国际商务复习提纲

复习提纲
1.Clash of Civilizations between two different countries based on their culture, politics, legal
system and economics.
Collective vs. Individualism
Democratic vs. Totalitarian
Differences in Economic Systems
Norms vs. Values
Religions: as Norms or as Folkways
The Economic Implications Confucianism
Four Hofstede’s Index: Power Distance/ Individualism/ Uncertainty Avoidance/ Masculinity
2. The Organization of International Business
The definition of Vertical differentiation
✧Centralization
✧Decentralization
✧The main characteristics of each approach of vertical differentiation
3. Global Manufacturing and Materials Management
∙Introduction
✧Definition
✧Strategic Objectives of Manufacturing and Materials Management
✧Total Quality Management
∙Where to Manufacture
✧Country factors
✧Technological factors
✧Product factors
✧Match of strategy and manufacture
∙Make or Buy
✧Advantages of Make
✧Advantages of Buy
✧Strategic Alliances with Suppliers
∙Managing a Global Supply Chain
✧Achieve lowest possible cost
✧Meet customer’s needs
4. Economic integration
Students should base on the main influences of economic integration to be reviewed, for example Static Effects and dynamic effect.
5. International trade patterns
Review these five fundamental notions:
Franchising, FII, Licensing, greenfield strategy, Countertrade
6. International HRM
Review the efficiently work of expatriate manager驻外经理in foreign country. A few points/questions can be considered (but not restrict to these) for the review of expatriate issues, which is identified as an important part of the chapter of global HRM (please refers to the PPT slides):
First of all, distinguishing the Hofstede’s national dimensions. And identify if there are any differences between China and the UK(or USA) in relation to the national cuture.
Secondly, identifying the reasons of expatriate failure and explore the fact that why so many expatriates expeirence failure.
Thirdly, telling what are the capabilities that expatriate should acquire in order to qualify for working in multinational subsidiary.
Fourthly, concluding what are the factors HR managers should consider when selecting expatriates.
7. Foreign exchange market
The functions of the Foreign Exchange Market: covert currencies and reducing risk.
1)the reasons firms need to convert currencies;
2)how to use forward exchanges or swaps to hedge against exchange rate changes.
8. Financial Management in the International Business
The means of moving money across borders to attain efficiencies and reduce taxes.
Global money management techniques
How to use payments netting system to transfer subsidiary capital.
How to use financial measures to manage exchange risk.
一、Clash of Civilizations between two different countries based on their culture, politics, legal system and economics.
1、possible question：what is Collectivism and. Individualism? What is their differences?
Collectivism refers to a political system that stressed the primacy of collective goals over individual goals. When collectivism is emphasized, the needs of society as a whole are generally viewed as being more important than individual freedoms. In such circumstances, an individual′s right to do something may be restricted on the grounds that it runs counter to “the good of society”or to “the common good.” On th e contrary, individualism refers to a political system that stresses the primac fo individual goals over the collective goals, it emphasize the individual development and individual rights. So this system emphasize much on individual rights protection.
Main differences: A. collectivism is the core of morality of Socialism while individualism is the core of morality of capitalism.
2、possible question: what is the Democratic and Totalitarian?
Democracy and totalitarianism are at different ends of a political dimension. Democracy refers to a political system in which government is by the people, exercised either directly or through elected representatives. Totalitarianism is a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties.
3、possible question:what is the differences in different Economic Systems?
It should be clear that political ideology and economic systems are connected. In countries where individual goals are given primacy over collective goals, we are more likely to find free market system. In contrast, in countries where cillective goals are given preeminence, the state may have taken control over many enterprises, market in such countries are likely to be restricted rather than free. We can identify tree broad types of economic ststems——a market economy, a command economy, and a mixed economy.
In a pure market economy, all productive activities are privately owned, as opposed to owned by the state. The goods and services that a country produces are not planed by anyone. Production is determined by the interaction of supply and demand and signaled to producers through the price system. For a market to work in this manner, suppply must not be restricted. A supply restriction occurs when a single firm monopolizes a market. In such circumstances, rather than increase output in response to increased demand, a monopolist might restrict output and let prices rise. Given the dangers inherent in monopoly, the role of government in a market economy is to encourage vigorous free and fair competition between private producers.
