Global Business Environment
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Course Introduction
Global Business Environment examines the dynamic and interconnected landscape in which international companies operate. The course explores key factors influencing global business, including economic, political, legal, technological, social, and cultural dimensions. Students analyze how globalization shapes strategies, operations, and decision-making within multinational organizations, and evaluate challenges such as cross-border trade, international financial systems, and ethical considerations. Through case studies and real-world examples, learners develop a comprehensive understanding of how businesses adapt to the rapidly changing global marketplace and the importance of global awareness in achieving sustainable competitive advantage.
Recommended Textbook
International Business Law and Its Environment 10th Edition by Richard Schaffer
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Page 2
Chapter 1: Introduction to International Business
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Sample Questions
Q1) Tariffs on imported products are imposed for which of the following reasons?
A) Collection of revenue
B) Protection of domestic industries
C) To assert political objectives
D) All of the these are correct
Answer: D
Q2) Trade consists of the import and export of goods or services.
A)True
B)False
Answer: True
Q3) In the case In re Union Carbide Corporation Gas Plant Disaster at Bhopal,the U.S.court ruled:
A) that Union Carbide was criminally responsible for the deaths at the Indian plant.
B) that Union Carbide was liable to the plaintiffs under Indian law.
C) that Union Carbide was not responsible for the negligent acts of its subsidiary in India.
D) that the case brought in U.S. courts should be transferred to the courts of India.
Answer: D
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Chapter 2: International Law and the World's Legal Systems
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Q1) A code of conduct is a set of principles that guide people's behavior and actions when communicating with others via the Internet and social media.
A)True
B)False
Answer: False
Q2) In a common law system,the judge has the power to control the conduct of the trial and empowered with authority to examine witnesses and demand tangible evidence from the plaintiff and defendant.
A)True
B)False
Answer: False
Q3) Nations that express their willingness to join a treaty are called:
A) ratifiers.
B) signatories.
C) contracting parties.
D) abrogators.
Answer: B
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Page 4
Chapter 3: Resolving International Commercial Disputes
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Q1) In the Bhopal,India,disaster,the Union Carbide subsidiary involved was owned 50.9% by the parent company with headquarters in Connecticut while the other 49.1% was controlled by Indians.The case on behalf of the victims was started in the U.S.The judge dismissed the case saying it should be tried in India because of:
A) venue.
B) Rex Nonquam Moritur.
C) lack of jurisprudence.
D) Forum Non Conveniens.
Answer: D
Q2) In a California lawsuit between a U.S.resident and a manufacturer based in Taiwan,what might limit the jurisdiction of the California court?
A) The Due Process Clause of the Fourteenth Amendment
B) Sovereign immunity
C) The Hague Convention on Taking Evidence Abroad
D) Comity
E) All of these are correct
Answer: A
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5
Chapter 4: The Formation and Performance of Contracts for the Sale of Goods
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Q1) Draft a model statute regarding international e-contracts (perhaps considering rules for offer,acceptance,and revocation).
Q2) The CISG says that the remedy of specific performance is allowed where the domestic laws of a country allow such a remedy.
A)True
B)False
Q3) Consider the benefits and detriments of a U.S.buyer and a German seller using CISG law for a sales contract.
Q4) Both the U.S.and France have ratified the Convention on Contracts for the International Sale of Goods (CISG).A buyer in France and a seller in the U.S.enter into a contract for the sale of widgets.If a dispute arises:
A) the CISG will apply since all the requirements have been met.
B) the CISG will not apply since the requirement of "legal selection" has not been met.
C) the Uniform Commercial Code (UCC) will apply since the seller is a U.S. company.
D) neither the UCC nor CISG will apply.
Q5) In what ways is the coverage of the CISG and the UCC similar? Different?
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Chapter 5: The Documentary Sale and Terms of Trade
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Sample Questions
Q1) Most buyers in an international sale are now willing to pay cash in advance in order to reduce credit risk.
A)True
B)False
Q2) The type of bill of lading not recommended for the shipment of perishable goods is:
A) a received-for-shipment bill of lading.
B) an on-board bill of lading.
C) a negotiable bill of lading.
D) a straight bill of lading.
Q3) A sale made with terms "CIF Tokyo" includes in the price quoted for the goods which of the following:
A) cash, in-transit expenses, foreign exchange expenses.
B) cash, insurance, freight.
C) cost, insurance, freight.
