=1.

THE GLOBAL ENVIRONMENT OF BUSINESS: NEW PARADIGMS FOR INTERNATIONAL MANAGEMENT

INTRODUCTION: The Global Environment of Business provides students with a truly international perspective that integrates both market (industry structure) and nonmarket (i.e. political forces) analysis concisely, in a way not found in other texts. The following key issues are emphasized : Industry Structure: Management must strategize to deal with the bargaining strength of customers, suppliers, and competitiors on a country by country basis. Low cost labour and outsourcing are changing the nature of the firm dramatically.Macroeconomic Forces: Management must formulate country strategies in light of each country's income levels and growth rates, foreign exchange rates, inflation rates, interest rates, and unemployment rates.Political Forces: Regulations, financial incentives, tax regimes, investment restrictions, and trade agreements differ widely from country to country.Societal Forces: Ethics, labour, and environmental practices differ from country to country. In addition, specific consumer preferences and demographic trends must play a role in national strategies.Technological Forces: Strategies must correspond to each country's technological infrastructure and the pace and direction of technological change. SUMMARY: There are 4 types of forces: 1. Social Force: The subject of ethical codes and CSR crystallizes many social challenges. At the one extreme are those who, like Milton Friedman (1970/2001), advocate the guiding principle of shareholder value maximization as the sole determinant of managerial decisions. Some analysts, such as Porter and Kramer (2006), believe that each firm should create a competitive advantage through appropriate CSR strategies. From this perspective, CSR morphs into political strategies through which a firms reactions can be designed in order to achieve desirable government decisions. A major force underlying the CSR challenges in international business is the difference in culture among countries. Countless articles have utilized the typology created by Hofstede and Bond (1988) in order to analyze the implications of cross-country cultural differences for management decisions. Personal relationships that involve an ongoing exchange of favours may be criticized as petty corruption that can pervade all types of business transactions, both between firms and also with government employees. For the MNE, these issues are linked in a host of multidimensional decisions that require ongoing responses, hopefully within a consistent set of strategies that create a competitive advantage while maintaining an ethical code of conduct. Social forces are changing as the MNE confronts these issues.

2.Technological Force: Among cultural differences, the role of personal relationships and trust is a key determinant of the nature and extent of social capital, linking these cultural differences to their implications for entrepreneurship. Social capital can play a key role in market entry decisions and in the creation of new products, services, or procedures. Firms differ in their ability to utilize social capital within each culture, so the enhancement of a firms ability in this regard may lead to a competitive advantage for the firm. Each nation, and each region within each nation, has its own unique innovation system that forms a key component of the environment of business. These innovation systems differ significantly, with some offering distinct advantages for the firms located there. This reality rests to a large degree on culture, social capital, education, and entrepreneurship. For each nation or region, a set of crucial characteristics includes the nature and strength of attitudes toward risks and rewards, the entrepreneurial quality of university relations with businesses, the willingness of all members of a value chain to become partners in the pursuit of knowledge, and the extent to which innovations within the financial system support this process. Current success creates conditions that support future success in repeated cycles of new technological advances, each of which may move from the research phase to widespread diffusion throughout the economy. A drug divide exists between the developed nations and the less developed nations. The United States, Western Europe, and Japan consume nearly 85 percent of the worlds production of pharmaceuticals. Big Pharma firms have focused their research on health issues of the highincome populations, often searching for lifestyle drugs. They have tended to ignore diseases that are prevalent in the low-income, less developed world. Furthermore, while firms in the developed nations have built their R&D programs on the expectation of patent protection, the less developed nations have often ignored these patents. Generic production with much lower prices has led to a growth in parallel trade. In response, international trade negotiations have sought to create global standards for patent protection, largely unsuccessfully. In many jurisdictions, electricity distributors must ensure that specific percentages of their electricity are derived from green energy. These pressures are creating many opportunities for entrepreneurial responses. For a number of reasons, the United States may not be the most attractive market for these investments. Hence, even U.S. firms may be tempted to invest in wind electricity generation in other nations. Meanwhile, government programs and policies are expanding quickly and consumer preferences are changing quickly. 3.Economic Forces: An industrys profit potential depends on the structure of that industry, and industry structures differ in significant respects among nations. . The degree of the monopolists strength in price negotiations will be impacted by the threat of new entrants and the threat of substitutes. If these threats are weak, then a monopolist may gain exceptionally high profits. However, even if no substitutes currently exist, the threat of new entrants may make the market contestable, such that a monopolist has to act as if potential entrants were already in the marketplace. With modern communications and transportation technologies, outsourcing can involve any nation; so the value chain has become an international web.

