Preparing for Global Markets: Challenges and Opportunities for Businesses and Entrepreneurs

Globalization Talk it Over

Today, international business people must think globally about production and sales opportunities. Many global managers will eventually find themselves living and working in cultures altogether different from their own. Many entrepreneurs will find themselves booking flights to places they had never heard of. What do you think companies can do now to prepare their managers for these new markets? What can entrepreneurs and small businesses with limited resources do?

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• I think what the companies should do is preparing their entrepreneurs to learn more about national culture which is a strong shaper of people’s values, attitudes, customs, beliefs, communication styles and business environment in those countries before they go because it is very hard to understand the different cultures. Moreover, the entrepreneurs and small businesses with limited resources should do a research in that those countries before doing businesses. As far as I know, there are certain real obstacles to exporting for small businesses and lack of investment capital.

For example, some common myths create artificial obstacles. The companies should find the way to make it better in this point of view.

In the past, national governments greatly affected the pace of globalization through agreements to lower barriers to international trade and investment. Is the pace of change now outpacing the capability of governments to manage the global economy? Will national governments become more or less important to international business in the future? Explain your answer.

• In my opinion, I think the national government strongly affect to international trade and investment and I think it cannot be changed. In the future, I think national governments would become more and more powerful to international business, and very helpful for international trade like importing and exporting. Because of the globalization of markets and production are the two forces which driving globalization (lower trade and investment barriers and increased technological innovation) are taking companies into previously isolated markets and increasing competitive pressures worldwide.

Information technologies are developing at a faster rate than ever before. How have these technologies affected globalization? Give specific examples. Do you think globalization will continue until we all live in one “global village”? Why or why not?

• For example, eBay is a very good example for information technologies not only eBay is well-known for E-commerce ; but also, eBay is a web-based forum . People use internet around the world , so eBay provides an efficient distribution system because information inefficiency.

Nowadays , eBay could transform the international business market place in ways that created legions of exporters and importers, helped impoverished nation, balanced the world’s supply and demand, and significantly improve the efficiency of the global market that no one did and I think we will never live in one global village because many things are very differences. We cannot live in one culture , same attitude , same life style and the same believing.

Consider the following statement : “ Globalization and the resulting increase in competition harm people, as international companies play one government against another to get the best deal possible. Meanwhile, governments continually ask for greater concessions from their citizens, demanding that they work harder and longer for less pay. “ Do you agree? Why or why not?

• I agree with this statement because it is true. Globalization and the resulting increase in competition harm people every day, as international companies play one government against another to get the best deal possible.

Anyway, globalization creates jobs and boosts wages which improving standards of living and making possible new ways of life.

Ethical Challenges

You are the U. S. citizen recently assigned as the manager of distribution in a European country where bribery is relatively accepted. Your job description includes responsibility for accepting shipments as they enter the local port authority. On your first trip down to the docks to sigh for a shipment, the customs agent in charge asks for a “tip” to clear the goods for pick up. The value of the incoming shipment is around $ 150,000.

Knowing that the government has recently launched an initiative to reduce corruption, how do you react? If additional information would be helpful to you, what would it be?

• I think I have to give them a tip because in that country the bribery is relatively accepted, and I think they can make my job easier. Moreover , the value of the incoming shipment is pretty high, it might have a damage on my goods if I do not give them a tip because they might do not care about my shipment and I think to give a tip for somebody is not a corruption, but it shows you are very appreciated in their jobs.

Practicing International Management Case

MTV: Going global with a local beat - Thinking globally

The past decade has witnessed a growing similarity in the attitudes and spending habits of youthful consumers around the world. As one journalist puts it, “ It may still be conventional wisdom to ‘ think globally and act locally ‘but in the youth market , it is increasingly a case of one size fits all. ” Do you agree or disagree? Why or why not?

• I agree with this statement because nowadays the youthful consumers always follow attitudes and chare habits with each other.

The environment teach them to think globally and it is increasing a case of one size fits all. According to the passage, although style and format are largely driven by the U. S. youth culture, content is tailored entirely to local markets.

Some people are concerned that teens exposed to large doses of U. S. youth culture on MTV networks will begin to identify less and less with their own societies. Others worry that teenager consumers in developing countries want more and more Western goods that they can’t afford. MTV’s response to such criticism: “It’s just fun,” says one network executive. “ It’s only TV. What do you think? Are there dangers in broadcasting U. S. programs and ads to both developed and developing countries ?

• I think family should more concern about the teens exposed to large doses of U. S. youth culture on MTV networks. It is not a good thing to follow the culture which the Western products are very high prices. There are some dangers in broadcasting U. S. programs and ads to both developed and developing countries and I think the owner of the network program should give a good example of Western culture and a good knowledge for audiences not the wrong attitudes and wrong communication style.

Digital compression technology made it possible for MTV to program over a global network. Can you think of any other technological innovations that have helped companies to think globally and act locally?

• I think it is possible for other programs to create programs over a global network like MTV. For example, Big Brothers , Supermodel , First stage show, and etc.

Advances in technology are often accompanies by evolution in the entertainment industry. How do you think new technologies such as iPod and DVD player/burners will affect entertainment in the years to come?

• iPod and DVD player/burner are already in trend and effect entertainment in the world today. I think in the future, they are more powerful and become a leader of the digital-music industry. According to the passage, the Apple is rolling past the competition, boasting its-billionth download in early 2006; moreover, the trend toward greater interdependence among nations and economies benefits Apple enormously.

Cross-Cultural Business Ethical Challenges

You are vice president of operations for a U. S. ased software firm. Your firm’s board of directors wants you to explore building a software design operation in India. Typically, when international firms enter the Indian market they quickly learn about the various ways in which a rigid caste system can affect business activities. Do you think it will be possible to uphold a U. S. management style in India? Or should your company be prepared to adjust to the local Indian managerial style and human resource practices?

