- DI & DS
- English Language
-
Intelligence & CR
- Alphabet & Number Ranking
- Analytical Reasoning
- Blood Relations Test
- Coding - Decoding
- Comparision of Ranks
- Direction Sense Test
- Mathematical Operation / Number Puzzles
- Series
- Sitting Arrangement
- Statement and Arguement
- Statement and Conclusion
- Statement and Course of Action
- Statement-Assumption
- Syllogism
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Mathematical Skills
- Average
- Calender
- Clocks
- Geometry
- Height and Distance
- Logarithms
- Mensuration
- Mixtures and Alligations
- Number System
- Percentage
- Permutation and Computation
- Probability
- Profit and Loss
- Ratio and Proportion
- Set Theory
- Simple calculations
- Simple Equations
- Simple Interest and Compound Interest
- Time and Work
- Time, Speed and Distance
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7.
Google headquarters in Mountain View, California, has a certain Centre feel to it – so many fun space-age toys to play with, so little time. In one corner is a spinning globe that emits light beams based on the volume of people searching on Google. As you would expect, most of the shafts of light are shooting up from North America, Europe, Korea, Japan, and coastal China. The Middle East and Africa remain pretty dark. In another corner is a screen that shows a sample of what things people are searching for at that moment, all over the world. When I was there in 2001, I asked my hosts what had been the most frequent searches lately. One, of course, was “sex,” a perennial favourite of Googlers. Another was “God.” Lots of people searching for Him or Her. A third was “jobs” – you can’t find enough of those. And the fourth most searched item around the time of my visit? I didn’t know whether to laugh or cry : ‘professional wrestling’. The weirdest one, though, is the Google recipe book, where people just open their refrigerators, see what ingredients are inside, type three of them into Google, and see what recipes come up !
Fortunately, no single word or subject accounts for more than 1 or 2 percent of all Google searches at any given time, so no one should get too worried about the fate of humanity on the basis of Google’s top search items on any particular day. Indeed, it is the remarkable diversity of searches going on via Google, in so many different tongues, that makes the Google search engine (and Search engines in general) such huge flatteners. Never before in the history of the planet have so many people – on their own – had the ability to find so much information about so many things and about so many other people.
Said Russian-born Google cofounder Sergey Brin, “If someone has broadband, dial-up, or access to an Internet cafe, whether a kid in Cambodia, the university professor, or me who runs this search engine, all have the same basic access to overall research information that anyone has. It is a total equalizer. This is very different than how I grew up. My best access was some library, and it did not have all that much stuff, and you either had to hope for a miracle or search for something very simple or something very recent. When Google came along, he added, suddenly that kid had “universal access” to the information in libraries all over the world.
That is certainly Google’s goal – to make easily available all the world’s knowledge in every language. And Google hopes that in time, with a PalmPilot or a cell phone, everyone everywhere will be able to carry around access to all the world’s knowledge in their pockets. “Everything” and “everyone” are keywords that you hear around Google all the time. Indeed, the official Google history carried on its home page notes that the name “Google” is a play on the word “googol”; which is the number represented by the numeral 1 followed by 100 zeros. Google’s use of the term reflects the company’s mission to organize the immense, seemingly infinite amount of information available on the Web, ‘just for you”. What Google’s success reflects is how much people are interested in having just that – all the world’s knowledge at their fingertips. There is no bigger flattener than the idea of making all the world’s knowledge, or even just a big chunk of it, available to anyone and everyone, anytime, anywhere.
“We do discriminate only to the degree that if you can’t use a computer or don’t have access to one, you can’t use Google, but other than that, if you can type, you can use Google,” said Google CEO Eric Schmidt. And surely if the flattening of the world means anything, he added, it means that “there is no discrimination in accessing knowledge. Google is now searchable in one hundred languages, and every time we find another we increase it. Let’s imagine a group with a Google iPod one day and you can tell it to search by voice – that would take care of people who can’t use a computer- and then [Google access] just becomes about the rate at which we can get cheap devices in to people’s hands”.
How does searching fit into the concept of collaboration? I call it “informing.” Informing is the individual’s personal analogue to uploading, outsourcing, in sourcing, supply chaining, and offshoring.Informing is the ability to build and deploy your own personal supply chain – a supply chain of information, knowledge, and entertainment. Informing is about self-collaboration – becoming your own selfdirected and self-empowered researcher, editor, and selector of entertainment, without having to go to the library or the movie theatre or through network television. Informing is searching for knowledge. It is about seeking like-minded people and communities. Google’s phenomenal global popularity, which has spurred Yahoo! and Microsoft (through its MSN Search) also to make power searching and informing prominent features of their Web sites, shows how hungry people are for this form of collaboration. Google is now processing roughly one billion searches per day, up from 150 million just three years ago.
The easier and more accurate searching becomes, added Larry Page, Google’s other cofounder, the more global Google’s user base becomes, and the more powerful a flattener it becomes. Every day more and more people are able to inform themselves in their own language. Today, said Page “only a third of our searches are U.S.-based, and less than half are in English.” Moreover, he added, “as people are searching for more obscure things, people are publishing more obscure things,” which drives the flattening effect of informing even more. All the major search engines have also recently added the capability for users to search not only the Web for information but also their own computer’s hard drive for words or data or e-mail they know is in there somewhere but have forgotten where. When you can search your own memory more efficiently, that is really informing. In late 2004, Google announced plans to scan the entire contents of both the University of Michigan and Stanford University libraries, making tens of thousands of books available and searchable online.
In the earliest days of search engines, people were amazed and delighted to stumble across the information they sought; eureka moments were unexpected surprises, said Yahoo!’s cofounder Jerry Yang. “Today their attitudes are much more presumptive. They presume that the information they’re looking for is certainly available and that it’s just a matter of technologists making it easier to get to, and in fewer keystrokes,” he said. “The democratization of information is having a profound impact on society. Today’s consumers are much more efficient– they can find information, products, and services, faster [through search engines] than through traditional means. They are better informed about issues related to health, leisure, etc. Small towns are no longer disadvantaged relative to those with better access to information. And people have the ability to be better connected to things that interest them, to quickly and easily become experts in given subjects and to connect with others who share their interests."
Google’s founders understood that by the late 1990s hundreds of thousands of Web pages were being added to the Internet each day, and that existing search engines, which tended to search for keywords, could not keep pace. Brin and Page, who met as Stanford University students in computer science in 1995, developed a mathematical formula that ranked a Web page by how many other Web pages were linked to it, on the assumption that the more people linked to a certain page, more important the page. The key breakthrough that enabled Google to become first among search engines was its ability to combine its PageRank technology with an analysis of page content, which determines which pages are most relevant to the specific search being conducted. Even though Google entered the market after other major search players, its answers were seen by people as more accurate and relevant to what they were looking for. The fact that one search engine was just a little better than the others led a tidal wave of people to switch to it. (Google now employs scores of mathematicians working on its search algorithms, in an effort to always keep them one step more relevant than the competition).
For some reason, said Brin, “people underestimated the importance of finding information, as opposed to other things you would do online. If you are searching for something like a health issue, you really want to know; in some cases it is a life-and-death matter. We have people who search Google for heart-attack symptoms and then call nine-one-nine.” But sometimes you really want to inform yourself about something much simpler.
