Question Paper

International Business Environment (MB3G1GM): January 2009

Section A : Basic Concepts (30 Marks)

i
.

This section consists of questions with serial number 1 - 30 .

Answer all q uestions.
Each question carries one mark.
Maximum time for answering Section A is 30 Minutes.

1. Which of the following is/are not true about the characteristics of a Multinational
organisation?

e
x
e

<Answer>

I. Key assets and responsibilities are highly centralized .

II. Oversea subsidiary is responsible for identifying and exploiting opp ortunities in the
local environment.
III. Knowledge is developed at the headquarters and passed o nto subsidiaries.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) Both (I) and (III) above.
2. In which of the following Regional Trade Agreements (RTAs) India is a member?
(a) BAFTA
(b) CEFTA
(c) EFTA
(d) NAFTA
(e) SAPTA.
3. Political risk analysis involves macro and micro analyses. In this regard which of the
following is not dealt by macro analysis?
(a) Political stab ility
(b) Composition of ruling party
(c) Strength of opposition party
(d) The lob bying strength of the domestic industrialists
(e) Impact of government policy.
4. Which of the following statements is not true?
(a) The ACFTUC, the only recognized workers union in China is fully controlled by
the communist party of China
(b) India is a federal republic
(c) The Russian political system has characteristics of bo th the presidential and
parliamentary form of government
I. Economic wellbeing.
(d) Japan has a democratic parliamentary form of government
II. Emotional support.
(e) Canada has a bicameral Parliament, consisting of senate and house of co mmons.
III. Suitable family lifestyle.
Which
of the following are the functions of a family?
IV. Socialization of 5.
family
members.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) (I), (II) and (III) above
(d) (II), (III) and (IV) abo ve
(e) All (I), (II), (III) and (IV) above.

Page 1 of 19

<Answer>

<Answer>

<Answer>

<Answer>

6. According to Adler there are five stages that occur in the event of a cultural shock. In <Answer>
which of these stages, the individual tries to understand the new culture and starts moving
away from ethnocentrism?
(a) Contact stage
(b) Disintegration stage
(c) Reintegration stage
(d) Autonomy stage
(e) Independence stage.
7. Which of the following is not true about communicatio n pro cess in China?

<Answer>

(a) In china effective communication is essential for business success

(b) China has a high context culture where a message is properly understood only in
relation to its context
(c) Chinese communication always aims at preserving the harmony of the gro up
(d) In the Chinese context, one should always be moderate and modest in presenting
oneself
(e) In China less attention is paid to non verbal communication.
8. According to Hofstedes analysis France ranks high on

<Answer>

I. Uncertainty avoidance.
II. Individualism.
III. Power distance.
IV. Masculinity.
(a) Both (I) and (II) above
(b) Both (I) and (III) above
(c) Both (I) and (IV) abo ve
(d) (I), (II) and (III) above
(e) (I), (III) and (IV) above.
9. __________ act as a link between the custo mers making bu ying decision and companies

<Answer>

trying to sell their p roducts and services by connecting the buyers and sellers through net.
(a) Infomediaries
(b) Innomediaries
(c) Portals
(d) Market makers
(e) Service providers.
10. Which of the following consist of a group of industries that are closely linked by common
product markets, lab or po ol, similar technology etc.?
(a) R&D consortium
(b) Joint venture
(c) Industrial park
(d) Industrial cluster
(e) IUCRC.
11. In which of the following system(s), there exist a free-market system that allows business
competition and freedo m of choice for bo th consumers and producers?
I. Communism.
II. Socialism.
III.
Capitalism.
(a) Only
(I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) Both (II) and (III) above.

Page 2 of 19

<Answer>

<Answer>

12. The total monetary value of good s and services produced in a country during a financial

<Answer>

year is called
(a) Gross domestic product
(b) Gross national product
(c) Net national product
(d) Net domestic product
(e) Consumption expenditure.
13. Which of the following are included in intellectual property rights?

<Answer>

I. Patent.
II. Trade marks.
III. Copyrights.
IV. Trade secrets.
(a) Both (I) and (III) above
(b) Both (II) and (III) above
(c) Both (II) and (IV) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
14. Which of the following is a direct tax?
(a) Inheritance tax
(b) Excise duty
(c) Customs duty
(d) Sales tax
(e) Octroi.
15. Which of the following acts in India prevents the exploitation of labor by paying unduly
low wages?
(a) The Trade Unions Act, 1926
(b) The Workmens Compensation Act, 1923
(c) The Payment of Wages Act, 1936
(d) The Minimum Wages Act, 1948
(e) The Payment of Bonus Act, 1965.
16. In China, Foreign Direct Investment can be made in the form of

<Answer>

<Answer>

<Answer>

I. Joint Sino-foreign ventures.

II. Cooperative businesses.
III. Exclusively foreig n-owned enterprises.
IV. Cooperative exploitation in China.
(a) (I), (II) and (III) above
(b) (I), (II) and (IV) above
(c) (I), (III) and (IV) above
(d) (II), (III) and (IV) abo ve
(e) All (I), (II), (III) and (IV) above.
17. According to which of the follo wing INCO term, the seller becomes responsible for all
duties until the goods are delivered to the buyer at his premises?
(a) Delivery Duty Paid
(b) Delivery Duty Unpaid
(a)
predatory pricing
(c) Consumers
Delivered Atfrom
Frontier
(b)
Host
governments
(d) Delivered Ex Quayfrom the lo ss of legitimate tax revenue
(c)
(e) National
Deliveredpride
Ex Ship.
(d) Foreign prod ucers from unfair local competition
18. The
of antidumping policies
(e) Domestic producers
fromultimate
unfairobjective
foreign competition.
Pageis3toofpro
19 tect

<Answer>

<Answer>

19. According to Max Webers classification of people, there are three dimensions of social

<Answer>

position. They are

I. Class.
II. Status.
III. Tastes.
IV. Power.
V. Culture.
(a) (I), (II) and (III) above
(b) (I), (II) and (IV) above
(c) (II), (III) and (IV) abo ve
(d) (I), (II) and (V) abo ve
(e) (II), (III) and (V) above.
20. ____________ is an example of a market maker in the business-to-customer segment
(a) Yahoo
(b) Netscape browser
(c) eBay
(d) AOL
(e) ZDnet.
21. Which of the following is the process of communication using eye?
(a) Kinesics
(b) Proxemics
(c) Oculesics
(d) Paralanguage
(e) Symbolism.
22. Which of the following is an advantage of technology transfer to the host country?

