MGF2351 Revision

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  • Hofstede’s Cultural Dimensions
    Individualism vs. Collectivism
    Power Distance
    Uncertainty Avoidance
    Femininity vs. Masculinity
    Short-term / Long-term Orientation
    Indulgence vs. Restraint
  • MGF2351 Revision

    1. 1. Business and Economics WEEK 12 – EXAM REVISION
    2. 2. EXAM - 50% 100 MARKS SEMESTER ONE 2014 – MGF 2351 2
    3. 3. Section A: Short Answer Questions  ANSWER ONLY 6 – worth 10 (18 min) marks each (60 total – 1hr 48min) – Question 1: The International Business Environment (Weeks 1 & 2) – Question 2: Culture in International Business (Week 3) – Question 3: Theories of International Trade and Investment (Week 4) – Question 4: The Regulatory Framework (Week 5) – Question 5: Foreign Direct Investment and the Multinational Enterprise (Week 6) – Question 6: Cooperation among Nations (Week 7) – Question 7: Entry Strategies for Internationalising (Week 10) – Question 8: Globalisation and International Business (Week 11) 3
    4. 4. Section B: Essay Questions  ANSWER ONLY 2:  1 from each section!  Worth 20 (36 min) marks each (40 total - 1hr 12min) – Question 1: Foreign Exchange and the International Monetary System (Week 8) – Question 3: The Structure and Strategy of International Business (Week 9) 4
    5. 5. Common Pitfalls  Not answering question  Not providing examples  In section 2 ,answering questions from the same topic  Not answering the required number of questions Avoid these! 28th February 2011Presentation title 5
    6. 6. PRACTICE EXAM  The practice exam is a carbon copy of the structure of the final exam.  Familiarise yourself!  Actually do it, under timed conditions!!  Think of other questions that may be asked in the actual exam.. 28th February 2011Presentation title 6
    7. 7. 7  Read the question carefully  Look for key words  Address all components of the question - They will all be assigned marks  Provide examples  No need for an essay structure – JUST MAKE IT CLEAR, Bullet points are also fine  WE don’t need you to reproduce the exact textbook definition! Answering Short Answer Questions
    8. 8. ANSWERING ESSAY QUESTIONS  Must use a more formal essay style of writing.  Do not try to spill out everything you know!! Remember to look back at the question and ensure you stay on track.  Remember to clearly number your questions. Which section? Which question number? Mark question number on exam cover  Begin a new question on a new page.  Make sure your writing is readable!! 8
    9. 9. 9 Use reading time well – Understand what the question is asking – Choose which questions you will answer – Think of examples If you don’t know, guess! – You cant lose marks, only gain them! Relax!!!
    10. 10. 10  Plenty of case studies in the text book  Also throughout they mention many others!!  When you are writing your revision notes, include examples and how they can be used to support each topic.  EVERY Exam question requires examples.  Don’t make up examples! WHERE TO FIND EXAMPLES??
    11. 11. 11  What is a political economy? – Political, economic, and legal systems of a country are interdependent  Political systems – Collectivism (socialism, communism) vs. individualism – Democracy vs. totalitarianism (communist, theocratic, right- wing, and tribal)  Economic systems – Command – Market – Mixed INTERNATIONAL BUSINESS ENVIRONMENT
    12. 12. 12  Legal systems – Common, civil, and theocratic law  Important issues for international business – Contract law – Property Rights and Corruption – Protection of Intellectual Property – Product Safety and Liability  Economic development – GNI, PPP, HDI  Transition economies – Attractiveness, costs, risks INTERNATIONAL BUSINESS ENVIRONMENT
    13. 13. 28th February 2011Presentation title 13 A system of values and norms that are shared among a group of people and that when taken together constitute a design for living. Elements of Culture – Religion – Political Philosophy – Economic Philosophy – Education – Language – Social Structure Hofstede’s Cultural Dimensions Changing Cultures – Cultural Convergence – Cultural Divergence Society and Nation State CULTURE
    14. 14. 28th February 2011Presentation title 14 THEORIES OF INTERNATIONAL TRADE  What is free trade?  Classical country-based trade theories – Mercantilism – Absolute Advantage – Comparative Advantage  Modern firm-based trade theories – Product Life Cycle Theory – New Trade Theory – Porter’s National Competitive Advantage
    15. 15. 28th February 2011Presentation title 15  Why Governments Intervene in Trade:  Political – Protecting jobs and industries – National security – Retaliation – Protecting consumers – Furthering foreign policy objectives – Protecting human rights  Economic – Infant industry – Strategic trade policy THE REGULATORY FRAMEWORK
    16. 16. 16 THE REGULATORY FRAMEWORK  How Governments Intervene in Trade: – Tariffs – Subsidies – Import Quotas – Voluntary Export Restraints – Local Content Requirement – Administrative Policies – Anti-dumping policies  The World Trade Organisation – Purpose – Benefits – What do the critics say?