[1] Which of the following is not a correct statement?
(1) Informing is supply chain management
(2) Informing is the ability to build and deploy your own supply of information
(3) Knowledge makes you self-directed and selfempowered
(4) Knowledge and information reduce inequality[2] According to the passage,
(1) PageRank technology analyses the relevance of information
(2) Google search does not determine which pages contain relevant information
(3) Google was the first search player on the web
(4) Yahoo entered the market after Google[3] The author of the passage suggests that most people use Google to search for:
(1) Jobs
(2) Sex
(3) God
(4) All of the above[4] Which of the following is a correct statement?
(1) More than 70 percent of people search for God on Google
(2) Less than 2 percent of people search for God on Google
(3) More than 50 percent of people search for sex on Google
(4) About 30 percent of people search for wrestling on Google[5] According to the author of the passage,
(1) Google has made the world flat
(2) Google has revealed the history of the planet
(3) Different languages have created Google engine
(4) Limited information is available on Google engine
[6] Which of the following is a correct statement?
(1) Only about 50 percent of Google users belong to North America
(2) Only 20 percent of Google users belong to North America
(3) Only 5 percent of Google users belong to North America
(4) Nearly 33 percent of Google users belong to North America[7] Which of the following is a correct statement?
(1) More than half of Google searches are in the English language
(2) More than half of Google searches are in a Non- English language
(3) Most of Google searches are in the English language
(4) None of the above[8] According to the passage,
(1) In earlier days people were not surprised to find the information they were searching
(2) Today people do not expect to find the information they are looking for
(3) Today people are happy to find the information they are looking for
(4) Today people expect to find the information they are looking for[9] Which of the following is a correct statement?
(1) The co-founders of Google were students of Stanford University
(2) The co-founders of Google were professors of Stanford University
(3) Larry Page and Jerry Yang were co-founders of Google
(4) Eric Schmidt and Jerry Yang were co-founders of Google[10] According to the passage, most people who search on Google belong to :
(1) Europe and Korea
(2) Japan and Central Asia
(3) Middle East and Africa
(4) Europe, Korea, Japan and Central Asiaasked in FMS
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8.
Diwali saw the last great burst of the autumnal exuberance unleashed a month earlier at Dusshera. Within a month of the last Diwali rocket vanishing into the Delhi skies, the city seemed to curl its tail between its legs and disappear into a state of semi-hibernation for the duration of the cold season. The brief but bitter Delhi winter came as suddenly as an undertaker: darkclad, soft-footed, unannounced and unwelcome. There is no snow in Delhi – the winters are too dry – but, white winds from the snow peaks still sweep down the slopes, freezing the plains of the Punjab and shattering the brittle buds, before raking through the streets of the capital and brushing the narrow Delhi alleyways clear of people. The Delhi–wallahs withdraw into themselves. They lift up their knees to their chins and pull their heavy Kashmiri blankets tightly around. Over their heads they wind thick woollen mufflers. If you look into the dark of the roadside restaurant-shacks you see only the whites of their eyes peering out into the cold.
The sky is grey, the air is grey, and the dull, cold greyness seeps into the ground, the stones and the buildings. The only colours are the red and yellow silk flags flying over the new Muslim graves in Nizamuddin. The trees in the gardens stand shrouded in a thin wrap of mist. In Old Delhi, the goats fattening for slaughter huddle together under sackcloth coats; some are given old cardigans to wear, with their front legs fitted through the sleeves. Winter smoke winds slowly out of the chimneys; bonfires crackle outside the jhuggi clusters. As you look through the windowpanes you can see winter lying curled like a cobra across the land. Olivia now spent her mornings in the warmth of our flat; it was too cold and misty to paint until the sun had reached its zenith at midday. If she ventured out she would return early, before a sudden dusk brought to a close the brief winter afternoon. Brisk evenings were followed by cold nights. We muffled ourselves in our new shawls – we had not considered packing jerseys or overcoats when we set off to India – and sat warming ourselves, in front of the heaters. My reading was mostly historical. I had become fascinated with that period of Delhi’s history known as the Twilight. It was an epoch whose dark melancholy perfectly reflected the cold, misty scenes outside our own windows.
The Twilight is bounded by two of the greatest disasters in Delhi’s history: the Persian massacres of 1739 and the equally vicious hangings and killings which followed the British recapture of Delhi after the 1857 Indian Mutiny. The first massacre took place in the wake of an unexpected invasion of India by the Persian ruler, Nadir Shah. At Karnal in the Punjab the newly-crowned Shah defeated the Mughal army and advanced rapidly on Delhi. He encamped at the Shalimar Gardens, five miles north of the city. Having been invited into Delhi by the nervous populace, Nadir Shah ordered the massacre after a group of Delhiwallahs attacked and killed 900 of his soldiers in a bazaar brawl. At the end of a single day’s slaughter 1, 50,000 of the city’s citizens lay dead.
Nadir Shah’s massacre exacerbated the decline of the Mughal Empire which had been steadily contracting since the death of Aurangzeb, the last Great Mogul, in 1707. By the end of the eighteenth century, Delhi, shorn of the empire which gave it life, had sunk into a state of impotent dotage. The aristocracy tried to maintain the life-style and civilization of the empire, but in a mined and impoverished city raped and violated by a succession of invaders. The destruction created a mood conducive to elegy, and the great Urdu writers made the most of the opportunity. ‘There is no house from where the jackal’s cry cannot be heard,’ wrote Sauda. ‘The mosques at evening are unlit and deserted. In the once beautiful gardens, the grass grows waist-high around fallen pillars and the ruined arches. Not even a lamp of clay now burns where once the chandeliers blazed with light…’
On the throne in the Hall of Audience in the 'Qila-i- Mualla, the Exalted Fort sat the Emperor Shah Alam. He was a brave, cultured and intelligent old man, still tall and commanding, his dark complexion offset by a short white beard. He spoke four languages and maintained a harem of five hundred women; but for all this, he was sightless - years before, his eyes had been gouged out by Ghulam Qadir, an Afghan marauder whom he had once kept as his catamite. Like some symbol of the city over which he presided, Shah Alam was a blind emperor ruling from a ruined palace. At his court, the elaborate etiquette of Mughal society was scrupulously ‘maintained’; poetry, music and the arts flourished. But beneath the surface lustre, all was rotten. Servants prised precious stones from the pietra dura inlay on the walls to sell in Chandni Chowk. The old court costumes were threadbare; the plaster was peeling. Mountains of rubbish accumulated in the city streets and amid the delicate pavilions of the Exalted Palace. Unable to see the decay around him, Shah Alam still could not escape its stench.
With Iris Portal and the Haxby sisters I had heard the testimonies of the last British in Delhi. Now, in the cold of early December, I visited the chilly Delhi libraries searching for the accounts of the first English to penetrate the city’s walls in the late eighteenth century. The most detailed of the early descriptions was that written by Lieutenant William Franklin. Franklin had been sent to Delhi by the directors of the East India Company to survey the then unknown heartlands of the empire of the Great Mogul. Franklin’s account of his discoveries, published in Calcutta in the 1795 Asiatic
Researches (the journal of the newly-founded Royal Asiatic Society) painted a melancholy picture of the once-great capital. Franklin had approached the city on horseback from the northwest. His first glimpse was of a landscape littered with crumbling ruins: ‘The environs are crowded with the remains of spacious gardens and the country-houses of the nobility,’ he wrote in his report. ‘The prospect towards Delhi, as far as the eye can reach, is covered with the remains of gardens, pavilions, mosques and burying places.’