<Answer>

<Answer>

<Answer>

(a) Technology diffusion

(b) Technology expertise
(c) Technology transaction
(d) Technology cooperation
(e) Technology up gradation.
23. Social groups formed primarily to accomplish goals are called as

<Answer>

(a) Formal groups

(b) Primary groups
(c) Ad-hoc groups
(d) Secondary groups
(e) Informal groups.
24. Based on their contribution to the companys revenue, some customers worth more to an

<Answer>

MNC than others. MNCs must put in extra effort to retain these customers. In this regard
the MNCs must
I. Deliver consistent product services.
II. Save customers time.
III. Offer peace of mind by offering secure payment mechanisms.
IV. Respect the individuality of the customers.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) (I), (II) and (IV) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.

Page 4 of 19

25. Which of the following is not a nontariff barrier to international trade?

(a) Multi-fiber agreement restrictions
(b) Customs duty
(c) Quotas
(d) Canalization of imports
(e) Voluntary export restriction.
26. Competition has transformed market place from a sellers market place to a buyers

<Answer>

<Answer>

market place, where the buyers focus is o n

(a) Cost
(b) Demand
(c) Benefit
(d) Supply
(e) Value.
27. Which of the following institutions of the European union has the authority to approve the
legislation passed by the commission?

<Answer>

(a) European central bank

(b) Council of Ministers
(c) European commission
(d) European parliament
(e) European council.
28. According to Porter the two factors that decides a nations competitive advantage are

<Answer>

(a) Market competitiveness and factor co nditions

(b) Factor conditions and demand conditions
(c) Market competitiveness and technological conditions
(d) Factor conditions and technological conditions
(e) Political and economic conditions.
29. Which of the following is false about characteristics of culture?

<Answer>

(a) Culture is static

(b) Culture is socially shared
(c) Culture facilitates communicatio n
(d) Culture can be learned
(e) Culture is cu mulative.
30. Which of the following countrys wealthy businessmen are called as Oligarchs?

<Answer>

(a) Russia
(b) Japan
(c) China
(d) Australia
(e) Indonesia.
END OF SECTION A

International Business Environment (MB3G1IB):

January 2009
Section B : Caselets (50 Marks)
Answer
This
Marks
Detailed
section
are
all
explanations
indicated
questions.
con sistsagainst
of
should
questions
each
formquestion.
Page
with
part 5of
serial
ofyour
19number
answer.1 6.

Do not spend more than 110 - 120 minutes on Section B.

Caselet 1
Read the ca selet carefully and answer the following questions:
1. According to Mr. Stewart-Weeks Investing in these new technologies needs to be
seen in terms of the real full return on investment in terms of the applications and
results you get as a result of investing. What care do you think the Sydney hospital
should take while selecting the technology?
2. Many companies like Cisco, Dell, Intel, IBM, Cerner Corp, PowerClinical and
Vocera Communications provided the new technology to the hospital. What
according to are the desirable characteristics of new technology? ( 9 marks)

<Answer>

( 8 marks)
<Answer>

The introduction of wireless technology at a Sydney hospital has helped free up

doctors to divert more attention to patient care, a study has found. But IT experts say
convincing already financially restricted hospital boards to boost their investmen t in
technology systems remains a challenge. A report released by the NTF Group, a
market research body, and commissioned by Cisco Systems, showed patient safety
and waiting times improved substantially following the intro duction of new voiceactivated hands-free commu nications. The before and after study measured the
impact of the new communication technologies on the daily work of emergency
department clinicians and nurses at The Children's Hosp ital at Westmead in Sydney.
Martin Stewart-Weeks, regional director for Cisco Systems' internet business
solutions group, said improving hospital technology was about making staff more
mobile and better connected to the facility's information systems. How do you
actually untether a clinician or a nurse from a particular computer that's stuck on a
desk somewhere so that all this information and all this communication can actually
follow them as they literally run around a hospital? Mr Stewart-Weeks asked.
Connectivity and the mobility piece are absolutely front and centre. The report
said the trial resulted in significant time savings and increased hospital capacity.
Improved efficiency included 20 hours of staff time saved per day while the annual
monetary value of such savings, calculated on the basis of average hospital salaries,
was estimated to be more than $7 million. The probability of a fast or very fast triage
response also increased from 38 per cent to 46 per cent while the prob ability of a
slow or very slow triage response decreased from 42 per cent to 34 per cent. The
trial provided clinicians with wireless communication devices and mobile access to
clinical application s. The new technology was provided by Cisco, Dell, Intel, IBM,
Cerner Corp, PowerClinical and Vocera Communications. It included wireless
networking access points, hands-free communicatio n badges, notebook computers
on wheels and handheld computers, which allowed clinicians wireless access from
the bedside. Investing in these technologies needs to be seen in terms of the real full
return on investment in terms of the applications and results you get as a result of
investing, Mr Stewart-Weeks said.
END OF
CASELET 1

Caselet 2
Read the ca selet carefully and answer the following questions:
3. Explain the various types of economies on the basis of the level of economic <Answer>
development. Which category do you think Philippines econo my belongs to? ( 8 marks)
WHAT distinguishes Manila from other South-East Asian cap itals is the ubiquitous
Jeepney, the loud
ricketythebus
used by
the of
city's
poorer
4. Discuss
different
types
econo
micinhabitants.
indicators Once
to be modified
used to measure the overall
<Answer>
American Jeeps, nowadays most Jeepneys are cobbled together from second-hand
econo mic activity of a country such as Philippines.
( 9 marks)
Japanese lorries. They have become a metaphor for the PhilippinesPage
econo
6 ofmy:
19

inefficient and easily overtaken.

