International Management Essay

Chapter 1Q1. What argon the differences betwixt knowledge do main(prenominal)-wide, orbicular, and multi dry landal companies?Multi rural atomic number 18aal federation An salute with multi land affiliates, to each unmatched(prenominal) of which formulates its bear employment strategy based on perceived commercialise differences.Global play on An organization that attempts to standardize and meld operations worldwide in all functional beas.Inter realmal company Either a global or a multi interior(prenominal) companyQ2. Give examples to show how an internationalistic subscriber line double-decker capability check genius of the controllable forces in answer to a change in the uncontrollable forces.Uncontrollable forces(External forces) Physical/political/Sociocultural/Competitive/ scotch/Socioeconomic/Distri moreoverive/Financial/LegalManager ground hunt down foyer for a changing a truth and promoting a new ca-ca which requires changes in a cultural a ttitude.Q3. A nation whose GNI is teenyer than the gross sales majority of a global fuddled is in no line to enforce its wishes on the topical anaesthetic subsidiary of that plastered. True or foolish? Explain.False.GNI is different from sales volume in terms of a advisement method. GNI is a measure of value added, non sales. And each subsidiary of global stiffs is also a topical anaesthetic company that essential(prenominal) comply with law in the country where it is located.Q4. Discuss the forces that atomic number 18 tip international firms to the globalisation of their sourcing, crop, and merchandise placeing.5 major forces Political, Technological, Market, Cost, and Competitive Followings are the five change-based drivers that are leading international firms to globalize their operations, with an example for each kind (1)political-preferential af fine agreements, (2)technological-advances in communications technology, (3) foodstuff-global firms hold u p global customers, (4)cost-globalization of return line and product helps debase cost by achieving economies of scale, and (5) belligerent-firms are defending their hearthst oneness markets from distant competitors by entering the opposed competitors markets.Q5. Business is calling, and e really firm has to nurture and market its levelheadeds. Why, then, might managers be unable to apply the techniques and concepts they start out learned in their own country to different(a) areas of the world?Despite firms progress to knowledges and skills for argumentation in own country, they might not be successful in external countries that commit their own cultures and trends of consumption. Good example for this question is Wal-mart in Korea. The international environmental defined as the interactions (1) mingled with the national environmental forces and the unusual environmental forces and (2) surrounded by the unknown environmental forces of two countries when an affilia te in wizard country does vexation with customers in another.Q6. What do you believe make waters extraneous personal line of credit activities more complex than purely house servant ones?To make a end in strange country is more difficult than home country. They not only must take into account the domestic forces bot also must evaluate the influence of 10 exotic national environments.Q7. Discuss nearly possible conflicts between host goernments and unknown-owned companies.I am the opinion that restrictions for subsidiaries of unconnected companies are sensitive problems. For example, If a certain nation prohibits championship for foreign companies, conflicts go forth sum up. And complains of foreign companies pass oning also increase. On the other hands, If a certain nation is open to the funding for foreign companies, there will be some(prenominal) troubles with foreign companies well-nigh taxes and incentives.Q8. Why, in your opinion, do the authors affection the mapping of the self-reference criterion as probably the gravidgest cause of international business blunders? Can you count of an example?If I do business in oversea, I dont know everything exactly concerning about(predicate) foreign countrys culture, policy, social situations, economy, and trends. So, doing business well in foreign country is very difficult. Self-reference criterion means unconscious reference to ones own cultural values when judging behaviors of others in a new and different environment. Managers unfamiliarity with other cultures, to make matters worse, some managers will ascribe to others their own preferences and reactions. For example, selling beefs by self-reference criterion business in Muslim countries will be failed.Q9. You check decided to take a job in your hometown after graduation. Why should you study international business?Owing to globalization trends in the worlds, and instantance of relationship between domestic and foreign country, we prevai l to study hard international business. I will take a job in home country. But I might have opportunities for business in overseas and meeting foreign buyers. Thus, to obtain other countries values, cultures, policies, and trends by studying international business is very spellant for me.Q10. Although forces in the foreign environment are the same as those in the domestic environment, they operate differently. Why is this so?I pretend that domestic environmental and foreign environmental are different in terms of domestic and foreigns culture, and international environmental. When comparing with domestic environmental, operating company in the foreign country has different environments such as companys market parcel, foreigners own culture, and growth in global. And domestic environmental is also originated in home countrys culture which effect on the companies.Q11. What examples of globalization whoremonger you identify within your fraternity? How would you classify each of these examples(e.g., international investiture, international occupation)? foreign coronation I could feel the globalization by watching the Coka-Cola in every super market. International passel FTA(Korea and Chile) is a full(a) example for international raft. This free work agreements is mutually profitable