[1] Which of the following is a correct statement?
(1) Olivia is a painter
(2) Olivia is the author’s neighbour
(3) Olivia is a historian
(4) Olivia is the author of the passage[2] During the winter season in Delhi,
(1) People largely stay indoors
(2) Most people prefer to walk around the streets
(3) The road side stacks are well-lit
(4) None of the above[3] Which of the following is a correct statement?
(1) Bright saffron coloured silk flags fly over the new Muslim graves
(2) Yellow and red silk flags fly over the new Muslim graves
(3) Yellow and green silk flags fly over the new Muslim graves
(4) All Muslim graves are covered with black flags[4] According to the passage,
(1) All the goats wear old cardigans
(2) No goats wear cardigans
(3) All the goats are given new cardigans to wear
(4) Some goats wear old cardigans[5] Which of the following is a correct statement?
(1) The author of the passage was known to Iris Portal
(2) The author was not familiar with the Huxley sisters
(3) Neither Iris Portal nor the Huxley sisters knew about the last British in India
(4) The author was not interested in the first English who entered Delhi
[6] According to the passage,
(1) Twilight is the name of a person
(2) A period in European history is known as Twilight
(3) A period in Delhi’s history is known as Twilight
(4) None of the above[7] Which of the following is a correct statement?
(1) The Mughal Empire declined after the death of Aurangzeb
(2) The Mughal Empire prospered after the death of Aurangzeb
(3) Nadir Shah helped the prosperity of the Mughal Empire
(4) By the end of the 18th century, Delhi had become a very powerful state[8] Which of the following is a correct statement?
(1) Emperor Shah Alam was an intelligent old man
(2) Emperor Shah Alam was tall and dark complexioned
(3) Emperor Shah Alam was blind
(4) All of the above[9] Which of the following is a correct statement?
(1) Emperor Shah Alam followed the etiquette of Muslim society
(2) Emperor Shah Alam did not care about the etiquette of Muslim society
(3) Poetry, music and the arts were not part of the Muslim culture
(4) All of the above[10] Which of the following is a correct statement?
(1) The invasion of Nadir Shah was anticipated
(2) Nadir Shah invaded Persia
(3) The massacre ordered by Nadir Shah killed 900 soldiers
(4) The massacre ordered by Nadir Shah killed 15000 citizens of Delhi
[11] According to the passage,
(1) Winter in Delhi is very pleasant
(2) Summer season in Delhi is very pleasant
(3) Both summer and winter seasons are pleasant in Delhi
(4) Winter season in Delhi is not so pleasantasked in FMS
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9.
The fairness exercise, thus structured, is aimed at identifying appropriate principles that would determine the choice of just institutions needed for the basic structure of a society. Rawls identifies some very specific principles of justice (to be discussed presently), and makes the strong claim that these principles would be the unanimous choice that would emerge from the political conception of justice as fairness. He argues that since these principles would be chosen by all in the original position, with its primordial equality, they constitute the appropriate ‘political conception’ of justice, and that people growing up in a well-ordered society governed by these principles would have good reason to affirm a sense of justice based on them (irrespective of each person’s particular conception of a ‘good life’ and personal ‘comprehensive’ priorities). So the unanimous choice of these principles of justice does quite a bit of work in the Rawlsian system, which includes the choice of institutions for the basic structure of the society, as well as the determination of a political conception of justice, which Rawls presumes will correspondingly influence individual behaviours in conformity with that shared conception.
The choice of basic principles of justice is the first act in Rawls’s multi-staged unfolding of social justice. This first stage leads to the next, ‘constitutional’, stage in which actual institutions are selected in line with the chosen principle of justice, taking note of the conditions of each particular society. The working of these institutions, in turn, leads to further social decisions at later stages in the Rawlsian system, for example through appropriate legislation (in what Rawls calls ‘the legislative stage’). The imagined sequence moves forward step by step on firmly specified lines, with an elaborately characterized unfolding of completely just societal arrangements.
The whole process of this unfolding is based on the emergence of what he describes as ‘two principles of justice’ in the first stage that influence everything else that happens in the Rawlsian sequence. I have to express considerable scepticism about Rawls’s highly specific claim about the unique choice, in the original position, of one particular set of principles for just institutions, needed for a fully just society. There are genuinely plural, and sometimes conflicting, general concerns that bear on our understanding of justice. They need not differ in the convenient way– convenient for choice that is- that only one such set of principles really incorporates impartiality and fairness, while the others do not. Many of them share features of being unbiased and dispassionate, and represent maxims that their proponents can ‘will to be a universal law’ (to use Immanuel Kant’s famous requirement).
Indeed, plurality of unbiased principles can, I would argue, reflect the fact that impartiality can take many different forms and have quite distinct manifestations. For example, in the illustration with the competing claims of three children over a flute, considered in the Introduction, underlying each child’s claim there is a general theory of how to treat people in an unbiased and impartial way, focusing, respectively, on effective use and utility, economic equity and distributional fairness, and the entitlement to the fruits of one’s unaided efforts. Their arguments are perfectly general, and their respective reasoning about the nature of a just society reflects different basic ideas that can each be defended impartially (rather than being parasitic on vested interests). And if there is no unique emergence of a given set of principles of justice that together identify the institutions needed for the basic structure of the society, then the entire procedure of ‘justice as fairness’, as developed in Rawls’s classic theory, would be hard to use.
As was discussed in the Introduction, Rawls’s basic claim of the emergence of a unique set of principles of justice in the original position (discussed and defended in his A Theory of Justice) is considerably softened and qualified in his later writings. Indeed, in his Justice as Fairness: A Restatement, Rawls notes that ‘there are indefinitely many considerations that may be appealed to in the original position and each alternative conception of justice is favoured by some consideration and disfavoured by others’, and also that ‘the balance of reasons itself rests on judgment, though judgment informed and guided by reasoning’. When Rawls goes on to concede that ‘the ideal cannot be fully attained’, his reference is to his ideal theory of justice as fairness. However, there need not be anything particularly ‘nonideal’ in a theory of justice that makes room for surviving disagreement and dissent on some issues, while focusing on many solid conclusions that would forcefully emerge from reasoned agreement on the demands of justice.
What is clear, however, is that if Rawls’s second thoughts are really saying what they seem to be saying, then his earlier stage-by-stage theory of justice as fairness would have to be abandoned. If institutions have to be set up on the basis of a unique set of principles of justice emanating from the exercise of fairness, through the original position, then the absence of such a unique emergence cannot but hit at the very root of the theory. There is a real tension here within Rawls’s own reasoning over the years. He does not abandon, at least explicitly, his theory of justice as fairness, and yet he seems to accept that there are incurable problems in getting a unanimous agreement on one set of principles of justice in the original position, which cannot but have devastating implications for his theory of 'justice as fairness’. My own inclination is to think that Rawls’s original theory played a huge part in making us understand various aspects of the idea of justice, and even if that theory has to be abandoned– for which there is, I would argue, a strong case- a great deal of the enlightenment from Rawls’s pioneering contribution would remain and continue to enrich political philosophy. It is possible to be at once deeply appreciated and seriously critical of a theory, and nothing would make me happier than having Rawls’s own company, if that were to come, in this ‘dual’ assessment of the theory of justice as fairness.
[1] According to Rawls,
(1) Principles of justice are the unanimous choice of a just society
(2) Principles of justice are politically derived
(3) Both the above
(4) None of the above
[2] Which of the following best fits the title of the passage?
(1) The Idea of Justice
(2) Unbiased Principles
(3) Justice as Fairness
(4) The Basic Structure of Society[3] Which of the following is NOT a correct statement?
(1) Suitable principles need to be identified to determine the choice of just institutions
(2) Just institutions are required for the basic structure of society
(3) Rawls has identified specific principles of justice
(4) The author of the passage is in agreement with the principles of justice identified by Rawls[4] Which of the following is a correct statement?
(1) Rawls argues that citizens of a society governed by principles of justice would affirm a sense of justice based on them
(2) The author of the passage argues that citizens of a society governed by principles of justice would affirm a sense of justice based on them
(3) Both Rawls and the author of the passage argue that citizens of a society governed by principles of justice would affirm a sense of justice based on them
(4) Neither Rawls nor the author of the passage argues that citizens of a society governed by principles of justice would affirm a sense of justice based on them[5] Which of the following is a correct statement?
(1) The author of the passage argues that principles of justice are chosen by all in the original position
(2) Rawls argues that principles of justice are chosen by all in the original position
(3) Both the author of the passage and Rawls argue that principles of justice are chosen by all in the original position
(4) Neither the author of the passage nor Rawls argue that principles of justice are chosen by all in the original position
[6] Which of the following is NOT a correct statement?
(1) The author of the passage believes that principles of justice constitute the political concept of justice
(2) Rawls believes that principles of justice constitute the political concept of justice
(3) Both the author of the passage and Rawls believe that principles of justice constitute the political concept of justice
(4) Neither the author of the passage nor Rawls believe that principles of justice constitute the political concept of justice[7] Which of the following is a correct statement?
(1) Rawls rejects the theory of justice as fairness
(2) The author of the passage rejects the theory of justice as fairness
(3) Neither the author of the passage nor Rawls rejects the theory of justice as fairness
(4) All of the above[8] Which of the following is NOT a correct statement?
(1) The author of ‘Justice as Fairness: A Restatement’ is not the author of the passage
(2) Rawls is the author of ‘Justice as Fairness: A Restatement’
(3) Rawls has not changed or modified his original position on the principles of justice.
(4) None of the above[9] According to the passage,
(1) Rawls’s multistage theory of justice as fairness is not tenable
(2) Rawls’s multistage theory of justice as fairness is very sound
(3) The author of the passage reinforces Rawls’s multistage theory of justice as fairness.
(4) None of the above
[10] According to the passage,
(1) The basic principles of justice is the first stage of a multistaged process of social justice developed by Rawls.
(2) The basic principles of justice is the first stage of a multistaged process of social justice developed by the author of the passage
(3) Rawls’s concept of social justice is confined to the basic principles of justice
(4) Rawls’s concept of social justice developed as a two-stage process[11] Which of the following is a correct statement?
(1) The author of the passage does not agree that impartiality can take many different forms
(2) Rawls thinks that impartiality can take many different forms
(3) The author of the passage believes that impartiality can take many different forms
(4) None of the above[12] According to the passage,
(1) The author of the passage is in agreement with Rawls’s claim that there exists one particular set of principles for just institutions
(2) The author of the passage is not in agreement with Rawls’s claim that there exists one particular set of principles for just institutions
(3) Neither of the above
(4) Both (1) and (2) above[13] According to the passage,
(1) Rawls believes that there are several concerns that may lead to an understanding of justice
(2) The author of the passage believes that there are several concerns that may lead to an understanding of justice
(3) The author of the passage believes that one set of principles lead to our understanding of justice
(4) Rawls believes that there are conflicting concerns that may lead to an understanding of justice
[14] According to the passage,
(1) There is no theory of how to ensure justice in an unbiased and impartial way
(2) One cannot treat people with economic equity and distributional fairness
(3) There is a general theory of economic equity and distributional fairness
(4) None of the above[15] Which of the following is a correct statement?
(1) Rawls suggests the theory ‘justice as fairness’
(2) The author of the passage suggests the theory ‘justice as fairness’
(3) Both Rawls and the author of the passage suggest the theory ‘justice as fairness’
(4) None of the aboveasked in FMS
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10.
Early books on business strategy aimed to structure and codify the many documentary histories and memoirs of business leaders. They contained precious little theory or models drawn from economics or other social sciences. They do contain many good ideas but few frameworks in which to place them. There was limited guidance as to when and where anyone idea would or would not work. Just because an idea was useful in one company at one moment in time, does not mean it will always work. Gradually ideas and models emerged that provided the necessary structure to the chaos of anecdotal memories. First we need to distinguish between corporate and business level strategy. At the corporate level, businesses need to ask themselves fundamental questions such as 'Which business should we be in?' At the business level, a business needs to ask itself, 'How do we compete?' It is at this latter level that we position our thinking. The organization has decided that it will compete in a certain market and is seeking ways to optimise what it does in pursuit of its goals, in other words, what its strategy should be. How we think about business strategy has evolved and changed as new and better ideas have become more widely known and accepted and as the needs of business have changed. Business strategy has had many definitions but these are two that give a sense of what is involved irrespective of where we are in time: 'Strategy is about matching the competencies of the organization to its environment. A strategy describes how an organization aims to meet its objectives'.
The changing environment for any business can be understood by assessing the main factors that create change in a marketplace: political (including legislative), economic, social and, technological trends. If strategy is about matching your business to the opportunities and challenges of the environment, then it pays to understand what that means and how the environment is changing and likely to change in the future. A company's ability to match itself to its environment can be assessed in turn by listing its main strengths, weaknesses, opportunities and threats - the now familiar SWOT analysis. PEST and SWOT analyses have become the logical starting points for any business looking to appraise itself and to define or redefine its strategy. How a company matches itself to its environment is left to its management to decide. We believe that it is time to identify better ways in which any organization can identify how to match itself to the changing needs and views of the most important part of its environment, its customers. We also believe that management needs to look more inside their organizations to find the answers to the challenges presented by their environment. A third definition of strategy explains why commercial organizations should invest time and money in creating a strategy: 'A successful strategy is one that achieves an above average profitability in its sector.' We also believe that any approach to strategy must be capable of demonstrating that it can guide a business organization to above average profitability or at least to an increase in profitability. For not-for-profit organizations the performance measures will be very different. A business school might aim merely to break even but measure itself by the number of students it educates. A charity might measure its total giving or a ratio of donations to income. A church might measure itself by the size of its congregation. Performance measures that are relevant to commercial business can be applied to any type or style of organization.
