This document appears to be lecture slides for a course on management of international business. It covers several topics: - An introductory travel exercise to discuss issues to consider when planning an international trip and how it relates to international business. - A discussion of cases like Google exiting China and the BP oil spill to talk about important issues companies face when doing business internationally. - An overview of concepts like globalization, the globalization of markets and production, and how global institutions have helped manage the global economy. - A comparison of different political and economic systems around the world and how they affect a country's attractiveness for foreign investment. - A discussion of other factors like intellectual property rights,

1. Management of International BusinessSupapakYodseraneeBBA, 20101BBA, MIB 2010

2. WK1 AgendaMeet and greet, seating chartSyllabus, course structure, toolsTravel exerciseVideo clipsCases and discussionInfo search exerciseHomeworkSummary2BBA, MIB 2010

3. Travel ExerciseIn a group of 4-5, plan your trip abroad.What are the issues to consider?Where’s your destination?How did you decide?Tell your class.How does this exercise apply to MIB?3BBA, MIB 2010

4. Video ClipsGoogle exit from China (to HK)Why Google entered China?Why Google exit from China? What’s the problem?What’s the company motto mean? “Don’t be evil”Parental control vs. biased mediaBP Oil Spill in the Gulf of MexicoWhat will this incident affect? What will change?Important issues of doing international business.Globalization What’s globalization?What are the pros and cons of globalization?4BBA, MIB 2010

5. Outsourcing American Health CareWho, What, When, Where, Why, How ???Pros and ConsDiscussion questionsWhat trends have facilitate this process?Is the globalization of health care good or bad for the patients?Is it good for the American economy?Who might benefit? Who might lose?Should the US government restrict outsourcing of medical procedures to developing nations?What do we do in Thailand? Does Thailand involve in medical tourism business?5BBA, MIB 2010

6. Thai Political Risk CaseWhat factors affect foreign companies doing business in Thailand? What makes a country attractive to foreign companies?OPIC (Overseas Private Investment Corporation)MIGA(Multilateral Investment Guarantee Agency)6BBA, MIB 2010

7. Info Search ExerciseList Thai MNEs as much as you can.List Foreign MNEs doing business in Thailand.Categorize their business industries.Where are their headquarters or their branches?What are the size of their business?Any other interesting information? Growth rate? Make a summary.What website would be a good start?7BBA, MIB 2010

8. Homework & SummaryRegister yourself in Facebook with your full name and current picture!Add ajob.ubu@gmail.comInfo Search ExerciseGet the booksRead chapter 1-8What’s the difference in managing domestic vs. international business?What are the benefits of doing international business?Success factor?BBA, MIB 20108

9. WK1.2 AgendaStudent News, Hot topic: Political RiskLectureMind mapHomework9BBA, MIB 2010

10. International BusinessWhen did we start international trade?What’s the development?International tradeInternational investmentOur timeWhat’s the buzz word for our time?Globalization10BBA, MIB 2010

11. GlobalizationGlobalization: a shift toward a more integrated and interdependent world economyGlobalization has two aspects-The globalization of market-The globalization of production11BBA, MIB 2010

12. The Globalization of MarketsGlobalization of marketA merging of historically distinct and separated national markets into one huge global market placeGlobal market examples:Should the companies customize their products?Think globally, act locally.12BBA, MIB 2010

13. The Globalization of MarketsWhat help create the globalization of markets?Falling trade barriersConvergence in taste and preference of the consumersGlobal basic products offering from the firms13BBA, MIB 2010

14. The Globalization of ProductionThe globalization of production refers to sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production like land, labor, and capitalWhy should we do this?We can compete easier and more effectively with lower cost or better quality.Assemble in MexicoKorean panelTaiwanese ChipAssemble in ThailandChinese electronic componentsProcessor from the US14BBA, MIB 2010

15. Globalization in a bookBBA, MIB 201015

16. The Emergence of Global InstitutionsInstitutions are needed toHelp manage, regulate and police the global market placePromote the establishment of multinational treaties to govern the global business systemInstitutions created over the half past centuries include:The General Agreement on Tariffs and Trade (GATT)The World Trade Organization (WTO): control the world trading system and promote lower barriers to tradeThe International Monetary Fund (IMF): maintain order in international monetary systemThe World Bank: promote economic developmentThe United Nations (UN): maintain peace, security, cooperation and human rights16BBA, MIB 2010

17. Drivers of GlobalizationTwo major factorsThe decline in barriers to the free flow of goods, services, and capital that has occurred since the end of WWIITechnological changeTariffs have dropped significantly since 1950 to around 4 % in 2005BBA, MIB 201017

