Course

Introduction/
Course
syllabus
  The course of International Business covers key global business
issues such as cultural, political and ethics aspects; cross-border
trade and investment; the global monetary system and
competition in the global environment.
 Apart from these, the basic content of the course also includes
Course international activities that fall largely within functional
disciplines such as global production, outsourcing, logistics;
overview global marketing; R&D and global human resources
management.
 A variety of realworld examples and cases from small, medium,
and large companies around the world are used for students to
discuss, analyze and solve within the context of the appropriated
theory.
 Explain

• Explain how and why the world’s countries differ and understand,
realize and analyze the different challenges business faces when
they operate in an international environment and in a changing
world

Course Present

objectives • Present a thorough view of the economics and politics of

international trade and investment and examine the various
cultural and political issues that impact international business
activities.

Examine

• Examine the strategies and structures of international businesses.

Text books and References
 Class attendance: 5%

Homework/Quiz: 5%

Examination,
assessment Group presentation: 15%
and grading
Mid-term exam: 15%

Final exam: 60%

 Course calendar
Part 1: Introduction and
Part 2: Country difference
Overview
Chapter 1: Globalisation Chapter 2: National difference in Political Economy
Chapter 3: Differences in Culture
Chapter 4: Ethics in International Business

Part 3: Competing in a Global marketplace

Chapter 5: The strategy of IB Chapter 8: Global production, outsourcing &

Chapter 6: Entry strategy and Strategic Logistics
Alliances Chapter 9: Global marketing and R&D
Chapter 7: Exporting, Importing and Chapter 10: Global human resources management
Countertrade
Chapter 1:
Globalization
 Understand Understand what is meant by the term Globalisation

Recognize Recognize the main drivers of globalization

Learning Describe Describe the changing natural of global economy

objectives:
Explain the main argument in the debate over the impact of
Explain globalization.

Understand how the process of globalization is creating

Understand opportunities and challenges for business managers.
 Definition: Globalization refers to the shift
toward a more integrated and
interdependent world economy
Hill (2015, tr.15)
What is the
meaning of
“Globalization”
Two facets of globalization:

• Globalisation of market
• Globalisation of production
Globalization Moving away from an economic
system in which nation markets
of market are distinct entities, isolated by
trade barriers of distance, time
and culture, and toward a system
in which national markets are
merging into one global market.
Hill(2015, tr.18:19)
 Globalization of production

- Definition: Trend by individual firms to disperse parts of the productive processes

to different locations around the globe to take advantage of national differences
in the cost and quality of factor of production like land, labor and capital. Hill(2015,
tr.19:20)
Companies can:
 Lower their overall cost structure
 Improve the quality or functionally of their product offering
 Example of globalization of production: Video: “Story of an iPhone - Analytics in Supply Chain Decisions”
Link Youtube : https://www.youtube.com/watch?v=YbM_LydRlnM&t=2s
 Global Institutions
• help manage, regulate, and police the global
marketplace
The • promote the establishment of multinational treaties to
govern the global business system
emergence
of Global Examples include
Institutions • the General Agreement on Tariffs and Trade (GATT)
• the World Trade Organization (WTO)
• the International Monetary Fund (IMF)
• the World Bank
• the United Nations (UN)
The emergence of Global Institutions

 The World Trade Organization (like its predecessor GATT)

 polices the world trading system
 makes sure that nation-states adhere to the rules laid down in trade treaties
 promotes lower barriers to trade and investment
 The International Monetary Fund (1944) maintains order in the international monetary system
 The World Bank (1944) promotes economic development
 The United Nations (1945)
 maintains international peace and security
 develops friendly relations among nations
 cooperates in solving international problems and in promoting respect for human rights
 is a center for harmonizing the actions of nations
 (1) Declining trade and
Drivers of
globalization investment barriers
Two macro factors
underlie the trend
(2) Technological change
toward greater
globalization
 International Trade: Occurs when a firm
exports good or services to consumers in
(1) Declining
another country.
trade and
investment Foreign Direct Investment (FDI): direct
barriers investment in business operations in
foreign country.
 1920s – 1930s:
Trade and
investment
barriers were very Under GATT,
high in order to more than 100
protect domestic countries agreed
industries from to lower trade
Route of foreign
competition
and investment
barriers
declining
trade and
investment After WWII, the The WTO
advanced launched to aim
barriers industrial nations
of the West
for further
liberalizing the
committed global trade and
themselves to investment
removing barriers framework.
to the free flow of
goods, services
and capitals.
 (1) Declining trade and investment barriers
Average Tariff Rates on Manufactured Products as Percent of Value
Tariff and
non-tariff
barriers
from 1995 to
2015
 For globalization of market:
Implications (+) Firms can view the world, rather than a single
of declining country, as their market
trade and (-) Domestic firms face with intense competition
investment from foreign competitors.
barriers for For globalization of production:
globalization - Firm can base production in the optimal location
for that activity
(2) Technological change