• I think it is possible to upload some management style, but not a lot. As I know, India has English as a second language, and some people follow British or American style. Anyway, majority of people still have their ways, my explorer to build a software design operation in India I find it is pretty hard. Therefore, my company should be prepared to adjust to the local Indian managerial style and human resource practices.

You are the vice president of international operations for a large pharmaceutical firm that manufactures and anti-malarial drug. Your firm is considering opening up a factory in a small Central American nation where malaria is still extremely common.

The operation will be a cooperative venturing between your firm and the local government. The majority of the people in that country cannot afford the medicine because of the high import tariffs. Yet if your plan goes through, over 200 jobs will be create and the drug’s international price will drop by over 50 percent. In the final meeting with a senior government official, the gentleman informs you that if you pay him $500,000 cash, the deal will go through. What issues must you consider? What do you do?

• I think I will accept that agreement, but I think $500,000 is a lot of money though. Maybe I will ask him to pay about $ 400,000 is fine for me, and I will ask him to think about the majority of the people who cannot afford the medicine because of the high import tariffs, and my company can create the job over 200 jobs. Moreover, the drug’s international price will drop by over 50 percent. I think he will consider that offer.

You are the public relations director for a company that recently announced its decision to close its factory in the U. S. and outsource the work to manufacturers in Asia and Latin America.

Your firm is doing just what many other companies have already done, reducing labor cost by shifting work to low-wage countries such as China, India, Mexico, and Central American nations. Yet the media and disgruntled workers are lambasting your firm’s decision. Is there a reasonable response to charges that the companies you will hire frequently exploit child labor, force women to work 75-hour weeks, and destroy family units?

• If I were a public relations for a company that recently announced its decision to close its factory in the U. S. nd outsource the work to manufacturers in Asia and Latin America. I know it was wrong to hire frequently exploit child labor, force women to work 75 hours a week, and destroy family units. Anyway, I gave them jobs and money and I think they were willing to do so. It was better than no job and no money.

PIMC: Modernization or westernization

If your international firm were doing business in Asia, would you feel partly for these social trends? Is there anything that your company could do to ease the tensions being experienced by these cultures? Be specific.

• If my international firm were doing business in Asia, I would feel partly for these social trends. What my company should do to ease the tensions being experienced by these cultures are learn their cultures; for example, it is very important to understand a people’s manners and customs. At a minimum, understanding manners and customs will help my company to avoid making embarrassing mistakes or offending people. It is good to learn the appropriate ways of behaving, speaking, and dressing in a culture and can define appropriate habits or behaviors in specific situations.

In your opinion, is globalization among the causes of the increasing incidence of divorce, crime, and drug abuse in Asia? Why or why not?

• Yes, I think globalization causes of the increasing incidence of divorce, crime, and drug abuse in Asia. According to the passage, for decades, Western multinationals set up factories across Southeast Asia to take advantage of relatively low-cost labor. Later local companies sprang up and became competitive global players in their own right.

The result was spectacular rates if economic growth in a few short decades that elevated living standards in many Asian countries far beyond what was thought possible, and caused the increasing incidence of divorce, crime, and drug abuse in Asia.

Broadly defined, Asia comprises over 60 percent of the world’s population- a population that practices Buddhism, Confucianism, Hinduism, Islam, and numerous other religions. Given the fact that there are considerable cultural differences between countries such as China, India, Indonesia, Japan, and Malaysia, is it possible to carry on a valid discussion of “Asian” values? Why or why not?

• I think it is possible to carry on a valid discussion of Asian values. Culture includes a people’s beliefs and traditional habits and the ways in which they relate to one another.

These factors fall into one or more of the eight major components of culture

1. aesthetics
2. Values and attitudes
3. manners and customs
4. social structure
5. religion
6. personal communication
7. education
8. physical and material environments.

Consider the following statement:” Economic development and capitalism require a certain style of doing business in the twenty-first century. The sooner Asian Cultures adapt, the better. ” Do you agree or disagree? Explain.

• I agree with this statement because if the Economic development and capitalism require a certain style of doing business in the twenty-first century, the Asian culture should be adapt and everything will better than ever.

Politics, Law and Business Ethics

The Internet and the rise of “e-government” are forcing politicians to change their methods of governing. How might the Internet change totalitarian political systems, such as China, North Korea?

What might the net ‘s future expansion mean for nations with theocratic systems ( for example, Iran)? What changes might technology bring to the way that democratic function? The internet and the rise of " e-government "are forcing politicians to change their methods of governing. i think the internet can change totalitarian political systems just a little bit it cannot change totally. For example, in Iran, a political system that is under the control of totalitarian religious leaders is called theocratic totalitarianism. Iran is a prominent example of theocratic totalitarian state.

Although political reforms have stalled in Iran recently, the country does allow private businesses to operate within boundaries set by the government. Anyway, technology might change political systems to the way that democracies function because people around the world are demanding greater participation in the political process and forcing many nations to abandon totalitarian for democratic systems.

Under a totalitarian political system, the Indonesian economy grew strongly for 30 years. In India, meanwhile, the economic system of the world’s largest functioning democracy was relatively poor for decades until recently.

Relying on what you learned in this chapter, do you think the Indonesian economy grew despite or because of a totalitarian regime? What might explain India’s relatively poor performance under a democratic political system? I think the Indonesian economy grew because of a totalitarian regime. For example, India's relatively poor performance under a democratic political system might because of democracies maintain stable business environments primarily through laws that protect individual property rights. In theory, commerce proper when the private sector includes independently owned firms that exist to make profits.

Bear in mind that although participative democracy, property rights, and free markets tend to encourage economic growth, they do not always do so. For instance, although India is the world's largest democracy, it experienced slow economic growth for decades until recently.

