Management 2022 Paper II 50 marks Discuss

Q8

(a) (i) Discuss the importance of Foreign Direct Investment (FDI) for developing economies like India. Should these countries go all out for attracting more FDI? 8 (ii) Discuss the role of authorities created by the Government of India for streamlining the FDI movement in India. 7 (b) (i) Outline how the culture of a country might influence the cost of doing business in that country. Illustrate with examples. 7 (ii) What is ethnocentrism? How does it influence the management of multi-national companies? 8 (c) (i) If you were a manager in a company that operates in many countries, what criteria would you use to determine whether a technological innovation should be developed as a product for global consumers or local consumers? 7 (ii) COVID-19 pandemic has impacted global logistics and supply chains. Explain how an efficient logistic function can help an international business compete more effectively in the post-pandemic global marketplace. 7 (iii) What are the various options a firm has to minimize its global tax liability? 6

हिंदी में प्रश्न पढ़ें

(a) (i) भारत जैसे विकासशील अर्थव्यवस्थाओं के लिए प्रत्यक्ष विदेशी निवेश (एफ० डी० आई०) की महत्ता की विवेचना कीजिए। क्या इन देशों को अधिक एफ० डी० आई० आकर्षित करने के लिए भरपूर प्रयास करना चाहिए? 8 (ii) भारत में एफ० डी० आई० आंदोलन को सरल व कारगर बनाने (स्ट्रीमलाइनिंग) के लिए भारत सरकार द्वारा सृजित अधिकारियों की भूमिका की विवेचना कीजिए। 7 (b) (i) रेखांकित कीजिए कि किस प्रकार किसी देश की संस्कृति उस देश में व्यवसाय करने की लागत को प्रभावित कर सकती है। सोदाहरण स्पष्ट कीजिए। 7 (ii) प्रजातिकेंद्रिकता (एथ्नोसेंट्रिज्म) क्या है? यह किस प्रकार बहुराष्ट्रीय कम्पनियों के प्रबन्ध को प्रभावित करता है? 8 (c) (i) यदि आप एक ऐसी कम्पनी के प्रबन्धक होते जो अनेक देशों में काम करती है, तो यह निर्धारित करने के लिए आप कौन-कौन से मानदण्डों का उपयोग करते कि क्या एक उत्पाद के रूप में शिल्पवैज्ञानिक (टेक्नोलॉजिकल) नवाचार (इनोवेशन) को वैश्विक उपभोक्ताओं अथवा स्थानीय उपभोक्ताओं के लिए विकसित किया जाना चाहिए? 7 (ii) कोविड-19 देशान्तरगामी महामारी ने वैश्विक लॉजिस्टिक एवं आपूर्ति श्रृंखलाओं को प्रभावित किया है। समझाइए कि किस प्रकार एक दक्ष लॉजिस्टिक कार्य अन्तर्राष्ट्रीय व्यवसाय को देशान्तरगामी महामारी के पश्चात् वैश्विक बाजार-स्थल में अधिक प्रभावपूर्ण रूप से मुकाबला करने में सहायता कर सकता है। 7 (iii) एक प्रतिष्ठान के पास अपने वैश्विक कर दायित्व को न्यूनतम करने के कौन-कौन से विभिन्न विकल्प हैं? 6

Evaluate your answer to this question → See all 2022 Management questions

Directive word: Discuss

This question asks you to discuss. The directive word signals the depth of analysis expected, the structure of your answer, and the weight of evidence you must bring.

See our UPSC directive words guide for a full breakdown of how to respond to each command word.

How this answer will be evaluated

Approach

The question demands a comprehensive discussion across multiple interconnected themes in international business. Structure your answer with a brief introduction on globalization and FDI, followed by systematic treatment of each sub-part (a)(i)-(ii), (b)(i)-(ii), (c)(i)-(iii), ensuring balanced coverage of conceptual depth, institutional knowledge, cultural analysis, and strategic decision-making, concluding with synthesized insights on India's evolving position in global business.

