INTERNATIONAL

BUSINESS

Instructors: Nicholas Matziorinis Sujata Madan Phone: 514-398-4000 514 398- 4062 e-mail: nicholas.matziorinis@mcgill.ca sujata.madan@mcgill.ca Office: Bronfman 501 Bronfman 511 Office hours: Bronf 501 by appointment Bronf TBA

Secretary: Kathi Murphy kathi.murphy@mcgill.ca Office: Bronfman 491

Semester: Fall 2010 Course Number: MGCR 382 Sections CRN 1170 Section 001 151 Teaching Assistants: TBA

e-mail: Phone: 514-398-1255

MW

16:00-17:30

BRONFMAN

Course Description and Objectives:

This course offers a small window onto the expanded world of international business. Rapid changes in the global economy present both challenges and opportunities to firms operating internationally. This course aims to provide the future international manager with analytical skills to understand better economic and political aspects of the global business environment, and how these affect firms. The course is designed to be a foundation for further studies in international business and related fields. The course aims to achieve the following: (1) expose students to the complexities of the international business environment and its major agents; (2) familiarize students with the influential players on the international business scene; (3) introduce students to the fundamentals of international trade and investment; and

(4) develop an international perspective.

Learning Outcomes
Analyse economic and global trends, changing international trade patterns, foreign direct investment flows, differences in economic growth rates among countries, and the impact of cross-cultural differences to draw conclusions relevant to international firms. Develop an internationalisation strategy for a firm that wishes to expand abroad by taking into consideration the legal constraints, ethical and social issues, cross-cultural characteristics, economic environment, political factors and foreign exchange issues. Assess the impact of foreign exchange on the firms decision to internationalise. Develop a critical point of view on globalisation and its actors. The course is divided into three parts. Part I (chs. 1, 2 and 10) provides an overview of the international context. Part II (chs. 3, 4, 5, 11, 12, 13, 17 and 19) explores legal, cultural, social responsibility, strategic, collaborative and logistical challenges when operating internationally. Part III (chs. 6, 7, 8, 9 and 18) focuses on international trade theory, trade policies and foreign investment and analyzes the impact of international monetary and financial systems.

R.W. Griffin and M.W. Pustay International Business 6th Edition, Pearson-Prentice Hall, 2009 Additional readings will be posted on WebCT Vista course site.

TEXTBOOK

Student Code of Conduct, http://www.mcgill.ca/cio/e-policies/. For any other questions, please see the frequently asked questions (FAQ): http://www.mcgill.ca/tls/projects/srs/faq/

E V A L U A T I O N Date Mark s
McGill University values academic integrity. Therefore, all students must understand the meaning and consequences of cheating, plagiarism and other academic offences under the Code of Student Conduct and Disciplinary Procedures. The use of a clicker other than your own is considered an academic offense. During class, possession of more than one clicker, or that of another student, will be interpreted as intent to commit an academic offense. (see
www.mcgill.ca/students/srr/honest/

Section 1 Feb. 17 Midterm 35% Section 71 Feb. 17 Final Exam 35% Period Group (January 30% Projects 27) March 24 NB: Adjustments to group project mark may be made based on peer evaluation. TOTAL 100% P

for more information )

It is the responsibility of a student missing any class to check with fellow students whether any announcement was made regarding exam/assignments/lectures. Penalty for late assignments: 5% per day. Any student, whether they are in the B. Comm. program or not, who misses a Management mid-term examination, must apply to the B. Comm. Student Affairs Office to request alternate arrangements. Students must report the missed exam within 5 working days of the date of the exam. Requests submitted after the 5-day period will automatically be denied, regardless of the reason for the missed mid-term, unless the delay was caused by exceptional circumstances. In accord with McGill Universitys Charter of Students Rights, students in this course have the right to submit in English or in French any written work that is to be graded. [policy approved by Senate on 21 January 2009]

Students are encouraged to follow international business events through the Financial Times and the Economist. The WebCT course site provides a large list of websites with information relevant to international business as well as a list of supplementary books on international business and globalization. Attend all classes. Penalty for late assignments: 5% per day.