for each nations Q12. Why is there encounter to globalization of plenty and integration of the worlds economy? Please assess the major arguments for and against such globalization efforts.I retrieve that this argument against globalization is originated by the different concourses valules and concepts. This argument stern be examined by three autochthonic ones (1) that globalization has produced uneven results across nations and people (2) that globalization has had deleterious effect on labor and labor standards (3) that globalization has contri simplyed to a decline in environmental and health conditions.Chapter 2Q1. How large and definitive a map do small and mediumsize enterprises play in generating export sales?The coincidence of generating export sales from the SMEs in the U.S.A change magnitude constantly. gibe to the exporter Data average in the text book, Of derive exporters, 218,382 were SMEs(small and medium-size enterprises). It is 97 percent of all U.S.A exporters.Q2. How has deal in product and services changed over the past decade? What have been the major trends? How might this information be of value to a manager?Although the economic growth of global has slowdowned in the 2000, the direct value of their merchandise exports increased, the pro muckle of exports coming from the regions of Latin America, Africa, and Middle East decreased between 1980 and 2004. The largest exporters and importers of merchandise are generally genuine countries.The results of services exports are analogous with merchandise exports. Regionalization of condescension is increasing more and more. It is accounted for over 70 percent b y 2005. Further, South and East Asias share of the worlds manufacturing value added has nearly quadrupled since 1980. From this information the managers whitethorn be prepared for the increased competition from exports to their own domestic markets.Q3. The greater part of international trade consists of an exchange of unexampled materials from developing nations for manufactured straightforwards from developed nations. True? or false? Explain.False. This is correct partially. More than half the exports from developing nations go to developed countries. Also, over 70% of exports from developed economies go to other industrialized nationsQ4. The volume of exports has increased, but the ranking of U.S. barter partner in crimes in holy influence of importance be the same year after year. True or false? Of what use in this information to a manager?False. Of the top 15 nations, 8 have remained on the keep down over the geezerhood listed, including Canada, Mexico, Japan, Ger many a(prenominal), the linked Kingdom, France, Italy, and Brazil. However, each nations ranking has changed over time, and some new nations have been added to replace other nations that have become relatively less important as trade partners.Q5. What is the value of analyzing foreign trade data? For example, what should the manifold in real terms of exports in less than 35 years indicate to managers?The analysis information would be helpful to anyone just commencement to search outside the home market for new business opportunities by studying the general growth and purportion of trade and analyzing major trading partners.Q6. Knowing that a nation is a major trading partner of another signifies what to a marketing analyst?There are values to centre attention on a nation that is al filmy a hefty purchaser of another country The business climate in the importing nation is relatively favorable Export and import regulations are not insurmountable There should be no strong cultur al objections to buy that nations good Satisfactory transportation facilities have already been establishedQ7. What are the different components of foreign investment? Why has the character between them begun to blur in recent years?It stomach be divided into two components First is portfolio investment and second is direct investment. 1. Portfolio investment The purchase of stocks and bonds to obtain a return on the funds invested. 2. channelize investment The purchase of sufficient stock in a firm to obtain significant management control. Because of globalization in recent years, the governing note beetween them begun to blur.Q8. How has the level and direction of FDI changed over the past decade, both overall and in terms of yearly outflows and inflows? Why would this information be of relevance to managers? one-year FDI outflows hit a historical high in 2000-$1,201 billion. However, By 2002, the total was only $647 billion, only about 54 percent of the 2000figure becaus e of a subsequent decline in the overall level of annual FDI flows. Outflows significantly increased to $730 billion by 2004. The vast proportion of outward FDI, over 87 percent, originates from the developed countries.This data has been associated with mergers, acquisitions purchasing of companies in other nations. In annual inflows case, developed countries have been alse occupying over 70 percent of annual FDI investments. Recently for managers, important issues related to inflows are trend that proportion of Asiatic FDI that has been directed to China and its territories. Their combined proportion of Asian FDI grew from 52.4 percent during 1985-1995 to 75 percent in 2004.Q9. Why has FDI historically followed foreign trade? What is it about the new international business environment that is causing this path to market expansion to change?Reason is that engaging in foreign trade is typically less costly and less risky than making a direct investment into foreign markets. Also, m anagement can expand the business in small increments rather than by dint of the considerably greater amounts of investment and market size that a foreign production facility requires. Generally, because the local market would not be large enough to support local production by all the firms exporting to it, the situation would become one of seeing who could begin manufacturing there first-class honours degree.Q10. Why has or so foreign direct investment gone into acquiring existing companies rather than establishing new ones?1) integrated restructuring in the United States caused management to put on the market businesses or other assets. 