Rutgers University - Camden
School
of Business
Spring
2006 BSB 118
International Business
Environment- MGT 506
Professor
Rakesh B. Sambharya Office
Hours: Wednesday
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. 2003. International
Business: Competing in the Global Marketplace. McGraw-Hill Irwin, 5th
edition.
Website
– http://crab.rutgers.edu/~sambhary
My
website contains syllabus, classnotes, and links to other websites and relevant
material.
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 United States.
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 3, 2006.
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
18, 2006 Introduction to
the course.
Introduction to
International Business; Ch. 1.
National
Differences in Political Economy; Ch. 2.
Jan
25, 2006 International
Trade Theory; Ch. 4.
The
Political Economy of International Trade; Ch 5.
Feb 1, 2006
Reading: Porter, M. E. 1990.
“The Competitive Advantage of Nations,” Harvard
Business Review, March-April, pp.
73-93.
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
8, 2006 Foreign Direct Investment;
Ch 6.
The Political Economy of Foreign
Direct Investment; Ch 7.
Case: Global Wine Wars: New World Challenges
Old
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 France and other
traditional producers to lose market share to challenges from Australia, United
States, and other New World countries in the late twentieth century?
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 Bordeaux
vineyard?
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
Barossa Valley (a premier Australian wine region) producing wines in the
premium and super-premium categories?
Feb
15, 2006 Differences in Culture; Ch 2.
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 Europe. Do you think it was a wise decision to invest
in constructing a new park near Paris?
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 United States and /or Japan? In general, what issues should a
company think through before extending a successful service concept across
cultural boundaries?
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 United States model, and if so, in what
ways? What recommendations would you make regarding staffing, training, and general management?
Feb
22, 2006 Regional Economic Integration;
Ch. 8
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?
March
1, 2004 The Foreign Exchange
Market; Ch 9.
The
International Monetary System; Ch 10.
The Global
Capital market; Ch. 11
Case: Japan’s Automakers Face Endaka
Assignment Questions:
1) What happened to Japan’s
Big Four automakers in 1985, and then again in 1994-1995? Why did these changes occur?
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 Japan’s automakers to endaka?
March
8, 2006 Exam - Mid Term
March
22, 2006 The Strategy of
International Business; Ch. 12
Comprehensive Case Report #2: Philips and
Matsushita: A New Century, a New Round
(in textbook page 517).
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? What do you think of the
company’s outsourcing plans?
5) What advice would you
have for Kunio Nakamura? Is the restructuring program attainable?
March 29, 2006 Mode of Entry & Strategic
Alliances; Ch 14.
Case: Eli Lilly in India: Rethinking the
Joint Venture Strategy
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, 2006 Exporting, Importing
and Countertrade; Ch 15.
Case: Vietnam: Market Entry Decisions
Assignment Questions:
1) Does Vietnam represent
an attractive investment opportunity?
2) Is it too late for U. S.
companies to enter Vietnam?
3) What recommendations
would you make to each of the three U.S. MNCs regarding whether to enter
Vietnam, mode of entry, and timing?
4) What factors will
determine the success of MNCs in Vietnam?
April
12, 2006 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 United States from 1986 to 1990. It’s 1990, and you’ve been
asked by top management to evaluate Rhone-Poulenc’s progress to date in the
United States. What do you tell them?
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 U.S., or Speciality Chemical in Germany) be
selected (hint: nationality) and how should their performance be evaluated?
Would you recommend that their compensation include a component based on
worldwide Sector performance or a component based on overall country
performance? What are the consequences of your recommendation?
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
19, 2006
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
26, 2006 Global Manufacturing
and Materials; Ch 16.
Global Marketing; Ch 17.
May
3, 2006 Term paper due - Country and
Industry Competitiveness Report.
May
10, 2006 Final Examination.