International Business Management Notes PDF

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International Business Management CHENG Ming (Office 437 – Tuesday)  Studied in Canada and Australia, he worked for some companies connected with     

robots – he likes flexibility in time Text Book: International Management (culture, strategy, management – 10th edition, in 7th edition they had two case studies) Marks: 10 % class participation, 20 % group + individual presentation, 70 % Final Individual report Final task: Analysis of some international company (3 000 words +-50 words) More than 50 % revenue of company must be overseas, note financial, no oil, coal mines (no natural resources)

Lesson no.1          

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1978 – first declaration of opening up Foreing trade for china much important than US (podíl HDP číny = ?, podíl HDP USA = ?) 2009 – US recovered quickly, although they caused it (70 % services – tertiary industry – mohli se vzchopit bez ostatních států) Costco (some supermarket chain) – Carrefour acquired by Sunnings, Carrefour (missed delivery services effectively) Walmart – sold out to (some Chinese company: the biggest shares, than wallmart + investment fond) 2 main components of globalization: 1. Markets, 2. Production Majority of foreign investors are from US (SAIC – Shanghai Automobilie Industrial Corporation - Volkswagen) - výhoda: snižuje celkovou cenu, může I zvýšit kvalitu a funkce (ale jen někdy) Boeing 777 – 132 500 major components – 545 suppliers around the world Ve skutečnosti hodně čínské elektroniky (made in china label) – je vlastně primárně jen assembled v číně (pude se ale považovat za vyrobeno) správně ji měl být ukázat podíl procenturální součástek. GSP treaty 1971 – import z developing countries snížil výrazně tarify (dal tak chudším zemím šanci) - in age tarrifs went down from like 40 % to 10 % Custom unions, common markets – seřazení podle miry ekonomické integrace (Nastudovat si úrovně různých integrací zemí.)

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Free trade. Tariffs (a tax imposed on imported goods) between member countries are significantly reduced, some abolished altogether. Each member country keeps its own tariffs in regard to third countries. The general goal of free trade agreements is to develop economies of scale and comparative advantages, which promotes economic efficiency. Custom union. Sets common external tariffs among member countries, implying that the same tariffs are applied to third countries; a common trade regime is achieved. Custom unions are particularly useful to level the competitive playing field and address the problem of re-exports (using preferential tariffs in one country to enter another country). Common market. Services and capital are free to move within member countries, expanding scale economies and comparative advantages. However, each national market has its own regulations such as product standards. Economic union (single market). All tariffs are removed for trade between member countries, creating an uniform (single) market. There is also free movements of labor, enabling workers in a member country is able to move and work in another member country. Monetary and fiscal policies between member countries are harmonized, which implies a level of political integration. A further step concerns a monetary union where a common currency is used, such as with the European Union (Euro). Political union. Represents the potentially most advanced form of integration with a common government and were the sovereignty of member country is significantly reduced. Only found within nation states, such as federations where there is a central government and regions having a level of autonomy.

Explaining article:

Regional Economic Integration: Why is it taking place? Why do nations take part in trade? Provide examples of the levels of financial integration. The reason why the Regional Economic Integration is happening because nowadays we've the open market where every countries or express can hold the free trade to others countries. This integration results from regional monetary integration blocs in which member countries consent to eliminate tariffs and other limitations on the cross-national movement of products, services, capital and in more advanced phases labor within the bloc (THE ROLE FROM THE REGIONAL ECONOMIC INTEGRATION FOR THE INTERNATIONAL BUSSINESS). Among the main things that lead to the integration is the globalization. It affects no on many types of life including the economy. So that, this is a significance to have the Economic integration in order to have the better economy in which the globalization is making its results on. Nations take part in financial integration because each country cannot produce all the goods and services due to its restriction of resources or technology. Therefore, countries produce what they can and have the fully supply of materials, and then they trade a different country in order to exchange for whatever they need. Some countries trade with other nations for particular goods and services because the other countries can produce these cheaper. One country may have progress at producing high quality widescreen-high-definition Tv set. A different country may have the resources for producing goods but they dont contain the technology. It could profit both countries to operate with each other for his or her different but complementary goods and services. There are several levels of the regional economical integration which will be the Free Trade Area, The Custom Union, THE NORMAL Market, and The Economic Union. The Free Trade Area is the least restrictive form of economical integration among countries. In a free trade area, all obstacles to operate among member countries are removed. (Free Trade Area). The free trade area doesn't have a common exterior tariff, meaning different quotas and customs. A free trade area is a result of a free of charge trade arrangement between several countries. Free trade areas and agreements (FTAs) are cascadable to some degree; if some countries signal agreement to create free trade area and choose to make a deal another free trade contract with some external country(ies) " then the new FTA will consist of the old FTA in addition to the new country(ies). (Free Trade Area)Therefore, goods and services are openly bought and sold among member countries in much the same way that they stream freely. European Free Trade Association (EFTA) and North American Free Trade Arrangement (NAFTA) are one of the biggest free trade areas on earth. The traditions union is one step further across the spectrum of monetary integration. Just like a free trade area, it eliminates trade obstacles between member countries and adopts the external trade plan (2) in goods and services among themselves. One of the biggest

