Introduction to International Business



BBB 4M- Introduction to International Business Exam Review

Exam Format/ Instructions/ Time

Multiple Choice 45 marks

True or False 20 marks

Fill In the Blanks 25 marks

Short Answer 25 marks

Case Studies 20 marks

Bring a pen, a pencil and a calculator. These will not be provided to you at the exam and you will be required to use them. Sharing during the exam is not permitted.

Exam Date: Thursday, June 21st, 9:00 am.

Location: TBD

Percentage of Final Mark: 20%

Exam Review Ideas, Concepts, and Terms

Unit #1

1. Development of international business from 1500 years ago to today/ Economic connections Canada has with various countries and regions around the world.

2. Identify and explain types of trade barriers/ Identify and explain 4 environmental factors for international business.

3. Differences between domestic and international business.

4. Identify and explain ways government discourages international business: laws, trade barriers, political risks, taxes/ Identify and explain ways governments encourages international business: free trade zones, MFN status, FTA’s, etc.

5. Basic economic problem/ scarcity/ supply & demand/ market price & equilibrium price/ inflation (demand-pull, cost-push).

6. Difference between industrialized, developing, less developed countries/ absolute advantage/ comparative advantage/ opportunity cost/ GDP/ GNP/ balance of trade/ trade surplus & deficit/ foreign debt./ infrastructure.

7. Corporate tax rate pros and cons.

Unit #2

1. Identify 3 main types of ownership. Be able to identify characteristics of each one and outline the differences/ advantages/ disadvantages.

2. Identify 4 other forms of business organization. Identify characteristics.

3. Understand an MNC. Identify characteristics, be able to give examples, outline and discuss controversies/concerns about MNC’s/ arguments in support/against the nature of corporations (The Corporation).

4. Know the difference between balance of trade and balance of payments/ what is a trade deficit/ know the difference between the 5 forms of trade relationships/ identify characteristics of each.

5. WTO, IMF, World Bank, World Court, OECD, UNDESA. Who they are/ what they do/ identify roles they play/ differences/similarities. Protests against WTO, causes/ outcomes/ WTO rebuttal

6. NAFTA, APEC, OPEC, LAFTA, ECOWAS, ASEAN, APTA, CEFTA, SAFTA, WFTO. Who they are/ what they do/ controversies.

7. What is fair trade? How can you participate in fair trade?

8. What is money/ characteristics/ functions?

9. What is the purpose of the foreign exchange/ how does it work/ 3 factors that affect the exchange/ be able to convert one currency to another/ interest rates/ 3 factors that affect interest rates/ inflation/ hard vs. soft currency/ rating currency/ floating exchange vs. pegged exchange rate/ currency future/ buy forward/ exchange controls

10. Forms of competition/ differences/ barriers to entry/ examples.

11. Civil, Common, Statutory Law/ characteristics/similarities/differences/liabilities/ negligence/ strict liability/6 conditions of liability/ resolving legal issues- mediation, arbitration, International Court of Justice/ contract requirements and components/ Intellectual Property/ Patents/ Copyrights/ Licensing/ trademarks/ property law/ types of property

12. Advantages/ disadvantages of self-employment/ financing small business/ differences between start-up costs and continuing costs/ variable vs. fixed costs/ benefits of entrepreneurship for the economy.

13. Importance of importing/ 3 reasons companies import/4 steps to become an importer/ Importance of exporting/ 4 steps of exporting/ reasons why companies don’t export/

14. Indirect exporting/ direct exporting/ consulting/ licensing/ franchising/ joint venture/ FDI/ what they are/ high or low risk.

Unit #3

1. Know the different types of organizational charts and be able to draw an example of each.

2. Role of managers in organizations/ 8 characteristics of managers/ Differences between autocratic, participative, and free-reign managers/ Differences between front-line managers, middle managers, senior managers, and CEO’s/ differences and importance between lines of authority and span of control/ role of delegation of power in organizations

3. Understand how companies evolve: domestic (exporting ( international ( global

4. Importance culture plays on managerial practices: decision making, hiring preferences, permanence of employment, labour-management relation

5. Difference between host-country nationals, parent-country nationals, and third-country nationals/ Differences, pros, and cons of ethnocentric, polycentric, regiocentric, geocentric forms of HR.

6. Forms of compensation/ three factors employers focus on when looking at screening employees.

Unit #4

1. Identify and explain the advantages of doing business in Canada/ Be familiar with the KPMG Business Competitiveness article/ Where Canada stands internationally in terms of competitiveness and why/Canada’s challenges going forward/ pros and cons of outsourcing/ impact of Wal-Mart on local, national, and international economy.

