companies not only in issuing various range of insurance products but also in various aspects in terms of customer service, channels of distribution, effective techniques of selling the products etc. privatization of the insurance sector has opened the doors to innovations in the way business can be transacted.

New age insurance companies are embarking on new concepts and more cost effective way of transacting business. The idea is clear to cater to the maximum business at the lest cost. And slowly with time, the age-old norm prevalent with government companies to expand by setting up branches seems getting lost. Among the techniques that seem to catching up fast as an alternative to cater to the rural and social sector insurance is hub and spoke arrangement. These along with the participants of NGOs and Self Help Group (SHGs) have done with most of the selling of the rural and social sector policies.

The main challenges is from the commercial banks that have vast network of branches. In this regard, it is important to mention here that LIC has entered into an arrangement with Mangalore based Corporations Bank to leverage their infrastructure for mutual benefit with the insurance monolith acquiring a strategic stake 27 per cent, Corporation Bank has decided to abandon its plans of promoting a life insurance company. The bank will act as a corporate agent for LIC in future and receive commission on policies sold through its branches.

LIC with its branch network of close to 2100 offices will allow Corporation Bank to set up extension centers. ATMs or branches with in its premises. Corporation Bank would in turn implement an effective Cash Flow Management System for LIC. IRDA Act, 1999 Preamble of IRDA Act 1999 reads ‘An Act to provide for the establishment of an authority to protect the interests of holders of insurance policies, to regulate, to promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. Section 14 of IRDA Act, lays the duties, powers and functions of the authority.

The powers and functions of the authority. The powers and functions of the Authority shall include the following.  Issue to the applicant a certificate of registration, to renew, modify withdraw, suspend or cancel such registration.  To protect the interest of policy holders in all matters concerning nomination of policy, surrender value f policy, insurable interest, settlement of insurance claims, other terms and conditions of contract of insurance.  Specifying requisite qualification and practical training for insurance intermediates and agents. Specifying code of conduct for surveyors and loss assessors.  Promoting efficiency in the conduct of insurance business .Promoting and regulating professional regulators connected with the insurance and reinsurance business.Specifying the form and manner in which books of accounts will be maintained and statement of accounts rendered by insurers and insurance intermediaries. Adjudication of disputes between insurers and intermediates.  Specifying the percentage of life insurance and general and general business to be undertaken by the insurers in rural or social sectors etc.

Section 25 provides that Insurance Advisory Committee will be constituted and shall consist of not more than 25 members. Section 26 provides that Authority may in consultation with Insurance Advisory Committee make regulations consists with this Act and the rules made there under to carry the purpose of this Act. Section 29 seeks amendment in certain provisions of Insurance Act, 1938 in the manner as set out in First Schedule. The amendments to the Insurance Act are consequential in order to empower IRDA to effectively regulate, promote, and ensure orderly growth of the Insurance industry.

Impact of Liberalization

While nationalized insurance companies have done a commendable job in extending volume of the business opening up of insurance sector to private players was a necessity in the context of liberalization of financial sector. If traditional infrastructural and semipublic goods industries such as banking, airlines, telecom, power etc. have significant private sector presence, continuing state monopoly in provision of insurance was indefensible and therefore, the privatization of insurance has been done as discussed earlier.

Its impact has to be seen in the form of creating various opportunities and challenges.

Opportunities :

• Privatization if Insurance was eliminated the monopolistic business of Life Insurance Corporation of India. It may help to cover the wide range of risk in general insurance and also in life insurance. It helps to introduce new range of products.
• It would also result in better customer services and help improve the variety and price of insurance products.
• The entry of new player would speed up the spread of both life and general insurance.
• It will increase the insurance penetration and measure of density.
• Entry of private players will ensure the mobilization of funds that can be utilized for the purpose of infrastructure development.
• Allowing of commercial banks into insurance business will help to mobilization of funds from the rural areas because of the availability of vast branches of the banks.
• Most important not the least tremendous employment opportunities will be created in the field of insurance which is a burning problem of the presence day today issues.