While companies still use SWOT and PEST analyses, other strategic tools have become dated as business has changed in its nature. A century ago, the multinational was the exception on the corporate landscape. Most business was small and local and this is still true in many countries and in many sectors to this day. In markets where competition is fragmented and the main competitors are small, a relatively unsophisticated business plan, one that concerns itself solely with the business itself and its immediate market, is likely to be more than adequate. Gap analysis is still a relevant technique that can focus the management of such organizations into thinking about the main issues they face, specifically how to bridge the gap between their existing financial performances and where they would like the business to be in the future. If the gap is wide and if the recent performance has been poor, it is likely that the company will have to reinvent itself and to find a different answer to the question 'What business are we in?' Used in conjunction with a PEST and SWOT analysis, a firm can construct a clear sense of direction. By identifying and costing various projects that will help to fill the strategic planning gap, it can create a strategic plan. The value of gap analysis lies in its simplicity, but it has one key weakness. It ignores competition. It also lacks any model to help management decide what to do or how to appraise their ideas as to how to fill the planning gap. But first there is a question on the way strategies actually evolve. Is it via the purposive analysis implied by Gap, SWOT and PEST analyses?
There has been a lively debate as to whether 'strategy' is something that senior management can decide upon and impose upon an organization or whether strategies emerge from within an organization, guided by managers rather than decided by them. Many argue that specific strategies tend to emerge, rather than be created, in larger organizations because many new and different strategies are constantly being created and acted upon routinely through the interaction between the firm and its customers or even suppliers. An order might arrive from another country and before it knows it, the firm is in the export business. An existing customer, impressed by what the firm has done in the past in supplying one product or service, asks it to provide another outside its normal scope of operation. It does so successfully and finds itself in a new business. This idea of a business almost lurching from one opportunity to another may appeal, but the analogy of strategy as evolution where a series of often random events occur, a tiny minority of which change the business because they produce sustained sales or profit, is not too far from reality. Indeed some have argued that you can apply this thinking outside of the firm - one business species thrives as it adapts to a changing environment while another is wiped out when its main source of nourishment declines.
In reality, businesses do, indeed must, try to formalize their strategies, to take control of their own destiny. The problem is how? The best answer will probably be a combination of direction and evolution. From the top or centre will come an analysis and formal plan. This will include the financial objectives of the firm, as there is no sense in delegating those. The contribution from lower down the organization, the bottom up component can include the source of options to be analysed. The role of the planner is to select the best options so that the firm has a clear direction to follow. The worst possible situation is where the company is actively trying to pursue more than one competing strategy at the same time. It does not work. The problem with such thinking is that it leaves the role of strategy formulation somewhat in limbo. On the one hand we are saying that strategy is about having a clear understanding of how the organization is planning to meet its objectives. On the other, we are arguing the value of allowing radical ideas to emerge from the customer interface, somewhere not always regarded as the place where strategy is formed. So just where do we stand on the issue of who are responsible for strategic management? What is best left to the senior team in our view are decisions about which markets to be in, whether to enter country X this year or next, whether to acquire Company Y or to divest Division A - what we labelled earlier as corporate level strategy. Our focus is on market strategy; what organizations should do to manage their way in markets they are already in and intend to stay in. For the first type of decision we concede the need for a centralized function that makes decisions. For the second type of role we will argue that managers should create a framework and set objectives and then let the organization get on with meeting those objectives.
The strategy process is about flows of ideas and instructions up and down the organization. There will be two distinct flows in any business, the financial planning flow and the strategic planning flow. They interact and often conflict. A typical financial objective might be to achieve a 24 per cent return on assets employed each year. A typical vision statement is more qualitative and more long-term, to be market leader in a specific field. Underpinning the company vision will be a strategy that gives practical form to that vision. At the same time, it explains how the company expects to achieve its financial goals and objectives. All too often, it is far from clear in written plans how the strategy will deliver the required financial performance. Tactics are the shorter term, day-to-day matters that will be of relevance to many employees, for example a sales target of four customer calls a day, a production plan for 50 tonnes of product. Money is required to fund the business and to meet day-to-day expenditure. Typically a financial budget is prepared for every part of an organization. Individual budgets are totalled and compared with the revenue forecasts to judge the viability of the plan.
Those reading this who have prepared budgets and forecasts know only too well that preparing them is an art as well as a science. The art comes in not leaving yourself with too little fat, in slightly over forecasting a budget and under forecasting a revenue stream. Those reading this who manage those who prepare budgets and forecasts recognize that managers 'suffice' rather than maximize profit, and probably have a number of ways of ensuring that both forecasts and budgets appear challenging while still being feasible. There is a danger in our experience of believing one's own forecasts. Senior managers spend time and effort making sure that the next year's plan looks' sound because revenue and expenditure balance. But what appears on paper is no more than a wish list. If the organization is in a stable environment then a simple extrapolation from last year is adequate. In such a case, the financial flow will dominate management thinking. In situations where the environment is more fluid and less predictable, then rigidity creates myopia. Organizations in the service sector have to be prepared to change, often on a daily basis to respond to shifts in what their customers want or in what their competition are doing. Visionary companies often out-perform financially driven ones because there is not a reliance upon budgeting and forecasting, there is often not enough time to do such things, as the business is too concerned with how it can cope with the opportunities that are there in the market and that can never be predicted. Having a rigid top down approach can stifle the very essence of organization's ability to succeed. Senior management's role is to set targets, let middle and junior managers decide or at least influence how to meet them. As organizations become more complex and physically larger, it becomes more impossible for one person at the top to be able to manage down. Education standards have risen but companies can ignore the potential they recruit, trying to control what they should be letting free, lacking the framework that will guide employees to achieve without detailed manuals on what to do and how to do it.
An approach can be adopted that is not budget driven in the sense that the firm relies upon replicating what it did last year, but not so free and easy so that senior management lose all control over what is happening. The balance between the two flows in terms of the relative power they have in the organization is interesting to observe. Some companies have a good strategy. Profitability is almost taken for granted. The debate is more about how much profit to return to shareholders, how much to invest, and what the staff bonus scheme should payout this year. In other companies, financial management is all-powerful. It needs to be, as the business has not discovered a position in its market that it can use to achieve above average profitability, most probably because it lacks an effective strategy. It lurches from one financial crisis to another. Many businesses survive in this way for years, but the better employees leave for better paid and more satisfying jobs 'elsewhere. Even among some apparently better performing organizations employee turnover can be an issue. Here financial performance has been gained at the expense of employees. Employees leave, disliking the uncaring attitude to both staff and to customers that means they care little for their employer. Over the years, a number of models have been produced largely from academic research that companies can use to improve their chances of achieving above average profitability. The strategic decisionmaking in an organization is guided by a model, a simplified picture of what makes for success in business. So what are these models and how useful have they proven to be? By the 1980s, businesses realized that they needed more sophisticated tools to help them construct valid strategies. The main problems to be faced in their markets were not so much the trends identified by their trend analyses, but by the less predictable actions of their competitors. Take the retail sector as a good example. In the 1950s, there were few countries in the world where concentration levels in the retail sector were high. By the 1990s, most developed nations had food retail sectors that were dominated by a small number of players. At the same time such companies owned more than one retail business and strategies were needed for each market.