In the 1970s the Philippines was richer than its neighbors. Yet while it chugged
along at growth rates of around 2%, other countries stepped on the gas: it was passed
by Singapo re, Malaysia, Thailand and more recently, by China. A former American
colony, it could have made more of its cultural affinities with the United States,
including the widespread use of English. The incompetent and crooked rule of
Ferdinand Marcos from 1965 to 1986 bears some of the blame for its failure to do
so. A sluggish econo my combined with a fast-growing population has forced some
8m Filipinos equivalent to almost a tenth of the resident population to seek jobs
abroad.
The current president, Gloria Macapagal Arroyo, an econo mist, aspires to see her
country join the ranks of the rich world by 2020. Yet her six years in office have
been marked by political instability, and progress on reforms has been slow.
However, things are looking up. The economy has grown by at least 5% in each of
the past three years, for the first time since the 1970s. In the first quarter of this year,
growth was 6.9%, year-on-year. Soaring remittances from Filipinos overseas help.
Last year they added up to $12.8 billion, equivalent to 11% of GDP. Exports
especially to China and most particularly of microchips are also booming.
Better economic management also helps. Inflation is now 2.6%, down from 8.6% in
2004. Changes made in 2005 have increased tax revenues without hurting growth.
Despite recent wobbles, the government should still come close to balancing the
budget next year, compared with a deficit of over 5% of GDP in 2002.
The country's banks, hurt badly in the 1997 Asian financial crisis, have been slow to
recover, but now they are starting to lend again. Foreign direct investment is picking
up from a low base. Texas Instruments recently chose the Philippines over China for
a $1 billion electronics factory, while Hanjin, a South Korean shipbuilder, will spend
$1.7 billion on its Philippines yard. Foreign mining firms have started to develop
huge untapped mineral reserves.
The Philippines has rapidly emerged as India's main rival in Business-Process
Outsourcing (BPO) and now hosts the call-centres o f many American firms. A recent
study by the Asian Develop ment Bank reckoned that BPO could provide jobs for up
to 11% of those jo ining the Philippines' labour force between no w and 2010.
All good news, but worries remain. However welcome the growth in call-centre
jobs, it is engineering and business graduates who are queueing to take them. A
recent International Labour Organisation study noted that the country's average
annual productivity growth between 2000 and 2005 was just 0.9%, compared with
10.3% in China and 4.9% in India, suggesting that many new job entrants are
underemployed.
END OF
CASELET 2

Caselet 3
Read the ca selet carefully and answer the following questions:
5. What do you think are the general challenges faced by GE while entering the <Answer>
GE has always been a global
company.
After World War II, GEs relationship with
Japanese
market?
( 8 marks)
Japan has grown steadily. GE has built the largest power plant in Japan. GE ventured
into the Japanese6. market
during
Jack
Welchs
days.
Jack
Welch
recollects,
I
first
What are the steps GE needs to take to manage cross cultural differences before <Answer>
came to Japanentering
as a young
in alliance
what was
theculturally
plastic operation,
which community?
was a
into manager
a strategic
with
varied Japanese
( 8 marks)
small venture at GE then, and I arrived in Tokyo in search of partners and markets. I
was lucky to meet and shake hands on a joint venture with Hiroyasu Nagase, the
head of Nagase & Co. GE provided its advanced technology and the product
Page 7 to
ofthe
19

deal, whereas the Japanese counterpart offered its skills in supply chain
management.
Welch recollects, I remember being frustrated by how long the Japanese took to
make a decision. But when they made one, you could bet your house on it. In over
35 years, almost every business relationship I had in Japan turned into an enduring
personal relatio nship.
After its initial success in the power sector, GE ventured into other segments of the
market. GE agreed to establish a 50:50 joint venture in factory automation with
Fanuc o f Japan, the clear market leader in numerical controls for machine tools. This
arrangement was regarded as one of the biggest international deals ever made in
1980s.
Commenting on the deal, Welch said, Ive seen first-hand the value of a Japanese
handshake on a deal. It is more valuable than an ironclad written contract in most
parts of the world. The loyalty of our business partners, their commitment to
excellence, and their devotion to quality has never wavered.
In the mid 1990s, the Japanese economy began to sour. The Japanese started
deregulating their financial markets to attract foreign investment. GE grabbed the
opportunity, and in 1994, acquired Minebea, a $1 b illion con sumer finance company,
subsidiary of a ball-bearing company. During this period, GE also entered into a
joint venture with Toho Mutual Life Insurance.
In the initial stages of its operations in Japan, GE employed US expatriates.
However, as the pace of globalization accelerated, GE reduced the number of
expatriates it employed. As a result, within a year GE reduced expenses by over
$200 million. A US expatriate is hired to manage a J apanese operation on a salary of
$500,000. Welch therefore advised his business leaders to employ smart Japanese
university graduates. However, GE found it difficult to hire the best male Japanese
graduates because they were reluctant to work for foreign companies in Japan.
Welch recollects, Finally, it dawned on me. One of our best opportunities to
differentiate GE fro m Japanese companies was to focus on women. Women were not
the preferred hires for Japanese companies, and few had progressed far in their
organizations. GE tried to position itself as the employer of choice for women by
including in the compensation package benefits such as a day-care center for young
children, one year leave for new parents, and higher wages and shorter working
hours.
END OF
CASELET 3
END OF SECTION B

Section C : Applied Theory (20 Marks)

This section con sists of questions with serial number 7 - 8.
Answer all questions.
Marks are indicated against each question.
Do not spend more than 25 -30 minutes on Section C.
<Answer>

7. What do you understand by political risk? Explain the factors that contribute to
political
worldwide but also brought
withrisk.
it hazards of cyber crimes. In this regard,
( 10 marks)
explain the ways and 8.
means
The to
ever
combat
increasing
cyber crimes.
use of internet has not
Page
only
8 ofboosted
19
the businesses
( 10 marks)
<Answer>

END OF SECTION C
END OF QUESTION PAPER

Page 9 of 19

Suggested Answers
International Business Environment (MB3G1GM): January 2009
Section A: Basic Concepts
Answer

Reason

1. E The follo wing are the characteristics of a multinational company:

< TOP >

I. Key assets and responsibilities are highly decentralized.

II. Oversea subsidiary is responsible for identifying and exploiting opportunities in
the local environment.
III. Knowledge is d eveloped and retained by the subsidiaries.
2. E Among the mentioned Regional Trade Agreements (RTAs) India is a member of
SAPTA.

< TOP >

3. E Impact of government policy is subject matter of microanalysis. < TOP >

4. D Japan has a constitutional monarchy with a parliamentary form of government < TOP >
5. E The follo wing are the functions of a family
Economic wellbeing.
Emotional support.
Suitable family lifestyle.
Socialization of family members.
6. D In the fourth stage which is also called as the autonomy stage , the individual tries to
understand the new culture and starts moving away from ethnocentrism.
7. E In China more attention is paid to nonverbal communication.
8. D According to Hofstedes analysis France ranks high on uncertainty avoidance,
individualism and power distance while masculinity ranks the lowest.

