Session 1i BUSE608
-
Upload
abdulrahman-alotaibi -
Category
Documents
-
view
223 -
download
0
Transcript of Session 1i BUSE608
-
8/13/2019 Session 1i BUSE608
1/40
1/30
DR SAJJAD HAIDER
Introduction to Module
Introduction to International Business
BUSE 608
International Business
KAAU, 2011-12
-
8/13/2019 Session 1i BUSE608
2/40
2/30
DR SAJJAD HAIDER
$700 billion
27 billion
$2 trillion
12 billion
$1 trillion
-
8/13/2019 Session 1i BUSE608
3/40
3/30
DR SAJJAD HAIDERSource: http://news.bbc.co.uk
-
8/13/2019 Session 1i BUSE608
4/40
4/30
DR SAJJAD HAIDER
America sneezes and the UK catches the cold
FTSE
CAC
DAX
Nikkei
Nasdaq
Dow
Jones
-
8/13/2019 Session 1i BUSE608
5/40
5/30
DR SAJJAD HAIDER
Sydney
Hang Seng
BSE
RTS
-
8/13/2019 Session 1i BUSE608
6/40
6/30
DR SAJJAD HAIDER
Click on an event on the timeline
http://news.bbc.co.uk/1/hi/business/8242825.stm
-
8/13/2019 Session 1i BUSE608
7/407/30 DR SAJJAD HAIDER
APA Chinese worker moves large tires at an
assembly line for buses made by Chinese auto manufacturer Foton
By JENNIFER LOVEN, AP White House Correspondent Jennifer Loven, Ap White House Correspondent
Sat Sep 12, 5:34 pm ET
WASHINGTONPresident Barack Obama's decision to impose trade penalties on
Chinese tires has infuriated Beijingat a time when the U.S. badly needs Chinese help on
climate change, nuclear standoffs with Iran and North Korea and the global economy.
China condemned the White House's announcement late Friday as protectionist and said it violated
global trade rules. At home, the punitive tariffs on all car and light truck tires coming into the U.S.
from China may placate union supporters who are important to the president's health care push.
To the White House, it was "simply about enforcing the rules of the road and creating a trade system
that is based on those rules and is fair for everyone," spokesman Robert Gibbs told reporters
traveling with Obama on Saturday to a health care event in Minneapolis.
Chen Deming, China's minister of commerce, said the penalties would hurt relations with the U.S. A
ministry statement said Obama had "compromised to the political pressure of the U.S. domestic
trade protectionism."
-
8/13/2019 Session 1i BUSE608
8/408/30 DR SAJJAD HAIDER
Introduction and Outline
There are two significant aspects to this module:
The international business environment, and the changes
which have taken place in the post-war period
The operation of business on an international basis, and the
implications for managers in terms of strategy, structure andoperational functions
-
8/13/2019 Session 1i BUSE608
9/409/30 DR SAJJAD HAIDER
Introduction and Outlinecont
The module will develop an understanding of what is
different about international business through study of the
international environment covering such issues as:
Changing world trade and investment conditions
International economic agreements
Political and economic risk Cultural and ethical differences
International competitive conditions
-
8/13/2019 Session 1i BUSE608
10/4010/30 DR SAJJAD HAIDER
Introduction and Outlinecont
The module also examine why and how companiesinternationalise their operations, covering issues as:
Decisions on foreign market entry methods, ranging fromexporting to different forms of foreign direct investment (FDI)
Issues which arise in the operation of international business,incorporating decisions on international business strategy, and the
management of business functions such as human resourcemanagement, logistics and marketing
-
8/13/2019 Session 1i BUSE608
11/4011/30 DR SAJJAD HAIDER
Learning Outcomes
At the completion of this module students will be able
to:
Evaluate the key factors influencing the post-war trends in
global trade, investment and competition
Identify and analyse the opportunities and risks which exist in
the international business environment
-
8/13/2019 Session 1i BUSE608
12/4012/30 DR SAJJAD HAIDER
Learning Outcomescont
Critically assess the relevance of international trade,
investment and competition theories to the analysis of current
business and management issues (both from a government and
MNC perspective)
Understand the motivating forces behind different foreign
market entry decisions and evaluate the appropriateness of
each entry method in a range of circumstances
Analyse the strategic and functional decisions which companies
take in the course of their international operations
-
8/13/2019 Session 1i BUSE608
13/4013/30 DR SAJJAD HAIDER
Reading List
The essential text for the module is:
Hill, C.W.L.,
International Business:
Competing in the Global Marketplace(7thEdition), McGraw-Hill, 2009
-
8/13/2019 Session 1i BUSE608
14/4014/30 DR SAJJAD HAIDER
Reading List Cavusgil, S. T., Knight, G., and Tiesenberger, J. R. 2008. International Business: Strategy,
Management and the New Realities. Prentice Hall.
