Question: After a promising start, Mercosur, the major

> Read the Management Focus feature titled Did Walmart Violate the Foreign Corrupt Practices Act? What is your opinion? If you think it did, what do you think the consequences will be for Walmart?

> You are the CEO of a company that has to choose between making a $100 million investment in Russia or Poland. Both investments promise the same long-run return, so your choice is driven by risk considerations. Assess the various risks of doing business i

> What is the relationship between corruption in a country (i.e., bribe-taking by government officials) and economic growth? Is corruption always bad?

> Vietnam now has an economy that is growing strongly with low unemployment and rising living standards. What changes in economic policy have been responsible for this economic transformation?

> Why did Vietnam experience a low economic growth rate in the decade after the end of the Vietnam War in 1976?

> How do you think a shift toward more democratic institutions will affect economic progress in Vietnam?

> Can you think of any unintended consequences that might occur as the result of the imposition of antidumping duties on Chinese steel imports by the United States and the EU?

> The level of public corruption in Vietnam is high. Why is this the case? How do you think this affects Vietnam’s economic performance? What should the government do about this?

> Describe the shifts in the world economy over the last 30 years. What are the implications of these shifts for international businesses based in Great Britain? North America? Hong Kong?

> If a firm is changing its strategy from an international to a transnational strategy, what are the most important challenges it is likely to face in implementing this change? How can the firm overcome these challenges?

> What is the most appropriate organizational architecture for a firm that is competing in an industry where a global strategy is most appropriate?

> Describe the organizational architecture a transnational firm might adopt to reduce the costs of control.

> Discuss this statement: “An understanding of the causes and consequences of performance ambiguity is central to the issue of organizational design in multinational firms.”

> Can a company be good at corporate social responsibility but not be sustainability oriented? Is it possible to focus on sustainability but not corporate social responsibility? Based on reading the section on Implications for Business Practice, discuss ho

> Milton Friedman stated in his famous article in the New York Times in 1970 that “the social responsibility of business is to increase profits.” Do you agree? If not, do you prefer that multinational corporations adopt a focus on corporate social responsi

> A manager from a developing country is overseeing a multinational’s operations in a country where drug trafficking and lawlessness are rife. One day, a representative of a local “big man” approaches the manager and asks for a “donation” to help the big m

> Do you think facilitating payments (speed payments) should be ethical? Does it matter in which country, or part of the world, such payments are made?

> Are the EU and the United States correct to impose significant antidumping duties on imports of Chinese steel? What will the benefits of such policy be? Are there any drawbacks?

> Under what conditions is it ethically defensible to outsource production to the developing world where labor costs are lower when such actions also involve laying off long-term employees in the firm’s home country?

> Drawing upon John Rawls’s concept of the veil of ignorance, develop an ethical code that will (a) guide the decisions of a large oil multinational toward environmental protection, and (b) influence the policies of a clothing company in the potential deci

> The choice of strategy for a multinational firm must depend on a comparison of the benefits of that strategy (in terms of value creation) with the costs of implementing that strategy (as defined by organizational architecture necessary for implementation

> What do you see as the main organizational problems that are likely to be associated with implementation of a transnational strategy?

> Reread the Management Focus on Procter & Gamble, and then answer the following questions: a. What strategy was Procter & Gamble pursuing when it first entered foreign markets in the period up until the early 1980s? b. Why do you think this strategy becam

> In what kind of industries does a localization strategy make sense? When does a global standardization strategy make most sense?

> Plot the position of the following firms on Figure 13.6: Procter & Gamble, IBM, Apple, Coca Cola, Dow Chemical, Intel, and McDonald’s. In each case justify your answer.

> In a world of zero transportation costs, no trade barriers, and significant differences between nations with regard to factor conditions, firms must expand internationally if they are to survive. Discuss.

> Reread the Country Focus on Secularism in Turkey, then answer the following questions: a. Can you see anything in the values and norms of Islam that is hostile to business? b. What does the experience of the region around Kayseri teach about the relation

> Choose two countries that appear to be culturally diverse. Compare the culture of those countries and then indicate how cultural differences influence (a) the costs of doing business in each country, (b) the likely future economic development of that cou

> What alternative policy might China pursue? What are the costs and benefits of this alternative policy to China?

> Do you think that business practices in an Islamic country are likely to differ from business practices in a Christian country? If so how?

> Outline why the culture of a country might influence the cost of doing business in that country. Illustrate your answer with examples.

> Reread the Management Focus on China and Its Guanxi, then answer the following questions a. Why do you think that it is so important to cultivate guanxi and guanxiwang in China? b. What does the experience of DMG tell us about the way things work in Chin

> Happy Company wants to raise $2 million with debt financing. The funds are needed to finance working capital, and the firm will repay them with interest in one year. Happy Company’s treasurer is considering three options: a. Borrowing U.S. dollars from S

> A firm based in Mexico has found that its growth is restricted by the limited liquidity of the Mexican capital market. List the firm’s options for raising money on the global capital market. Discuss the pros and cons of each option, and make a recommenda

> In 2008‒2009, the world economy retrenched in the wake of a global financial crisis. Did the globalization of capital markets contribute to this crisis? If so, what can be done to stop global financial contagion in the future?

