Question Tag: International business

Search 500 + past questions and counting.
Professional Bodies Filter
Program Filters
Subject Filters
More
Tags Filter
More
Check Box – Levels
Series Filter
More
Topics Filter
More
  • 3 Marks

AT – March 2023 – L3 – Q3f – International taxation

Discuss two harmful effects of double taxation on international trade and investment.

Evaluate TWO (2) harmful effects of double taxation. (3 marks)

Double taxation can have several harmful effects on international trade and investment. Two of the most significant effects are:

  1. Negative Impact on Cross-Border Investments:
    • Double taxation discourages foreign direct investment (FDI) as businesses and individuals are subjected to tax in both the country of source and the country of residence. This leads to reduced profits and makes cross-border investments less attractive, ultimately limiting the flow of capital and technology between countries.
  2. Inhibition of International Trade:
    • The imposition of double taxation creates tax barriers that hinder the free exchange of goods and services between countries. When businesses are taxed twice on the same income, it increases the cost of doing business internationally, reducing the competitiveness of companies engaged in international trade and slowing down economic growth.

In conclusion, double taxation reduces international investments and impedes the growth of cross-border trade, creating unfavorable conditions for global economic cooperation.

  • 4 Marks

CSEG – May 2016 – L2 – Q4c – Strategic management in the globalised workplace

Explain two limitations associated with offshoring, focusing on potential drawbacks for firms engaging in this practice.

Explain TWO limitations that are associated with offshoring. (4 marks)

Limitations of Offshoring are:

i) It can affect the quality of a firm’s product or services offered since the use of third parties breaks the direct link between the firm and its customers.

ii) It can lead to bad publicity to the firm in the home market when consumers perceive moves to offshore operations as leading to domestic jobs losses.

iii) It could lead to loss of control since it increases the scope for third parties not to meet agreed service levels.

  • 8 Marks

CSEG – May 2016 – L2 – Q3b – Strategic management in the globalised workplace

Identify and explain four management orientations in the management of international business, focusing on their philosophies and key features.

Management perception about the global environment is an important factor in shaping its orientation or philosophy in developing a general strategic profile in the international arena.

Required: Identify and explain FOUR management orientations in the management of international business. (8 marks)

(i) Management orientation and organisation for engaging in international business are as follows:

  1. Ethnocentrism orientation
  2. Polycentrism orientation
  3. Regiocentrism orientation
  4. Geocentrism orientation
  5. Ethnocentrism orientation: This is a home country orientation and it’s based on the philosophy that the culture of the home country is superior to that of other countries. The approach, thus, ignores any inter-country differences which exist. Essentially, ethnocentric companies will tend to exhibit the following features:
  • Market the same products with the same marketing programmes in overseas countries as at home.
  • Centralize the marketing function in the home country
  • Standardize the marketing mix
  • Carry out no local market research or adaptation of promotion.

As a result of the above, market opportunities in the overseas markets may not be fully exploited and foreign customers may thus be alienated by the approach. Ethnocentric companies usually focus on its domestic market and sees exports as secondary to domestic marketing. One significant advantage in using this approach is the economies of scale that accrues to the company.

  1. Polycentrism orientation: The polycentrism orientation is based on a philosophy that is exactly in contrast with the ethnocentrism orientation. This orientation believes that each country’s culture is unique. Based on this philosophy, the following features of polycentric companies become evident:
  • It adapts totally the product and the marketing programme to each local environment
  • It establishes largely independent local subsidiaries who are free to formulate their own objectives and plans
  • It decentralizes its marketing management function
  • It invests massively in marketing research in order to be responsive to the local markets.

The result of the above is major increases in turnover. However, loss of economies of scale can seriously damage profitability. Ethnocentric companies tend to think of themselves as having multiple identities, what is usually referred to as multinational corporations.

  1. Regiocentrism orientation: This is a synthesis of ethnocentrism and polycentrism orientations. It is based on the philosophy that there are both similarities and differences between countries that can be incorporated into regional objectives and strategies. Thus, with the approach market segmentation is fulfilled on the basis of similarities in terms of regions. A regiocentric company will find economic, cultural or political similarities among regions in order to cover the similar needs of potential consumers. For instance, nations like India, Pakistan and Bangladesh possess a strong regional identity that can be exploited using same products and strategies. The significant features of regiocentric companies are:
  • It uses an integrated approach to marketing that is based on regional blocks.
  1. Geocentrism orientation: This orientation is similar to regiocentrism orientation. The only difference is that it fails to recognise similarities and differences among regional blocks. Thus, the target of geocentric companies, also known as global companies, is to target consumers who have similar tastes and preferences wherever they may be found on the globe. The main idea of this approach is to borrow from every country what is best. It treats the issues of standardization and adaptation on their merits so as to formulate objectives and strategies that exploit markets fully while minimizing company costs. The aim is to create a global strategy that is fully responsive to local market differences. The essential features of a global company are as follows:
  • It uses an integrated approach to marketing management.
  • It gives due consideration to each country’s condition without allowing any specific country’s culture or condition to dominate.

Take control of your business data with insight and in-depth understanding by taking this course. 

Services

Contact Info

  • +233203701923
    +233543919232
  • info@noohrabusiness.com

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope