Spring
2007
International Business
Environment- MGT 506
Professor
Rakesh B. Sambharya Office
Hours: Wednesdays
Room
223, Business & Science Bldg. 5.00
to 6.00 p.m. or by apt.
e-mail: sambhary@camden.rutgers.edu Phone: 856-225-6712 Fax:
856-225-6231
Hill, Charles W. L. 2006. International
Business: Competing in the Global Marketplace. McGraw-Hill Irwin, 6th edition.
Website
– http://crab.rutgers.edu/~sambhary
My
website contains syllabus, classnotes, and links to other websites and relevant
material.
Cases
Cases can be purchased from the Harvard Business
School Publishing website at
http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=cp&c=c09787
Each
case is priced at $3.70. Please be aware that each case costs $6.00 if you go
directly to the Harvard website. You may use cases from previous classes used
by students in earlier semesters.
Course
Background
The world economy is becoming
increasingly integrated. Goods, money, information, and services are all being
traded across national boundaries and markets for more and more products and
services are now global in structure. New information technologies allow
instantaneous communication worldwide, thus facilitating coordination among all
parts of the international enterprise. All these forces of change create a more
complex international business environment. Multinational enterprises (MNEs)
have become the most important single element in creating and shaping the
global production system. National boundaries vary in their degree of
permeability to the flow of factors of production and of traded goods, but all
of them are affected by the growing importance of MNEs. The 500 largest MNEs
control over half of the world’s exchange of manufacturing goods and services.
The growing interdependence of the global economic system and the important
role of the MNEs create the need to study the global environment and the
strategic issues, operating problems, and management challenges associated with
operations across national boundaries.
Course
Objectives
1. To learn, understand and interpret
various international business concepts, practices and institutions.
2. To increase our understanding of
business environments other than the
3. To expand our horizons for
understanding the increasingly interdependent nature of business in modern society across national boundaries.
4. To apply theories, techniques, and
concepts to real world international business cases.
5. To understand current events in the
world of international business (strongly recommend regular reading of business
periodicals such as Financial Times (www.FT.com),
Businessweek, Forbes, Economist (www.economist.com),
Wall Street Journal, Fortune,
Thunderbird International Business Review, Business Strategy Review).
Grading
Scheme
Mid Term
Examination 20
Class
Participation 20
Case Reports
(2 reports) 20
Paper 20
Final
Examination 20
100 points
Classroom
Policies and Expectations
Case
Reports.
Deadlines for the three case comprehensive reports are final. I will count only
the best two reports towards the grade. If a student for some reason
cannot submit the report on time please discuss the situation with me before
the due date.
Reports are
done individually and should be at least 6 pages in length double-spaced and
typed. Reports should not simply repeat material and facts from the cases.
Reports will be graded on originality, creativity, analysis, and the ability to
integrate different topics covered in class. Questions to be answered are given
in the syllabus.
Class
Participation.
Students are expected to read required assignments and come prepared to discuss
in class. Only ONE absence is
permitted and beyond that a student will be penalized. Your grade for class participation will
depend on attendance and participation. Participation will be graded in terms
of its relevance, clarity, probity and imagination. Students are responsible
for material and information given in classes that miss. Please make sure you
contact your colleagues to find out what you missed. Quality is more critical
than quantity, but assessment of the former normally requires a reasonable
amount of the latter.
Exams: Both the midterm and
final examination will consist of a combination of objective and essay type
questions. Materials covered in the exams will be from the textbook, notes,
class discussions and any handouts given in class. There will be no make-up
exams.
Paper: A fifteen-page term
paper (minimum 15, maximum 25) is expected from students. This paper is a
country report in terms of its international competitiveness. A student
will select a country and industry of choice in consultation with me and report
on the culture, distinctive management practices, and economic and political
aspects of its environment. The paper is due on May 2, 2007.
Teaching
Methodology
There are two
separate but interrelated parts to the course material. I will do a fair amount of lecturing
regarding course content but I involve students in discussion and
questions. On the other hand, whenever
cases are being done, students are expected to do most of the talking and I
will be more of a facilitator and moderator.
I ask a lot of questions and will call on students frequently, so be
prepared.
I
use e-mail to communicate to the class regarding any changes in the schedule,
questions on cases, just plain announcements, and reminders so please log on
every week and check for messages. Please use the e-mail if you have any
questions and/or problems.
Please
turn off all cellular phones in class. Students who miss class
are responsible for all announcements made in class. Please keep in touch with
fellow students.
Jan
17, 2007 Introduction to the course.
Introduction to
International Business;
National Differences in
Political Economy;
Jan
24, 2007 International Trade Theory;
The Political Economy of
International Trade; Ch 6.
Jan 31, 2007
Balance
of Pyments
Ethics in International Business:
Business Review, March-April, pp.
73-93. (Handout)
Case: The Japanese
Facsimile Industry in 1990.
Assignment Questions:
1) Why have Japanese companies
become the world leaders in the facsimile industry?
2) In 1990, how might an American firm
successfully enter the industry? A European firm? Are Korean firms a threat to
Japanese dominance?
3) Which strategic issues face the
Japanese facsimile firms in 1990?
4) What strategic options should the
firms consider?