< TOP >

< TOP >

< TOP >
< TOP >

9. A Infomediaries act as a link between the customers making buying decision and
companies trying to sell their products and services by connecting the buyers and
sellers through net.

< TOP >

10. D Industrial cluster consist of a group of industries that are closely linked by common
product markets, labor pool, similar technology etc..

< TOP >

11. C In capitalist system, there exist a free-market system that allows busines s competition
and freedom of choice for both consumers and companies.

< TOP >

12. A The total monetary value measured from the goods and services prod uced in a < TOP >
country for one financial year is called Gross domestic product.
13. E Intellectual property rights broadly include patent, trade marks, copyrights and trade
secrets.
14. A Direct tax is paid by the person on whom it is legally imposed. It cannot be passed on
to someone else. Inheritance tax is an example of direct tax.
15. D The Minimum Wages Act, 1948 , prevents the exploitation of labor by paying unduly
low wages.

< TOP >

< TOP >
< TOP >

16. E In China Foreign Direct Investment can be made in the form of

< TOP >

Joint Sino-foreign ventures.

17. A Under Delivery goods
Duty Cooperative
Exclusively
Paid,
are delivered
the seller
foreign-owned
businesses.
exploitation
to becomes
the buyerinresponsible
atenterprises.
China.
Page
his premises.
10 offor
19 all duties until the

< TOP >

18. E The ultimate objective of anti dumping policies is to protect domestic producers from
unfair foreign co mpetition.
19. B According to Max Webers classification of people there are three dimensions of
social position, they are class, status and power.

< TOP >

< TOP >

20. C eBay is an example of a market maker in the business-to-customer segment. < TOP >
21. C The use of eye in the process of communication is called as Oculesics. < TOP >
22. A Technology diffusion is an advantage o f technology transfer to the host country. < TOP >
23. A Economic, political or social groups formed primarily to accomplish goals are
referred as formal groups.
24. E MNCs might have certain custo mers who are worth more than other in terms of their
contribution to the companys revenue and profitability. MNCs must take some extra
effort to retain these customers. In this regard the MNCs must

< TOP >

< TOP >

Deliver consistent product services.

Save customers time.
Offer peace of mind by offering secure payment mechanisms.
Respect the individuality of the customers.
25. B Customs duty is a tariff barrier. All other restrictions to trade mentioned are non < TOP >
tariff barrier to international trade.
26. E Competition has transformed market place from a sellers market place to a buyers
market place, where the buyers focus is on value.

< TOP >

27. B Council of ministers is authorized to approve the legislation passed by the < TOP >
commission in European union.
28. B According to Porter of the two factors that decides a nations competitive advantage
are factor co nditions and demand conditions.
29. A The follo wing are the basic characteristics of culture:

< TOP >

< TOP >

Culture is dyna mic: Culture is constantly changing. This dynamic aspect makes some
products outdated and ushers in new buying habits.
(a) Thus, the statement that Culture is static, is false.
(b) Culture is socially shared: Culture cannot exist by itself. Members of a society
must share it.
(c) Culture facilitates communication: Culture at times facilitates/imped es
communication. While some global advertisements are effective in many
countries, they are not received well by other countries.
(d) Culture can be learned: Culture is not inherited. It is learned and acquired. The
process of learning makes the individual to acclimatize to social class and to
society.
(e) Culture is cumulative: Culture evolves over many generations; each generation
adds some new patterns of behavior to the existing culture. As a result, over
thousands of years, culture becomes a complex web of patterns and values.
However, over time certain ideas and traditions are also discarded from culture.
30. A In Russia the wealthy businessmen are called as oligarchs.

Page 11 of 19

< TOP >

International Business Environment (MB3G1GM): January 2009

also erase the competitive advantage of well-established firms. It can change industry
Section B : Problems
structures or create completely new industries. Sometimes technology savvy companies, in
their enthusiasm, create new technologies withou t focusing on customer needs.
1. Technology affects industry in many ways. It can intensify competition in an industry and can
The choice of technology for a company must depend on the type of competitive advantage it
seeks to develop. Such a choice can complement the firm's competitive advantage. The
technology chosen must be in tune with the firm's overall strategies. A thorough analysis of all
the firm's technologies is necessary to identify areas where there is scope for cost
minimisation or product differentiation. Coordination amo ng different departments such as
information systems, R&D, transportation, communicatio ns, office automation, and materials
handling is necessary to ensure consistency and to exploit interdependencies among the
departments. Technology can help in achieving this coordination.
The extent to which an organization's competitive advantage depends on technological change
determines the selection of specific technologies and their develop ment. Firms should
concentrate on technologies that have the most sustainable impact on cost or differentiation.
Also, there should be a balance between the cost of improving technolo gy and the benefits
that might occur.
Sometimes firms are forced to choose between conflictin g options. For example, a firm may
have to choose between investing in an established technology or a new technology. As
technologies go through a life cycle and reach maturity stage, the benefit/cost tradeoff will be
less. The tradeoff in mature technologies will be lower compared to that in newer
technologies. But the returns in mature technologies are far more certain compared to newer
technologies.
However, it is extremely difficult to determine whether a particular technology has reached
maturity. Take the case of an aluminu m smelting firm. It may have to choose between
improving its existing Hall-Heroult process or investing in developing carbothermic reduction
(new technology.) Though the Hall-Heroult process was designed before 1900, it is currently
undergoing major improvements in efficiency. Likewise, improvements in the fuel efficiency
of the diesel engine occurred only after 1974. although the technology was over HO years old.
In both these instances, efficiency gains were sought because of rising energy prices. These
technologies could be improved because of improvements in materials technology,
instrumentation, and electronics. So it is difficult to determine in which technology lo invest,
and when to in vest.
Most products use a combination of many technologies or s ub technologies. When a particular
technology is termed as 'mature', it means the technolo gy reached maturity under a particular
combination of sub technologies. It is possible that by changing the combination of these sub
technologies, new technolo gies can b e created . Any improvement in any sub technology going
into a product or process might result in significant improvements in overall performance of
the product.
Hence, a firm trying to be selective in its investments on technology should base its decisions
on the overall impact that a particular technology may have on the company's activities. There
are different types of technolo gies: technolo gies that are innovation s (technologies different
from and unrelated to existing technologies), and technologies that are improvements in
existing technolo gies. However, improvements in existing technologies may not be always
possible. Generally, when improvements in existing technologies are not possible, a firm
discards the existing technology and adopts a new technolog y.
A firm must not limit its choice of technology to only those that offer avenues for major
breakthroughs. Even small improvements in existing technolo gies, though unrelated to the
product or production process, can result i n co mpetitive advantage. Cumulative improvements
in many activities are more su stainable and are more difficult for competitors to replicate than
any single major improvement. The success of Japanese firms, for example, can be attributed
to improvements in technology throughout the value chain, and not to any single pathbreakingSome
advance
of the
in technology.
2.characteristics
Characteristics
of onew
f New
technologies
Techno lo gies
are electro
Page
nic 12
deliverability.
of 19
information

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intensity, customizability, and b undling of p roducts and serv ices .