traditions unions is the Andean Pact. They have Bolivia, Columbia, Ecuador, and Peru as its customers. Furthermore, however, the traditions union establishes a common trade policy regarding nonmembers. Typically, this takes the form of the common external tariff, whereby imports from non-members are subject to the same tariff when sold to any member country. Tariff earnings are then shared among members according to a perspective formula. The common market does not have any barriers to trade among associates and has a standard external trade policy like the customs union. Additionally, the normal market removes limitations on the motion of the factors of development (labor, capital, and technology) across edges. (2) Thus, restrictions on immigration, emigration, and crossborder investment are abolished. When factors of development are easily mobile, then

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G8 - > G7 (Russia was kicked) (+12 countries) 90 % of world GDP WCO – World Customs Organization (also known as BTN – brussels something) – before custom cooperation counsel nomenclature Tendency to unification of classification of products (classifications are import for choosing tariffs for different categories) – snaha vše nadefinovat společně

Lesson no.2          

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SITC - deals of international customs (one systém – divide into 10 categories – more for statistic) – WCO – for 23 categories – more for customs, import duties HS – Harmonized systém – ambition to harmonize SITC and WCO WIPO – World Intellectual Property Organization – patents, industrial designs, 181 members ZTE – more like servers Patent x Trademark – Slide Wipo – just a change between 2017 to 2018 Finance centres of Europe Frankfurt, London IMF – International Monetary Fund (85 % majority of voting right – US 16, 2 % nothing can happen without United states) Lexus (owned by Japanese Toyota) SAIC motors – čínský automobilový concern Capitalization, in accounting, is when the costs to acquire an asset are expensed over the life of that asset rather than in the period it was incurred. In finance, capitalization is the sum of a corporation's stock, long-term debt, and retained earnings. In finance, capitalization or book value is the total of a company's debt and equity. GINI index, of equality

Tržní kapitalizace se vypočítává tak, že se aktuální hodnota kurzu násobí počtem akcií na burze. S rostoucí kapitalizací trhu je často spojen vyšší obrat akcií. Investoři proto často využívají tento ukazatel jako měřítko, aby vyhodnotili objem obchodu a tržní likviditu podniku.

