...domestic industries a competitive edge 4. Explain how trading blocs affect trade 5. Highlight the opportunities and challenges of conducting business in other countries 6. List five ways to improve communication in an international business relationship 7. Identify five forms of international business activity 8. Discuss terrorism’s impact on globalization Answers to End-of-Chapter Questions Test Your Knowledge Questions for Review 1. How can a company use licensing agreements to enter world markets? By licensing, a company can negotiate an agreement that entitles it to produce or market another company’s product in return for a royalty or fee. The company that obtains the license is responsible for the product quality, promotion, and distribution, and it must pay the other company a percentage of its sales. On the other hand, the company that grants the license avoids shipping costs, trade barriers, and other problems associated with international trade, while still receiving a portion of the revenue from overseas sales. 2. What two fundamental product strategies do companies choose between when selling their products in a global marketplace? Should products be standardized, selling the same brand everywhere in the world, or customized to accommodate local target markets? 3. What is the balance of trade, and how is it related to the balance of payments? The balance of trade is determined by the relationship between the value of a country’s ...
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...Introduction In an open economy, there are no impediments to trade. Goods and services flow freely between business and citizens in one country to their counter parts in another. This section discusses exchange rates, exchange rate adjustments and systems, macroeconomic policy in an open economy, as well as international banking, including international currency reserves, debt, and risk. Learning Materials Open Economy Macroeconomics: Exchange Rates, Balance of Payments and Policy Exchange-Rate Systems With some notable exceptions, most countries in the world have their own currency. Consequently, foreign exchange markets have developed to allow individuals, businesses, governments and other institutions to be able to make payment and receive payment across borders. Each country decides on an exchange rate system, whether they will set their exchange value of their currency administratively, allow markets to determine it, or some combination of those two approaches. Both macroeconomic and microeconomic forces influence the price of each currency in terms of another currency, its exchange rate. Exchange-rate systems include fixed, freely floating, managed floating, fixed peg, crawling-peg currency board, and dollarization. The United States, European Union, United Kingdom and Japan follow managed floating systems. Currency Boards and Monetary Policy Developing countries and small countries with large international sectors are more likely to use fixed systems, peg...
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...Chapter 2 International Flow of Funds Lecture Outline Balance of Payments Current Account Capital and Financial Accounts International Trade Flows Distribution of U.S. Exports and Imports U.S. Balance of Trade Trend International Trade Issues Events That Increase International Trade Trade Friction Factors Affecting International Trade Flows Impact of Inflation Impact of National Income Impact of Government Policies Impact of Exchange Rates Interaction of Factors Correcting a Balance of Trade Deficit Limitations of a Weak Home Currency Solution International Capital Flows Distribution of DFI by U.S. Firms Distribution of DFI in the U.S. Factors Affecting Direct Foreign Investment Factors Affecting International Portfolio Investment Agencies that Facilitate International Flows How Trade Affects an MNC’s Value Chapter Theme This chapter provides an overview of the international environment surrounding MNCs. The chapter is macro-oriented in that it discusses international payments on a country-by-country basis. This macro discussion is useful information for an MNC since the MNC can be affected by changes in a country’s current account and capital account positions. Topics to Stimulate Class Discussion 1. Is a current account deficit something to worry about? 2. If a government...
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...Balance Of Trade Difference in value over a period of time between a nation's imports and exports of goods and services. The balance of trade is part of a larger economic unit, the balance of payments, which includes all economic transactions between residents of one country and those of other countries. If a nation's exports exceed its imports, the nation has a favourable balance of trade, or a trade surplus. If imports exceed exports, an unfavourable balance of trade, or a trade deficit, exists. Current United States Balance of Trade The United States reported a balance of trade deficit equivalent to 44 Billion USD in September of 2010. The United States is the most significant nation in the world when it comes to international trade. For decades, it has led the world in imports while simultaneously remaining as one of the top three exporters of the world. Main exports are: machinery and equipment, industrial supplies, non-auto consumer goods, motor vehicles and parts, aircraft and parts, food, feed and beverages. U.S. imports non-auto consumer goods, fuels, production machinery and equipment, non-fuel industrial supplies, motor vehicles and parts, food, feed and beverages. Main trading partners are: Canada, European Union, Mexico, China and Japan. |Country |Interest Rate |Growth Rate |Inflation Rate |Jobless Rate |Current Account |Exchange Rate | [pic][pic][pic] |[pic][pic] to |[pic][pic] [pic] [pic][pic]...