1. Microprocessors and Telecommunications:

 The explosive growth of high power and low cost computing
 Development of satellite, optical fiber, and wireless technologies..
2. The Internet and World Wide Web:
 Mạng WWW  develop the information backbone of the global economy.
 It allows businesses to expand their global presence at a lower cost than ever before.
3. Transportation Technology
 The development of commercial jet aircraft and super freighters and containerization
 reducing time and costs of shipping goods over long distance.
  For globalization of market:
 lower information processing and communication costs - firms
can create and manage globally dispersed production systems.
Implications  lower transportation costs - firms can disperse production to
of economical, geographically separate locations

technological
 For globalization of production:
change for  low cost global communications networks - help create an
globalization electronic global marketplace
 low-cost transportation - help create global markets
 global communication networks and global media - create a
worldwide culture, and a global market for consumer products
 3. The changing of demographics of the Global
Economy

Before 1960s:
(1) US dominance in the world economy and trade picture
(2) US dominance in world foreign direct investment
(3) The dominance of large multinational US firms on the international business
(4) Half the globe is communist.
After 1960s:
 All four of these qualities either have changed or are now changing rapidly
(1) The changing world output and world trade picture
Hill (2015, tr.34)
(2) The changing foreign direct investment picture
Percentage Share of Total FDI Stock 1980-2007
(2) The changing foreign direct investment picture
FDI Inflows 1988-2008
 100%
TRIỆU USD 80%
60%
40%
20%
0%

2006

2009
1994
1990

1992

1995
1993

1997

2000

2002

2004
2005

2007
2008
1991

1996

1998
1999

2001

2003

2018
2010
2011

2014

2016
2012
2013

2015

2017
Developed economies Developing economies Transition economies

Global FDI inflows 1990-2018

(Unit: million USD)
28
(3) The changing nature of the multinational enterprise
A multinational enterprise (MNE) is any business that has
productive activities in two or more countries

There has been a rise in

The growth of mini –
non – US
multinationals.
multinationals.
 (3) The changing nature of the multinational enterprise

There has
been a rise in
non – US
multinationals
 Between 1989 and 1991, a series of
democratic revolutions swept the
Before, many former communist nations Communist World. Many of the former
were essentially closed to Western Communist nations of Europe and Asia
seem to share a commitment to
international business. democratic politics and free market
economics.

(4) The changing world order

THE GLOBAL ECONOMY OF THE 21ST CENTURY

- The US is no longer be the dominant in the

global economy like before

- The world is moving toward a more global

economic system

- The world witness rapid change in

developing countries like China, South Korea
and Taiwan
Is the shift toward a
more integrated and
interdependent
global economy a
good thing?
The Globalization Debate

The globalization debate focus on 4 main aspects:

(1) Jobs and income
(2) Labor policies and the environment
(3) National sovereignty
(4) The world’s poor.
Presentation topic: Group 1:
Analyze and find examples to
illustrate your point about the
four main aspects of the
globalization debate?
 Managing an international business differs
from managing a domestic business because
countries are different
Managing in the range of problems confronted in an
international business is wider and the problems
the global more complex than those in a domestic business
marketplace firms have to find ways to work within the limits
imposed by government intervention in the
international trade and investment system
international transactions involve converting
money into different currencies
 Understand Understand what is meant by the term Globalisation

Recognize Recognize the main drivers of globalization

Summarize Describe Describe the changing natural of global economy

chapter 1
Explain Explain the main arguments in the debate over the
impact of globalization.

Understand Understand how the process of globalization is creating

opportunities and challenges for business managers.