Feb
7, 2007 Foreign Direct Investment;
Ch 7.
The Political Economy of Foreign
Direct Investment; Ch 8.
Case: Global Wine Wars:
Assignment Questions:
1) How did the French
become the dominant competitors in the increasingly global wine industry for
centuries? What source of competitive advantage were they able to develop to
support their exports? Where were they vulnerable?
2) What changes in the
global industry structure and competitive dynamics led
3) What advice would you
offer today to the French Minister of Agriculture? To the head of the French
wine industry association? To the owner of a mid-size, well regarded
4) What advice would you
offer today to the Australian Minister of Agriculture? To the Australian wine
industry association? To the owner of a mid-size, well regarded vineyard in the
Feb
14, 2007 Differences in Culture; Ch 3.
Comprehensive Case Report #1: Euro Disney:
The First Hundred Days
Assignment Questions:
1) Assess the pros and cons of Disney’s decision
to build a theme park in
2) What is Euro Disney’s target market, and what
are the implications for the development and organization of the park?
3) What aspects of the traditional Disney theme
park formula, in terms of park design and service design (the basic product),
might prove to be transferable to Euro Disney, and which might prove to be
specific to the
4) Assess the implementation of Euro
Disney’s service delivery system. What could the company have done differently?
5) Should Euro Disney proceed with
the next step of development?
6) What
lessons has Euro Disney learned which could be applied to the development of
second theme ? Should the park be adapted for the local market from the
Feb
21, 2007 Regional Economic Integration;
Case: Regarding NAFTA
Assignment Questions:
1) What is the rationale
behind NAFTA? Does it make sense? Is it a good idea?
2) To what extent do the
goals of NAFTA depend on the creation of a formal international institution?
3) How would you advise
each of the case protagonists to shift their business strategies as NAFTA
approaches?
a) Is NAFTA a good
development for the company?
b) How does it change their
strategic landscape?
c) What problems or
opportunities does it create?
d) How would you advise
(Peterson/Jaekel/Solis) to respond?
Feb
28, 2007 The Foreign
Exchange Market; Ch 10.
The International
Monetary System; Ch 11.
Case:
Assignment Questions:
1) What happened to
2) How well did the
Japanese firms respond to the changes of 1985? What will they have to do
differently in 1995?
3) What lessons, if any,
can other firms take from the response of
Mar
7, 2007 Exam - Mid Term
Mar
21, 2007 The Strategy of International
Business;
Comprehensive Case Report #2: Philips and
Matsushita: A New Century, a New Round.
Assignment
Questions
1) How did Philips become the
leading consumer electronics company in the world in the postwar era? What distinctive
competence did they build? What distinctive incompetencies?
2) How did Matsushita succeed in
displacing Philips as No. 1? What were its distinctive competencies and incompetencies?
3) What do you think of the
change each company has made to date - the objectives, the implementation, the impact? Why is the change
so hard for both of them?
4) What overall strategic
recommendations would you make to Gerald Kleisterlee? To Kunio Nakamura?
Mar 28, 2007 Mode of Entry & Strategic Alliances; Ch 14.
Case: Eli Lilly in
Assignment Questions:
1) Did Eli Lilly pursue the
right strategy to enter the Indian market?
2) Carefully consider the
evolution of the joint venture. Evaluate the three successive IJV leaders.
Identify the unique challenges faced by each.
3) How would you assess the
overall performance of the JV? What did the partner learn from the IJV?
4) What action would you
recommend regarding the Ranbaxy partnership? What are the implications of your
recommendations? How would you implement this?
April
5, 2007 Exporting, Importing and
Countertrade; Ch 15.
Case:
Assignment Questions:
1) Does
2) Is it too late for
3) What recommendations
would you make to each of the three U.S. MNCs regarding whether to enter
4) What factors will
determine the success of MNCs in
April
11, 2007 The Organization of
International Business; Ch 13.
Comprehensive Case Report No. 3: Rhone-Poulenc
(A) and (B) (Condensed)
Assignment Questions:
1) Rhone-Poulenc has made 18 separate
acquisitions in the
2) What structural solution do you recommend for
Rhone-Poulenc? Does a worldwide Sector
structure make sense? If so, should it be implemented company-wide, or perhaps only in certain Sectors or in some
countries?
3) What should be the roles of the
Sectors and the country organizations? What are the likely side-effects, and how would you deal with them?
4) How should managers of divisions (e.g.
Agrochemical Division in the
5) As Rhone-Polenc senior management, how will
you go about deciding those issues, and how will you announce and implement
your plan? What concerns do you have regarding the process of decision making
an implementation?
April
18, 2007 Global Human Resources
Management; Ch 18.
Case:
Colgate-Palmolive Managing International Careers
Assignment Questions:
1) What is your critical evaluation
of Colgate-Palmolive’s International Assignment Policy? What are its strong points? What weaknesses do you
find?
2) What should Colgate-Palmolive do
about the growing issues of dual-career families?
3) What should an MNC consider when
designing a policy regarding international career development?
April
25, 2007 Global Manufacturing and
Materials; Ch 17.
Global Marketing; Ch 17.
May
2, 2007 Term paper due - Country and
Industry Competitiveness Report.
May
9, 2007 Final Examination.