International Management Essay

Chapter 1Q1. What ar the take issueences in the midst of external, global, and multiho employ servant companies?Multi stateal social club An organization with multi republic affiliates, separately of which formulates its energize air strategy base on perceived market differences.Global ph cardinalr An organization that attempts to standardize and integrate operations humankind-wide in all(prenominal) functional aras.Inter kingdomal ac familiarity Either a global or a multi municipal comp whatsoeverQ2. Give causas to show how an global agate line manager great power manipulate unmatchable of the controllable forces in answer to a spay in the uncontrollable forces.Uncontrollable forces(External forces) Physical/political/Socio pagan/Competitive/Economic/Socio frugal/ divided/Financial/LegalManager do- nonhing tap for a changing a law and promoting a cutting overlap which requires variegates in a cultural attitude.Q3. A province whose GNI is smaller tha n the gross revenue mountain of a global sign of the zodiac is in no position to enforce its wishes on the topical anesthetic anesthetic subordinate word of that substantial. accredited or False? let off.False.GNI is diametric from gross revenue volume in footing of a com composeation method. GNI is a measure of value added, not sales. And each subsidiary of global stanchs is too a local comp any that must comply with law in the rude where it is located.Q4. Discuss the forces that are leading planetaryist firms to the globalisation of their sourcing, doing, and marketing.5 major(ip) forces Political, Technological, Market, Cost, and Competitive Followings are the five change-based drivers that are leading global firms to widen their operations, with an example for each kind (1)political-preferential barter understandings, (2)technological-advances in communications technology, (3)market-global firms nonplus global customers, (4) exist- globalisation of m erchandise line of products and mathematical product helps reduce costs by achieving economies of scale, and (5) free-enterprise(a)-firms are defending their home markets from conflicting competitors by get in the remote competitors markets.Q5. Business is billet, and e truly firm has to begin believe and market its in force(p)s. wherefore, then, might managers be unable to concur the techniques and concepts they pee learned in their deliver body politic to an early(a)(prenominal) areas of the world?Despite firms slang knowledges and skills for commercialised enterprise in experience realm, they might not be successful in extraneous countries that have their avouch endings and course of studys of consumption. Good example for this question is Wal-mart in Korea. The inter realmal environmental defined as the interactions (1) surrounded by the municipal environmental forces and the inter soilal environmental forces and (2) mingled with the alien environment al forces of devil countries when an affiliate in one bucolic does telephone line organisation with customers in approximately anformer(a)(prenominal).Q6. What do you believe move ins inter stateal business activities more complex than purely domesticated ones?To make a decision in external unpolished is more concentrated than home earth. They not except must pee-pee into account the domestic forces bot in any case must evaluate the influence of 10 foreign realmal environments.Q7. Discuss some practical conflicts between host g all overnments and foreign-owned companies.I am the opinion that restrictions for subsidiaries of foreign companies are sensitive problems. For example, If a accepted population prohibits funding for foreign companies, conflicts bequeath increase. And complains of foreign companies go away besides increase. On the other hands, If a certain nation is open to the funding for foreign companies, in that location result be some troubles with foreign companies some taxationes and incentives.Q8. wherefore, in your opinion, do the authors regard the use of the self-reference quantity as probably the biggest cause of multinational business blunders? Can you think of an example?If I do business in overseas, I dont know everything exactly concerning about foreign state of matters culture, polity, social military positions, economy, and trends. So, doing business well in foreign democracy is very difficult. Self-reference criterion political relation agency 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 give ascribe to others their own preferences and reactions. For example, marketing shout outs by self-reference criterion business in Moslem countries will be failed.Q9. You have decided to take a mull in your hometown after graduation. why should you stud y external business?Owing to globalization trends in the worlds, and out scramance of relationship between domestic and foreign body politic, we have to study hard international business. I will take a job in home country. that I might have opport social unities for business in overseas and run across foreign buyers. Thus, to take other countries values, cultures, policies, and trends by perusal international business is very authorised for me.Q10. Although forces in the foreign environment are the selfsame(prenominal) as those in the domestic environment, they fit differently. Why is this so?I think that domestic environmental and foreign environmental are different in terms of domestic and foreigns culture, and international environmental. When compare with domestic environmental, operating company in the foreign country has different environments much(prenominal) as companys market share, foreigners own culture, and growth in global. And domestic environmental is l ikewise originated in home countrys culture which effect on the companies.Q11. What examples of globalization barelyt you place in spite of appearance your community? How would you classify each of these examples(e.g., international enthronisation, international get by)? International investment funds I could tonicity the globalization by watching the Coka-Cola in every super market. International muckle FTA(Korea and Chile) is a secure example for international dole out. This free shell out agreements is inversely advantageous for each nations Q12. Why is in that respect foeman to globalization of foxiness and integration of the worlds economy? Please assess the major line of productss for and against such globalization efforts.I think that this argument against globalization is originated by the different messs valules and concepts. This argument gouge be examined by three radical ones (1) that globalization has produced uneven results across nations and peop le (2) that globalization has had deleterious effects on get and dig up standards (3) that globalization has contributed to a decline in environmental and health conditions.Chapter 2Q1. How wide and important a role do small and mediumsize enterprises play in generating exportation sales?The proportion of generating export sales from the SMEs in the U.S.A change magnitude constantly. According to the businesser Data mean(a) in the text book, Of match exporters, 218,382 were SMEs(small and medium-size enterprises). It is 97 per centum of all U.S.A exporters.Q2. How has plenty in merchandise and function changed over the past decade? What have been the major trends? How might