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Top 10 Highest-Paying Languages in the Translation Industry
The demand for skilled translators is skyrocketing in a globalised world where communication knows no borders. Businesses, governments, and individuals are constantly seeking linguistic experts to bridge the gap between languages and cultures. If you're considering a career in translation, exploring the languages that offer the highest financial rewards is essential. Here, we delve into the 10 highest-paying languages in the field of translation.
German
Known for its economic prowess and technological advancements, Germany stands as an economic powerhouse in Europe. As a result, the demand for German-English and English-German translations is consistently high. Industries such as automotive, engineering, and finance often require precise translation services to navigate the intricacies of German documentation. Language Services Bureau is a recognised Translation Agency listed by the German Consulate in Mumbai.
Mandarin
China's emergence as a global economic giant has made Mandarin a highly sought-after language in the translation industry. Businesses eager to tap into the Chinese market require accurate translations to navigate legal, technical, and marketing documents. Professionals proficient in Mandarin find themselves in high demand, often commanding lucrative compensation for their expertise.
Arabic
The economic influence and cultural significance of the Middle East have propelled Arabic into the upper echelons of highly paid translation languages. With over 40 Arabic-speaking countries in the Middle East, Governments, corporations, and NGOs working in the region regularly seek translation services for legal, diplomatic, and business purposes. As a result, Arabic translators are often well paid for their specialised skills.
French
Known as the language of diplomacy, French continues to play a crucial role in international affairs. Organisations such as the United Nations and the European Union conduct their business in French, necessitating skilled translators. Additionally, the French influence in the luxury, aeronautics, technology, nuclear science, and fashion industries further boosts the demand for French to english translation services.
Japanese
Japan's status as a technological and economic hub has made Japanese a valuable language in the world of translation. The country's innovations in industries like robotics, electronics, and automotive require precise translation for global collaboration. Japanese translators often find themselves in high demand, especially in the tech and manufacturing sectors.
Spanish
With over 460 million native speakers, Spanish holds a prominent place in the translation industry. The cultural and economic ties between Spanish-speaking countries and the rest of the world create a constant need for translation services. From legal documents to marketing materials, Spanish translators play a vital role in facilitating communication on a global scale.
Hindi
As one of the most spoken languages globally, Hindi's importance is reflected in the demand for translation services. India's rapid economic growth and diverse business landscape make Hindi a key language for international corporations. Translators proficient in Hindi can find opportunities in various sectors, including IT, healthcare, and finance.
Italian
Italy's contributions to art, fashion, and design have made Italian a language of prestige and influence. Companies operating in these industries often require accurate translations to navigate international markets. Italian translators with expertise in specific fields, such as art or fashion, can command higher fees due to the specialised knowledge required.
Russian
Russia's vast economic and geopolitical influence ensures that the Russian language remains a high-demand language for translation services. Industries such as energy, technology, and finance often require Russian translators to navigate complex documentation and negotiations. The specialised nature of these translations contributes to the elevated compensation for Russian language experts.
Portuguese
As the official language of multiple economically significant countries, including Brazil, Portuguese is a key language in the translation landscape. The South American giant's growing influence in global trade and business makes Portuguese translators valuable assets. Professionals proficient in Portuguese can find opportunities in the agriculture and renewable energy industries, amongst others.
CONCLUSION
The world of translation offers many opportunities for those fluent in high-demand languages. As businesses and organisations continue to expand globally, the need for skilled translators will only increase. If you're considering a career in translation, mastering one of these high-paying languages could open doors to a rewarding and financially lucrative profession. Keep in mind that specialising in specific industries or niches within these languages can further enhance your earning potential, making you a sought-after expert in the field. Language Services Bureau provides international language training in translating some high-paying languages suitable for individual and group requirements.
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6 Best Career Options After Learning French in India
As we all know, people who speak a foreign language have an advantage in their studies and work. Regardless of the career path, especially languages ​​2 and 3, be it Chinese, English, Japanese or any other language, the salary or remuneration of linguists will skyrocket depending on the difficulty of the studies. And the demands of the job market for any young person interested in studying or working in a language and just wanting to discover a culture, history, etc. different.Â
In this article, we've compiled six of the most popular and highest paying jobs you can find after learning the French language. Let's talk about it-
Air Hostess
This is the most popular career opportunity that can earn you hundreds of thousands of money with your bilingual skills. Skills allow you to communicate with passengers in their own language. However, it is also a career that is not easy to find. Since you need to pass all exams and interview levels to meet the criteria set by the aviation authorities, the language issue is very important. In addition, TOEIC and TOFEL test results are required to meet airline criteria. You can go to the French Institute in Mumbai, which will help you not only to learn French but also to pass the exam.
Translator
Translation is another career that continues to make money. Because whether it is official documents, legal documents, film scripts or other voice-overs, there is always a need to translate into French from another language. Due to unlimited business negotiations, it is often translated into a third language and requires a very high level of language skills, and the pay is well worth it. As a freelance translator you can also work for many companies who are still looking for an interpreter.
Business Analyst
International banking and finance companies urgently need a multilingual employee. The banking system, which forces employees to communicate with the global population, forces this company to prioritize people with different language skills. Knowledge of languages ​​will help you negotiate or make deals. With a knowledge of French, you can easily build your position in the banking / finance industry in India and other countries.
Fashion industry
The clothing industry has gone global. If you want to dive into this world, prepare to communicate in different languages. Therefore, it is advisable to be proficient in French, Italian and Spanish if you want to have a successful career in this field. Fashion shoppers are people who are responsible for choosing different items to sell in a store. They usually work in department stores, retail stores, or wholesale clothing distributors. They need to be aware of the trends and really understand the taste of the market.
 International event organizer
According to the official website, French is one of the six international languages ​​recognized by the United Nations. Unsurprisingly, many international events are held in French. Of course, we are talking about congresses, meetings, sports competitions, festivals and exhibitions.
 Therefore, an international event organizer is needed to support this. This job can be an interesting job prospect for French speaking professionals. The main responsibility of an international event organizer is to ensure that it runs smoothly. To learn French in Mumbai and take French lessons in Mumbai, this city being the center of many international events, this is your chance to be part of the Event Company.
 Journalists, journalists or media editors
Working in electronic media offers promising prospects for Francophones. With the language skills acquired during your degree, you can work in media as journalists, editors, and writers to cover many popular stories from foreign language sources. Grammar skills are essential if you want to work in writing, and verbal skills are essential if you want to work as a good TV leader or a good reporter.
 Conclusion
Despite all of the above vacation options, and many of them, speaking French can be the most enjoyable and exciting thing you can have.
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Make your business global for higher profit and revenue. Here’s how!
A business’s primary goal is to generate revenue and profit margins. These objectives are attained due to customer satisfaction. Usually, companies try to satisfy customers by offering them a good quality product or service and in addition to that, a two-way communication channel for feedback and suggestions. Now imagine if your business is expanding in new areas, the target markets have changed. In such a case, will the customers instantly choose your brand? The answer is a blatant no. Your business is alien to that particular region. Before even choosing your product or service, they need to be aware of the company and have some faith in the brand. The natural answer is localisation of your website and mobile applications. But many often forget to pay attention to the need for document translation which is vital for your expanding business to create goodwill among your customers and clients both.Â
What is document translation?
Document translation refers to translating one document involved in business activities from the source language to the target language. Say Mr X started a business in 2018 for supplying paper and other paper related products. He started the operation with his hometown city; Bangalore and later went on to supply paper to Delhi, Mumbai and other metropolitan cities. With the business going good and creating profit, Mr X wants to expand his business to South American countries like Brazil and Argentina. Both the countries are multilingual companies with people speaking Portuguese, Spanish, English and many other languages. Now Mr X has catered to each group of people in their language for a more significant customer base and client base. If your business is in such a situation, you and Mr X both need to connect with a document translation agency to approach more people in new territories.Â
Make sure your translation agency is taking care of these
You need to translate all your business documents including the company’s financial documents, the technical documents, the contracts, the products, the list of services offered, the brochures and the manuals etc.
Dialects matter: These documents shouldn’t just be translated generally from the source language to the target language but also should include the voice of the area. Many times, the same language is spoken in different ways or dialects, even in regions present in close proximity. Therefore, the translation agency has to make sure that they take care of such details.Â
Cultural nuances: The translation agency should also take into account the cultural nuances of the region. The crucial festivals, holidays or events should be taken into account for document translation.
The technical jargon: The translation agency if dealing with technical, legal or financial documents, should take care of the correct usage and translation of the technical terms. Many times, the meanings of legal terms could differ depending on the region, or there might be no legal term for particular aspects of the concerned document. In such cases, the translator should explain the jargon in a simplified manner so that the clients understand the documents and have no sense of doubt about the authenticity of the same.Â
In Conclusion
If your business is ready to climb the ladder of global expansion, then you need to understand the importance of document translation. Communication being the key to any successful business, it is necessary to make your business documents available in the language favourable for your potential clients and customers. It will increase the amount of transparency and will give you an edge over your competitors. These competitors can either be big MNCs or could be already well-settled local brands. It is necessary to earn the same or more amount of trust than these local brands in order to increase the revenue and customer base.
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Translation Companies In Mumbai|Indian Languages Translator|Translation Company In India
Voice-over Services E-learning Localization Translation Company In India Indian Languages Translator A Reliable Language Translation Partner
Medical Translation
 Translation plays an ancillary role in pharmaceutical research. The level of precision required in medical translation is high. Medical translators should have adequate medical training and the process of translation should have adequate checks and balances. Medical translation has legal and health ramifications, owing to which stakeholders must ensure high level of accuracy.
 This can be done by ensuring you have a reliable translation partner. A reliable translation agency will make sure that the translators are qualified medical translators. They will be native speakers of the target language. They will emphasise ongoing training and up-to-date technical knowledge on the part of the translators. Further, they will ensure that there is a medical and pharmaceutical subject matter expert at strategic stages of the translation process.
 WordPar International offers some of the best medical translation services in USA, Europe and India. Our list of satisfied customers is increasing and vouch for our responsiveness, accuracy and timely delivery.
 https://www.wordpar.com/medical-pharmaceutical-translation/
 Pharmaceutical Translation
 Translation of clinical trials, protocols, application dossiers and similar documents present a challenge. While applying for patents and submitting reports for approvals in various countries can be a daunting task. Pharma companies need reliable pharmaceutical translation services in the USA, India and Britain, when their original reports are in English and require excellent medical translation services in Europe, Brazil or Asia. WordPar partners with qualified translators with sound education and training in the said fields.
 Learn more about our quality control assurance processes that ensure that WordPar International is among the best translation service providers in India and the USA. The below article discusses parameters for selection of specialised translations and who qualifies as good pharmaceutical translators.Â
 https://www.wordpar.com/selecting-translators-specialised-translators/
 E-Learning Localization for Pharma Industry
 Translation for medical and pharma industry also includes localization of e-learning modules and training module. Use of medical equipment and tutorials about the use and administering of medicines, devices and vaccines forms part of this area of language conversion. WordPar International offers e-learning localisation in USA, India and Europe in most languages including English, German, Portuguese, French, Spanish, Dutch, Polish, Hungarian, Russian, Chinese, Korean, Vietnamese and so on.
 E-learning includes translation of on-screen content, narration scripts and slide notes. Then, the narration scripts are recorded by our team of excellent voiceover artistes from all over the world, and finally integration into the e-learning modules.
 Read more about our e-learning localization services in India here:
https://www.wordpar.com/e-learning-localization/
 The best localization service begins at the design stage. This is our motto, and we work closely with clients to develop the source content in a way that is conducive for efficient localization in various languages. To read more about how localization can begin at the design stage of content development, read the article in the link below:
 https://www.wordpar.com/localization-begins-at-design-stage/
 Voiceover
 To support localization of videos, presentation and e-learning modules, we offer excellent voiceover services in US, Europe and India. Our network of professional artistes in almost all mainstream languages of the world give our clients a wide range of voice talents. Voice options based on gender and age are available to suite the varying demands of the respective narration. More information can be read on the following post:
 https://www.wordpar.com/voice-over-and-voice-narration/
 Indian Languages Translator | Translation Company In India | E-learning Localization | Voice-over Services | Translation And Localization
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korean language interpreter mumbai
Introduction
An important quality of a good translator is curiosity. Striving to learn new and interesting things from different spheres of   competence will  eventually improve your work and keep it current.
 One of the useful ways to stay tuned in to the   tendencies and new technologies used in translation are translation blogs run by  independent   translators, companies, or associations. Since there are a great variety  of websites, it will take you    some  time to find the ones that are most suitable for you. The list below will give    you an idea which  blogs are worth   checking out in  if you are looking for details about starting a  career as a   freelancer, billing your clients, learning new words and terminology, or simply having fun.
 Translation Blogs for the Novice Translator
If you are just starting your career as  a professional translator, and especially as a freelancer, you might need some advice on how to organize   your work. The blogs below will help you with practical tips on how to approach clients, determine price and much more.
 Thoughts on Translation is a high-quality translation-focused blog written by Corinne McKay, an American Translators Association   certified  French to English translator. You can consider it a one stop shop for tips, tricks, and translation  korean language interpreter mumbai   news, focused   on human translation provided both by agencies and freelancers. Here you    will find advice on marketing and doing business as a translator and read about the author’s own experience in the profession.
Between Translations is run by Jayne Fox, a German into English translator, who tries to keep her readers updated with the most  useful tips for a professional translator. You can read about the necessary skills of a good translator  or which are the best CAT (computer-assisted translation) tools and how to use them efficiently. Other great  pieces of advice are provided on how to price translations or work with clients from different time zones.
Translation Times is written by twin-sisters Judy and Dagmar Jenner who are both translating and interpreting in Spanish, German, English, and French. They offer great articles on the practical side of the job such as rate negotiations, cancellation   policy, and software recommendations. In addition to that you will    find information about translation workshops and conferences, book reviews, academic translation programs, and job opportunities.
About Translation offers information, news and opinions about professional translations and you can find anything from ancient translation practices to current translation conferences. The blog is run by Riccardo Schiaffino, who is a certified translator from English into Italian. Even though, it has not been updated recently, the topics covered are written in an engaging and professional manner and the site is worth keeping an eye on.
Translation Blogs for the Curious
If you are looking for a blog that will keep   you informed and entertained at the same time, offering information about curious facts or the history of translation and interpretation, then you need to follow these three blogs:
 Oxford Dictionaries Blog is a great place full of resources for translators interested in linguistics. Here you can find curious  about  both well-known and rare words, as well as read about the recent influences that change the language. The blog covers serious and funnier topics such as how animals understand what people say, which makes it a great way to get your dose of knowledge and humor for the day.
Naked Translation offers a great mixture of useful tips for translators and interesting notes on the etymology of  some words. In the blog  korean language interpreter mumbai    you will find great articles with stunning images and lots of tricks to make your job easier. It is written by   and is focused mainly on translations from English into French and vice versa, however it contains tons of useful information for all translators.
Unprofessional Translation is the place to find curious details about the origin of the translator and interpreter professions. Although  not updated    on a regular basis, the blog is still worth checking if you want to learn about  competitions for    child translators, and bilingualism, about the interpreters of some infamous historical figures  or about the oldest    depiction of an interpreter. Despite its name, the blog is quite professionally written and tackles topics such as Natural Translation, Native Translation and Language Brokering.
Specialized Translation Blogs
Quite often translators specialize   in certain field or industry – medicine, law, food service, equipment and supply, etc. and in order to provide quality   document translation, they need to update their knowledge regularly. One of the   ways to do that is by following some specialized blogs. Here are a few to check out:
 Signs & Symptoms of Translation is a blog dedicated to medical translations. It is written by Emma Goldsmith, who is a Spanish to English    medical translator. Here you can also find some useful information about CAT tools and how to use them.
Intralingo is for those, who deal with and/or love literary translations. The blog does not only give insights into these types of texts but also presents ideas on how to make money from it. It is definitely worth reading if you are a literature and translation enthusiast.
Glossarissimo is a great blog that will  help any professional do their work better with its rich database of glossaries. Here you can find monolingual and multilingual resources and terminology for translators and interpreters.
Transblawg is dedicated to German-English legal translation. The posts, written by Margaret Marks, are full of humor and entertainment, which makes his blog fun and quite useful at the same time. It offers help and information to translators on a variety of topics and specializations.
This is just a small fraction of the great specialized blogs you can find on the web. Make sure to check the fields that you are most interested in as well.
 Translation Blogs for Fun
The work of a translator is indeed  quite intense and can be very stressful. Meeting deadlines, working on complicated texts, and dealing   with clients  from different time zones can take a toll. Therefore, it is necessary to have a look at the    funny   side of the job as well. Here are three blogs that will help you take a break and have some fun:
 Translator Fun is for those    who would enjoy  some posts and cartoons with a heavy dose of humor. The topics the blog   tackles will  sound more  familiar to those actually working in the field of translation, who allow themselves looking at the job from a less serious angle.
Blog is another cure for a long   and tedious   translation project, when you need some laughter to power you up. The blog offers a series of funny cartoons that present the everyday life of a translator in a humorous manner.
Musings from an  Overworked Translator is a blog that successfully combines the serious and the funny parts of the translator’s job. Here you can find useful information about new translators, e-mail etiquette and much more. Funny jokes, cartoons, and videos to make your day brighter.
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Tools used by translators
Translations agencies in India and other countries use tools to translate the documents. These tools are used to convert texts and the advanced tools also have memory software. Mentioned below are some common tools that companies in Indian cities such as Delhi use. Since Delhi is the capital and is the hub of such services, language translation services in Delhi also take help of such software. Metros like Mumbai, which is the financial capital of the country, also equally use these tools.
·        Linguee: This is a commonly used tool that aids learners and trainees to comprehend the use of a particular word, text in various documents. This tool is used in conjunction with images which help the translators to be sure of the use. Other than this, Linguee also searches the web to find out if there are alternative ways in which a particular word is used.
·        SDAL Trados Studio: For freelancers and agencies in Indian cities like Delhi, the use of this tool is most effective to term them as Best Translator in Delhi. This is a Computer-assisted translation (CAT) tool. This is advanced software that uses machine translation, localization, and terminology.  This is one of the established CAT tools that often reflect how reliable your services are.
·        The Free Dictionary: While translating, the most common problem is that of the meanings of words. This is a free dictionary that has extensive terminology related to all the fields like medical, business, idioms, synonym legal, financial and many more. Here, you can use translations in not just the English language, but Portuguese, Spanish, Japanese, and French.