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P. 2008. International Business:
Environments and Operations. 12thEdition. Prentice Hall.
Recommended journals/Newspapers/Web links: Journal of International Business Studies (JIBS)
Financial Times (FT.com)
The Economist (Economist.com) http://nulis.napier.ac.uk/
http://proquest.umi.com/login
http://nulis.napier.ac.uk/http://nulis.napier.ac.uk/ -
8/13/2019 Session 1i BUSE608
15/4015/30 DR SAJJAD HAIDER
TopicL1 W1 Introduction to International BusinessL2 W1 Globalisation of the World EconomyL3 W1 Political and Economic RiskL4 W1 Cultural and Ethical RiskL5 W2 International Trade TheoriesL6 W2 FDI: Home/Host Country PerspectivesL7 W2 International Economic AgreementsL8 W3 Foreign Market Entry StrategiesL9 W3 Strategy, HRM and Marketing
W4 FINAL EXAMINATION
-
8/13/2019 Session 1i BUSE608
16/4016/30 DR SAJJAD HAIDER
tutorial
participation
contribution
TopicL1 W1 WalMarts Global Expansion
IKEAL2 W1 Wipro Ltd
Ecuadorean Valentine RosesL3 W1 Building a Market Economy in
Piracy in the Video Game MarketL4 W1 Nike: The Sweatshop debateL5 W2 Italian Ceramic Tile Industry
The Rise of the Finlands NokiaL6 W2 FDI in South AfricaL7 W2 The Great Banana Wars
NAFTA and the Textile IndustryL8 W3 Getting Airline Alliances Off the
GroundL9 W3 Nestle: Global Strategy
W4 FINAL EXAMINATION
-
8/13/2019 Session 1i BUSE608
17/40
17/30 DR SAJJAD HAIDER
Assessments
There are three forms of assessment for this module,
and the overall mark will be made up as follows:
50% Coursework
1. 30% Coursework, Submission date ...
2. 20% Tutorial Participation and Contribution (Continuous)
50% Exam
-
8/13/2019 Session 1i BUSE608
18/40
18/30 DR SAJJAD HAIDER
Coursework
Coursework Question:
Evaluate the impact of global recession on international
trade and investment with respect to the country of
your choice. Support your arguments with the use of
relevant examples wherever possible.
-
8/13/2019 Session 1i BUSE608
19/40
19/30 DR SAJJAD HAIDER
Guidelines Length: Minimum 2,000 words, maximum 3,000 (Reports in excess of the word limit will be cappedto 40%)
Completion date: December, 2011
All reports should be typed and must include a list of references.
Give the word count on the front page (indicate clearly)
A list of references along with appendices while necessary is NOT included in
the word account.