2) Foreign companies wanted to gain rapid access in the United States to advanced technology, especially in computers and communications 3) Management of foreign firms felt that entrance into the large and prosperous American market could be more successful 4) Increased international private-enterprise(a) pressures also could be reasons for th is question.Q11. What are the main reasons that a firm might enter into foreign markets?First reason is to increase their profits and sales (Enter new markets / concord greater profits / Test market) Second is to protect markets, profits, and sales (Protect domestic market / Attack in competitors home market / Protect foreign markets / Guarantee supply of raw materials / Acquire technology and management know-how / geographic diversification / Satisfy managements craving for expansion)Q12. What are in-bond plants? Why might they be an attractive alternative for a manufacturing company?In-bond plants, often called maquiladoras, is production facilities in Mexico that temporarily import raw materials, components, or parts duty-free to be manufactured, processed, or assembled with less high- determined local labor, after which the finished or semifinished product is exported. Because the Mexican government permitted duty-free importation of parts and materials from the USA within th e in-bond plant, provided that the finished products were re-exported.Q13. How can a firm protect its domestic market by commit overseas?When companies face competitor which has inflict price return in domestic, companies can break this difficult situation by using payoffs of overseas investments.(cheap labor cost, raw material, and etc.)Q14. What are the seven dimensions along which management can globalize? How is it possible for a firm to be multidomesic on one dimension of globalization and global on another?There are at least seven dimensions 1) product, 2) market, 3) promotion, 4) where value is added to the product, 5) competitive strategy, 6) use of non-home-country personnel, and 7) conclusion of global ownership in the firm. The possibilities range from zero standardization(multidomestic) to standardization along all seven dimensions(completely global). The challengefor company managers is to determine how far the firm should go with each one.Chapter 3Q1. Describe c ommercialism, and explain why mercantilism has been argued to be a poor approach to use in order to promote economic development and prosperity.commerce is an economic system (Europe in 18th century) to increase a nations wealth by government regulation of all of the nations commercial interests. Mercantilism that stressed governments promotion of limitation of imports from other nations and internal economies in order to improve tax revenues popular during 17th and 18th centuries in Europe. The problem of Mercantilism is to be rich a country use uped to have a lot of poor people.Mercantilism failed to understand the notions of absolute wages and comparative degree advantage and the benefits of trade. For instance, Portugal was a far more efficient manufacturing business of wine than England, while in England it was relatively cheaper to produce cloth. Thus if Portugal change in wine and England in cloth, both states would end up mend off if they traded. This is an example of the reciprocal benefits of trade due to a comparative advantage. In modern economic possibleness, trade is not a zero-sum peppy of competition, because both sides can benefit.Q2.a. Explain Adam Smiths theory of absolute advantage.The ability of a country, individual, company or region to produce a good or service at a set down cost per unit than the cost at which any other entity produces that good or service. Entities with absolute advantages can produce something using a smaller number of inputs than another party producing the same product. As such, absolute advantage can reduce costs and boost profits.b. How does Ricardos theory of comparative advantage differ from the theory of absolute advantage?Absolute advantage and comparative advantage are two basic concepts to international trade. down the stairs absolute advantage, one country can produce more rig per unit of productive input than another. With comparative advantage, if one country has an absolute (dis)advantage in every type of output, the other might benefit from specializing in and exporting those products, if any exist.A country has an absolute advantage economically over another, in a particular good, when it can produce that good at a lower cost. Using the same input of resources a country with an absolute advantage will have greater output. presume this one good is the only item in the market, beneficial trade is impossible. An absolute advantage is one where trade is not mutually beneficial, as opposed to a comparative advantage where trade is mutually beneficial.A country has a comparative advantage in the production of a good if it can produce that good at a lower opportunity cost relative to another country. The theory of comparative advantage explains why it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. What matters is not the absolute cost of production but the opportunity cost, whic h measures how much production of one good, is reduced to produce one more unit of the other good.c. Using the example from the chapter, explain why no gains from specialization exist(and thereof why two countries could not trade in a means that benefits each) if there is no pattern of comparative advantage(if the ratios of soybeans to cloth production are the same in the two countries).China has an absolute advantage in producing both soybeans and cloth. If there is a trade between 2 countries match to comparative advantage theory, United States will have 4 loads of soybeans and 5 bolts of cloth. On the other hand, China will have 4 tons of soybeans and 5 bolts of cloth. Therefore, china will have a passing play for their total soybeans compared withbefore trading the products.Q3. Consider the case in which a country does not have a comparative advantage in the production of a product, such as apples, because its soils or climate are not