Electronic deliverability
Mo st new techno lo gies provide electro nic deliverability of serv ices . Some products have
large co mpo nents that can b e delivered electronically. Fo r example, customers can book
reservations online for their air travel. They can ob tain confirmation and tickets through email.
Information intensity
The new techn ological environment can be described in terms of information intensity as
well. All prod ucts and servicees hav e some informati on content. But the amo unt of
information associated with the prod ucts keeps changing. A co mpany that sells cars offers a
lot of information through prod uct man uals on operating ins tructions. On the other hand, a
company that sells ice cream offers no in formation except the name of the flavor and
ingredients. In the past, information on comparative benefits was limit ed and difficult to
collect. There were no indep endent agencies to rely upon. The Web is allowing customers
and organizations to co llect or offer such information easily. Organizations today can offer
information that it is not possible to cover in product manuals.
Customizability
Customizability is another major benefit offered by new informati on technologies. Tod ay
organ izations are able to tailor their products to the sp ecific needs and preferences of
individual custo mers. Fo r example, newspapers prov id e the same information to all buyers,
irrespective of their interests. Online ed itions are cus tomized to offer news & information
that the sub scriber is interested in. Dell Computers offers PCs to its customers based on
their requirements in terms of the right disk space, microprocessor power, and other
features. New information technologies are allowing Dell Co mput ers to offer made-to-order
computers at co mpetitive prices. Other companies operating in this environment and
competing with Dell Computers have to mold their strategies to the realities of new
technolog ical environment.
Bundling of products a nd services
The new technolog ical environment is also characterized by bundling of products and
services. In U.K, upto the 1990 s, custo mers went to bank for their savings and day-to day
transactions. They went to building society for their mortgages. They preferred insurance
agents when they wanted to buy life & property policies, and financial advisors fo r
investments. This is no longer the case. The new technologies enable institution s to offer
bu ndled services to their cust omers. These institutions can no w ad dress all the fin ancial
needs of their custo mers through a single account.
Bundling of prod ucts or services is successful not only because of convenience, but also
because of custo mer's co nfidence in one product/service sp ills over to the other
p roducts/services offered. Custo mers bu ying books at Amazon.com no lo nger buy just
bo oks. There are many cu sto mers who purchas e toys, clothing, tools, and other items along
with bo oks. They do that because they are familiar with the website, and trust the q uality of
products and services it is offering .
3. On the basis of the level of development reached countries can be classified as developed,
underdeveloped, or developing economies.
DEVELOPED ECONOMIES
A developed economy is one, which has reached a very high stage of development. The' per
capita income and standard of living of the people is very high in such countries. Countries
like USA, UK, Germany, Japan, Italy, Canada, and France are highly developed countries.
The term 'underdevelopedUNDERDEVELOPED
econo mies' is relative.ECONOMIES
In general, those countries which have real
per capita income less than 25% of the per capita income of the United States, are considered
as underdeveloped
The
World Bank in countries.
its World Development
According to Report
the United
(1999-2000)
Nations,classified
countries various
in which
countries
per capita
on
realbasis
the
income
of Gross
is lowNational
when compared
Product (GNP)
with the
perper
capita.
capita(GNP
real incomes
is the income
of the United
generated
States
fromof
America,
within
theAustralia,
country as
Canada
alsoDEVELOPING
net
andincomes
Western received
Europe
ECONOMIES
are
from
termed
abroad).
as underdeveloped
According
Page 13
to of
the
countries.
19report, low-

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income countries are those with 1998 GNP per capita of $760 and belo w; and Middle-income
countries are those with GNP per capita ranging between $760 and $9,360. As against them,
the high-income countries which are mostly members of the Organization for Economic Cooperation and Develop ment (OECD) and some others have GNP per capita of$ 9,360 or more.
The International Monetary Fund (IMF) has defined a developing country as follows: "Lowand middle-income countries in which most people have a lower standard of living with
access to fewer goods and services than do most people in high-income countries."
The term 'developing economies' signifies that though still underdeveloped , the process of
development has been initiated in these countries.
Philippine is a developed eco nomies.
4. The most important eco nomic indicators are as follows:
INFLATION AND INDEX NUMBERS