The MNE must choose investment locations in the context of each nations ever-changing macroeconomic variables. Growth rates, unemployment and inflation rates, and foreign exchange rates may all impact a firms business plans. In recent years, the macroeconomic objective of maximizing economic growth has led governments to implement certain industrylevel policies. Governments have devoted greater attention to privatization and deregulation, education, skills training, and funding of R&D in the expectation that these programs will increase the nations productivity and, hence, increase its growth rate. In The Competitive Advantage of Nations, Michael Porter (1990) analyzes the basis for a nations competitiveness by drawing a diagram of a diamond, where each of the four corners represents an underlying feature: factor conditions, demand conditions, related and supporting industries, and firm strategy structure and rivalry. These competing firms or rivals may all be internationally competitive. Backward and forward linkages to suppliers and purchasers are necessary to create a vertical cluster that is internationally competitive. 4. Political And Governmental Forces: Political and governmental forces are related to each of social, technological, and economic forces. These forces play a key role in the building of social capital, the fostering of entrepreneurship, and the facilitation of immigration. . In the context of these interactions, the firm must adjust its strategies and management practices in response to social and political forces, but the firm may also seek to influence these forces through lobbying of government and by relating with interest groups. Political forces are also related to technological forces through the development of the knowledge economy and ongoing partnerships within the triple helix. Government ownership and regulations can influence the speed with which firms adopt information technologies, microelectronics, and e-business. Governments continually attempt to alter the functioning of specific markets. Each firms industry structure is subject to government intervention in response to externalities or third-party effects and monopolistic pricing. Public policies differ among nations, and these differences can impact the firms trade and investment decisions. For MNEs, relevant public policies include ownership, regulation, taxation, and subsidies, all of which impact business strategies and management. . Many nations have copied this model. Some, such as Malaysia, have focused their zone on the attraction of high-tech firms. Meanwhile, the relatively advanced nations have been striving to retain jobs in the context of corporate offshoring to low-wage countries, and some have created special subsidy programs for this purpose. However, such government policies may conflict with provisions of trade and investment agreements, such as the World Trade Organization. Competition or antitrust policy now needs to be based on international market behaviour rather than just national market behaviour. Trade and investment disputes are a continual threat for MNEs. In particular, Chinas rapid and substantial expansion throughout the global economy has created a host of concerns about unfair competition and distortions that prevent the creation of a level playing field.

2. Syria to Sochi: What to expect at G20

INTRODUCTION: Leaders at the forefront of the geopolitical standoff over Syria will be in the same room for meetings in St Petersburg: US PresidentBarack Obama, Russian President Vladimir Putin, French President Francois Hollande, UN Secretary-General Ban Ki-moon, Turkish PM Recep Tayyip Erdogan, among others. Here's a look at what to expect at the G20, nations that represent two thirds of the world's population and 85% of its GDP. The threat of missiles over the Mediterranean is weighing on world leaders meeting on the shores of the Baltic this week and eclipsing economic battles that usually dominate when the Group of 20 leading world economies convenes. Summary: SYRIA: Western bombs are unlikely to fall on Syria during this gathering. The US and French presidents are readying possible military strikes, but both are waiting for the US Congress to weigh in first. UN's Ban will press for diplomatic action, amid resistance from Russia and China to any UNmandated military moves. US-RUSSIA TIFF Even without Syria, Obama and Putin had plenty to disagree about. Obama snubbed the Russian leader, cancelling a one-on-one meeting over lack of progress on other issues, including Edward Snowden. Body language may be key to understanding where the US-Russia relationship is going.The developing economies are now starting to falter. And they're placing part of the blame on the US Federal Reserve's moves to wind down stimulus measures. The goal of some leaders at this G20 is to get Google and other major cross-border companies to pay more taxes and stop using loopholes and tax havens. With Russia set to host the Winter Olympics in Sochi, this summit is the place for other leaders to pressure Putin to open up his country and himself to criticism, opposition and public debate. Activists want pressure against Russia's gay propaganda law and legal cases targeting Putin opponents. The Russian leader wants global recognition and revenue from these games.

