International Business Test - 31

The World Bank Group is composed of the IBRD, IDA, IFC, MIGA, and ICSID. The IMF is a separate organization that collaborates with the World Bank Group but does not belong to it.

To avoid disputes, exchange rates are typically fixed in advance, preferably at the time of placing an order. This ensures clarity and transparency in international transactions by establishing the conversion rate between currencies before the actual exchange of goods or services takes place. By fixing exchange rates at the order placement stage, both parties can accurately calculate costs and avoid any uncertainties or disagreements regarding currency conversion during customs clearance, dock dues, or shipping orders.

The degree of mobility of factors of production like labour and capital is relatively more within a country. Domestic markets are relatively more homo- geneous in nature. Business systems and practices are relatively more homogeneous within a country.

An airway bill is similar to the bill of lading with only one difference, that it is issued by an airway company and not by a shipping company. When goods are transported through airways then instead of a bill of lading the exporter gets an airway bill.

When a company makes a full investment of equity share capital of a company, the company is owned by the investor. The parent company acquires full control over the foreign company by making 100 per cent investment in equity capital.

Joint venture is a common strategy to enter into a foreign market as the domestic company jointly ventures into the foreign market with a domestic company of that region with the required resources and finances.

The dual ownership arrangement may lead to conflicts, resulting in battle for control between the investing firms as both the firms are focused on the completion of their own objectives, less coordination between firms may lead to conflicts.

Foreign firms entering into joint ventures share the technology and trading secrets with local firms in foreign countries, thus always establishing the risks of such a technology and secrets being disclosed to others apart from the risks associated with entry into foreign markets with dynamic business environments.

W.T.O, or the World Trade Organization, is primarily responsible for regulating and overseeing global trade rules. It is an international organization that aims to facilitate trade negotiations, settle disputes, and ensure adherence to agreed-upon trade regulations among its member countries. While other organizations may focus on specific aspects of trade, such as regional trade agreements or trade within specific zones (like free trade zones or entrepots), the W.T.O is the preeminent institution dedicated to establishing and enforcing rules governing international trade on a global scale. 

Direct method involves making the goods available directly to the target customer in a market or by setting up a branch office or subsidiary in the foreign country. Indirect method involves making the goods available to the customers through a channel partner.