appropriate. Explain who would be likel y to favor free trade, and who would be likely to oppose free trade, in this product. Favor to free trade countries which has a comparative advantage in production of a product, such as apples. Opposite to free trade countries which has a comparative damage in production of a product, such as apples.Q4. What is the relationship between the Heckscher-Ohlin factor endowment theory and the theories in question 2?It builds on David Ricardos theory of comparative advantage by predicting patterns of commerce and production based on the factor endowments of a trading region. The model fundamentally says that countries will export products that utilize their abundant and cheap factors of production and import products that utilize the countries scarce factors.Q5. Why were Leontiefs empirical results considered to be irrational?In 1954, Leontief found that the U.S. (the most capital-abundant country in the world by any criteria) exported labor-intensive commodities and imported capital-i ntensive commodities, in contradiction with Heckscher-Ohlin theory.Q6. Why does most of the worlds international trade take place between economies that are similar in their level of economic development?According to the Linders demand-oriented theory, The reason is 1) income levels of both nations 2) overlapping demand. Because an entrepreneur will produce goods to meet demand, the kinds of products manufactured reflect the countrys level of income per capital. Goods produced for domesticconsumption will eventually be exported, due to similarity of income levels and thusly demand in other countries.Q7. Name some products that you believe have passed through the four stages of the international product life cycle.Telegraphy. I read recently how Western juncture sent the last telex / conducting wire in 2006, so that definitely qualifies to decline. You can literally see how this expand based upon rail and cable laying and didnt start in all places on earth (let alone a single count ry) at the same time and continued to be a viable business in some countries long after voice, fax, then email and SMS replaced such.Q8. What factors increase the cost of trading goods and services across borders? Can these costs be reduced? How?I think that import/export obligations, subsidies, expensive transaction costs, and etc are factors which increase the cost of trading goods and services across borders. This factors which occur costs can be reduced by free trade agreements(FTA) or regional trade agreements such as NAFTA, EU. It will reduce unnecessary costs and encourage trading among nations.Q9. It seems that free, unrestricted international trade, in which each nation produces and exports products for which it has a comparative advantage, will enable everyone to have a high(prenominal) level of living. Why, then, does every country have import duty restrictions?Because many nation did not produce other nations product and the nation has lower qualities or a lot of cost bankrupt than other nations product. In case that many nation needs other nations product. At the trading among the nations, there are a lot of problems. For example, economical, historical problems, political and so on. If a nation has infant industry.For example, farming which is needed to develop for domestic market, The nation can be protect the industry from competitive companies by having import duty restrictions. And then, their nations infrastructure can be collapse. Forfair competition, nation have to improve the balance of the trading.Q10. We certainly need denial industries, and we must protect them from import competition by placing restrictions on competitive imports. True or false? Is there an alternative to trade restrictions that might make more economic sense?I think that it may be not true. All is not certainly, If nations competitive industry help income of nation that select and improve nations industry. A nation trading needs of basic infrastructure among th e nations. And then, close to tax of the trading remove or a little portion levy.Q11. Suppose that a country negotiates an agreement with its trade partners to restrict its imports through voluntary export restrictions(VERs). What impacts might be expected from implementing such VERs?VER(Voluntary Export Restriction) means that exporting nation restricted quantities of export and list of article. In case that at nations exporting product surplus or insufficiency in a given situation. In a surplus situation, nation should be restricted for their quantities. In a insufficiency situation, nation make some increasing demand and higher cost.Q12. Workers are paid $20 an hour in the United States but only $4 in Taiwan. Of course we cant cope. We need to protect our jobs from cheap foreign labor. What are some possible problems with this assertion?In a given situation, cheaper product come round in our nation. At the same time, our nations job of labor disappeared. LDC(Lower Develope Cou ntry) has cheaper plight that supply more profi better than industrialization nation. But Many industrialization nation has higher wage and lower productivity. Production costs may actually be higher in a low-wage.Q13. There are two general classifications of import duties tariff and non-tariff barriers. a. Describe the various types of tariff barriers.An ad valorem tariff is a set percentage of the value of the good that is being imported. Sometimes these are problematic, as when the international price of a good falls, so does the tariff, and domestic industries become more insecure to competition. Conversely, when the price of a good rises on the international market so does the tariff, but a country is often less interested in credential measures when the price is higher.A specialized tariff, is a tariff of a specific amount of notes that does not vary with the price of the good. These tariffs are vulnerable to changes in the market or inflation unless updated periodical ly.A revenue tariff is a set of rates designed primarily to raise money for the government. A tariff on burnt umber imports imposed by countries where coffee cannot be grown, for example raises a steady flow of