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Master of Business Administration- MBA Semester 3
IB0012-Management of Multinational Corporations
(Book ID: B1906)
Assignment (60 Marks)
Note: Answer all questions must be written within 300 to 400 words each.
Each Question carries 10 marks 6 X 10=60.
Q1. What are the benefits of MNCs to home and host countries?
Answer. Following are the main features of MNCs:
Location MNCs has their headquarters in home countries and have their
operational division spread across foreign countries to minimize the cost.
Capital Assets Major portion of the capital assets of the parent company is
owned by the citizens of the companys home country.
Board of Directors Majority of the members of the Board of Directors are
citizens of the home

Q2. What do you understand by global sourcing? What are the different
forms of global sourcing? Elucidate.
Answer. Global Sourcing
A procurement strategy in which a business seeks to find the most cost efficient
location for manufacturing a product, even if the location is in a foreign country. For
example, if a toy manufacturer finds that manufacturing and delivery costs are lower
in a foreign country due to lower wages of foreign employees, the company might
close the domestic factory and use a foreign manufacturer. Global sourcing generally
refers to sourcing outside of a company's traditional market. Two quite different

Q3. What is the need and importance of global strategy for MNCs?
Answer. Global Strategy is a shortened term that covers three areas: global,
multinational and international strategies. Essentially, these three areas refer to those
strategies designed to enable an organisation to achieve its objective of international
expansion.
To create a successful global strategy, managers first must understand the nature of
the global industries and the dynamics of global competitions.
In developing global strategy, it is useful to distinguish between three forms of
international expansion that arise from a companys resources, capabilities and
current international position. If the company is

Q4. How is the performance of employees assessed and appraised in

multinational corporations? Explain in brief.
Answer. Organizations have indentified the importance of performance appraisal
and it has been found in the cases of all big multinational companies that they have
implemented the performance appraisal systems to enhance the productivity of their
employees. There are varieties of different perspectives that evident the importance
of performance management and its measurement (Whitney, 1994). Organization
should present true and fair views of performance appraisal to gain trust of the
employees, their loyalty and job satisfaction are the main core of any organizational
success. So, it results in counter of an

Q5. What are the main reasons pertaining to the inadequate attention
towards issues relating to labour relations in MNCs?
Answer. Following are the Key Issues in International Industrial Relations
(IIR)
Issue 1: Who should handle Labour Relations Headquarter or the subsidiary in the
concerned country the national dissimilarities in economics, political, and legal
systems create diverse labour-relations system across countries, MNCs HQs typically
delegate the control over labour relations to their foreign subsidiaries. Having said
that, the participation of the MNC headquarters in host-country labour relations is
impacted by 4 key elements:

Q6. Explain enterprise risk management? Discuss types of risk in ERM.

Answer. Enterprise risk management (ERM) is the process of planning,
organizing, leading, and controlling the activities of an organization in order to
minimize the effects of risk on an organization's capital and earnings. Enterprise risk
management expands the process to include not just risks associated with accidental
losses, but also financial, strategic, operational, and other risks.
ERM provides a framework for risk management, which typically involves identifying
particular events or circumstances relevant to the organization's objectives (risks and
opportunities), assessing them in terms of likelihood and magnitude of impact,
determining a response strategy, and monitoring progress. By

Spring-2016
Get solved assignments at nominal price of Rs.125
each.
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09882243490