·        Fluency Now: This tool is also one of the advanced CAT Tool and a translation memory software. This tool is compatible with other operating systems besides Microsoft.  You may use this with Mac and Linux too. This tool is premium because it also provides additional help such as proofreading, document statistics and also provides a project management solution.
·        MemoQ: If you work as a freelance translator, then this software is best for you as it has memory software that enables you to reuse an already done translation. It has features that also help in adjudicating the flow, consistency and correct terminology too.
Other than these tools, there are many others available in the market in India and other countries. You must choose a translating tool based on the features and its compatibility with the operating system you have.
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Have Command over Translation and Conquer the World
After healthcare, translation is the second fastest growing industry in the service sector. Organisations and people with good translation skills are marking big profits in the truly expandable world of business.
According to the Bureau of Labour Statistics, translation is going to be the fifth fastest growing occupation by 2022. After the economic recession of 2008, the maximum numbers of multinational corporations are shifting their focus from Europe and America to emerging economies of BRICS countries, South East Asia, Middle East and some parts of Africa and South America. As businesses are shifting their bases and annexing the new territories and markets the knowledge about the language and culture of these explored market is must for the businesses those want expand.
Hyundai, Samsung, and LG are the leading brands in automobiles and consumer electronics in India, but all these three companies are from South Korea. People in India are either comfortable in Hindi or English, whereas Korean is the language of aliens for them which they neither understand or they can communicate. Therefore, if these brands want to survive and grow in the Indian market they must employ people who are familiar with the local languages as well as the Korean language which is almost impossible. Hence, hiring translators of the Korean language is the only solution to fill the communication gap.
In total 196 countries of the world, people speak more than 7000 languages and among these 20 languages play a vital role in the international business; prominent are English, Chinese, Arabic, Japanese, Korean, Russian, German, French and Spanish. All these languages are popular in countries which are the global economic powers and have expertise in both manufacturing and service sector.
Businesses cannot sustain merely on technology and quality, communication with the local target audience and media bridges the gap between them. Here, professional translators in cities like Delhi and Mumbai play a vital role for converting all types corporate and promotional communication in the local languages. They coordinate with the management, communication planners, advertising & PR team and with other key members of the organisation. A good translator sensibly understand the need of the marketers and requirement of the market, after a thorough analysis, he/she do the translation of a document or message considering the culture and socio-economic factors of the target market.
There are n numbers of language translation agencies in Delhi , but, do they all provide quality translation or not is a big question. Before hiring professional translation services in India, an organisation should strictly check the qualifications of the translators, past projects, details of clients and testimonials of the agency. No doubt after doing a rigorous research, businesses can find some good translation agencies in Delhi and their professional services can surely help in magnifying the image and improving the revenue of a business organisation. From the aforesaid discussion, you can easily analyse the demand of professional translators in the growing global market. Then, don't wait polish your translation skills and let the world follow you!
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Interesting things about language Translation Companies in Mumbai
There is no doubt about language being the most interesting as well as one of the most complex aspects of human lives. This is more true in a country like India, where there are 22 official languages being spoken. In addition to that, 1652 different dialects and languages are spoken throughout the country, which are not given official status by the Government of India. There are some first Translation Companies in Mumbairendering professional translation across diverse Indian language. India is rising in its stature globally and with a large, highly growing economy, India is a magnet for global businesses.
National Language – One of the least spoken languages:
Hindi is the national language of India. It is termed as the fourth most spoken languages in the world after English, Spanish and Mandarin. However, the national language is spoken by less than 40 percent of the Indian population, which makes it one of the most  widely spoken languages in India. However, due to a large diversity in India, it is not used widely in some other parts of India such as South or in North East.
Translation + Cross check + Review:
Many certified Indian translation services use a �Three Check’ method for local language translation to ensure the translation is done without any flaws. The Three Check method primarily contains a first translation by a bilingual expert. It is then cross checked against the original document by a second expert. Finally, a native language expert checks and does the final touching. Most Translation Companies in Mumbaitend to rely more on human translation & editing. Machine translation and use of CAT tools are still quite limited.
Common Language – English:
Statically, English is far more spoken in India as compared to Hindi and few other official languages of the country. The translation services use English as a common medium whenever there arises a conflict in any translation service. This is because English is known and spoken by more than half of the population in India.
Evidently, in order to survive in a country like India, translation among all the contradictory dialects and languages is not only essential but it is obligatory!
So these are the points Translation Companies in Mumbai are giving good services to know more about kindly visit our site.
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BPO – BANE OR BOON?
Several MNCs are increasingly unbundling or vertical disintegrating their activities. Put in simple language, they have begun outsourcing (also called business process outsourcing) activities formerly performed in-house and concentrating their energies on a few functions. Outsourcing involves withdrawing from certain stages/activities and relaying on outside vendors to supply the needed products, support services, or functional activities. Take Infosys, its 250 engineers develop IT applications for BO/FA (Bank of America). Elsewhere, Infosys staffers process home loans for green point mortgage of Novato, California. At Wipro, five radiologists interpret 30 CT scans a day for Massachusetts General Hospital. 2500 college educated men and women are buzzing at midnight at Wipro Spectra mind at Delhi. They are busy processing claims for a major US insurance company and providing help-desk support for a big US Internet service provider-all at a cost upto 60 percent lower than in the US. Seven Wipro Spectra mind staff with Ph.Ds in molecular biology sift through scientific research for westernpharmaceutical companies. Another activist in BOP is Evalue serve, headquarterd in Bermuda and having main operations near Delhi. It also has a US subsigiary based in New York and a marketing office in Australia to cover the European market. As Alok Aggarwal (co-founder and chairman) says, his company supplies a range of value-added services to clients that include a dozen Fortune 500 companies and seven global consulting firms, besides market research and venture capital firms. Much of its work involves dealing with CEOs, CFOs, CTOs, CIOs, and other so called C-level executives. Evaluserve provides services like patent writing, evaluation and assessment of their commercialization potential for law firms and entrepreneurs. Its market research services are aimed at top-rung financial service firms, to which it provides analysis of investment opportunities and business plans. Another major offering is multilingual services. Evalueserve trains and qualifies employees to communicate in Chinese, Spanish, German, Japanese and Italian, among other languages. That skill set has opened market opportunities in Europe and elsewhere, especially with global corporations. ICICI info tech Services in Edison, New Jersey, is another BOP services provider that is offering marketing software products and diversifying into markets outside the US. The firm has been promoted by $2-billion ICICI Bank, a large financial institution in Mumbai that is listed on the New York Stock Exchange. In its first year after setting up shop in March 1999, ICICI info tech spent $33
million acquiring two information technology services firms in New Jersy-Object Experts and ivory Consulting – and command Systems in Connecticut. These acquisitions were to help ICICI Info tech hit the ground in the US with a ready book of contracts. But it soon found US companies increasingly outsourcing their requirements to offshore locations, instead of hiring foreign employees to work onsite at their offices. The company found other native modes for growth. It has started marketing its products in banking, insurance and enterprise resource planning among others. It has ear market $10 million for its next US market offensive, which would go towards R & D and back-end infrastructure support, and creating new versions of its products to comply with US market requirements. It also has a joint venture – Semantik Solutions GmbH in Berlin, Germany with the Fraunhofer Institute for Software and Systems Engineering, which is based in Berlin and Dortmund, Germany – Fraunhofer is a leading institute in applied research and development with 200 experts in software engineering and evolutionary information. A relatively late entrant to the US market , ICICI Infotech started out with plain vanilla IT services, including operating call centeres. As the market for traditional IT services started wakening around mid-2000, ICICI Info tech repositioned itself as a “Solutions” firm offering both products and services. Today , it offers bundied packages of products and services in corporate and retail banking and include data center and disaster recovery management and value chain management services. ICICI Infotech’s expansion into new overseas markets has paid off. Its $50  million revenue for its latest financial year ending March 2003 has the US operations generating some $15 million, while the Middle East and Far East markets brought in another $9 million. It new boasts more than 700 customers in 30 countries, including Dow Jones, Glazo-Smithkline, Panasonic and American Insurance Group. The outsourcing industry is indeed growing form strength. Though technical support and financial services have dominated India’s outsourcing industry, newer fields are emerging which are expected to boost the industry many times over. Outsourcing of human resource services or HR BPO is emerging as big opportunity for Indian BPOs with global market in this segment estimated at $40-60 billion per annum. HR BPO comes to about 33 percent of the outsourcing revenue and India has immense potential as more than 80 percent of Fortune 1000 companies discuss offshore BOP as a way to cut costs and increase productivity. Another potential area is ITES/BOP industry. According to A NASSCOM survey, the global ITES/BOP industry was valued at around $773 billion during 2002 and it is expected to grow at a compounded annual growth rate of nine percent during the period 2002 – 06, NASSCOM lists the major indicators of the high growth potential of ITES/BOP industry in India as the following. During 2003 – 04, The ITES/BPO segment is estimated to have achieved a 54 percent growth in revenues as compared to the previous year. ITES exports accounted for $3.6 billion in revenues, up form $2.5 billion in 2002 – 03. The ITES-BPO segment also proved to be a major opportunity for job seekers, creating employment for around 74,400 additional personnel in India during 2003 – 04. The number of Indians working for this sector jumped to 245,500 by March 2004. By the year 2008, the segment is expected to employ over 1.1 million Indians, according to studies conducted by NASSCOM and McKinsey & Co. Market research shows that in terms of job creation, the ITES-BOP industry is growing at over 50 per cent. Legal outsourcing sector is another area India can look for. Legal transcription involves conversion of interviews with clients or witnesses by lawyers in to documents which can be presented in courts. It is no different from any other transcription work carried out in India. The bottom-line here is again cheap service. There is a strong reason why India can prove to be a big legal outsourcing Industry. India, like the US, is a common-law jurisdiction rooted in the British legal tradition. Indian legal training is conducted solely in English. Appellate and Supreme Court proceedings in India take place exclusively in English. Due to the time zone differences, night time in the US is daytime in India which means that clients get 24 hour attention, and some projects can be completed overnight. Small and mid – sized business offices can solve staff problems as the outsourced lawyers from India take on the time – consuming labour intensive legal research and writing projects. Large law firms also can solve problems of overstaffing by using the on – call lawyers. Research firms such as Forrester Research, predict that by 2015, more than 489,000 US lawyer jobs, nearly eight percent of the field, will shift abroad. Many more new avenues are opening up for BOP services providers. Patent writing and evaluation services are markets set to boom. Some 200.000 patent applications are written in the western world annually, making for a market size of between $5 billion and $7 billion. Outsourcing patent writing service could significantly lower the cost of each patent application, now anywhere between $12,000 and $15,000 apiece-which would help expand the market. Off shoring of equity research is another major growth area. Translation services are also becoming a big Indian plus. India produces some 3,000 graduates in German each year, which is more than that in Switzerland. Though going is good, the Indian BPO services providers cannot afford to be complacent. Phillppines, Maxico and Hungary are emerging as potential offshore locations. Likely competitor is Russia, although the absence of English speaking people there holds the country back. But the dark horse could be South Affrica and even China BOP is based on sound economic reasons. Outsourcing helps gain cost advantage. If an activity can be performed better or more cheaply by an outside supplier, why not outsource it? Many PC makers, for example, have shifted from in – house assembly to utilizing contract assemblers to make their PCs. CISCO outsources all productions and assembly of its routers and witching equipment to contract manufactures that operate 37 factories, all linked via the internet. Secondly, the activity (outsourced) is not crucial to the firm’s ability to gain sustainable competitive advantage and won’t hollow out its core competence, capabilities, or technical know how. Outsourcing of maintenance services, date processing, accounting, and other administrative support activities to companies specializing in these services has become common place. Thirdly, outsourcing reduces the company’s risk exposure to changing technology and / or changing buyer preferences. Fourthly, BPO streamlines company operations in ways that improve organizational flexibility, cut cycle time, speedup decision making and reduce coordination costs. Finally, outsourcing allows a company to concentrate on its core business and do what it does best. Are Indian companies listening? If they listen, BPO is a boon to them and not a bane.
 Questions :
 1. Which of the theories of international trade can help Indian services providers gain competitive edge over their competitors?
 2. Pick up some Indian services providers. With the help of Michael Porter’s diamond, analyse their strengths and weaknesses as active players in BPO.
 3. Compare this case with the case given at the beginning of this chapter. What similarities and dissimilarities do you notice? Your analysis should be based on the theories explained.
 No : 2
PERU
Peru is located on the west coast of South America. It is the third largest nation of the continent (after Brazil and Argentina), and covers almost 500.000 square miles(about 14 per cent of the size of the United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering snow – capped Andes mountains, sparkling grass – covered plateaus, and thick rain forests. Peru has approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians (one half of the population) live in Peru than in any other country in the western hemisphere. The ancestors of Peru’s Indians were the famous incase, who built a great empire. The rest of the population is mixed and a small percentage is white. The economy depends heavily on agriculture, fishing , mining, and services, GDP is approximately $15 billion and per capita income in recent years has been around $4,3000. In recent years the economy has gained some relative strength and multinationals are now beginning to consider investing in the country. One of these potential investors is a large New York based bank that is considering a $25 million loan to the owner of a Peruvian fishing fleet. The owner
wants to refurbish the fleet and add one more ship. During the 1970s, the Peruvian government nationalized a number of industries and factories and began running them for the profit of the state in most cases, these state – run ventures became disasters. In the late 1970s the fishing fleet owner was given back his ships and allowed to operate his business as before. Since then, he has managed to remain profitable, but the biggest problem is that his ships are getting old and he needs an influx of capital of make repairs and add new technology. As he explained it to the new York banker. “Fishing is no longer just an art. There is a great deal of technology involved. And to keep costs low and be competitive on the world market, you have to have the latest equipment for both
locating as well as catching and then loading and unloading the fish” Having reviewed the fleet owner’s operation, the large multinational bank believes that the loan is justified. The financial institution is concerned, however, that the Peruvian government might step in during the next couple of years and again take over the business. If this were to happen, it might take an additional decade for the loan to be repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the last decade, the fleet the way he has over the last decade, the loan could be repaid within seven years. Right now, the bank is deciding on the specific terms of the agreement. Once theses have been worked out, either a loan officer will fly down to Lima and close the deal or the owner will be asked to come to New York for the signing. Whichever approach is used, the bank realizes that final adjustments in the agreement will have to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have to have the authority to commit the bank to specific terms. These final matters should be worked out within the next ten days.
 Questions :
 1. What are some current issues facing Peru? What is the climate for doing business in Peru today?
 2. What type of political risks does this fishing company need to evaluate? Identify and describe them.
 3. What types of integrative and protective and defensive techniques can the bank use?
 4. Would the bank be better off negotiating the loan in New York or in Lima? Why?
 No : 3
RED BECOMING THICKER
The Backdrop
There seems to be no end to the troubles of the coloured – water giant Coca Cola. The cola giant had entered India decades back but left the country in the late 1970s. It staged a comeback in the early 1990s through the acquisitions route. The professional management style of Coca Cola did not jell with the local bottlers. Four CEOs were changed in a span of seven years. Coke could not capitalize on the popularity of Thums Up. Its arch rival Pepsi is well ahead and has been able to penetrate deep into the Indian market. Red in the balance sheet of Coke is becoming thicker and industry observers are of the opinion that it would take at least two decades more before Coke could think of making profits in India.
 The Story
It was in the early 1990s that India started liberalizing her economy. Seizing the opportunity, Coca Cola wanted to stage a comeback in India. It chose RameshChauhan of Parle for entry into the market. Coke paid $100 million to Chauhan and acquired his well established brands Thums Up, Goldspot and Limca. Coke also bagged 56 bottlers of Chauhan as a part of the deal. Chauhan was made consultant and was also given the first right of refusal to any large size bottling plants and bottling contracts, the former in the Pune – Bangalore belt and the latter in the Delhi and Mumbai areas. Jayadeva Raja, the flamboyant management expert was made the first CEO of Coke India. It did not take much time for him to realize that Coke had inherited several weaknesses from Chauhan along with the brands and bottlers. Many bottling plants were small in capacity (200 bottlers per minute as against the world standard of 1600) and used obsolete technology. The bottlers were in no mood to increase their capacities, nor were they willing to upgrade the trucks used for transporting the bottle. Bottlers were more used to the paternalistic approach of Chauhan and the new professional management styles of Coke did not go down well with them. Chauhan also felt that he was alienated and was even suspected to be supplying concentrate unofficially to the bottlers. Raja was replaced by the hard – nosed Richard Niholas in 1995. The first thing Nicholas did was to give an ultimatum to the bottlers to expand their plants or sell out. Coke also demanded equity stakes in many of the bottling plants. The bottlers had their own difficulties as well. They were running on low profit margins. Nor was Coke willing to finance the bottlers on soft terms. The ultimatum backfired. Many bottlers switched their loyalty and went to Pepsi. Chauhan allegedly supported the bottlers, of course, from the sidelines. Coke thought it had staged a coup over Pepsi when it (Coke) clamed the status of official drink for the 1996 Cricket World Cup tournament. Pepsi took on Coke mightily with the famous jingle “Nothing official about it”. Coke could havecapitalized on the sporty image of Thums Up to counter the campaign, but instead simply caved in. Donald Short replaced Nicholas as CEO in 1997. Armed with heavy financial powers, Short bought out 38 bottlers for about $700 million. This worked out to about Rs 7 per case, but the cost – effective figure was Rs 3 per case. Short also invested heavily in manpower. By 1997 , Coke’s workforce increased to 300. Three years later, the parent company admitted that investment in India was a big mistake. It is not in the culture of Coke to admit failure. It has decided to fight back. Coke could not only sustain the loss, it could even spend more money on Indian operations. It hiked the ad budget and appointed Chaitra Leo Burnett as its ad agency. During 1998 – 99, Coke’s ad spend was almost three times that of Pepsi. Coke is taking a look at its human resources and is taking initiatives to re – orient the culture and inject an element of decentralization along with empowerment. Each bottling plant is expected to meet predetermined profit, market share, and sales volumes. For newly hired management trainees, a clearly defined career path has been drawn to enable them to become profit centre heads shortly after completion of their probation. Such a decentralized approach is something of a novelty in the Coke culture worldwide. But Alezander “Von Behr, who replaced Short as Chef of Indian operations, reiterated Coke’s commitment to decentralization and local responsiveness. Coke has divided India into six regions, each with a business head. Change in the organization structure has disappointed many employees, some of whom even quit the company. Coke started cutting down its costs. Executives have been asked to shift from farm houses to smaller houses and rentals of Gurgaon headquarters have been renegotiated. Discount rates have been standardized and information systems are being upgraded to enable the Indian headquarters to access online financial status of its outposts down to the depot level. Coke has great hopes in Indian as the country has a huge population and the current per capita consumption of beverages is just four bottles a year. Right now, the parent company (head – quartered in the US) has bottle full of problems. The recently appointed CEO-E Neville Isdell needs to struggle to do the things that once made the Cola company great. The problems include –
 Meddling Board
Coke’s star- studded group of directors, many of whom date back to the Goizueta era, has built a reputation for meddling.
