- •International Management: Exam Questions
- •International management: an overview.
- •How would you define management?
- •What are the managerial functions?
- •What are the basic managerial jobs?
- •In what fundamental way are the basic goals of all managers at all levels and in all kinds of enterprises the same?
- •What is the nature of today’s global business environment? How does this environment facilitate international business activities? Provide examples.
- •How do the legal–political, economic, and cultural environmental differences within a country affect a firm’s international business transactions? Provide examples.
- •What is international business? How does the management of an international business differ from that of a domestic one? Provide examples with specific firms and countries in mind.
- •International transactions involve money converting into different currencies
- •Define globalization. What are the pros and cons of globalization? Provide examples.
- •What is the globalization of markets? Of production? Provide examples.
- •Why do we study international business? Why has studying it become more important today than ever before?
- •How would you define the nature and purpose of international management?
- •What advantages do multinational corporations have? What challenges must they meet? Give examples.
- •What are the major forms of internationalizing? How do firms choose the market entry modes?
- •Why is managing an international business different from managing purely domestic business?
- •International economic environment
- •What are the major objectives for the international economic environment scanning? Name the elements of international economic environment that require special attention of the firms. Why?
- •What are the stages of the country economic analysis? What are the major objectives of this analysis?
- •Compare and contrast the theories of absolute and comparative advantage. How do they stand today? Does one stand more than the other? Why or why not? Support your answer with examples.
- •What do the contemporary trade theories state? Provide examples.
- •Explain the difference between autonomous and offsetting (or accommodating) transactions.
- •Since the balance of payments must always balance, how do balance of payments deficits or surpluses emerge?
- •How will the dollar/euro exchange rate be affected if American consumers consider that it is fashionable to own a bmw car?
- •What are the causes of globalization?
- •What is the difference between a free-trade area and a customs union?
- •What are the costs and benefits of economic and monetary union?
- •International cultural environment
- •Define culture. Which definition in your opinion, is the most appropriate and why? Provide examples?
- •Which needs must be satisfied by culture? Briefly explain each and provide examples.
- •Present culture and its elements. Provide examples and relate them to international business.
- •What is the role of each major religion in conducting international business? What do Christianity, Islam, Hinduism, and Buddhism declare in terms of business?
- •Describe Trompenaar’s value dimensions and discuss their use in international business.
- •Compare and contrast the Kluckhohn–Strodtbeck and Hofstede frameworks and their application in understanding culture.
- •What is parochialism? Culture shock? Ethnocentrism? Provide examples.
- •What are the phases of the culture shock? Explain the methods of dealing with culture shock
- •What do we mean by cross-cultural management and training?
- •How employers can help bridge the cultural divide in the workplace?1
- •How would you train an international business manager?
- •Which practical tips would you provide as the most appropriate when it comes to international business, and why?
- •What is social capital? In your opinion, how cross-cultural management can benefit the business from the point of view of its intangible assets and the income statement?
- •International political and legal environment
- •Define and describe the international political environment. Name its key elements. How should the international managers deal with the foreign political environments?
- •What is political risk? What are the sources of political risk for international companies? How are they connected with the types of political risks?
- •Define the categories of international political risk. Provide examples.
- •What are the objectives of political risks analysis? Are they different from the objectives of international political environment analysis?
- •What are the elements of risks that should be formalized? Explain the methods of political risks analysis.
- •What are the factors and variables of political risks rating, modeling and forecasting suggested by the prs Group and The Economist Intelligence Unit, and beri?
- •What are the best information sources for the political risks analysis?
- •What are the basic strategies to manage political risk?
- •How should international managers minimize the political risk?
- •How does the political environment affect the economy?
- •How does the legal environment affect international business? How should the international managers address the various legal challenges in different countries?
- •What ways are there in resolving international disputes?
- •What are the differences between Common, Civil, and Theocratic Law? How do international managers deal with these different types of laws?
- •What is corruption and how does it affect international business?
- •What is bribery and how is it being addressed by international agencies?
- •Strategic planning in the multinational company.
- •Why strategic planning is important?
- •What are the limitations for strategic planning?
- •How to organize the strategic planning process?
- •Why strategic planning process might be different in different organizations? Provide examples.
- •What are the existing approaches and methods to strategic management?
- •Organizing in the multinational company.
- •What kinds of authority relationships exist in organizations?
- •How authority is dispersed throughout the organization structure, and what determines the extent of this dispersion?
- •What explains the differences in organizing practices between countries? How these differences might be managed?
- •Fundamentals of international hr management. Leadership and motivation in international context.
- •What are the different approaches to international staffing? Outline their main characteristics.
- •What are the functions of international assignments?
- •What are the reasons for using international assignments?
- •What are the positive and negative aspects of a Parent Country National?
- •What elements would you include in a repatriation program?
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Compare and contrast the theories of absolute and comparative advantage. How do they stand today? Does one stand more than the other? Why or why not? Support your answer with examples.
The Principle of Absolute Advantage
A country has an absolute advantage over it trading partners if it is able to produce more of a good or service with the same amount of resources or the same amount of a good or service with fewer resources. In the case of Zambia, the country has an absolute advantage over many countries in the production of copper. This occurs because of the existence of reserves of copper ore or bauxite. We can see that in terms of the production of goods, there are obvious gains from specialization and trade, if Zambia produces copper and exports it to those countries that specialize in the production of other goods or services.
The Principle of Comparative Advantage
It is easy to see that if countries have an absolute advantage there are advantages to trade. However, what happens if one country has an absolute advantage over its trading partners in the production of a number of goods. Specialization and trade can still result in there being welfare gains made from trade.
A country has a comparative advantage in the production of a good or service that it produces at a lower opportunity cost than its trading partners. Some countries have an absolute advantage in the production of many goods relative to their trading partners. Some have an absolute disadvantage. They are inefficient in producing anything, relative to their trading partners. The theory of comparative costs argues that, put simply, it is better for a country that is inefficient at producing a good or service to specialize in the production of that good it is least inefficient at, compared with producing other goods.
Example:
The Production Possibility Curve can be used to illustrate the principles of absolute and comparative advantage.
Country A has an absolute advantage in the production of both maize and wheat. At all points its production possibility curve lies to the right of that of Country B. Country B has an absolute disadvantage. Due to abundance of raw materials or more productively efficient production techniques, Country A is able to produce more wheat and more maize that Country B. Perhaps common sense tells us that Country A should produce both goods and export surpluses and Country B neither. However, when comparative advantage is considered a different story emerges.
Consider the opportunity cost of Country A producing one more unit of maize. Half a unit of wheat has been foregone. When country B produces one more unit of maize two units of wheat are foregone. Economics is concerned with the allocation of scarce resources. Fewer resources are foregone if Country A concentrates its resources in the production of maize.
Now consider the opportunity cost of Country B producing one more unit of wheat. Two units of maize have been foregone. When Country B produces one more unit of wheat only half a unit of maize is foregone. Fewer resources are foregone if Country B specialises in the production of wheat.
In the above case Country A should produce maize and Country B wheat. The surpluses produce should then be traded.