KSLU Solved Question Papers
International Business
Previous Year Question Paper with Solution
B.Com. LL.B. (Five Years) · Sem 4
2019 Jun Examination
munotes.in
Mumbai
B.Com. LL.B. (Five Years) Sem 4 International Business 2019 Jun Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2019 Jun examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2019 Jun examination, in the order it was set.
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2019 Jun examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 13 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1Define international business and its objectives.[16]
Answer
For full marks, cover: definitions of international business (narrow and broad), and the elements of a sound definition; its objectives, set out at three levels: for the firm (profit, growth, scale, risk spreading, resources, technology, use of capacity, competitive strength, brand), for the nation (foreign exchange, growth and jobs, specialisation, technology, consumer welfare, balanced development, cooperation) and for the world trading system (as stated in the WTO's founding agreement); conflicts among these objectives; how India pursues them today, with official figures; a table; and a conclusion.
Definitions
International business can be defined narrowly or broadly.
- Narrow definition. International business is the export and import of goods and services between countries. This view treats it as the same as international trade.
- Broad definition. International business is every commercial transaction that crosses national borders. It includes trade in goods and services, investment, licensing and franchising, and contract manufacturing. It also includes management contracts, turnkey projects and the operations of multinational companies.
The broad definition is now accepted, because firms today enter foreign markets in many ways besides trade. A sound working definition follows. International business is the set of transactions in goods, services, capital, technology and know-how carried on across national borders for gain. Private firms, public bodies and governments all carry it on.
Elements of the definition
- Cross-border transactions. At least two countries are involved.
- Many forms. Trade, investment and contractual arrangements all count.
- Many participants. Small exporters, large multinationals, state enterprises and governments all take part.
- Purpose of gain. The aim is profit for firms and welfare for nations.
- Many environments. The business works under several sets of laws, currencies and cultures at once.
Objectives of international business
A. Objectives of the firm
- Profit. Foreign markets can offer higher prices or larger volumes than the home market, which raises total profit.
- Growth beyond the home market. When sales at home stop growing, foreign markets offer room to expand.
- Economies of scale. Larger output for world markets lowers the cost of each unit.
- Spreading risk. Selling in many countries means a slowdown in one market can be balanced by growth in another.
- Access to resources. Firms go abroad for raw materials, energy, skilled people and capital that are scarce or costly at home.
- Access to technology and ideas. Working with foreign partners and customers brings new methods and designs.
- Use of spare capacity. Unused capacity can be used to serve foreign buyers, spreading fixed costs.
- Competitive strength. A firm that competes abroad learns to match the world's best, which also protects it at home.
- Longer product life. A product that is mature at home may still be new and in demand in other countries.
- Brand and reputation. Success abroad raises a firm's standing with customers, investors and lenders.
B. Objectives of the nation
- Earning foreign exchange. A country needs foreign currency to pay for essential imports such as crude oil, machinery and technology, and to service foreign debt.
- Growth and employment. Export industries and foreign investment raise output and create jobs.
- Specialisation. Trade lets a country concentrate on what it produces at relatively low cost and buy the rest, raising national income.
- Technology transfer. Imports of capital goods, foreign investment and licensing bring modern technology.
- Consumer welfare. Consumers gain from more choice, better quality and competitive prices.
- Balanced regional development. Export zones, clusters and district export plans can spread industry to new areas.
- International cooperation. Trade ties build friendly relations and give a country a stronger voice in world affairs.
C. Objectives of the world trading system
The agreement that set up the WTO states the objectives that its members pursue through trade. They are:
- raising standards of living;
- ensuring full employment and a large and steadily growing volume of real income and demand;
- expanding the production of and trade in goods and services;
- making optimal use of the world's resources in line with sustainable development, while protecting the environment; and
- making positive efforts so that developing countries, especially the least developed, secure a share in the growth of world trade.
The means are reciprocal reductions of tariffs and other barriers and the removal of discrimination in trade.
D. Objectives of responsible conduct
Society also expects international business to be conducted responsibly. The OECD Guidelines for Multinational Enterprises were revised on 8 June 2023. They ask firms to act responsibly on matters such as corruption, climate change and supply chains. In India, the National Guidelines on Responsible Business Conduct of 2019 set out nine principles. They include ethical conduct, employee well-being, human rights and protection of the environment. Earning profit within these standards is now part of the objective of sound international business.
Objectives differ by the form of business
- Exporting mainly seeks sales and foreign exchange with little investment abroad.
- Licensing and franchising seek fee income from a brand or technology at low risk.
- Contract manufacturing and sourcing seek lower costs or special skills.
- Joint ventures seek local knowledge and shared risk.
- Wholly owned subsidiaries seek full control of a foreign market or a production base.
A firm chooses the form that best serves its main objective in each market.
How the objectives have changed over time
In the first wave of globalisation, from about 1870 to 1914, firms went abroad mainly to secure raw materials and markets. After the Second World War, market access and economies of scale became the main aims. Since about 1980, efficiency has dominated. Firms place each stage of production where it is cheapest or best, so that value chains run through many countries. Today two further objectives have joined them. One is access to talent and technology: foreign firms run more than 1,750 global capability centres in India for research and engineering. The other is resilience and sustainability. Firms now spread their suppliers to reduce risk. They must also meet green rules, such as the European Union's carbon border measure, in force since 1 January 2026.
Conflicts among the objectives
The three sets of objectives do not always agree. A multinational may aim to maximise worldwide profit by shifting profits to low-tax countries, while the host nation wants tax revenue. A firm may prefer to import cheap inputs, while the nation wants local suppliers to grow. A country may protect a weak industry, while the world trading system seeks lower barriers. Governments therefore use law and policy to align private objectives with national ones. In India these include the Foreign Trade (Development and Regulation) Act, 1992, the Foreign Exchange Management Act, 1999 and the Competition Act, 2002.
How India pursues these objectives
- Export target. The Foreign Trade Policy 2023, in force since 1 April 2023, aims to raise exports of goods and services to USD 2 trillion by 2030.
- Present level. Total exports reached a record USD 863.1 billion in 2025-26, of which services were USD 421.3 billion.
- Investment and technology. Total FDI inflow was about USD 94.5 billion in 2025-26 (provisional).
- Foreign exchange. Reserves stood at USD 701.4 billion on 16 January 2026, enough for about 11 months of imports.
- Support for small firms. The Export Promotion Mission, approved on 12 November 2025 with Rs 25,060 crore, helps small and first-time exporters with finance and market access.
These figures show the national objectives being pursued through the business objectives of thousands of Indian firms.
Objectives at a glance
| Level | Main objectives | Indian example |
|---|---|---|
| Firm | Profit, growth, scale, risk spreading, resources, technology | IT firms serving clients worldwide |
| Nation | Foreign exchange, jobs, specialisation, technology, welfare | Record exports of USD 863.1 billion in 2025-26 |
| World system | Living standards, full employment, sustainable development, a share for developing countries | India's membership of the WTO since 1995 |
Conclusion. International business, in its broad sense, is every commercial transaction across national borders, including trade, investment and contractual entry. Its objectives can be seen at three levels. Firms seek profit, growth, scale, safety and new resources. Nations seek foreign exchange, jobs, technology and welfare. The world trading system seeks higher living standards, sustainable development and a fair share for developing countries. Sound national policy brings these levels together. India's Foreign Trade Policy 2023 tries to do so, with its target of USD 2 trillion of exports by 2030.
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