Chapter 2: National Differences in Political Economy  

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General environment Pest Model : Five Force Model (5 force model – Porter) https://www.mindtools.com/pages/article/newTMC_08.htm (připomeň si to) https://www.investopedia.com/terms/p/porter.asp Who is our competitor: Supply side – lidé co vyrábí ty samé věci jako já, Demand side – lidé co usilují o stejný tip zákazníků jako já. STRATEGIC CIRCLE: similar business in reasonable range No problem to sucrifice individual for society.They refers each other as early stage of socialism. In their mind, socialism more you work more you get, comunnism, there comes a watch, it goes against. They claim that there is another one counsil, where other sides could consult with comunistic party. (They choose ther of course, only those acceptable for them – that one can consult.) To prepare case studies of the. Types of economy: Market Ecnonomy, Command Economy (Planned economy), Mixed Economy, State-directed Economy o Different form mixed economy: state here do not také usually private enterprises into public ownership. It directs private investments through „industrial policy“. o *command economy: higher level of control, for example even movement of people¨ o *old china: for buying cake you did not need only a money but also a coupon for that cake.. For travelling you needed to register at place where you arrived (different village). Macro political risk analysis: Major government decisions which influence all business in the country Mikro political risk: Influencing certain sectors Possible political risks: Confiscation, Campaign against foreign goods, Mandatory labor benefits legislatin, Kidnapping, terrorism, Civil wars, Forms of violance - how to reduce risk of boycott: do not talk about those political issues, do not stress that you come from certain country, stress some charity activies and amount of jobs you are bringing to the area *hide an origin: does it sound chinese, does it sound wester Issues influencing enterance to the market: violating human right, using lower quality environmental standards, child labor, corruption National Bureau of Statistic – english.gov.cn (State Council), China Council for the promotion of international Trade, or Ministry of Finance of CPR.

Chapter 3: Ethics in International Business

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Stakeholders: somebody whose interest is related to certain business or issue, or who is influenced or influence certain issue Usually owners, employees, customers (people on which externalities have an effect) Můžu být stakeholder a mít ve věci zájem, třeba dostanu peníze, dostanu lepší ovzduší. Ale nemusím mít žádný vliv, to řeší management. Management nemusí zajímat ovzduší protože žijí na Bahamách, ale mají velký vliv. Stakeholders: o A stakeholder is a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers and suppliers. o However, the modern theory of the idea goes beyond this original notion to include additional stakeholders such as a community, government or trade association. Iraq, oil for food program: Daimler, Siemens, Volvo, Weir involved Response of China to Human rights conditions on different countries China release US Human Right Report since 1999. (haha) GoldmanSachs (gave money to Greek – they hided a big part of debt publicly – much more debt than expected) *greek opportunity: iron, petrolem, zinc (přírodní zdroje), zemědělství, turismus Foxconn: Huge capacities Futian, huge investmets even in US, Terry Gou: owner, it employs 1.2 million people and is its largest private employer and exporter. Ethical behavior: will i bribe to get a contract in some country, unrealistic performance expectation (forcing people to do not moral act to achieve their goals) Friedman Doctrine: the only social responsibility of business is to increase profit,, so long as the company stays within the rules of law (risk that going agains moral rules could lead for public denial, pr problems – its risk) o if there is no regulation on bribes, or environment protection, you can commit bribes or destract nation Cultural Relativism: ethics is just reflection of cultury and firms should simply adopt the ethics of the cultures in which they operate (if bribary is ok, will we do it) Righteous Moralism: the belief that a home-country standard are the appropriate one to follow Utilitarian: the moral value of act is measured by its consequences Kantian Ethics: moral imperative, always behave the way that you behavior could be used also as a rule in society. He also consideres as unacceptable consider people as means to something, but always only as target of actions. Rights theories – to believe taht people have some rights which transcend national boundaries a cultures Justice theories – it needs to be just (najdeš to v té prezentaci kdyžtak)

Lesson no.3

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Chinese Communist Disciplinary department: complains which you can report there to investigate o Učitel to uvedl jako paralelu k hlídání politických stran jinými politickými stranami www.myclimate.com – firmy dávají peníze NGOs aby působili dobře Snaha kompenzovat svoje emise příspěvkem na společnosti co sází stromy.

Chapter 4 Differences of Culture:    