this training be of value to a manager?Although the scotch growth of global has slowdowned in the 2000, the infinite value of their merchandise exports increased, the proportion of exports glide slope from the regions of Latin America, Africa, and Middle East decreased between 1980 and 2004. The la rgest exporters and importers of merchandise are generally unquestionable countries.The results of go exports are similar with merchandise exports. Regionalization of portion out is change magnitude more and more. It is accounted for over 70 per centumage by 2005. Further, South and East Asias share of the worlds manufacturing value added has nearly quadrupled since 1980. From this instruction the managers whitethorn be prepared for the increased competition from exports to their own domestic markets.Q3. The great part of international trade consists of an exchange of raw materials from developing nations for fabricate honests from create 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 alter nationsQ4. The volume of exports has increased, but the ranking of U.S. merchandise checkmates in redact of importance r e primary(prenominal)s the same category after year. True or false? Of what use in this information to a manager?False. Of the solve 15 nations, 8 have remained on the amount over the years listed, including Canada, Mexico, Japan, Ger some(prenominal), the United 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 undersized important as trade partners.Q5. What is the value of analyzing foreign trade data? For example, what should the quadruple in real terms of exports in less(prenominal) than 35 years indicate to managers?The analysis information would be helpful to anyone just starting to hunt outside the home market for new business opportunities by studying the general growth and committee of trade and analyzing major craft partners.Q6. Knowing that a nation is a major concern partner of another signifies what to a marketing analyst? at that pla ce are utilitys to focusing attention on a nation that is already a sizable buyer of another country The business climate in the importing nation is relatively favorable exportation and import regulations are not insurmountable in that respect should be no strong cultural objections to get that nations upright Satis computey transport facilities have already been establishedQ7. What are the different components of foreign investment? Why has the distinction between them begun to blur in recent years?It bath be divided into devil 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. operate investment The purchase of sufficient stock in a firm to obtain significant circumspection control. Because of globalization in recent years, the distinction beetween them begun to blur.Q8. How has the take and direction of FDI changed over the past decade, dev il general and in terms of yearly outflows and inflows? Why would this information be of relevance to managers?Annual FDI outflows hit a historical high in 2000-$1,201 billion. However, By 2002, the total was completely $647 billion, only about 54 percent of the 2000figure because of a subsequent decline in the overall level of annual FDI flows. Outflows significantly increased to $730 billion by 2004. The vast proportion of outer FDI, over 87 percent, originates from the developed countries.This data has been associated with mergers, acquisitions buying 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 Asian FDI that has been directed to China and its territories. Their combine 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 gaga than making a direct investment into foreign markets. Also, concern can expand the business in small increments rather than with the considerably great amounts of investment and market size that a foreign production facility requires. Generally, because the local market would not be large enough to shop at local production by all the firms exporting to it, the situation would become one of seeing who could begin manufacturing there prime(prenominal).Q10. Why has most foreign direct investment gone into acquiring existing companies rather than establishing new ones?1) Corporate restructuring in the United States caused management to put on the market businesses or other assets. 2) foreign companies complimentsed to gain rapid access in the United States to advanced tec hnology, 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 warlike pressures also could be flat coats for this 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 / gravel greater profits / Test market) Second is to hold dear markets, profits, and sales ( value domestic market / Attack in competitors home market / Protect foreign markets / Guarantee supply of raw materials / arrogate technology and management know-how / geographic diversification / reward managements desire 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 expensive 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 the States within the in-bond plant, provided that the finished products were re-exported.Q13. How can a firm cherish its domestic market by expend overseas?When companies face competitor which has disgrace charge good in domestic, companies can break this difficult situation by using goods 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? on that point 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) extent 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 cold the firm should go with each one.Chapter 3Q1. report mercantilism, and explain why mercantilism has been argued to be a myopic approach to use in order to promote economic ontogenesis and prosperity.Mercantilism 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 make better tax revenues popular during 17th and 18th centuries in Europe. The enigma of Mercantilism is to be rich a country needed to have a split of poor people.Mercantilism failed to understand the notions of absolute good and proportional service and the benefits of trade. For instance, Portugal w as a far more cost-efficient producer of wine-colored than England, while in England it was relatively cheaper to produce fabric. Thus if Portugal specialized in wine and England in cloth, both states would end up mitigate off if they traded. This is an example of the reciprocal benefits of trade payable to a proportional returns. In modern economic theory, trade is not a zero-sum game 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 demoralize 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 bit of inputs than another party producing the same product. As such, absolute advantage can reduce costs and cost increase profits.b. How does Ricardos theory of comparative advantage differ from the theory of absolute advantage?Absolute advantage and comparative advantage are cardinal staple concepts to international trade. Under absolute advantage, one country can produce more output 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. Assuming this one good is the only breaker point 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 coun try. 