 Moribund Marketing
Once world class critics say that today the soda giant has become too conservative, with ads that don’t resonate with the teenagers and young adults that made up its most important audience.
 Lack of Innovation
In the US market , Coke hasn’t created a best – selling new soda since Diet Coke in 1982. In recent years Coke has been outbid by rival Pepsi Co for faster growing noncarb beverages like SoBe Gatorade.
 Friction with Bottlers
Over the past decade, Coke has often made its profit at the expenses of bottlers, pushing aggressive price hikes on the concentrate it sells them. But key bottlers are now fighting back with sharp increases in the price of coke at retail.
 International Worries
Coke desperately needs more international growth to offset its flagging US business, but while some markets like Japan remain lucrative, in the large German market Coke has problems so far as bottling contracts go. When its own house is not in order in the large country, will the company be able to focus enough on the Indian market?
 Questions:
 1. Why is that Coke has not been able to make profit in its Indian operations?
 2. Do you think that Coke should continue to stay in India? If yes, why?
 3. What cultural adaptations would you suggest to the US expatriate managers regarding their management style?
 4. Using the Hofstede and the value orientations cultural model , how can you explain some of the cultural differences noted in this case ?
 NO. 4
THE ABB PBS JOINT VENTURE IN OPERATION
ABB Prvni Brnenska Stojirna Brno, Ltd. (ABB-PBS), Czechoslovakia was a joint venture in which ABB has a 67 per cent stake and PBS a.s. has a 33 per cent stake. This PBS share was determined nominally by the value of the land, plant and equipment, employees and goodwill, ABB contributed cash and specified technologies and assumed some of the debt of PBS. The new company started operations on April 15, 1993. Business for the joint venture in its first two full years was good in most aspects. Orders received in 1994, the first full year of the joint venture’s operation, were higher than ever in the history of PBS. Orders received in 1995 were 2½ times those in 1994. The company was profitable in 1995 and ahead of 1994s results with a rate of return on assets of 2.3 per cent and a rate of return on sales of 4.5 per cent. The 1995 results showed substantial progress towards meeting the joint venture’s strategic goals adopted in 1994 as part of a five year plan. One of the goals was that exports should account for half of the total orders by 1999. (Exports had accounted for more than a quarter of the PBS business before 1989, but most of this business disappeared when the Soviet Union Collapsed). In 1995 exports increased as a share of total orders to 28 per cent, up from 16 per cent the year before. The external service business, organized and functioning as a separate business for the first time in 1995, did not meet expectations. It accounted for five per cent of all orders and revenues in 1995, below the 10 per cent goal set for it. The retrofitting business, which was expected to be a major part of the service business, was disappointing for ABB-PBS, partly because many other small companies began to provide this service in 1994, including some started by former PBS employees who took their knowledge of PBS-built power plants with them. However, ABB-PBS managers hoped that as the company introduced new technologies, these former employees would gradually lose their ability to perform these services, and the retrofit and repair service business, would return to ABBPBS. ABB-PBS dominated the Czech boiler business with 70 per cent of the Czech market in 1995, but managers expected this share to go down in the future as new domestic and foreign competitors emerged. Furthermore, the west European boiler market was actually declining because environmental laws caused a surge of retrofitting to occur in the mid -1980 s, leaving less business in the 1990 s. Accordingly ABB-PBS boiler orders were flat in 1995. Top managers at ABB-PBS regarded business results to date as respectable, but they were not satisfied with the company’s performance. Cash flow was not as good as expected. Cost reduction had to go further. The more we succeed, the more we see our shortcomings” said one official. Restructuring The first round of restructuring was largely completed in 1995, the last year of the three-year restructuring plan. Plan logistics, information systems, and other
physical capital improvements were in place. The restricting included :
  Renovating and reconstructing workshops and engineering facilities.
ď‚· Achieving ISO 9001 for all four ABB-PBS divisions. (awarded in 1995)
ď‚· Transfer of technology from ABB (this was an ongoing project)
ď‚· Intallation of an information system.
ď‚· Management training, especially in total quality assurance and English language.
ď‚· Implementing a project management approach.
A notable achievement of importance of top management in 1995 was a 50 per cent increase in labour productivity, measured as value added per payroll crown. However, in the future ABB-PBS expected its wage rates to go up faster than west European wage rates (Czech wages were increasing about 15 per cent per year) so it would be difficult to maintain the ABB-PBS unit cost advantage over west European unit cost. The Technology Role for ABB-PBS The joint venture was expected from the beginning to play an important role in technology development for part of ABB’s power generation business worldwide. PBS a.s. had engineering capability in coal – fired steam boilers, and that capability was expected to be especially useful to ABB as more countries became concerned about air quality. (When asked if PBS really did have leading technology here, a boiler engineering manager remarked, “ Of course we do. We burn so much dirty coal in this country, we have to have better technology”) However, the envisioned technology leadership role for ABB-PBS had not been realized by mid – 1996. Richard Kuba, the ABB-PBS managing director, realized the slowness with which the technology role was being fulfilled, and he offered his interpretation of events. “ABB did not promise to make the joint venture its steam technology leader. The main point we wanted to achieve in the joint venture agreement was for ABBPBS to be recognized as a full-fledged company, not just a factory. We were slowed down on our technology plans because we had a problem keeping our good, young engineers. The annual employee turnover rate for companies in the Czech Republic is 15 or 20 per cent, and the unemployment rate is zero. Our engineers have many other good entrepreneurial opportunities. Now we’ve begun to stablise our engineering workforce. The restructing helped. We have better equipment and a cleaner and safer work environment. We also had another problem which is a good problem to have. The domestic power plant business turned out to be better than we expected, so just meeting the needs of our regular customers forced some postponement of new technology initiatives.” ABB-PBS had benefited technologically from its relationship with ABB. One example was the development of a new steam turbine line. This project was a cooperative effort among ABB-PBS and two other ABB companies, one in Sweden and one in Germany. Nevertheless, technology transfer was not the most important early benefit of ABB relationship. Rather, one of the most important gains was the opportunity to benchmark the joint venture’s performance against other established western ABB companies on variables such as productivity, inventory and receivables.
 Questions :
 1. Where does the joint venture meet the needs of both the partners ? Where does it fall short?
 2. Why had ABB-PBS failed to realize its technology leadership ?
 3. What lessons one can draw from this incident for better management of technology transfers?
 NO. 5.
CHINESE EVOLVING ACCOUNTING SYSTEM
Attracted by its rapid transformation from a socialist planned economy into a market economy, economic annual growth rate of around 12 per cent, and a population in excess of 1.2 billion, Western firms over the past 10 years have favoured China as a site for foreign direct investment. Most see China as an emerging economic superpower, with an economy that will be as large as that of Japan by 2000 and that of the US before 2010, if current growth projections hold true. The Chinese government sees foreign direct investment as a primary engine of China’s economic growth. To encourage such investment, the government has offered generous tax incentives to foreign firms that invest in China, either on their own or in a joint venture with a local enterprise. These tax incentives include a two – year exemption from corporate income tax following an investment, plus a further three years during which taxes are paid at only 50 per cent of the standard tax rate. Such incentives when coupled with the promise of China’s vast internal market have made the country a prime site for investment by Western firms. However, once established in China, many Western firms find themselves struggling to
comply with the complex and often obtuse nature of China’s rapidly evolving accounting system. Accounting in China has traditionally been rooted in information gathering and compliance reporting designed to measure the government’s production and tax goals. The Chinese system was based on the old Soviet system, which had little to do with profit or accounting systems created to report financial positions or the results of foreign operations. Although the system is changing rapidly, many problems associated with the old system still remain. One problem for investors is a severe shortage of accountants, financial managers, and auditors in China, especially those experienced with market economy transactions and international accounting practices. As of 1995, there were only 25,000 accountants in china, far short of the hundreds of thousands that will be needed if China continues on its path towards becoming a market economy.
Chinese enterprises, including equity and cooperative joint ventures with foreign firms, must be audited by Chinese accounting firms, which are regulated by the state. Traditionally, many experienced auditors have audited only state-owned enterprises, working through the local province or city authorities and the state audit bureau to report to the government entity overseeing the audited firm. In response to the shortage of accountants schooled in the principles of private sector accounting, several large international auditing firms have established joint ventures with emerging Chinese accounting and auditing firms to bridge the growing need for international accounting, tax and securities expertise. A further problem concerns the somewhat halting evolution of China’s emerging accounting standards. Current thinking is that China won’t simply adopt the international accounting standards specified by the IASC, nor will it use the generally accepted accounting principles of any particular country as its mode. Rather, accounting standards in China are expected to evolve in a rather piecemeal fashion, with the Chinese adopting a few standards as they are studied and deemed appropriate for Chinese circumstances. In the meantime, current Chinese accounting principles present difficult problems for Western firms. For example, the former Chinese accounting system didn’t need to accrue unrealized losses. In an economy where shortages were the
norm, if a state-owned company didn’t sell its inventory right away, it could store it and use it for some other purpose later. Similarly, accounting principles assumed the state always paid its debts – eventually. Thus, Chinese enterprises don’t generally provide for lower-of-cost or market inventory adjustments or the creation of allowance for bad debts, both of which are standard practices in the West.
 Questions :
 1. What factors have shaped the accounting system currently in use in China ?
 2. What problem does the accounting system, currently in sue in China, present to foreign investors in joint ventures with Chinese companies ?
 3. If the evolving Chinese system does not adhere to IASC standards, but instead to standards that the Chinese governments deem appropriate to China’s “Special situation”, how might this affect foreign firms with operations in China ?
 NO. 6
UNFAIR PROTECTION OR VALID DEFENSE ?
“Mexico Widens Anti – dumping Measure …………. Steel at the Core of US-Japan Trade Tensions …. Competitors in Other Countries Are Destroying an American Success Story … It Must Be Stopped”, scream headlines around the world. International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume and selection of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of the World Trade Organisation (WTO) and smaller groups of nations, governments seem to be crying foul in the trade game now more than ever before. We see efforts at protectionism in the rising trend in governments charging foreign producers for “dumping” their goods on world markets. Worldwide, the number of antidumping cases that were initiated stood at about 150 in 1995, 225 in 1996, 230 in 1997 , and 300 in 1998. There is no shortage of similar examples. The Untied States charges Brazil, Japan, and Russia with dumping their products in the US market as a way out of tough economic times. The US steel industry wants the government to slap a 200 per cent tariff on certain types of steel. But car markers in the United States are not
complaining, and General Motors even spoke out against the antidumping charge – as it is enjoying the benefits of law – cost steel for use in its auto product ion. Canadian steel makers followed the lead of the United States and are pushing for antidumping actions against four nations. Emerging markets, too , are jumping into the fray. Mexico recently expanded coverage of its Automatic Import Advice System. The system requires importers (from a select list of countries) to notify Mexican officials of the amount and price of a shipment ten days prior to its expected arrival in Mexico. The ten-day notice gives domestic producers advance warning of incoming low – priced products so they can complain of dumping before the products clear customs and enter the marketplace. India is also getting onboard by setting up a new government agency to handle antidumping cases. Even Argentina, China , Indonesia, South Africa, South Korea, and Thailand are using this recently – popularized tool of protectionism. Why is dumping on the rise in the first place ? The WTO has made major inroads on the use of tariffs, slashing tem across almost every product category in recent years. But the WTO does not have the authority to punish companies, but only governments. Thus , the WTO cannot pass judgements against individual companies that are dumping products in other markets. It can only pass rulings against the government of the country that imposes an antidumping duty. But the WTO allows countries to retaliate against nations whose producers are suspected of dumping when it can be shown that : (1) the alleged offenders are significantly hurting domestic producers, and (2) the export price is lower than the cost of production or lower than the home – market price. Supporters of antidumping tariffs claim that they prevent dumpers from undercutting the prices charged by producers in a target market and driving them out of business. Another claim in support of antidumping is that it is an excellent way of retaining some protection against potential dangers of totally free trade. Detractors of antidumping tariffs charge that once such tariffs are imposed they are rarely removed. They also claim that it costs companies and governments a great deal of time and money to file and argue their cases. It is also argued that the fear of being charged with dumping causes international competitors to keep their prices higher in a target market than would other wise be the case. This would allow domestic companies to charge higher prices and not lose marketshare – forcing consumers to pay more for their goods.
 Questions
1. “You can’t tell consumers that the low price they are paying for a particular fax machine or automobile is somehow unfair. They’re not concerned with the profits of companies. To them, it’s just a great bargain and they want it to continue.” Do you agree with this statement ? Do you think that people from different cultures would respond differently to this statement? Explain your answers.
 2. As we’ve seen, the WTO cannot currently get involved in punishing individual companies for dumping – its actions can only be directed toward governments of countries. Do you think this is a wise policy? Why or why not? Why do you think the WTO was not given the authority to charge individual companies with dumping? Explain.
 3. Identify a recent antidumping case that was brought before the WTO. Locate as many articles in the press as you can that discuss the case. Identify the nations, products (s) , and potential punitive measures involved. Supposing you were part of the WTO’s Dispute Settlement Body, would you vote in favor of the measures taken by the retailing nation? Why or why not?
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Operators Manuals Operators manuals and training material translated from Japanese to Kannada, Tamil, Telugu and Malayalam
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Today, the company boasts of a multilingual library and complete resources material in all south-Indian regional languages side by side with their Japanese resource books.
Abstraction & Summarization of Legal Agreements Abstraction of lease agreements in Korean, Mandarin, Japanese, Russian, Ukrainian, French, German, Hungarian, Czech, Greek, Italian, Turkish, Arabic, Hebrew, Spanish and Portuguese
A global back office and outsourcing company outsourced the abstraction of lease agreements and related contracts. These contracts were available in various languages of Europe, Central Asia, East Asia and Latin America. Thousands of contracts for various economic regions needed to be summarised in English language and their data fed to a central database belonging to their clients.
The projects were executed with 99% accuracy with the help of legal experts, lawyers or legal translators from the various countries and with efficient project management. Some of the languages became repeat and ongoing projects while others remained sporadic requests.
The central legal team in the project management team had the task of transferring knowledge procedures and the nuances of abstract templates to every new recruit for every language pair. Identification of the right linguist for the requirements was another decisive element for the success of the project. Projects in various languages continue to this day.
Patents and articles translation Patents and articles translated from Chinese, Japanese, German, Korean and Russian to English.
A subsidiary manufacturing company wanted its patents and articles translated. Hundreds of scientific patents and articles for various economic regions needed to be translated in English language. The projects are executed with 99% accuracy with the help of translators with legal and technical expertise and with efficient project management. Most language projects are a continue to be an ongoing project.
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korean interpreter mumbai
korean interpreter mumbaiIntroduction
An important quality of a good translator is curiosity. Striving to learn new and interesting things from different spheres of   competence will  eventually improve your work and keep it current.
 One of the useful ways to stay tuned in to the   tendencies and new technologies used in translation are translation blogs run by  independent   translators, companies, or associations. Since there are a great variety  of websites, it will take you    some  time to find the ones that are most suitable for you. The list below will give    you an idea which  blogs are worth   checking out in  if you are looking for details about starting a  korean interpreter mumbai  career as a   freelancer, billing your clients, learning new words and terminology, or simply having fun.
 Translation Blogs for the Novice Translator
If you are just starting your career as  a professional translator, and especially as a freelancer, you might need some advice on how to organize   your work. The blogs below will help you with practical tips on how to approach clients, determine price and much more.
 Thoughts on Translation is a high-quality translation-focused blog written by Corinne McKay, an American Translators Association   certified  French to English translator. You can consider it a one stop shop for tips, tricks, and translation   news, focused   on human translation provided both by agencies and freelancers. Here you    will find advice on marketing and doing business as a translator and read about the author’s own experience in the profession.
Between Translations is run by Jayne Fox, a German into English translator, who tries to keep her readers updated with the most  useful tips for a professional translator. You can read about the necessary skills of a good translator  or which are the best CAT (computer-assisted translation) tools and how to use them efficiently. Other great  pieces of advice are provided on how to price translations or work with clients from different time zones.
Translation Times is written by twin-sisters Judy and Dagmar Jenner who are both translating and interpreting in Spanish, German, English, and French. They offer great articles on the practical side of the job such as rate negotiations, cancellation   policy, and software recommendations. In addition to that you will    find information about translation workshops and conferences, book reviews, academic translation programs, and job opportunities.
About Translation offers information, news and opinions about professional translations and you can find anything from ancient translation practices to current translation conferences. The blog is run by Riccardo Schiaffino, who is a certified translator from English into Italian. Even though, it has not been updated recently, the topics covered are written in an engaging and professional manner and the site is worth keeping an eye on.
Translation Blogs for the Curious
If you are looking for a blog that will keep   you informed and entertained at the same time, offering information about curious facts or the history of translation and interpretation, then you need to follow these three blogs:
 Oxford Dictionaries Blog is a great place full of resources for translators interested in linguistics. Here you can find curious facts about  both well-known and rare words, as well as read about the recent influences that change the language. The blog covers serious and funnier topics such as how animals understand what people say, which makes it a great way to get your dose of knowledge and humor for the day.
Naked Translation offers a great mixture of useful tips for translators and interesting notes on the etymology of  some words. In the blog   you will find great articles with stunning images and lots of tricks to make your job easier. It is written by   and is focused mainly on translations from English into French and vice versa, however it contains tons of useful information for all translators.
