DYNAMICS OF INTERNATIONAL BUSINESS
Geography 330 Instructor: James E. McConnell
Summer, 2006 Office Hours: Thursday, 1:30-3:30 p.m.
SIM/UB Undergraduate Program and by appointment
Mon & Wed 1:30-5:15 p.m. Office location:
Classroom#: Phone:
e-mail address: geojem@buffalo.edu
Webpage: http://www.buffalo.edu/~geojem
Course Description and Objectives
The term “dynamics” refers to the “rapidly changing” events and characteristics of the global business environment. In addition, the term reflects, in part, the many ways in which corporate managers are responding to the variety of opportunities and challenges that they are confronting in the emerging global economy. “International business,” of course, refers to the variety of activities, both domestic and international, in which companies engage in the process of conducting cross-border commerce. These activities include exporting and importing, the location of production, direct capital investments, and various forms of strategic and co-operational alliances.
The purpose of this course is to examine these exciting and rapidly changing patterns, processes, strategies, and impacts of international business from a geographical (i.e., spatial) viewpoint. Using this perspective, one can examine the opportunities and problems of human spatial interaction within a global-business setting, and focus upon the strategies, policies, and decisions of corporate executives, local and national governments and NGOs, and other "local and global" decision-making groups and organizations that are the major “actors” within the international business environment.
More specifically, emphasis in the course is given to the underlying forces, emerging geographical patterns, and controversial issues inherent in the evolving local-global ("glocal") economy; the interactions between international companies and nation-states; the interrelationships between cultural, political, legal, and economic environments and corporate decision-making; the basis for developing international competitive advantages for firms, industry clusters, regions, and nations; core concepts of spatial systems and theories of industrial geography, international business, and regional economic growth and development; location-related problems and decision-making strategies of transnational corporations engaged in cross-border trade and investment activities; the impacts of security regulations at international borders on cross-border commerce and supply chains; policies related to restrictions on the cross-border movement of people, capital, technology, commodities, and services; the growing importance of regional economic integration and regional trading blocs; the internationalization process of small and medium-sized companies; strategic planning, organizing, and marketing for international business expansion; the variety of Internet-based information and data systems that are available to international managers; and the practical, day-to-day tasks and strategies of operating an export department in an international company.
This course also serves as an introduction to the Geography Department’s undergraduate specialization in international trade and direct investment at the University at Buffalo (USA). The Department also has Master’s and Ph.D. programs in international trade and investment; a dual MBA-MA degree option in international business with the School of Management; and, for undergraduates, a new "Combined BA-MA Degree in Geography with Specialization in International Economic and Business Geography" that can be completed in five years. Also, the Department houses the Center for Global Commerce, which includes the Canada-U.S. Trade Center in which faculty and students conduct research on global trade and investment issues and provide trade-related assistance to North American companies.
Class Format and Reading Requirements
A lecture/discussion and student presentation format is used in the course. Participants are expected to attend all of the classes and contribute to classroom discussions.
The required text for the course is: International Business: The Challenges of Globalization (Third Edition, 2006, from Pearson/Prentice-Hall Publishers; ISBN: 0-13-143275-3), by J.J. Wild, K.L. Wild, and J.C.Y. Han. Assigned readings from the text and other resources are set forth below in the course outline.
Keeping in touch with the “real world” of international business
Note that emphasis will be given to present-day events and issues within the international community. Therefore, class members are encouraged to examine on a regular basis business-related newspapers, magazines, and various on-line news media. Examples of such sources include the following:
(1) Singapore-based news media: Business Times and Straits Times.
(2) Other Asian-based news outlets: Asia Times (on-line newspaper of events and trends in Asia: www.atimes.com); Asia-inc (monthly business magazine for Asian executives: www.asia-inc.com); Asia Media (media news and views from Asia Pacific: www.asiamedia.uda.edu); and Asian Business Strategy News (Asian business and marketing intelligence news, columns, and research articles: www.apmforum.com).
(3) U.K-based news media: Financial Times and The Times.
(4) Canada-based news media: The Globe and Mail
(5) U.S.-based news media: The Journal of Commerce (http://www.JOC.com); Business Week (http://www.businessweek.com/globalbiz ); and The Economist (http://www.economist.com).
(6) In addition, a list of recent publications is attached (page 7) that may be of interest to students in IB.
Communications
If you wish to contact me during the summer session, please feel free to utilize e-mail (see my address above) or visit me in my office. In addition, the course outline and weekly/daily assignments are available on my webpage: http://www.buffalo.edu/~geojem/. Also, I may be communicating with you from time to time via e-mail using the University at Buffalo’s "UBLearns course management system."
