Q1.

EPRG Model
Ans:
1. Ethnocentric (E) Orientation: In an ethnocentric approach, a company's management believes that its home
country's practices and values are superior to those of other countries.
For Example: A multinational company based in India may send Indian managers to its international subsidiaries
and expect them to implement business strategies based on Indian practices and cultural norms.
2. Polycentric (P) Orientation: In a polycentric approach, a company recognizes the differences in each country and
adopts a decentralized management style. Local managers have a significant level of autonomy.
For Example: An Indian company operating in the United States may hire American managers who are familiar
with the local market and culture to make decisions that are better suited to the U.S. environment.
3. Regiocentric (R) Orientation: The regiocentric approach considers regional differences rather than a global
perspective. Companies divide the world into regions and develop strategies that are specific to each region.
For Example: An Indian pharmaceutical company might develop different marketing strategies for the South Asian
region, considering the specific healthcare needs and regulatory environments in countries like India, Bangladesh,
and Sri Lanka.
4. Geocentric (G) Orientation: In a geocentric approach, companies adopt a global perspective and seek the best
people and ideas regardless of their origin. The focus is on hiring the most qualified individuals and implementing
standardized business practices globally.
For Example: An Indian IT services company might adopt a geocentric approach by hiring top talent from various
countries and implementing standardized project management methodologies globally.
Q2. Risks in International Business
Ans:
1. Commercial risk : It refers to the uncertainties and potential financial losses that a company may face due to factors
directly related to its commercial activities. These risks can arise from issues such as market conditions, competition,
and the performance of the company itself.
For Example A company exporting smartphones to various countries may face commercial risk if there is a sudden
decline in demand for its product due to changing consumer preferences or the introduction of a new and more popular
competitor.

2. Economic Risk : When the potential financial losses and uncertainties arising from changes in economic conditions
that can impact the overall business environment. These conditions include macroeconomic factors such as inflation,
interest rates, exchange rates, and overall economic stability.
For Example A company engaged in international trade is exposed to exchange rate risk when buying and selling goods
in different currencies. If a company's home currency strengthens against the currencies of its trading partners, the
company's exports may become more expensive, potentially leading to a decline in sale

3. Import Restrictions: The potential challenges and uncertainties that companies may face due to restrictions imposed
by governments on the import of certain goods or services. These restrictions can take various forms, including tariffs,
quotas, licensing requirements, and technical standards.
For Example Country A imposes a 25% tariff on imported automobiles. An international car manufacturer that exports
vehicles to Country A will face higher costs when selling its products in that market. This tariff can reduce the
competitiveness of the company's products and potentially lead to a decline in sales.

4. Local Content Requirement : When the challenges and uncertainties that companies may encounter when foreign
governments impose regulations mandating a specific percentage of a product or service to be sourced locally. However,
they can pose difficulties for international companies that may face increased costs or operational challenges.
For Example The limited pool of domestically-produced solar panels led to higher costs for government solar
projects, potentially diverting resources from other crucial areas.

5. Exchange Controls: Exchange control risk, also known as currency risk, is a significant concern for international
businesses operating in India. It refers to the potential for losses due to fluctuations in the exchange rate between the
Indian rupee and other currencies.
For Example The Reserve Bank of India (RBI), the country's central bank, plays a key role in formulating and
implementing exchange control policies.

6. Political Risk: Political risk refers to the potential for unexpected changes in a country's political environment that
could adversely impact the operations of a foreign business. For Example In 2012, the Indian government unexpectedly
changed its policy on foreign direct investment (FDI) in the multi-brand retail sector. This decision forced Walmart,
which had already invested billions of dollars in India, to significantly scale back its operations.
Q3. Hofsted`s Cultural Dimension
Ans:
1. Power Distance Index (high versus low): This refers to the degree of inequality that exists and is accepted between
people with and without power.
A high PDI score indicates that a society accepts an unequal, hierarchical distribution of power, and thatpeople
understand "their place" in the system.
A low PDI score means that power is shared and is widely dispersed, and that society members do not accept
situations where power is distributed unequally.

2. Individualism Versus Collectivism: This refers to the strength of the ties that people have to others within their
community.
A high IDV score indicates weak interpersonal connection among those who are not part of a core "family." Here,
people take less responsibility for others' actions and outcomes.
In a collectivist society, however, people are supposed to be loyal to the group to which they belong, and, in exchange,
the group will defend their interests. The group itself is normally larger, and people take responsibility for one another's
well-being.

3. Masculinity Versus Femininity: This refers to the distribution of roles between men and women. In masculine
societies, the roles of men and women overlap less, and men are expected to behave assertively. Demonstrating your
success, and being strong and fast, are seen as positive characteristics.
In feminine societies, however, there is a great deal of overlap between male and female roles, and modesty is perceived
as a virtue. Greater importance is placed on good relationships with your direct supervisors, or
working with people who cooperate well with one another.