In-class Mid-Term Test (35%): A closed-book multiple-choice, short answer and essay question 2 hr inclass test (Oct 20, 2010) will be given, covering the material presented in the readings and class up until that point. Students who miss the midterm tests have one week to apply in writing to the B.Com. office of the Desautels Faculty of Management to request approval for a makeup test. Final Exam (35%): A 3-hour test will be held during the exam period. The closed book final will combine short answer and essay questions on the key concepts presented with each class, and their applications. Group Project (30%): Groups of 4 to 5 students will produce a joint brief on an issue, addressed to a high-ranking government official, leader of an international organization or CEO of a multinational firm (the decision-maker). Assume you are acting in an advisory role and have been asked to prepare the brief to promote a position on the issue. The objective is to present a comprehensive but concise analysis of the key aspects the decision-maker should know about the issue in a readable, thorough, precise, incisive and developmental manner. The brief should provide the decision-maker with an in-depth exploration of the issues, their evolution, their relevance, the key policy options, and key protagonists/stakeholders and their respective positions and strategies, making appropriate use of course concepts. The brief should conclude with recommended positions and/or actions and consider the consequences of following the recommendation. While you must take a position, you may not ignore the views of opponents. The brief must be accompanied by the three best (seminal and landmark) papers/articles on the particular issue that will help the decision-maker appear knowledgeable on the issue. These articles/papers must be written by experts in the field (not journalists) and should be recent, not before 2004. The brief should be approximately 12 doubled-spaced pages (12 pt font, 1 margins), excluding cover letter, executive summary, tables, figures, bibliography and the 3 best background articles. Group project proposals will be due on September 29, 2010. Group papers will be due on December 1, 2010 before class. Further details on handing in procedures will be provided. There are 10 topics available to choose from and we ask for your first and second preference. Individuals will be assigned to teams according to similar preferences (first choices where possible) and section, but otherwise randomly. Style: Divide your brief into sections for easier reading Do not use I or We. Use impersonal form Cover letter (with executive summary) is useful to set up situation. Who is the intended recipient of the brief? Who are you? Most of the evaluation will focus on the analysis. Description of issues should be concise but precise (no more than 50% of project should be descriptive.) Include in-text references (or footnotes) to indicate where you obtained facts, ideas and quotations in your brief, plus alphabetized bibliography at end listing all sources used. Here are sources to help you: APA style: http://www.mcgill.ca/howardross/collections/links/reference/cite/ Short reference style guide on WebCT Time management tool for group paper: (optional, use only if you find it useful) http://www.mcgill.ca/library-assistance/how-to/calculator/

TENTATIVE SCHEDULE
Week / Instructor 1 Matziorinis 2 Matziorinis 3 Matziorinis 4 Matziorinis 5 Matziorinis 6 Matziorinis 7 Matziorinis 8 Madan 9 Madan 10 Madan 11 Madan 12 Madan 13 Madan 14 Madan Week of Topics : Aug 30 Introduction Overview Sept 6 Global Marketplace International Cooperation Readings G&P ch. 1 G&P ch. 2 G&P ch. 10 G&P ch. 10 G&P ch. 12 G&P ch. 11 G&P ch. 13 G&P ch. 17 G&P ch. 3 G&P ch. 4,19 G&P ch. 5 In Bronf 151 G&P ch. 6 G&P ch. 9 G&P ch. 8 G&P ch. 7 G&P ch. 8 G&P ch. 18

Sept 13 International Cooperation Entry Modes Sept 20 International Strategic Management International Strategic Alliances Sept 27 Organizing your project International Operations Oct 4 Legal, Technological & Political Forces; Role of Culture; Human Res. Oct 11 Ethics and Social Responsibility Review Oct 18 MIDTERM EXAM (Oct 20) Oct 18 Oct 25 Nov 1 Nov 8 Nov 15 Nov 22 Exam Week Trade Theories Trade Policies Foreign Exchange Introduction Monetary Systems and BOP Foreign Exchange - Parity International Financial Management FINAL EXAM

This schedule is tentative but the midterm date is fixed. For an up-to date schedule, check WebCT regularly.