In a pure command economy, the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold. Consistent with the collectivist ideology, the objective of a command economy is for government to allocate resource for “the good of society.” In addition, in a pure command economy, all businesses are state owned, the rationale being that the government can then direct them to make investments that are in the best interests of the nation as a whole rather than in the interests of private individuals. While the objective of a command economy is to mobilize economic recouces for the public good, the opposite seems to have occurred. In a conmmand economy,
state-owned enterprises have little incentive to controlcosts and be efficient because they can not go out of business.
Between market economies and command economies can be found mixed economies. In a mixed economy, certain sectors of the economy are left to private ownship and free market mechanisms while other sectors have signifiant state ownship and government planning. In a mixed economy, governments also tend to take over troubled firms they consider to be vital to national interests.
4、possible question: what is norms and values?
Norms are the social rules that govern people′actions towad on another. Norms can be subdivided further into two major categories: folkways and mores. Folkways are the routine conventions of everyday life. Generally, folkways are actions of little moral significance. Rather, they are social conventions concerning things such as the appropriate dress code in a particular situation, good sicial manners, eating with the correct utensils, neighborly behavior, and the like. Mores are norms that are seen as central to the functioning of a society and to its social life. They have much greater significance than folkways. Accordingly, violating mores can bring serious retribution. Mores include such factors as indictments against theft, adultery, incest, and cannibalism.
Values form the bedrock of a culture. They provide the context within which a society′s norms are estabilshed and justified. They may include a society′s attitudes toward such concepts as individual freedom, democracy, truth, justice, honesty, loyalty, society obligations, collective responsibility, the role of women, love, sex,marriage, and so on. Values are not just abstract concepts, they are invested with considerable emotional significance. Values also often are reflected in the political and economic systems of a society.
5、possible question: what is religions?
Religion may be defined as a system of shared beliefs and rituals that are concerned with the realm of the sacred. 关于norms和folkways上面已说
6、possible question: what is the Economic Implications Confucianism?
This basis thesis is that confucian ethics may help explain the economic success of China, Japan, and South Korea because it lowers the costs of doing business in those countries. In this regard, three values central to the confucian system of ethices are of particular interest: loyalty, reciprocal obligations, and honesty in dealings with others.
In confucian thought, loyalty to one′s superiors is regarded as a sacred duty. In modern organizetions based in confucian cultures, the loyalty that binds employees to the heads of their organization can reduce the conflict between management and labor that we find in more class-conscisous societes. Cooperation between management and labor can be achieved at a lower cost in a culture where the value system emphasizes the virtue fo loyalty.
The concept of reciprocal obligations is important. Confucian ethics stess that superiors are obliged to reward the loyalty of their subordinates by betowing blessings on them. If these “blessings” are not forthcoming, then neither will be the loyalty. This confucian ethic si central to the Chinese concept of GUANXI, which refers to relationship networks supported by reciprocal obligations. GUANXI is an important mechanism ofr building long-term business relationships and getting business done in China.
A third concept found in confucian ethics is the importance attached to honesty. Confucian thinkers emphasize that, although dihonest behavior may yield short-term benefits for the
transgressor dishonesty does not pay in the long run. The importance attached to honesty has major economic implications. When companies can trust each other not to break contractual obligations, the costs of doing business are lowered. For instance, expensive lawyers are not needed to resolve contract disputes.
7、what is Four Hofstede’s Index: Power Distance/ Individualism/ Uncertainty Avoidance/ Masculinity?
Hofstede′s pow er distance dimension focused on how a society deals with the fact that people are unequal in physical and intellectual capabilities. According to Hofstede, high power distance cultures were found in countries that let inequalities grow over time into inequalities of power and wealth. Low power distance culture were found in societies that tried to play down such inequalites as much as possible.
