Questions and Answers of Introduction Global Business

The United Nations Conference on Trade and Development (UNCTAD) provides ranking of the largest transnational corporations (TNCs) in the world, including a ranking of the 100 largest financial TNCs
It has long been thought that health care is one of the industries least vulnerable to dislocation from globalization. After all, like many service businesses, health care is normally delivered where
You work for a manufacturing company that has operations in the United States and Western Europe. However, increasing competition has prompted the firm to examine the option of shifting production to
The Market Potential Index (MPI) is an indexing study conducted by the Michigan State University Center for International Business Education and Research (MSU-CIBER) to compare emerging markets on a
With 75 million people, Egypt is the most populous Arab state. On the face of it, over the past few years Egypt has made significant economic progress. In 2004, Prime Minister Ahmed Nazif and his
Established in 1920, the consumer electronics giant Panasonic was at the forefront of the rise of Japan to the status of major economic power during the 1970s and 1980s (before 2009 Panasonic was
The Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises is a set of voluntary principles and standards for responsible business conduct addressed by
In December 2008 Siemens, the large German electronics firm, agreed to pay $1.6 billion in fines to settle legal suits bought by the American and German governments. The governments asserted that
You work for a telecommunications company and your current project is to determine the five African countries that, in your estimation, should have an advantage in telecommunications infrastructure.
Best known as one of the world’s largest producers of computer mice, Logitech is in many ways the epitome of the modern global corporation. Founded in 1981 in Apples, Switzerland, by two Italians
The establishment of the Free Trade Area of the Americas could be a threat as well as an opportunity for your company. Identify the countries participating in the negotiations for the FTAA. Are there
For several years now the European Union, the largest regional trading bloc in the world, has been trying to liberalize its energy market, replacing the markets of its 27 member states with a single
Established in the 1920s, Spain’s Telefonica was a typical state-owned national telecommunications monopoly until the 1990s. Then the Spanish government privatized the company and deregulated the
Reread the Management Focus “The European Commission and Media Industry Mergers,” then answer the following questions:a. Given that both AOL and Time Warner were U.S.-based companies, do you
For several years now the European Union, the largest regional trading bloc in the world, has been trying to liberalize its energy market, replacing the markets of its 27 member states with a single
You are assigned the duty of ensuring the availability of 100 million Japanese yen for a payment scheduled for tomorrow. Your company possesses only U.S. dollars, so you must identify a Web site that
Your company imports olive oil from Italy to sell in the United States. As expected, the exchange rate has changed from the previous year has impacted your bottom line. In preparing an annual report
Caterpillar Tractor has long been one of America’s major exporters. The company sells its construction equipment, mining equipment, and engines to some 200 countries worldwide. As a leading
While Latvia has been a member state of the European Union since 2004, it has not completed the third stage of the European Monetary Union and therefore still uses its own currency, the Latvian lats.
The International Capital Markets division of the International Monetary Fund (IMF) publishes the Global Financial Stability Report, a semiannual report that provides an assessment of global
In the 1990s Argentina was the darling of the international financial community. The country had fixed the exchange rate for the Argentinean peso to the U.S. dollar at $151 peso. Maintaining the
IBM’s CEO, Sam Palmisano, likes to talk about the evolution of global strategy at one of the world’s largest computer enterprises. According to Palmisano, when IBM first started to expand
General Electric formerly entered a foreign market by either acquiring an established firm or establishing a greenfield subsidiary. Joint ventures with a local company were almost never considered.
How do you explain the use of countertrade? Under what scenarios might its use increase further by 2015? Under what scenarios might its use decline?
Al Merritt founded MD International in 1987. A former salesman for a medical equipment company, Merritt saw an opportunity to act as an export intermediary for medical equipment manufacturers in
Microsoft made its name by building two monopolies, its Windows operating system and its Office suite of personal productivity software, that are used the world over. Windows, for example, runs on
In late 2004 IBM announced it was getting out of the personal computer business and would sell its entire PC operations to Lenovo, the fast-growing Chinese manufacturer of personal computers, for
Globalization temporarily creates “winners” and “losers.” What reform would you suggest to help those who are not benefiting from globalization? How might these reforms be implemented?
Is sustainable business and economic development the answer to the globalization controversy?
Do you believe that there is a “digital divide” in the global economy? Is globalization narrowing that gap? If so, how?
While domestic institutions play an important role in the globalization process, what are some of the fundamental policy measures that those countries need to promote in order to benefit from
Globalization can be facilitated only if national governments are willing to participate in that process. What roles can the three major international institutions play to be a part of this
What are some of the major economic reform themes that are common to the three international organizations promoting globalization?
1. Why is it difficult to compare the financial statements of a U.S. company with those of a company in India or Germany? 2. How would McDonald’s benefit if IFRS were adopted for use in all
Before locating operations in a country, why should a MNC evaluate that country’s tax system?
How does financial ratio analysis enable an investor to compare two companies?
How does auditing contribute to better financial reporting?
What are the benefits of every country using the same GAAP; that is, IFRS? Why haven’t all countries adopted IFRS?
Describe U.S. GAAP and why it differs from GAAP in other countries.
Briefly describe the main sources of finance for international trade and investment. Distinguish between short-term and long-term finance sources.
What derivative securities can be used to hedge the effects of fluctuations in currency values on the cash flows of firms and investors?
What is the difference between foreign exchange risk arising from translation, transactions, and economic risks?
List the factors that a firm should consider when making an outsourcing decision.
