International trade has flourished over the years due to the many benefits it ha s offered to different countries across

the globe. International trade is the ex change of services, goods, and capital among various countries and regions, with out much hindrance. The international trade accounts for a good part of a countr ys gross domestic product. It is also one of important sources of revenue for a d eveloping country. With the help of modern production techniques, highly advanced transportation sy stems, transnational corporations, outsourcing of manufacturing and services, an d rapid industrialization, the international trade system is growing and spreadi ng very fast. International trade among different countries is not a new a concept. History suggests that in the past there where several instances of international trade. Traders used to transport silk, and spices through the Silk Route in the 14th an d 15th century. In the 1700s fast sailing ships called Clippers, with special cr ew, used to transport tea from China, and spices from Dutch East Indies to diffe rent European countries. The economic, political, and social significance of international trade has been theorized in the Industrial Age. The rise in the international trade is essenti al for the growth of globalization. The restrictions to international trade woul d limit the nations to the services and goods produced within its territories, a nd they would lose out on the valuable revenue from the global trade. The benefits of international trade have been the major drivers of growth for the last half of the 20th century. Nations with strong international trade have become prosperous and have the power to control the world economy. The global tr ade can become one of the major contributors to the reduction of poverty. David Ricardo, a classical economist, in his principle of comparative advantage explained how trade can benefit all parties such as individuals, companies, and countries involved in it, as long as goods are produced with different relative costs. The net benefits from such activity are called gains from trade. This is one of the most important concepts in international trade. Adam Smith, another classical economist, with the use of principle of absolute a dvantage demonstrated that a country could benefit from trade, if it has the lea st absolute cost of production of goods, i.e. per unit input yields a higher vol ume of output. According to the principle of comparative advantage, benefits of trade are depen dent on the opportunity cost of production. The opportunity cost of production o f goods is the amount of production of one good reduced, to increase production of another good by one unit. A country with no absolute advantage in any product , i.e. the country is not the most competent producer for any goods, can still b e benefited from focusing on export of goods for which it has the least opportun ity cost of production. Benefits of International Trade can be reaped further, if there is a considerabl e decrease in barriers to trade in agriculture and manufactured goods. Some important benefits of International Trade Enhances the domestic competitiveness Takes advantage of international trade technology Increase sales and profits Extend sales potential of the existing products Maintain cost competitiveness in your domestic market Enhance potential for expansion of your business Gains a global market share Reduce dependence on existing markets Stabilize seasonal market fluctuations The advantages of globalisation (an economic view) The economic benefits that greater openness to international trade bring are: Faster growth: economies that have in the past been open to foreign direct inves tments have developed at a much quicker pace than those economies closed to such investment e.g. communist Russia Cheaper imports: this is down to the simple fact that if we reduce the barriers imposed on imports (e.g. tariffs, quota, etc) then the imports will fall in pric

e New technologies: by having an open economy we can bring in new technology as it happens rather than trying to develop it internally Spur of foreign competition: foreign competition will encourage domestic produce rs to increase efficiency. Carbaugh (1998) states that global competitiveness is a bit like golf, you get better by playing against people who are better than y ou. Increase consumer income: multination will bring up average wage levels because if the multinationals were not there the domestic companies would pay less. Increased investment opportunities: with globalisation companies can move capita l to whatever country offers the most attractive investment opportunity. This pr events capital being trapped in domestic economies earning poor returns. Ans2: Geert Hofstede Cultural Dimensions The following is excepted from the paper "Human Resource Strategies as a Technol ogy of Governance in Danish Subsidiaries in Southeast Asia" by Daniel Fleming & Henrik Sborg

As with any concept, idea, or research, there are always discussions, disagreeme nts, and contrarian viewpoints. This portion of Fleming s and Sborg s paper prese nt views that challenge portions of Hofstede s work. = = =

"As human resources are mainly developed in local organizations and cultural ins titutions, we begin by looking at the formation of local work cultures and the i nternational debate about how multinational companies are influencing local work cultures. How resistant are different national working cultures to the cultural impact of multinational companies? Do HRM discourses in multinational companies encourage global convergence or local divergence?