Current Scenario

After opening up of insurance in private sector, various leading private companies including joint ventures have entered the fields of insurance both life and non-life business. Tata – AIG, Birla Sun life, HDFC standard life Insurance, Reliance General Insurance, Royal Sundaram Alliance Insurance, Bajaj Auto Alliance, IFFCO Tokio General Insurance, INA Vysya Life Insurance, SBI Life Insurance, Dabur CJU Life Insurance and Max New York Life. SBI Life insurance has launched three products Sanjeevan, Sukhjeevan and Young Sanjeevan so far and it has already sold 320 policies under its plan.

Conclusion

From the above discussion we can conclude that the entry of private players in insurance business is needful and justifiable in order to enhance the efficiency of operations, achieving greater density and insurance coverage in the country and for a greater mobilization of long term savings for long gestation infrastructure prefects. New players should not be treated as rivalries to government companies, but they can supplement in achieving the objective of growth of insurance business in india.

Article: Information technology: a growth navigator for small scale industries in India Small scale industries (SSI) have a significant role in the Indian economy in view of its contribution to production, employment, and export. However, since 1991 small scale industries in India find themselves in an intensely competitive environment due to globalization, domestic economic liberalization, and dilution of sector specific protective measures. The formation of World Trade Organization in 1995 also forced the member countries (including India) to drastically scale down the restrictions on import.

This article analyzes the various factors influencing the growth of small scale industries in India. Information Technology (IT) is one of the significant factors, which is, in general, not used by the small scale industries in India for their production and business process, in the growth of small scale industries in India. Further on the basis of Nolan’s ‘Stages of growth model’ the stages of use of information technology in small scale industries are studied. Small Scale Industry in India: An Analysis in the Context of Liberalization

Small and Micro producers are crucial in developing economies, and their role is even greater in the largely rural economies of South Asia. In India as well, the sector is the second largest employer, after agriculture, and accounts for nearly 6 percent of the country’s GDP. India was an exception in that it gave the small-scale sector large incentives, and protection, in the period 1948-1991, going to the extent of reserving certain production lines solely for the sector.

In the historical context of this, this paper shall attempt to analyze the issues peculiar to a ‘smalls scale of production’ in India in an increasingly globalised scenario. It shall also look at some of the other issues plaguing the sector such as credit availability and maintaining quality standards. Movement of toxic metals from small-scale industrial areas: a case study from Delhi, India In India, an estimated 70% of the total industrial pollution load is attributed to Small and Medium Enterprises (SMEs). Among SMEs, small-scale industries continue to use obsolete technologies with no stringent rules for pollution control.

Consequently, waste generated from them is generally dumped without treatment. These facts are strengthened from the analysis conducted on solid waste and wastewater samples from five industrial areas, water samples of river Yamuna, the tributary of river Ganges and solid waste samples of landfill areas in Delhi. Toxic metal concentrations were analysed and found in high concentration in collected samples. Besides that, fractionation study was also done. The data obtained from this study identify that the wastes with high concentrations of toxic metals, calling for the introduction of point source control of waste generation.

Each of these stakeholders gains when a company improves the value Hahn. The common key processes that should be used to improve the value and supply chain revolve around the customer, stakeholder, and supplier. Strategic planning to change management to customer service all serve a purpose. That purpose is to enable companies and partners to do business in such a different way that creates competitive advantage. When performance is elevated to a level in which success is imminent the company not only sees increase in profits but also sees new levels in customer service, inventory, production, and synchronization of key operations.

Country Risk Analysis – Struck Entering Japan Any number of risks can affect an organization’s global operations and the way to overcome these risks is by implementing advantageous strategic goals and strategies. In any new business venture a firm must take risks to achieve objectives set. When expanding into a new country a higher degree of risk must be taken. However, a higher degree of risk does not mean the company will be venerable to losses because of changes in the economies or political situations in countries in which they are investing.

Understanding the types of risk involved and properly planning for these risks will allow the company to mitigate most problems and revert losses. As described by A. M. Best’s assessment (2009) of the three categories of risk, Japan has been rated low in economic, political, and financial systems. Economic Environment Japan is the second largest economy in the world behind the United States. Yet, revised figures for the final quarter of 2009 grew by less than what was estimated, 1. 1 percent. “Japan continues to face the problem of deflation” (BBC News, 2010, Para. 6).