Consider the following statement “Democratic political systems, as opposed to totalitarian ones, provide international companies with more stable environments in which to do business. ” Do you agree? Why or why not? Support your argument with specific country examples. I agree with this statement.

For example, Japan is a good example for democratic political system which provides international companies with more stable environments in which to do business. Democracies, for example, pass laws to protect individual civil liberties and property rights. But totalitarian governments could also grant such rights. Whereas democracies strive to guarantee such rights, totalitarian governments retain the power to repeal them whatever they want.

PIMC: Caveat Emptor - Who ever said Latin was dead?

What actions can companies and governments take to ensure that products annot be easily pirated? Be specifics.

• The actions that the companies and governments can take to ensure that products cannot be easily pirated Industrial property, includes patents and trademarks often a firm's most valuable assets. Laws protecting industrial property are designed to reward inventive and creative activity.
• A patent is a right granted to the inventor of a product or process that excludes others from making, using, or selling the invention.
• Trademarks are words or symbols that distinguish a product and its manufacturer.
• Trademark protection typically lasts indefinitely, provides the word or symbol continues to be distinctive.
• Copyrights give creators of original works the freedom to publish or dispose of them as they choose. The existence of a copy right is typically denoted by inclusion of the well-known symbol, a date, and the copyright holder's name.

Do you think that the international business community is being too lax about the abuse of intellectual property right? Are international companies simply afraid to speak out for fear of jeopardizing access to attractive markets?

• In my opinion, I think the international business community is being too lax about the abuse of intellectual property rights. The enforcement of product liability laws differs from nation to nation, but when there is software piracy, there is often music and movie piracy as well. There are a lot of pirated products and I think the international companies are simply afraid to speak out for fear of jeopardizing access to attractive markets. For example, in China and India, because of a combination of lax anti-piracy regulations and booming economies, the problem is expected to persist and perhaps grow worse.

Increased digital communication may pose a threat to intellectual property because technology allows people to create perfect clones of original works. How do you think the Internet might affect intellectual property laws?

• I think the internet can affect intellectual property laws because technology allows people to create perfect clones of original works. According to the passage, people use internet around the world and the piracy of intellectual property--computer software, firm books, music CDs, and pharmaceutical drugs-- is a global problem.

Traditionally peddled by sidewalk vendors and in back-street markets, counterfeiters are adding the internet to their usual channels of distribution. Just as the internet slashes the cost and hassles of starting a business for honest folks, it has the same effect counterfeiters.

Update the Tiffany vs. eBay lawsuit mentioned in the case. Identify each main argument of both the plaintiff and the defendant. If there has been a settlement, what were the terms? If the case has been tried in the courts, what was the verdict? What have been the implications of the lawsuit for counterfeits sold on online auctions?

• According to the passage, Tiffany & Company, the New York retailer renowned for its expensive jewelry, files a lawsuit against online auctioneer eBay in mid-2004. Tiffany 's suit alleges that eBay contributed directly to infringement of the Tiffany trademark because of the "substantial volume" of counterfeit Tiffany jewelry sold through eBay's website. If the case has been tried in the courts, the verdict might be Tiffany & Company win the case because it has the right to protect its products. Moreover, eBay should bear responsibility for the sale of counterfeit merchandise on its site.

Economic Systems and development Ethical Challenges

You are the CEO of a Canadian-Chinese joint venture that operate in China. Your Chinese partner is the People’s Liberation Army (PLA). The PLA has built a sprawling network of businesses enterprises that do everything from raise pigs to run airlines and hospitals, mine coal, manage hotels, and operate paging and cellular networks. As a business conglomerate, of cause, the PLA partners with international investors.

Some argue that a large portion of foreign investment going to China is with companies and cartels controlled by the Chinese military. Others argue that it’s easy to read too much into the PLA’s foray into business. They point out that there is little centralized coordination among the thousands of businesses with military affiliations, and that some companies are run by retired officers, others by civilians. As the CEO of the joint organization do you have any ethical concerns about partnering with the PLA? If so, what are they? Supposed a clash between pro-democracy demonstrators and the PLA turns bloody.

How would this turn of events affect business relations with your PLA partner? Are the ethical issues of partnering with the Chinese military and different from those that arise from exporting to China? Why or why not?

• As the CEO, I do concern about partnering with the PLA because PLA is very powerful in the Chinese market and it has built a sprawling network of businesses and enterprises that do everything from raise pigs to run airlines and hospitals, mine coal, and manage hotel, operate paging and cellular networks. If I interrupt or do something wrong, my business might behave problems.

If there is a clash between pro-democracy demonstrators and the PLA turns bloody, I would support my PLA partner. The ethical issues of partnering with the Chinese military are different from those that arise from exporting to China.

You are the managing director of your U. S. firm subsidiary in southern France. The social-welfare states of Western Europe were founded after the Second World War with specific ethical considerations in mind: Reduce social and economic inequality; improve living standards for the poor; and provide early free health care for all. Now many of these countries have trimmed social-welfare provisions and increased their reliance on market forces. Do you think that the ethical concerns of a half a century ago are a thing of the past? Or do you feel that market reforms will simply recreate the conditions that motivated the development of the welfare state in the first place? What can you do as a manager to alleviate workers’ fears that a more open economy will reduce their social safety net?

• In my opinion, I think the ethical do concerns of a half a century ago are the thing of the past, and I feel that market reforms will simply recreate the conditions that motivated the development of the welfare state in the first place. All I can do is providing a stable fiscal and monetary environment for my employees that help their social safety net; moreover, such conditions reduce the risks associated in the future.

PIMC: Talkin’ ‘Bout a Revolution

Why do you think the Cuban government requires non-Cuban businesses to hire and pay workers only through the government? Do you think it is ethical for non-Cuban businesses to enter into partnerships with the Cuban government? Why or why not?

