International Business

Subject Area: Business

Instructor name: Mitchell Strom

E-mail address: mitch_strom@yahoo.com

Schedule of class: Monday & Wednesday, from 1.30 pm to 3.00 pm

Classroom assigned:

Level: Course is offered at the 300-level.

Description: Although international business has been important for decades, its impact
on our lives has been more visible in the recent years. I am presently typing this syllabus
in a computer manufactured by an American corporation (H-P), many of whose
components are produced in Taiwan or mainland China. The computer was assembled in
the Czech Republic and purchased to the Spanish HP subsidiary in an Internet Auction
conducted by an American firm (Ebay). A few minutes ago, a courier delivered me the
latest International Business book I ordered a week ago from a UK Internet-bookstore.

Why this complex network of business corporations that spread across the countries?
Why now and not before? Why we should study international business differently as
regular business? This course will provide an overview of the challenges facing
businesses as they compete on the global playing field.

We shall start the course focusing on the economic foundations of international business.
Next we will consider the main forces that shape business across countries: political,
economic, cultural and legal forces. The last part of the course will analyze the internal
aspects of a firm oriented towards international business.

At the end of the course you should be able to:

1. Understand the most widely used international business terms and concepts.

2. Identify the role and impact of political, economic, social and cultural variables in
international business.

3. Analyze international business from a multi-centric perspective, avoiding

ethnocentrism.

Prerequisites: None required

Language of Instruction: English

Contact Hours: 45 hours

Recommended Credits: 3 credits

Class Format: This is a 15-week course, structured in 30 1 1/2-hour lectures. Each
lecture will combine a presentation of the topic done by the lecturer, plus the joint
discussion of a previously assigned reading or audiovisual material.

We will pay special attention to quantitative measures. Business decisions are based on
facts, and numerical data is the most helpful way to justify a particular choice. As you will
see we will work frequently with tables and charts. The required math level is very
elementary.

Finally, and to complete our understanding of international business we will have the
chance to visit several local companies and institutions involved in global business.
Alternatively there is a possibility that speakers from outside firms will come to class and
talk about them. Following is a preliminary list of field trips (detailed dates will be given
at the beginning of the course):

• Price Waterhouse Coopers: We will speak to Cristina Merino who works

at PWC about the importance of the services they perform, such as
assurance, tax and legal services, business advisory services, corporate
finance, transaction services, crisis management, human resource services,
global compliance services, executive search selection, and activities such
as their Spanish Economic Outlook for 2007.

• UNWTC - The World Tourism Organization of the United Nations:

We will talk to Michel Julian who works as Marketing and Research, and he
will tell us about the objectives of the organization, how it can help the
tourism sector of all members of the U.N. and specifically will relate to us
the work he does in Marketing Intelligence.

• Elvira Bonmati of EUREN (European Economic Network), who works

in Human Resources, will explain to us the profile of those wishing to work
in the international business. She will talk about what she looks for in
international managers, and what it takes to get a foreign assignment.

• Starbucks

• IKEA

Contents:

1. February 5th

Introduction to the course. What is international business?

Background reference: Hill, chapter 1.
Reading: “As Ford appeals to U.S. patriotism, Toyota model has more local parts”,
Wall Street Journal, 5/12/2006.

2. Feb. 7

Globalization
 Case study: “Nike. The Sweatshop Debate”

3. Feb. 12

International Trade and Foreign Investment

Background reference: Hill, chapter 6. (Ball, chapter 2)
Reading: “Living and dying on history and artificial economic sweeteners”, The
Economist, 9/22/2005.

4. Feb. 14

Economic Theories on International Trade

Background reference: Hill, chapter 4 & 5. (Ball, chapter 3)
Reading: “Kicking Up Dust”, Newsweek, 7/25/2005.

5. Feb. 19

Audiovisual Material: “Is Wal-Mart Good for America?”

6. Feb. 21

Exchange rates & balance of payments.

Background reference: Hill, chapters 9 & 10.
Reading: “Gently towards the heavens”, The Economist, 4/1/2006.

7. Feb. 26

Field trip #1

8. Feb. 28

International Economic Analysis.

Background reference: Hill, chapter 11.
Reading: “Lattenomics”, The Economist, 1/15/2004.

9. March 5

The Role of Culture in International Business.

Background reference: Hill, chapter 3. (Ball, chapter 9)

10. Mar. 7

Audiovisual material: “Gung Ho” (http://www.imdb.com/title/tt0091159/ )

11. Mar. 12

The Role of Legal Forces in International Business.