Assessment: Class Attendance, Examinations, Individual Project, and Grading Policy
Throughout the six-week period, each participant in this course is expected to attend classes regularly, read all of the assigned readings, participate in classroom discussions and exercises, complete three exams, and prepare independently brief “Backgrounder Booklet” essays on specific topics in international business. The overall assessment of student performance in the course is as follows: 1st exam = 20 % of the final grade; 2nd exam = 25%; 3rd exam = 25%; “Backgrounder Booklet” essays = 20%; and classroom attendance and participation = 10%. More specific information about the course requirements is set forth below.
Exams: The three exams are tentatively schedule to occur during the last part of the period on May 31, June 14, and June 28. These exams will consist of multiple-choice questions and questions that require relatively short, paragraph-type responses. The questions will be based upon the assigned chapters in the textbook and other supplemental reading materials, class lectures and discussions, the topics that are in the “Backgrounder Booklet” essays, student presentations, and the contents of in-class videos. The first, second, and third exams are valued at 20, 25, and 25 percent, respectively, of the final course grade.
“Backgrounder Booklet” Essays: In addition to the three regularly scheduled exams, each class member is expected to develop independently three “Backgrounder Booklet” essays. The total value of these essays is 20 percent of the final course grade. Booklet #1 is to be completed and turned in at the beginning of the period on May 31; Booklet # 2 is to be turned in on June 14, and Booklet #3 on June 21. The first part of the period on the first two “exam” days and the latter part of the period on June 21will be devoted to a discussion and review of the topics contained in the Booklets. Class participants are to be prepared to discuss the contents of their essays on the days when they are to be turned in. The purpose of the Booklets is to assist class members in obtaining an in-depth understanding of some of the important topics in international business, and in becoming familiar with various Internet sources of information on IB. Note that each Booklet is focused upon six topics. Therefore, each Booklet is to contain sufficient background information on each of the six topics that enables others in the class to understand the nature and significance of the topic. In addition, the brief essay for each of the topics must include at least one annotated Internet reference that is used in preparing the essay. [Note: An “annotated” reference means that, in addition to specifying the Internet address of the reference (and when it was retrieved), two or three sentences are included that describe the nature of the Internet site, and that help the reader to understand what is in the reference and why it is significant for the topic.] Finally, note that the contents of the Booklets are to be typed; no more than TWO typed pages (using 11-font, double-spaced typing) are to be devoted to each of the topics; the six topics of each Booklet are to be stapled together behind a cover sheet that contains the class member’s name, student number, and date of submission; and only “hard” copies of the booklets will be accepted—no e-mails, faxes, or CDs will be accepted!
The six topics for Booklet #1, which are to be turned in on May 31, are: 1)What is the rationale underlying Friedman’s thesis that the “world is flat,” and how valid is the thesis? 2) What is the significance of the concept of the“localness” of international business and the global-local (“glocal”) concept in economic geography? 3) What are the principal cultural differences between doing business in Singapore versus in the United States? 4) In what ways are these trade policy issues related: local content requirements, trade “facilitation,” and the Foreign Corrupt Practices Act? 5) What demands is JIT manufacturing putting upon the following: 3PLs, logistics management, and international supply chains? 6) What is the significance of Michael Porter’s “diamond-plus-two” model for the following: the “innovative” regional economy, the “World Competitiveness Yearbook,” and Singapore’s relative competitive advantage in the global marketplace?
The topics for Booklet #2, which are to be turned in on June 14, are: 1) How are international trade data measured, what are TEUs, and what are the different ocean-container specifications? [See: http://www.evergreen-marine.com, and look under the heading “Equipment.”]; 2) What is Douglas Irwin implying when he states that “free trade is under fire?” 3) What is the “flying geese” model of regional production networks and how is it relevant to present day operations in Singapore and other ASEAN nations? 4) What are the FDI patterns of Singapore’s TNCs and their regional production networks? [See Henry Yeung’s 2001 article in the Jo. of Economic Geograhy]; 5) Should South America look to NAFTA or to the EU? What is the view from the South? 6) What are the challenges facing the emerging FTAs in Africa?
The topics for Booklet #3, which are to be turned in on June 21, are: 1) What are the components of a company’s core competencies and value chain, and how are they related to successful ventures in international business? 2) What is INTTRA and what is its relevance for global e-commerce? 3) Describe three variables that are critically important in measuring market and site potential in a foreign country? 4) Identify the key risks of creating strategic alliances in China. 5) What were the primary trade-related issues that are currently affecting China-U.S. relationships? [Hint: What did President Hu discussed when he visited the U.S. on April 19 and 20, 2006?] 6) In what ways are global business ethics related to corporate performance?