revenue.A prophylactic tariff is intended to artificially inflate prices of imports and protect domestic industries from foreign competition (see also effective rate of protection,) especially from competitors whose host nations appropriate them to operate under conditions that are illegal in the protected nation, or who subsidize their exports.b. What are some of the nontariff barriers?Non-tariff barriers may also be in the form of product standards and technical regulations, which may dictate particular manufacturing guidelines or product specifications. If products do not meet the given requirements, they will face an import ban. Examples of this sort are the European Union restrictions on genetically-modified organisms or beef treated with growth hormones.Q14. A firm e ntering the market first will soon dominate it, and the large market share it acquires will enable it to obtain the benefits of economies of scale. True or false? toy with that there are at least two studies showing that first removal firms held large market shares.True. First-mover advantage theory is economic and strategic advantage gained by being the first company to enter an industry. However, If only the firm possess core strategies such as superior technology, knowledge about local market, and other advantages over indigenous firms. It could be failure that you awkwardly enter the market for the first mover without these strategies.This conclusion will meet about more advantage opportunities to the second mover who has been indirectly undergo the failure of first mover. It is never true that only the first mover strategy is the best theory.Q15. According to theories presented in this chapter, why do companies go after in foreign direct investment?For defensive reason, Re fer to the international product life cycle theory. International investement as well as international trade. Refer to the eclectic theory of international production, the company must have location and ownership advantages to invest in a foreign plant. It will invest where it is most profitable in internalize. It is monopolistic advantage.Chapter 4Q1. What are some reasons that business people should be aware of important international institutions?International institutions have resolved conflicts among nations. It is very important to make business internationally. International institutions has also valuable data which apply to business.Q2. compensate though the UN is best known for peace keeping missions, it has many agencies twisting in activities affecting business. In your judgement, do these activities justify support for the UN? Would it be better if the activities of these agencies were done by private entities such as trade groups?The UN has helped some countries which need support to make their industry by funding and teaching knowledges. This activities justify support for the UNbecause UN has a number of informations which is originated by connections of other counties.Q3. How did the WTO come into existence? What purpose does it serve? Would bilateral trading agreements work better than the multilateral WTO approach?The Bretton Woods Conference of 1944 proposed the creation of an International Trade Organization (ITO) to establish rules and regulations for trade between countries. The ITO charter was concord at the UN Conference on Trade and Employment in capital of Cuba in March 1948, but was blocked by the U.S. Senate (WTO, 2004b).Some historians have argued that the failure may have resulted from fears within the American business community that the International Trade Organization could be used to regulate, rather than liberate, big business (Lisa Wilkins, 1997 Helen Milner 1993).Only one element of the ITO survived the General Agreement on Tariffs and Trade (GATT). Seven rounds of negotiations occurred under GATT before the eighth round the Uruguay fill in concluded in 1995 with the establishment of the WTO as the GATTs replacement. The GATT principles and agreements were adopted by the WTO, which was charged with administering and extending them. Unlike the GATT, the WTO has a substantial institutional structure.I think that the multilateral trading agreements is better than bilateral trading agreements because there will be no discrimination to all WTO members.Q4. What are the four main organs of the EU, and what is the purpose of each?1. European Parliament to pass European laws, voice of the European people in EU 2. Council of European Union policy setting, voice of the member states, where decisions on foreign policy and security issues are made 3. European Commission represents the interest of Europe as a whole, runs the day to day operations of EU 4. European royal court of Justice court that decides ca ses related to EU policiesQ5. What is the impact of the EU on business?The European Union has had a significant influence on international trade, especially in respect of the countries that are member states in the Union. Internally, trading between the member states within the European Union has become less restrictive, because of the laws and regulations passed. Globally, the European Union has created a power that can compete internationally with superpowers such as the United States.Q6. The U.S. Congress approved the jointure American Free Trade Agreement despite strong opposition from organized labor. Why would labor have opposed NAFTA?I think a reason why is that they (organized labor) want to obtain working indorse in North America.Q7. What is the importance of the OECD for business?OECD promotes economic expansion and provides a number of economic information/researches which can support and help its country members.Q8. Mercosurs major trading partner is the EU rather than the United States. Why might this be the case?Mercosur is based on the EU and can trade several countries in the EU.Q9. How might a small business person in Des Moines, Iowa, who is exporting agricultural products control useful the international institutions and agreements that this chapter describes?1. To find out which countries is available for a business person to export their productions. 2. To protect their products from other foreign competitors.