The individualism versus collectivism dimension focused on the relationship between the individual and his or her fellows. In individualistic societies, the ties between individuals were loose and individual achievement and freedom were highly valued. In socities where collectivism was emphasized, the ties between individuals were tight. In such societies, people were born into collectives, such as extended families, and everyone was supposed to look after the interest of his or her collective.
H ofsted′s uncertainty avoidance dimension measured the extent to which different cultures socialized their members into accepting ambiguous situations and toleraing uncertainty. Members of high uncertainty avoidance cultures placed a premimu on job security, careerpatterns, retirement benefits, and so on. They also had a strong need for rules and regulations. Manater was expected to issue clear instuctions, and subordinates′initiatives were tightly controlled. Lower uncertainty avoidance cultures were characterized by agreater rediness to take risks and less emotional resistance to change.
Hofstede′s masculimity versus feimininity dimension looked at the relationship between gender and work roles. In masculine cultures, sex roles were shareply differentiated and traditional “masculine values,”such as achievement and the effective eercise of power, determined cultural ideals. In feminine cultures, sex roles were less sharply distinguished, and little differentiation was made between men and women in the same job.
二、The Organization of International Business
1、possible question: what is the definition of Vertical differentiation?
Vertical differentiation determines where in its hierarchy the decision-making power is concentrated. The main two approaches are centralization and decentralization.
2、possible question: what is centralization and decentralization? What is the main characeristics of two approaches?
Centralization is a kind of organizaion structure that top managers or general company of a group have most rights to make final decisions. While decentralization is the other kind of organization structure that first-line managers or contralled companies of a group have most rights to make final decisions but the top managers just have right to make decision related to he whole group.
The main characteristics of centralizatioin are that, first it can facilitate coordination, such as this coordination might be achieved by centralizing production scheduling at the firm′s head office, and so on. Second, centralization can help ensure that decision s are consistent with organizational objectives. Centralization of inmortant decisions minimizes the chance of this
inconsistency occurring. Third, by concentrating power and authority in one individual or a management theam, centralization can give top-level managers the means to bring about needed major organizational changes. Forth, centraliaiton can avoid the duplication of activities that occurs when various subunits within the organization carry on similar activities. Finally, top management can become overburdened when dicision-making authority is centralized.
The main characteristics of decentralization are that, first decentralizaiton fives topo management time to focus on critical issues by delegating more routine issues to lower-level managers second, motivational research favors decentralization. Third, decentralization permits greater flexibilit——more rapid response to environmental change. Forth, decentralization can result in better dcisions. In a decentralized structure, decisions are made closer to the spot by individuals who have better information than managers several levels up in a hierarchy. Fifth, decentralization can increase control. The more responsibility subunit managers have for decisions that impact subunit performance, the fewerexcuses they have for poor performance.
三、Global Manufacturing and Materials Management
1、Possible question：what is the definition of Materials Management? What is the strategic Objectives of Manufacturing and Materials Management? What is Total Quality Management?
Materials Management is the activity that controls the transmission of physical materials through the value chain, from procurement through production and into distribution. Additionally, logistics is the procurement and physical transmission of material through the supply chain, from suppliers to customers.
The strategic objectives of manufacturing and materials management are first to Lower costs. Dispersing production activities to various locations around the globe where each activity can be performed most efficiently can lower cost. Costs can also be cut by managing he global supply chain efficiently so as to better match supply and demand. Second is to increase product quality by eliminating defective products from both the supply chain and the manufacturing process. Improved quality control reduces costs by increasing productivity, lowering rework and scrap costs associated with defective products and reducing the warranty costs and time associated with fixing defective products. Third is to accommodate demands for local responsiveness. Demands for local responsiveness create pressures to decentralize production activities to the major national or regional markets in which the firm does business or to implement flexible manufacturing processes that enable the firm to customize the product coming out of a factory according to the market in which it is to be sold. Finally is to be able to respond quickly to shifts in customer demand. In recent years, time-based competition has grown more important. When consumer demand is rone to large and unpredictable shifts, the firm that can adapt most quickly to these shifts will gain an advantages.