Because deflation is bad for the economy, the tendency is for consumers and businesses to delay in making major purchases. With the value of currency rising all he higher value of currency to purchase more. Bank of Japan board members during their February meeting had mixed views on the economy. Some members believe that upside and downside risks were becoming balanced, whereas others felt “considerable downside risks to the economy’ (Toasts, 2010, Para. 2). Believing that brand recognition alone could aid in the success of expansion into Japan was not a good move for Struck.

Because the Japanese have a taste for everything western Struck was sure about the marketability of the Japanese. Unfortunately, Struck suffered because of “bad predictions” (Gators, 2009, Para. 0) and not enough information gathered on Japan’s economy. Political Environment Presently, Japanese Prime Minister Taro Ass is struggling to implement strategies to bolster Japan’s economy. The Liberal Democratic Party (LDAP) has not passed a supplemental budget needed to fund the first economic stimulus package discussed back in October 2008 (Hashish, 2009).

The political paralysis of Japan takes part in the global financial crisis causing the eroding of consumer product purchases. Once a business is up and running the worry becomes entering and enforcing contracts with errs and sellers. Even with guidelines set in formulating and enforcing contracts variations are still placed on certain ways a country views the legal system. Japan is a civil law system country encouraging shorter and less specific contracts because the general civic code deals with many pertinent issues (Daniels, Redheaded ; Sullivan, 2007).

The wealth of the country decides on what business regulation procedures are required when opening a business. With free trade becoming more popular in countries that at one time placed strict regulations on foreign businesses he increase in capital has effected multinational and international companies to expand outside their home countries. The relaxed restrictions result in opportunities for people to experience global products and brands. Components of a Global Business Plan A business plan tells a story about a company’s strategies and goals.

Along with this information, a business plan also requires specific components. The first section must start with an executive summary. The executive summary is a brief synopsis of the business plan that includes a description of the nature of the business, a reason rodents or services is needed, description of the organization and management team, and a brief explanation on the sales and marketing approach. The next section is more detailed information taken from the executive summary including the business, market analysis, financing, and management sections.

Conclusion Stakeholders can be anyone directly and indirectly associated with the company, such as customers, suppliers, employees, and shareholders. Each can benefit as well as lose. The key is making sure all activities are streamlined and work in a synchronized manner. When this happens stakeholders benefit by lower costs, new reduce design and development, and trustworthiness of the company. Economic exposure is defined as, “the extent to which a firm’s market value is sensitive to unexpected changes in foreign currency’ (Perry, 2009, Three Types of Foreign Exchange Exposure for Mans, Para. ). Before expanding into another country, researching the economic structure of the country is important. Economic risk comes from the inability of a country to meet financial obligations. Sustaining, and self-governing society (Daniels, Redheaded, & Sullivan, 2007, Para. 1). Creating a majority of people in society that accepts present political views an result in positive benefits including the attraction of foreign investment and international trade. When turmoil among the people and the roles of government exists, friction occur creating unpleasant unrest.

Diebold

1. Before 1997, Diebold manufactured its ATM machines in the United States and sold them internationally via distribution agreements, first with Philips Electronics NV and then with IBM. Why do you think Diebold choose this mode of expanding internationally? What were advantages and disadvantages of this agreement?

Diebold didn’t have the need to expand its business across the boarders before the 1980’s since they already had a massive demand inside of the United States. They used a key international business alliance, distribution alliances when they thought it was time to export their ATM machines internationally. Distribution alliances, such as joint ventures, allow a company to acquire new capacity and expertise, to enter related businesses or new geographic markets, to access greater resource or to share risks. In Diebold’s case, the company was first worried of entering foreign markets alone since it lacked the resources to establish an international presence. Therefore their alliance with Philips and later IBM, permitted them to use their global marketing, sales and service functions.

These two alliances made it possible for Diebold to use Philips and IBM distributions systems and knowledge about international markets, and reputation. Diebold could also take the advantage of using the Brand awareness among consumers. But on the contrary, distribution alliances also has it’s disadvantages such as a clear awareness by both parties of the objective and strategy, an imbalance in levels of expertise, investment or assets, difference in cultures and management styles and sharing profits. In Diebold’s case, the biggest disadvantages were the dissatisfaction of Philips and IBM’s sales efforts, since Diebold’s ATMs were simply part of their product portfolio and therefore not their first priority. But Diebold did not have the proper control of its product in foreign markets, and they didn’t have the ability to adapt to local markets .