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...TITLE: Maynard Company Case 3-1 BACKGROUND: Upon seeing the balance sheet in Case 2-1, Diane Meynard was surprised that cash increased by $31,677 but net income was only S19,635. Her friend will prepare an income statement to find out why and her friend found a record of cash receipts and disbursements. She also learned that all accounts payable were to vendors for purchase of merchandise inventory and the cost of sales was $39,345 in June. STATEMENT OF THE PROBLEM The cash increased by $31,677 but net income was only $19,635. ALTERNATIVE COURSES OF ACTION a. To check transactions that affected the income statement but not cash. b. To find out whether Maynard Company uses accrual method or cash basis accounting RECOMMENDATION The change in cash balance was greater than net income as there are certain transactions in the income statement that do not affect cash balance/ the balance sheet, and vice versa. The transactions that affected the income statement but did not affect cash are the following: revenues recognized from credit sales, depreciation, amortization of prepaid insurance, and accrual of wages and taxes. On the other hand, the transactions that affected cash/ the balance sheet but did not affect net income are the following: availment of bank loans, declaration of dividends, payment of Diane Maynard’s loans to the company, purchase of equipment and other assets, and accounts payable. CONCLUSION a) $14,715 represents only the amount of merchandise purchased...
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...Questions to Lecture 7 – IS-LM model and Aggregate demand 1. Draw Keynesian cross as a comparison of planned and realized expenditures. What is the intercept of planned expenditure line? What is its slope? If government expenditures would be positive function of output, how would the Keynesian cross change? We will go over this on the review session – easier to explain than on paper. The intersect point represents the equilibrium output. Black line – planned expenditures Blue line – realized expenditures If government expenditures would be positive function of output the blue line would shift up. 2. What are the tools of fiscal policy? Fiscal policy has 3 tools: 1. Increase or decrease government expenditures 2. Cut or increase taxes 3. Increase or decrease transfer payments 3. Explain the mechanism of government expenditures multiplier – why is the effect on the output greater than initial increase in government expenditures? The government purchases multiplier is ∆Y/∆G Initially, the increase in G causes an equal increase in Y, so ∆Y=∆G, But with increasing Y will be increasing C(Y-T) →further ↑Y →further ↑C →further ↑Y So government purchases multiplier will be greater than 1, it is same principal like with Bank’s creation of money when lending out. 4. Explain the mechanism of tax...
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...A college degree makes you money while doing less work, but people without a college education usually work tireless hours to make half the amount. It’s Monday morning, a person just finished working a six-hour shift. They have just gotten get off at 5 am, and have class at 8 am, how do they cope? Studies show working more than 15 hours can affect a student’s success in the classroom (Semuels, p. 210). Also, people who went through 35 hours of sleep deprivation saw two letter grade drops in classes (Semuels, p. 211). Working a job, especially the night shift doesn’t seem like a bright idea? Some schools offer programs to work during the night and receive half...
