In a short essay, provide an overview of Hofstede’s “Four Dimensions of National Culture”: Individualism versus collectivism, power distance, uncertainty avoidance and masculinity versus femininity.

An individualism based person will only look into his personal progress and development. Such persons are normally unable to grasp the power of collectivism as they are separatists by nature. They normally go after their own self-centered goals. These persons are normally found as unfit for the collective-purposed projects so far.

In this regard, again, Hofstede’s is of the opinion that normally, the people with a self-centered, selfish or worldly approach only go and seek their own interests out of all of the things and matters. They only go for themselves by the end of the day. This sort of approach is called as a commercialized approach only. The approach of thinking that asks a person,”where is my interest in it , where am I standing into this situation.’ These kinds of persons normally do not want to be disturbed in any means or through any circumstances. Until, unless their own selves are not into it.

The persons or a group of people belong to a certain category called collectivism. Collectivism asks them to work not only for themselves or for their individual cause only but to go and serve for the collective interest of a larger group like serving their nation or even humanity in the larger terms.

2. Power Distance Index

Power distance index deals with the scenarios related to power zones of different societies and cultures that can be as many as we think and segregate from within the societies. Every single culture or society has always got so many of the power zones area as we can ponder or think over to them. These areas do influence different men from different perspectives and in a very different manner, indeed. One must try to explore what kind of power zones are there in a single given society.

High power distance index deals with a class of people who accept the Power as some Majesty Force, which should be accepted for sure and in all means. They do not really think of delegation of powers among the weal classes like them even.

3. Uncertainty Avoidance Index:

Hofstede's is of the view that, to an extent, we all have some fears. Our fears can be fewer than our counterparts, but we cannot avoid fully to our fears and uncertainty. That is also the fact that no one out of us always likes to face challenges or a situation of uncertainty by all the time. So he reaches a conclusion statement that there are people in our lives who are less avoiding uncertainty, or there are some people who always like to stay in their comfort zones and try not to face uncertainty at all. 

The law of fearing the unknown is also not a new phenomenon to readers of psychology or human instinct.

High Uncertainty Avoidance Index: These are kinds of people who have got very low tolerance for the uncertainty conditions. They always like to have safe voyages in their lives. They want just to have enough belongings in their lives with a very low tendency to face challenges anymore. They have very little hunger for facing uncertainty.

Low Uncertainty Avoidance Index: These kinds of people can be called as the tigers of their own lives. They always have a high tolerance for risk-taking. They do not avoid challenges and uncertainty at all.

4. Masculinity versus Feminity

Hofstede further elaborates his point as he presents his concept that it is not at all a comparison of Masculinity versus Feminity, but it is a prior comparison among The Tough Versus Tender One. So , he looks at the feminity factor as the most tender in comparison to man when it comes to practical life even.

Question TWO

Explain the limitations of early trade theories, and discuss why born global firms exemplify a contemporary trade approach.

Early trade theories got the failure because the issues were not addressed properly; however, the theories like an absolute advantage as well as the comparative advantage get the fame because they addressed effectiveness to the national as well as the international trades. In modern world there is advancement and international competition is increasing in the firm and as a consequence, there is the incorporation of world economies, benefits are there to businesses; thus, governments are supportive. Moreover, in the absolute advantage as well as the comparative advantage there is the rationale for international trade but early trade theories do not focus on such aspects. Contemporary trade complexities should be noticed and concerned in all the traded theories so there could be benefits related to trades. Some of the issues or causes of failure of the early trade theories are discussed below:

·         Traded products are considered commodities; however, they shouldn’t be considered as commodities only; they or traded goods should be characterized by differentiated features that make them special based on their brand so there should be strong branding in this way.

·         There is costly international transportation that is also a big reason of trade theories failure

·         There are also the tariffs (taxes on export, imports), there are specific regulations based on country to country and also the import barriers. These government restrictions also make issues or hamper in international trade.

·         Low-cost telecommunication services are given by modern telecommunications services or there are beneficial internet facilitate global trade which is cheap.

·         There could be scale economies; due to the large-scale production however, in this way, the commodities may be sold at the lower prices that also cause issues in international trade.

·         There should be foreign direct investment by the internationalized so that banking and retailing can become easy in international trade.

·         Moreover, innovative companies or highly entrepreneurial companies have easy access to the exceptional human talent and due to this these companies or enterprises are getting the benefits in the term of profit and in developing the superior business strategies.

There is the born of global or international trade with globalization because benefits are obtained to the firms; however, entrepreneurship is a part of early internationalizing firms and it may become the norm in international business. Tangible resources are scarce, financial as well as human, resources because other countries are providing better facilities to the people. However, due to the born of the global firms internationalize, there is a growing intensity of international competition. International competition is increasing in the firm and as a result, there is the integration of world economies. Advancement in the international business and globalization is fruitful for many businesses because new strategies and talent are concerned. Early trade theories got the failure as there was not support earlier as compare to the modern world; there was costly international transportation as well as no major benefit to the telecommunication services.

There were issues related to foreign direct investment and less innovative companies. Consequently in the modern world of international business and globalization, the benefits are obtained from such aspects and businesses are growing. In the modern trade absolute advantage as well as the comparative advantage provided benefits of the rationale for international trade. With the advancement in international big business and globalization, their countries are also getting benefits in communication and transportation technologies that may also helpful for the businesses because it is lowering the cost of venturing abroad. With the born global phenomenon can provide benefits to the businesses and there could be a new field of scholarly inquiry.