Web references MUST contain the full URL and state the date accessed e.g.:
http://www.wto.org/english/tratop_e/tratop_e.htm
(Accessed 08 September 2009)
http://www.wto.org/english/tratop_e/tratop_e.htmhttp://www.wto.org/english/tratop_e/tratop_e.htm -
8/13/2019 Session 1i BUSE608
20/40
20/30 DR SAJJAD HAIDER
Case Study Analysis
In this module, tutorials will be based on the analysis of case
studies, mostly taken from the Hill text.
In the examination there is also a compulsory case study
question on a case which students will only see on the day
It is, therefore, essential that students understand our
expectations of you in terms of conducting an effective case
study analysis
-
8/13/2019 Session 1i BUSE608
21/40
21/30 DR SAJJAD HAIDER
Case Study Analysiscont
In tutorials, and in respect of the exam compulsory casestudy question, students will be expected to answer
specific questions about the case
However, for a full expos on the subject, students should consult :
Strategic Management, Competitiveness and Globalisation, Concepts and
Cases, Hitt, Ireland and Hoskisson: read the full chapter; Preparing an EffectiveCase Analysis Any edition has the full chapter, available in the library
-
8/13/2019 Session 1i BUSE608
22/40
22/30 DR SAJJAD HAIDER
Case Study Analysiscont The case should then be read thoroughly, to identify the facts which
are critical to the analysis
The question(s) are likely to require students to identifytools/frameworks which will have to be applied in the analysis
The analysis will further be required to enable students to evaluate thekey issues and come to a coherent judgement in relation to the
question(s) posed
Students should be aware that the foregoing methodology will berequired, not only in tutorials, but also in the compulsory case studyexam question
-
8/13/2019 Session 1i BUSE608
23/40
23/30 DR SAJJAD HAIDER
Introduction to International Business
BUSE 608
International BusinessKAAU, 2011-12
-
8/13/2019 Session 1i BUSE608
24/40
24/30 DR SAJJAD HAIDER
Globalisation
Cultural &
Ethical Risks
Political &
Economic Risks
InternationalTrade Theories
International
Economic
Agreements
FDI: Host/Home
Country
Perspectives
Foreign Market
Entry
Strategies
Revision/CW
feedback
MFO: Strategy,
HRM and
Marketing
Introduction to
International
Business
-
8/13/2019 Session 1i BUSE608
25/40
25/30 DR SAJJAD HAIDER
Learning Outcomes
Define what constitutes international business
Evaluate the key differences in conducting business
internationally, as opposed to remaining in a companysdomestic market
Critically assess the objectives of an organisation ininternationalising its operations
Understand the key factors in the development of the worldtrading system
-
8/13/2019 Session 1i BUSE608
26/40
26/30 DR SAJJAD HAIDER
What is International Business
International business consists of transactions carried out
across national borders to satisfy the objectives of
business organisations Business activity which crosses national boundaries takes
several forms:
Trade exporting/importing
Contracting licensing/franchising
Investment foreign direct investment (FDI) through wholly
owned subsidiaries, alliances, or acquisitions
-
8/13/2019 Session 1i BUSE608
27/40
27/30 DR SAJJAD HAIDER
The Internationalisation of Business
Sectors with which the study of international business is
concerned:
Manufacturing: taking advantage of cost-effective locations
Resource-based: minerals/metals, oil and agriculture
Construction: multinational projects such as dams & airports
Services: rapid expansion in financial services, telecoms and
retail
-
8/13/2019 Session 1i BUSE608
28/40
28/30 DR SAJJAD HAIDER
What is Different about IB?
Additional costs:
Trading costs e.g. import duties, distribution agents
Travel/relocation costs e.g. use of expatriate managers
Local market costs e.g. government regulations,
product/service modifications
-
8/13/2019 Session 1i BUSE608
29/40
29/30 DR SAJJAD HAIDER
What is Different about IB?