3.Brighter US economy makes Fed tapering more likely

INTRODUCTION: The U.S. economy is showing strength as summer nears a close a trend that's raising the likelihood that the Federal Reserve will slow its bond buying later this month. The steady improvement is also lifting hopes for Friday's report on job growth last month. The August gain is expected to nearly match the year's monthly average of 192,000 jobs. On Thursday, reports showed that services companies are stepping up hiring and that a dwindling number of people are losing jobs. Those figures follow reports of stronger auto sales and faster expansion by U.S. factories. This year's solid job growth, along with a sharp drop in layoffs, has helped lower the unemployment rate to 7.4 percent from 7.9 percent in January. It also means more Americans are earning paychecks and will likely boost consumer spending in coming months.

SUMMARY: Analysts predict that employers added 177,000 jobs in August. ``People are finding work, and they have more money to spend,'' said Drew Matus, an economist at UBS. The Fed's $85 billion a month in Treasury and mortgage bond purchases have helped keep home-loan and other borrowing rates ultra-low to encourage consumers and businesses to borrow and spend more. Chairman Ben Bernanke has said the Fed could begin slowing its bond purchases by year's end if the economy continued to strengthen and end the purchases by mid-2014. Key data released in the past week have bolstered the position of those Fed officials who argue that the economy is healthy enough to withstand tapering. U.S. services firms, which employ about 90 percent of the U.S. workforce, expanded last month at their fastest pace in nearly 8 years, according to a report Thursday from the Institute for Supply Management. The institute's index of service sector growth has jumped 5.8 points in the past two months to 58.6 the biggest twomonth increase since it began in 1997. Survey results reported Thursday by payroll provider ADP found that American businesses added 176,000 jobs in August. That was just below the 198,000 added in July but close to the past year's average monthly gain. In addition, most of the growth in the number of people working is due to fewer layoffs rather than strong hiring. Many employers remain reluctant to fill jobs. Job growth measures the number of people hired minus the number who lose or quit jobs. When companies are laying off few, it doesn't take many hires to create solid growth in the number working.

4. Walmart and Washington D.C. in minimum wage showdown

INTRODUCTION: WASHINGTON: District of Columbia MayorVincent Gray could decide as early as this week whether to sign a minimum wage bill that could discourage Wal-Mart Stores Inc , the world's biggest retailer, from opening stores in the U.S. capital. The bill, approved by the City Council two months ago, would require big retailers to pay a 50 percent premium on the local minimum wage of $8.25 per hour, with backers saying that Wal-Mart and others can easily afford it to get into the District of Columbia's fast-growing market. SUMMARY: Wal-Mart has been the target of nationwide demonstrations calling on the company to provide better pay and working conditions. In New York on Thursday, three dismissed Wal-Mart workers were arrested in a protest outside the office of Chrisopher Williams, a Walmart director, organizers said. "We're glad (Wal-Mart has) finally recognized the value of the District of Columbia," said Councilmember Vincent Orange, a backer of the bill. "But we also recognize the value of our residents, and the value of one hour of our residents' time is greater than $8.25," Orange said on Wednesday. The city's Large Retailer Accountability Act targets non-unionized stores with more than 75,000 square feet (7,000 square meters) of interior space and whose parent companies have yearly revenues of $1 billion a year. They would have to pay a minimum wage of $12.50 an hour, while the federal minimum is $7.25. The bill gives a four-year exemption to big retailers already in the District of Columbia. BROUGHT UP SHORT The City Council's 8-5 vote in July approving the measure brought up short years of efforts by Walmart, Wal-Mart's main U.S. unit, to expand into the U.S. capital. Steven Restivo, a Walmart spokesman, said that if the measure took effect the company would halt plans to build three stores awaiting the start of construction. They include two that were set to be built in impoverished neighborhoods east of the Anacostia River. "You don't go change the deal (with Wal-Mart). This is a bait and switch," said Barbara Lang, president and chief executive of the District of Columbia Chamber of Commerce .District of Columbia unemployment rose to 8.6 percent in July, from 8.4 percent in December and a percentage point above the U.S. average. Orange, the city council member, said supporters of the bill were seeking one more vote on the 13-member council to be able to override a Gray veto.

