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23 views3 pages

Assignment

Uploaded by

Rajvi Chatwani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Assignment

Submitted by: Rajvi Rajendra Chatwani


Student Id: 201900929
Submitted to: Prof. Roberto Alvarez
Course Name: Global Business Environment
Program + Semester: IBM I – G2
Due Date: April 10, 2020
Question: There are four modes of supply services: Cross-border trade (Mode 1),
consumption abroad (Mode 2), commercial presence (Mode 3), and temporary movement
of natural persons (Mode 4). Based on your personal perception and understanding, which
mode of trading services offers more advantages for business in developing countries?
Why?
Answer: The GATS concept of trade in services includes the four supply modes. The differences
between these modes are based on whether the service provider and the customer are present
when the transaction happens in the same country or in different countries.
"Cross-border supply" happens when a service is supplied "from one Member's territory to the
other Member's territory." This is equivalent to trade in goods where the commodity is shipped
across borders and the customer and the manufacturer remain in their respective territories.
Similar to conventional trade, both the manufacturer and the customer stay in their respective
countries when a product is shipped across a border. For example, a law firm may provide legal
advice to a client overseas by telephone or through the internet.
Consumption abroad, happens when commodities are used in the country of origin. When the
service is given the customer or his / her property is abroad. For example, a property of a
consumer may be sent abroad for repairs.
"Commercial presence" means "the delivery of a service by one Member's service provider,
through the commercial presence in the territory of any other Member. GATS recognises that
service providers also need to develop a commercial presence abroad in order to ensure closer
contact with the customer at various stages of manufacturing, distribution, marketing, sale and
delivery as well as after-sales service. A financial institution, for example, may open a branch in
another country to provide financial services there.
"Temporary presence of natural persons" occurs when an entity is temporarily present for a
commercial service in the territory other than their own. GATS describes Mode 4 as the delivery
of a service by "one member's service provider through the intervention of a member's natural
persons in the territory of any other member." In general Mode 4 covers the following:
 Contractual service providers whether they are employees of a Foreign Service provider or
self-employed;
 Intra-corporate transferees and international workers who are directly recruited by developed
foreign companies;
 Service sellers entering the host country to create contractual ties for a service contract, or
individuals responsible for establishing a market presence.
Using the proper supply mode will lead to improved efficiencies and lower costs and reduced
distress. Companies also start with a supply mode which then works for the current state of their
market. Sadly, as the project progresses and expands, they don't make improvements to their
supply mode though. Choosing a supply mode is not always a simple job, and it may not always
be the case what may have been an efficient cost-effective option at the start of your business.
Considering all factors listed above, in my opinion the mode of supply service which is
advantageous for companies in developing countries is “Cross Border supply”
Question: The “Triple Bottom Line” (TBL) theory holds that if a firm looks at profits
only, ignoring people and the planet, it cannot account for the full cost of doing business.
Based on your own understanding, explain what this statement means.
Answer: The Triple Bottom Line (TBL) is a concept or philosophy that advises businesses
agreeing to concentrate on social and environmental issues just as they do on income. TBL
theory holds that if a corporation just looks at profits, ignoring people and the planet, it cannot
account for the full cost of doing business.
In 1994 John Elkington, the founder of a British company called Sustainability, coined the term
"the triple bottom line." One is the standard indicator of corporate profit, the "bottom line" of
the account for income and loss. The second is the result in the "people account" of a company,
an indicator in some way or type of how socially conscious an enterprise has been in its
operations. The third is the "earth" account of the company's bottom line, a measure of how
environmentally sustainable it was. Thus, the triple bottom line (TBL) is made up of three Ps:
income, people and the earth. The maximum costs involved in doing business are only taken
into account by a corporation that generates a TBL.
Business leaders have historically been concerned about their bottom lines or the numerical
gains their firms create. More leaders are now beginning to think sustainably. The triple bottom
line theory extends the traditional accounting system to incorporate two other fields of
performance: their company's social and environmental impacts.
Planet + People = Environmental + Social Responsibility
According to TBL theory, corporations will operate on these three bottom lines simultaneously:
1. Profit: the standard measure of corporate profit — the profit and loss (P&L) account. There
is also acknowledgement by sustainable organisations that "benefit" is not diametrically
opposed to "people" or "earth."
2. People: Tests how socially conscious a company over the course of its activities are. A triple
bottom line business pays equal wages and takes action to ensure that manufacturer factories
have safe working conditions.
3. The Planet: Tests how responsible a firm has been for the environment. Such initiatives can
include waste reduction, investment in renewable energy, more effective use of natural
resources and better logistics. Apple, for example, has invested heavily in preserving the
climate.
Today, the corporate world is more conscious of its environmental and social responsibility.
Companies are adopting or ramping up their social initiatives. Customers expect businesses to
be considerate to all stakeholders and to be open about their operations. Many customers are
ready to pay more for items if that means respecting the environment in the manufacturing
process and providing a living wage to employees.

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