The grading policy will be as follows: A plus/minus grading system will be used in assigning final grades in the course. The following represents the scale that will be utilized in assigning final grades.
Letter Grade % Equivalent Interpretation
A 92.5 – 100.0 High Distinction
A- 90.0 – 92.4 High Distinction
B+ 87.5 – 89.9 Superior
B 82.5 – 87.4 Superior
B- 80.0 – 82.4 Superior
C+ 77.5 – 79.9 Average
C 72.5 – 77.4 Average
C- 70.0 – 72.4 Average
D+ 67.5 – 69.9 Passing Grade
D 60.0 – 67.4 Minimum Passing Grade
F 00.0 – 59.9 Failure
General UB Program Policies:
Everyone is expected to attend classes on a regular basis and complete the three class-length exams and turn in the “Backgrounder Booklet” essays when scheduled. In fairness to others in the class, late assignments, if accepted, will be penalized one full letter grade for each business day that they are tardy. Attendance and active participation is expected by all students in every class. Students are expected to be present for the entire duration of each class. Tardiness or absenting oneself during class will result in a deduction from the attendance and participation portion of the final grade.
Students who are absent from a midterm or final exam must formally request a make up exam in writing to the resident director and, if applicable, present a valid medical clearance. There will be no make ups for other course assessments, and students who are absent from such assessments will receive a zero. Make up exams will not be granted automatically but will be considered on a case-by-case basis, taking into account all the relevant circumstances.
UB Statement of Principle on Academic Integrity:
The University at Buffalo has a responsibility to promote academic honesty and integrity and to develop procedures to deal effectively with instances of academic dishonesty. Students are responsible for the honest completion and representation of their work, for appropriate citation of sources, and for respect for others’ academic endeavors. By placing their name on academic work, students certify the originality of all work not otherwise identified by appropriate acknowledgements. Additionally, students are expected to understand and abide completely by the following guidelines for academic integrity in all UB courses:
Plagiarism, cheating, and other incidents of academic dishonesty will result in an automatic failing grade for the course. Depending on the severity of the violation, your case may also be reported to UB for further investigation and may result in expulsion from the university. Plagiarism consists of copying work from another source without giving proper citations. You must not copy information from printed materials, internet sources, or from the work of other students. If you are uncertain about how to submit your work correctly, consult the instructor immediately. Any claim of ignorance of the rules of academic integrity by any student is unacceptable.
Special notes: Should you have difficulty with materials discussed in class or presented in the text, please let me know. I am most willing to help you, but I may not recognize that you are having difficulties. In addition, if you have a “diagnosed disability (physical, learning, or psychological),” which makes it difficult to carry out the course requirements, please let me know. Good luck to all!!
COURSE OUTLINE AND ASSIGNED READINGS
Section I: Introduction and Overview
A. The interface between economic geography and international business
[What is the geographical (i.e., spatial) perspective of international business (IB), and what are the different scales of resolution and analysis? What are examples of the major issues and trends in IB? What are some of the key “drivers” of the global economy? What are key websites for information related to IB?]
Reading Assignments:
(1) Text: Chapter 1, pp. 27-32
(2) “Global Trends 2015: A Dialogue about the Future with Non-government Experts”
(December, 2000). Read all of the subsections under the section heading titled
“Overview.” Access this reading on line at the following address:
http://www.cia.gov/cia/reports/globaltrends2015/index.html (retrieved 7/25/05).
B. Globalization: driving forces, emerging patterns, and controversial issues and claims
[Subtopics include the “structure” of the new geo-economy (regionalism vs. multilateralism), key players in globalization (G), measuring G, principal drivers of G, the spatial dimensions of G (place matters in cyberspace and world-city networks), impacts of G at both the “local” and “global” level (worker migrations and immigration policies, income distribution, sovereignty, and culture), the nature of the debates about G (anti-globalization protests against the WTO, the IMF, and the World Bank), the politics of G (political and economic diplomacy), and who in the world is gaining and who is losing.]