5. Volvo recalls 2014 models to correct software glitch

INTRODUCTION: DETROIT: Volvo Cars US said on Thursday it is recalling more than 8,000 2014 models to correct a software glitch that could drain the battery and cause headlights, windshield wipers and turn signals to malfunction. A Volvo spokeswoman said the company is recalling 7,767 vehicles in the United Statesand 366 in Canada.

SUMMARY: The company has received no reports of accidents, she said. Volvo said it notified the National Highway Traffic Safety Administration of the recall on August 20. On vehicles equipped with keyless ignition, the central electronic module, a computer that controls various functions, "will not perform as intended," according to the recall notice. Volvo dealers will perform a software upgrade to the module, the company said. Volvo said it notified the National Highway Traffic Safety Administration of the recall on August 20. Volvo dealers will perform a software upgrade to the module, the company said. Volvo is owned by China's Zhejiang Geely Holding Group Co.

6.ECB 'very cautious' about eurozone recovery

INTRODUCTION: European Central Bank chief Mario Draghion Thursday sought to temper hopes that the eurozone was about to rebound strongly, insisting that the nascent recovery remains extremely fragile. "I am very, very cautious about recovery. I can't share the enthusiasm," Draghi told a news conference after the ECB held its key interest rates at their current record lows for the fourth consecutive month. SUMMARY:

"Certainly we are alert to geopolitical risks that may come out of the Syrian situation and economic risks that may derive from emerging markets situation," the central bank chief said. And the central bank "stands ready to act" should the situation suddenly deteriorate again in face of, for example, geo-political risks related to the situation in Syria, Draghi said. And while the projections were fractionally more optimistic with regard to growth this year, they were more cautious about the outlook for next year. Draghi said that the central bank's staff projections saw the eurozone economy shrinking by 0.4 percent this year and then growing by 1.0 percent next year. In the bank's previous forecasts in June, the economy had been expected to contract by 0.6 percent in 2013 and grow by 1.1 percent in 2014. Following six quarters of negative output growth, real gross domestic product ( GDP) in the eurozone increased by 0.3 percent in the second quarter of 2013. "Since then, survey-based confidence indicators up to August have improved further from low levels, overall confirming our previous expectations of a gradual recovery in economic activity, Draghi said.

7.US service firms expand at fastest pace in 8 years

INTRODUCTION: Companies in the US service sector expanded at their fastest pace in nearly 8 years last month as sales and orders grew and employers ramped up hiring. The Institute for Supply Management said Thursday that its service-sector index rose to 58.6 in August from 56 in July. It's the highest point since December 2005. Any reading above 50 indicates expansion. SUMMARY: Consumers appear to be spending more at auto dealerships, retailers, hotels and restaurants. The housing recovery is also spurring growth in real estate. The report ``implies that the economic recovery is gathering a real head of steam,'' said Paul Dales, an economist at Capital Economics. A measure of hiring rose to 57, the most in six months. That's an encouraging sign for the job market because the service sector employs 90 percent of the US workforce, including retail, construction, health care and financial services. The upbeat figures come after another report Thursday showed that weekly applications for unemployment benefits fell to nearly their lowest level in five years. Also, a private survey found that US businesses added 176,000 jobs last month, below the previous month but roughly in line with the average gain this year.

Overall income rose just 0.1 percent in July, down from 0.3 percent the previous month. Slower growth in wages forced Americans to restrain spending last month. Consumer spending rose a scant 0.1 percent in July. Consumer spending drives roughly 70 percent of economic activity. On Monday, the ISM said factory activity grew at the fastest pace in more than two years in August. New orders jumped to their highest level since April 2011 and export orders rose at a healthy clip. Employers likely added 177,000 jobs in August, economists forecast, while the unemployment rate was likely unchanged at 7.4 percent.

8.Hyundai reaches tentative wage deal with unions

INTRODUCTION: Details of the agreement, which must be approved by a vote of Hyundai's 46,000 unionised workers, were not known. South Korea's top carmaker Hyundai Motorreached a tentative agreement with its unions Thursday over wages and benefits following a series of partial strikes.. SUMMARY: Management insists it cannot afford to meet such demands at a time of heightened competition and slowing growth in overseas markets. Hyundai workers have staged a series of partial strikes from August 16, resulting in what the company says was lost production of 50,000 vehicles worth about one trillion won ($910,000). Details of the agreement, which must be approved by a vote of Hyundai's 46,000 unionised workers, were not known. Among other demands, the unions want a 130,500 won increase in basic monthly salary for workers and a shared cash payment for members amounting to $2.4 billion -- or 30 percent of last year's net profit at the carmaking group.