• I think the Cuban government requires non-Cuban businesses to hire and pay workers only through the government because the government wants to get more benefits and I think it is not right to do so. I think it is none ethical for non-businesses to enter into partnerships with the Cuban government. As according to the passage, why do companies investing in Cuba put up with such restrictions? For one thing, they are getting the great return on their investment.

Because of Cuba's assets are incredibly cheap, and the potential return is huge, on the other hand, people are very poor because the government takes advantage of them. The Cuban government should give some benefits back to its people and let non-Cuban businesses to hire and pay workers through them.

“ See Cuba before Castro dies,” is the chant of some young travelers reacting to reports that Fidel Castro’s health is declining. Do some research on Cuba, and describe a scenario for economic transition in the event that the Castro regime collapses.

How do you think that transition to a market economy in Cuba would be the same as, or different from, the transitions now taking place in Russia and China?

• In my opinion, the transition to a market economy in Cuba would be different from the transition now taking place in Russia and China. It's hard to say because of political leader, economic events and historical eras in Cuba is different from Russia and China. Moreover, Cuba had already attracted investments from many businesses from other countries, largely drawn by its highly qualified workforce, near-perfect literacy rate, and demand for foreign products and services.

Besides its trade embargo against Cuba, the United States also has enacted a law that permits U. S. companies to sues companies from other nation that traffic in the property of U. S. firms nationalized by Castro when he took over. The law also empowers the U. S. government to deny entry visas to the executives of such firms as well as their families. Why do you think the United States maintains such a hard time against doing business with Cuba? Do you think this embargo is in the United States’ best interests? Why or why not?

• I think the structure and relationship of the American political system is very influence the existence and specification of the trade embargo. Every about trade controls that directly affect quantity and indirectly affect price include quotas, VERs, buy local legislation, arbitrary standards, licensing, arrangements, foreign exchange controls, administrative delays, and requirements to take goods in exchange must depends on it. Therefore, the United States maintains such a hard line against doing business with Cuba.

International Trade

If the nations of the world were to suddenly cut off all trade with one another, what product might you no longer be able to obtain in your country? Choose one other country and identify the products it would need to do without.

• If the nations of the world were to suddenly cut off all trade with one another, I think oil might no longer be able to obtain in my country. For example, I think Brunei is able to obtain oil because it has this resource in the country. Brunei does not need to import oil from the nations and it does not have any problems if the nations were suddenly cut of all trade.

Many economists predict the eventual rise of China as a “Superpower” because of economic reform, along with the work ethic and high education of its population. How do you think trade between Asia, Europe, and North America will be affected by China’s continued development?

• I think the trade between Asia, Europe, and North America will be affected by China's continued development because China is one of the most powerful market in the world today, and the products and labors in china are much cheaper than Asia, Europe, and North America.

According to the passage, Data reveal why headlines in the United States often complain that Asia's markets are not open to goods from North America, but open for China to export goods to their country.

Because of its abundance of natural resources, Brazil was once considered a nation certain to attain advanced economic status quickly. Yet over the past two decades Brazil has sometimes been referred to as an economic ”basket case. ” What forces do you think are preventing Brazil’s economic progress?

• I think in the Brazil case, I think advanced factors are preventing. Brazil's economic progress. Advanced factors include things such as the skill levels of different segments of the workforce and the quality of the technological infrastructure in a nation. Advanced factors are the result of investments in education and innovation such as worker training and technological research and development. Whereas the basic factor can be the initial spark for why an economy begins producing a certain product, advanced factors account for sustained competitive advantage a country enjoys in that product.

You are a research fellow for a Washington, D. C. based research institute investigating the ethics of restrictions on the international movement of labor. In the practice of international trade, both physical resources and capital cross international borders rather freely, whereas labor is heavily restricted. In fact, it can be extremely difficult for individuals to obtain the permit that allows them to gainfully employed within many countries. Thus, while companies are free to set up production in markets where labor is cheap, labor cannot move to markets where wages are higher.

Some argue this locks poor people to their poor geographies and gives them little hope for advancement. Why do you think this situation prevails? Is it ethical that of all the components of production, labor is the one most subject to restrictions on its international mobility? Explain.

• I think this situation prevails in some countries not majority of them. If the companies are free to set up production in markets, and give labor more wages so labor can move to markets where wages are higher.

In some developing countries, the wages still low, it is hard to make it up because it is extremely difficult for individuals to obtain the permit that allow them to gainfully employed within many countries.

You are the production manager for a European based on firm that is considering outsourcing its manufacturing to a producer in China. You are asked by your firm’s CEO to prepare a report that outlines the benefits and drawbacks of this potential change. During your research, you consider the act that international trade theories propose that protectionist actions that restrict imports harm a nation’s standard of living –an argument for free trade. Yet, you know that free trade and global competition is driving firms like your own to move production to cheaper locations aboard, thereby eliminating jobs in their home countries. Clearly the gains and losses of free trade are not always distributed evenly across the population. As part of your report to the CEO, argue either for or against the need for measures that protect domestic production and; therefore , job at home.

• I will agree about the need for measures that protect domestic production and job at home. Because of the fact that international trade theories propose that protectionist actions that restrict imports harm a nation’s standard of living. Although, it is t the right thing to choose a country like China where the productions are very cheap, but on the contrary, in the home country people will unemployment and do not have money to spend for their family. I know that free trade and global competition is driving firm like your own to move production to cheaper aboard , thereby eliminating jobs in their home countries.

You are a member of a World Trade Organization task force that is reviewing the recent banana conflict between the United States recently ended a nine-year battle over trade in bananas. The European Union was giving preferential treatment to banana exporters from Africa, the Caribbean, and the Pacific island nations. But the United Stated challenged what it saw as unfair trading practices, and the World Trade Organization agreed. Large global fruit companies such as Dole, Chiquita, and Del Monte—which alone account for nearly two-thirds of fruit traded worldwide—supported the U. S. action.