- Convergence, transnational communication and a third culture

In the literature on international comparative management and organization, inte rest in the above questions has been growing over the last 20 years. Several cas e studies have focused on work culture, management and organizational developmen t in multinational companies in different countries (Hofstede 1980; ILO 1991; Fr enkel 1994; Garsten 1994). These studies reach different conclusions about how c ultural, institutional and technological factors influence management and organi zation in companies in multinational groups within the same industry, and especi ally how management and organizational culture influence employees in local comp anies in a multinational group. Some claim that local cultural and institutional factors are crucial in shaping the development of management and organization a nd particularly employees attitudes towards working life (Hofstede 1980). Others claim that although local values are important for the development of employees a ttitudes towards work, the corporate culture in a multinational group becomes mo re and more important in local employees value orientations (Garsten 1994).

The different interpretations of the impact of multinational companies on manage ment and organization in foreign subsidiaries have breathed new life into the co nvergence debate from the1950s and 1960s (Kerr, Dunlop, Harbison, Myers 1960). I n contrast to the old convergence approach, which laid great emphasis on institu tional systems and structural processes, the new approach focuses more on the ac tors and carriers of convergence processes (Thompson, Flecker,Wallace 1994/95; L ocke, Kochan, Piore 1995). The new focus is on transnational processes in multin ational companies and not so much on differences in National Business Systems (W hitley1990), industrial relations or societal effects (Maurice et al.1980), whic h were the dominant issues in international management and organization research in 1980s. The authors within the new convergence school do not argue against th e influence of national social institutions on company strategies and organizati onal practices, but they raise the question of whether the increasing globalizat ion of many companies does not reduce the influence of national institutions and cultural values. They pay greater attention to transnational actors potential ca pacity to reduce national differences in management and organization. They argue that the increasing internal and external competition in multinational companie s searching for best practices is undermining the importance of national social in stitutions and local cultural values in company strategies and practices (Garste n 1994; Castells 1998).

We do not intend to discuss these positions at length here. Instead, we limit ou r discussion to two key positions that represent different interpretations of th e impact of globalization on culture. Geert Hofstedes analysis of IBM subsidiarie s in more than 50 countries is an approach that has been inspiring to many resea rchers because it focuses on national culture and work-related value differences in a single organization. Yet, this approach has been criticized for giving bia sed emphasis of the influence of national culture on employee values. Hofstede h as sought to test how employees in different national contexts look at the follo wing four theoretical dimensions: Power Distance Uncertainty Avoidance Individualism vs. Collectivism Masculinity vs. Femininity

The outcome of his survey is that employees in the same national context share s imilar attitudes towards these four dimensions. Differences only arise between d ifferent national contexts. The result of Hofstedes investigation is not surprisi ng. IBMs subsidiaries do not adapt to the parent companys values and culture, but continue to reproduce local values. There is barely any scope for external influ ence.

Several authors have criticized Hofstede for not taking into account the changin g relationship between parent companies and subsidiaries in a globalized economy . Among his critics is Christina Garsten who, in her analysis of Apple Computer, ends up with a different view of the parent companys impact on its subsidiaries. Garsten does not seek to identify national homogeneity and consensus in Apples n ational subsidiaries by analyzing common national cultural values. The cultural complexity that Christina Garsten seeks to identify in Apple Computers demands a more dynamic concept of culture than Geert Hofstedes categorization of attitudes according to pre-established theoretical dimensions. Christina Garsten sees cul ture as a dynamic process in which a collective constantly redefines itself to a dapt to a shifting situation. Using this concept of culture, a national group of employees in a multinational company does not act in accordance with one common

set of collective national values. The groups actions are influenced by various sub cultural contexts and display different interpretations of and engagement wi th their company.

We find Garstens approach very inspiring, particularly the way in which she takes into consideration the influence of transnational communication streams in comp anies. Hofstede did not pay much attention to this, perhaps because global human resource strategies were much less developed in the 1970s when he carried out h is research. Transnational communication between the parent company and the subs idiaries in Apple Computer is, according to Christina Garsten, a dialectical rel ationship in which both local and global processes are at work. Local employees are anchored in their local culture and environment. Yet they also work in an or ganization that is not local but global in its ideas and set-up. This global det ermination of the local subsidiary does not mean that the latter loses its own l ocal culture or influence on local production. In the globalization process, the re is a built-in dialectical tension between the global and local dimensions. In other words, the transmission of information and knowledge from headquarters to subsidiaries also involves a transformation where local actors filter and inter pret what they receive. However, it is worth stressing that in this transmission process communication channels in multinational companies are asymmetric. It is the headquarters that have a pivotal role in opinion formation in the subsidiar ies, mainly because of dominance over media, information and HRM in companies. H owever, this asymmetry does not necessarily imply a homogenization which hampers local creativity and autonomy in the subsidiaries.