9. Rethinking Ethical Issues in Global Business Environment Siringi Elijah Mirwoba1

INTRODUCTION: Business ethics phenomenon in globalised business environment has become a critical issue that has attracted business and management research scholars to engage on crucial debates and discussion at both local as well as international forum. The dawn of a global knowledge society with information-driven economies and expansion of cross-border trade as consequences of liberalization and globalization policy is placing new demands on business organizations for more innovative approaches in business ethics at both local as well as global business environment (Nissanke and Thorbecke, 2005). This premise is consistent with Brownlie et al. (1999) who indicate that; What is it like to think new thoughts to undo the fragile web of assumption Sheth and Sisodia (1999) also support this hypothesis by asserting that, the context of ethics in global business environment is changing in fundamental ways. The acceptance of law-like generalizations has to be, as they suggest, Either enhanced or modified. The old opinion of business ethics as an oxymoron, or that business organizations do not have ethics (Laczniak and Murphy, 1993) is being re-thought. Another critical research question raised in this article could be; what parameters form a set of universal ethical norms that are acceptable to all and could be applied at global business environment? This premise is supported by Parker (1998) who argues that the primary challenge associated with the impact of globalization on ethics in global business environment is balancing, conflicting and (or) competing objectives such as the apparent trade-off between profits and social responsibility, individual and collective interest, autonomy and collaboration innovation and order, heterogeneity and homogeneity. It has many concepts: 1.METHODOLOGY 2. CONCEPTUALIZATION GLOBAL BUSINESS ETHICS 3. ETHICAL DILEMMAS: HARD DECISIONS OF CHOICE IN GLOBAL BUSINESS 4. GLOBAL BUSINESS ETHICS: WHAT DO SCHOOLS OF THOUGHT STAND FOR?

SUMMARY: This is a desk research study critiquing ethical issues in global business environment. The study adopts a descriptive research design. The author has achieved these results through surfing of internet and a thorough survey of reputed research data banks meant for business scholars maintained by Blackwell, Emerald as well as Jestor subscribed to by Maseno University-Kenya. The qualitative analysis of results and presentation in this article is purely descriptive in nature.

In the introduction section we have indicated that the paradigm shift of global business environment due to globalization and liberalization policy has necessitated the business community in general to rethink new approaches to carry out business. This scenario has resulted into optimal utilization of global resources including competitive sourcing of inputs for achieving cost competitiveness in productive economies of scale in operations and efficient technology utilization. The long-term impact of the current globalization policy on the corporate world and the business community in general is a sea change in the rules of thumb by which business is expected to operate in harmony with global social environment. The firms external environment manifested in public policies and expectations is becoming a key factor in major strategic business decisions. On the other hand, Ferrell, Fraedrich and Ferrell (2002) describe global ethical issues as encompassing human rights, sexual and racial discrimination, price discrimination, bribery, harmful products, pollution and telecommunications issues. In this scenario, it is no wonder that the attention of top management, governments and society are being directed towards corporate governance, corporate accountability and corporate social responsibility (CSR) (Hazarika, 1998). Hampden-Turner (1990) sees di and lemma as two contrasting propositions, so choosing between them is a challenge. Table 1 depicts the dynamics of business ethics as function of time and culture. This is rightly pointed out by Goran and Wood (2003). Dynamics of Business Ethics Model Companys view Acceptable Unacceptable OthersViews Acceptable Congruence

Posi tive diss ona nce

Unacceptabl e

Negative dissonanc e

Congruence

Critics also charge that they are too many intermediaries in global business environment and that the intermediaries are inefficient or that they provide unnecessary or duplicate services. The growing literature in international business ethics indicate that managing across borders involves dealing with ethical challenges that are complex and multifaceted (Arthaud-Day, 2005; Buller and McEvoy, 1999; Falkenberg, 2004; Windsor, 2004). Big interesting questions can be raised about the role of laws and the legal system in the crosscultural ethical decision-making. At a more macro-level one could argue that a fairly comprehensive international legal systems exits to resolve most disputes. Should Business organizations use the system to resolve conflicts? De-George (1993a has suggested that law is often ineffective outside boundaries; expectations vary from society to society or from region to

region; and interests often clash where no clear methods of resolving disputes exist.