[1] Which of the following is a true statement?
(1) An idea found useful in one company at one time will always work in other companies
(2) An idea found useful in one company at one time may not work in other companies
(3) An idea found irrelevant in one company at one time will work in other companies
(4) A useful idea will always remain relevant for all companies at all times[2] According to the passage,
(1) Anecdotal memories created chaos
(2) Useful ideas emerged fairly rapidly to deal with business strategy
(3) Gradual emergence of ideas confused the business strategists
(4) Sudden emergence of ideas created confusion among the business strategists[3] According to the passage,
(1) Recent literature aims to codify documentary histories on business strategy
(2) Recent books aim to document memoirs of business leaders
(3) Many documentary histories were codified in early books on business strategy
(4) None of the above[4] According to the author of the passage,
(1) There is no difference between business and corporate level strategy
(2) We cannot differentiate business from corporate strategy
(3) Business should be based on questions raised at the corporate level
(4) Strategy is based on the questions raised at the business level[5] Which of the following is not a true statement?
(1) Early books on business strategy contained very little theory
(2) Early books on business strategy contained many models drawn from social sciences
(3) Early books on business strategy contained little or no theory derived from social sciences
(4) Early books on business strategy contain many good ideas[6] It is true that
(1) business strategy has not changed for many years
(2) not many new ideas have become widely known to influence our business strategy
(3) not many new ideas have become widely known as the needs of business have changed
(4) new ideas have changed our business strategies[7] According to the passage,
(1) there cannot be many definitions of business strategy
(2) there are only two definitions of business strategy
(3) there are many definitions of business strategy
(4) no definition of business strategy is an accurate description[8] We can understand the changing environment of a business by
(1) analysing the factors affecting the market
(2) assessing the political, economic, social and technological trends
(3) Both of the above
(4) None of the above[9] SWOT analysis is a process
(1) which tests a company's ability to cope with the environment
(2) which helps a company to appraise itself
(3) Both of the above
(4) None of the above[10] According to the passage,
(1) customer is a part of the environment
(2) customer defines the business environment
(3) business environment shapes the customer
(4) business strategy moulds the customer[11] Which of the following is not a true statement?
(1) Commercial organizations should invest time and money in creating strategy
(2) Commercial organizations should not invest time and money in creating strategy
(3) A successful strategy should lead to profitability
(4) Performance measures that are relevant to commercial organizations are also applicable to not-for-profit organisations[12] According to the passage, SWOT analysis
(1) has become a dated tool
(2) is not a tool used by companies any more
(3) is a tool still used by companies
(4) has become redundant[13] Which of the following is a true statement?
(1) A century ago most businesses were multinational
(2) A century ago most businesses were big
(3) A century ago most businesses were local
(4) Multinational businesses were common until the end of the last century[14] According to the passage, Gap analysis
(1) is no more relevant
(2) bridges the gap between the present and the future
(3) identifies the difference between the present performance and the future vision
(4) None of the above[15] According to the passage,
(1) Gap analysis is a fairly complex process
(2) Gap analysis has no weakness
(3) Gap analysis has many weaknesses
(4) None of the above[16] Which of the following is not a true statement?
(1) Specific strategies often evolve
(2) Specific strategies are always created
(3) Strategies are constantly created through interaction between customers and suppliers
(4) Strategies are dictated to the customers and suppliers[17] The businesses must formalise their strategies by
(1) Controlling and monitoring
(2) Direction and evolution
(3) Planning and analysis
(4) All of these[18] According to the passage,
(1) Strategy demands' a clear understanding of the future
(2) Strategy should encourage radical ideas to emerge from customers
(3) Organisation should be clear as to how it plans to achieve its goals
(4) All of the above[19] The author of the passage focuses on
(1) Corporate strategy
(2) Market strategy
(3) Both of the above
(4) None of the above[20] According to the passage, the financial planning flow
(1) and the strategic planning flow mean the same
(2) should be based on strategic planning flow
(3) and the strategic planning flow do not ever interact
(4) and the strategic planning flow conflict with each other[21] According to the passage,
(1) organisations which perform well do not experience employee turnover
(2) employee turnover could be an issue even in organisations which perform well
(3) organisations which perform well faces employee turnover more acutely than others
(4) financial performance should be considered more important than employee turnover[22] According to the passage,
(1) in a stable environment, organisation should be prepared to change
(2) in a fluid environment, planning is not required
(3) in a stable environment, financial flow will dominate management thinking
(4) in a fluid environment, rigid plans often work well[23] The passage suggests that
(1) senior management should not set targets
(2) senior managers should set targets
(3) junior management should not be asked to meet the targets
(4) middle managers cannot be asked to influence as to how to meet targets[24] Which of the following is a tactic?
(1) Specific production plan for a specific product
(2) A sales target for a specific day
(3) Both of the above
(4) None of the aboveasked in FMS
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11.
The systems perspective, applied to organizations in its classic formulations as an organic or a cybernetic model, is open to criticism for failing to give a sufficient account of change. In the organic model, change is seen primarily as an adaptive response by the system, acting as a whole or through subsystems with specific functions, to maintain itself in balance with a shifting environment. Change is thus externalised beyond the system boundary. The organism's response is characterized as a negative feedback process by means of which a control centre becomes aware of a disparity between actual and desired behaviour or conditions and triggers actions to reduce the disparity. The model assumes that the organism is so constituted as to be able to detect significant disparities and to be able to adjust its behaviour in response to them.
When the organic model is generalized to apply to organizations, the emphasis on boundary, environment, feedback and adaptive response are carried over, and management is readily identified as the control centre, which directs the organization's· operations. However, organizations do not possess the same unity or consistency of form as organisms. Their external boundaries, as well as internal boundaries between subsystems, are less evident and less fixed. Responses to internal and external problem situations are not generally preset or inbuilt, but have to be invented. Applied uncritically, the model attributes too central a role to management and overestimates management's power to control events and actions. Direction of operations comes not from an integrated control centre but from a multiplicity of factors whose behaviour is not merely adaptive but also creative and contentious.
The cybernetic model provides a more elaborate account of control and communication mechanisms organized hierarchically and recursively and distributed throughout the system. It also includes an environmental scanning function, which opens up the possibility of proactive change in the system. Nevertheless, although change becomes a subtler, complex and generalized phenomenon in this model, changes are still seen as adjustments, whether reactive or proactive, which serve to maintain or increase order in the system. Nor is it any easier to relate change to human agency in the cybernetic model than in the organic.
In the "soft systems" approach articulated by Checkland, attention shifts from the actual constitution of organizations as complex systems towards organizational actors' understandings and formulations of problem situations. This is a view, which allows and expects multiple interpretations of the world at hand. When soft systems methodology (SSM) is applied to a problem situation in an organization, it culminates in a debate which aims to define changes which are "systemically desirable and culturally feasible". The human role in defining (and subsequently carrying out) changes is thus recognized.
