international business

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin International Business Dr. K. Vogiatzoglou ( Dr. LOU ) Textbook: Charles Hill, Global Business Today, 7 th Edition, McGraw-Hill/Irwin. 1-2 Aim of the Course This course provides a review and analysis of the international trade, investment, and business environment for managers. It applies this knowledge to practical aspects of doing business in international markets & managing firms in the globalized economy. Emphasis is given on the economic, geographical, historical, legal and political factors that make international business significantly different from domestic business activities. The course points to real-world phenomena and issues of contemporary globalization, and promotes an intuitive understanding and creative thinking with regard to international entrepreneurship and the global economic system. 1-3 Outline of the Course Week 1 ： Introduction to International Trade and to the Globalization Process Week 2 ： National Differences in Political Economy Week 3 ： Differences in Culture Week 4 ： International Trade Theory I Week 5 ： International Trade Theory II Week 6 ： The Political Economy of International Trade Week 7 ： Foreign Direct Investment Week 8 ： Review week Week 9 ： Mid-term exam Week 10 ： The Foreign Exchange Market Week 11 ： The International Monetary System Week 12 ： The Strategy of International Business Week 13 ： Entering Foreign Markets Week 14 ： Exporting, Importing, and Countertrade Week 15 ： Global Production, Outsourcing, and Logistics Week 16 ： Global Marketing and R&D Week 17 ： Review week Week 18 ： Final exam 1-4 Additional Information There will be class discussions, one homework assignment, a mid-term written exam, and a final written exam. Scoring Attendance: 25% Homework assignment: 25% Mid-term exam: 25% Final exam: 25% The course will also use alternative material (magazines, internet sites, etc.) and topics discussed on TV that are relevant to international trade, business, and cross-cultural co-operation. 1-5 Introduction In the world economy today, we see  fewer self-contained national economies with high barriers to cross-border trade and investment  a more integrated global economic system with lower barriers to trade and investment  over $4 trillion in foreign exchange transactions daily  over $12 million of goods and $3.3 trillion of services being sold across national borders  the establishment of international institutions Chapter 1: Globalization 1-6 What Is Globalization? Question: What is globalization? Answer:  Globalization refers to the trend towards a more integrated global economic system Two key facets of globalization are:  the globalization of markets  the globalization of production 1-7 The Globalization of Markets  Globalization of markets - the merging of historically distinct and separate national markets into one huge global marketplace  In many markets today, the tastes and preferences of consumers in different nations are converging upon some global norm  Coca Cola, Starbucks, Sony PlayStation, and McDonald’s hamburgers, IKEA furniture 1-8 The Globalization of Production  Globalization of production - the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor energy, land, and capital)  Goal: lower overall cost structure or improve the quality or functionality of their product and gain competitive advantage  Boeing and Vizio 1-9 The Emergence of Global Institutions Global institutions  manage, regulate, and police the global market place  promote the establishment of multinational treaties to govern the global business system  the World Trade Organization (WTO) - polices world trading system and ensures nations adhere to the rules established in WTO treaties  In 2010, its 154 members accounted for 97% of world trade  the International Monetary Fund (IMF) - maintains order in the international monetary system 1-10 The Emergence of Global Institutions  the World Bank - promotes economic development  the United Nations (UN) - maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for human rights, and is a center for harmonizing the actions of nations [...]... managers within an international business? Answer: Managing an international business (any firm that engages in international trade or investment) differs from managing a domestic business in four key ways 1-35 Managing in the Global Marketplace 1 Countries differences require companies to vary their practices country by country 2 Managers face a greater and more complex range of problems 3 International. .. Global Economy In the 1960s: the U.S dominated the world economy and world trade and world FDI U.S multinationals dominated the international business scene about half the world the centrally planned economies of the communist world was off limits to Western international business Today, much of this has changed 1-19 Changing World Output and World Trade Picture In the early 1960s: U.S - dominant... technological change 1-11 Declining Trade and Investment Barriers International trade occurs when a firm exports goods or services to consumers in another country Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country During the 1920s and 1930s, many nations erected barriers to international trade and FDI to protect domestic industries from... world’s 100 largest nonfinancial MNEs were from the U.S., 13 were from France, 13 from Germany, 14 were from Britain, and 10 were from Japan Small and medium-size firms are now expanding internationally easier to build international sales via the Internet 1-26 The Changing World Order The collapse of communism in Eastern Europe export and investment opportunities Economic development in China huge... implications of technological change for the globalization of production? Answer: Lower transportation costs make a geographically dispersed production system more economical and allow firms to better respond to international customer demands 1-17 The Role of Technological Change Question: What are the implications of technological change for the globalization of markets? Answer: Low cost communications networks... Share of Total FDI Stock, 1980 - 2008 1-23 Changing Foreign Direct Investment Picture Figure 1.3: FDI Inflows, 1988 - 2008 1-24 The Changing Multinational Enterprise  A multinational enterprise is any business that has productive activities in two or more countries  Since the 1960s: there has been a rise in non-U.S multinationals there has been a rise in mini-multinationals 1-25 The Changing Multinational... country by country 2 Managers face a greater and more complex range of problems 3 International companies must work within the limits imposed by governmental intervention and the global trading system 4 International transactions require converting funds and being susceptible to exchange rate changes 1-36 . review and analysis of the international trade, investment, and business environment for managers. It applies this knowledge to practical aspects of doing business in international markets &. multinationals dominated the international business scene  about half the world the centrally planned economies of the communist world was off limits to Western international business Today, much. geographical, historical, legal and political factors that make international business significantly different from domestic business activities. The course points to real-world phenomena and