> Why has the global capital market grown so rapidly in recent decades? Do you think this growth will continue throughout the next decade? Why?

> Reread the Country Focus on the U.S. dollar, oil prices, and recycling petrodollars, then answer the following questions: a. What will happen to the value of the U.S. dollar if oil producers decide to invest most of their earnings from oil sales in domes

> Imagine that Canada, the United States, and Mexico decide to adopt a fixed exchange rate system. What would be the likely consequences of such a system for (a) international businesses, and (b) the flow of trade and investment among the three countries?

> Debate the relative merits of fixed and floating exchange rate regimes. From the perspective of an international business, what are the most important criteria for choosing between the systems? Which system is the more desirable for an international busi

> Uber’s strategy has been to break these regulations, establishing its service first, and then fighting attempts by regulators to shut the service down. This goes along with the old saying, “do first, ask questions later.” Is this business approach viable

> Do you think the standard IMF policy prescriptions of tight monetary policy and reduced government spending are always appropriate for developing nations experiencing a currency crisis? How might the IMF change its approach? What would the implications b

> What opportunities might current IMF lending policies to developing nations create for international businesses? What threats might they create?

> Why did the gold standard collapse? Is there a case for returning to some type of gold standard? What is it?

> You are the CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufactures component parts for your U.S. assembly operations. The subsidiary has been financed by bank borrowings in the United States. One of your analysts told you that the Mexica

> You manufacture wine goblets. In mid-June you receive an order for 10,000 goblets from Japan. Payment of ¥400,000 is due in mid-December. You expect the yen to rise from its present rate of $1 = ¥130 to $1 = ¥100 by December. You can borrow yen at 6 perc

> Reread the Management Focus on Embraer, then answer the following questions: a. What does the recent economic history of Brazil tell you about the relationship between price inflation and exchange rates? What other factors might determine exchange rates

> Two countries, Great Britain and the U.S., produce just one good: beef. Suppose that the price of beef in the U.S. is $2.80 per pound, and in Britain it is £3.70 per pound. a. According to PPP theory, what should the $/£ spot exchange rate be? b. Suppo

> The interest rate on South Korean government securities with one-year maturity is 4 percent and the expected inflation rate for the coming year is 2 percent. The interest rate on U.S. government securities with one-year maturity is 7 percent, and the exp

> Read the Management Focus feature in this chapter, “NAFTA’s Tomato Wars,” then answer the following questions: a. Was the establishment of a minimum floor price for tomatoes consistent with the free trade principles enshrined in the NAFTA agreement? b. W

> Are cities around the world doing a disservice to citizens or visitors, or both, by banning it outright from operating in their community?

> How should a firm with self-sufficient production facilities in several ASEAN countries respond to the creation of a single market? What are the constraints on its ability to respond in a manner that minimizes production costs?

> How should a U.S. firm that currently exports to only ASEAN countries respond to the creation of a single market in this regional grouping?

> What were the causes of the 2010–2012 sovereign debt crisis in the EU? What does this crisis tell us about the weaknesses of the euro? Do you think the euro will survive the sovereign debt crisis?

> Do you think it is correct for the European Commission to restrict mergers between American companies that do business in Europe? (For example, the European Commission vetoed the proposed merger between WorldCom and Sprint, both U.S. companies, and it ca

> What in general was the effect of the creation of a single market and a single currency within the EU on competition within the EU? Why?

> What are the economic and political arguments for regional economic integration? Given these arguments, why don't we see more substantial examples of integration in the world economy?

> The world’s poorest countries are at a competitive disadvantage in every sector of their economies. They have little to export. They have no capital; their land is of poor quality; they often have too many people given available work opportunities; and t

> Drawing on the new trade theory and Porter's theory of national competitive advantage, outline the case for government policies designed to build a national competitive advantage in biotechnology. What kind of policies would you recommend the government

> Reread the Country Focus on moving white-collar jobs offshore. a. Who benefits from the outsourcing of skilled white-collar jobs to developing nations? Who are the losers? b. Will developing nations like the United States suffer from the loss of high-ski

> Reread the Country Focus feature, Is China Manipulating Its Currency in Pursuit of a Neo-Mercantilist Policy? a. Do you think China is pursuing an economic policy that can be characterized as neo-mercantilist? b. What should the United States, and othe

> Companies like Uber, Lyft (one of Uber’s main competitors), and Airbnb (an online marketplace that enables people to lease or rent short-term lodging) are innovating in fields that traditionally have been very complex and regulated. Can Uber’s business m

> What are the potential costs of adopting a free trade regime? Do you think governments should do anything to reduce these costs? What?

> Unions in developed nations often oppose imports from low-wage countries and advocate trade barriers to protect jobs from what they often characterize as “unfair” import competition. Is such competition “unfair”? Do you think that this argument is in the

> Is free trade fair? Discuss.