The European Union argued it was trying to support struggling economies, for which bananas make up a large portion of their income. Discuss the ethics of managing trade in the interests of countries vulnerable in the global economy. Would you have argued on behalf of the United States or European Union? Why? What are the pros and cons of each side’s arguments?

• I would argue on behalf of the European Union because it was unfair trading practices. The pros because large global fruit companies such as Dole, Chiquita, and Del Monte which alone account for nearly two-thirds of fruit traded worldwide supported the United States action.

The cons, the European argued it was try to support struggling economies, for which bananas make up a portion of their income. The ethics of managing trade in the interests of countries vulnerable in the global economy is not fair because WTO wants to help the free flow of trade, to help negotiate further opening of markets, and to settle trade disputes between its member, but the European Union was giving preferential treatment to banana exporters from Africa. The European should take the same treatment.

PIMC: First in Asia and the world

As the first to set up an international air express business in 1969, DHL has the first-mover advantage over other companies. Is being a first mover as advantageous for a service company, such as DHL worldwide Express, as it is for a manufacturing company, such as Boeing? Explain.

• I think as the first to set up an international air express business, DHL is being a first mover as advantageous for a service company as it is for a manufacturing company. Anyway, Express air delivery is now a huge business in Asia, but DHL has several formidable competitors snapping at its heels. These include Federal Express, which offers competitive rates, and local players like Hong Kong Delivery, whose small size makes it highly flexible.

When it comes to global expansion and setting up affiliates abroad, how is a service company’s focus different from that of a manufacturing company? What elements are necessary for a service company to achieve global success? What are the obstacles to global expansion?

• I think when it comes to global expansion and affiliates aboard, the service company's more focus on customer service and reliability.

For example, DHL, the company hires DHL personnel in the countries in which it operates and sees this practice as keys to fogging relationship with customers in overseas markets. Anyway, there are the obstacles to global expansion such as local players, the dangers of complacency, prices.

DHL prides itself on having its own full-time staff of more than 160,000 people spread across the globe instead of relying on the local agents. Discuss the merits and drawback of this international staffing approach.

• The international staffing approach of DHL is pretty good comparing with other international express companies.

The merits as according to the passage, many of them based in Asia, the company's first and most important international market, and the personnel in the countries in which it operates will know how to deal and success in the business in their own countries. Therefore, it is not difficult for DHL Worldwide Express. About the drawback, I think it is not so important because DHL give the jobs for local employees, and they have money to spend and take care of the family.

After reading the above case, what do you think are the dangers, if any, of being a first mover.

• I think it is very risk to be the first mover to set up an international air express business, but the DHL does it good in many ways and very successful in many countries in the world shipping today. Moreover, the demonstrating its commitment to remaining the best in its class, in 2003 DHL orchestrated a successful merger with Airborne Express that continued into 2004, and customers of the new DHL are empowered with more choices in their shipping options than ever before, as they reap the benefits of the most extensive global transportation network in the industry.

Business-Government Trade Relations

Imagine that people in your nation are convinced that international trade is harmful to their wages and jobs and that you can task is to change their minds. What kind of programs would you implement to educate your people about the benefits if trade? Describe how each would help change people’s attitudes.

• In my opinion, I think it is wrong that the people in my nation think that international trade is harmful to their jobs and wages. Anyway, it is difficult to change their attitudes so I will provide working capital guarantee program for them.

This program will helps such a small and medium-size businesses that have exporting potential but lack the needed fund by encouraging commercial lenders to loan them money. The bank guarantee covers 90 percent of the loan’s principal and accrued interest. Therefore, people in my countries will know exactly that international trade is not harmful, so they can make a good benefit from them.

Most countries create a list of “hostile” countries and require potential exporters to those nations to apply for special permission before they are allowed to proceed. Which countries and products would you place on such a list for your nation, and why?

• Vietnam would be a hostile country for my nation because this country has the same products as Thailand. When Thailand exports rice, food, fruits, cloths and etc. , Vietnam exports all goods as well. The prices are the problems because Vietnam offers lower costs than Thailand.

Two students are discussing efforts within global trading system to reduce trade ‘s negative effects on the environment . one student says, “ Sure, there may be pollution effects , but there a small price to pay for a higher standard of living.

The other student agrees saying, ‘ Yeah, those three huggers’ are always exaggerating those effects any way. Who cares if some little toad in the Amazon goes extinct? I sure don’t ,” What counterarguments can you offer to these students?

• I think the two students care about the higher standard of living and do not even care about the pollution problems. I will counterarguments with them about of concern to many people are levels of carbon dioxide emission, the principal greenhouse gas, believe to contribute to global warning.

Because of most carbon dioxide emission are create from burning of fossil fuels and the manufacturer of cement. If they want to live with that their health might be destroy by the pollutions and have short lives.

PIMC: Unfair Protection or Valid Defense?

“ You can’t tell consumers that the low price they are paying for that fax machine or automobile is somehow unfair. They‘re not concerned with the profits of some company. To them, it’s just a great bargain and they want to continue. “Do you agree with this statement?

Do you think that people from different cultures could respond differently to this statement? Explain

• To me, I think it is not a big deal for the consumer that pay for the low price for that fax machine or automobile. I do not agree with this statement and I believe that people from different cultures could respond differently to this statement. It is such a great bargain for a company to do business. If the company wants to success in the business in this globalization, they need to deal with automobile and to be continued.

As we have seen, currently the WTO cannot get involved in punishing individual companies—its actions can only be directed toward governments of countries. Do you think this is a wise policy? Why or why not? Why do you think the WTO was not given authority to change individual companies with dumping? Explain.

• I think it is such a wise policy because the government in each country can control the whole country directly. No matter what the governments do, the companies should follow the rule. I believe that the international business cannot survive with out government support.