D) currency exchange expenses, insurance, freight.
Q4) What are the benefits and possible detriments of using an inspection firm?
Q5) Consider when a shipping term as opposed to contradictory contract language will be most persuasive in identifying the type of contract.Vice versa?
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Chapter 6: Legal Issues in International Transportation
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Q1) Transporting new cars above deck on an ocean carrier would be considered:
A) a peril of the sea.
B) a material deviation from the bill of lading.
C) an act of general average.
D) all of these are correct.
Q2) Carriers are liable for damages equal to the value of the goods regardless of how their value is stated on the bill of lading.
A)True
B)False
Q3) The ship Audie Murphy leaves the New York Port with a ship load of GMC pick-up trucks bound for the Port of Istanbul,Turkey.A fire breaks out aboard the ship and destroys the more than thirty GMC pick-up trucks.After an investigation it has been unable to determine the cause.Who is financially responsible to the owner of the cargo?
A) Captain of the Audie Murphy
B) Buyer
C) The Owner of the ship - Jack Palace
D) None of these are correct
Q4) Draft a sample of bill of lading,ensuring that you have addressed the concerns in Z.K.Marine.
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Chapter 7: Bank Collections and Letters of Credit
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Q1) When the Seller's bank guarantees payment under the letter of credit issued by buyer's bank it becomes a(n):
A) confirmed letter of credit.
B) irrevocable letter of credit.
C) letter of credit with stipulations.
D) standby letter of credit.
Q2) Assume that DownPillow sells pillows to a Japanese buyer and forwards documents and a draft for acceptance.Assume also that DownPillow discounts the trade acceptance to a U.S.bank,which then discounts the instrument in the credit markets.If the pillows turn out to be moldy and worthless,which of the following statement(s)is (are)true?
A) The Japanese buyer does not have to pay because the pillows are damaged.
B) The U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow.
C) The Japanese buyer must still honor and pay the acceptance upon presentation.
D) The Japanese buyer does not have to pay because the pillows are damaged and the U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow.
E) All of these are correct.
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Page 9
Chapter 8: National Lawmaking Powers and the Regulation
of USTrade
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Sample Questions
Q1) Under the Constitution,a treaty is considered:
A) "non-binding and discretionary."
B) "unenforceable."
C) "law of the land."
D) none of these are correct.
Q2) One argument in favor of a strong executive branch in international affairs is that the nation must "speak with one voice."
A)True
B)False
Q3) A treaty is an agreement or contract between two or more nations that is recognized and given effect under international or domestic law.
A)True
B)False
Q4) The Omnibus Act provides a fast-track procedure for approving trade agreements whereby the president can declare the agreement to be law.
A)True
B)False
Q5) Weigh the relative value and risks of fast-rack regulation.
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Chapter 9: The World Trade Organization: Basic Legal Principles
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Sample Questions
Q1) Tariffs are computed:
I.As a percentage of value (ad valorem).
II.On the basis of physical units (specific).
A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.
Q2) Guador,a small country in South America,is a member of the WTO.American fruit producers recently succeeded in persuading several members of Congress to introduce a bill to remedy Guador's alleged unfair trade practices in the citrus fruit industry.The bill provides for a unilateral threefold increase in the tariff solely applicable to citrus fruits originating in Guador.Furthermore,the bill imposes periodic testing procedures upon Guadorian citrus fruits from which American producers are exempt.Finally,the bill caps imports of Guadorian citrus fruits into the United States at $20 million in value annually.If enacted,would the bill violate American obligations pursuant to the GATT? Why or why not?
Q3) Quotas serve to increase the amount of imports of a product.
A)True
B)False
Q4) Describe the benefits and detriments of enacting a quota?
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Chapter 10: Laws Governing Access to Foreign Markets
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Q1) In 1947,the international community created the 1947 GATT and incorporated into the context of the principles is the protection of intellectual property to encourage innovation and protection.
A)True
B)False
Q2) Which of the following statements regarding the 1994 Agreement on Import Licensing Procedures is false?
A) Applications should not be refused because of minor errors in paperwork.
B) The WTO Import Licensing Committee must be notified if any new products will become subject to licensing requirements.
C) It calls for the procedures to be fair, reasonable, and nondiscriminatory.
D) Where licenses are used to administer quotas, the amount of the quota already used must be published for all importers to see.
E) All of these are correct.
Q3) The WTO General Agreement on Trade in Services applies basic GATT Principles to service industries.