They also had to share profits with Philips and IBM.

2. What do you think prompted Diebold to alter its international expansion strategy in 1997 and start setting up wholly owned subsidiaries in most markets? Why do you think the company favored acquisitions as an entry mode?

Diebold wasn’t satisfied with their alliances with IBM in 1997. They also belived that now they had enough of experience and expertise to operate their business internationally themselves. With this in hand they thought that buying shares from IBM and wholly owning subsidiaries in most markets allowed them to attain greater market shares by gaining direct control over distribution. This also allowed the company to adapt better to local markets, and there were many differences in different markets in the way that the products and services were used.

Diebold therefore acquired local manufacturing presence, which facilitated local customization and drove forward sales. The company favored acquisitions as an entry mode since it permitted to generate cost efficiency through economies of scale, then increased value generation, revenue, market shares and reduced the cost of capital. Diebold’s acquisitions also reduced tax, and were beneficial entering new markets, when introducing new products and gained higher competitiveness.

3. Diebold entered China via a joint venture, as opposed to a wholly owned subsidiary. Why do you think they did this?

There were no acquisition opportunity for Diebold to enter China’s market. But they forecasted a very important potential of demand there. To be able to enter this new market they were therefore in need to share the risks and establish a manufacturing and distribution joint venture. By keeping an ownership in majority position, they shared the financial risks but kept high control over the production and distribution in China.

4. Is Diebold pursuing a global standardization strategy or a localization strategy? Do you think this choice of strategy has impacted upon its choice of entry mode? How?

Diebold is generally pursuing a localization strategy. There are local differences in the way ATMs are used according to the customs and uses of different markets, which requires certain adaptations to the local market.

Diebold headquarters believed that adapting themselves to local markets would be the key to increase products appeal and with that increase sales. For example, in part of Asia, many customers pay their utility bills with cash via ATMs. Then, to gain market shares, Diebold had to adapt its machines in the way that they can both accept and count stacks of up to 100 currency notes, and weed out counterfeits. However, we can also see that Diebold can use sometimes a global standardization strategy. With the acquisition of the Brazilian company Procomp, they found a potential large business area to deal with the electronic voting machine business. It had a huge success in Brazil, and as a consequence, Diebold saw an opportunity to globalize the electronic voting machine business to new areas and new markets. This strategy highly affected Diebold’s choice of entry mode.

Since they believed it was important to adapt its products to the local market, the fact that they operated a foreign acquisition binge and had mostly wholly owned subsidiaries where truly important. In those cases, Diebold could maintain operational control over its acquisitions, but it could also take advantage of foreign management and technical expertise, better integrate its ATMs machines developments and operate quick execution of strategic priorities according to the local market it was implemented in. As a consequence the need for local knowledge and better adaptation was reached by their acquisitions in foreign markets.

The Globalization of Health Care

1. What are the facilitating developments that have allowed health care to start globalizing?

The beginning of health care globalization appeared with diagnostic procedures and communication technologies. As there was a shortage of radiologists in the United States, the price of diagnostics was very high, and competent persons in other countries were available to read the images and make diagnostics, the demand for radiologists moved to foreign countries. Later, health care globalized because of the high cost of medical intervention in the United States. People can get the same service outside the United States boundaries, in Mexico, India or Singapore for example, for much cheaper, often including the travel expenses. Moreover, there was the fact that a lot of American citizens are not insured or are under insurance, which can lead to high copayments for expensive procedures, and then abroad treatment is far cheaper. Also, there is the emergence of high quality hospitals in foreign places. As the medical service is equivalent to the same service in the US, and the price is much cheaper, people tend to move abroad to get their hospitalization. Furthermore, the costs of insuring workforces are rising, which makes American companies to move to foreign markets. Finally, insurance companies use international hospitals to experiment payments for foreign treatments.