How can global operations management be used as a source of competitive advantage?
1. What are the advantages and disadvantages of using licensing and exporting? 2. Will Mary need to use the services of a freight forwarder? If so, what specific services? The Horse Place
How should companies deal with international customers who complain?
How can companies competitively set international prices while avoiding allegations of dumping?
What are the advantages of using freight forwarders.
What are some of the disadvantages that can result when companies use channels of distribution to market their products overseas?
What is the difference between standardization and adaptation?
Why do companies need to research their international markets?
1. How will the expansion of sexual harassment laws globally affect company policies and procedures? 2. How will companies handle the increase in possible lawsuits stemming from sexual
If you were president of the United States and trying to negotiate better labor standards for NAFTA, what new provisions might you try and negotiate (at least from the U.S. perspective)?
Why is it often very difficult for supervisors, in any culture, to provide employees with a negative performance appraisal?
What are the pros and cons of using the Internet for the “virtual staffing” of corporate operations?
1. What are some advantages and disadvantages of the Shell Matrix?2. Why do you think Shell has undergone so many organizational restructurings? 3. How would you decide what would be Shell’s
A matrix structure may provide the advantages of the functional and divisional structures, but it may also provide the disadvantages of these two structures. Argue in favor of or against this
Which type of company often adopts hybrid structures?
Compare and contrast the following organizational structures: functional structure, product structure, market structure, and geographical region structure.
What is the difference between export departments and international divisions?
Organizational structures can help a company fail or succeed. Why do you think that is the case?
Why are global businesses evolving toward stateless corporations?
1. How does Mr. Buffett’s age affect Berkshire Hathaway’s recent strategic moves such as buying Burlington Northern Santa Fe Railroad instead of another large insurance company? 2. What does
In what ways did the organizational culture at Bernard Madoff Investment Services company help lead to Madoff’s success for so many years?
Do you think global businesses should place more emphasis upon operational or tactical plans? Why?
In what ways are corporate mission statements more than just “public relations”?
1. Is ArcelorMittal a “stateless” corporation or a MNE? Where is its home country?2. What is Mittal Steel’s core competency, and what was its strategic motive for global business?ArcelorMittal
To partially overcome its current account deficit, the United States needs to attract FDI that could spur economic growth. What policy measures should the United States take to keep attracting FDI
Quite often, host countries have a love-hate relationship with MNEs. Why?
MNEs try to maximize profits. How could MNEs maximize profits and minimize profit volatility at the same time?
What is a recent development in the evolution of multinational enterprises and how does that development affect globalization?
It is anticipated that emerging-market multinationals will play a greater role in international business during this century. What mode of international business operations do you think they would
1. Why is ethics important to doing business? 2. If all companies established a corporate ethics code, would that eliminate company financial scandals? Why or why not? For nearly 40 years,
Why are internal controls important to successful company operations?
Briefly describe the financial scandals at Enron, WorldCom, Vivendi, and Parmalat; what other scandals have happened in recent years or months?
How does corporate social responsibility contribute to successful business operations?
Why is the ethical character of people so important to business and society?
What do you consider the key characteristics of a person of integrity?
1. Why do you think the democracy of Ghana continues to permit local towns or regions to have tribal chiefs, kings, and the like? Do you think this tradition will continue into the future?2. Would
What are some steps countries can take to better enforce intellectual property rights in their jurisdictions?
Criminal laws vary widely throughout the world. What may be a “crime” in one country, may represent permissible conduct in another locale. Why do you think there are such vast global differences
What are some arguments in favor of permitting at least some level of “corruption” in the conduct of business throughout the world?
Are there any places in the world, today, where “pure”, “free market” capitalism exists?
1. What sources about Ecuador should you consult to obtain cultural information about this country that will need to be included in your cultural map? 2. What other aspects of Ecuadorian
What are some cultural factors that U.S. companies must recognize when doing business in Latin America?
What are some important secondary sources that companies can consult to learn about the cultures of other countries?
What are the four characteristics of culture that global marketers must recognize?
1. How did Greece get into trouble with its government debt? Did joining the Eurozone help them pay rising government debts? Explain your answers. 2. Should Greece exit the euro? How would it
Assume that the one-year U.S. Treasury bond rate is 3% and the similar European government bond rate is 5%. Comparing these inflation rates, could it be expected that the dollar will appreciate or
Briefly describe the international monetary systems implemented under the Bretton Woods, Smithsonian, and Jamaica Agreements.
What is the difference between independent floating, managed floating, and fixed exchange rate systems? Provide an example of a direct quote of an exchange rate.
1. Given the security concerns of both the EU and Russia, where should the EU’s eastern border end? Do you think the buffer states should become NATO members as well? Why or why not? 2. Should
NAFTA has improved Mexico-U.S. trade and investment, yet bilateral trade between the United States and China is greater than with Mexico. Why is this true?
1. Is economic nationalism justified? 2. Is the Smoot-Hawley plan better or worse than “Buy American”? “Buy Spanish”? Or “British jobs for British workers”? Explain fully.The
Some believe there is a disconnect between trade theory and trade policy. What rationale could the United States use to support its trade policies? Give specific examples.
What trade theories support the recent rise of China and India on the global stage? Explain your views in detail.
1. What are the advantages and disadvantages of biofuels in terms of addressing the challenge of sustainable development?2. Should bioethanol production from corn be encouraged, given that corn is
What are some underlying factors that are causing decoupling to happen as societies move from a unipolar to a multipolar world? In your opinion, in which direction is the balance of global economic