Additional risks:
Political/Legal e.g. import/investment barriers, lack of legalprotection
Economic/Financial e.g. inflation levels, foreign exchange risks
Cultural/Ethical e.g. differences in values, beliefs, and practices
-
8/13/2019 Session 1i BUSE608
30/40
30/30 DR SAJJAD HAIDER
What is Different about IB? Hill puts it thus Managing an international business is different from
managing a domestic business for at least four reasons:
1. Countries are different
2. The range of problems confronted by a manager is wider and theproblems themselves more complex than those confronted by a managerin a domestic business
3. Managers must find ways to work within the limits imposed bygovernmentsintervention in the international trade and investmentsystem
4. International transactions involve converting money into differentcurrencies
-
8/13/2019 Session 1i BUSE608
31/40
-
8/13/2019 Session 1i BUSE608
32/40
-
8/13/2019 Session 1i BUSE608
33/40
33/30 DR SAJJAD HAIDER
World Trading System The UK was the pioneer of free trade (from the 1850s)
The Great Depression put the cause back significantly (NB
the Smoot-Hawley tariff in the USA)
This was reversed in the expansionist post war climate
the establishment of General Agreement on Tariffs and Trade
(GATT), a multilateral trade agreement, in 1947
-
8/13/2019 Session 1i BUSE608
34/40
34/30 DR SAJJAD HAIDER
GATT
Tariff reduction was spread over 8 rounds
Membership grew from 19 to over 120 nations
Although GATT was extremely successful in reducing barriersto trade and investment, in the 1980s new strains to the world
trading system appeared: the successof Japan; the failure
of the USA; and the increasing use of bilateral trade
agreements Early 90s GATT becomes World Trade Organisation (WTO)
-
8/13/2019 Session 1i BUSE608
35/40
35/30 DR SAJJAD HAIDER
WTO Since 2003 the WTO has had 145 members, with a further 25
countries negotiating for membership
Between 1995 and 2003, more than 280 trade disputes
between member countries were brought to the WTO,
compared with a total of 196 cases handled by GATT in its
entire existence
The WTO has widened its remit to encompass regulations
governing foreign direct investment (FDI), and hassubsequently reformed the international regulation of the
global telecoms and financial services industries
-
8/13/2019 Session 1i BUSE608
36/40
36/30 DR SAJJAD HAIDER
WTO
A further significant issue to the WTO has been that of protectingintellectual property products of the mind, ideas (e.g. books,music, computer software, designs, technological know-how)
The 1995 Uruguay agreement contained a protocol to protectintellectual property (the trade related aspects of intellectualproperty rights the TRIPS agreement)
As with GATT, the WTO has been successful in further lowering tradeand investment barriers. There remain problem areas, however,
particularly in disputes between developed and developingcountries a theme that will be covered in depth in lecture 2 onglobalisation
-
8/13/2019 Session 1i BUSE608
37/40
37/30 DR SAJJAD HAIDER
Summary
International business is different because it involves
costs and risks not present in a companys home market
International managers are, therefore, faced with a muchmore complex set of problems arising out of differences
in diverse international business environments
-
8/13/2019 Session 1i BUSE608
38/40
38/30 DR SAJJAD HAIDER
Summary
Businesses internationalise their operations for a variety
of reasons, ranging from increasing the scale of their
markets to counteracting competitive pressures
although international expansion may have more to do
with the ego of the senior executives than delivering
shareholder value
-
8/13/2019 Session 1i BUSE608
39/40
39/30 DR SAJJAD HAIDER
Summary International trade and investment has grown
substantially in the post war period, aided by multilateral
agreements such as GATT and the WTO
The range of areas covered by the WTO has been
extended to cover service businesses, and intellectual
property rights
Next weeks lecture will explore the role which suchmultilateral agreements has played in advancing the
process of globalisation
-
8/13/2019 Session 1i BUSE608
40/40
Reading List
This lecture is based around Hill Chapter 1, as is next
lecture
Class Discussions:
Cave Rescue (handouts)
Wal~Marts Global Expansion, Hill p. 443
IKEA, Hill p. 36