How can human resource management discourse be understood in the dialectical rel ationship between the global and the local in multinational companies? As a resu lt of the growing networks in multinational companies, human resource management discourse is increasingly shaping the thinking of management groups in the indi vidual units and the way in which they implement demands and tasks. It is also a platform for establishing a common language among the units. Manuel Castells ha s tried to describe these complicated processes in The Rise of Network Society(C astells1996). He considers network structures and growing flexibility as two clo sely connected elements in the new global economic system. He argues that networ king strategies add flexibility to the system, but they do not solve the problem of adaptability for the companies. In our opinion, this is a key reason why man agement in multinational companies seek strategies which can cope with flexibili ty. Manuel Castells makes an interesting observation in this connection. To be ab le to internalize the benefits of network flexibility the corporation had to bec ome a network itself and dynamize each element of its internal structure (Castell s 1998: 164). In such network structures, management has to experiment with hori zontal organizational models and decentralization of the units. This is precisel y the agenda of human resource management discourse.

When management experiments with these network structures in multinational compa nies, it engenders cultural encounters between units that have different cultura l backgrounds. What is the outcome of these encounters? Mike Featherstone uses t he apt concept of a third culture to understand the outcome of these encounters in the globalization process (Featherstone1990: 7: 1-14). The third culture argume nt is that national and local cultures and identities increasingly have to relat e to global discourses, but they do not necessarily adopt them. To illuminate th is argument, we will discuss two of the most powerful discourses in the present global debate: the free market and human rights. Universal principles of free op en markets, private ownership and human rights increasingly affect material and

ideological practices in most countries. However, when implemented as new princi ples or laws in a given national context (e.g. the ILO child labor convention), a third outcome is produced which is neither national/local nor global/universal . Rather, it is an encounter of two cultures which results in a third (at least until the law is integrated into national culture). To the extent that we can th ink of a global culture in daily life or in practice, not just as an ideal or a universal concept, third culture discourses may be the closest we can come to te ntatively defining a global culture in practice. There are many different phenom ena which suggest that globalization is a differentiated, multi-dimensional and polycentric process.3It is not just a question of one multinational agenda or on e dominant superpower discourse.

The same logic can be used when analyzing management in subsidiaries which imple ment human resource strategies. Multinational companies with different parent co mpany cultures set up human resource strategies inspired by global consultants a nd best practice examples. They transfer HRM strategies to subsidiaries, which d evelop a third company culture: a reflexive, discursive mix of the parent compan y culture, the local work culture and the multinational practices. In fact, all multinational subsidiaries represent different third culture outcomes, which tog ether constitute a global company culture in practice.

Although most human resource development in multinational companies does not hav e a particularly high public profile compared with, for instance, human rights o r democratization discourses, its impact should not be underestimated. Managers may also take part in public discussions on education, vocational training and q ualifications, but company culture is generally concealed from public scrutiny a nd intervention. Still, companies may exert a powerful influence over industrial relations policies, salary systems, vocational training, and IT-strategies in m any countries. By company culture, we understand not just the values prescribed by management but also tacit knowledge and collective experiences of work cultur e and management-labor relations. Here, we believe that human resource managemen t has an increasing impact on the formation of company cultures and employee ide ntities. However, because this process does not take place in public and is ther efore not subject to critical reflection, human resource management tends to be seen as a neutral or objective training and qualification process, not as a tech nology of governance for complex decisions and power relations in companies." There are many different countries in the world, each with its own specific cult ure, or way of doing things. While most people have a sense of what culture is, it is difficult to measure, compare and analyse such a diverse and all-pervasive subject. In an attempt to define some measurable and quantifiable aspects of cu lture, Geert Hofstede developed the idea of cultural dimensions. These dimension s originated from a study of IBM employees conducted between 1967 and 1978 which initially covered 40 different countries. The large amount of information that the study provided enabled Hofstede to identify four key areas that affected all cultures: social inequality, relationships between individuals and groups, conc epts of masculinity and femininity, and uncertainty and ambiguity. These key are as are the four dimensions of culture which eventuated from the IBM study. They were named: Power distance (PDI) (from small to large) Collectivism versus individualism (IDV) Femininity versus masculinity (MAS) Uncertainty avoidance (UAI) (from weak to strong) These four dimensions form a model which can be used to compare different cultur es.