The total quality management is (有多种定义)
TQM is a philosophy advocating four basic principles (i) intense focus on customer satisfaction, (ii) accurate measurement of activities, (iii) continuous improvement of products and processes, and (iv) empowerment of people. (Noori & Radford, 1995) ;
TQM is a management philosophy that builds a customer driven, learning organization dedicated to total customer satisfaction through continuous improvement in the effectiveness and efficiency of the organization and its processes. (Corrigan, 1995) ; TQM is a system of management that gauges a company’s dedication to consistent
improvement and a sincere effort to serve its customers with what they expect all the time. It is a philosophy of management to achieve greater productivity and a total awareness of quality as an increasingly important element in competitiveness (Gould, 1992).
TOTAL Everyone and everything that we do
QUALITY Giving the customer what they expect all the time MANAGEMENT The way we act and operate our policies and
procedures, and our training and instruction to all of our
employees
Total quality management is defined as both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. It is the application of quantitative methods and human resources to improve all the processes within an organization and exceed customer needs now and in the future. TQM integrates fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach. TQM consists of:
• Total: Made up of the whole
• Quality: Degree of excellence a product or service provides
• Management: Act, art, or manner of handling, controlling, directing, etc. Therefore, total quality management is the art of managing the whole to achieve excellence.
2、possible question: what should be considered when we dicide where to manufacture.
The main factors we should consider are Country factors, Technological factors and Product factors.
The country fators include relative factor costs, political economy, national culture, trade barriers and exchange rates. So other things equal, a firm should locate its various manufacturing activities where the economic, political, and cultural conditions, including relative factor costs, are conducive to the performance of those activities. Also inmortant in some industries is the presence of global concentrations of activities at certain locations.
The technological factors include fixed costs, minimum efficient scale and flexible manufacturing. In some cases the fixed costs of setting up a production plant are so high that a firm must serve the world market form a single location ofr from a very few locations. Conversely, a relatively low level of fixed costs can make it economical to preform a particular activity in several locations at once. As for minimum efficient scale, the larger the minimum efficient scale of a plant relative to total global demand, the greater the argument for centralizing production in a single location or a limited number of locations. If lower, several locations. As for flexible manufactruing technologies allow the company to produce a wider variety of end products at a unit cos that at one time could be achieved only through the mass peoduction of a standardized output. Summary: other things being equal, when fixed costs are substantial, the minimum efficient scale of production is high, flexible manufacturing technologies are available, the argument for concentrating production at a few choice locations are strong.
The product factors include value to weight ratio (which influence transportation costs) and whether product serves universal needs.
3、possible question: what is possible strategy to locate where to manufacture? How should the strategy and manufacture match?
Two possible strategy to locate where to manufacture are concentration and decentralization. When Differences in political economy are substantial; Differences in culture are substantial; Differences in factor costs are substantial; Trade barriers are few; Exchange rates are stable; Fixed costs are high; Minimum efficient scale is high; Flexible manufacturing technology is available; Value-to-weight ration is high; Serves universal needs are required, we should choose concentrated stragetic.
As for match of strategy and manufacture, 见PPT P17
4、possible question: what is the advantage of make and what is the advantage of buy?
The advantages of make are lower costs, facilitating specialized investments, proprietary product technology protection and improved scheduling. Lower cost: it may pay a firm to continue manufacturing a product or component part in-house if the firm is more efficient at that production activity than any other enterprise, such as Boeing decided to outsource the production of some component prats but keep the design and final integration of aircraft for it is more efficient at design and final intergration. Facilitating specialized investments: in general, we can predict that when substantial investments in specialized assets are required to manufacture a component, the firm will prefer to make the component internally rather than contract it out to a supplier. Protecting proprietary product technology: the firm would not want competitors to get this technology. Improving scheduling: production cost saving result from it makes planning, coordination, dand scheduling of adjacent processes easier.