DETAILED COURSE LEARNING OBJECTIVES

Week 1: Introduction to Course: Chapter 1 - An Overview of International Business Objectives: Discuss the meaning of international business. Explain the importance of understanding international business. Identify and describe the basic forms of international business activities. Analyze the causes and evaluate the consequences of globalization. Week 1: (continued) Chapter 2 - Global Marketplaces and Business Centers Objectives: Evaluate the impact on business of the political and economic characteristics of the worlds various marketplaces. Understand the uses of national income data in making business decisions. Discuss North America as a major marketplace and business center in the world economy. Describe Western Europe as a major marketplace and business center in the world economy. Appreciate the problems facing the economies of the former communist countries of Eastern and Central Europe. Examine Asia as a major marketplace and business center in the world economy. Explore the development challenges facing African, Middle Eastern, and South American countries. Week 2: Chapter 10 - International Cooperation among Nations Objectives: Explain the importance of the GATT and the WTO to international businesses. Contrast the different forms of economic integration among cooperating countries. Analyze the opportunities for international businesses created by the completion of the EUs internal market. Describe the other major trading blocs in todays world economy. Week 2: (continued) Chapter 12 Entry Modes Objectives: Discuss how firms analyze foreign markets. Outline the process by which firms choose their mode of entry into a foreign market. Describe forms of exporting and the types of intermediaries available to assist firms in exporting their goods. Identify the basic issues in international licensing and discuss the advantages and disadvantages of licensing. Identify the basic issues in international franchising and discuss the advantages and disadvantages of franchising. Analyze contract manufacturing, management contracts, and turnkey projects as specialized entry modes for international business. Characterize the greenfield and acquisition forms of FDI. Week 3: Chapter 11 - International Strategic Management Objectives: Characterize the challenges of international strategic management. Assess the basic international strategic alternatives available to firms. Distinguish and analyze the components of international strategy. Describe the international strategic management process. Identify and characterize the levels of international strategies.

Week 3 (continued): Chapter 13 - International Strategic Alliances Objectives: Compare joint ventures and other forms of strategic alliances. Characterize the benefits of strategic alliances. Describe the scope of strategic alliances. Discuss the forms of management used for strategic alliances. Identify the limitations of strategic alliances Week 4: Chapter 17 International Operations Objectives: Describe the nature of international operations management. Analyze the supply chain management and vertical integration decisions facing international production managers. Analyze the meaning of productivity and discuss how international firms work to improve it. Explain how firms control quality and discuss total quality management in international business. Analyze how international firms control the information their managers need to make effective decisions. Week 5: Chapter 3 - Legal, Technological, and Political Forces Objectives: Describe the major types of legal systems confronting international businesses. Explain how domestic laws affect the ability of firms to conduct international business. List the ways firms can resolve international business disputes. Describe the impact of the host countrys technological environment on international business. Explain how firms can protect themselves from political risk. Analyze the risks facing international firms doing business in emerging market economies Week 5 (Continued): Chapter 4 -The Role of Culture Objectives: Discuss the primary characteristics of culture. Describe the various elements of culture and provide examples of how they influence international business. Identify the means by which members of a culture communicate with each other. Discuss how religious and other values affect the domestic environments in which international businesses operate. Describe the major cultural clusters and their usefulness for international managers. Explain Hofstedes primary findings about differences in cultural values. Week 5 (continued): Chapter 19 Human Resource Management (p557-p562) Objectives: Detail how firms recruit and select managers for international assignments. Week 6: Chapter 5 - Ethics and Social Responsibility in International Business Objectives: Describe the nature of ethics. Discuss ethics in cross-cultural and international contexts. Identify the key elements in managing ethical behaviour across borders. Discuss social responsibility in cross-cultural and international contexts. Identify and summarize the basic areas of social responsibility. Discuss how organizations manage social responsibility across borders. Identify and summarize the key regulations governing international ethics and social responsibility.