Power Distance Index (PDI) Power distance can be defined as the degree to which less powerful people accept and even expect that power is distributed unequally. It is important to note th e PDI does not measure the actual difference in power between to individuals, bu t rather how that power is perceived. For example, in a worker-manager example, the actual authority and power of the manager will be similar or even identical across cultures with differing PDI scores, but the way that this power is percei ved by both members is considerably different. Low PDI PDI is indicative of the dependence between people. In a culture with low PDI, t here will be limited dependence between workers and managers, and consultation b etween both members is commonplace; there is interdependence between workers and managers. There is a very small emotional distance between members, with subord inates freely communicating with their bosses, and even contradicting them. Both members act more as equals, although subordinates still lack the power of their bosses. High PDI At the other end of the PDI scale, in a culture with high PDI, there is high dep endence of workers on managers. Subordinates can either accept the dependence an d embrace the resulting autocratic or parental relations, or reject it and displ ay counterdependence. The emotional distance between members in a high PDI cultu re is very large and subordinates will rarely approach their bosses with critiqu es or criticism. Individualism (IDV) Individualism (high IDV score) is the extent to which people prefer to live with a strong sense of personal identity, while collectivism (low IDV score) refers to the preference of a group identity. The majority of the world s cultures exhi bit a low IDV score, and IDV and PDI tend to be negatively correlated. Low IDV In a culture with low IDV, members form a part of strong groups. Low individuali sm societies tend to work as a group and think for the group, even to the point of experiencing groupthink , where individuals downplay their own theories and suggestions in order to conform more readily to the group. A given individual wi ll more likely to be willing to sacrifice personal gains for the benefit of the greater group. High IDV In a culture with high IDV, members have loose ties with each other and operate as individuals, looking after themselves and their immediate family and friends, making their own decisions, and developing their own identity. Members will ten d to avoid developing close ties and loyalties to others; they will express pers onal opinions and ideas, and are not afraid to speak out against the majority. Masculinity (MAS) Masculinity (high MAS score) is the preference for an aggressive and dominant at titude, while a culture with a low MAS score, femininity, tends towards modest b ehaviour. MAS also is an indication of the emotional gender roles in a culture, a high MAS score indicates distinct gender roles, while a low MAS score indicate s overlapping roles. Low MAS A culture with a low MAS score will promote emotional relationships between memb ers, and open displays of emotion. Harmony and cooperation are also preferred ov er conflict and competition. People are more likely to be modest, honest, and no t over-exaggerate. Both men and women in such a feminine culture will display th ese traits. In the work environment, people prefer to develop working relationsh ips with their colleagues and superiors, good working conditions, and job securi ty. Feminine cultures will generally have a large political "left" movement, be more conservative, sacrifice economic growth for environmental preservation, and prefer negotiation and compromise in international relations. High MAS In a culture that scores highly on the MAS index, there are clear gender roles f or men and women. Men tend to be tough, aggressive, competitive, and assertive,

while women display low MAS traits as outlined above. In a work environment, men place importance on high earnings, job recognition, career advancement, power, and work that provides a challenge. From a political perspective, countries with high MAS scores tend to place the importance of the economy over the environmen t, have large defence budgets, and spend less on international aid. Uncertainty avoidance (UAI) Uncertainty avoidance is the amount that people prefer to be governed by rules, laws, and standard operating procedures, and accept uncertainty or ambiguity. Low UAI A low UAI score suggests a society that is more flexible and relaxed, and does n ot worry when things go wrong. In the working environment, there are less restri ctive rules, and less order. Meetings may start and run late, people may not tur n up simply because they have something more important to do. People feel more c omfortable in new and ambiguous situations. High UAI Culture with a high UAI index prefer things to be well ordered, planned ahead, a nd run to time. Work, and also life in general, should be governed by rules and laws. By doing this, members seek to decrease or even remove any uncertainty, wh ich they see as a threat to a good life. As a result, there are usually high str ess and anxiety levels if (when) anything happens to create any uncertainty. References 1. Hoecklin, L. (1995). Culture: What it is, what it is not and how it directs o rganisational behaviour. In Hoecklin, L. (1995). Managing Cultural differences: Strategies for Competitive Advantage. New York: Addison-Wesley Publishing Compan y. 2. Hofstede, G., Hofstede, G. S., & Minkov, M. (2010). Cultures and organization s: Software of the mind. New York: McGraw Hill.