The reason why the WTO was not given authority to change individual companies with dumping because only the governments can have the right to have authority to punish companies. It can only pass ruling against the government of the country that imposes and antidumping duty.

Identify a recent antidumping case that was brought before the WTO. Locate as many articles in the press as you can that discuss the case. Identify the nations, product(s), and potential punitive measures involved. Supposing you were part of the WTO’s dispute settlement Body, would you vote in favor of the measures taken by the retaliating nation? Why or why not?

• If I were the part of the WTO’s dispute settlement Body, I would vote in a favor of the measures taken by the retaliating nation. According to the passage, alternatives to bringing antidumping cases before the WTO do exist U. S. President George w. Bush relied on a section 201 or global safeguard investigation under U. S. trade law in 2002 to slap tariffs of up to 30 percent on steel imports. The U. S. steel industry had been suffering under an onslaught of steel imports from many nations, including Brazil, the European Union, Japan, and South Korea.

Yet, nations still brought complaints about the action before WTO. Moreover, supporters of antidumping tariffs claim that they prevent dumpers from undercutting the prices charged by producers in a target market, driving them out of business.

Foreign Direct Investment PIMC: Mercedes-Benz

What do you think were the chief factors involved in Mercedes’ decision to undertake FDI in the United States rather than build the M-Class in Germany? In my opinion, I think the people from the U. S. is prefer M-Class to the people in Germany, and in the United States the population is higher than in the Germany.

Therefore, the demand is more than Germany. Labor costs in the U. S. Deep South are 50 percent lower than in Germany. Also, Alabama offered an attractive $250 million in tax refunds and other incentives to win the much needed Mercedes jobs. Moreover, Mercedes also wanted to be closer to the crucial U. S. market and to create a plant from the ground up, one that would be a model for its future international operations.

Why do you think Mercedes decided to build the plant from the ground up in Alabama rather than buy an existing plant in, say, Detroit?

List as many reasons as you can, and explain your answer.

• Creating a plant from the ground up that would be a model for its future international operations.
• The plant is also designed so that workers can unilaterally stop the assembly line to correct manufacturing problems.
• The system has been a catalyst to communication among the Alabama plant’s 1,500 U. S. workers, German trainers, and diverse management team that includes executives from both Detroit and Japan.

Do you think Mercedes risks diluting its” Made in Germany” reputation for engineering quality by building its M-class in Alabama? Why or why not?

• I think it is no risk diluting its reputation for engineering quality by building its M-class in Alabama. According to the passage, Mercedes spent an enormous amount of time and effort to train its U. S. workforce. So far the Mercedes’ M-class is competing very well against the entrenched competition. The company is also gaining valuable experience in how to set up and operate a plant in another country.

What do you see as the pros and cons of Mercedes’ approach to managing FDI - abandoning the culture and some of practices of its home country?

What are the pros and cons of the approach of the Japanese carmakers—trying to duplicate the culture and production practices of the home country? The pros of Mercedes of the Japanese carmakers, when Japanese carmakers entered the U. S. market in the 1980s, they reproduced their car-building philosophies, cultures, production practices, and management styles in the United States. The cons of Mercedes of the Japanese carmakers, Mercedes started with the proverbial blank sheet of paper; moreover, Mercedes had to abandon the rigid hierarchy of the typical Mercedes production line and create a more egalitarian shop floor.

Regional Economic Integration

It is likely that the proliferation and growth of regional trading blocs will continue into the foreseeable future. At what point do you think the integration process will stop( if ever)? Explain your answer.

• I believe that the integration will never stop and it is likely that the proliferation and growth of regional trading blocs will continue into the foreseeable future. According to the passage, a group of nations in a geographic region undergoing economic integration is called a regional trading bloc.

There are five potential levels of integration in corporate the properties of those preceding it; such as, a free trade area, a custom union, a common market, an economic union and a political union. It is no doubt that is why the growth of regional trading blocs will continue into the foreseeable future.

Some people believe that the rise of regional trading blocs threatens free-trade progress made by the World Trade Organization (WTO). Do you agree? Why or why not?

• I believe that the rise of regional trading blocs threatens free-trade progress made by many groups such as WTO, NAFTA, CAFTA, ALADI, EFTA, EU, EEA, MERCOSUR, CARICOM, CACM, FTAA, ASEAN, APEC, AU and GCC. All these associations help the rise of trading blocs threatens free-trade progress that impact in people’s job. Because trading blocs significantly reduce or eliminate barriers to trade among members, the nation that supplies a particular good or service is likely to be the most efficient nation at creating that product.

Certain groups of countries, particularly in Africa, are far less economically developed than other regions, such as Europe and North America. What sort of integration arrangement do you think developed countries could create with less-developed nations to improve living standards? Be as specific as you can.

• I believe that the Economic Community of West African States (ECOWAS) and the Organization of African Unity (AU) can help to improve living standards in Africa. According to the passage, (ECOWAS) was formed in 1975 but relaunched its efforts at economic integration in 1992 because of a lack of early progress.

One of the important goal of ECOWAS is the formation of a customs union and eventual common market. And the ambitious goals of the AU are to promote peace, security, and stability across Africa, and to accelerate economic and political integration while addressing problems compounded by globalization.

Talk to the Web

In this chapter, we explored the trend toward greater integration of national economies, understanding the potential benefits and drawbacks of regional integration. One proposed regional agreement we covered was the Free Trade Area of Americas ( FTAA).

• Visit the official Web site of the FTAA ( www. alca-ftaa. org). What are the stated reasons why government across the Americas are pushing for the free trade area? Now visit the Web site of a group determined to derail the FTAA (www. stoptheftaa. org). What are the reasons why the anti-FTAA group is protesting its implementation? Do you think the FTAA would help lift the living standards for people in the smallest countries (such as Ecuador or Nicaragua)? Or would the FTAA only be a boon for the largest nations such as Brazil, Canada, and the United States?