Unprofessional Translation is the place to find curious details about the origin of the translator and interpreter professions. Although  not updated    on a regular basis, the blog is still worth checking if you want to learn about  korean interpreter mumbai  competitions for    child translators, and bilingualism, about the interpreters of some infamous historical figures  or about the oldest    depiction of an interpreter. Despite its name, the blog is quite professionally written and tackles topics such as Natural Translation, Native Translation and Language Brokering.
Specialized Translation Blogs
Quite often translators specialize   in certain field or industry – medicine, law, food service, equipment and supply, etc. and in order to provide quality   document translation, they need to update their knowledge regularly. One of the   ways to do that is by following some specialized blogs. Here are a few to check out:
 Signs & Symptoms of Translation is a blog dedicated to medical translations. It is written by Emma Goldsmith, who is a Spanish to English    medical translator. Here you can also find some useful information about CAT tools and how to use them.
Intralingo is for those, who deal with and/or love literary translations. The blog does not only give insights into these types of texts but also presents ideas on how to make money from it. It is definitely worth reading if you are a literature and translation enthusiast.
Glossarissimo is a great blog that will  help any professional do their work better with its rich database of glossaries. Here you can find monolingual and multilingual resources and terminology for translators and interpreters.
Transblawg is dedicated to German-English legal translation. The posts, written by Margaret Marks, are full of humor and entertainment, which makes his blog fun and quite useful at the same time. It offers help and information to translators on a variety of topics and specializations.
This is just a small fraction of the great specialized blogs you can find on the web. Make sure to check the fields that you are most interested in as well.
 Translation Blogs for Fun
The work of a translator is indeed  quite intense and can be very stressful. Meeting deadlines, working on complicated texts, and dealing   with clients  from different time zones can take a toll. Therefore, it is necessary to have a look at the    funny   side of the job as well. Here are three blogs that will help you take a break and have some fun:
 Translator Fun is for those    who would enjoy  some posts and cartoons with a heavy dose of humor. The topics the blog   tackles will  sound more  familiar to those actually working in the field of translation, who allow themselves looking at the job from a less serious angle.
Blog is another cure for a long   and tedious   translation project, when you need some laughter to power you up. The blog offers a series of funny cartoons that present the everyday life of a translator in a humorous manner.
Musings from an  Overworked Translator is a blog that successfully combines the serious and the funny parts of the translator’s job. Here you can find useful information about new translators, e-mail etiquette and much more. Funny jokes, cartoons, and videos to make your day brighter.
korean interpreter mumbai
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Text
korean translation mumbai
Introduction
An important quality of a good translator is curiosity. Striving to learn new and interesting things from different spheres of competence will eventually improve your work and keep it current.
 One of the useful ways to stay tuned in to the  korean translation mumbai  tendencies and new technologies used in translation are translation blogs run by independent   translators, companies, or associations. Since there are a great variety of websites, it will take you  some  time to find the ones that are most suitable for you. The list below will give    you an idea which  blogs are worth   checking out in  if you are looking for details about starting a career as a   freelancer, billing your clients, learning new words and terminology, or simply having fun.
 Translation Blogs for the Novice Translator
If you are just starting your career as a professional translator, and especially as a freelancer, you might need some advice on how to organize   your work. The blogs below will help you with practical tips on how to approach clients, determine price and much more.
 Thoughts on Translation is a high-quality translation-focused blog written by Corinne McKay, an American Translators Association certified  French to English translator. You can consider it a one stop shop for tips, tricks, and translation   news, focused   on human translation provided both by agencies and freelancers. Here you will find advice on marketing and doing business as a translator and read about the author’s own experience in the profession.
Between Translations is run by Jayne Fox, a German into English translator, who tries to keep her readers updated with the most  useful tips for a professional translator. You can read about the necessary skills of a good translator or which are the best CAT (computer-assisted translation) tools and how to use them efficiently. Other great  pieces of advice are provided on how to price translations or work with clients from different time zones.
Translation Times is written by twin-sisters Judy and Dagmar Jenner who are both translating and interpreting in Spanish, German, English, and French. They offer great articles on the practical side of the job such as rate negotiations, cancellation   policy, and software recommendations. In addition to that you will    find information about translation workshops and conferences, book reviews, academic translation programs, and job opportunities.
About Translation offers information, news and opinions about professional translations and you can find anything from ancient translation practices to current translation conferences. The blog is run by Riccardo Schiaffino, who is a certified translator from English into Italian. Even though, it has not been updated recently, the topics covered are written in an engaging and professional manner and the site is worth keeping an eye on.
Translation Blogs for the Curious
If you are looking for a blog that will keep   you informed and entertained at the same time, offering information about curious facts or the history of translation and interpretation, then you need to follow these three blogs:
 Oxford Dictionaries Blog is a great place full of resources for translators interested in linguistics. Here you can find curious facts about both well-known and rare words, as well as read about the recent influences that change the language. The blog covers serious and funnier topics such as how animals understand what people say, which makes it a great way to get your dose of knowledge and humor for the day.
Naked Translation offers a great mixture of useful tips for translators and interesting notes on the etymology of some words. In the blog   you will find great articles with stunning images and lots of tricks to make your job easier. It is written by   and is focused mainly on translations from English into French and vice versa, however it contains tons of useful information for all translators.
Unprofessional Translation is the place to find curious details about the origin of the translator and interpreter professions. Although not updated    on a regular basis, the blog is still worth checking if you want to learn about  competitions for    child translators, and bilingualism, about the interpreters of some infamous historical figures or about the oldest    depiction of an interpreter. Despite its name, the blog is quite professionally written and tackles topics such as Natural Translation, Native Translation and Language Brokering.
Specialized Translation Blogs
Quite often translators specialize   in certain field or industry – medicine, law, food service, equipment and supply, etc. and in order to provide quality   document translation, they need to update their knowledge regularly. One of the  korean translation mumbai  ways to do that is by following some specialized blogs. Here are a few to check out:
 Signs & Symptoms of Translation is a blog dedicated to medical translations. It is written by Emma Goldsmith, who is a Spanish to English    medical translator. Here you can also find some useful information about CAT tools and how to use them.
Intralingo is for those, who deal with and/or love literary translations. The blog does not only give insights into these types of texts but also presents ideas on how to make money from it. It is definitely worth reading if you are a literature and translation enthusiast.
Glossarissimo is a great blog that will help any professional do their work better with its rich database of glossaries. Here you can find monolingual and multilingual resources and terminology for translators and interpreters.
Transblawg is dedicated to German-English legal translation. The posts, written by Margaret Marks, are full of humor and entertainment, which makes his blog fun and quite useful at the same time. It offers help and information to translators on a variety of topics and specializations.
This is just a small fraction of the great specialized blogs you can find on the web. Make sure to check the fields that you are most interested in as well.
 Translation Blogs for Fun
The work of a translator is indeed quite intense and can be very stressful. Meeting deadlines, working on complicated texts, and dealing   with clients  from different time zones can take a toll. Therefore, it is necessary to have a look at the    funny   side of the job as well. Here are three blogs that will help you take a break and have some fun:
 Translator Fun is for those who would enjoy  some posts and cartoons with a heavy dose of humor. The topics the blog   tackles will sound more  familiar to those actually working in the field of translation, who allow themselves looking at the job from a less serious angle.
Blog is another cure for a long  korean translation mumbai  and tedious   translation project, when you need some laughter to power you up. The blog offers a series of funny cartoons that present the everyday life of a translator in a humorous manner.
Musings from an Overworked Translator is a blog that successfully combines the serious and the funny parts of the translator’s job. Here you can find useful information about new translators, e-mail etiquette and much more. Funny jokes, cartoons, and videos to make your day brighter.
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Compare this case with the case given at the beginning of this chapter. What similarities and dissimilarities do you notice
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  N. B.: 1) Attempt any Four cases
2) All cases carries equal marks.
No: 1
BPO – BANE OR BOON?
Several MNCs are increasingly unbundling or vertical disintegrating their activities. Put in simple language, they have begun outsourcing (also called business process outsourcing) activities formerly performed in-house and concentrating their energies on a few functions. Outsourcing involves withdrawing from certain stages/activities and relaying on outside vendors to supply the needed products, support services, or functional activities. Take Infosys, its 250 engineers develop IT applications for BO/FA (Bank of America). Elsewhere, Infosys staffers process home loans for green point mortgage of Novato, California. At Wipro, five radiologists interpret 30 CT scans a day for Massachusetts General Hospital. 2500 college educated men and women are buzzing at midnight at Wipro Spectra mind at Delhi. They are busy processing claims for a major US insurance company and providing help-desk support for a big US Internet service provider-all at a cost upto 60 percent lower than in the US. Seven Wipro Spectra mind staff with Ph.Ds in molecular biology sift through scientific research for westernpharmaceutical companies. Another activist in BOP is Evalue serve, headquarterd in Bermuda and having main operations near Delhi. It also has a US subsigiary based in New York and a marketing office in Australia to cover the European market. As Alok Aggarwal (co-founder and chairman) says, his company supplies a range of value-added services to clients that include a dozen Fortune 500 companies and seven global consulting firms, besides market research and venture capital firms. Much of its work involves dealing with CEOs, CFOs, CTOs, CIOs, and other so called C-level executives. Evaluserve provides services like patent writing, evaluation and assessment of their commercialization potential for law firms and entrepreneurs. Its market research services are aimed at top-rung financial service firms, to which it provides analysis of investment opportunities and business plans. Another major offering is multilingual services. Evalueserve trains and qualifies employees to communicate in Chinese, Spanish, German, Japanese and Italian, among other languages. That skill set has opened market opportunities in Europe and elsewhere, especially with global corporations. ICICI info tech Services in Edison, New Jersey, is another BOP services provider that is offering marketing software products and diversifying into markets outside the US. The firm has been promoted by $2-billion ICICI Bank, a large financial institution in Mumbai that is listed on the New York Stock Exchange. In its first year after setting up shop in March 1999, ICICI info tech spent $33
million acquiring two information technology services firms in New Jersy-Object Experts and ivory Consulting – and command Systems in Connecticut. These acquisitions were to help ICICI Info tech hit the ground in the US with a ready book of contracts. But it soon found US companies increasingly outsourcing their requirements to offshore locations, instead of hiring foreign employees to work onsite at their offices. The company found other native modes for growth. It has started marketing its products in banking, insurance and enterprise resource planning among others. It has ear market $10 million for its next US market offensive, which would go towards R & D and back-end infrastructure support, and creating new versions of its products to comply with US market requirements. It also has a joint venture – Semantik Solutions GmbH in Berlin, Germany with the Fraunhofer Institute for Software and Systems Engineering, which is based in Berlin and Dortmund, Germany – Fraunhofer is a leading institute in applied research and development with 200 experts in software engineering and evolutionary information. A relatively late entrant to the US market , ICICI Infotech started out with plain vanilla IT services, including operating call centeres. As the market for traditional IT services started wakening around mid-2000, ICICI Info tech repositioned itself as a “Solutions” firm offering both products and services. Today , it offers bundied packages of products and services in corporate and retail banking and include data center and disaster recovery management and value chain management services. ICICI Infotech’s expansion into new overseas markets has paid off. Its $50  million revenue for its latest financial year ending March 2003 has the US operations generating some $15 million, while the Middle East and Far East markets brought in another $9 million. It new boasts more than 700 customers in 30 countries, including Dow Jones, Glazo-Smithkline, Panasonic and American Insurance Group. The outsourcing industry is indeed growing form strength. Though technical support and financial services have dominated India’s outsourcing industry, newer fields are emerging which are expected to boost the industry many times over. Outsourcing of human resource services or HR BPO is emerging as big opportunity for Indian BPOs with global market in this segment estimated at $40-60 billion per annum. HR BPO comes to about 33 percent of the outsourcing revenue and India has immense potential as more than 80 percent of Fortune 1000 companies discuss offshore BOP as a way to cut costs and increase productivity. Another potential area is ITES/BOP industry. According to A NASSCOM survey, the global ITES/BOP industry was valued at around $773 billion during 2002 and it is expected to grow at a compounded annual growth rate of nine percent during the period 2002 – 06, NASSCOM lists the major indicators of the high growth potential of ITES/BOP industry in India as the following. During 2003 – 04, The ITES/BPO segment is estimated to have achieved a 54 percent growth in revenues as compared to the previous year. ITES exports accounted for $3.6 billion in revenues, up form $2.5 billion in 2002 – 03. The ITES-BPO segment also proved to be a major opportunity for job seekers, creating employment for around 74,400 additional personnel in India during 2003 – 04. The number of Indians working for this sector jumped to 245,500 by March 2004. By the year 2008, the segment is expected to employ over 1.1 million Indians, according to studies conducted by NASSCOM and McKinsey & Co. Market research shows that in terms of job creation, the ITES-BOP industry is growing at over 50 per cent. Legal outsourcing sector is another area India can look for. Legal transcription involves conversion of interviews with clients or witnesses by lawyers in to documents which can be presented in courts. It is no different from any other transcription work carried out in India. The bottom-line here is again cheap service. There is a strong reason why India can prove to be a big legal outsourcing Industry. India, like the US, is a common-law jurisdiction rooted in the British legal tradition. Indian legal training is conducted solely in English. Appellate and Supreme Court proceedings in India take place exclusively in English. Due to the time zone differences, night time in the US is daytime in India which means that clients get 24 hour attention, and some projects can be completed overnight. Small and mid – sized business offices can solve staff problems as the outsourced lawyers from India take on the time – consuming labour intensive legal research and writing projects. Large law firms also can solve problems of overstaffing by using the on – call lawyers. Research firms such as Forrester Research, predict that by 2015, more than 489,000 US lawyer jobs, nearly eight percent of the field, will shift abroad. Many more new avenues are opening up for BOP services providers. Patent writing and evaluation services are markets set to boom. Some 200.000 patent applications are written in the western world annually, making for a market size of between $5 billion and $7 billion. Outsourcing patent writing service could significantly lower the cost of each patent application, now anywhere between $12,000 and $15,000 apiece-which would help expand the market. Off shoring of equity research is another major growth area. Translation services are also becoming a big Indian plus. India produces some 3,000 graduates in German each year, which is more than that in Switzerland. Though going is good, the Indian BPO services providers cannot afford to be complacent. Phillppines, Maxico and Hungary are emerging as potential offshore locations. Likely competitor is Russia, although the absence of English speaking people there holds the country back. But the dark horse could be South Affrica and even China BOP is based on sound economic reasons. Outsourcing helps gain cost advantage. If an activity can be performed better or more cheaply by an outside supplier, why not outsource it? Many PC makers, for example, have shifted from in – house assembly to utilizing contract assemblers to make their PCs. CISCO outsources all productions and assembly of its routers and witching equipment to contract manufactures that operate 37 factories, all linked via the internet. Secondly, the activity (outsourced) is not crucial to the firm’s ability to gain sustainable competitive advantage and won’t hollow out its core competence, capabilities, or technical know how. Outsourcing of maintenance services, date processing, accounting, and other administrative support activities to companies specializing in these services has become common place. Thirdly, outsourcing reduces the company’s risk exposure to changing technology and / or changing buyer preferences. Fourthly, BPO streamlines company operations in ways that improve organizational flexibility, cut cycle time, speedup decision making and reduce coordination costs. Finally, outsourcing allows a company to concentrate on its core business and do what it does best. Are Indian companies listening? If they listen, BPO is a boon to them and not a bane.
 Questions :
 1. Which of the theories of international trade can help Indian services providers gain competitive edge over their competitors?
 2. Pick up some Indian services providers. With the help of Michael Porter’s diamond, analyse their strengths and weaknesses as active players in BPO.
 3. Compare this case with the case given at the beginning of this chapter. What similarities and dissimilarities do you notice? Your analysis should be based on the theories explained.
 No : 2
PERU
Peru is located on the west coast of South America. It is the third largest nation of the continent (after Brazil and Argentina), and covers almost 500.000 square miles(about 14 per cent of the size of the United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering snow – capped Andes mountains, sparkling grass – covered plateaus, and thick rain forests. Peru has approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians (one half of the population) live in Peru than in any other country in the western hemisphere. The ancestors of Peru’s Indians were the famous incase, who built a great empire. The rest of the population is mixed and a small percentage is white. The economy depends heavily on agriculture, fishing , mining, and services, GDP is approximately $15 billion and per capita income in recent years has been around $4,3000. In recent years the economy has gained some relative strength and multinationals are now beginning to consider investing in the country. One of these potential investors is a large New York based bank that is considering a $25 million loan to the owner of a Peruvian fishing fleet. The owner
wants to refurbish the fleet and add one more ship. During the 1970s, the Peruvian government nationalized a number of industries and factories and began running them for the profit of the state in most cases, these state – run ventures became disasters. In the late 1970s the fishing fleet owner was given back his ships and allowed to operate his business as before. Since then, he has managed to remain profitable, but the biggest problem is that his ships are getting old and he needs an influx of capital of make repairs and add new technology. As he explained it to the new York banker. “Fishing is no longer just an art. There is a great deal of technology involved. And to keep costs low and be competitive on the world market, you have to have the latest equipment for both
locating as well as catching and then loading and unloading the fish” Having reviewed the fleet owner’s operation, the large multinational bank believes that the loan is justified. The financial institution is concerned, however, that the Peruvian government might step in during the next couple of years and again take over the business. If this were to happen, it might take an additional decade for the loan to be repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the last decade, the fleet the way he has over the last decade, the loan could be repaid within seven years. Right now, the bank is deciding on the specific terms of the agreement. Once theses have been worked out, either a loan officer will fly down to Lima and close the deal or the owner will be asked to come to New York for the signing. Whichever approach is used, the bank realizes that final adjustments in the agreement will have to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have to have the authority to commit the bank to specific terms. These final matters should be worked out within the next ten days.
 Questions :
 1. What are some current issues facing Peru? What is the climate for doingbusiness in Peru today?
 2. What type of political risks does this fishing company need to evaluate? Identify and describe them.
 3. What types of integrative and protective and defensive techniques can the bank use?
 4. Would the bank be better off negotiating the loan in New York or in Lima? Why?
 No : 3
RED BECOMING THICKER
The Backdrop
There seems to be no end to the troubles of the coloured – water giant Coca Cola. The cola giant had entered India decades back but left the country in the late 1970s. It staged a comeback in the early 1990s through the acquisitions route. The professional management style of Coca Cola did not jell with the local bottlers. Four CEOs were changed in a span of seven years. Coke could not capitalize on the popularity of Thums Up. Its arch rival Pepsi is well ahead and has been able to penetrate deep into the Indian market. Red in the balance sheet of Coke is becoming thicker and industry observers are of the opinion that it would take at least two decades more before Coke could think of making profits in India.