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Inflation is a rise in the general level of prices. Inflation affects the purchasing po wer
of
people's income and wealth (personal income and saving), and the government's ability
to
manage the economy through fiscal and monetary policies (government budgets and
debt,
money supply, interest rates). The tendency to channel funds into different types of investment
and the ability to compete
in worldINCOME
markets (balance of payments, value of the currency)
GDP AND NATIONAL
Gross Domestic Prod uct and National Income are considered to be the most important
are
economic
indicators. by the inflation rate. A low rate of inflation is a basic goal of economic policy
also
influenced
The gross domestic product (GDP) is the broadest indicator of economic output and growth. It
because
it protects
purchasing
in desig
fiscal
covers the goods
and services
prod uced andpower;
consumed helps
in the private,
public,ning
do mestic,
and and monetary policies
to
international sectors of the economy.
National, Income
measuresgrowth
the volume
of commodities
andinvestment
services prod uced
during
a given
promote
economic
and
encourages
in the
production
of goods and services.
period. Alternatively, national income may be defined as the aggregate factor income (Le.,
Fearning of labor and property) which arises from the current prod uction of goods, and services
by the nation's economy. An economy is considered to be prosperous if the GDP and National
income are high.
INTEREST RATES
Interest represents the cost of borrowing money. An interest rate is the annualized percentage
that interest is of the principal of the loan. The level of interest rates for different loans reflects
the length and the risk of the loan. Interest rates have a significant impact on borro wing and
spending. Generally business, household, and government borrowing are stimulated when
interest rates are perceived as high. If interest rates are expected to rise, there is an incentive to
borrow immediately, but if interest rates are expected to fall, the borrowing gets delayed.
Interest rates react to and influence movements of the gross domestic product, money supply,
inflation, and value of the currency.
UNEMPLOYMENT
Unemployment figures indicate the number of persons without jobs who are available for and
actively seeking Work. Thus, unemployment manifests itself in the form of excess supply of
labor over the demand for labo r. The unemployment rate is the percentage of unemployed
persons in the labor force, and the labor force is defined as the sum of the employed and the
Income
distribution
implies the rate
proportion
of total
household
moneytoincome
as economy
received by
unemployed.
The unemployment
is a major
indicator
of the degree
which the
households
in
low-,
middle-,and
high-income
groups.
Income
distribution
focuses
on
provides jobs for those seeking work. It is a key consideration in determining whether
differences
in
the
economic
well-being
of
different
groups
in
the
population.
A
large
disparity
economic growth should be stimulated or restrained. In general, there is an inverse
in
inco me distrib
ution
suggests a society
is divided
into
"haves" and "have-nots," which
relationship
between
unemployment
and thethat
gross
do mestic
product.
raises both economic and
social
concerns.
Economic
growth
is - hindered when purchasing
INCOME DISTRIBUTION
po wer and profit-motivated incentives are not broadly based. Socially,Page
a large
14 of
disparity
19
results

in increasing discord and despair among the population. Measures of poverty are related to the
distribution of income.
FOREIGN EXCHANGE RESERVES
Foreign exchan ge reserves have a strong bearing on the process of economic growth of an
economy. Gold, statutory depository receipts and foreign currency assets- of the central bank
of a country constitute a country's foreign exchange reserves. The fluctuations in foreign
exchange reserves emanate from the movements in the external sector of the economy, In fact,
improvement or deterioration in the country's balance of payment, capital inflow and capital
outflow determine the size of the foreign exchange reserves. Thus, the position of the foreign
exchange reserves shows the state of the country's balance of payments. If the foreign
exchange reserves of a country fall below the absolute minimum level, then the currency of
that country depreciates against foreign currencies. Likewise, if the foreign exchange reserves
are more than the absolute minimum level, then the currency value ap preciates.
INFRASTRUCTURE
Infrastructure has an important place in the study of the business environment within a
country, as it helps in the smooth running of business. It forms a support service facility
without which movement of goods and services, communication and development is limited.
Infrastructure can also be considered as one of the economic indicators of a country. This is
because the economic develop ment of a co untry has to b e accompanied by the development in
infrastructure. The better the infrastructural facilities in a country, the better is the scope for
economic development.
The prosperity of a country depends directly upon the development of industry. Industrial
production not only requires machinery and equipment but also skilled manpower, transport
services, communication facilities, etc. All these facilities and services collectively constitute
the infrastructure of an eco nomy and the development and expansion of these facilities are an
essential pre-condition for increasing industrial production in a country.
5. CHALLENGES OF GLOBALIZATION
The mess ag e for managers in glob al ind ustries is, "Eit her quickl y ado pt a g lobal
strategy or see your co mpetitiven ess diminish". Irrespective of the strateg y, MNCs must
constantly raise custo mer expectation s to wards their prod ucts or serv ice and finally, surpass
their expectations. Economies of scale through mass production are no longer helpful in
gaining co mpetitive ad vantage. Mass production and grad ual' improvement are being
replaced by custo mization, building customer relation ships and re-engineering the business
process. If the competitor offers similar ben efits at lower cost or more benefits at the same
cost, then customers switch to the competing brand. To be competitive, companies have to
constantly innovate and make their own prod ucts ob solete. Competition has transformed th e
market place from a seller's market to a buyer's market where the customers' focus is on
value
Customer Centricity in Globalization
Customer loyalty results from customer centric decisions by the company. Customers reward
companies that meet their changing needs promptly, by remaining loyal to the prod uct. Since it
takes years to win customers and o nly mo ments to lo se them, companies have to work on
their customer relations constantly. MNCs must build cu sto mer relationships based on trust,
repu tation and lo yalty. 'Customer d eligh t' means exceed ing the exp ectation s of the
custo mers by anticipating their needs and inquiries. Delighted customers are so lo yal that they
do
not evenrelations
consider and
competing
Customers
attach
lot of importance
service
Customer
supplierproducts.
partnership
s are as
impaortant
as financialtostatements
to
although
it
is
highly
subjective
and
most
difficult
to
measure.
Charles
Schwab's
$
evaluate an MNC's survival and growth prospects. MNCs must be flexible to420
meet the
billion
online
brokerage
houseinmeasures
its performance not
with the profit
and loss
(P&L)
changing
needs
of customers
various demographic-and
psychographic
settings.
Companies
account,
but
with
customer
metrics
that
measure
the
wealth
accumulated
by
customers,
cannot take success for granted and assume that a particular strategy will always work. The
customer
customer
retention
rates. continuous upgradation of prod ucts and
on ly waysatisfaction
to succeed and
in global
markets
is through
Customer Value Expectations
services. Understanding the prod uct characteristics can help the firm understand its
competition in the market better. At the core of the product is the benefit
Page 15
derived.
of 19 People do

