Lecture 1 - Intro to international business

Question 1

Define International Business (2)

Answer 1

1) Firms engaging in cross-border economic activities

2) The activity of during business abroad

Question 2

Define imports, exports and FDI

Answer 2

Imports =
goods and services purchased abroad and brought into a country

Exports =
goods and services sold abroad and sent out of a country

Foreign Direct Investments =
Directly investing, controlling and managing activities in a foreign country

Question 3

Define MNCs and their possible benefits and drawbacks for the countries they enter

Answer 3

Multinational corporation: A business that has direct investments (in form of manufacturing subsidiaries) abroad in multiple countries.

B: Can generate jobs, investment and tax revenue for the countries they enter

D: When closing or scaling back operations they can leave thousands of people out of work

Question 4

Define what determines the success and failure of firms around the globe from 2 views

Answer 4

1) Institution-based view:
Formal and informal rules of the game

2) Resource-based view:
Firm-specific resources and capabilities

Question 5

Define Liability of Outsidership and 3 factors can contribute to it

Answer 5

= A firm’s inherent disadvantage due lo lack of familiarity, networks and legitimacy in the local contexts.

1) Distant origins
2) Lack of local experience
2) Lack of nearby experience

Question 6

Define Globalization

Answer 6

= Trend toward greater economic, cultural, political and technological interdependence among national institutions and economies.

Question 7

Which 2 forces are driving globalization?

Answer 7

1) Technological change and innovation
-Makes it easier, faster and less costly to move data goods and equipment around the world = communication and transport

2) Liberalization of trade
Different agreements on trade:
-General Agreement of Tariffs and Trade GATT 1947
-World Trade Organization WTO - 1995
-EU
-Organizations: The World Bank, The International Monetary Fund IMF
-Regional trade agreements

Question 8

Mention 3 optimistic and 3 pessimistic view on the globalization’s impact on National Societies

Answer 8

Optimistic:
1) Productivity gains through specialization
2) Greater choice of less expensive products
3) Catch-up opportunities for poorer countries

Pessimistic:
1) Loss on national sovereignty, i.e. control over key rules and national identity
2) Increased inequality within countries
3) Loss of certain types of jobs in advanced economies

Question 9

Mention 3 optimistic and 3 pessimistic view on the globalization’s impact on Natural Environment

Answer 9

Optimistic:
1) Sharing of ‘green’ technologies and business practices
2) Energy-efficient scale of production
3) Locating production where clean energy is available

Pessimistic:
1) Increased pollution from transport
2) Shifting of pollution to countries with less regulation
3) Destruction of natural habitats by infrastructure and mining projects

Question 10

Define Sustainability

Answer 10

= Meeting the needs of the present without compromising the ability of future generations to meet their own needs

Question 11

Mention 5 components of SDG 16: Peace Justice and Strong Institutions

Answer 11

1) Political stability (democratic systems)

2) Economic systems that supports growth (market economy)

3) Legal systems (that fight corruption and promote the rule of law)

4) Strong norms and values (that clearly defines right from wrong)

5) Strong ethical behavior (CSR)