Reading Assignments:
(1) Text: Chapter 1, pp. 2-27 and 32-47
C. National business environments, conflict situations, border security, and business diplomacy
[Subtopics include culture, politics, and law in business; cross-cultural staffing and cultural programs; conflict resolution between businesses and nation-states; political systems and managing political risk; global legal and ethical issues; and new “homeland” security regulations, corporate costs of cross-border commerce, and corporate investment/location strategies; and special case study of how countries in Latin America are viewing the economics and politics of the proposed Free Trade Area of the Americas--the FTAA]
Reading Assignments:
(1) Text: Chapters 2, 16, and 3
D. Economic systems, the multinational enterprise, and country competitiveness: What is meant by global competitiveness?
[Topics include business and economic development conditions in different economies; countries in economic transition; MNEs from developed and developing nations; determinants of corporate, regional, and national competitiveness; Porter’s theories of competitive advantage; core competencies and value-chain activities; The World Competitiveness Yearbook; the “innovative” regional economy; industry clusters and regional economic growth and development; and the current competitive stature and lobbying activities of the steel and machine tool industries in the U.S.]
Reading Assignments:
(1) Text: Chapters 4 and 5 (pp. 168-171).
(2) Reports by the U.S. Council on Competitiveness: a) Background on the organization:
http://www.compete.org/about_us; b) National innovation and the National Innovation
Interim Report: http://www.compete.org/nii ; and c) Regional innovation initiative:
http://www.compete.org/nri/ncric.asp .
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Section II: “Geographies” of International Business
A. Core concepts of spatial and industrial production systems
[Focus upon corporate restructuring and employment flexibility, the new global economic map, and geographic shifts in production, trade, and direct investments.]
Background: J.E. McConnell, “International Trade: Geographic Aspects," International
Encyclopedia of the Social & Behavioral Sciences (2001), pp. 7848-7852.
B. International trade in goods and services
[Attributes of trade flows (direction, composition, magnitude, and means of conveyance), world patterns, old and new theories, government trade and investment policies and regulatory mechanisms (tariff and non-tariff barriers), the international travels of T-shirts, nature and challenges of cross-border e-commerce, the cost of increased protectionism and security regulations, and "free trade under fire" (Should the U.S. steel and textile industries be protected?)
Reading Assignments:
(1) Text: Chapters 5 and 6
C. International location theory and overseas production
[Patterns and theories related to locating foreign direct investments and technology and managerial transfers; interactions and policy issues between international companies and nation-states; impacts upon host and home countries; and overseas production concerns and strategies]
Reading Assignment:
(1) Text: Chapters 7 and 15
D. Regional economic integration
[Historical developments, the formal theory of customs unions-trade creation and diversion, regional trading blocs and corporate strategy, regional and national economic growth, aid versus trade for developing nations, prospects for a US-Middle East FTA, emerging FTAs in Africa, and case studies of NAFTA and the proposed FTAA]
Reading Assignments:
(1) Text: Chapter 8
Background: J.E. McConnell, “On extending the NAFTA southward: The view from the South,”
Occasional Paper No. 25 (Canada-U.S. Trade Center, May, 2002), pp. 1-13.
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Section III: Developing and Implementing International Business Strategies
A. The internationalization process of the firm
[Possible modes of entry, factors affecting firm-level strategy and trajectory, the importance of location in strategic planning, and a case study of the export decision-making process of manufacturing firms in Western New York]
Reading Assignment:
(1) Text: Chapter 11
B. Planning and organizing for international business
[Developing and monitoring an international and Internet-based information system; structuring global strategic alliances; and conducting research to assess risks, market potentials, modes of entry, distribution channels, organizational structures, product development, managing global R&D, human and physical resource needs, e-commerce prospects, competitive strategies, and new security requirements]
Reading Assignments:
(1) Text: Chapters 11, 12, and 13
C. International financial markets and the international monetary system
[Capital markets and exchange rates; the foreign exchange and "forward" market systems; PPP, the British pound, the euro and the US $; capital markets, the IMF, and the World Bank; forecasting and managing financial crises; and international accounting operations, transfer pricing, and tax havens]
Reading Assignments:
(1) Text: Chapters 9 and 10
D. Day-to-day business “mechanics” of export marketing
[Actual case study of the export-order cycle process, contractual arrangements, and documentation requirements of a local WNY exporting company]
Reading Assignments:
(1) Text: Chapters 14 and 13 (pp. 378-381)
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Tentative schedule of lecture/discussion topics and exams[1]
Week #1 [3]
Monday, May 22: 1:30-5:15 Sections I-A and B
Wednesday, May 24: 1:30-5:15 Sections I-C
Week #2 [4]
Monday, May 29: 1:30-5:15 Sections I-C and D
Wednesday, May 31: 1:30-5:15 Review & discussion of paper topics (1:30-2:45); 1st exam (3:15-5:15)
Week #3 [5]
Monday, June 5: 1:30-5:15 Sections II-A and B
Wednesday, June 7: 1:30-5:15 Sections II-C
Week #4 [6]
Monday, June 12: 1:30-5:15 Section II-D
Wednesday, June 14: 1:30-5:15 Review & discussion of paper topics (1:30-2:45); 2nd exam (3:15-5:15)
Week #5 [7]
Monday, June 19: 1:30-5:15 Section III-A, B, and C
Wednesday, June 21: 1:30-5:15 Section III-C and D, and review of paper topics
Week #6 [8]
Wednesday, June 28: 2:00-4:00 3rd exam (2:00-4:00 p.m.)