The soft systems approach makes change more central to organizational life' than it is in the harder approaches sketched above, which focus on the system's capacity to cope with and respond to environmental perturbations. Change now becomes something, which flows from human understanding and decision-making, which is not in general prefigured or automatic, and which involves negotiation by competing parties. However, some of the legacy of the earlier systems views persists in the soft systems approach and methodology, and serves to prevent fuller appreciation of the nature of change in organizational life. For instance, the central notion of transformation in the methodology relates still to the transformation of inputs into outputs by the system, rather than to transformation of the system itself. Analysis and modelling in SSM, by and large, is conducted by the analyst alone, so that some of the most important interpretations in the change exercise are supplied by external experts. When the conceptual model is brought forward by the analyst for organizational debate, the voice of management is likely to be dominant, again restricting opportunity for a more thoroughgoing review of possibilities. Thus, even though the soft systems approach brings change to the centre of the organizational stage by focusing on human activity systems and embracing the interpretative standpoint, change is still characterized as a discontinuous step from an old order to a new one, facilitated by the alchemy of the analyst, and sanctioned by management.
In the systems tradition as discussed so far, there is a common interest in how complex systems achieve, maintain and increase order, in a turbulent environment, which threatens to invade or dissolve them. In the organic model, change is essentially an external threat to be responded to. Richer notions of change are developed in the cybernetic and soft systems approaches, but still, change is seen as a way of preserving or improving order in the system, rather than as a fundamental feature of the system itself. In the translation of systems concepts to organizational models, the identification of control with management has produced an impression that organizational change must be managed, and that managers, in alliance with experts, can and should manage change.
It has always been clear that organizations are not organisms, but the limitations of applying the organic metaphor have only become obvious relatively recently, when the pace of organizational and technological change has thrown into question the contemporary validity of organizational models based on central control, stability and bureaucracy. It may be that continuous change is an essential feature of organizations or it may be that disorder is not only tolerable in organizations but also natural and productive. To contemplate these possibilities, it is necessary to go beyond the familiar systems models and at the same time to question ideas of change management.
Kiel, following an earlier formulation by Jantsch, describes three stages in the development of models of organizational change. The first stage, deterministic change, is a mechanical or linear view, which equates to a presystems or early systems view of organizations as machines subject to rational control. The second stage, equilibrium-based change, is essentially the systems perspective, especially as represented by the organic or cybernetic models. The third stage, dissipative or transformation change, views organizations as dynamic selforganizing systems capable of radical transformation as well as gradual evolution, and continually moving between order and disorder and between stability and instability. Organizational models in this third stage go beyond (or may be seen to extend) the systems tradition, drawing on theories of chaos, complexity and self-organization from the natural sciences. New holistic theories of change are emerging which challenge the centrality of order and control in complex systems.
According to these theories, many complex systems are non-linear, i.e. systems in which relationships between cause and effect are not constant. Therefore, small inputs can sometimes lead to' disproportionately large con sequences (and at other times not), and small variations in initial conditions can sometimes produce large variations in outcomes (and sometimes not). Generally, processes cannot be fully controlled or planned, and cannot be run back and repeated. Many natural systems, including ecologies and the weather, are non-linear. They are characterized by complex multiple patterns of interaction which combine with random disturbances to produce unpredictable events that will sometimes transform the system into an entirely new configuration. In general, as they move from one relatively stable region of behaviour to another, such systems pass through a chaotic transition phase. A system far from equilibrium and at the edge of chaos is one on the point of transformative change, but the future state of the system is not predictable.
It seems attractive to adopt a transformational model of organizational change derived from these more general ideas of dynamic non-linear systems. The complexity, uncertainty and centrality of change processes seem much better captured in this kind of model than in earlier systems models. However, it should be remembered that just as organizations are not organisms, neither are they weather systems or whirlpools. Organizations are constituted by people, not particles. Change is produced not by the complex interaction of effectively structureless atoms, but by the meaningful and value-laden interaction of already complex individual human beings.
Though it may indeed be fruitful to see organizations as non-linear systems, to do so will require a fundamental shift in our understanding of the role and limits of control and likewise of the role and limits of management. It would, for instance, be fallacious to assume that management can apply the transformational model in order to produce a desirable transformation in their organization, since this would be to treat non-linear systems as though they were linear (and so predictable and controllable). Another danger is that by simply adopting the language of non-linear systems we will produce a spurious jargon and mystification which will lead neither to increased understanding nor to practical action in organizational life. The theories of chaos and complexity are seductive, and can easily lead you into a world of butterfly effects, strange attractors and NK fitness landscapes. Nevertheless, a cautious and sober application of them might prove fruitful in our area of interest.
[1] Choose the correct statement from the following:
(1) Cybernetic model focuses on actors' understanding and formulations of problem situations
(2) Organic model focuses on actors' understanding and formulations of problem situations
(3) Soft systems approach focuses on actors' understanding and formulations. of problem situations
(4) Soft systems approach focuses on organisations as complex systems[2] Which of the following assumptions may be made from the passage?
(1) Processes can be fully planned
(2) Many natural systems are characterised by complex patterns of interaction
(3) People are particles of organisations
(4) Change is produced by complex interactions of atoms[3] According to the passage, which of the following is not a correct statement?
(1) In the organic model, change is viewed as an external threat
(2) In the cybernetic model, change is viewed as a way of improving order in the system
(3) In the cybernetic model and in the soft systems approach, change is seen as a fundamental feature of the system
(4) In the soft systems approach, change is viewed as a way of improving order in the system[4] The systems model has been criticised because it
(1) failed to provide a satisfactory account of change
(2) revealed the classic dimension of the organic model
(3) did not respond to negative feedback
(4) refused to look beyond the system[5] Which of the following is a correct statement?
(1) Deterministic change is the systems perspective
(2) Equilibrium-based change is the systems approach
(3) Equilibrium-based change is a mechanical view
(4) Transformational change is a mechanical view[6] Which of the following is not a correct statement?
(1) Change is primarily a response to the environment
(2) The system as a whole or the sub-systems adapt to the environment
(3) The environment is not stable
(4) Change cannot be externalised beyond the system boundary[7] According to the passage, change
(1) does not flow from human understanding or decision-making
(2) is generally prefigured
(3) is automatic
(4) involves negotiation by competing parties[8] The organic model assumes that
(1) the organism's response is negative
(2) a control centre influences behaviour
(3) the organism is able to adjust its behaviour
(4) the organism is not able to detect significant disparities[9] Change is seen flowing from human understanding in the
(1) cybernetic model
(2) organic model
(3) soft systems approach
(4) harder approaches[10] Which of the following is not a correct statement?
(1) Management is seen as the control centre of organisations
(2) Organic model uses concepts of boundary and adaptive response
(3) The organic model views management as a part of environment
(4) Organisations are not totally comparable to organisms[11] Which of the following is not a correct statement?
(1) Cybernetic model recognises human role in defining change
(2) Organic model does not recognise human role in defining change
(3) Soft systems approach recognises human role in defining change
(4) Soft systems approach defines changes, which are systemically feasible[12] According to the passage,
(1) cybernetic model is more realistic
(2) organic model is more realistic
(3) organic model is as realistic as the cybernetic model
(4) cybernetic model is as realistic as the organic model[13] Which of the following is a correct statement?
(1) Cybernetic model takes better care of environmental factors
(2) Organic model takes better care of environmental factors
(3) Cybernetic model is not suitable for proactive change
(4) Organic model is suitable for proactive changeasked in FMS
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12.