> Mercantilism is a bankrupt theory that has no place in the modern world. Discuss.

> NAFTA has produced significant benefits for the Canadian, Mexican, and U.S. economy. Discuss.

> You are the international manager of a U.S. business that has just developed a revolutionary new personal computer that can perform the same functions as existing PCs but costs only half as much to manufacture. Several patents protect the unique design o

> Read the Management Focus on Cemex and then answer the following questions: a. Which theoretical explanation, or explanations, of FDI best explains Cemex’s FDI? b. What is the value that Cemex brings to the host economy? Can you see any potential d

> What are the strengths of the eclectic theory of FDI? Can you see any shortcomings? How does the eclectic theory influence management practice?

> Compare and contrast these explanations of FDI: internalization theory and Knickerbocker's theory of FDI. Which theory do you think offers the best explanation of the historical pattern of FDI? Why?

> In 2008, inward FDI accounted for some 63.7 percent of gross fixed capital formation in Ireland, but only 4.1 percent in Japan (gross fixed capital formation refers to investments in fixed assets such as factories, warehouses, and retail stores). What do

> If you lived in a city with such diversity of people as Dubai, would you assimilate yourself with the people who are like you, or would you try to integrate into the overall community of all people?

> Reread the Management Focus, “Protecting U.S. Magnesium.” Who gains most from the antidumping duties levied by the United States on imports of magnesium from China and Russia? Who are the losers? Are these duties in the best national interests of the Uni

> You are an employee of an U.S. firm that produces personal computers in Thailand and then exports them to the United States and other countries for sale. The personal computers were originally produced in Thailand to take advantage of relatively low labo

> Given the arguments relating to the new trade theory and strategic trade policy, what kind of trade policy should business be pressuring government to adopt?

> Whose interests should be the paramount concern of government trade policy—the interests of producers (businesses and their employees) or those of consumers?

> Do you think that governments should consider human rights when granting preferential trading rights to countries? What are the arguments for and against taking such a position?

> Reread the Management Focus on Boeing and answer the following questions: a. What are the benefits to Boeing of outsourcing manufacturing of components for the Boeing 787 to firms based in other countries? b. What are the potential costs and risks to B

> If current trends continue, China may emerge as the world’s largest economy by 2030. Discuss the possible implications for such a development for (a) the world trading system; (b) the world monetary system; (c) the business strategy of today’s European-

> How does the Internet affect international business activity and the globalization of the world economy?

> Evaluate this statement: “Ultimately, the study of international business is no different from the study of domestic business. Thus, there is no point in having a separate course on international business.”

> How have changes in technology contributed toward the globalization of markets and production? Would the globalization of markets and production have been possible without these technological changes?

> What international staffing policy is AstraZeneca pursuing with regard to its “high-potential” employees?

> Evaluate this statement: “The study of international business is fine if you are going to work in a large multinational enterprise, but it has no relevance for individuals who are going to work in small firms.”

> You are the CFO of a Canadian firm that is considering building a $10 million factory in Russia to produce milk. The investment is expected to produce net cash flows of $3 million each year for the next 10 years, after which the investment will have to c

> You are the CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufactures component parts for your U.S. assembly operations. The subsidiary has been financed by bank borrowings in the United States. One of your analysts told you that the Mexica

> Why might an accounting-based control system provide headquarters management with biased information about the performance of a foreign subsidiary? How can these biases best be corrected?

> Why do the accounting systems of different countries differ? Why do these differences matter?

> Why is diversity good for an international business? What actions can a company take to foster greater diversity?

> Reread the Management Focus on McDonald’s global compensation practices. How does McDonald’s approach help the company take into account local differences when reviewing the performance of different country managers and awarding bonus pay?

> In what ways can organized labor constrain the strategic choices of an international business? How can an international business limit these constraints?

> What is the link between an international business’s strategy and its human resource management policies, particularly with regard to the use of expatriate employees and their pay scale?

> Research suggests that many expatriate employees encounter problems that limit both their effectiveness in a foreign posting and their contribution to the company when they return home. What are the main causes and consequences of these problems, and how

> Why did Burberry initially choose a licensing strategy to expand its presence in Japan?

> What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? When is each approach appropriate?

> You work for a company that designs and manufactures personal computers. Your company’s R&D center is in Michigan. The computers are manufactured under contract in Taiwan. Marketing strategy is delegated to the heads of three regional groups: a North Ame

> Price discrimination is indistinguishable from dumping. Discuss the accuracy of this statement.

> You are the marketing manager of a food products company that is considering entering the Indian market. The retail system in India tends to be very fragmented. Also, retailers and wholesalers tend to have long-term ties with Indian food companies; these

> Within 20 years, we will have seen the emergence of enormous global markets for standardized consumer products. Do you agree with this statement? Justify your answer.

> Imagine you are the marketing manager for a U.S. manufacturer of disposable diapers. Your firm is considering entering the Brazilian market. Your CEO believes the advertising message that has been effective in the United States will suffice in Brazil. Ou