Type:
Solution Manual
Resource:
International Business The New Realities
Edition:
4th Edition
Author(s):
S. Tamer Cavusgil Gary Knight John Riesenberger
PART 1 FOUNDATION CONCEPTS
CHAPTER 1 INTRODUCTION: WHAT IS INTERNATIONAL BUSINESS? Instructor’s Manual by Marta Szabo White, Ph.D.
I. LECTURE STARTER/LAUNCHER ■ Consider having everyone in class introduce themselves. One way to initiate introductions is distribute random pages torn from business magazines, in which each person receives one page. Next each student circles words on the page that describe him/her. In groups of two or three, each student shares the rationale behind each word that he/she circled. Finally, one of the group members introduces another group member to the class. This process enables students to immediately know at least one other student in the class. The circled words and explanations are often humorous, which serve as icebreakers during your first classroom encounter. ■ globalEDGE™ (globaledge.msu.edu) assembles a collection of tools and games that will allow you to compare countries on a variety of statistical indicators, rank countries based on these indicators, and test your knowledge of country capitals from around the world. Get Insights By Country: http://globaledge.msu.edu/Global-Insights/By/country Currency Converter: http://www.xe.com/ Country Comparator: http://globaledge.msu.edu/comparator Ranking Countries: http://globaledge.msu.edu/global-resources/resource/5128 Country Tools and Data: http://globaledge.msu.edu/tools-and-data Global Resource Directory: http://globaledge.msu.edu/global-resources/ ■ Under Country Insights click on a region, then select a country, Zimbabwe for example. http://globaledge.msu.edu/Countries/Zimbabwe Everyone in the class should be assigned a different country. Each student is then responsible for becoming an expert on that country. Twice during the term, each student
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could report on their country, and summarize a newspaper article published in their country, i.e. an International Newspaper Memorandum assignment. [1] An exciting way to introduce your students to International Business is the CIA Maps, from the CIA World Factbook, which provides an interactive and fun tool to introduce to international business: https://www.cia.gov/library/publications/the-world-factbook/ [2] Another great way to introduce student to the world of international business is to direct them to the BBC website: http://news.bbc.co.uk/1/hi/country_profiles/default.stm [3] Comic relief- Humorous (possibly offensive) introduction to IB 2:09 minutes Catherine Tate- Translator: http://www.youtube.com/watch?v=ma8Vwkpx5y8
INTERNATIONALIZATION AT HARLEY-DAVIDSON [CLOSING CASE] ■ Harley Davidson is the chapter Closing Case. These questions serve as hooks for students to familiarize themselves with the chapter concepts ■ 1908- Harley Davidson sold the first Harley police motorcycle to which police department? ANSWER: Detroit; Nearly every large U.S. police department employed Harley motorcycles ■ 1988- Harley Davidson opened up its first foreign production facility. Which country was it in? ANSWER: Brazil (Manaus)… Why is Brazil an important foray into the international arena? It represents a key emerging market country.
II. LEARNING OBJECTIVES AND THE OPENING VIGNETTE LEARNING OBJECTIVES After studying this chapter, students should be able to: 1.1 Describe the key concepts in international business 1.2 Understand how international business differs from domestic business 1.3 Identify major participants in international business 1.4 Describe why firms internationalize 1.5 Appreciate why you should study international business
Key Themes ■ In this chapter, there are five themes: . 2 | Page
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[1] Key concepts in international business [2] How international business differs from domestic business [3] Who participates in international business [4] Why firms internationalize [5] Why you should study international business ■ This chapter is the introduction to the text, as well as to the foundation concepts. The first part of this text (chapters 1 - 8) explores globalization from a macro, environmental level, while the second part (chapters 9 -17) examines international business from a more micro, organizational level. The fundamental concepts introduced in Chapter 1 are central to both macro and micro perspectives for understanding international business. Thus, these basic concepts permeate the entire text, and students should be wellacquainted them. ■ In this chapter, use a macro lens to introduce students to some of the fundamental international business concepts. ■ Cross-border trading has been around for centuries; contemporary international business has gained considerable momentum/complexity over the past four decades. ■ International business refers to the trade and investment activities by companies across national borders. Globalization of markets refers to ongoing economic integration and growing interdependency of countries worldwide. Stress the dramatic growth in world trade, which now exceeds some $18 trillion annually. ■ There are two ways to invest internationally- passively (portfolio investment -financial assets) or actively (foreign direct investment- capital, technology, labor, land, plant and equipment). ■ Also important are importing (global sourcing)-buying products/services from abroad and bringing them back to the home country. Exporting- manufacturing a product or service in one country and selling it to another. ■ Address the broader questions of: ◘ Why firms go international? - Primarily to increase sales and profits! ◘ What is the difference between internationalization and globalization? Former- Expansion of international business activities vs, Latter- Integration, interdependency & interconnectedness of internationalization (the 4 I’s) Example: Increasing exports vs. Sourcing value-chain activities strategically around the globe to leverage factor efficiencies ◘ How international business is different from domestic business: Complexity and Risks (4) ◘ Who participates in international businessMultinational Enterprise (MNE) Small and Medium-sized Enterprise (SME) Born Global - entrepreneurial firm that is international from almost inception ◘ Why you should study international business- Competitive advantage- for you and your firm! ■ Note that international business is both a cause and a result of increasing national prosperity.
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Teaching Tips ■ In this chapter, use a broad brush approach in generating excitement about the importance of international business activity. Ask students to examine their clothing, watches, iPhones, iPods and report where in the world each item was manufactured. This discussion underscores the profound and pervasive impact that globalization has had on all of us. ■ Next, ask students what they would like to do professionally, after they graduate. Once they respond, ask if they can accomplish that successfully without understanding international business, and the impact of global trends on their industry and business? The answer is, of course, a resounding NO!!! Commentary on the Opening Vignette: CHINA GLOBALISES LONDON’S BLACK CABS • Key message In the past, internationalization tended to refer to corporations in developed western states buying into markets in developing or emerging economies. As the manufacturing balance has shifted towards the emerging economies, internationalization has become increasingly concerned with corporations in emerging markets internationalizing into developed western economies. • Uniqueness of the situation described ■ Cash-rich manufacturers in emerging markets such as China are looking for investment opportunities in developed economies. ■ This is enabling them to acquire the expertise, technology and entrance into these markets much faster than they would have achieved by gradual growth. ■ The Chinese government firmly supports this transition from Chinese based subcontracting manufacturers for developed country corporations to owners of these corporations in the home markets. ■ This allows privately-owned Chinese businesses to diversify very quickly and to bring more advanced products and manufacturing back to China. • Classroom discussion ■ This example reflects the ongoing process of economic integration and growing interdependency of countries worldwide, but in reverse of the preconceived notion of the process. ■ The internationalization of many Chinese businesses is an example of the determination of private businesses to systematically increase the international dimension of their business activities. ■ This allows Chinese manufacturers to become part of the widespread diffusion of products, technology, and knowledge worldwide. ■ The case illustrates how globalization both compels and facilitates companies to expand abroad- international expansion is easier due to market and product globalization.
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