International BusinessMGT 265
Prerequisite: ENG 111 or OAT 151 either with a minimum grade of "C". MGT 153 is recommended. Examines the three environments within which the typical business person must function in a global economy: domestic, foreign and international. The international organizations (i.e., GATT, IMF, OPEC, EC and the UN) and the international monetary system will be covered. Physical, sociocultural, political, legal, labor and financial forces in global markets will be analyzed. Case studies will be used to emphasize management decision making in marketing, production, financing and staffing in world-wide companies. (45-0)
Outcomes and Objectives
Demonstrate an understanding of the globalization of the world economy.
- Discuss the globalization of markets and production over the last two decades.
- Describe the factors that underlie the trend toward globalization.
- Discuss the barriers that traditionally prohibit the flow of goods, services, and capital.
Demonstrate an understanding of the workings of the international monetary systems.
- Explain the gold standard and how it relates to a monetary standard.
- Discuss the break-down of the gold standard.
- Describe the European Monetary System.
Demonstrate an understanding of the international capital market.
- Define the function of a capital market.
- Discuss the growth of the international capital market during the 1970s and 80s.
- Define Eurocurrency.
- Discuss the two classifications of the international bond market.
- Define the implications of international capital market for international business practice.
Demonstrate an understanding of the various way in which firms can profit from global expansion.
- Discuss how, for some firms, international expansion represents a way of earning greater returns by transferring the skills and product offerings derived from their core competencies to markets where indigenous competitors lack those skills.
Demonstrate an understanding of organizational structures and internal control mechanisms.
- Identify the four main dimensions of organizational structure.
- Define vertical differentiation.
- Define horizontal differentiation.
- Discuss how firms usually begin abroad with an international division.
Demonstrate an understanding of the steps firms must take to establish themselves as exporters.
- Discuss the biggest impediment to exporting ignorance of foreign market opportunities.
- Describe why neophyte exporters often become discouraged or frustrated with the exporting process.
- Explain how information gathering is the best way to overcome ignorance.
- Discuss the many pitfalls associated with exporting.
- Discuss the "trust" factor and how it relates to the individuals involved in the exporting process.
- Discuss problems that may arise because of a lack of trust between parties.
Demonstrate an understanding of how efficient manufacturing and materials management functions can help improve an international business's competitive position.
- Discuss how the choice of an optimal manufacturing location must consider country factors, technological factors and product factors.
- Explain country factors.
- Explain technological factors.
- Explain product factors.
- Discuss the advantages of making components in-house.
- Discuss the advantages of buying components from independent suppliers.
Demonstrate an understanding of the marketing and R & D functions in international business.
- Discuss how a product can be viewed as a bundle of attributes.
- Describe country differences in consumer tastes and preferences.
- Define distribution strategy.
- Discuss barriers to international communication.
Demonstrate an understanding of human resource management in international business.
- Discuss how the firm's strategy needs to be congruent with the HRM policies.
- Discuss how a staffing policy can be a tool for developing and promoting a corporate culture.
- Define ethnocentric, polycentric, and geocentric staffing policies.
- Explain how training can lower the probability of expatriate failure.
Demonstrate an understanding of financial accounting within the multinational firm.
- Discuss how accounting is the language of business.
- Explain how accounting is shaped by the environment in which it operates.
- Describe the five main factors that influence the type of accounting system that a country has.
- Discuss the national differences in accounting and auditing standards.
- Discuss how the annual budget is the main instrument by which headquarters controls foreign subsidiaries.
Describe different country's internal systems.
- Discuss how political systems can be assessed according to two dimension--the degree to which they emphasize collectivism as opposed to individualism and the degree to which they are democratic or totalitarian.
- Discuss collectivism as an ideology that views the needs of society as being more important than the needs of the individual.
- Discuss individualism as an ideology that is built on an emphasis on the primacy of individual's freedoms in the political, economic, and cultural realm.
- Describe how democracy and totalitarianism are at different ends of a political spectrum.
Demonstrate an understanding of the social culture's implications for business practice.
- Discuss culture as a complex whole that includes knowledge, belief, art, morals, law, custom, and other capabilities acquired by people as members of society.
- Discuss how values and norms are the central components of a culture.
- Describe how all societies are stratified into different classes.
- Identify the world's major religions, and discuss how religion may be defined as a system of shared beliefs and rituals that are concerned with the realm of the sacred.
- Describe language as the one defining characteristic of a culture.
- Discuss how formal education is the medium through which individuals learn skills and are socialized into the values and norms of society.
Demonstrate an understanding of why it is beneficial for a country to engage in international trade.
- Discuss the theory of absolute advantage.
- Discuss the theory of comparative advantage.
- Describe the product life cycle and how trade patterns are influenced why where a new product is introduced.
Demonstrate an understanding of how the reality of international trade deviates from the theoretical ideal of unrestricted free trade.
- Describe how tariffs raise the cost of imported products.
- Describe how an import quota is a direct restriction imposed by an importing country on the quantity of some good that may be imported.
Demonstrate an understanding of theories that attempt to explain the pattern of foreign direct investment between countries.
- Discuss how foreign direct investment occurs when a firm invests directly in facilities to produce in a foreign country.
- Describe how horizontal FDI is FDI in the same industry abroad as a firm operates at home.
- Discuss any theory seeking to explain FDI must explain why firms go to the trouble of acquiring or establishing operations abroad, when the alternatives of exporting and licensing are available to them.
Demonstrate an understanding of the influence of governments on firms' decisions to invest in foreign countries.
- Discuss political ideology and how it affects FDI.
- Describe the "radical view."
- Describe the "free market view."
- Discuss the benefits of FDI to the host country and how it can make a positive contribution to the economy of the host country.
Demonstrate an understanding of regional economic integration.
- Discuss the levels of economic integration that are possible in theory.
- Describe regional economic integration and its attempt to achieve economic gain.
- Discuss the economic and political debate surrounding regional economic integration.
- Discuss regional economic integration in Europe, the Americas, and elsewhere.
- Discuss the important implication of regional economic integration for the practice on international business.
Demonstrate an understanding of how the foreign exchange market works.
- Discuss the functions of the foreign exchange market.
- Explain why international business participates in the foreign exchange market.
- Explain how using forward exchange rates can reduce the foreign exchange risk.