A)True
B)False
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12
Chapter 11: Regulating Import Competition and Unfair Trade
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Q1) In determining whether increased imports are a substantial cause of serious injury,the ITC does not consider:
A) unemployment or underemployment in the industry.
B) growing inventories.
C) overall economic trends.
D) an actual increase in imports or in market share held by imports.
E) all of these are considerations.
Q2) "Scenario"
Loan guarantees by the French government to French filmmakers who utilize French equipment in the making of their movies.
Q3) The antidumping duty imposed under U.S.law is based on the amount by which the foreign market value exceeds the cost of production by at least 10%.
A)True
B)False
Q4) The GATT Agreement authorizes countervailing duties to offset the effect of subsidies on imports that cause or threaten material injury to a domestic industry.
A)True
B)False
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Chapter 12: Imports,Customs,and Tariff Law
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Q1) The purpose of trade preferences is to provide assistance for countries whose economies are developing.
A)True
B)False
Q2) Which of the following combinations of drawbacks are not applicable?
A) Same condition and manufacturing
B) Manufacturing and substitution
C) Substitution and same condition
D) Any of these combinations could occur
Q3) To determine the dutiable status of goods,it is necessary to know their classification,country of origin,and details pertaining to:
A) perishable/non-perishable status.
B) partially or fully manufactured goods.
C) value.
D) raw materials to be used in production.
Q4) The rule of informed compliance requires the customs broker to be responsible for compliance with customs laws and handling all documentation with reasonable care.
A)True
B)False
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Chapter 13: Export Controls and Sanctions
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Q1) Which is not a current issue regarding export controls?
A) Can effective multilateral controls be established?
B) Who is the enemy?
C) In the absence of multilateral controls, can unilateral controls be effective?
D) Can the State Department both promote trade and commerce and control exports?
Q2) Discuss the strengths and weaknesses of using export controls to effectively stem the tide of high-tech equipment to countries who do not share our political or democratic beliefs.
Q3) The trade sanctions against the Castro government in Cuba has been successful in encouraging a more democratic style representation.
A)True
B)False
Q4) Diversion refers to the illegal placement of goods in the hands of an individual for whom an export license would not be granted because of the type of product,the product's end use,or the country involved.
A)True
B)False
Q5) Compare and contrast unilateral export controls with multilateral controls.
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Chapter 14: North American Free Trade Law
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Q1) Presume that the Caribbean countries have been granted NAFTA membership.Design a plan for phasing them into membership.
Q2) The Fair Trade Commission:
A) attempts to settle disputes that arise over NAFTA.
B) is a law-making body that was formed by NAFTA.
C) was created by NAFTA to help promote fair trade.
D) will be phased out over the next ten years.
Q3) Two U.S.groups that have tended to oppose NAFTA are labor unions and the Free Enterprise Institute.
A)True
B)False
Q4) The North American Agreement on Labor Cooperation promotes:
A) freedom of association.
B) restrictions on child labor.
C) equal pay for men and women.
D) prohibition of forced labor.
E) all of these are correct.
Q5) NAFTA was built on the Mexico-Canada Free Trade Agreement.
A)True
B)False
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Chapter 15: The European Union
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Q1) The trend for regional economic integration is apparent worldwide.
A)True
B)False
Q2) The European Court of Justice and the International Court of Justice have concurrent jurisdiction over EU member international trade disputes with non-EU members.
A)True
B)False
Q3) Because no dissenting opinions are issued,no ruling is made by the Court of Justice until all judges are in agreement.
A)True
B)False
Q4) The Maastricht Treaty abolished the Communities and established the European Union as a successor to the European Community.
A)True
B)False
Q5) In what ways are the nations of the European Union similar to and different from the states of the USA?
Q6) Write a memorandum advocating for or against the entrance of Turkey into the EU.
Page 17
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Chapter 16: Marketing: Representatives,Advertising,and Anti-Corruption
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Q1) Draft a contract with a foreign representative.Include a provision regarding termination and payment for services under such circumstances.
Q2) Under the EU's directive on agency relationships,whenever a principal makes a sale in a territory or a market sector reserved for the agent,the principal must pay the agent a commission,whether or not the agent actually participated in the sale,no matter what the agency agreement provides.This is known as a(n):
A) economic condition alarm.
B) economic commission.
C) commission override.
D) permanent commission.
