International Business Management question

Business Finance

Management in International Business

smu

Question Description

The questions on

the exam do not presume you have any specific knowledge of particular countries, products or

companies. When answering the questions make as many logical assumptions as you wish.

State clearly what your assumptions are. The questions are based on principles, theory and

current events we discussed in class and that appear in your book. Use this background when

answering the questions. Use appropriate terminology relevant to international business.

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FINAL EXAM BUSI 3312 (01) International Business Management December 9, 2016 1:30-4:30pm Instructions You have three hours to complete this examination which will account for 30% of your final grade. Judge the time spent on each question by the value given to it. The exam contains eleven (11) questions. You must answer any seven (7) questions; each answer will be worth fourteen (14) points toward your grade in the exam, a total of ninety-eight (98) points. I will award the other two points as bonus points for a particularly good answer. The questions on the exam do not presume you have any specific knowledge of particular countries, products or companies. When answering the questions make as many logical assumptions as you wish. State clearly what your assumptions are. The questions are based on principles, theory and current events we discussed in class and that appear in your book. Use this background when answering the questions. Use appropriate terminology relevant to international business. If you are having trouble understanding a question or one or more of the words used in it, raise your hand and I will try to help you. Answer any seven (7) of the following questions 1. In general, why do countries control the import of goods and services from other nations? What are some of the methods governments use to control the import of good and services? 2. You are the President of Cuba, a relatively poor Caribbean country whose economy is heavily dependent on tourism and the export of sugar, alcohol (mainly rum) and tobacco products (mainly cigars). You have entered into discussions with Canada on a free trade agreement that you hope will help grow your economy and help Cuban businesses. In your negotiations with Canada what would you be asking to have included in the agreement? Why? Make any assumptions about Cuba and Canada you wish in answering this question. 3. As discussed in class, the Volvo Group, a Swedish based manufacturer of heavy trucks, recently signed an agreement with the Chinese Dongfeng Motor Group to set up a joint venture company in China to manufacture heavy trucks for the Chinese and other Asian markets. Describe what you feel the advantages of this joint venture agreement are for both Volvo and Dongfeng. What does each company stand to gain from the joint venture? 4. When a company makes its very first sale to an unfamiliar foreign buyer they should offer payment terms that include “open account”, a Delivered Duty Paid (DDP) Incoterm and the price should be in the buyer’s home currency. Do you believe this would be the correct export pricing strategy for a company dealing with a new overseas customer? Why or why not? If you do not agree with this strategy, what terms would you offer? 5. Elections recently took place in the USA. The election resulted in a Republican President, Donald Trump, as well as control of both the Senate and House of Representatives by the Republican Party. The Republicans are against government funded health care and bailouts of the financial system and want to pursue “smaller” government. They also push for a much more aggressive “America First” foreign and trade policy and an end to what they consider unfair trade agreements . What do you think the impact of the election will be on foreign companies doing business in the USA? 6. In class we discussed the idea of the “stateless corporation”. What does it mean to be a stateless corporation and describe why many large companies today organize themselves in this manner. 7. Describe some of the positive and negative benefits of Foreign Direct Investment (FDI) on countries that allow foreign companies to invest in businesses in their territory? Do you think FDI has a positive net benefit on the economy of your home country? Why or why not? Be specific. 8. Your company manufactures sneakers in the poor, south Asian country of Bangladesh. You have invested CAD$25 million in the factory which supplies sneakers to retailers around the world. While you are a Canadian company this is your only manufacturing plant anywhere in the world. You have just learned that the Bangladesh government has applied to the International Monetary Fund (IMF) for a loan because it can no longer meet its payments on money borrowed from local and international commercial banks. What might be the impact of an IMF loan to Bangladesh on your company? Should you be concerned about this? Be specific. 9. Given the many difficulties of being successful in international business, why do companies internationalize? What benefits do they achieve? Be specific. 10. SNC-Lavalin is a large Canadian consulting engineering company. Recently they were asked to bid on a contract to design a hydro-electric dam in Brazil. The contract would be worth several hundred million dollars and could be important for the company’s profitability over the next five years. One of the company’s executives pointed out, however, that the new dam would flood large areas of the Amazon rain forest, destroy the habitat of several endangered species and contribute to global warming. She warned that the company would face severe criticism from environmentalists here in Canada and other parts of the world. She wondered if it would be ethical for the company to try to win the contract. Do you think SNC should pursue the contract? Why or why not? Be detailed in your answer. 11. “If a product sells in Toronto it will sell in Tokyo or Dubai.” Discuss this statement in light of your knowledge of international business. Do you agree with it? Why or why not? ...
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