2. Understand the reasons for growth in international business.

3. Why business changes- new technology, new processes, and new attitudes/ factors that affect Canada’s productivity.

4. What is the G8? History/ Criticisms/ Role of Russia/ expanding the G8/ G8 efficacy.

5. Difference between invention and innovation/ stages of product development/ the product life cycle/ product positioning ( steps and examples)/ external vs internal pricing factors/ economies of scale/ pricing strategies/ direct, vertical, conventional distribution strategies/ elements of promotion/ goals of advertising/ AIDA ( know and be able to apply)

6. Difference between legislated and voluntary codes/ importance of ethics for corporations/ stakeholders/ difference between ethics and legality/ cultural relativism/ corporate social responsibility (what is it, examples)/ be familiar with MEC and their code of ethics/ be familiar with various ethical issues in the workplace (i.e. societal, human rights, equality etc.)

7. Understand the Auto Pact/ why was it created/ who was involved/ how it evolved/ what happened to it/ what resulted from its demise?

In addition to the material listed above you are responsible for all content covered in class including all notes, videos, handouts, case studies and articles.

Exam Review Questions

UNIT#1

1. Define the following: (a) domestic business; (b) international business; (c) global dependency.

2. How does domestic business differ from international business?

3. Why is international business important?

4. What are some examples of international business activities that occurred before 1800?

5. Explain how you are affected by international business?

6. What factors affect a country’s decision to trade goods and services with another country?

7. Define the following: (a) imports; (b) exports; (c) trade barriers; (d) culture.

8. What are the four parts of international business environment?

9. What cultural factors affect international business activities?

10. Name four factors that affect international business activities?

11. What actions might a country take to encourage other countries to buy its goods and services?

12. What responsibilities do you believe people have as citizens in our global economy?

13. Define the following: (a) scarcity; (b) economics; (c) opportunity cost.

14. What is the basic economic problem?

15. Why does every decision have an opportunity cost?

16. Explain how scarcity affects you and your family.

17. Think of three choices you have made recently. What were the opportunity costs of those choices?

18. Define the following: (a) supply; (b) demand; (c) equilibrium; (d) inflation.

19. How does consumer demand create inflation?

20. How can the price of raw materials affect inflation?

21. Sometimes quantity demanded goes up even if prices goes up. Describe an example when that might occur.

22. Describe three situations in which inflation has affected you or your family. What were the possible causes of that inflation?

23. Why would modern infrastructure give a country an advantage over other countries?

24. What is capitalism? Characteristics?

25. What are the main influences on a country’s economic development?

26. What types of business are commonly found in developing countries?

27. What is the difference between absolute advantage and comparative advantage?

28. What does GDP measure?

29. How would a high inflation rate affect a country’s economy in terms of international business?

30. Describe situations in which people, companies, and countries face the basic economic problem of scarcity.

31. If demand for a product in our society is high, what are some things that happen to reduce that demand?

32. What problems may arise when a government decides to sell government owned businesses to private companies?

33. What factors could affect the value of a country’s currency compared to that of another country?

34. Describe how a country’s customs and traditions can influence economic development.

35. What is protectionism?

UNIT #2

1. Define sole proprietorship, limited liability, dividends, corporation, unlimited liability.

2. What are the advantages of a sole proprietorship?

3. What are the disadvantages of a partnership?

4. “Because of the advantage of limited liability, every business should be organized as a corporation”. Do you agree? Explain.

5. Define a MNC.

6. What kinds of competitive advantages can a multinational company have?

7. How do non-profit organizations benefit society?

8. Describe ways a global company could provide social and economic benefits to a host country.

9. Define indirect exporting, direct exporting, joint venture, FDI, licensing, franchise, and management contract.

10. What is the difference between licensing and franchising?

11. What factors would affect how the parties in a joint venture divide future profits?

12. List reasons why most companies in the world start out and remain sole proprietorships. How does being a sole proprietorship benefit or limit a company’s ability to become involved in international business?

13. What types of restrictions might a foreign government put on a multinational corporation doing business in its country?

14. What are some concerns people might have about a company making many foreign investments in their country?

15. What are the main reasons companies import goods?

16. Do you agree or disagree that imports threaten the jobs of people in the importing country? Explain your position.

17. What are the advantages of competition?

18. If a country had to create a money system other than coins and currency, what items might be used? Keep in mind the characteristics of money.