18. Drivers of GlobalizationBBA, MIB 201018

19. The Changing Demographics of the Global EconomyA drastic change in demographics of the world economy in the last 30 yearsThe changing world output and world trade pictureThe changing FDI pictureThe changing in multinational enterpriseThe changing world orderBBA, MIB 201019

20. 1.The Changing World Output and World Trade PictureThe share of world output accounted for by developed countries is decreasing. It is the opposite in developing countries and is expecting to be more than 60% by 2020.BBA, MIB 201020

21. 2. The changing FDI pictureNeed to update this chart. http://www.unctad.org/Templates/Page.asp?intItemID=1923&lang=1BBA, MIB 201021The share of FDI accounted for by developing countries have risen from 2% in 1980 to 12% in 2005

22. 3. The Changing Nature of Multinational EnterpriseA multinational enterprise (MNE) is any business that has productive activities in two or more countries. Since 1960, there has been a rise in non US MNE and a growth of mini multinationalshttp://money.cnn.com/magazines/fortune/global500/2009/full_list/BBA, MIB 201022

23. 4. The Change in World OrderMany communist nations in Europe and Asia has committed to democratic politics and free market economies and so create new. opportunities for international businessChina and Latin America are also moving toward greater free market reforms.BBA, MIB 201023

24. Debate: Is globalization a good thing?BBA, MIB 201024Anti globalization, protest at WTO meetings.

25. National Differences in Political EconomyPolitic or economic first?Think of India and China.What countries are still communist?Can communist countries have economic success?BBA, MIB 201025

26. Political SystemThe political economy of a nation refers to how the political, economic, and legal system of a country are interdependent.They interact and influence on each other and they affect the level of economy.Political System refers to the system of government in a nationAssess in two dimensionsDegree of collectivism vs. individualismDegree of democratic vs. totalitarianWhat would be the country in each quadrant?BBA, MIB 201026Political System

27. Collectivism and IndividualismCollectivism: collective goals over individual goalsSocialistsadvocate state ownership of the basic means of production, distribution, and exchange.State-owned enterprise are managed to benefit society as a whole rather than individual capitalistsIn the early 20th century, socialism split into:Communism: achieved through violent revolution and totalitarian dictatorship (collapsed in the 90s)Social democrat: achieved through democratic means. The UK, France, and Germany adopted free market economies and privatized their inefficient state owned enterprise.Individualism: an individual should have freedom in his economic and political pursuitsIndividualism means democratic political system and free market economiesIndividualism is built on two principles:Emphasis on the importance of guaranteeing individual freedom and self expressionThe welfare of society is best served by letting people pursue their own economic self interestBBA, MIB 201027

28. Democracy and totalitarianismTotalitarianism:government has absolute control over all aspect of human life and prohibit opposing political parties.There are four major forms of totalitarianismCommunist: communist party monopolizes power: China, Vietnam, Lao, N Korea, CubaTheocratic:religious party monopolizes the power: Iran, Saudi ArabiaTribal :a particular tribe monopolizes the power, Tanzania, Uganda, Kenya, ZimbabweRight Wing: permits individual on economic freedom but restricts on political freedom: Pakistan, MyanmarDemocracy: a government is by the people (directly or elected representative)Democracy=> individualismCommunism=>collectivism, totalitarianismPure democracy: citizens should be directly involved in decision makingMost democracy countries are representative democracy where citizens are periodically elect individuals to represent them.BBA, MIB 2010

29. Economic SystemThere are three types of economic systems:Market economy: Business: privately owned Production: supply and demand, price systemGovernment: encourage free and fair competition.Command economy: Business: state ownedProduction: government plan goods and services as well as price Mixed economy:Business: certain sectors are private ownership and free market. Government own their firms that are important to national securityExample of state owned enterprise?BBA, MIB 201029

30. Legal SystemLegal system refers to the rule that regulate behavior as well as the processes by which the laws are enforced. Types of legal systemsCommon law: based on tradition, precedent, and customCivil law: based on detailed set of laws organized into codesTheocratic law: based on religious teachingsCustomary law: based on the wisdom of daily experience or important traditions. Depending on the legal system, contracts are approached in different ways. For example, contract tends to be shorter and less specific under civil law because many issues already covered in the civil code.United Nations Convention on Contracts for the International Sale of Goods (CIGS)BBA, MIB 201030

31. Legal Issues in International BusinessBBA, MIB 201031

32. Ranking from World Bank 2010BBA, MIB 201032

33. Property Rights and CorruptionProperty rights refer to the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.Property rights can be violated in two waysPrivate action:theft, piracy, blackmail, and the like by private individuals or groups.Public action: public officials such as politicians and government extort income, resources, or the property itself from property holders through legal mechanism such as excessive taxation, expensive license, and taking assets into state ownership without compensation to the ownerBBA, MIB 201033