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...difficult situation to make a decision to keep the position he has already accepted with Tick and Check LLP, or to break his promise and commitment with Tick and Check and take a job with his preferred employer of choice, Foot and Balance LLP. Many times in life we are faced with a decision to choose between our obligations and desires. Billy Tushoes should accept the offer from Foot and Balance because it is the job he prefers. If Billy chooses to keep the job he accepted with Tick and Check there is a high possibility that his job performance will be affected negatively. In certain circumstances it is okay to back out of a promise that you have given to someone else. For example, if the promise made in the first place is unethical. This is seen when a promise goes against someone’s moral code. Another example would be if keeping the promise is going to affect a person’s well-being and their quality of life then they should not feel obligated to keep their commitment. As in Billy’s case, if he keeps the job with Tick and Check his job performance will most likely be affected negatively because he would regret not taking the job that he was really hoping to get with Foot and Balance. The two main stakeholders in this case are Tick and Check and Foot and Balance. Both companies are interested in hiring the best candidate possible for the position that is open. Billy is also a stakeholder in this case. His interest is to work for the company that will provide him the best opportunity...
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...INR 2001: Intro to International Relations January 12, 2015 Big Themes in International Relations * Conflict or Cooperation? Pays to Cooperate: Success in business- Don’t shoot customers * Major Actors in Conflicts * Chines, Navy, NATO, and Somali Pirates * States fighting other states * States fighting rebellions within the state * Conflict between non-state actors * Not all conflict is between states, much if not most is below the level of state-state conflict * Conflict maybe driven by man interests- ethnic conflict, material resources, land * Cooperation * Lots of Conflict and lots of Cooperation * Examples * Cooperation focused on economic issues, why? * All sides gain from economic exchange so it literally pays to cooperate * Is cooperation or conflict the natural state? * Economic cooperation mitigates conflict * Globalization or Fragmentation? * France-Germany and the European Union * Free trade agreements and NAFTA * What is Globalization * Examples: * Increasing level interconnectedness * What it means for international relations * More interdependence * Cultural aspects, both positive and negative * Is globalization a new phenomena * Less and less dialogue more usual stuff happening * 50 million died as a result 1918 Spanish...
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...important political diplomat. It is noted that the President must be able to at least promote the quintessential virtues, ethics, and tradition of the one of the greatest countries in the world. The greatest battle of the decade is predicted to be how the United States will react to leadership that will be interested in the economic dealings rather than serving the American people. Friedman made a bold and unshakable declaration: America is an imperial empire. He gives the overview of what America will be facing in the upcoming years which includes balance of power. Also America could lose itself as a Republic. The book starts with a summarized historical background and explains current political situations that are happening globally. It then analyzes each geographical region and assessment plans. The Next Decade is a comprehensive and remarkable analysis that encompasses the issues and benefits for being a super power. A main theme of the book is how the American administrations of the next ten years will need to create global power balances. Friedman describes America's success with global affairs not by sanctioning countries, but by creating competing relationships, which offset one another. Friedman tells this is the decade where the United States as a power must mature to manage its power and balance as an unintended...
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...I hope to determine in detail all the characteristics of the UK economy, government fiscal and monetary policies and how each one effects on the Tesco PLC organisation. I plan to give a clear and comprehensive look into each of the factors which build the UK economy and analyse and evaluate with strong evidence of application to theory throughout the report. The UK has a democratic, parliamentary system of governance known as the Westminster system. The structure of the administration ensures that there is an adequate separation of powers between the executive branch, led by the prime minister, the bicameral legislature and the judiciary, and that there is a system of checks and balances in place. The current population of the UK is 64.1 million. The UK was one of the largest macroeconomics in the world. It was seen to be one of the strongest and most stable economies before 2007, however post 2008 economic deceleration began and the GDP growth rate fell to 0.7%. In 2008, the economy entered into a recession, with a predicted negative growth rate of -4.5% for the following year. (Data monitor Statistics) The current conservative government’s main economic aims are Economic growth with more goods and services produced in the economy, alongside low inflation, little unemployment with a Fair distribution of income. (HM Treasury) Taxation comes in two forms direct taxation (taxation on income and profits) and indirect taxation this is taxation on expenditure (VAT, excise duty). The...