    17. 17. 17 FDI and the MNE  What is FDI / What is an MNE? Forms of FDI – Greenfield Investment – Mergers and Acquisitions Why Choose FDI over other modes of entry? Benefits/Costs of FDI to home and host nations Political Ideology – Radical view – Free Market View – National Pragmatism
    18. 18. 18 COOPERATION BETWEEN NATIONS  What is economic integration?  Different types of economic integration – Bi-lateral, multi-lateral, regional, international  Why pursue economic integration? – Nation-state perspective – Business perspective  Trade related concepts – Trade creation, diversion, and deflection  Different levels of economic integration – Free trade area, customs union, common market, economic union, and political union.
    19. 19. 19  What is the Foreign Exchange Market? – Currency conversion – Insure again foreign exchange risk  Types of Foreign Exchange Systems – Floating – Pegged – Dirty float – Fixed  Role of the IMF  Monetary union  Influences on exchange rate FOREIGN EXCHANGE AND THE INTERNATIONAL MONETARY SYSTEM
    20. 20.  How Internationalisation Improves Profitability – Market Expansion – Location Economies – Experience Effects – Subsidiary Competencies  Pressures of the Global Market – Local Responsiveness – Cost Reductions  Strategies for International Business – International – Localisation – Global Standardisation – Transnational  Structures for International Business – VERTICAL VS HORIZONTAL – International Divisional – Functional – Product – Worldwide Area – Matrix 28th February 2011Presentation title 20 STRATEGY AND STRUCTURE
    21. 21. 21  Which market?  When to enter?  On what scale?  How to enter? – Exporting, turnkey projects, licencing, franchising, joint ventures, FDI – Consider core competencies – Pressures for cost reduction vs. local responsiveness  Countertrade ENTRY STRATEGIES
    22. 22. 22 GLOBALISATION  What is globalisation? Production and Market, Interconnected and Interdependent economy.  Drivers of Globalisation – Declining trade barriers – Technology – Environmental standards – Civil society – Culture  Global governance and institutions – WTO, IMF, UN, World Bank  Debate on Globalisation (Preble article) – Jobs – Inequality and poverty – National sovereignty and cultural diversity – The natural environment
    23. 23. LETS PRACTICE 28th February 2011Presentation title 23
    24. 24. Presentation title 24 SHORT ESSAY: Question: Identify the three types of economic systems. Explain the differences and similarities between them. Use valid examples in your answer. The three economic systems are: Command Economy, Market Economy Mixed Economy. They are different from each other with respect to “ownership”, “role of government” and “type of government system”. Free Market Command Mixed Resources are owned privately. The consumers and firms decide the allocation of resources. Government has no control over the economy. E.g. USA Resources are owned by the government. The government decides the allocation of resources; that is what to produce, how to produce and for whom to produce. Firms are not very efficient as they do not earn profits. E.g. Soviet Union, Cuba Resources are owned both privately and by the government. Important sectors like health,medical,education are under the government and less important ones are under private ownership. Eg.India
    25. 25. Part B: Long Essay Question: When expanding globally firms are subjected to two main types of competitive pressures. What are these? How do these competitive pressures influence the type of business strategy used by firms? Discuss using real life examples. Answering Strategy: 1. UNPACKING 1. Two pressures: Cost and localisation and examples 2. Influence on Business strategy: 4 strategies 3. Examples 2. STRUCTURING 3. WRITING UP 28th February 2011Presentation title 25
    26. 26.  INTRODUCTION: Firms undertake internationalization and enter global markets in order to increase their profitability and profit growth firms. In the global environment they are faced with two main competitive forces: (1) pressure for cost reduction and (2) pressure for local responsiveness. Both these competitive pressures impact business strategy.  BODY: Define the two terms.  Business strategy depends upon the relative strength of these competitive pressures.  International (LL), Localisation (LH), Global standardization (HL), and Transnational (HH)  E.G. :Xerox, Cars, Intel, Caterpillar  CONCLUSION: Businesses should therefore carefully consider the competitive forces operating I the global market and then devise and implement a suitable strategy. They should also be cognizant of the dynamic nature of these competitive pressures and make necessary adjustments in business strategy. 28th February 2011Presentation title 26
    27. 27. 27 THE END GOOD LUCK Teaching Evaluations

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