 The Story
It was in the early 1990s that India started liberalizing her economy. Seizing the opportunity, Coca Cola wanted to stage a comeback in India. It chose RameshChauhan of Parle for entry into the market. Coke paid $100 million to Chauhan and acquired his well established brands Thums Up, Goldspot and Limca. Coke also bagged 56 bottlers of Chauhan as a part of the deal. Chauhan was made consultant and was also given the first right of refusal to any large size bottling plants and bottling contracts, the former in the Pune – Bangalore belt and the latter in the Delhi and Mumbai areas. Jayadeva Raja, the flamboyant management expert was made the first CEO of Coke India. It did not take much time for him to realize that Coke had inherited several weaknesses from Chauhan along with the brands and bottlers. Many bottling plants were small in capacity (200 bottlers per minute as against the world standard of 1600) and used obsolete technology. The bottlers were in no mood to increase their capacities, nor were they willing to upgrade the trucks used for transporting the bottle. Bottlers were more used to the paternalistic approach of Chauhan and the new professional management styles of Coke did not go down well with them. Chauhan also felt that he was alienated and was even suspected to be supplying concentrate unofficially to the bottlers. Raja was replaced by the hard – nosed Richard Niholas in 1995. The first thing Nicholas did was to give an ultimatum to the bottlers to expand their plants or sell out. Coke also demanded equity stakes in many of the bottling plants. The bottlers had their own difficulties as well. They were running on low profit margins. Nor was Coke willing to finance the bottlers on soft terms. The ultimatum backfired. Many bottlers switched their loyalty and went to Pepsi. Chauhan allegedly supported the bottlers, of course, from the sidelines. Coke thought it had staged a coup over Pepsi when it (Coke) clamed the status of official drink for the 1996 Cricket World Cup tournament. Pepsi took on Coke mightily with the famous jingle “Nothing official about it”. Coke could havecapitalized on the sporty image of Thums Up to counter the campaign, but instead simply caved in. Donald Short replaced Nicholas as CEO in 1997. Armed with heavy financial powers, Short bought out 38 bottlers for about $700 million. This worked out to about Rs 7 per case, but the cost – effective figure was Rs 3 per case. Short also invested heavily in manpower. By 1997 , Coke’s workforce increased to 300. Three years later, the parent company admitted that investment in India was a big mistake. It is not in the culture of Coke to admit failure. It has decided to fight back. Coke could not only sustain the loss, it could even spend more money on Indian operations. It hiked the ad budget and appointed Chaitra Leo Burnett as its ad agency. During 1998 – 99, Coke’s ad spend was almost three times that of Pepsi. Coke is taking a look at its human resources and is taking initiatives to re – orient the culture and inject an element of decentralization along with empowerment. Each bottling plant is expected to meet predetermined profit, market share, and sales volumes. For newly hired management trainees, a clearly defined career path has been drawn to enable them to become profit centre heads shortly after completion of their probation. Such a decentralized approach is something of a novelty in the Coke culture worldwide. But Alezander “Von Behr, who replaced Short as Chef of Indian operations, reiterated Coke’s commitment to decentralization and local responsiveness. Coke has divided India into six regions, each with a business head. Change in the organization structure has disappointed many employees, some of whom even quit the company. Coke started cutting down its costs. Executives have been asked to shift from farm houses to smaller houses and rentals of Gurgaon headquarters have been renegotiated. Discount rates have been standardized and information systems are being upgraded to enable the Indian headquarters to access online financial status of its outposts down to the depot level. Coke has great hopes in Indian as the country has a huge population and the current per capita consumption of beverages is just four bottles a year. Right now, the parent company (head – quartered in the US) has bottle full of problems. The recently appointed CEO-E Neville Isdell needs to struggle to do the things that once made the Cola company great. The problems include –
 Meddling Board
Coke’s star- studded group of directors, many of whom date back to the Goizueta era, has built a reputation for meddling.
 Moribund Marketing
Once world class critics say that today the soda giant has become too conservative, with ads that don’t resonate with the teenagers and young adults that made up its most important audience.
 Lack of Innovation
In the US market , Coke hasn’t created a best – selling new soda since Diet Coke in 1982. In recent years Coke has been outbid by rival Pepsi Co for faster growing noncarb beverages like SoBe Gatorade.
 Friction with Bottlers
Over the past decade, Coke has often made its profit at the expenses of bottlers, pushing aggressive price hikes on the concentrate it sells them. But key bottlers are now fighting back with sharp increases in the price of coke at retail.
 International Worries
Coke desperately needs more international growth to offset its flagging US business, but while some markets like Japan remain lucrative, in the large German market Coke has problems so far as bottling contracts go. When its own house is not in order in the large country, will the company be able to focus enough on the Indian market?
 Questions:
 1. Why is that Coke has not been able to make profit in its Indian operations?
 2. Do you think that Coke should continue to stay in India? If yes, why?
 3. What cultural adaptations would you suggest to the US expatriate managers regarding their management style?
 4. Using the Hofstede and the value orientations cultural model , how can you explain some of the cultural differences noted in this case ?
 NO. 4
THE ABB PBS JOINT VENTURE IN OPERATION
ABB Prvni Brnenska Stojirna Brno, Ltd. (ABB-PBS), Czechoslovakia was a joint venture in which ABB has a 67 per cent stake and PBS a.s. has a 33 per cent stake. This PBS share was determined nominally by the value of the land, plant and equipment, employees and goodwill, ABB contributed cash and specified technologies and assumed some of the debt of PBS. The new company started operations on April 15, 1993. Business for the joint venture in its first two full years was good in most aspects. Orders received in 1994, the first full year of the joint venture’s operation, were higher than ever in the history of PBS. Orders received in 1995 were 2½ times those in 1994. The company was profitable in 1995 and ahead of 1994s results with a rate of return on assets of 2.3 per cent and a rate of return on sales of 4.5 per cent. The 1995 results showed substantial progress towards meeting the joint venture’s strategic goals adopted in 1994 as part of a five year plan. One of the goals was that exports should account for half of the total orders by 1999. (Exports had accounted for more than a quarter of the PBS business before 1989, but most of this business disappeared when the Soviet Union Collapsed). In 1995 exports increased as a share of total orders to 28 per cent, up from 16 per cent the year before. The external service business, organized and functioning as a separate business for the first time in 1995, did not meet expectations. It accounted for five per cent of all orders and revenues in 1995, below the 10 per cent goal set for it. The retrofitting business, which was expected to be a major part of the service business, was disappointing for ABB-PBS, partly because many other small companies began to provide this service in 1994, including some started by former PBS employees who took their knowledge of PBS-built power plants with them. However, ABB-PBS managers hoped that as the company introduced new technologies, these former employees would gradually lose their ability to perform these services, and the retrofit and repair service business, would return to ABBPBS. ABB-PBS dominated the Czech boiler business with 70 per cent of the Czech market in 1995, but managers expected this share to go down in the future as new domestic and foreign competitors emerged. Furthermore, the west European boiler market was actually declining because environmental laws caused a surge of retrofitting to occur in the mid -1980 s, leaving less business in the 1990 s. Accordingly ABB-PBS boiler orders were flat in 1995. Top managers at ABB-PBS regarded business results to date as respectable, but they were not satisfied with the company’s performance. Cash flow was not as good as expected. Cost reduction had to go further. The more we succeed, the more we see our shortcomings” said one official. Restructuring The first round of restructuring was largely completed in 1995, the last year of the three-year restructuring plan. Plan logistics, information systems, and other
physical capital improvements were in place. The restricting included :
  Renovating and reconstructing workshops and engineering facilities.
ď‚· Achieving ISO 9001 for all four ABB-PBS divisions. (awarded in 1995)
ď‚· Transfer of technology from ABB (this was an ongoing project)
ď‚· Intallation of an information system.
ď‚· Management training, especially in total quality assurance and English language.
ď‚· Implementing a project management approach.
A notable achievement of importance of top management in 1995 was a 50 per cent increase in labour productivity, measured as value added per payroll crown. However, in the future ABB-PBS expected its wage rates to go up faster than west European wage rates (Czech wages were increasing about 15 per cent per year) so it would be difficult to maintain the ABB-PBS unit cost advantage over west European unit cost. The Technology Role for ABB-PBS The joint venture was expected from the beginning to play an important role in technology development for part of ABB’s power generation business worldwide. PBS a.s. had engineering capability in coal – fired steam boilers, and that capability was expected to be especially useful to ABB as more countries became concerned about air quality. (When asked if PBS really did have leading technology here, a boiler engineering manager remarked, “ Of course we do. We burn so much dirty coal in this country, we have to have better technology”) However, the envisioned technology leadership role for ABB-PBS had not been realized by mid – 1996. Richard Kuba, the ABB-PBS managing director, realized the slowness with which the technology role was being fulfilled, and he offered his interpretation of events. “ABB did not promise to make the joint venture its steam technology leader. The main point we wanted to achieve in the joint venture agreement was for ABBPBS to be recognized as a full-fledged company, not just a factory. We were slowed down on our technology plans because we had a problem keeping our good, young engineers. The annual employee turnover rate for companies in the Czech Republic is 15 or 20 per cent, and the unemployment rate is zero. Our engineers have many other good entrepreneurial opportunities. Now we’ve begun to stablise our engineering workforce. The restructing helped. We have better equipment and a cleaner and safer work environment. We also had another problem which is a good problem to have. The domestic power plant business turned out to be better than we expected, so just meeting the needs of our regular customers forced some postponement of new technology initiatives.” ABB-PBS had benefited technologically from its relationship with ABB. One example was the development of a new steam turbine line. This project was a cooperative effort among ABB-PBS and two other ABB companies, one in Sweden and one in Germany. Nevertheless, technology transfer was not the most important early benefit of ABB relationship. Rather, one of the most important gains was the opportunity to benchmark the joint venture’s performance against other established western ABB companies on variables such as productivity, inventory and receivables.
 Questions :
 1. Where does the joint venture meet the needs of both the partners ? Where does it fall short?
 2. Why had ABB-PBS failed to realize its technology leadership ?
 3. What lessons one can draw from this incident for better management of technology transfers?
 NO. 5.
CHINESE EVOLVING ACCOUNTING SYSTEM
Attracted by its rapid transformation from a socialist planned economy into a market economy, economic annual growth rate of around 12 per cent, and a population in excess of 1.2 billion, Western firms over the past 10 years have favoured China as a site for foreign direct investment. Most see China as an emerging economic superpower, with an economy that will be as large as that of Japan by 2000 and that of the US before 2010, if current growth projections hold true. The Chinese government sees foreign direct investment as a primary engine of China’s economic growth. To encourage such investment, the government has offered generous tax incentives to foreign firms that invest in China, either on their own or in a joint venture with a local enterprise. These tax incentives include a two – year exemption from corporate income tax following an investment, plus a further three years during which taxes are paid at only 50 per cent of the standard tax rate. Such incentives when coupled with the promise of China’s vast internal market have made the country a prime site for investment by Western firms. However, once established in China, many Western firms find themselves struggling to
comply with the complex and often obtuse nature of China’s rapidly evolving accounting system. Accounting in China has traditionally been rooted in information gathering and compliance reporting designed to measure the government’s production and tax goals. The Chinese system was based on the old Soviet system, which had little to do with profit or accounting systems created to report financial positions or the results of foreign operations. Although the system is changing rapidly, many problems associated with the old system still remain. One problem for investors is a severe shortage of accountants, financial managers, and auditors in China, especially those experienced with market economy transactions and international accounting practices. As of 1995, there were only 25,000 accountants in china, far short of the hundreds of thousands that will be needed if China continues on its path towards becoming a market economy.
Chinese enterprises, including equity and cooperative joint ventures with foreign firms, must be audited by Chinese accounting firms, which are regulated by the state. Traditionally, many experienced auditors have audited only state-owned enterprises, working through the local province or city authorities and the state audit bureau to report to the government entity overseeing the audited firm. In response to the shortage of accountants schooled in the principles of private sector accounting, several large international auditing firms have established joint ventures with emerging Chinese accounting and auditing firms to bridge the growing need for international accounting, tax and securities expertise. A further problem concerns the somewhat halting evolution of China’s emerging accounting standards. Current thinking is that China won’t simply adopt the international accounting standards specified by the IASC, nor will it use the generally accepted accounting principles of any particular country as its mode. Rather, accounting standards in China are expected to evolve in a rather piecemeal fashion, with the Chinese adopting a few standards as they are studied and deemed appropriate for Chinese circumstances. In the meantime, current Chinese accounting principles present difficult problems for Western firms. For example, the former Chinese accounting system didn’t need to accrue unrealized losses. In an economy where shortages were the
norm, if a state-owned company didn’t sell its inventory right away, it could store it and use it for some other purpose later. Similarly, accounting principles assumed the state always paid its debts – eventually. Thus, Chinese enterprises don’t generally provide for lower-of-cost or market inventory adjustments or the creation of allowance for bad debts, both of which are standard practices in the West.
 Questions :
 1. What factors have shaped the accounting system currently in use in China ?
 2. What problem does the accounting system, currently in sue in China, present to foreign investors in joint ventures with Chinese companies ?
 3. If the evolving Chinese system does not adhere to IASC standards, but instead to standards that the Chinese governments deem appropriate to China’s “Special situation”, how might this affect foreign firms with operations in China ?
 NO. 6
UNFAIR PROTECTION OR VALID DEFENSE ?
“Mexico Widens Anti – dumping Measure …………. Steel at the Core of US-Japan Trade Tensions …. Competitors in Other Countries Are Destroying an American Success Story … It Must Be Stopped”, scream headlines around the world. International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume and selection of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of the World Trade Organisation (WTO) and smaller groups of nations, governments seem to be crying foul in the trade game now more than ever before. We see efforts at protectionism in the rising trend in governments charging foreign producers for “dumping” their goods on world markets. Worldwide, the number of antidumping cases that were initiated stood at about 150 in 1995, 225 in 1996, 230 in 1997 , and 300 in 1998. There is no shortage of similar examples. The Untied States charges Brazil, Japan, and Russia with dumping their products in the US market as a way out of tough economic times. The US steel industry wants the government to slap a 200 per cent tariff on certain types of steel. But car markers in the United States are not
complaining, and General Motors even spoke out against the antidumping charge – as it is enjoying the benefits of law – cost steel for use in its auto product ion. Canadian steel makers followed the lead of the United States and are pushing for antidumping actions against four nations. Emerging markets, too , are jumping into the fray. Mexico recently expanded coverage of its Automatic Import Advice System. The system requires importers (from a select list of countries) to notify Mexican officials of the amount and price of a shipment ten days prior to its expected arrival in Mexico. The ten-day notice gives domestic producers advance warning of incoming low – priced products so they can complain of dumping before the products clear customs and enter the marketplace. India is also getting onboard by setting up a new government agency to handle antidumping cases. Even Argentina, China , Indonesia, South Africa, South Korea, and Thailand are using this recently – popularized tool of protectionism. Why is dumping on the rise in the first place ? The WTO has made major inroads on the use of tariffs, slashing tem across almost every product category in recent years. But the WTO does not have the authority to punish companies, but only governments. Thus , the WTO cannot pass judgements against individual companies that are dumping products in other markets. It can only pass rulings against the government of the country that imposes an antidumping duty. But the WTO allows countries to retaliate against nations whose producers are suspected of dumping when it can be shown that : (1) the alleged offenders are significantly hurting domestic producers, and (2) the export price is lower than the cost of production or lower than the home – market price. Supporters of antidumping tariffs claim that they prevent dumpers from undercutting the prices charged by producers in a target market and driving them out of business. Another claim in support of antidumping is that it is an excellent way of retaining some protection against potential dangers of totally free trade. Detractors of antidumping tariffs charge that once such tariffs are imposed they are rarely removed. They also claim that it costs companies and governments a great deal of time and money to file and argue their cases. It is also argued that the fear of being charged with dumping causes international competitors to keep their prices higher in a target market than would other wise be the case. This would allow domestic companies to charge higher prices and not lose marketshare – forcing consumers to pay more for their goods.
 Questions
1. “You can’t tell consumers that the low price they are paying for a particular fax machine or automobile is somehow unfair. They’re not concerned with the profits of companies. To them, it’s just a great bargain and they want it to continue.” Do you agree with this statement ? Do you think that people from different cultures would respond differently to this statement? Explain your answers.
 2. As we’ve seen, the WTO cannot currently get involved in punishing individual companies for dumping – its actions can only be directed toward governments of countries. Do you think this is a wise policy? Why or why not? Why do you think the WTO was not given the authority to charge individual companies with dumping? Explain.
 3. Identify a recent antidumping case that was brought before the WTO. Locate as many articles in the press as you can that discuss the case. Identify the nations, products (s) , and potential punitive measures involved. Supposing you were part of the WTO’s Dispute Settlement Body, would you vote in favor of the measures taken by the retailing nation? Why or why not?
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Attracted by its rapid transformation from a socialist planned economy into a market economy
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 INTERNATIONAL BUSINESS
  N. B.: 1) Attempt any Four cases
2) All cases carries equal marks.
No: 1
BPO – BANE OR BOON?