ISSUES: Human rights: 1. Business should support and respect the protection of internationally proclaimed human rights. 2. Make sure they are not complicit in human rights abuses. Labour: 3. Business should uphold the freedom of association and the effective recognition of the right to collective bargaining. 4. The elimination of all forms of forced and compulsory labor. 5. The effective abolition of child labor. 6. Eliminate discrimination in respect to employment and occupation. Environment: 7. Business should support a precautionary approach to environmental challenges. 8. Undertake initiatives to promote greater environmental responsibility. 9. Encourage the development and diffusion of environmentally friendly technologies. Anti-corruption: 10. Businesses should work against all forms of corruption, including extortion and bribery

CONCLUSION: Understanding customers is an important first step in developing strong customer relationships. To gain competitive advantage, business organizations must use this understanding to design market offers that deliver more value than the offers from their competitors. One key component to create and achieve sustainable competitive advantage in an organization is by incorporating professional ethics and good business practices into an organization. We strongly suggest therefore, that global business organizations need to investment in and adopt proactive approaches to ethical safeguards needed and these should be regarded as dimensions for better understanding of ethical and unethical behaviors. They also need strategies that are acceptable to all stakeholders for purposes of dealing with complex ethical dilemmas in global business environment.

10.Crisis in International Business Environment in India

INTRODUCTION: International business refers to performance of tradeand investment by firms across borders (Cavusgil,et.al: 2008). It is needless to say that the International Business Environment (IBE) is the environment or broad conditions in which businesses are held across the world, by and large (Paul: 2008). The 9% rate of growth is the for-ever refrain of the UPA government, particularly of its economist primeminister, Dr. Manmohan Singh, an economist of worldstanding. The second UPA government- UPA-11 (2009-14) has got more strident about growth, as the be-all and end-all of the Indian economy and its business sector. It doesnt seem to matter even if an economy is over-heated in the process of a high growth drive, and the environmental and human or real costs prove to be quite high, and almost prohibitive. SUMMARY: objectives of enquiring (1) The broad feature of global and national business environment, (2) The crisis in the international business, (3) Fall in business standards, and (4) Refurbishing the business environment, which appear to be the main issues of international and national business environment at the present juncture. The late Prof. C. K. Prahalad had tried togive a new orientation especially MNC businesses though his most famous theory of the BOP Bottomof the Pyramid (Ahmed, Gouher: 2011). It is the crisis ridden United States of America which is showing the new business way, with Bill Gates and Warren Buffett acting the icons of new businesses, of combining profits with service or philanthropy. COMPETITION THE KEY: Its a sort of economic democracy. Competition and competitiveness appear to best describe and portray the todays global business situation (Porter, 1985). The heralders of this international business era are President Ronald Regan in the United States of America, Prime Minister Margret Thatcher, the iron lady, in the United Kingdom, the ruling communist party and in the peoples Republic of China, in 1979 and, not the least in our Mother-land India, the RaoSingh duo, i.e., the Prime Minister Sri P. V. Narasimha Rao and the then Finance Minister and the present Prime Minister Dr. Manmohan Singh-a strange combination of outstanding statesmen in their own right in 1999. The Dynamics of IBE Thus, a spirit of competition is seen to pervade the IBE, and notwithstanding its moral, leadership and regulatory lapses and the on-going financial or recessionary crisis greatly attributed to business greed, the Environment is marked by the dynamics of free trade under WTO-World Trade Organization (1995), MNCs, FDI, globalization,

The environment is marked by mergers, acquisitions, JVs across the countries and continents. The developed countries are eying the markets of developing nations, especially the BRIC ones- Brazil, Russia, India and China. It is marked by the rise of China and its obtaining great economic and trade and business heights. It is greatly a trading environment. Table 1: Global Export Trade (%) S.No. Year 1 2 3 4 2006 2007 2008 2000-09 Percentage 16.0 13.9 14.3 10.4

The Environment needs reforms, and a firmregulatory mechanism, it having had no basic social sresponsibility and larger public consideration.