Small companies typically have difficulty competing against large multinationals when their governments take part in regional trading blocs. What could governments do to help their small companies complete after the formation of such blocs small nations can really strengthen their negotiating positions against large nations? Do you think that very small nations can really strengthen their negotiating against large nations? Do you think that very small nations should even participate in regional trade agreements with very large nations?

Why or why not? Do you think that sub regional trade agreements cause instability on a sub regional, regional, or global scale, or do you believe they foster cooperation? Explain your answer. After all you have read in this chapter about regional trade agreements, what is your assignment of their value? Should their progress continue or be rolled back? `

• The reason for the effort to unite the economies of the Americas into a single free trade area began at the Summit of the Americas, which was held in December 1994 in Miami, U.S.A. The Heads of State and Government of the 34 democracies in the region agreed to construct a Free Trade Area of the Americas, or FTAA, in which barriers to trade and investment will be progressively eliminated. They agreed to complete negotiations towards this agreement by the year 2005 and to achieve substantial progress toward building the FTAA by 2000. The Heads of State and Government further directed their ministers responsible for trade to take a series of concrete initial steps to achieve the Free Trade Area of the Americas.

Their decisions regarding these steps are contained in the Miami Summit's Declaration of Principles and Plan of Action. The reason why the Anti-FTAA is protesting its implementation might be because the JBS STOP the FTAA! Campaign has been put on hold due to the virtual disappearance of the Bush administration's Free Trade Area of the Americas (FTAA) initiative since sometime in 2005. If the American public and Congress permit the current Security and Prosperity Partnership/North American Union process to proceed, then we can expect a resuscitation of the FTAA project somewhere down the road.

I believe that small nations cannot really strengthen their negotiating position against large nations, but I think the small nations should even participate in regional trade agreements with very large nations. After I read this chapter, I think their progress should be continued because it is a good thing that the main regional trade agreements efforts throughout the world today. Such efforts are occurring despite debate over their merits and demerits. Moreover, regional economic integration can provide consumers and industrial buyers with greater choice at lower prices, improve firm productivity, and boost national competitiveness.

PIMC: Tainted Trade; Increasing Imports Brings Increase in Illness

How do you think countries with a high volume of exports to the United States, such as Mexico, would respond to stricter food-safety rules? Do you thinks such measures are a good way to stem the tide of food-related illnesses? Why or why not?

• I believe that Mexico should respond to stricter food-safety rules because it is such measures are a good way to stem the tide of food-related illnesses. Nobody wants to get sick because of eating bad food and I believe that Mexico should have ethical to strict its rules before exporting food to the United States. Moreover, the United States should tighten further the ban on importing fruit and vegetables from countries that do not meet expanded U. S. food-safety standards. More money should give to the FDA to enable it to hire investigators to inspect more fully not just produce but also farming methods and government safety systems.

Sue Doneth of Marshall, Michigan, is a mother of one of the schoolchildren who was exposed to the hepatitis A virus after eating tainted frozen strawberry desserts. Speaking before Congress she said,” We are forcing consumers to trade the health and safety of their families for free trade. That is not fair trade. NAFTA is not a trade issue; it is a safety issues. ” Do you think food-safety regulations should be built into as extension of NAFTA? Why or why not? What are the benefits and drawbacks of putting food-safety regulations into international trade pacts?

• I think food-safety regulations should be built into as extension of NAFTA because the NAFTA should not abandon consumer’s health and life. People need to live longer and need healthy food. Canada, Mexico and the United States should be responsible for their people and I believe that there are more benefits than drawbacks of putting food-safety regulations into international trade pacts. The good point for the trading partner is people can trust and have more demand to buy the foods and products between countries without scaring illnesses.

The lack of harmonized food-safety practices and standards is just one of the challenges faces by the food industry as it becomes more global. What other challenges face the food industry in an era of economic integration and opening markets?

• The prices are the matters, people like to buy good food, high qualities, but low prices. The food industry needs to make a similar product, and similar price to response their desire to raise standard of living.

International Strategy & Organization

This chapter explored different international strategies and the corporate-, business-, and department level strategies that companies use. Altria Group is the parent company of global giants Kraft Foods and Philip Morris. Visit the Web site of Altria (www. altria. com) . What corporate-level strategies do you think Altria is pursuing in its different businesses? Visit the Web sites of Kraft Foods(www. Kraft. com) and Philip Morris (www. philipmorris. com)-- both their domestic and international operations. What business-level strategies do you think is being pursued by(a)Kraft, and (b) Philip Morris? In 2001, Kraft was spun off with an initial public offering of Kraft’s stock.

Why do you think this action was taken at the time? Do you think this action was taken at the time? Do you think it had anything to do with the mix of businesses that then parent Philip Morris was involved in? Why or why not? Identify as many stakeholders of Altria, Philip Morris, and Kraft Foods as you can. Aside from past smoking-related lawsuits, are there any trends that encouraged Kraft’s independence?

• Altria Group has an Executive Diversity Council, which is supported by senior company leaders. Its role is to unite the diversity efforts of all business areas by aligning, coordinating and communicating about these efforts.

Their cross-functional diversity efforts are coordinated through Human Resources. The employee diversity representatives on the Executive Diversity Council keep them informed about issues and needs among their employees. These representatives also communicate with their internal business units about diversity training and events. Their strategy is Creating reliable, consistent growth. That's what they're doing at Kraft, and their strategies are focusing our efforts. In 2001, Kraft held an initial public offering (IPO) for 16% of its shares, which. helped to pay off some of the debt incurred from the Nabisco.