Several MNCs are increasingly unbundling or vertical disintegrating their activities. Put in simple language, they have begun outsourcing (also called business process outsourcing) activities formerly performed in-house and concentrating their energies on a few functions. Outsourcing involves withdrawing from certain stages/activities and relaying on outside vendors to supply the needed products, support services, or functional activities. Take Infosys, its 250 engineers develop IT applications for BO/FA (Bank of America). Elsewhere, Infosys staffers process home loans for green point mortgage of Novato, California. At Wipro, five radiologists interpret 30 CT scans a day for Massachusetts General Hospital. 2500 college educated men and women are buzzing at midnight at Wipro Spectra mind at Delhi. They are busy processing claims for a major US insurance company and providing help-desk support for a big US Internet service provider-all at a cost upto 60 percent lower than in the US. Seven Wipro Spectra mind staff with Ph.Ds in molecular biology sift through scientific research for westernpharmaceutical companies. Another activist in BOP is Evalue serve, headquarterd in Bermuda and having main operations near Delhi. It also has a US subsigiary based in New York and a marketing office in Australia to cover the European market. As Alok Aggarwal (co-founder and chairman) says, his company supplies a range of value-added services to clients that include a dozen Fortune 500 companies and seven global consulting firms, besides market research and venture capital firms. Much of its work involves dealing with CEOs, CFOs, CTOs, CIOs, and other so called C-level executives. Evaluserve provides services like patent writing, evaluation and assessment of their commercialization potential for law firms and entrepreneurs. Its market research services are aimed at top-rung financial service firms, to which it provides analysis of investment opportunities and business plans. Another major offering is multilingual services. Evalueserve trains and qualifies employees to communicate in Chinese, Spanish, German, Japanese and Italian, among other languages. That skill set has opened market opportunities in Europe and elsewhere, especially with global corporations. ICICI info tech Services in Edison, New Jersey, is another BOP services provider that is offering marketing software products and diversifying into markets outside the US. The firm has been promoted by $2-billion ICICI Bank, a large financial institution in Mumbai that is listed on the New York Stock Exchange. In its first year after setting up shop in March 1999, ICICI info tech spent $33
million acquiring two information technology services firms in New Jersy-Object Experts and ivory Consulting – and command Systems in Connecticut. These acquisitions were to help ICICI Info tech hit the ground in the US with a ready book of contracts. But it soon found US companies increasingly outsourcing their requirements to offshore locations, instead of hiring foreign employees to work onsite at their offices. The company found other native modes for growth. It has started marketing its products in banking, insurance and enterprise resource planning among others. It has ear market $10 million for its next US market offensive, which would go towards R & D and back-end infrastructure support, and creating new versions of its products to comply with US market requirements. It also has a joint venture – Semantik Solutions GmbH in Berlin, Germany with the Fraunhofer Institute for Software and Systems Engineering, which is based in Berlin and Dortmund, Germany – Fraunhofer is a leading institute in applied research and development with 200 experts in software engineering and evolutionary information. A relatively late entrant to the US market , ICICI Infotech started out with plain vanilla IT services, including operating call centeres. As the market for traditional IT services started wakening around mid-2000, ICICI Info tech repositioned itself as a “Solutions” firm offering both products and services. Today , it offers bundied packages of products and services in corporate and retail banking and include data center and disaster recovery management and value chain management services. ICICI Infotech’s expansion into new overseas markets has paid off. Its $50  million revenue for its latest financial year ending March 2003 has the US operations generating some $15 million, while the Middle East and Far East markets brought in another $9 million. It new boasts more than 700 customers in 30 countries, including Dow Jones, Glazo-Smithkline, Panasonic and American Insurance Group. The outsourcing industry is indeed growing form strength. Though technical support and financial services have dominated India’s outsourcing industry, newer fields are emerging which are expected to boost the industry many times over. Outsourcing of human resource services or HR BPO is emerging as big opportunity for Indian BPOs with global market in this segment estimated at $40-60 billion per annum. HR BPO comes to about 33 percent of the outsourcing revenue and India has immense potential as more than 80 percent of Fortune 1000 companies discuss offshore BOP as a way to cut costs and increase productivity. Another potential area is ITES/BOP industry. According to A NASSCOM survey, the global ITES/BOP industry was valued at around $773 billion during 2002 and it is expected to grow at a compounded annual growth rate of nine percent during the period 2002 – 06, NASSCOM lists the major indicators of the high growth potential of ITES/BOP industry in India as the following. During 2003 – 04, The ITES/BPO segment is estimated to have achieved a 54 percent growth in revenues as compared to the previous year. ITES exports accounted for $3.6 billion in revenues, up form $2.5 billion in 2002 – 03. The ITES-BPO segment also proved to be a major opportunity for job seekers, creating employment for around 74,400 additional personnel in India during 2003 – 04. The number of Indians working for this sector jumped to 245,500 by March 2004. By the year 2008, the segment is expected to employ over 1.1 million Indians, according to studies conducted by NASSCOM and McKinsey & Co. Market research shows that in terms of job creation, the ITES-BOP industry is growing at over 50 per cent. Legal outsourcing sector is another area India can look for. Legal transcription involves conversion of interviews with clients or witnesses by lawyers in to documents which can be presented in courts. It is no different from any other transcription work carried out in India. The bottom-line here is again cheap service. There is a strong reason why India can prove to be a big legal outsourcing Industry. India, like the US, is a common-law jurisdiction rooted in the British legal tradition. Indian legal training is conducted solely in English. Appellate and Supreme Court proceedings in India take place exclusively in English. Due to the time zone differences, night time in the US is daytime in India which means that clients get 24 hour attention, and some projects can be completed overnight. Small and mid – sized business offices can solve staff problems as the outsourced lawyers from India take on the time – consuming labour intensive legal research and writing projects. Large law firms also can solve problems of overstaffing by using the on – call lawyers. Research firms such as Forrester Research, predict that by 2015, more than 489,000 US lawyer jobs, nearly eight percent of the field, will shift abroad. Many more new avenues are opening up for BOP services providers. Patent writing and evaluation services are markets set to boom. Some 200.000 patent applications are written in the western world annually, making for a market size of between $5 billion and $7 billion. Outsourcing patent writing service could significantly lower the cost of each patent application, now anywhere between $12,000 and $15,000 apiece-which would help expand the market. Off shoring of equity research is another major growth area. Translation services are also becoming a big Indian plus. India produces some 3,000 graduates in German each year, which is more than that in Switzerland. Though going is good, the Indian BPO services providers cannot afford to be complacent. Phillppines, Maxico and Hungary are emerging as potential offshore locations. Likely competitor is Russia, although the absence of English speaking people there holds the country back. But the dark horse could be South Affrica and even China BOP is based on sound economic reasons. Outsourcing helps gain cost advantage. If an activity can be performed better or more cheaply by an outside supplier, why not outsource it? Many PC makers, for example, have shifted from in – house assembly to utilizing contract assemblers to make their PCs. CISCO outsources all productions and assembly of its routers and witching equipment to contract manufactures that operate 37 factories, all linked via the internet. Secondly, the activity (outsourced) is not crucial to the firm’s ability to gain sustainable competitive advantage and won’t hollow out its core competence, capabilities, or technical know how. Outsourcing of maintenance services, date processing, accounting, and other administrative support activities to companies specializing in these services has become common place. Thirdly, outsourcing reduces the company’s risk exposure to changing technology and / or changing buyer preferences. Fourthly, BPO streamlines company operations in ways that improve organizational flexibility, cut cycle time, speedup decision making and reduce coordination costs. Finally, outsourcing allows a company to concentrate on its core business and do what it does best. Are Indian companies listening? If they listen, BPO is a boon to them and not a bane.
 Questions :
 1. Which of the theories of international trade can help Indian services providers gain competitive edge over their competitors?
 2. Pick up some Indian services providers. With the help of Michael Porter’s diamond, analyse their strengths and weaknesses as active players in BPO.
 3. Compare this case with the case given at the beginning of this chapter. What similarities and dissimilarities do you notice? Your analysis should be based on the theories explained.
 No : 2
PERU
Peru is located on the west coast of South America. It is the third largest nation of the continent (after Brazil and Argentina), and covers almost 500.000 square miles(about 14 per cent of the size of the United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering snow – capped Andes mountains, sparkling grass – covered plateaus, and thick rain forests. Peru has approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians (one half of the population) live in Peru than in any other country in the western hemisphere. The ancestors of Peru’s Indians were the famous incase, who built a great empire. The rest of the population is mixed and a small percentage is white. The economy depends heavily on agriculture, fishing , mining, and services, GDP is approximately $15 billion and per capita income in recent years has been around $4,3000. In recent years the economy has gained some relative strength and multinationals are now beginning to consider investing in the country. One of these potential investors is a large New York based bank that is considering a $25 million loan to the owner of a Peruvian fishing fleet. The owner
wants to refurbish the fleet and add one more ship. During the 1970s, the Peruvian government nationalized a number of industries and factories and began running them for the profit of the state in most cases, these state – run ventures became disasters. In the late 1970s the fishing fleet owner was given back his ships and allowed to operate his business as before. Since then, he has managed to remain profitable, but the biggest problem is that his ships are getting old and he needs an influx of capital of make repairs and add new technology. As he explained it to the new York banker. “Fishing is no longer just an art. There is a great deal of technology involved. And to keep costs low and be competitive on the world market, you have to have the latest equipment for both
locating as well as catching and then loading and unloading the fish” Having reviewed the fleet owner’s operation, the large multinational bank believes that the loan is justified. The financial institution is concerned, however, that the Peruvian government might step in during the next couple of years and again take over the business. If this were to happen, it might take an additional decade for the loan to be repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the last decade, the fleet the way he has over the last decade, the loan could be repaid within seven years. Right now, the bank is deciding on the specific terms of the agreement. Once theses have been worked out, either a loan officer will fly down to Lima and close the deal or the owner will be asked to come to New York for the signing. Whichever approach is used, the bank realizes that final adjustments in the agreement will have to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have to have the authority to commit the bank to specific terms. These final matters should be worked out within the next ten days.
 Questions :
 1. What are some current issues facing Peru? What is the climate for doing business in Peru today?
 2. What type of political risks does this fishing company need to evaluate? Identify and describe them.
 3. What types of integrative and protective and defensive techniques can the bank use?
 4. Would the bank be better off negotiating the loan in New York or in Lima? Why?
 No : 3
RED BECOMING THICKER
The Backdrop
There seems to be no end to the troubles of the coloured – water giant Coca Cola. The cola giant had entered India decades back but left the country in the late 1970s. It staged a comeback in the early 1990s through the acquisitions route. The professional management style of Coca Cola did not jell with the local bottlers. Four CEOs were changed in a span of seven years. Coke could not capitalize on the popularity of Thums Up. Its arch rival Pepsi is well ahead and has been able to penetrate deep into the Indian market. Red in the balance sheet of Coke is becoming thicker and industry observers are of the opinion that it would take at least two decades more before Coke could think of making profits in India.
 The Story
It was in the early 1990s that India started liberalizing her economy. Seizing the opportunity, Coca Cola wanted to stage a comeback in India. It chose RameshChauhan of Parle for entry into the market. Coke paid $100 million to Chauhan and acquired his well established brands Thums Up, Goldspot and Limca. Coke also bagged 56 bottlers of Chauhan as a part of the deal. Chauhan was made consultant and was also given the first right of refusal to any large size bottling plants and bottling contracts, the former in the Pune – Bangalore belt and the latter in the Delhi and Mumbai areas. Jayadeva Raja, the flamboyant management expert was made the first CEO of Coke India. It did not take much time for him to realize that Coke had inherited several weaknesses from Chauhan along with the brands and bottlers. Many bottling plants were small in capacity (200 bottlers per minute as against the world standard of 1600) and used obsolete technology. The bottlers were in no mood to increase their capacities, nor were they willing to upgrade the trucks used for transporting the bottle. Bottlers were more used to the paternalistic approach of Chauhan and the new professional management styles of Coke did not go down well with them. Chauhan also felt that he was alienated and was even suspected to be supplying concentrate unofficially to the bottlers. Raja was replaced by the hard – nosed Richard Niholas in 1995. The first thing Nicholas did was to give an ultimatum to the bottlers to expand their plants or sell out. Coke also demanded equity stakes in many of the bottling plants. The bottlers had their own difficulties as well. They were running on low profit margins. Nor was Coke willing to finance the bottlers on soft terms. The ultimatum backfired. Many bottlers switched their loyalty and went to Pepsi. Chauhan allegedly supported the bottlers, of course, from the sidelines. Coke thought it had staged a coup over Pepsi when it (Coke) clamed the status of official drink for the 1996 Cricket World Cup tournament. Pepsi took on Coke mightily with the famous jingle “Nothing official about it”. Coke could havecapitalized on the sporty image of Thums Up to counter the campaign, but instead simply caved in. Donald Short replaced Nicholas as CEO in 1997. Armed with heavy financial powers, Short bought out 38 bottlers for about $700 million. This worked out to about Rs 7 per case, but the cost – effective figure was Rs 3 per case. Short also invested heavily in manpower. By 1997 , Coke’s workforce increased to 300. Three years later, the parent company admitted that investment in India was a big mistake. It is not in the culture of Coke to admit failure. It has decided to fight back. Coke could not only sustain the loss, it could even spend more money on Indian operations. It hiked the ad budget and appointed Chaitra Leo Burnett as its ad agency. During 1998 – 99, Coke’s ad spend was almost three times that of Pepsi. Coke is taking a look at its human resources and is taking initiatives to re – orient the culture and inject an element of decentralization along with empowerment. Each bottling plant is expected to meet predetermined profit, market share, and sales volumes. For newly hired management trainees, a clearly defined career path has been drawn to enable them to become profit centre heads shortly after completion of their probation. Such a decentralized approach is something of a novelty in the Coke culture worldwide. But Alezander “Von Behr, who replaced Short as Chef of Indian operations, reiterated Coke’s commitment to decentralization and local responsiveness. Coke has divided India into six regions, each with a business head. Change in the organization structure has disappointed many employees, some of whom even quit the company. Coke started cutting down its costs. Executives have been asked to shift from farm houses to smaller houses and rentals of Gurgaon headquarters have been renegotiated. Discount rates have been standardized and information systems are being upgraded to enable the Indian headquarters to access online financial status of its outposts down to the depot level. Coke has great hopes in Indian as the country has a huge population and the current per capita consumption of beverages is just four bottles a year. Right now, the parent company (head – quartered in the US) has bottle full of problems. The recently appointed CEO-E Neville Isdell needs to struggle to do the things that once made the Cola company great. The problems include –
 Meddling Board
Coke’s star- studded group of directors, many of whom date back to the Goizueta era, has built a reputation for meddling.
 Moribund Marketing
Once world class critics say that today the soda giant has become too conservative, with ads that don’t resonate with the teenagers and young adults that made up its most important audience.
 Lack of Innovation
In the US market , Coke hasn’t created a best – selling new soda since Diet Coke in 1982. In recent years Coke has been outbid by rival Pepsi Co for faster growing noncarb beverages like SoBe Gatorade.
 Friction with Bottlers
Over the past decade, Coke has often made its profit at the expenses of bottlers, pushing aggressive price hikes on the concentrate it sells them. But key bottlers are now fighting back with sharp increases in the price of coke at retail.
 International Worries
Coke desperately needs more international growth to offset its flagging US business, but while some markets like Japan remain lucrative, in the large German market Coke has problems so far as bottling contracts go. When its own house is not in order in the large country, will the company be able to focus enough on the Indian market?
 Questions:
 1. Why is that Coke has not been able to make profit in its Indian operations?
 2. Do you think that Coke should continue to stay in India? If yes, why?
 3. What cultural adaptations would you suggest to the US expatriate managers regarding their management style?
 4. Using the Hofstede and the value orientations cultural model , how can you explain some of the cultural differences noted in this case ?
 NO. 4
THE ABB PBS JOINT VENTURE IN OPERATION
ABB Prvni Brnenska Stojirna Brno, Ltd. (ABB-PBS), Czechoslovakia was a joint venture in which ABB has a 67 per cent stake and PBS a.s. has a 33 per cent stake. This PBS share was determined nominally by the value of the land, plant and equipment, employees and goodwill, ABB contributed cash and specified technologies and assumed some of the debt of PBS. The new company started operations on April 15, 1993. Business for the joint venture in its first two full years was good in most aspects. Orders received in 1994, the first full year of the joint venture’s operation, were higher than ever in the history of PBS. Orders received in 1995 were 2½ times those in 1994. The company was profitable in 1995 and ahead of 1994s results with a rate of return on assets of 2.3 per cent and a rate of return on sales of 4.5 per cent. The 1995 results showed substantial progress towards meeting the joint venture’s strategic goals adopted in 1994 as part of a five year plan. One of the goals was that exports should account for half of the total orders by 1999. (Exports had accounted for more than a quarter of the PBS business before 1989, but most of this business disappeared when the Soviet Union Collapsed). In 1995 exports increased as a share of total orders to 28 per cent, up from 16 per cent the year before. The external service business, organized and functioning as a separate business for the first time in 1995, did not meet expectations. It accounted for five per cent of all orders and revenues in 1995, below the 10 per cent goal set for it. The retrofitting business, which was expected to be a major part of the service business, was disappointing for ABB-PBS, partly because many other small companies began to provide this service in 1994, including some started by former PBS employees who took their knowledge of PBS-built power plants with them. However, ABB-PBS managers hoped that as the company introduced new technologies, these former employees would gradually lose their ability to perform these services, and the retrofit and repair service business, would return to ABBPBS. ABB-PBS dominated the Czech boiler business with 70 per cent of the Czech market in 1995, but managers expected this share to go down in the future as new domestic and foreign competitors emerged. Furthermore, the west European boiler market was actually declining because environmental laws caused a surge of retrofitting to occur in the mid -1980 s, leaving less business in the 1990 s. Accordingly ABB-PBS boiler orders were flat in 1995. Top managers at ABB-PBS regarded business results to date as respectable, but they were not satisfied with the company’s performance. Cash flow was not as good as expected. Cost reduction had to go further. The more we succeed, the more we see our shortcomings” said one official. Restructuring The first round of restructuring was largely completed in 1995, the last year of the three-year restructuring plan. Plan logistics, information systems, and other
physical capital improvements were in place. The restricting included :
  Renovating and reconstructing workshops and engineering facilities.
ď‚· Achieving ISO 9001 for all four ABB-PBS divisions. (awarded in 1995)
ď‚· Transfer of technology from ABB (this was an ongoing project)
ď‚· Intallation of an information system.
ď‚· Management training, especially in total quality assurance and English language.
ď‚· Implementing a project management approach.