2. Who benefits from the globalization of health care? Who are the losers?

Considering the medical services provided outside the United States equivalent to the one received inside the United States, the first beneficiaries from the globalization of health care are the consumers, especially the ones who are not insured or under insurance. They will have access to the same service for a price that can be a lot lower than the one received in the United States. The second beneficiary from the globalization of health care is the country and the ones who provide the medical care outside the United States to US citizens. Indeed the demand increases as long as people move abroad to obtain medical care. The third beneficiaries from the globalization of health care are some insurance companies because the payout to hospitals and doctors would be much cheaper to medical care outside the United States. On the other hand, the people who are not benefiting from the globalization of health care are the United States and the medical operators inside the United States such as doctors, hospitals and surgeons. A globalization of health care leads to that they receive less patients and less demand for their services.

3. Are there any risks associated with the globalization of health care? Can these risks be mitigated? How?

The first concern and risk associated with the globalization of health care is the quality of medical care provided in other countries. However, this
risk is mitigated by the fact that medical tourists usually use new private hospitals where the medical care and medical standards are respected and are equivalent to the ones provided in the United States. Another risk could be the communication difficulties between patients and medical practitioners since it is likely to happen that the two parties would have different native languages. However, English tend to be worldly accepted, even among medical services, and a lot of medical persons in charge studied in the United States and have strong English education. Another concern could be the time in which the medical care is provided. Indeed, if there is a long distance between the home place of the patient and the location he will be operated, unexpected negative medical problems can happen to the patient if the needs should have been quickly provided.

4. On balance, do you think that the globalization of health care is a good thing, or not?

Usually, competition among industries is a good thing for the consumers and for the industry itself. For the customer, assuming that he is well informed of the quality of the service provided, he has the choice; a wide range of choice according to the price, the quality, the location etc… Consequently he can find the same medical service for a lower price, which is a good thing. Moreover, competition is a good thing for the medical sector too since competition always forces innovations, price lowering etc… Furthermore, if the United States is having troubles with their competitiveness of their medical system, medical tourism might force them to find a better insurance system to keep its citizens having medical care inside its borders. Globalization of health care would also help poor countries to develop high quality facilities.

Logitech

1. In a world without trade, what would happen to the costs that American consumers would have to pay for Logitech’s products?

Wages highly differ from one country to another. The salaries from Taiwan and
China are extremely low compare to the US salaries. Consequently, the costs of production in the US would be a lot higher than the cost of production in low wages countries. Then, the price of a Logitech’s product would be very high because to cover its cost of production and make profit, the company would have to raise the price of the product. In the Logitech case, Wanda, retails for $40, of which only $3 is the production cost from China. This $3 cost would explode if the product was produced in the United States. In my opinion, the American consumers would actually not pay anything for a lot of products (especially digital) in a world without trade since many companies would probably never be able to expand.

2. Explain how trade lowers the costs of making computer peripherals such as mice and keyboards.

In the Logitech case, we can see that the company uses many countries to produce just one product. This permits to produce a high quality product at a low price. It is using two big concepts: economies of scale, and absolute advantage. Economies of scale are the cost advantages that a company obtains due to expansion and outsourcing. For example Logitech manufactures in Asia to reduce the cost of assembling. Absolute advantage is the ability of a party to produce more of a good or service than competitors using the same amount of resources. In other words it is when a country is good (better than others) at doing something. For example, Logitech does its research and development work in Switzerland and performs its marketing, finance, and logistic operations in Fremont, California. When all these trades are combined together, the costs are reduced to the minimum, and Logitech can make high quality computer peripherals such as mice and keyboards at a large quantity and a small price.

3. Use the theory of comparative advantage to explain the way in which Logitech has configured its global operations. Why does the company manufacture in China and Taiwan, undertake basic R&D in California and Switzerland, design products in Ireland, and coordinate marketing and operations from California?

Logitech use the best advantages of each country and labor specialization. It does basic R&D work in Switzerland with 200 employees, its headquarters are in Fremont, California with 450 employees as well as some R&D, the ergonomic designs are developed in Ireland, and the products are manufactured in Taiwan and China. It becomes very cost efficient to break up the work in different countries for different specialization.

4. Who creates more value for Logitech, the 650 people it employs in Fremont and Switzerland, or the 4,000 employees at its Chinese factory? What are the implications of this observation for the argument that free trade is beneficial?