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not buy the product but buy the core benefits it offers. For ex amp le, in a televisio n, the
co re b enefit is i nformat ion and entertain ment . The competitors for TV manu facturers
are no t just o ther TV manufacturers but all providers of entertainment and information since
customers can buy any product that provides them audio-visual entertainment and
information. The co re benefi t is packaged in the form of a p ro duct like a TV, music
s ystem, newspapers, computers and cinema halls. Thus, the first stage in the analysis of a
product gives you the core product.
The next stage of the product is called the generic product. Here, the minimum expectations
of customers with regard to the prod uct are considered. Customers exp ect pictu re clarit y
and go od so und fro m a TV. Beyo nd these mi nimu m expectation s is the augmen ted
product in which customers demand certain features that differentiate th e product from the
competi to rs' product. Remote control, the number of channels and warrant y are some of the
differentiating factors. But with an increase in competition and over a period of time, the
augmented product becomes the expected product. Nowadays, all TV manufacturers provide
remote co ntrol facility and warranty. The highest level o f product is the potential prod uct,
in which the prod uct symbol izes the future of technology, design, service and pricing. TV
cum VCD player, TVs that can support internet, un limited warranty and customized
products are examples of the tran sformation in the entertainment and information products
business. MNCs can stay above the competitio n only by aiming at potential products. The
MNCs continue to provide augmented products assuming that they have created a
differentiation, soon the competition will render the differentiation meaningless.
Global Customization
The demands of customers vary according to their demograp hic, cultural and economic
environments. Companies make use of this variety in demand to make customized products.
Mass customization occurs as a result of hig her customer expectations and the firm's
attempts to remain competitive. Stanley M.Davis, who coined the term mass customization,
defines it as "the use of flexible processes and organizational structures to produce varied and
often individually customized products at prices approaching that of standardized, mass
produced alternatives." Kotler defines mass customization as "the ability to prepare on a mass
basis, individually designed products and communications to meet each customer's
requirements."
The underlying philosophy of mass production is. "do not make it until you sell it."
Customization avoids the pitfalls of mass prod uction, which depends on demand forecasts
Repeat
p urchases
account for
a sizab
le po rtio postpones
n o f an MNC's
reventill
ues.theSince
that may
not be accurate.
Mass
customization
production
last customers
minute to
have
access
to
information
about
the
competitors'
products
and
services,
retaining
them is
incorporate as many changes as the custo mer desires. The purp ose of mass customization
is a
challenge
to
co
mpanies.
Customer
retention
is
important
because
of
its
potential
impact
to give exactly what the customer wants. Sometimes overinvestmen t in technology brings theon
the
stream of prod
cash ucts
flows.that
Customer
loyalty can
defined
as. and
"theiscustomers'
riskfuture
of developing
the customer
doesbenot
require
unwilling feeling
to pay offor.
attachment
to
a
company's
people,
products
and
services."
Cu
sto
mer
retention
has the
The key to success in mass customization is to build processes that can seamlessly
and
advantage
of
resulting
in
wo
rd-o
f-mo
uth
pu
blicity,
which
in
turn
will
win
new
custo
mers.
efficiently customize products Glo bal Customer Loyalty
Lo yal customers are less price-sensitive and buy more with every new product introduction.
They also bring in new customers. Customer loyalty occurs at the highest level of customer
satisfaction. Companies have to create awareness about the product on the basis of which,
custo mers build an image about the product. After trial and repeat purchase, if the product
exceeds their expectations, customers become satisfied with the compan y's product and
service and remain loyal to the compan y's products. Since profits are generated through
repeat purchases b y custo mers, MNCs should seek to retain customers. Complaints of
customers are an oppo rtunity for the MNC to rectify mistakes and retain customers. The
problem should be eliminated from the system and should not be allowed to persist i.e. it
should move from correctio n to prevention. Instead o f shiftin g bl ame fro m on e employee to
another, the fi rm sho uld o wn responsibility and assure custo mers of prompt action. Solving
problems is neither cost-effective nor effective in retaining customers. MNCs must anticipate
problems and prevent them from happening before the customers can complain. Finally, MNCs
should invest time and money in improving value-delivery processes and not just satisfying
customers as a remedial measure. Products and services can be improved
Pageby16obtaining
of 19 feedback

from customers at the time of first purchase, repeat purchases and at the time of the
custo mers' dep arture. Feedback can be obtained through informal discussions or formal
surveys. Feedback is particularly impo rtant for MNCs that op erate in many markets with
different expectations. MNCs might have certain customers who are worth more than the
others in terms of their contrib ution to the company's revenues and profitability. MNCs must
make extra efforts to retain such customers. To do that, MNCs must:
Deliver consistent product service
Save customers' time
Offer peace of mind by offering secure payment mechanisms
Respect the individuality of the customer
6. MANAGING CROSS CULTURAL DIFFERENCES

< TOP >

With more and companies entering into strategic alliances at the international level, the need
for managing cultural differences is felt more than ever before. The various steps that
companies sho uld take to manage cultural differences are as follows:
The first step is to examine culture in a more structured way. It refers to identifying the
distinguishing characteristics of the alliance partner's national/eth nic,
industry/organizational and professional cultures. National/ethnic culture is defined by the
norms and values that create the society in which the partner organization is based. These
cultures drive thinking, communicatio ns styles, attitude towards hierarchy, gender roles
and other aspects of individual and group behavior. Company culture reflects the norms
and values of the organization. Professional culture considers the norms and values
embodied by professionals of a specific discipline.
Thorough research has to be conducted with regard to the culture of the co mpany with
which an alliance is to be formed. To gain better insights, the help of a professional who
is knowledgeable about the particular culture can be taken. These professionals anticipate
cultural problems and can thus help in avoiding
them.
The involvement of the management is crucial. It has to act as facilitators to alliance
partners and employees and help in managing cultural shock.
In order to address the cultural differences in each alliance, the alliance champions1'
must coordinate and supervise the process.
Especially in alliances, management has to take into consideration the following steps:
Assessing the alliance readiness of its own organization and that of the potential partner.
Mapping the cultural differences and similarities between the company and the potential
partner.
Identifying the critical success factors.
Focusing on the key drivers that lead to alliance success.
The alliance so formed should develop transparency in compensation and incentive policies to
minimize fear and distrust among employees.

Section C: Applied Theory

7. Political risk refers to political actions that have a negative impact on a firm's value. The< TOP >
process of establishing a causc-and-effect relationship between political factors and business
income is called political risk analysis. Political risk is not confined to a particular country or
region. It is inherent both in developing countries and in highly industrialized economies.
The political environment in the host country is referred to as foreign politics. The
While macro-political risks such as war and an ti-globalization efforts affect the value o f
environment can range from favorable or friendly to hostile or dangerous. Host governments
ail firms in a co untry, micro-political risks like regulation of certain industries adversely affect
view the import of certain products as undesirable because, import of these products can
the value of a firm or firms within that industry. Companies operating internationally have to
affect the balance of payments situation adversely. Imports are also seen as a problem when
deal with foreign politics, domestic po litics, and international politics.
tile goods that are being imp orted are produced locally as well. Imports can hamper local
Foreign Politics
production and can lead to .unemployment problems, and problems
Pagethat
17 of
arise
19 with the