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Collective programming of the mind which distinquishess the members of one human group from anothers *grammatical structure of Cantonies and English is claimed to be more similar to Chinese. Society: group of people who share a common set of values and norms Indians: a) They can recognize class from colour of the face, or accent, family names, clothing: there is many different characteristics o US: people are easily accepted for his or her own economic achievement o Teacher claims that UK is very hierarchical in comparison, class is important a lot: like accent: private x public university Tuhao – rich people with shitty background, they got mone somehow strangely, Foraigday – rich because a rich parend gave us money Confucianism: 5th century, more like ethnical code, need for high moral and ethical conduct o From humans to humans, Religions tell what God tell us to do, there is not believe in after-life, no workhop Islamic cultures: they do not tell we give you to pay something on debt, but they will let bank work: if they pretend that they are just giving investment – on místo úroku tomu říkají return on investment *culturní dimenze další klasifikace: Trompenaar´s Cultural Dimensions (Neutral vs. Emotional (výzkum, že některé kultury a jejich politici nemají sklon ukazovat jejich emoce veřejně – třeba čínští představitelé vůbec.) (specific vs diffuse – is private place and public place very distinquish or that difference is not clear, China – lidi zásahy do vnímání moc nevnímají, protože moc nevnímají prostor soukromí, hranice soukromí jsou zde velmi tenké – ten důvod nemůžou chápat (pak to jak moc se ve společnosti respektuje princip seniorátu či ne) power distence: even high expectation that boss will manage, boss will organize and give orders

Lesson 5   

Strategy: The actions that managers také to attain company goals, Profitability: the rate of return concept. Profit growth. Resource/based view (RBV) – based on its current resources, firm´s resources are most important in getting and keeping a competitive advantage. - intengible: prestigue, image, company culture

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Same things are easy to imitate, others not. VRIO – Value, Rare, Imitate, Organnize (starbuck – good quality, rare – specific, in chinese market original, imitate – hard (specifikum brandu), organized. (můžu si tu odškrtávat zda ta společnost tuhle věc má) o He likes this model a lot 3. strategie je guerilla https://www.strategicmanagementinsight.com/tools/vrio.html (he likes a Vrio a lot) Akční plán Co, Kdy, a Kdo je Zodpovědný za danou věc BCG matrix, Ansoff matrix Možnosti: zvýšit cenu, snížit náklady, vstoupit na nové trhy… ath The value chain: input – output (tangible vs intangible) - je zde a key process: (různé aktivity pak mají být specializované na různé oblasti), z pohledu Portera jsou hlavní aktivity R&D, Production, Marketing and Sales, Consumer Services - Secondary: Information, Systém, Logics, Human Resources (spíše jako support) Differenciace může například být i počet variací produktu, počet možností, které si můžeš vybrat. (taška – má v sobě záchrannou vestu, odrazku světla do tmy) Příklady hotelů: motel může být klidně více profitabilní než luxusní hotel (je třeba najít si svůj pozitioning a cestu jak na své pozici vydělávat) Organizace podle linek: Manažer, a co produktová linka jiný manažer, Nebo podle oblasti (pro různé země různí manžeři), nebo manažeři podle aktivit Decentralizace (může být poměrně drahá – řada věcí není standardizovaná). Japonská auta – kompaktní, menší spotřeba, lehčí (americká auta jsou stabilnější, pevnější, ale větší spotřeba) Ideální situace u mezinárodního produktu: je anonymita, standardizace (když věc nemusím adaptovat pro různé země) Political imperative: (v některé zemi musíš použít jiné jméno pro samou věc) – pro přizpůsobení se trhu (použít lokální chuť, lokální značku a přizpůsobit se jim) (v Indii Thumps Up brand) Adaptace Walmartu v Kanadě: v supermarketu normálně udice, červy pro rybaření (někde je to ale úplně zbytečné) Globální vs Lokální strategie: něco může být stejné všude (nějaký základní set produktů), něco se může značně lišit (mohu si vždy vybrat vstupím do země s mezinárodní strategií, konceptem a formou produktu / případně vstupím a provedu výraznou adaptaci) *někteří rodiče zvažují v jakém roce se má dítě narodil (rok prasete, krávy.. atd) Globální strategie: představa, můžu strategii aplikovat úplně všude a bude fungovat SWOT Analysis (he considers it jako moc mainstream, radši bych zvolil něco jiného) Portrova analýza se obvykle používá hodně k analýze hlavně mikroprostředí. (pro obecná prostředí se pracuje obvykle s jinými)

First-mover strategy (výhoda z rychlé vstupu na trh, i když trh není připraven vstoupím a připravím si půdu),

Strategy for the „Base of the Pyramid“ (BOP) – Prahalad (Indian American) – focus on poor people, Danone – focus on poor people (levný produkt + profit)...