Key points expected

  • FDI benefits for developing economies: capital inflow, technology transfer, employment generation, export promotion, and integration with GVCs; balanced view on risks like profit repatriation, crowding out domestic firms, and policy conditionality
  • Indian FDI regulatory architecture: DPIIT (FDI policy formulation), RBI (capital account regulations), SEBI (FII/FPI distinction), CCI (competition concerns), and sectoral caps with automatic vs. government route
  • Hofstede's cultural dimensions or similar framework applied to business costs: power distance affecting hierarchy costs, uncertainty avoidance influencing contract enforcement expenses, individualism-collectivism shaping labor relations
  • Ethnocentrism defined as home-country superiority bias; its manifestation in MNCs through centralized decision-making, expatriate-heavy staffing, and product standardization; contrast with polycentric/regiocentric/geocentric orientations (Perlmutter/Heenan)
  • Global vs. local product decision criteria: market homogeneity, scale economies, competitive pressure, regulatory requirements, cultural adaptability; reference to Levitt's 'Globalization of Markets' vs. customization arguments
  • Post-COVID logistics strategies: supply chain resilience through nearshoring/friendshoring, digitalization (blockchain, IoT), inventory optimization, multimodal integration; tax minimization through transfer pricing, tax havens, BEPS compliance, and India's MLI participation

Evaluation rubric

DimensionWeightMax marksExcellentAveragePoor
Concept correctness20%10Precise definitions of FDI (UNCTAD/OECD criteria), ethnocentrism, global product strategies, and tax arbitrage; accurate distinction between FDI and FPI; correct identification of automatic vs. government route sectors; no conceptual conflation between cultural dimensions and business costsGenerally correct definitions with minor inaccuracies; conflates FDI with foreign portfolio investment; vague understanding of ethnocentrism versus other orientations; imprecise on logistics concepts like 3PL/4PLFundamental errors: treats FDI as any foreign capital inflow, confuses ethnocentrism with ethnocentric staffing only, misidentifies regulatory bodies (e.g., attributing FDI policy to Finance Ministry alone), or presents outdated pre-2017 FDI norms
Framework citation20%10Explicit application of Dunning's OLI paradigm for FDI location decisions; Hofstede/GLOBE for cultural analysis; Perlmutter's EPRG framework for MNC orientations; Porter's diamond or value chain for competitive advantage; Bartlett-Ghoshal typology for global-local integrationMentions frameworks without systematic application; cites Hofstede without linking specific dimensions to business costs; references EPRG but doesn't contrast ethnocentrism with other orientations; frameworks appear as add-ons rather than analytical toolsNo recognizable theoretical framework; purely descriptive answer; or misapplies frameworks (e.g., using SWOT where specific international business theory is required)
Case / Indian example20%10Specific Indian illustrations: FDI in manufacturing (Samsung's Noida expansion, Apple's supply chain shift), services (IT/ITES), and recent PLI scheme successes; SEBI's FPI regulations post-2019; cultural costs illustrated through Walmart's initial India challenges or McDonald's localization; Make in India and Atmanirbhar Bharat tensionsGeneric references to 'MNCs in India' without naming firms; mentions DPIIT/RBI without specific regulatory actions; dated examples (pre-2015 FDI policy); superficial treatment of COVID impact on Indian logistics without sector-specific instancesNo Indian examples; purely theoretical treatment; or factually incorrect cases (e.g., attributing FDI success to wrong policy period, confusing FDI with domestic investment)
Multi-perspective analysis20%10Balanced evaluation: FDI benefits weighed against dependency risks and strategic sector concerns; ethnocentrism critiqued from host country and MNC headquarters perspectives; global standardization versus local responsiveness trade-offs analyzed with contingency logic; post-COVID logistics examined through efficiency-resilience-sustainability trilemmaOne-sided advocacy for FDI attraction without critical scrutiny; acknowledges ethnocentrism's problems but doesn't explore when it might be strategically justified; treats global-local decision as binary rather than spectrum; logistics discussion focuses only on cost reductionUncritical acceptance of FDI as universally beneficial; no recognition of power asymmetries in MNC-host country relations; ignores stakeholder perspectives (workers, local communities, SMEs); or presents tax minimization without ethical/legal considerations
Conclusion & recommendation20%10Synthesized conclusion linking FDI quality (not just quantity) to India's manufacturing ambitions; actionable recommendations on selective FDI promotion, calibrated cultural adaptation in MNC management, and strategic use of logistics digitalization; forward-looking stance on OECD/G20 tax reforms and India's positionSummary restatement of points without integration; generic recommendations ('India should attract more FDI'); no connection between sub-parts; weak or absent conclusion on tax optimization ethicsNo conclusion or abrupt ending; contradictory final position (e.g., advocating unrestricted FDI after noting risks); purely descriptive close with no evaluative or prescriptive element; or conclusion addressing only one sub-part

Practice this exact question

Write your answer, then get a detailed evaluation from our AI trained on UPSC's answer-writing standards. Free first evaluation — no signup needed to start.

Evaluate my answer →

More from Management 2022 Paper II