Question THREE

Business firms may choose to participate in or pursue internationalization strategies for various motivations that could be reactive or strategic in nature.

In a short essay, identify five major motivations for expanding overseas. Classify these motivations as strategic or reactive and provide an example of each.

There are truly international firm who wants to increase their resources and services to the international market; however, a business may want to increase their manufacturing, marketing, sourcing and also other adding activities at the global scale to get the benefits related to the profitability and save costs. The companies may increase their efficiency through focuses more on productivity, and flexibility in the international market. Consequently, the value chain activities, labor or technology, other inputs, partner capabilities can help any business to grow in the international market.

The companies or businesses if pursuing internalization strategies then there could be an increase in the profit and thus there could effectiveness in the market diversification. The companies of the modern world are increasing their revenue due to the increase in their sales; as many companies are getting the 50 % sales profit from abroad there are several reasons for the business to focus on the international market or several motivations for expanding overseas; some of them are given below.

Competitive advantages: Competitive advantages are the major reason because when new companies enter the market and they have better and competitive products then there are chances to get the consumers. Competitive advantages can be achieved in another market with the help of the cost of production, cheap labor and innovative ideas. In this way, the example of apple expansion in china can be given, as the company focus on cheap labor and thus concerned about reactive motivation.

Fewer government regulations: Less government regulation is another aspect that could be focused by the businesses when they decide to internationalize because if there are supportive governmental regulations then companies or businesses can move freely and can freely do the businesses to obtain the profit. However, there less government regulation can help the business to grow in the international market. In this way, the example of Chinese company moves production can be given; as the company moves from the south USA to Mexico because of the less governmental regulations. This is strategic motivation.

Strategic motivation: Strategic motivation is another aspect that could be focused by the businesses when they decide to internationalize because there are chances to focus on the diversifying suppliers at the lower procurement costs and in this way, companies can get more suppliers. In this way, the example of the Samsung manufacturing companies can be taken as they move to China and get the component suppliers. In this way, strategic motivation is the best approach to get suppliers. This is strategic motivation.

Acquire resources: Acquire resources are another aspect that could be focused by the businesses when they decide to internationalize because, in this way, there could be benefits related to the cheap labor as well as acquiring new resources. The major goals are to internationalize to get cheaper and advance resources. Acquire resources also help to pursue internalization strategies then there could be effective in the earnings and consequently, there could effectiveness in the market diversification. However, the example of internationalizes companies that move to India can be taken in this that internationalizes for manpower and cheap labor. This is strategic motivation.

Market demand: Market demand another aspect that could be focused by the businesses when they decide to internationalize because, in this way, companies can effectively focus on selling a product and discovers that how the product can be sold according to the demand in certain areas. To increase efficiency through focuses more on productivity, and flexibility in the international market, companies can sell their products according to the location and demand of the consumers. This is reactive motivation as companies’ shift, where there is higher demand for products or services.

Question FOUR

In a short essay, describe the three major participants in international business. Explain how the three work together in international business activities.

There can be many participants involves in the international business; however, the three major participants who are involved in the international business can do the transactions or involved in the transaction process. However, those three firms are facilitators, focal firms, and distributions channel intermediaries; however, these enterprises work closely together to effectively perform the functions or operations. There are certain activities by these three businesses and can include the contractual basis clients.

The first type is the focal firm; it involves the initiator in the international business transaction this initiator can help to conceives as well as designs and produce the offerings that are intended for the customers worldwide. It has the center stage in international business. The focal firm is very efficient as it supports the major business activities and with the involvement of the large multinational enterprises, there can be more effective services. However, the services are provided to the Multinational Corporations or MNCs, multinational enterprises and also to the small and medium-sized. There are also services for the privately-owned companies as well as the public, state enterprises that are owned by governments, stock-held firms, etc. business decisions can be given to all firms so that there could be effective in the international business operation. The focal firms are involved and provide services in the service sector.

The second type is the distribution channel intermediary; it is known as the specialist firm because it supports various operations that are present in the international market. However, there could be support for a variety of logistics as well as marketing services. Companies or enterprises can get help related to the international supply chain. The supply chain and marketing services are given within the country and abroad; there are services for the foreign markets with the help of the organizational distributors and sales representatives. These representatives provide distribution as well as relevant and efficient marketing services to international businesses. Intermediaries are independent businesses; these are the firms that work for focal firms are there is focus on a contractual basis.

The third type is the facilitator firm; these firms have special expertise in legal advice. However, legal advice can be given to different companies and organizations. There is legal advice for the support services, banking, customs clearance, or other related business. However, the facilitator assists focal firms and there is a decision and helpful strategies that how there could be growth in international businesses. Legal advice also is given by the facilitators so that there could be efficient international business transactions and also the efficient support to the logistics service providers so that business can efficiently perform specific functions.

These three firms facilitators, focal firms, and distributions channel intermediaries can help the international businesses to effectively perform the functions or operations. There are certain activities by these three businesses and these three organizations in international businesses can help to take efficient decisions for the firms and through this effective decisions and operations can be concerned. However, the focal firms are involved and provide services in the service sector. Distributions channel intermediaries provide distribution as well as relevant and efficient marketing services to international businesses. Intermediaries are independent businesses; these are the firms that work for focal firms are there is focus on a contractual basis and firms facilitators help to provide the legal advice by the facilitators so that there could be efficient international business transactions and also the efficient support to the logistics service providers so that business can efficiently perform specific functions. International businesses can grow and get the profit in the market with the help of these three organizations.