As an example, let’s take the mouse Wang Yan that sells for $40 to American consumers. The 4,000 employees in China add only $3 value to the product, while the 650 people it employs in Fremont and Switzerland then increase $37 to it. It is obvious that these 650 employees add more values to the company. Indeed, it is them who are in charge of the R&D, designs, marketing etc… Consequently we can see that manufacturing requires more labor but actually add less value to the product itself. It allows us to conclude that free trade is highly beneficial because it permits to reduce labor costs when a large amount of unqualified labor is required.

5. Why do you think the company decided to shift its corporate headquarters from Switzerland to Fremont?

I suppose the company decided to shift its corporate headquarters from Switzerland to Fremont because of comparative advantage. It is well known that the Silicon Valley is the best place for Research and Development in the high technology field. I suppose they wanted to hire the best qualified employees in term of technological advances. America is also known as the best country to find financing and to operate marketing and logistics operations.

6. To what extent can Porter’s diamond help explain the choice of Taiwan as a major manufacturing site for Logitech?

In the Logitech case, Taiwan’s factor conditions are represented by the science-based Industrial Park in Hsinchu. The demand conditions are that the Taiwanese were already trained to deal with technology. The relating and supporting industries are that Taiwan was the best as building technology at the lowest cost. The firm strategy, structure, and rivalry were that Taiwan had no domestic rivalry; they provided the lowest cost.

7. Why do you think China is now a favored location for so much high technology manufacturing activity? How will China’s increasing involvement in global trade help that country? How will it help the world’s developed economies? What potential problems are associated with moving work to China?

China is now a favored location for so much high technology manufacturing activity because China’s workers are among the cheapest in the world. I also believe that because they receive so many high technology companies to manufacture to, they also became educated in a certain degree in the high technology manufacturing field. Then, even though some countries have even cheaper labor, they stay in China to not start over educating people. However, the workers are not treated in the developed countries standards. Consequently, China’s increasing involvement in global trade is helping that country to grow its economy, to improve labor’s treatment and to increase wages. The world’s developed economies benefit from free trade and globalization of production in term of product prices and quality of products. It also permits to expand businesses created in developed countries. Associated with moving work to China, the potential problems people argue are the fact that developed countries inhabitants lose jobs to foreign markets. Another problem is about the social responsibility and ethical issues. People argue that it is unethical to use the labor in China since it does not respect the rules of work from developed countries in term of social and ethical field.

Nike

1. Should Nike be held responsible for working conditions in foreign
factories that it does not own, but where subcontractors make products for Nike?

Some people would not held Nike responsible for working conditions in foreign factories that it does not own, but where subcontractors make product for Nike. Ethics and working conditions can be viewed as the product of the culture. It is then subcontractors that establish working conditions according to the law and customs there. Moreover Milton Friedman opinion would tell us than the responsibility of any company such as Nike is to maximize profit, which leads Nike to find the best cost-effective subcontractor.

2. What labor standards regarding safety, working conditions, overtime, and the like, should Nike hold foreign factories to: those prevailing in that country, or those prevailing in the United States?

There are many differences between developed countries, such as the United States, labor standards and under developed or developing countries labor standards. Nike should therefore hold the foreign factories to the labor standards prevailing in those countries. A lot of companies take advantage of the social and working characteristics of these countries, and if Nike would not, it would lose competitiveness, and there would be no point of moving out to foreign countries if it was to follow the US standards. It could have just stayed in the United States. However, it is possible for Nike to also find some ways to increase the working conditions in their factories to receive a better reputation overseas.

3) An income of $2.28 a day, the base pay of Nike factory workers in Indonesia, is double the daily income of about half the working population. Half of all adults in Indonesia are farmers, who receive less than $1 a day. Given this, is it correct to criticize Nike for the low pay rates of its subcontractors in Indonesia?

I think that we shouldn’t criticize Nike for the low pay rates of its subcontractors in Indonesia since this is the reason they moved to another
country: to lower the manufacturing costs. And the result of it is that it gives jobs to Indonesian people, and as we can see, well-paid jobs in this country’s standards. Moreover Nike is not responsible for the wages operated by the subcontractors as long as they follow the Indonesian laws. And Nike is also not responsible for the salary of farmers in this country. This is an Indonesian government issue.

4. Could Nike have handled the negative publicity over sweatshop better? What might it have done differently, not just from a public relations perspective, but also from a policy perspective?

Nike definitely had the possibility to handle the negative publicity over sweatshop better. They used defensive policy of denial, which cost a lot of money and which is not very efficient. Indeed this is less efficient that admitting the mistakes and trying to work on it.

5. Do you think Nike needs to make any changes to its current policy? Is so, what? Should Nike make changes even if they hinder the ability of the company to compete in the market place?

I believe Nike can make changes to its current policy. Even if the changes can affect a little the costs of the subcontractors, its current policy had already a very negative effect on Nike’s image in consumers’ opinions. Nike could make arrangements with international labor agencies to help it correct its working conditions issues, and working on strategies to improve its image of exploiting company oversees.

6. Is the WRC right to argue that the FLA is a tool of industry?

Sometimes the FLA is not able to carry independent audits of international sweatshop. And the WRC, which is an independent tool of organized labor, rejects to make appointments with businesses because it would “jeopardize its independence”. Thus, both organizations appear to not be a perfect tool for industry.

7. If sweatshops are a global problem, what might be a global solution to this problem?

There will always be countries with cheaper labor costs than others; the problem is that some countries do not respect some human rights. Then the solutions would be to economically sanction these countries by stopping trading with them as long as they use illegal methods.

Manzana Insurance, the second largest property insurance company in the country, is currently facing stiff competition from its arch rival Golden Gate Insurance. Over the last few years Manzana Insurance has been facing several operational issues which have led to a substantial decrease in the number of policy renewals. In addition, Golden Gate has come up with aggressive strategies and Manzana faces the possibility of losing its existing policy holders to Golden Gate.

In this study we will look at the major issues Manzana is facing, analyse the causes behind the same and suggest feasible solutions and recommendations to improve its turnaround time. We have recalculated the turnaround time using the mean time required for processing a task (instead of using 95% SCT per request). Further details and calculations are provided in Exhibit 1 – for existing system. Each of the processes RUN, RAP, RAIN and RERUN are processed using a First In, First Out method with priority given in the order RUN, RAP, RAIN and RERUN.

Therefore, the backlog queue is also treated as a priority queue with the priority as mentioned before. Whenever, there is no task or job to be processed, the Server (clerk or employee) waits or remains idle till the Job becomes available. According to our analysis, using the Gantt chart for the existing process, the turnaround time for the existing system turns out to be, 836. 2 minutes, i. e. 1. 86 days. Job Flow and Capacity Utilization From the analysis of the current system, we notice that the distribution and underwriting departments are being efficiently utilized (88% and 82% respectively).

However, the capacity utilization of rating and writing departments is only 76% and 64% respectively. The fact that in spite of under-utilization of resources, Manzana still has a high turnaround time suggests that the prioritizing strategy used is flawed and has to be reworked. The current job flow requires the underwriting teams to process requests only from their assigned territories. This leads to overloading of a team during a particular period while the other teams are heavily under-utilized. This inturn adds to the high turnaround time experienced by Manzana.

Our capacity utilization calculations (Exhibit 3) reveal that there is a lot of volatility in the capacity utilization of the underwriting teams. This leads to overloading of one of the teams while the other teams are underutilised. Manzana should alter its policy with regards to the same and distribute the work load across the three teams irrespective of their assigned territories. The turnaround time using the suggested method of prioritization is given in Exhibit 3. From the corresponding Gantt chart, we see that the new value of TAT is 569. 80 However, this includes the initial setup time of 122.2 minutes (during which the Policy Writer is considered idle and waiting for the job to arrive from the previous departments).

This waiting time would disappear in the steady state case. Therefore, the effective turnaround time is 569. 80 – 122. 2 which is approximately equal to 450 minutes (7. 5 hours or 1 working day). The effective time taken in the Rating department is 515. 8 – 46. 7 which is approximately equal to 470 hours which is slightly higher than 1 working day. Therefore, with our new suggested model, it may be required to account for 20-30 minutes of overtime work to handle the same (or extend the work hours to 8hrs per day)