underutilization
of installed
capacities.
This is one
the reasons
imports
countries
world-wid
e should
be harmonized
toofform
internatiowhy
nal tobacco
cyber laws
thatfrom
can be
the US are discouraged
implemented
g lo bally. in Japan. Japan is one of the largest tobacco markets (size $11.4
billion)
in the world.
In Japan,
is good
d emandthrou
for toghbacco
manufactured
the
It
is essential
to distingu
is hthere
criminal
activities
the products
means by
which theyinare
US. Yet imports
from thebyUS
aredoes
minimal,
because between
they arecriminal
restricted
by local
committed.
The Internet,
itself
not distinguish
activities
and regulations
legal
meant to trad
protect
of more
than 113,000
Japanese
tobacco
growers.
Internet
ing.the
It interests
enh ances
the efficiency
of co
mmercial
activities
bu t enables criminal
Domestic Politics
activities too.
Criminal
activities
divided
g categories:
A compan
y may can
facebeprob
lemsinto
duethetofoallowin
political
crisis in its parent country. Often it is
assumed Lev
that eraging
companies
face
political
risk
when
they
operate
beyond mann
their er:
home
country.
technology to commit existing crimes
in a foolproof
Criminals
are
Although
the
risk
is
generally
higher
when
operating
outside
the
country,
the
domestic
using computers to create, store and dist ribute information. If existing laws in a co untry
environment
can also to
throw
up challenges
mat can
be traced
to political
factors.
are not amended
recognize
i nformation
stored
in electro
nic form,
so thatTherefore,
it can be a
firm used
needsastoevid
payence
attention
to
the
happenings
in
its
do
mestic
environment
as
well.
fo r p rosecution, criminals can easily escape the law.
International Politics
Lev eraging technolog y to create new forms of cyber crime: So me peop le cop y
Political
relations
between
also affect
theCriminals
quality of
business
information in electronictwo
formcountries
without autho
rization.
even
steal thebetween
identitiesthe
countries.
A
company
can
face
prob
lems
if
the
relations
between
the
home
country
of people, mak e huge purchases in their name or withdraw mo ney from their bankand
an dthe
host escape.
country Gov
arc not
good.
A
situation
may
arise
in
which
the
firm
may
face
conflicting
orders.
ernments and businesses need to work together to imp rove security systems
FACTORS THAT CONTRIBUTE TO POLITICAL RISK
and prevent identity theft.
To understand and assess
Designthe
ingpolitical
crimes environment
to attack security
of a country
systems
it is necessary
of computers
to identify
in theand
network: Some
criminals
andthat
antisocial
agencies
prevent
legitimate
access
to attitudes
info rmation
systems b and
y
evaluate
factors
can cause
political
instability.
Social
unrest,
of nationals,
initiating
denial
of attacks on
Thethat
lawscanneed
to social
be updated
impose severe
policies
of the host
government
areweb
somesites.
factors
cause
instabtoility.
punishment on tho seSocial
responsible
for such attacks.
Unrest
The
investigatio
n
of
e-crime
requires
law enforcement
o fficials
to acquire
special in
skills.
Factors such as economic hardship, internal
dissension and
insurgency,
differences
They
sho
uld
be
able
to
cap
ture
reliable
eviden
ce
fro
m
computer
systems,
such
as
ideology, religion, race, and culture can be potential sources of social disorder. For example,the
presence
certain
suspicious
filesand
, e-mail,
newsletters
andinweb
sites.
force
religious of
clashes
b etween
Hindu
Muslim
communities
India
afterThe
thelocal
Babripolice
Masjid
was
and
the
judiciary
also
need
to
be
trained
to
h
andle
cyber
crime.
demolished by Hindu fanatics on December 6. 1992, led to the destruction of public and
Cyb
er crime
in vestigat
io places
n demands
ad dition
resources
for governments
to train
personnel
private
properties
at many
all over
India. alThese
incidents
adversely affected
economic
across
the
criminal
justice
system
and
to
educate
peo
ple.
Governments
can
collaborate
with
activities and functioning of b usinesses in India.
large commercial organizations
and
share
the
costs
of
training
person
nel
in
the
skills
needed
Attitude of Nationa ls
to co mbat e-crime. They can also share int elligence on e-crime and develop standard
Due to various reasons such as a colonial past, citizens of certain countries may be hostile to
methods to measure the frequency of cyber crime. The IT ind ustry should take on the
companies from foreign countries. Such hostility can create problems for foreign firms
responsibility of developing product s and business solutio ns that are immune to criminal
operating in the country. Demonstrations in Bangalore again st Kentucky Fried Chicken (KFC)
activities.
in the 1990s, affected KFC's business adversely.
of the Host
Government
Cyb er laws help peop lePolicies
take action
against
cul prits and help enforcement agen cies
prosecute
criminals.
have different
laws These
and <systems
for
nis hment. >
TOP
OF THE
DOCUMENT
Government
policies Different
can affect countries
business operatio
ns of films.
policies
can pu
be
classified
However,
alland
co external
untries take
into Internal
consideration
damage
caused
to the within
victim to
into internalalmost
policies
policies.
policiesthe
regulate
a firm's
operations
assess
the severity
of the crime
anddetermine
determining
pu nishm
ent. Ifoutside
the act the
of the
accused leads
the country
while external
policies
a firm's
operations
country
to minor lo sses to users and their systems, it is co nsidered a misdemeanour and the accused
8. Combating Cyber Crime
is let off with penalties. Criminals, whose acts have led to huge lo sses undergo felon y
convictio ns and are imp risoned for several years depending on the degree of the offence.
In a survey con ducted b y McConell International, it was revealed that most countries do not
have co mprehensive laws to deal with cyber crimes. The laws in most co untries seek to
protect the computer systems of the government but not those of private institutio ns. Even
if adequate laws exist, go vernments face problems in their implementation. The Philipp ines
has the most comprehensive cyb er law but it is unable to enforce it effectively because of
lo opholes in the legal sy stem. Most crimes in cyber space go unnoticed. Crimes (and the
criminals) that are detected go unpunished. Co rru ptio n within law en forcement bodies
presents a con sid erable challenge in tackling organized cyber crime.
To deal with law enforcement problems, busines ses and governments should work in
collabo ratio n, develop policies to curb internal corruption and implement them effectively.
They can enter into information sharing agreements with industry trad e associations and
law enforcement officials and integrate their defen siv e hardware and software systems for
better coordination in crime detection and punishment. Cooperatio n should not be limited to
a country or a group of countries but should ext end across the Page
globe.
18 The
19
of 19cyb er laws of

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