As part of the acquisition, which Philip Morris expects to be completed by October, Nabisco will be folded into Kraft Foods Inc. , the operating food company of Philip Morris. Interestingly, following the combination, Kraft plans to undertake an initial public offering (IPO) for less than 20 percent of the newly combined company. The IPO proceeds will be used to retire a portion of the debt incurred as a result of the acquisition of Nabisco.

You are the CEO of a multinational corporation that operates in more than 100 nations worldwide.

Recent changes in the global economy (such as the expansion of the European Union in 2007 to now include 27 nations) are redrawing interdependence of socially, politically, economically, and legally diverse countries is causing firms to revise operating policies and strategies. You are personally involved in developing a code to be effective across all markets in which it operates. Given the complexity of the issues involved, what sort of policy do you think is appropriate for a firm involved in dissimilar nations? Do you think that is possible to create a uniform code of ethics that is applicable to any business operating in any culture? What issues should such a code address?

• The complexity of the issues involved about two international strategies, the strengths and special capabilities of an international company, along with the environmental forces it faces, strongly influence its strategy. Companies engaged in international business activities can approach the market using either a multinational or a global strategy. It is important to note that these two strategy do not include companies that export. Anyway, I believe that is possible to create a uniform code of ethics that is applicable to any business operating in any culture. If a company’s organizational structure is appropriate for its strategy plans, it will be more effective in working toward its goals.

You are a member of an international ethics commission assembled by the WTO. Your team has been asked to assess the global tactics of Microsoft in recent years. A primary issue is whether Microsoft took unfair advantage of its powerful position in the computer industry by using “ strong arm tactics” on software customers, and by crushing weaker rivals. Regardless of whether or not Microsoft is guilty of anticompetitive acts in a legal sense, o you believe Microsoft has conducted itself ethically in its business dealings? Do you argue that Microsoft has abused its power in the industry, or is simply a tough competitor? Do you think the WTO should develop a policy on the competitive tactics of global powerhouses such as Microsoft? Why or why not?

• I believe that Microsoft has conducted itself ethically in its business dealings and I think that is no point of felling guilty about crushing weaker rivals. Even though, Microsoft is kind like expensive, but it has strong arm tactics on software customers. It is such a tough competitor and I think that the WTO should develop a policy on the competitive tactics of global powerhouses such as Microsoft because the customers could buy the products in the low prices.

You are the new president of Star Manufacturing, an international subsidiary of a large multinational firm that makes automotive parts. Since you arrived at Star three month ago, you are finding it difficult to get your firm’s materials and finished products through customs quickly. Local legal counsel suggests a payment to local officials to estimate your problem with customs, an apparently common local practice.

The bribe would expedite the entire shipping process, which will help improve profits. What do you do? Is there a specific policy your firm could develop that all Star employees could follow? What other issues must you consider? If additional information would be helpful to you, what would it be?

• I will pay for the local officials to estimate my problem with customs if it will help improve my profits. I know the problems is hard to get my firm’s materials and finished products through customs quickly, so I will try to change my entire organization structure to reap the benefits that cross-functional cooperation provides.

Another issues that helpful for me is the cultural differences which are important to managers who design teams in international operations. PIMC: The Global Strategy of IKEA 1. Has IKEA taken a standardization approach or an adaptation approach in its markets around the world? Do you think the company’s approach is the right one for the future? Explain.

• In my opinion, IKEA is taken their own standardization approach. “IKEA is on the way to becoming the Wal-mart Stores of the home-furnishing industry. ” These words describe so perfectly. Their stratagem is low price.

For this goal, they let their customers do more things when they shopping IKEA furniture, they didn't provide more service; make design simple, more function and so on. All approach is for this goal. Moreover ,this company's approach is right. Wal-mart is a good example. Low price will have a large market and it works already. And they did the low price strategic in the furniture business area just in time. IKEA just make their own style already and successful. 2. Which retailers do you think will be IKEA’s biggest competitors in the United States? Why?

• I think Lexington Furniture Industries will be IKEA ‘s biggest competitors. Moreover, the low price style furniture companies and whole sale super markets will be the competitors for IKEA in the Unite States. Because they have same market, and service some type of consumers.

Company founder Kamprad recently decided to expand into China. Kamprad’s decision was not based on market research but, rather, on his own intuition. Find a recent article in the business press or check IKEA’s Web site to update the company’s China strategy. Did Kamprad’s decision pay off?

• In my opinion, it a good idea for Kamprad decided to expand into China, and spending millions on advertising to get its message across.

Anyway, IKEA opened a few stores in some big cities in China already, and it's doing very well because China is a big market in the world today. And IKEA is already successful in developed countries ,so their brand impact is their big advantage for Chinese customers. There is a huge group of customers for low price in China, I think IKEA will have a good market in China.

Analyzing International Opportunities

For many global companies, China represents a highly attractive market in terms of size and growth rate.

Yet China ranks lower in terms of economic freedom and higher in political risk than do some other countries. Despite these risks, hundreds of companies have established manufacturing operation in China. In large part this is because the Chinese government makes selling in China contingent on a company’s willingness to locate production there. The government wants Chinese companies to learn modern management skills from non-Chinese companies and to acquire technology. Some believe that Western companies are bargaining away important industry know-how in exchange for sales today by agreeing to such conditions.

Should companies go along with China’s terms, or should they risk losing sales by refusing to transfer technology? What do you think might be the long-term results of either solution?

• Because of China represents a highly attractive market in terms of size and growth rate, so China is a hottest topic in the world today. Doing business in China will have a lot of opportunities to success . If you don't enter this market, hundreds of companies will investment in China . But it depends how technologies you have. If you company based on this technologies, I don't think it's a good idea to do that.

Moreover, after you run a long time, maybe some Chinese company will do the same business as you. But you company already have your own customers and market. The other companies can not catch you at the short time, so you can keep your advantages and you can invest in another area as well.

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