Background reference: Hill, chapter 2. (Ball, chapters 10 &11)
Reading: TI corruption perceptions index 2005 (http://www.transparency.org)

12. Mar. 14

Strategy of international business

Background reference: Hill, chapters 12&13. (Ball, chapter 14)
Reading: “The super-jumbo of all gambles”, The Economist, 1/22/2005.
13. Mar. 19

Field trip #2

14. Mar. 21

Strategy of international business II

15. Mar. 26

Entry strategy and strategic alliances

Background reference: Hill, chapter 14.
Reading: “Latte developer”, The Economist, 1/15/2004

16. Mar. 28

Audiovisual Material: Ryanair

17. April 9

Topics in Intl. Business (I): Import-exports.

Background reference: Hill, chapter 15. (Ball, chapter 17)

18. Apr. 11

Topics in Intl. Business (II): International Marketing.

Background reference: Hill, chapter 17. (Ball, chapter 16)
Reading: “IKEA: How the Swedish Retailer Became a Global Cult Brand”,
Newsweek, 11/14/2005.

19. Apr. 16

Field Trip #3

20. Apr. 18

Topics in Intl. Business (III): Financial management.

Background reference: Hill, chapters 19 & 20. (Ball, chapter 19)
Reading: “So far, so good”, The Economist, 6/16/2005.
21. Apr. 23

Topics in Intl. Business (IV): Human Resource Management.

Background reference: Hill, chapter 18. (Ball, chapter 18).

22. Apr. 25

Audiovisual material: FC Barcelona. The Inside Story.

23. May 7

Current topics in Intl. Business

Background reference: TBA

23. May 9

International Organizations, Ball Ch. 4

25. May 14

Field Trip #4

26. May 16

Audiovisual material (dvd), “The Corporation”

27. May 21

Discuss issues of “The Corporation”

28. May 23

Students’ presentations

29: May 28

Students’ presentations

30. May 30

Students’ presentations

Readings:

The basic reference of this course is the following textbook:

- HILL, Charles W.L. “International Business: Competing in the Global Marketplace”,
5th ed., McGraw-Hill, 2005.

A secondary (but still good reference) is the following:

- BALL, Donald & McCULLOCH, Jr. “International Business: The Challenge of Global
Competition”. Irwin Press 2002.

If you want to buy a textbook, my advice is to choose the first one. There will be a couple
of copies in the center if you want to check them.

The required readings will be available at the copy center, together with selected parts of
the textbook. Data files and other relevant material will be available for downloading (we
will give directions about this at the beginning of the course).

Below is a list of non-technical readings. Only the first one is compulsory. These may
be helpful if you want to go in depth into a particular topic. All of them are intended for a
general audience.

• The World is Flat; a Brief History of the 21st Century , Friedman, Thomas.
Penguin 2005. This is a best-selling book which describes the author’s perception
about recent years’ changes due to globalization. Chapter 1 has been included in
the reading list.

• China, Inc.; the Relentless Rise of the Next Great Superpower, Fishman, Ted C.
Simon & Schuster, 2005. This book describes the evolution of China during the
recent decades and how it will affect the world economy in the future years.
 • Low cost. The Truth Behind the Low-Cost Revolution in the Skies, Calder, Simon.
Virgin Books, 2003. This book explains how low-cost airlines have changed the
way the overall airline industry operates. Mainly focused on the European
business, but also contains information about American low-cost airlines.

• Fast Food Nation: the Dark Side of the all-American Meal, and

• Reefer Madness: Sex, Drugs, and Cheap Labor in the American Black Market,
both books by Eric Schlosser

Form of Assessment:

20% Class Participation

30% Mid-Term Exams
20% Project
30% Term-paper

Final grades will be assigned following the usual CEA norms.

It is understood that class participation means active participation. Class attendance is

compulsory but does not ensure full grade: you have to prepare the readings or the
audiovisuals that will be presented in class and be active during their discussion. Mid-
term exams will be administered during the course and will take no more than twenty
minutes. Alternatively they can take the form of a take-home exercise.

Each of you will have to develop a project, consisting of an in-depth analysis of a foreign
country (please, don’t choose either the US or Spain!). Specifically the information we
need is the following:

• General overview: size, location, neighbors, language...

• Political conditions: democracy, political stability, terrorism…
• Economic conditions: GDP per capita, GDP growth, inflation, unemployment,
balance of payments…
• Social conditions: % of people who live in urban areas, % of people who use
Internet, % of women who work outside home, dependency ratio...
• Cultural conditions: values, public opinion on issues, role of women…
• Legal conditions: judiciary system, corruption, bribery…

You have to collect this information, prepare it and present it to the rest of the class,
spending no more than 10 to 15 minutes. Essentially, what we want is that after your
presentation any prospective investor will have enough information about the country to
decide in going ahead with some market research or not.

Finally, we shall require a term-paper with deadline May 30th. This term paper has to
answer to the question: Which are the effects of the latest wave on globalization in
international business? Your term-paper should include at least the book The World is
Flat (see above), which is one of the compulsory readings.