4. Uncertainty Avoidance Index (high versus low): This dimension describes how well people can cope with anxiety.
In societies that score highly for Uncertainty Avoidance, people attempt to make life as predictable and controllable
as possible. If they find that they can't control their own lives, they may be tempted to stop trying. These people may
refer to "mañana," or put their fate "in the hands of God."
People in low UAI-scoring countries are more relaxed, open or inclusive. Bear in mind that avoiding uncertainty is not
necessarily the same as avoiding risk. Hofstede argues that you may find people in high-scoring countries who are
prepared to engage in risky behavior, precisely because it reduces ambiguities, or in order to avoid failure.

5. Long- Versus Short-Term Orientation: This dimension was originally described as "Pragmatic Versus Normative
(PRA)." It refers to the time horizon people in a society display. Countries with a long-term orientation tend to
be pragmatic, modest, and more thrifty. In short-term oriented countries, people tend to place more emphasis on
principles, consistency and truth, and are typically religious and nationalistic.

6. Indulgence Versus Restrain: Hofstede's sixth dimension, discovered and described together with Michael Minkov, is
also relatively new, and is therefore accompanied by less data.
Countries with a high IVR score allow or encourage relatively free gratification of people's own drives and
emotions, such as enjoying life and having fun. In a society with a low IVR score, there is more emphasis
on suppressing gratification and more regulation of people's conduct and behavior, and there are stricter social norms.
Q4. PESTEL from International Business Perspective
Ans:

1. Political Factors:
Changes in political leadership, government policies, or geopolitical tensions can affect international businesses.
Example: India has a federal parliamentary democratic system. Political stability is crucial for international
businesses. Changes in government, policies, and regulations can impact business operations. For instance,
changes in taxation policies, trade regulations, or government stability can affect international businesses in India.

2. Economic Factors:
Economic conditions in different countries impact the purchasing power of consumers and the cost of doing
business.a fluctuating exchange rate can affect the profitability of international trade. Example: Exchange rates,
inflation rates, economic growth, interest rates.
3. Social Factors:
Understanding cultural nuances, consumer behaviors, and societal trends is crucial for international businesses.
For instance, preferences for certain products or communication styles may vary across cultures. Example:
Cultural differences, demographics, social trends.
4. Technological Factors:
Advances in technology can create opportunities or threats for international businesses. For example, the rise of e-
commerce has transformed the way companies approach international sales and distribution. Example:
Innovation, automation, research and development.
5. Environmental Factors:
Businesses need to consider their impact on the environment and adapt to changing environmental regulations.
For instance, industries with high carbon footprints may face increased scrutiny and regulations. Example:
Climate change, sustainability practices, environmental regulations.
6. Legal Factors:
Adherence to legal frameworks in different countries is essential. For example, changes in trade agreements or
intellectual property laws can have a significant impact on international business operations. Example:
International trade laws, intellectual property laws, labor laws.
Q5. World Trade Organization (WTO) objectives, TRIPS,TRIMS, AoA, dispute settlement body
Ans:
The World Trade Organization (WTO) is an international organization that deals with the global rules of trade between
nations.
1. Objectives of World Trade Organization:

 Promote Free Trade: Facilitate the smooth and predictable flow of trade by reducing trade barriers, such as tariffs and
quotas.
 Ensure Fair Competition: Prevent unfair trade practices, including anti-dumping measures and subsidies, that distort
international trade.
 Promote Economic Development: Support developing countries in their integration into the global economy.
 Facilitate Negotiations: Provide a platform for member countries to negotiate and resolve trade-related issues.

2. TRIPS (Trade-Related Aspects of Intellectual Property Rights): TRIPS is an agreement administered by the WTO
that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of
other WTO member countries.
 It Protects intellectual property (IP) like patents, copyrights, trademarks, and geographical indications.
 Aims to balance the interests of IP rights holders and the public in accessing knowledge and technology.
 Sets minimum standards for IP protection that WTO members must comply with.

3. TRIMS (Trade-Related Investment Measures): TRIMS is another agreement under the WTO that addresses certain
investment measures that can affect trade.
 Prohibits certain trade-distorting investment measures by WTO members.
 Aims to ensure that foreign investors receive fair treatment and do not gain an unfair advantage over domestic
competitors.
 Covers measures like local content requirements, export restrictions, and technology transfer mandates.

4. AoA (Agreement on Agriculture): The AoA is an agreement within the WTO that addresses issues related to
agricultural trade. It aims to liberalize agricultural trade by reducing tariffs, subsidies, and other trade barriers. The
agreement covers areas such as market access, domestic support, and export subsidies. The AoA remains a complex
and controversial agreement due to the sensitivity of agricultural issues for many countries.

5. Dispute Settlement Body (DSB): The DSB is a key component of the WTO's dispute settlement mechanism. Its
primary function is to provide a forum for the resolution of trade disputes between member countries. When a member
believes that another member's trade policies or actions are violating WTO agreements, it can bring a complaint to the
DSB. The DSB facilitates consultations between the parties involved and, if necessary, establishes dispute settlement
panels to make rulings. The goal is to ensure that trade disputes are resolved in a fair, timely, and effective manner.