19. Define soft currency, hard currency, currency future, floating exchange rate, and foreign exchange market.

20. How would printing additional money affect the value of a country's currency?

21. Define letter of credit, credit terms, trade credit, account receivable, account payable, bill of exchange, capital project.

22. Why do you think the letter of credit is the most popular payment method used for international business transactions?

23. Define common law, civil law, statutes, product liability, negligence, strict liability.

24. The justice system for most countries around the world are based on what kind of law?

25. Does negligence have to be proven in a successful strict liability case? Why or why not?

26. Define property, property rights, copyright, trademark, intellectual property, patent, contract, mediation, arbitration, litigation, International Court of Justice.

27. What are the three types of property?

28. What four elements must be present for a contract to be valid?

29. What is the difference between mediation and arbitration?

30. What are some of the reasons why two businesses from different countries might prefer to resolve a dispute through mediation or arbitration rather than litigation?

31. What is the importance of international law to businesses engaged in international trade?

32. Why is the International Court of Justice important to international business?

33. While not binding, why is the mediation process sometimes effective for settling disputes?

34. Describe a situation in which a company might use mediation or arbitration in international business.

35. Why do entrepreneurs turn to international business?

36. What actions could a government take to encourage the start up of new businesses?

37. Define variable costs, fixed costs.

38. How do variable costs differ from fixed costs?

UNIT #3 & 4

1. Define managers, autocratic managers, participative managers, free-rein managers.

2. What characteristics distinguish among autocratic, participative, and free-rein managers?

3. What are four culturally influenced dimensions of behaviour to which managers should be sensitive?

4. Why do managers use a combination of management styles?

5. What is the difference between line and staff positions?

6. Explain how employees become motivated to do well at their work.

7. Define span of control, front-line managers, lines of authority, CEO, degree of centralization.

8. Why is line of authority important regardless of the span of control?

9. What are the four stages through which a business passes on the way to achieving global status?

10. What would a company do if its span of control at some level became too large to manage?

11. Why do organizations competing in the global marketplace tend to have a limited number of levels of management?

12. Why is a participative manager likely to use autocratic and free-rein management on occasion?

13. Define host-country nationals, expatriates, parent-country nationals, third-country nationals, ethnocentric approach, polycentric approach, regiocentric approach, geocentric approach.

14. Why is human resources management different in the global environment?

15. Which human resource management approach is usually the least expensive?

16. What are two advantages to the polycentric approach to human resources management?

17. In what situations might staffing with third-country nationals be preferable to staffing with parent-country nationals?

18. Why would a truly global corporation most likely use the geocentric approach to human resources management?

19. Define employment forecasting, supply analysis, job description.

20. How are potential employees recruited?

21. Why does a company use different methods of recruiting for different jobs?

22. Which of the employee selection factors of competence, adaptability, and personal characteristics is typically the most important one for an international employee? Why?

23. Explain why training and development of employees on international assignments is important.

Exam Review Exemplar Cases

1. The Book Bin in Sophie’s neighbourhood shut down recently. She blamed the recent opening of a Chapters store several blocks away. Her friend, Adam, pointed out that The Mystery Club, a bookstore that specializes in mystery titles, had been doing even better since the arrival of Chapters. Adam knew the owner, who had developed a very cool Web site, from which she sold mystery titles all over the world. Mystery Club also had well-trained staff who seemed to know about almost every mystery writer currently available. The store also provided a fine selection of rare and out-of-print titles for the avid mystery collector. How does The Mystery Club demonstrate the way that a small Canadian business can thrive in the current business environment? Give at least four examples.

2. Guillermo has invented a new product that winds cords (extension cords, holiday lights, camping cord, wire, boat ropes, etc.) for easy storage. He applied for and received a patent for his invention, and has made several prototypes (working models of the product). He wants to know how to make his product available to the market, and make a profit on it, so he has asked you to list the options for him. Also, he says, he really prefers to spend his time inventing things, and does not care much for the details of business. After you have listed the options, indicate which ones might be best for Guillermo.

3. Morna and Stu manufacture plastic placemats. Their cool designs and vibrant colours have made the product very trendy, and they have opened up over twenty foreign markets. They have been producing at capacity, and the price of the placemats has been increasing steadily, so that the company actually made a profit in its first year. Morna and Stu are now thinking very seriously about opening a new factory to take advantage of the overwhelming demand for their product. What economic “laws” should they consider before they make their decision? What would you suggest that they do?

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download