Some recent publications that may be relevant for students interested in international business
* T.L.Friedman. 2005. The World is Flat: A brief history of the 21st Century (N.Y. Farrar, Straus, and
Giroux)
* M.Levinson. 2006. The Box: How the shipping container made the world smaller and the world
economy bigger (Princeton, NJ: Princeton University Press).
* C. Fred Bergsten. 2005 The United States and the World Economy Foreign economic policy for the
next decade (Washington, D.C.: Institute for International Economics).
* Richard Florida. 2005. The Flight of the Creative Class: The new global competition for talent (NY:
Harper Business).
* Oded Shenkar. 2005. The Chinese Century (Upper Saddle River, NJ: Wharton School Publishing).
* Kenichi Ohmae. 2005. The Next Global State: Challenges and opportunities in our borderless world
(Upper Saddle River, NJ: Wharton School Publishing).
* Ron Hira and Anil Hira. 2005. Outsourcing America: What’s behind our national crisis and how we
can reclaim American jobs (NY: American Management Association).
* George T. Haley, U.C.V. Haley, and C.T. Tan. 2004. The Chinese TAO of Business (Singapore: John
Wiley).
* Peter Andreas and Thomas J. Biersteker. 2005. The Rebordering of North America: Integration and
exclusion in a new security context (London: Routledge).
* Steve New and Roy Westbrook (eds.). 2004. Understanding Supply Chains: Concepts, critiques, and
futures (London: Oxford University Press).
* Francois Bourguignon, F.H.G. Ferreira, and N. Lustig (eds.). 2005. The Microeconomics of Income
Distribution Dynamids in East Asia and Latin America (Washington, D.C.: The World Bank and
Oxford University Press).
* Robert N. Gwynne and Cristobal Kay. Second Edition, 2004. Latin America Transformed:
Globalization and modernity (London: Edward Arnold).
* I.M. Destler. Fourth Edition, May, 2005. American Trade Politics (Washington, D.C.: Institute for
International Economics.
* D.Johnson and C. Turner. 2003. International Business: Themes and issues in the modern global
economy. London: Routledge. [Paperback. ISBN: 0-415-24890-6]
* G.P. Sampson and S. Woolcock (eds.), 2003. Regionalism, multilateralism, and economic
integration: The recent experience. N.Y.: United Nations University Press. [Paperback. ISBN:
92-808-1083-9]
* P. Rivoli. 2005. The travels of a T-shirt in the global economy. NJ: John Wiley & Sons.
[Cloth. ISBN: 0-471-64849-3]
* D.A. Irwin. 2005. Free Trade Under Fire. (Second Edition) Princeton: Princeton University Press.
[Paperback. ISBN: 0-691-12247-4]
* International Chamber of Commerce, 2003. Guide to Export-Import Basics. N.Y.: ICC Publishing,
Inc., 2nd edition.
* Quayes and Pescatrice. 2004. “North American border trade in a heightened security regime,” in
Canadian Jo. of Regional Science (Spring), pp. 49-60
* J. Pantulu and J.P.H. Poon. 2003. “Foreign direct investment and international trade: evidence form the US
and Japan,” Jo. of Economic Geography, Vol. 3, No. 3, pp. 241-259.
* K.D. Boyer. 1997. “Americana trucking, NAFTA, and the cost of distance,” Annals of the American Academy of Political and Social Science, Vol. 553 (September, 1997), pp. 55-65. [The author argues that trucking costs now determine the economic geography of North America. Any deployment of ITS/CVO technologies that can substantially affect highway costs will generate considerable locational and regional advantages. Logistical costs of transportation and distribution have become so important that they influence the location of production facilities for a particular industry throughout the continent.]
* J.J. Schott. 2004. Free Trade Agreements: US strategies and priorities. Washington, D.C.: Institute for International Economics.
* A. Estevadeordal, D. Rodrik, A.M. Taylor, and A. Velasco. 2004. Integrating the Americas: FTAA and beyond. Cambridge, MA: Harvard U. Press.
* “UN Commodity Trade Statistics Database (UN Comtrade), 2005. International trade data for some 130 countries may be obtained at: http://unstats.un.org/unsd/comtrade (retrieved 6/14/05).