A notable achievement of importance of top management in 1995 was a 50 per cent increase in labour productivity, measured as value added per payroll crown. However, in the future ABB-PBS expected its wage rates to go up faster than west European wage rates (Czech wages were increasing about 15 per cent per year) so it would be difficult to maintain the ABB-PBS unit cost advantage over west European unit cost. The Technology Role for ABB-PBS The joint venture was expected from the beginning to play an important role in technology development for part of ABB’s power generation business worldwide. PBS a.s. had engineering capability in coal – fired steam boilers, and that capability was expected to be especially useful to ABB as more countries became concerned about air quality. (When asked if PBS really did have leading technology here, a boiler engineering manager remarked, “ Of course we do. We burn so much dirty coal in this country, we have to have better technology”) However, the envisioned technology leadership role for ABB-PBS had not been realized by mid – 1996. Richard Kuba, the ABB-PBS managing director, realized the slowness with which the technology role was being fulfilled, and he offered his interpretation of events. “ABB did not promise to make the joint venture its steam technology leader. The main point we wanted to achieve in the joint venture agreement was for ABBPBS to be recognized as a full-fledged company, not just a factory. We were slowed down on our technology plans because we had a problem keeping our good, young engineers. The annual employee turnover rate for companies in the Czech Republic is 15 or 20 per cent, and the unemployment rate is zero. Our engineers have many other good entrepreneurial opportunities. Now we’ve begun to stablise our engineering workforce. The restructing helped. We have better equipment and a cleaner and safer work environment. We also had another problem which is a good problem to have. The domestic power plant business turned out to be better than we expected, so just meeting the needs of our regular customers forced some postponement of new technology initiatives.” ABB-PBS had benefited technologically from its relationship with ABB. One example was the development of a new steam turbine line. This project was a cooperative effort among ABB-PBS and two other ABB companies, one in Sweden and one in Germany. Nevertheless, technology transfer was not the most important early benefit of ABB relationship. Rather, one of the most important gains was the opportunity to benchmark the joint venture’s performance against other established western ABB companies on variables such as productivity, inventory and receivables.
 Questions :
 1. Where does the joint venture meet the needs of both the partners ? Where does it fall short?
 2. Why had ABB-PBS failed to realize its technology leadership ?
 3. What lessons one can draw from this incident for better management of technology transfers?
 NO. 5.
CHINESE EVOLVING ACCOUNTING SYSTEM
Attracted by its rapid transformation from a socialist planned economy into a market economy, economic annual growth rate of around 12 per cent, and a population in excess of 1.2 billion, Western firms over the past 10 years have favoured China as a site for foreign direct investment. Most see China as an emerging economic superpower, with an economy that will be as large as that of Japan by 2000 and that of the US before 2010, if current growth projections hold true. The Chinese government sees foreign direct investment as a primary engine of China’s economic growth. To encourage such investment, the government has offered generous tax incentives to foreign firms that invest in China, either on their own or in a joint venture with a local enterprise. These tax incentives include a two – year exemption from corporate income tax following an investment, plus a further three years during which taxes are paid at only 50 per cent of the standard tax rate. Such incentives when coupled with the promise of China’s vast internal market have made the country a prime site for investment by Western firms. However, once established in China, many Western firms find themselves struggling to
comply with the complex and often obtuse nature of China’s rapidly evolving accounting system. Accounting in China has traditionally been rooted in information gathering and compliance reporting designed to measure the government’s production and tax goals. The Chinese system was based on the old Soviet system, which had little to do with profit or accounting systems created to report financial positions or the results of foreign operations. Although the system is changing rapidly, many problems associated with the old system still remain. One problem for investors is a severe shortage of accountants, financial managers, and auditors in China, especially those experienced with market economy transactions and international accounting practices. As of 1995, there were only 25,000 accountants in china, far short of the hundreds of thousands that will be needed if China continues on its path towards becoming a market economy.
Chinese enterprises, including equity and cooperative joint ventures with foreign firms, must be audited by Chinese accounting firms, which are regulated by the state. Traditionally, many experienced auditors have audited only state-owned enterprises, working through the local province or city authorities and the state audit bureau to report to the government entity overseeing the audited firm. In response to the shortage of accountants schooled in the principles of private sector accounting, several large international auditing firms have established joint ventures with emerging Chinese accounting and auditing firms to bridge the growing need for international accounting, tax and securities expertise. A further problem concerns the somewhat halting evolution of China’s emerging accounting standards. Current thinking is that China won’t simply adopt the international accounting standards specified by the IASC, nor will it use the generally accepted accounting principles of any particular country as its mode. Rather, accounting standards in China are expected to evolve in a rather piecemeal fashion, with the Chinese adopting a few standards as they are studied and deemed appropriate for Chinese circumstances. In the meantime, current Chinese accounting principles present difficult problems for Western firms. For example, the former Chinese accounting system didn’t need to accrue unrealized losses. In an economy where shortages were the
norm, if a state-owned company didn’t sell its inventory right away, it could store it and use it for some other purpose later. Similarly, accounting principles assumed the state always paid its debts – eventually. Thus, Chinese enterprises don’t generally provide for lower-of-cost or market inventory adjustments or the creation of allowance for bad debts, both of which are standard practices in the West.
 Questions :
 1. What factors have shaped the accounting system currently in use in China ?
 2. What problem does the accounting system, currently in sue in China, present to foreign investors in joint ventures with Chinese companies ?
 3. If the evolving Chinese system does not adhere to IASC standards, but instead to standards that the Chinese governments deem appropriate to China’s “Special situation”, how might this affect foreign firms with operations in China ?
 NO. 6
UNFAIR PROTECTION OR VALID DEFENSE ?
“Mexico Widens Anti – dumping Measure …………. Steel at the Core of US-Japan Trade Tensions …. Competitors in Other Countries Are Destroying an American Success Story … It Must Be Stopped”, scream headlines around the world. International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume and selection of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of the World Trade Organisation (WTO) and smaller groups of nations, governments seem to be crying foul in the trade game now more than ever before. We see efforts at protectionism in the rising trend in governments charging foreign producers for “dumping” their goods on world markets. Worldwide, the number of antidumping cases that were initiated stood at about 150 in 1995, 225 in 1996, 230 in 1997 , and 300 in 1998. There is no shortage of similar examples. The Untied States charges Brazil, Japan, and Russia with dumping their products in the US market as a way out of tough economic times. The US steel industry wants the government to slap a 200 per cent tariff on certain types of steel. But car markers in the United States are not
complaining, and General Motors even spoke out against the antidumping charge – as it is enjoying the benefits of law – cost steel for use in its auto product ion. Canadian steel makers followed the lead of the United States and are pushing for antidumping actions against four nations. Emerging markets, too , are jumping into the fray. Mexico recently expanded coverage of its Automatic Import Advice System. The system requires importers (from a select list of countries) to notify Mexican officials of the amount and price of a shipment ten days prior to its expected arrival in Mexico. The ten-day notice gives domestic producers advance warning of incoming low – priced products so they can complain of dumping before the products clear customs and enter the marketplace. India is also getting onboard by setting up a new government agency to handle antidumping cases. Even Argentina, China , Indonesia, South Africa, South Korea, and Thailand are using this recently – popularized tool of protectionism. Why is dumping on the rise in the first place ? The WTO has made major inroads on the use of tariffs, slashing tem across almost every product category in recent years. But the WTO does not have the authority to punish companies, but only governments. Thus , the WTO cannot pass judgements against individual companies that are dumping products in other markets. It can only pass rulings against the government of the country that imposes an antidumping duty. But the WTO allows countries to retaliate against nations whose producers are suspected of dumping when it can be shown that : (1) the alleged offenders are significantly hurting domestic producers, and (2) the export price is lower than the cost of production or lower than the home – market price. Supporters of antidumping tariffs claim that they prevent dumpers from undercutting the prices charged by producers in a target market and driving them out of business. Another claim in support of antidumping is that it is an excellent way of retaining some protection against potential dangers of totally free trade. Detractors of antidumping tariffs charge that once such tariffs are imposed they are rarely removed. They also claim that it costs companies and governments a great deal of time and money to file and argue their cases. It is also argued that the fear of being charged with dumping causes international competitors to keep their prices higher in a target market than would other wise be the case. This would allow domestic companies to charge higher prices and not lose marketshare – forcing consumers to pay more for their goods.
 Questions
1. “You can’t tell consumers that the low price they are paying for a particular fax machine or automobile is somehow unfair. They’re not concerned with the profits of companies. To them, it’s just a great bargain and they want it to continue.” Do you agree with this statement ? Do you think that people from different cultures would respond differently to this statement? Explain your answers.
 2. As we’ve seen, the WTO cannot currently get involved in punishing individual companies for dumping – its actions can only be directed toward governments of countries. Do you think this is a wise policy? Why or why not? Why do you think the WTO was not given the authority to charge individual companies with dumping? Explain.
 3. Identify a recent antidumping case that was brought before the WTO. Locate as many articles in the press as you can that discuss the case. Identify the nations, products (s) , and potential punitive measures involved. Supposing you were part of the WTO’s Dispute Settlement Body, would you vote in favor of the measures taken by the retailing nation? Why or why not?
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You can’t tell consumers that the low price they are paying for a particular fax machine or automobile is somehow unfair
Assignment Solutions, Case study Answer sheets
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 INTERNATIONAL BUSINESS
 N. B.: 1) Attempt any Four cases
2) All cases carries equal marks.
No: 1
BPO – BANE OR BOON?
Several MNCs are increasingly unbundling or vertical disintegrating their activities. Put in simple language, they have begun outsourcing (also called business process outsourcing) activities formerly performed in-house and concentrating their energies on a few functions. Outsourcing involves withdrawing from certain stages/activities and relaying on outside vendors to supply the needed products, support services, or functional activities. Take Infosys, its 250 engineers develop IT applications for BO/FA (Bank of America). Elsewhere, Infosys staffers process home loans for green point mortgage of Novato, California. At Wipro, five radiologists interpret 30 CT scans a day for Massachusetts General Hospital. 2500 college educated men and women are buzzing at midnight at Wipro Spectra mind at Delhi. They are busy processing claims for a major US insurance company and providing help-desk support for a big US Internet service provider-allat a cost upto 60 percent lower than in the US. Seven Wipro Spectra mind staff with Ph.Ds in molecular biology sift through scientific research for western pharmaceutical companies. Another activist in BOP is Evalueserve, headquarterd in Bermuda and having main operations near Delhi. It also has a US subsigiary based in New York and a marketing office in Australia to cover the European market. As Alok Aggarwal (co-founder and chairman) says, his company supplies a range of value-added services to clients that include a dozen Fortune 500 companies and seven globalconsulting firms, besides market research and venture capital firms. Much of its work involves dealing with CEOs, CFOs, CTOs, CIOs, and other so called C-level executives. Evaluserve provides services like patent writing, evaluation and assessment of their commercialization potential for law firms and entrepreneurs. Its market research services are aimed at top-rung financial service firms, to which it provides analysis of investment opportunities and business plans. Another major offering is multilingual services. Evalueserve trains and qualifies employees to communicate in Chinese, Spanish, German, Japanese and Italian, among other languages. That skill set has opened market opportunities in Europe and elsewhere, especially with global corporations. ICICI infotech Services in Edison, New Jersey, is another BOP services  provider that is offering marketing software products and diversifying into markets outside the US. The firm has been promoted by $2-billion ICICI Bank, a large financial institution in Mumbai that is listed on the New York Stock Exchange. In its first year after setting up shop in March 1999, ICICI infotech spent $33 million acquiring two information technology services firms in New Jersy-Object Experts and ivory Consulting – and command Systems in Connecticut. These acquisitions were to help ICICI Infotech hit the ground in the US with a ready book of contracts. But it soon found US companies increasingly outsourcing their requirements to offshore locations, instead of hiring foreign employees to work onsite at their offices. The company found other native modes for growth. It has started marketing its products in banking, insurance and enterprise resource planning among others. It has earmarket $10 million for its next US market offensive, which would go towards R & D and back-end infrastructure support, and creating new versions of its products to comply with US market requirements. It also has a joint venture – Semantik Solutions GmbH in Berlin, Germany with the Fraunhofer Institute for Software and Systems Engineering, which is based in Berlin and Dortmund, Germany – Fraunhofer is a leading institute in applied research and development with 200 experts in software engineering and evolutionary information. A relatively late entrant to the US market , ICICI Infotech started out with plain vanilla IT services, including operating call centeres. As the market for traditional IT services started wakening around mid-2000, ICICI Info tech repositioned itself as a “Solutions” firm offering both products and services. Today , it offers bundied packages of products and services in corporate and retail banking and include data center and disaster recovery management and value chain management services. ICICI Infotech’s expansion into new overseas markets has paid off. Its $50 million revenue for its latest financial year ending March 2003 has the US operations generating some $15 million, while the Middle East and Far East markets brought in another $9 million. It new boasts more than 700 customers in 30 countries, including Dow Jones, Glazo-Smithkline, Panasonic and American Insurance Group. The outsourcing industry is indeed growing form strength. Though technical support and financial services have dominated India’s outsourcing industry, newer fields are emerging which are expected to boost the industry many times over. Outsourcing of human resource services or HR BPO is emerging as big opportunity for Indian BPOs with global market in this segment estimated at $40-60 billion per annum. HR BPO comes to about 33 percent of the outsourcing revenue and India has immense potential as more than 80 percent of Fortune 1000 companies discuss offshore BOP as a way to cut costs and increase productivity. Another potential area is ITES/BOP industry. According to A NASSCOM survey, the global ITES/BOP industry was valued at around $773 billion during 2002 and it is expected to grow at a compounded annual growth rate of nine percent during the period 2002 – 06, NASSCOM lists the major indicators of the high growth potential of ITES/BOP industry in India as the following. During 2003 – 04, The ITES/BPO segment is estimated to have achieved a 54 percent growth in revenues as compared to the previous year. ITES exports accounted for $3.6 billion in revenues, up form $2.5 billion in 2002 – 03. The ITES-BPO segment also proved to be a major opportunity for job seekers, creating employment for around 74,400 additional personnel in India during 2003 – 04. The number of Indians working for this sector jumped to 245,500 by March 2004. By the year 2008, the segment is expected to employ over 1.1 million Indians, according to studies conducted by NASSCOM and McKinsey & Co. Market research shows that in terms of job creation, the ITES-BOP industry is growing at over 50 per cent. Legal outsourcing sector is another area India can look for. Legaltranscription involves conversion of interviews with clients or witnesses by lawyers
into documents which can be presented in courts. It is no different from any other transcription work carried out in India. The bottom-line here is again cheap service. There is a strong reason why India can prove to be a big legal outsourcing Industry. India, like the US, is a common-law jurisdiction rooted in the British legal tradition. Indian legal training is conducted solely in English. Appellate and Supreme Court proceedings in India take place exclusively in English. Due to the time zone differences, night time in the US is daytime in India which means that clients get 24 hour attention, and some projects can be completed overnight. Small and mid – sized business offices can solve staff problems as the outsourced lawyers from India take on the time – consuming labour intensive legal research and writing projects. Large law firms also can solve problems of overstaffing by using the on – call lawyers. Research firms such as Forrester Research, predict that by 2015, more than 489,000 US lawyer jobs, nearly eight percent of the field, will shift abroad. Many more new avenues are opening up for BOP services providers. Patent writing and evaluation services are markets set to boom. Some 200.000 patent applications are written in the western world annually, making for a market size of between $5 billion and $7 billion. Outsourcing patent writing service could significantly lower the cost of each patent application, now anywhere between $12,000 and $15,000apiece-which would help expand the market. Off shoring of equity research is another major growth area. Translation services are also becoming a big Indian plus. India produces some 3,000 graduates in German each year, which is more than that in Switzerland. Though going is good, the Indian BPO services providers cannot afford to be complacent. Phillppines, Maxico and Hungary are emerging as potential offshore locations. Likely competitor is Russia, although the absence of English speaking people there holds the country back. But the dark horse could be South Affrica and even China BOP is based on sound economic reasons. Outsourcing helps gain cost advantage. If an activity can be performed better or more cheaply by an outside supplier, why not outsource it? Many PC makers, for example, have shifted from in – house assembly to utilizing contract assemblers to make their PCs. CISCO outsources all productions and assembly of its routers and witching equipment to contract manufactures that operate 37 factories, all linked via the internet. Secondly, the activity (outsourced) is not crucial to the firm’s ability to gain sustainable competitive advantage and won’t hollow out its core competence, capabilities, or technical know how. Outsourcing of maintenance services, date processing, accounting, and other administrative support activities to companies specializing in these services has become common place. Thirdly, outsourcing reduces the company’s risk exposure to changing technology and / or changing buyer preferences. Fourthly, BPO streamlines company operations in ways that improve organizational flexibility, cut cycle time, speedup decision making and reduce coordination costs. Finally, outsourcing allows a company to concentrate on its core business and do what it does best. Are Indian companies listening? If they listen, BPO is a boon to them and not a bane.
 Questions :
 1. Which of the theories of international trade can help Indian services providers gain competitive edge over their competitors?
 2. Pick up some Indian services providers. With the help of Michael Porter’s diamond, analyse their strengths and weaknesses as active players in BPO.
 3. Compare this case with the case given at the beginning of this chapter. What similarities and dissimilarities do you notice? Your analysis should be based on the theories explained.
 No : 2
PERU
Peru is located on the west coast of South America. It is the third largest nation of the continent (after Brazil and Argentina), and covers almost 500.000 square miles (about 14 per cent of the size of the United States). The land has enormous contrasts, with a desert (drier than the Sahara), the towering snow – capped Andes mountai ns, sparkling grass – covered plateaus, and thick rain forests. Peru has approximately 27 million people, of which about 20 per cent live in Lima, the capital. More Indians (one half of the population) live in Peru than in any other country in the western hemisphere. The ancestors of Peru’s Indians were the famous incase, who built a great empire. The rest of the population is mixed and a small percentage is white. The economy depends heavily on agriculture, fishing , mining, and services, GDP is approximately $15 billion and per capita income in recent years has been around $4,3000. In recent years the economy has gained some relative strength and multinationals are now beginning to consider investing in the country. One of these potential investors is a large New York based bank that is considering a $25 million loan to the owner of a Peruvian fishing fleet. The owner
wants to refurbish the fleet and add one more ship. During the 1970s, the Peruvian government nationalized a number of industries and factories and began running them for the profit of the state in most cases, these state – run ventures became disasters. In the late 1970s the fishing fleet owner was given back his ships and allowed to operate his business as before. Since then, he has managed to remain profitable, but the biggest problem is that his ships are getting old and he needs an influx of capital of make repairs and add new technology. As he explained it to the new York banker. “Fishing is no longer just an art. There is a great deal of technology involved. And to keep costs low and be competitive on the world market, you have to have the latest equipment for both
locating as well as catching and then loading and unloading the fish” Having reviewed the fleet owner’s operation, the large multinational bank believes that the loan is justified. The financial institution is concerned, however, that the Peruvian government might step in during the next couple of years and again take over the business. If this were to happen, it might take an additional decade for the loan to be repaid. If the government were to allow the fleet owner to operate the fleet the way he has over the last decade, the fleet the way he has over the last decade, the loan could be repaid within seven years. Right now, the bank is deciding on the specific terms of the agreement. Once theses have been worked out, either a loan officer will fly down to Lima and close the deal or the owner will be asked to come to New York for the signing. Whichever approach is used, the bank realizes that final adjustments in the agreement will have to be made on the spot. Therefore, if the bank sends a representative to Lima, the individual will have to have the authority to commit the bank to specific terms. These final matters should be worked out within the next ten days.