34. Property Rights and CorruptionHigh corruption reduce FDI, the level of international trade, and the economic growth rate in the country.The Foreign Corrupt Practices Act: illegal for US firms to bribe foreign government officials.Corruption Perception Index 200910=clean0=totally corruptWhat’s the map telling you?What do you think of the index?BBA, MIB 201034

35. 35The protections of intellectual property rightsIntellectual property refers to property that is the product of intellectual activity—software, music, chemical formula etc.It can be protected using:Patent: exclusive rights for a defined period to the manufacture, use or sale of that invention Copy rights: exclusive rights of authors, composers, play rights or artists and publishers to publish their works as they see fit Trademarks ™: design and names by which merchants and manufacturers designate and differentiate their productsWe can copy everything except your mother!How do firms avoid piracy?Stay way, file lawsuit, and lobby the governmentWorld Intellectual Property Organization, Paris Convention for the Protection of Industrial Property

36. The Determinants of Economic DevelopmentCountries have different levels of economic development. Common measure of economic development:Gross national income(GNI) Purchasing power parity(PPP) adjusting GNI by purchasing powerHuman Development Index(HDI): measure the development by capabilities and opportunities that people enjoy not by the material output life expectancy at birth, educational attainment, and whether average income is sufficient to meet basic needs of life in a country  Quality of lifeBBA, MIB 201036

37. Economic Data ChartNeed to update the data.BBA, MIB 201037++-+-+++--

38. Political Economy and Economic ProgressWhat’s the relationship between the two?Innovation and entrepreneurship are the engine of growth i.e. Dell, Microsoft, CiscoInnovation and entrepreneurship require a market economy—free to make money out of his ideaInnovation and entrepreneurship require strong property rightsDemocratic regimes help long term economic growthEconomic progress begets democracy i.e. Korean, TaiwanGeography and education also influence economic growthBBA, MIB 201038

39. The Spread of DemocracySince 1980s two trends have emerged:Democratic revolutionsCentrally planned=>free market economic modelThree main reasons account for the spread of democracy:Many totalitarian regimes failedto deliver economic progress to the vast bulk of their populations i.e. the collapse of communism in Eastern EuropeNew information and communication technologies have reduced the state’s ability to control access to uncensored information i.e. satellite TV, internetThe economic advances of the past quarter century have led to the emergence of increasing prosperous middle and working class who have pushed for democratic reformsBBA, MIB 201039

40. The New World Order and Global TerrorismMany countries are more difficult to do business because of the inherent violent conflict, or they are a part of a civilization that is in conflict with an enterprise’s home countryTerrorism represents one of the major threats to world peace and economic progress in the 21st centuryBBA, MIB 201040

41. Economic TransformationA shift toward a market-based system involve a number of steps:BBA, MIB 201041

42. Implications for managersPolitical economy raise important issues (operational, strategic, human rights, environment, etc.) for doing international business.Political economy clearly influence the attractiveness of that country for investment.BBA, MIB 201042Overall Attractiveness

43. Mind MapMake your own mind map as a summary for our lecture.Submit it to me.BBA, MIB 201043

44. HomeworkAdd additional important data to your info search exercise.Make a summary and present to the class on Friday June 4, 2010.Bring your notebook.44BBA, MIB 2010

45. WK1.3 AgendaHot topic: Student News, What happened in Japan? What about here? New PM?Mind map: The good, the bad, and the ugly mindData search resultUse various search engine and well known organizations websiteSpot unreliable websites by: Sitemap, dead link, strange definition, check with friends, hacker, censorStudent needs…India vs. ChinaBBA, MIB 201045

46. India vs. ChinaBBC video clips, Fed ArticleWhat is the focus of each country?Why China and India walk different path?What kind of business that you will prefer India over China?Apply the concept you’ve learned to compare China and India for the overall attractiveness of the country.What other information would be helpful for your reasoning? Where can you get it?BBA, MIB 201046

47. WebsitesWorld Bank: www.worldbank.orgWTO: www.wto.orgAsia Business Connection: www.asiabiz.comCIA fact book: www.cia.govBank of Thailand: www.bot.or.thMinistry of commerce: www.moc.go.thDepartment of foreign trade: www.dft.moc.go.thBoard of investment: www.boi.go.thThai stock exchange: www.set.or.thThai customs department: www.customs.go.thThai revenue department: www.rd.go.thThe office of industrial economics: www.oie.go.th/select_isic.aspBBA, MIB 201047