The advantages of buy are strategic flexibility, lower costs and help the firm capture orders from international customers. Strategic flexibility: the firm can maintain its flexibility, switching orders between suppliers as circumstances dictate. This is particularly important internationally, where changes in exchange rates and trade barriers can alter the attractiveness of supply sources. Lower costs: although making is often undertaken to lower costs, it may have the opposite effect. Outsourcing may lower the firm′s cost structure. The firm that sources from independent suppliers has fewer subunits to control and buying component parts from independent fuppliers avoids the bureaucratic inefficiencies and resulting costs that can arise when firms vertically integrate backward and produce their own components, and also avoid increse in roganizational complexity.
5、possible question: how to managing a global supply chain?
Logistics encompasses the activities necessary to get materials from suppliers to a manufacturing facility, through the manufactruing process, and out through a distribution system to the end user. In the international business, the logistics function manages the global supply chain. The twin objectives of logistics are manage a firm′s global supply chain at the lowest possible cost and in a way that best serves customer needs. JIT-just in time system is to economize on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process and not before. The major cost saving comes from speeding up inventory turnover, which reduces inbentory holding costs. The information technology also play a crucial role in modern materials management as it can enable a firm to optimize its production scheduling according to when components are expected to arrive.
四、Economic integration
五、International trade patterns
1、what is the fundamental notions of Franchising, FII, Licensing, greenfield strategy, Countertrade?
Licensing: a licensing agreement is an arrangement whereby a licensor grants the rights to intangible property to another entity for a specified period, and in return, the licensor receives a royalty fee from the licensee. The advantage of licensing is that, firstly the firm does not have to bear the development costs and risks associated with opening a foreign market. In addition, licensing can be attractive when a frm is unwilling to commit substantial financial resources to an unfamiliar or politically volatile foreign market. The final advantage is licensing is frequently used when a firm posesses some intagible property that might have business applications, but it does not want to develop those applications itself. Licensing has three serious problems, first is it does not give a firm that tight control over manufacturing, marketing, and strategy that is required for realizing experience curve and location economies. The second is competing in a global market may require a firm to coordinate strategic moves across countries by using profits earned in one country to support competitive attacks in another. The third problem is licensing is a risk associated with licensing technological know-how to foreign companies.
Franchising: franchising is similar to licensing, it is basically a specialized form of licensing in which the franchiser not only sells intangible property to the franchisee but also insists that the franchisee agree to abide by strict rules as to how it does business. The advantage of franchising is by using a franchising strategy, a service firm can build a global presence quickly and at a relatively low cost and risk, as McDonald′s has. The disadvantage is franchising may inhibit the firm′s ability to take profits out of one country to supprot competitive attacks in another. A m ore significant diadvantage of franchising is hard to control quality.
Greenfield strateagy is a firm can establish a wholly owned subsidiary in a country by building a subsidiary from the ground up. The big advantage of establishing a greenfield venture in a foreign cuntry is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants. The disadvantage is that greenfield wentures are slowr to establish, they are also rsky.
Countertrade is an alternative means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent. Countertrade denotes a whole range of barterlike agreements, its principle is to trade goods and services for other goods and services when they can not be traded for money. With its roots in the simple trading of goods and services for other goods and services, countertrade has evolved into a diverse set of activities that can be categorized as five ditinct types of trading arrangements: barter, counterpurchase, offset, switch trading, and compensation or buyback. Many countertrade deals involve not just one arrangement, but elements of two or more. countertrade′s main advantage is that it can five a firm a way to finance an export deal when other means are not available. In addition, the government of a country to which a firm is exporting goods or services may require a countertrade agreement. However, the drawbacks of countertrade agreements are substantial. Countertrade contracts may involve the exchange ouf unusable or poor-quality goods that firm can not dispose of profitably. In addition, even if the goods it receives are of high quality, the firm still needs to dispose of them profitably. So given these drawbacks, countertrade is most attractive to large, diverse multinational enterprises that can use their worldwide network of contacts to dispose of goods acquired in countertrading.。