Week 6 (Continued): Review. Week 7: (October 20): MIDTERM ( IN CLASS, Bronfman 151) Week 8: Chapter 6 - International Trade and Investment Theory Objectives: Understand the motivation for international trade. Summarize and discuss the differences among the classical country-based theories of international trade. Use the modern, firm-based theories of international trade to describe global strategies adopted by businesses. Describe and categorize the different forms of international investment. Explain the reasons for foreign direct investment. Summarize how supply, demand, and political factors influence foreign direct investment. Week 9: Chapter 9 - Formulation of National Trade Policies Objectives: Present the major arguments in favour of and against government intervention in international trade. Identify the advantages and disadvantages of adopting an industrial policy. Analyze the role of domestic politics in formulating a countrys international trade policies. Describe the major tools countries use to restrict trade. Specify the techniques countries use to promote international trade. Explain how countries protect themselves against unfair trade practices. Week 10 and 12: Chapter 8 - Foreign Exchange and International Financial Markets Objectives: Describe how demand and supply determine the price of foreign exchange. Discuss the role of international banks in the foreign-exchange market. Assess the different ways firms can use the spot and forward markets to settle international transactions. Distinguish the five parity conditions: PPP, interest rate parity, Fisher effect, international Fisher effect, and the forward rate as unbiased predictor of the future spot rate. Summarize the role of arbitrage in the foreign-exchange market. Discuss the important aspects of the international capital market. Week 11: Chapter 7 - The International Monetary System and the Balance of Payments Objectives: Discuss the role of the international monetary system in promoting international trade and investment. Explain the evolution and functioning of the gold standard. Summarize the role of the World Bank Group and the International Monetary Fund in the postwar international monetary system established at Bretton Woods. Explain the evolution of the flexible exchange-rate system. Compare the advantages and disadvantages of the fixed and flexible exchange-rate systems. Describe the function and structure of the balance of payments accounting system. Differentiate among the various definitions of balance of payments surplus and deficit.

Week 13 (14): Chapter 18 - International Financial Management

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Objectives: Discuss the major forms of payment in international trade. Compare the risks faced by importers and exporters in major forms of international trade payments. Identify the primary types of foreign-exchange risk faced by international businesses. Describe the techniques used by firms to manage their working capital. Evaluate the various capital budgeting techniques used for international investments. Discuss the primary sources of investment capital available to international businesses.

Final exam during exam week

Topics for group project:

Aircraft subsidy disputes: Canadas Bombardier vs. Brazils Embraer OR Boeing vs. Airbus Biofuels: i) Biofuels vs. Food, or, ii) Biofuel impact/footprint throughout fuel chain Chinas investments in Africa Intellectual property rights, pharmaceutical manufacturers & human needs Child labour (clothing or surgical tools)

Globalization implications for Chilean fruit-picking industry and its workers Collapse of Icesave (Icelands Landsbanki) with operations in UK & Netherlands Carbon Credit Trading (cap & trade) Reducing the global carbon footprint: US-China negotiations Torreon, Mexicos textile strategy for NAFTA

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International Business MGCR382 Peer Evaluation.

Name_________________________ Group number or topic _________________

PEER-EVALUATION: This information will enter into the group project and/or class participation portion of the mark. Please try to assign scores that reflect how you really feel about the extent to which the other members of your group contributed to your learning and/or your groups performance. This will be your only opportunity to reward the members of your group who worked hard on your behalf. If you give everyone the same score you will be hurting those who did the most and helping those who did the least. Instructions: In the space below please rate each of the other members of your group. Each members peer evaluation score will be the average of the points they receive from the other members of the group. (As a result the average peer evaluation score for all groups will be identical.) To complete the evaluation you should: 1. List the name of each member of your group by their last name. 2. Assign an average of ten points to the other members of your group. (For example, since you exclude yourself, you have a total of 30 points to allocate among members in a four member group; 20 points in a three member group, etc.). 3. Differentiate your ratings: you should have at least one score of 11 or higher (maximum = 15) and one score of 9 or lower. 4. Please remember that you do not include yourself in the scoring. Group Members 1)_____________________________________ 2)_____________________________________ 3)_____________________________________ 4)_____________________________________ Additional Feedback: highest and lowest ratings. Scores ________ ________ ________ ________

In the space below would you also briefly describe your reasons for your

1. Reason(s) for your highest rating(s). (Use back if necessary.)

2. Reason(s) for your lowest rating(s). (Use back if necessary.)

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