Q3) "Scenario"
A cash payment of $100 made by an agent of Chicago Chemicals Company,a U.S.corporation,to a processing clerk in the Chilean Office of Business Licensing in order to expedite consideration of CCC's application for authority to conduct business operations in Chile.
Q4) In what ways are advertising regulations pertaining to "sin" products in the U.S.more or less liberal than those in Europe (and/ or other regions)?
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Chapter 17: Protection and Licensing of Intellectual Property
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Q1) Licensees of IPRs are generally eager to operate under specific marketing quotas requested by the licensor.
A)True
B)False
Q2) Under a bilateral agreement concluded in 1994 between the U.S.and the EU:
A) U.S.-made liquor can be branded as "scotch whisky," or "cognac."
B) EU made liquor can be branded as "bourbon" or "Tennessee whiskey."
C) both of these are correct.
D) neither of these is correct.
Q3) What defense can an accused party use when accused of IP infringement?
A) Non-infringement
B) Invalidity
C) Unenforceability
D) All of these are correct
Q4) Importation of merchandise produced and sold abroad and then imported back into the United States for sale in competition with the U.S.trademark owner is referred to counterfeit goods.
A)True
B)False
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Chapter 18: The Legal Environment of Foreign Direct Investment
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Q1) Considering the different types of currency risk associated with foreign transactions,which is most salient for a U.S.business?
Q2) Suppose that you plan to set up a subsidiary in a foreign country.Devise a list of the types of tax incentives you seek to accrue.
Q3) OPIC insurance is provided to U.S.firms operating abroad by private American insurance companies.
A)True
B)False
Q4) In order to qualify for the favorable tax treatment of a Foreign Sales Corporation,a U.S.firm must meet all of the following tests,except:
A) at least one director must be a nonresident of the U.S.
B) its income must be derived from qualified export activity such as the sale of goods abroad.
C) management must be outside the U.S.
D) none of the income may be repatriated to the United States.
E) the FSC must participate in soliciting, negotiating, or contracting with a foreign buyer.
Q5) Compare and contrast the traditional and modern traditional theory of takings.
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Chapter 19: Labor and Employment Discrimination Law
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Q1) Weigh the benefits and detriments of a U.S.company employing workers in developing countries,including children.
Q2) Workers in the United States acquire a property interest in their jobs such that severance pay is an entitlement to compensate for property taken upon dismissal from the position.
A)True
B)False
Q3) Traditionally,Chinese unions have differed from Western-style unions because:
A) union officials are often members of management as well.
B) their purpose is to avoid labor unrest, not to advocate for the interests of the workers.
C) members do not have the right to strike.
D) all of these are correct.
Q4) Due to cultural beliefs about the nature of work and entitlements,severance pay in the U.S.is typically ________,and severance pay in Europe is typically ______.
A) low; high
B) low; low
C) high; low
D) high; high
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Page 21
Chapter 20: Environmental Law
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Q1) Environmental issues are generally limited to cross-border pollution such a between the United States and Mexico.
A)True
B)False
Q2) Some of the inadequacies of the traditional international pollution-control system include:
A) voluntary consent by nations to international litigation or arbitration of environmental disputes is rare.
B) litigation in the polluting company's home country can be circumvented by having all actions and decisions occur through a subsidiary in the less environmentally conscientious country.
C) voluntary consent by nations to international litigation or arbitration of environmental disputes is rare and litigation in the polluting company's home country can be circumvented by having all actions and decisions occur through a subsidiary in the less environmentally conscientious country..
D) None of these are correct.
Q3) In what ways are regional environmental treaties superior or inferior to global treaties?
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Chapter 21: Regulating the Competitive Environment
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Q1) The European Court of Justice has shown little reluctance to find competition conspiracies between a European subsidiary and its American parent.
A)True
B)False
Q2) Compare and contrast the Sherman Act and Articles 81 and 85 of the EU Treaty and/or other Competition laws.
Q3) Due to the fact that foreign competition law violations offer few,if any,damage awards,there is very little private litigation.
A)True
B)False
Q4) When evaluating the effect of a merger,the European Union seeks to determine:
A) the impact of the merger by totaling the total number of competitors left.
B) amount of capital invested in the combined companies in relation to the remaining competitors.
C) the compatibility of the merger with the common market, which is presumed if market share will not exceed 25 percent.
D) none of these are correct.
Q5) Write an argument that clawback provisions violate international law.
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