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, which 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 thus why two countries could not trade in a modal value 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 according to comparative advantage theory, United States will have 4 tons 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 loss for their total soybeans compared withbefore business 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 likely to favor free trade, and who would be likely to oppose free trade, in this product. prefer 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 disadvantage in production of a product, such as apples.Q4. What is the relationship between the Heckscher-Ohlin factor talent 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 es displaceially 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 paradoxical?In 1954, Leontief form that the U.S. (the most capital-abundant country in the world by any criteria) exported labor-intensive commodities and imported capital-intensive commodities, in contradiction in terms 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) cooccur 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, out-of-pocket to similarity of income levels and therefore demand in other countries.Q7. Name some products that you believe have passed through the four stages of the int ernational product life cycle.Telegraphy. I read recently how Western coalescence sent the last telex / telegram 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 country) simultaneously and keep to be a viable business in some countries long after voice, fax, then telecommunicate and SMS replaced such.Q8. What factors increase the cost of trading goods and run across borders? Can these costs be reduced? How?I think that import/export obligations, subsidies, expensive movement 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, un curb international trade, in which each nation produces and ex ports products for which it has a comparative advantage, will change everyone to have a higher(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 better 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 intentness.For example, farming which is needed to develop for domestic market, The nation can be defend the attention from competitive companies by having import duty restrictions. And then, their nations infrastructure can be collapse. For comme il faut competition, nation have to improve the balance of the trading.Q10. We sure enough need defense industries, and we must protect them from import competition by placing restrictions on competitive impo rts. True or false? Is there an alternative to trade restrictions that might make more economic understanding?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 the nations. And then, About obligation 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 have-to doe withs 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 nimiety or insufficiency in a minded(p) 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 manage. We need to protect our jobs from cheap foreign labor. What are some possible problems with this statement?In a given situation, cheaper product come round in our nation. At the same time, our nations job of labor disappeared. LDC(Lower Develope Country) has cheaper profits that supply more profi better than industrialization nation. But Many industrialization nation has higher wage and lower productivity. Production costs may in truth be higher in a low-wage.Q13. There are two general classifications of import duties obligation 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 harm of a good falls, so does the tariff, and domestic industries become more vulnerable 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 protection when the price is higher.A particularized tariff, is a tariff of a specific amount of money that does not vary with the price of the good. These tariffs are vulnerable to changes in the market or inflation unless updated periodically.A revenue tariff is a set of rates designed primarily to rig out money for the government. A tariff on coffee tree imports imposed by countries where coffee cannot be grown, for example raises a steady flow of revenue.A restrictive tariff is intended to artificially inflate prices of imports and protect domestic industries from foreign competition (see also stiff rate of protection,) especially from competitors whose host nations allow 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 standa rds 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 ledger entry the market first will soon get over it, and the large market share it acquires will enable it to obtain the benefits of economies of scale. True or false? look on that there are at least two studies showing that first movers 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 affliction that you awkwardly enter the market for the first mover without these strategies.This goal will bring about more advantage opportunities to the second mover who has been indirectly experienced the visitation 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 engage in foreign direct investment?For defensive reason, Refer to the international product life cycle theory. International investement as well as international trade. Refer to the eclecticist 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. Even thou gh the UN is best known for peace keeping missions, it has many agencies involved in activities affecting business. In your judgement, do these activities justify reenforcement for the UN? Would it be better if the activities of these agencies were make 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 symmetric trading agreements work better than the multilateral WTO approach?The Bretton timber Conference of 1944 proposed the creation of an International calling ecesis (ITO) to establish rules and regulations for trade between countries. The ITO charter was agree at the UN Conference on Trade and art in Havana in March 1948, but was blocked by the U.S. Senate (WTO, 200 4b).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). unaccompanied one element of the ITO survived the General Agreement on Tariffs and Trade (GATT). Seven rounds of negotiations occurred under GATT before the one-eighth round the Uruguay Round concluded in 1995 with the nerve of the WTO as the GATTs replacement. The GATT principles and agreements were adopted by the WTO, which was aerated 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 particles.Q4. What are the four main organs of the EU, and what is the purpose of each?1. European fan tan to pass European laws, voice of th e European people in EU 2. Council of European Union insurance policy setting, voice of the member states, where decisions on foreign policy and security issues are made 3. European missionary station represents the interest of Europe as a whole, runs the twenty-four hours to day operations of EU 4. European coquet of Justice court that decides cases 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. intercourse approved the mating American Free Trade Agreement despite strong opposition from organised labor. Why would labor have oppos ed NAFTA?I think a reason why is that they (organized labor) want to obtain working visa 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 aim useful the international institutions and agreements that this chapter describes?1. To find out which countries is uncommitted for a business person to export their productions. 2. To protect their products from other foreign competitors.