 Questions :
 1. What are some current issues facing Peru? What is the climate for doing business in Peru today?
 2. What type of political risks does this fishing company need to evaluate? Identify and describe them.
 3. What types of integrative and protective and defensive techniques can the bank use?
 4. Would the bank be better off negotiating the loan in New York or in Lima? Why?
 No : 3
RED BECOMING THICKER
The Backdrop
There seems to be no end to the troubles of the coloured – water giant Coca Cola. The cola giant had entered India decades back but left the country in the late 1970s. It staged a comeback in the early 1990s through the acquisitions route. The professional management style of Coca Cola did not jell with the local bottlers. Four CEOs were changed in a span of seven years. Coke could not capitalize on the popularity of Thums Up. Its arch rival Pepsi is well ahead and has been able to penetrate deep into the Indian market. Red in the balance sheet of Coke is becoming thicker and industry observers are of the opinion that it would take at least two decades more before Coke could think of making profits in India.
 The Story
It was in the early 1990s that India started liberalizing her economy. Seizing theopportunity, Coca Cola wanted to stage a comeback in India. It chose Ramesh Chauhan of Parle for entry into the market. Coke paid $100 million to Chauhan and acquired his well established brands Thums Up, Goldspot and Limca. Coke alsobagged 56 bottlers of Chauhan as a part of the deal. Chauhan was made consultant and was also given the first right of refusal to any large size bottling plants and bottling contracts, the former in the Pune – Bangalore belt and the latter in the Delhi and Mumbai areas. Jayadeva Raja, the flamboyant management expert was made the first CEO of Coke India. It did not take much time for him to realize that Coke had inherited several weaknesses from Chauhan along with the brands and bottlers. Many bottling plants were small in capacity (200 bottlers per minute as against the world standard of 1600) and used obsolete technology. The bottlers were in no mood to increase their capacities, nor were they willing to upgrade the trucks used for transporting the bottle. Bottlers were more used to the paternalistic approach of Chauhan and the new professional management styles of Coke did not go down well with them. Chauhan also felt that he was alienated and was even suspected to be supplying concentrate unofficially to the bottlers. Raja was replaced by the hard – nosed Richard Niholas in 1995. The first thing Nicholas did was to give an ultimatum to the bottlers to expand their plants orsell out. Coke also demanded equity stakes in many of the bottling plants. The bottlers had their own difficulties as well. They were running on low profit margins. Nor was Coke willing to finance the bottlers on soft terms. The ultimatum backfired. Many bottlers switched their loyalty and went to Pepsi. Chauhan allegedly supported the bottlers, of course, from the sidelines. Coke thought it had staged a coup over Pepsi when it (Coke) clamed the status of official drink for the 1996 Cricket World Cup tournament. Pepsi took on Coke mightily with the famous jingle “Nothing official about it”. Coke could have capitalized on the sporty image of Thums Up to counter the campaign, but instead simply caved in. Donald Short replaced Nicholas as CEO in 1997. Armed with heavy financial powers, Short bought out 38 bottlers for about $700 million. This worked out to about Rs 7 per case, but the cost – effective figure was Rs 3 per case. Short also invested heavily in manpower. By 1997 , Coke’s workforce increased to 300. Three years later, the parent company admitted that investment in India was a big mistake. It is not in the culture of Coke to admit failure. It has decided to fight back. Coke could not only sustain the loss, it could even spend more money on Indian operations. It hiked the ad budget and appointed Chaitra Leo Burnett as its ad agency. During 1998 – 99, Coke’s ad spend was almost three times that of Pepsi. Coke is taking a look at its human resources and is taking initiatives to re – orient the culture and inject an element of decentralization along with empowerment. Each bottling plant is expected to meet predetermined profit, market share, and sales volumes. For newly hired management trainees, a clearly defined career path has been drawn to enable them to become profit centre heads shortly after completion of their probation. Such a decentralized approach is something of a novelty in the Coke culture worldwide. But  Alezander “Von Behr, who replaced Short as Chef of Indian operations, reiterated Coke’s commitment to decentralization and local responsiveness. Coke has divided India into six regions, each with a business head. Change in the organization structure has disappointed many employees, some of whom even quit the company. Coke started cutting down its costs. Executives have been asked to shift from farm houses to smaller houses and rentals of Gurgaon headquarters have been renegotiated. Discount rates have been standardized and information systems are being upgraded to enable the Indian headquarters to access online financial status of its outposts down to the depot level. Coke has great hopes in Indian as the country has a huge population and the current per capita consumption of beverages is just four bottles a year. Right now, the parent company (head – quartered in the US) has bottle full of  problems. The recently appointed CEO-E Neville Isdell needs to struggle to do the things that once made the Cola company great. The problems include –
 Meddling Board
Coke’s star- studded group of directors, many of whom date back to the Goizueta era, has built a reputation for meddling. Moribund Marketing On ce world class critics say that today the soda giant has become tooconservative, with ads that don’t resonate with the teenagers and young adults thatmade up its most important audience.
 Lack of Innovation
In the US market , Coke hasn’t created a best – selling new soda since Diet Coke in 1982. In recent years Coke has been outbid by rival Pepsi Co for faster growing noncarb beverages like SoBe Gatorade.
 Friction with Bottlers
Over the past decade, Coke has often made its profit at the expenses of bottlers, pushing aggressive price hikes on the concentrate it sells them. But key bottlers are now fighting back with sharp increases in the price of coke at retail.
 International Worries
Coke desperately needs more international growth to offset its flagging US business, but while some markets like Japan remain lucrative, in the large German market Coke has problems so far as bottling contracts go. When its own house is not in order in the large country, will the company be able to focus enough on the Indian market?
 Questions:
 1. Why is that Coke has not been able to make profit in its Indian operations?
 2. Do you think that Coke should continue to stay in India? If yes, why?
  3. What cultural adaptations would you suggest to the US expatriate managers regarding their management style?
 4. Using the Hofstede and the value orientations cultural model , how can you explain some of the cultural differences noted in this case ?
 NO. 4
THE ABB PBS JOINT VENTURE IN OPERATION
ABB Prvni Brnenska Stojirna Brno, Ltd. (ABB-PBS), Czechoslovakia was a joint venture in which ABB has a 67 per cent stake and PBS a.s. has a 33 per cent stake. This PBS share was determined nominally by the value of the land, plant and equipment, employees and goodwill, ABB contributed cash and specified technologies and assumed some of the debt of PBS. The new company started operations on April 15, 1993. Business for the joint venture in its first two full years was good in most aspects. Orders received in 1994, the first full year of the joint venture’s operation, were higher than ever in the history of PBS. Orders received in 1995 were 2½ times those in 1994. The company was profitable in 1995 and ahead of 1994s results with a rate of return on assets of 2.3 per cent and a rate of return on sales of 4.5 per cent. The 1995 results showed substantial progress towards meeting the joint venture’s strategic goals adopted in 1994 as part of a five year plan. One of the goals was that exports should account for half of the total orders by 1999. (Exports had accounted for more than a quarter of the PBS business before 1989, but most of this business disappeared when the Soviet Union Collapsed). In 1995 exports increased as a share of total orders to 28 per cent, up from 16 per cent the year before. The external service business, organized and functioning as a separate business for the first time in 1995, did not meet expectations. It accounted for five per cent of all orders and revenues in 1995, below the 10 per cent goal set for it. The retrofitting business, which was expected to be a major part of the service business, was disappointing for ABB-PBS, partly because many other small companies began to provide this service in 1994, including some started by former PBS employees who took their knowledge of PBS-built power plants with them. However, ABB-PBS managers hoped that as the company introduced new technologies, these former employees would gradually lose their ability to perform these services, and the retrofit and repair service business, would return to ABBPBS. ABB-PBS dominated the Czech boiler business with 70 per cent of the Czech market in 1995, but managers expected this share to go down in the future as new domestic and foreign competitors emerged. Furthermore, the west European boiler market was actually declining because environmental laws caused a surge of retrofitting to occur in the mid -1980 s, leaving less business in the 1990 s. Accordingly ABB-PBS boiler orders were flat in 1995. Top managers at ABB-PBS regarded business results to date as respectable, but they were not satisfied with the company’s performance. Cash flow was not as good as expected. Cost reduction had to go further. The more we succeed, the more we see our shortcomings” said one official. Restructuring The first round of restructuring was largely completed in 1995, the last year of the three-year restructuring plan. Plan logistics, information systems, and other
physical capital improvements were in place. The restricting included :
  Renovating and reconstructing workshops and engineering facilities.
ď‚· Achieving ISO 9001 for all four ABB-PBS divisions. (awarded in 1995)
ď‚· Transfer of technology from ABB (this was an ongoing project)
ď‚· Intallation of an information system.
ď‚· Management training, especially in total quality assurance and English
language.
ď‚· Implementing a project management approach.
A notable achievement of importance of top management in 1995 was a 50 per cent increase in labour productivity, measured as value added per payroll crown. However, in the future ABB-PBS expected its wage rates to go up faster than west European wage rates (Czech wages were increasing about 15 per cent per year) so it would be difficult to maintain the ABB-PBS unit cost advantage over west European unit cost. The Technology Role for ABB-PBS The joint venture was expected from the beginning to play an important role in technology development for part of ABB’s power generation business worldwide. PBS a.s. had engineering capability in coal – fired steam boilers, and that capability was expected to be especially useful to ABB as more countries became concerned about air quality. (When asked if PBS really did have leading technology here, a boiler engineering manager remarked, “ Of course we do. We burn so much dirty coal in this country, we have to have better technology”) However, the envisioned technology leadership role for ABB-PBS had not been realized by mid – 1996. Richard Kuba, the ABB-PBS managing director, realized the slowness with which the technology role was being fulfilled, and he offered his interpretation of events. “ABB did not promise to make the joint venture its steam technology leader. The main point we wanted to achieve in the joint venture agreement was for ABBPBS to be recognized as a full-fledged company, not just a factory. We were slowed down on our technology plans because we had a problem keeping our good, young engineers. The annual employee turnover rate for companies in the Czech Republic is 15 or 20 per cent, and the unemployment rate is zero. Our engineers have many other good entrepreneurial opportunities. Now we’ve begun to stablise our engineering workforce. The restructing helped. We have better equipment and a cleaner and safer work environment. We also had another problem which is a good problem to have. The domestic power plant business turned out to be better than we expected, so just meeting the needs of our regular customers forced some postponement of new technology initiatives.” ABB-PBS had benefited technologically from its relationship with ABB. One example was the development of a new steam turbine line. This project was a cooperative effort among ABB-PBS and two other ABB companies, one in Sweden and one in Germany. Nevertheless, technology transfer was not the most important early benefit of ABB relationship. Rather, one of the most important gains was the opportunity to benchmark the joint venture’s performance against other established western ABB companies on variables such as productivity, inventory and receivables.
 Questions :
 1. Where does the joint venture meet the needs of both the partners ? Where does it fall short?
 2. Why had ABB-PBS failed to realize its technology leadership ?
3. What lessons one can draw from this incident for better management of technology transfers?
 NO. 5.
CHINESE EVOLVING ACCOUNTING SYSTEM
Attracted by its rapid transformation from a socialist planned economy into a market economy, economic annual growth rate of around 12 per cent, and a population in excess of 1.2 billion, Western firms over the past 10 years have favoured China as a site for foreign direct investment. Most see China as an emerging economic superpower, with an economy that will be as large as that of Japan by 2000 and that of the US before 2010, if current growth projections hold true. The Chinese government sees foreign direct investment as a primary engine of China’s economic growth. To encourage such investment, the government has offered generous tax incentives to foreign firms that invest in China, either on their own or in a joint venture with a local enterprise. These tax incentives include a two – year exemption from corporate income tax following an investment, plus a further three years during which taxes are paid at only 50 per cent of the standard tax rate. Such incentives when coupled with the promise of China’s vast internal market have made the country a prime site for investment by Western firms. However, once established in China, many Western firms find themselves struggling to
comply with the complex and often obtuse nature of China’s rapidly evolving accounting system. Accounting in China has traditionally been rooted in information gathering and compliance reporting designed to measure the government’s production and tax goals. The Chinese system was based on the old Soviet system, which had little to do with profit or accounting systems created to report financial positions or the results of foreign operations. Although the system is changing rapidly, many problems associated with the old system still remain. One problem for investors is a severe shortage of accountants, financial managers, and auditors in China, especially those experienced with market economy transactions and international accounting practices. As of 1995, there were only 25,000 accountants in china, far short of the hundreds of thousands that will be needed if China continues on its path towards becoming a market economy. Chinese enterprises, including equity and cooperative joint ventures with foreign firms, must be audited by Chinese accounting firms, which are regulated by the state. Traditionally, many experienced auditors have audited only state-owned enterprises, working through the local province or city authorities and the state audit bureau to report to the government entity overseeing the audited firm. In response to the shortage of accountants schooled in the principles of private sector accounting, several large international auditing firms have established joint ventures with emerging Chinese accounting and auditing firms to bridge the growing need for international accounting, tax and securities expertise. A further problem concerns the somewhat halting evolution of China’s emerging accounting standards. Current thinking is that China won’t simply adopt the international accounting standards specified by the IASC, nor will it use the generally accepted accounting principles of any particular country as its mode. Rather, accounting standards in China are expected to evolve in a rather piecemealfashion, with the Chinese adopting a few standards as they are studied and deemed appropriate for Chinese circumstances. In the meantime, current Chinese accounting principles present difficult problems for Western firms. For example, the former Chinese accounting system didn’t need to accrue unrealized losses. In an economy where shortages were the
norm, if a state-owned company didn’t sell its inventory right away, it could store it and use it for some other purpose later. Similarly, accounting principles assumed the state always paid its debts – eventually. Thus, Chinese enterprises don’t generally provide for lower-of-cost or market inventory adjustments or the creation of allowance for bad debts, both of which are standard practices in the West.
 Questions :
 1. What factors have shaped the accounting system currently in use in China ?
 2. What problem does the accounting system, currently in sue in China, present to foreign investors in joint ventures with Chinese companies ?
 3. If the evolving Chinese system does not adhere to IASC standards, but instead to  standards that the Chinese governments deem appropriate to China’s “Special situation”, how might this affect foreign firms with operations in China ?
 NO. 6
UNFAIR PROTECTION OR VALID DEFENSE ?
“Mexico Widens Anti – dumping Measure …………. Steel at the Core of US-Japan Trade Tensions …. Competitors in Other Countries Are Destroying an American Success Story … It Must Be Stopped”, scream headlines around the world. International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume and selection of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of the World Trade Organisation (WTO) and smaller groups of nations, governments seem to be crying foul in the trade game now more than ever before. We see efforts at protectionism in the rising trend in governments charging foreign producers for “dumping” their goods on world markets. Worldwide, the number of antidumping cases that were initiated stood at about 150 in 1995, 225 in 1996, 230 in 1997 , and 300 in 1998. There is no shortage of similar examples. The Untied States charges Brazil, Japan, and Russia with dumping their products in the US market as a way out of tough economic times. The US steel industry wants the government to slap a 200 per cent tariff on certain types of steel. But car markers in the United States are not
complaining, and General Motors even spoke out against the antidumping charge – as it is enjoying the benefits of law – cost steel for use in its auto product ion. Canadian steel makers followed the lead of the United States and are pushing for antidumping actions against four nations. Emerging markets, too , are jumping into the fray. Mexico recently expanded coverage of its Automatic Import Advice System. The system requires importers (from a select list of countries) to notify Mexican officials of the amount and price of a shipment ten days prior to its expected arrival in Mexico. The ten-day notice gives domestic producers advance warning of incoming low – priced products so they can complain of dumping before the products clear customs and enter the marketplace. India is also getting onboard by setting up a new government agency to handle antidumping cases. Even Argentina, China , Indonesia, South Africa, South Korea, and Thailand are using this recently – popularized tool of protectionism. Why is dumping on the rise in the first place ? The WTO has made major inroads on the use of tariffs, slashing tem across almost every product category in recent years. But the WTO does not have the authority to punish companies, but only governments. Thus , the WTO cannot pass judgements against individual companies that are dumping products in other markets. It can only pass rulings against the government of the country that imposes an antidumping duty. But the WTO allows countries to retaliate against nations whose producers are suspected of dumping when it can be shown that : (1) the alleged offenders are significantly hurting domestic producers, and (2) the export price is lower than the cost of production or lower than the home – market price. Supporters of antidumping tariffs claim that they prevent dumpers from undercutting the prices charged by producers in a target market and driving them out of business. Another claim in support of antidumping is that it is an excellent way of retaining some protection against potential dangers of totally free trade. Detractors of antidumping tariffs charge that once such tariffs are imposed they are rarely removed. They also claim that it costs companies and governments a great deal of time and money to file and argue their cases. It is also argued that the fear of being charged with dumping causes international competitors to keep their prices higher in a target market than would other wise be the case. This would allow domestic companies to charge higher prices and not lose market share – forcing consumers to pay more for their goods.
 Questions
1. “You can’t tell consumers that the low price they are paying for a particular fax machine or automobile is somehow unfair. They’re not concerned with the profits of companies. To them, it’s just a great bargain and they want it to continue.” Do you agree with this statement ? Do you think that people from different cultures would respond differently to this statement? Explain your answers.
 2. As we’ve seen, the WTO cannot currently get involved in punishing individual companies for dumping – its actions can only be directed toward governments of countries. Do you think this is a wise policy? Why or why not? Why do you think the WTO was not given the authority to charge individual companies with dumping? Explain.
 3. Identify a recent antidumping case that was brought before the WTO. Locate as many articles in the press as you can that discuss the case. Identify the nations, products (s) , and potential punitive measures involved. Supposing you were part of the WTO’s Dispute Settlement Body, would you vote in favor of the measures taken by the retailing nation? Why or why not?
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