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...shame, initiative vs. guilt, industry vs. inferiority, identity vs. identity confusion, intimacy vs. isolation, generativity vs. stagnation, and integrity vs. despair. At each stage individual is confronted with difficulties that needs to be resolved. Erickson believes these crises are characterized by both vulnerability and potential. As stated by Erickson the outcome of the crises determines the course of the development. The more failure an individual experiences during resolving a crisis, the more pressure he would put on him (Santrock, 2011, p. 23). The negative feelings during the crises might cause psychological disorders. According to Piaget’s cognitive developmental theory, children construct actively their understanding of the world and go through four stages of cognitive development: The sensorimotor stage, the preoperational stage,...
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...INTRODUCTION I am a French investor which sells mobile phone, I have a shop in Grasse. I plan to invest in foreign market and particularly in US. The United States is the world’s largest economy in the world with a GDP over than 15 million USD and a consumer market of more than 310 million people. The stability of the country offers a well opportunity for foreign investors. Obviously there are several risks for an internationalization that may be avoid or reduce in order to ensure my success. PESTEL POLITIC: US have a political stability. The country has an open market politic which promotes exchange with foreign countries. Moreover they apply an unconventional monetary policy. LEGAL: The US has one of the lowest tariff barriers, around 3%. An agreement is still negotiating between US and UE, which aim to facilitate trade between them. It’s the NAFTA Moreover, the US is member of the OECD, this significate that each country which is member of this agreement have facilities to access to the country Then, The US wanted the products conform to their standards ECONOMIC: As I said previously, the US is the world largest economy and the economy is still growing with growth in demand. The currency is the US Dollard There are different taxes in the country, they depend of the state. The interest rate is 0.25% Todays the inflation is negative, -0.10%, the forecast for the end of the year are + 0.05%, this is due to the decline in gazoline prices Unemployment...
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...role, if any, does work/life balance play in the success of an organization? Explain. Work-life balance is one of the most important issues facing employers and managers today. Employees at all levels are no longer willing to trade their quality of life in order to get a decent standard of living. Work/life plays a vital role in success of an organization. Work–life balance is having enough time for work and enough to have a life thus the work life balance. Baxter gives this facility to their employees. The employees mange their time in their life as well as their work, in this case the organization has no objection with their employees and vice versa. How does diversity in an organization affect the organization’s work/life balance? What ethical considerations exist that may drive the organization to be more work/life balanced? In the business world, the term "organizational diversity" refers to the concept of hiring many different kinds of people with as many different backgrounds and experience as possible. Work/life balance is part of the culture at Baxter. Managers and employees share responsibility in managing the daily demands of a career and family and are provided with a guidebook that encourages discussion and problem-solving strategies for work/life conflicts. In Baxter most of employees are not belong to one culture but they all share their problems with each other. How can organizations develop a culture that supports work/ life balance? In an organization...
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...Chapter 1: THE DYNAMIC ENVIRONMENT OF HRM LEARNING OUTCOMES After reading this chapter, students should be able to: • Discuss how cultural environments affect human resource management (HRM) practices. • Describe how technology is changing HRM • Identify significant changes that have occurred in workforce composition • Describe the HRM implications of a labor shortage • Describe how changing skill requirements affect HRM • Explain why organizational members focus on quality and continuous improvements • Describe work process engineering and its implications for HRM • Identify who makes up the contingent workforce and the HRM implications • Define employee involvement and list its critical components • Explain the importance of ethics in an organization. CHAPTER OVERVIEW The chapter’s opening vignette illustrates how Four Seasons Resorts and Hotels uses the Golden Rule to treat the employees as you expect them to treat the customer. While customers like to be pampered, so do the employees as evidenced by the Four Seasons being listed in Fortune magazine as one of the “Best Companies to Work For” every year since the list started in 1998. Overviews of today’s dynamic business world, highlighting cultural environments, globalization, technology, and social history evolution, set the stage for discussions about the implications to the HR field. These topics include: multicultural issues, global workforces, HRM technology, workforce...
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