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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 company’s 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

2. 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 company’s 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 IndustrialRelations (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.

3. 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 themin terms
of likelihood and magnitude of impact, determining a response strategy, and monitoring progress. By
Spring-2016
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