FDI can promote diffusion of international technology if the technological advantages of multinational firms do not remain restricted to one firm or its affiliates. Technological spillover may take place in the recipient country through demonstration effects (imitation), labour turnover, or increased competition. The channels for spillover can be horizontal (originating in the entry of the multinational-investor in the same sector) or vertical (originating in backward links when local suppliers supply multinational investors or in forward links when local customers buy from multinational investors).
Because a multinational has more incentive to promote local suppliers, backward links may be more widely observed than horizontal links, which inherently are associated with increased competition Research by Javorcik (2004) finds a positive effect of FDI on Lithuanian local suppliers work though backward links. Another finding is that greater productivity gains are associated with projects partially owned by foreign entities (joint ventures), suggesting that domestic capital participation increases productivity spillover. That could serve as an interesting model for Russia might be able to attract FDI top complement domestic firms' market share to direct foreign competition.
The evidence from Russia indicates that FDI inflows are lagging behind those of some BRICS comparators (see box 3-1), suggesting that the benefits from international technology diffusion have flowed to only a few economic sectors, with FDI heavily concentrated in oil and natural resources. At the same time, the large increases in FDI observed since 2002 suggest a growing balance within manufacturing and between the manufacturing and service sectors, indication that the growing domestic demand for consumer goods is driving a consistent share of total FDI flows in Russia.
Russian multinationals continue to dominate the outward FDI of the south eastern Europe and CIS region for FDI in joint ventures and mergers, accounting for 87 percent of the total in 2005.Iinvestment includes large deals to acquire and create joint ventures with enterprises in developed economics - notably Lukoil's purchase of Nelson Resources, a Canadian based oil company, and the recently announced merger of the aluminium and alumina assets of RUSAL, the SUAL Group, and Glencore International. Such partnerships are likely to gain in importance, given evidence that foreign-invested enterprises (FIEs) have been important for increasing labour productivity and export competitiveness in such countries as China.
One of the most powerful channels for technology' diffusion is the information and communications technology (ICT) channel. Usually, a good indicator of a country's capacity to leverage the ICT channel is the amount of FDI in communications, which in Russia remains extremely low (0.4 percent of total annual FDI in 2004-05). Moreover, according to various private sources, such as WITSA (2006), the amount of ICT investment in Russia, as a percent of GDP, is substantially lower than that in Central and Eastern Europe (CEE) countries.
Note that neither trade in capital goods nor FDI inflows are sufficient for the successful diffusion of technology. A country must be ready to absorb foreign knowledge and manufacturing and sales methods. In Russia vertical knowledge spillover could be hampered by the central planning legacy of large industrial plants, -which were more vertically integrated than 'Western plants. Moreover, local R& D, domestic research laboratories, and workers with the right skills are key aspects of the process. Trade competition and R&D expenditures are closely interrelated: unless a country is also well endowed in R&D and invests in R&D , spillover is not likely.Box 3-1. Gain from Reducing Barriers to Trade and to FDI Flows in Russia
Russia stands only to gain by reducing its barriers to trade and FDI inflows and thus reaping the benefits of global integration, increased competitiveness, and improved access to business services.Tariff barriers: The CIS has high average tariff and nontariff barriers, which would need to be reduced in the medium term in order to gain from international integration. For Russia in particular, Rutherford and Tarr (2006) shows that the average tariff increased between 2001 and 2003 from 11.5 percent to between 13 and 14.5 percent, placing its tariff rates (unweighted, or weighed averages) at a higher level than those of other middle-income countries, which average 10.6 percent. A reduction in the import tariff by 50 percent will produce gains to the economy on two counts: one, improved domestic resource allocation due to a shift in production to sectors where the value of production is higher, based on world market prices, and two, an increase in Russian productivity as a result of Russian businesses being able to import modern technologies. The second impact is more important for Russia.
Trade Restrictiveness Index: Kee, Nicita, and Olarreage (2006) computes indicators of trade restrictiveness that include measures of tariff and nontariff barriers for ninety-one developing and industrial countries. Of the indicators for the manufacturing sector, one focuses on the trade distortions imposed by each country on imports and another focuses on market access for exports in the rest of the world. It is interesting to note that the trade restrictiveness index (TRI) for imports .for Russia (.19) is lower than that for Brazil (.22) and India (.20) but higher than that for South Africa (.06). China (.12) and the European Union (.08).Russia's TRI is the highest in the Europe and Central Asia region, a reflection of the high tariff and nontariff barriers that it imposes on its imports. On the other hand, Russia faces less trade distortion on its· exports from the rest of the world, China being the only country facing a lower level of restrictiveness.
Barriers to FDI: Russia fares worse than other countries in the region, attracting one of the lowest levels of FDI inflows. Among the key restrictions on foreign service providers in Russia are the monopoly of Rostelecom on fixedline telephone services, the prohibition of affiliate branches of foreign banks, and the restricted quota on the share multinationals in the insurance sector. The reduction barriers to FDI in services alone would result in a gain of the order of 3.7 percent of GDP, accounting for about three-quarters of the total gains to Russia from WTO accession. The reduction in barriers to FDI in the service sector would allow multinationals to obtain greater post tax benefits on their investments, encouraging them to increase FDI to supply the Russia market. That in turn would lead to an increase in total service providers in Russia, giving Russian users improved access to telecommunication, banking, insurance, and other business services; lowering the cost of doing business and increasing the productivity of Russian forms using those services; and providing a growth impetus to the economy.
[1] Which of the following is a correct statement?
(1) Local suppliers promote multinationals
(2) Horizontal links are associated with increased competition
(3) Backward links are associated with increased competition
(4) Multinationals promote backward links[2] According to the passage,
(1) FDI inflows into Russia are the highest amongst BRICS
(2) FDI inflows into Russia are the lowest amongst BRICS
(3) Some BRIC countries are ahead of Russia in terms of FDI inflows
(4) All BRIC countries are ahead of Russia in terms of FDI inflows[3] Since the year 2002,
(1) FDI was made largely into oil and natural resources
(2) All sectors in Russia have received nearly equal amount of FDI inflow
(3) Manufacturing sector has received far more FDI inflow than service sector
(4) Service sector has received far more FDI inflow than the manufacturing sector[4] Russian multinationals
(1) receive most of FDI from South-eastern Europe
(2) invest most of FDI into South-eastern Europe
(3) invest largely in CIS countries
(4) do not receive much FDI from CIS countries[5] According to the passage,
(1) Russian MNCs have created large partnerships
(2) Russian MNCs have refrained from entering into JVs and Mergers
(3) Large European and US MNCs have deliberately kept Russian MNCs out of all major deals
(4) None of the above[6] The most suitable title for the above passage is
(1) Russian MNCs
(2) Multinational investments
(3) Foreign Direct Investment
(4) Diffusion of International Technology[7] The passage suggests that
(1) Russia has benefited from information and communication technologies (lCT) as a powerful channel
(2) Compared to Russia, Central and Eastern European countries have received far less amount of ICT investment
(3) Central and Eastern European countries have received far more of ICT investment
(4) Russia was found ready to absorb vertical knowledge spilloverasked in FMS
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