Question: Reread the Management Focus on Procter & Gamble,

> In the 1980s a stronger dollar hurt Caterpillar’s competitive position, but in 2008 a stronger dollar did not seem to have the same effect. What had changed?

> In the early 2000s Russia cut tax rates for individuals and corporations, and government tax revenues surged. Why? Does this result suggest that the IMF policy prescriptions were wrong?

> During the mid-1990s, the IMF wanted Russia to raise tax rates, close loopholes in the tax system, and cut public spending. Russia was unable to do this. Why?

> Why has the government of Saudi Arabia decided to sell shares of Saudi Aramco? What benefits does the decision offer the country?

> Discuss the IMF’s approach to shore up Egypt’s economy via austerity measures. What are the expected effects of such measures? Are they likely to lead to economic growth?

> How did the IMF help Egypt? What impact did it have on the country’s economy and prospects for future growth?

> What is the role of the IMF in the global economy? Why was it important for the IMF to step in to help Egypt?

> What should Nintendo do now? How should the company react to the continued pressure on the peso?

> Following the election of Donald Trump, the value of the Mexican peso has fallen relative to the U.S. dollar. Why do you think this happened? What do you expect will happen to the dollar/peso relationship going forward?

> Why is it so important for managers to understand how the foreign exchange market works? What is the role of the U.S. dollar in the relationship between the yen and the peso?

> Absent of any response from other nations, how long can China pursue this policy?

> Donald Trump won the 2016 presidential election with promises to bring back blue-collar jobs in manufacturing and coal. Reflect on job losses in these areas. Is trade the only reason or even the main reason for these job losses? Are there other factors t

> For the last 70 years, the United States has been a global economic and political leader working with countries to open borders and promote foreign investment. Trump has promised a more isolationist, America-first administration. If America turns inward,

> Discuss President Trump’s position on trade. In your opinion, is he right? Explain your response.

> As CEO of an auto company with manufacturing facilities in Mexico, what do Trump’s promises on NAFTA mean to you?

> As an American consumer looking for a new car, what does NAFTA mean to you? Does your response change if you are a consumer from Mexico or Canada?

> Discuss NAFTA in the Trump era. What changes in the agreement would he like to see?

> As part of its loosening of regulations for foreign companies, India allows 100 percent ownership of online retail marketplaces. Why do you think these are permitted, while traditional retailers still face restrictions?

> For years, India prevented foreign retailers from developing a presence in the country. In 2012, regulations were changed to allow foreign retailers to enter the market as long as they sourced 30 percent of their inventory locally. IKEA made the decision

> What benefits could foreign retailers like Tesco and IKEA bring to India? Do you see any drawbacks?

> Boeing is expected to benefit from some $5.7 billion in tax breaks from the state of Washington. Why is the state of Washington willing to provide these tax breaks to Boeing?

> Does the evidence suggest to you that China is dumping excess steel production on world markets?

> What is the role of customer satisfaction in Shoprite’s financial management strategy?

> In its early years, Airbus received subsidies for 100 percent of its development costs. Discuss this situation. Is there a time when subsidies should be considered acceptable? Why or why not?

> According to WTO rulings, both Airbus and Boeing have been recipients of government assistance at one point or another. Discuss the nature of aircraft manufacturing and why subsidies are seemingly part of the industry practice.

> A democratic political system is an essential condition for sustained economic progress. Discuss.

> Free market economies stimulate greater economic growth, whereas state-directed economies stifle growth. Discuss.

> Read the Management Focus feature titled Did Walmart Violate the Foreign Corrupt Practices Act? What is your opinion? If you think it did, what do you think the consequences will be for Walmart?

> You are the CEO of a company that has to choose between making a $100 million investment in Russia or Poland. Both investments promise the same long-run return, so your choice is driven by risk considerations. Assess the various risks of doing business i

> What is the relationship between corruption in a country (i.e., bribe-taking by government officials) and economic growth? Is corruption always bad?

> Vietnam now has an economy that is growing strongly with low unemployment and rising living standards. What changes in economic policy have been responsible for this economic transformation?

> Why did Vietnam experience a low economic growth rate in the decade after the end of the Vietnam War in 1976?

> How do you think a shift toward more democratic institutions will affect economic progress in Vietnam?

> Can you think of any unintended consequences that might occur as the result of the imposition of antidumping duties on Chinese steel imports by the United States and the EU?

> The level of public corruption in Vietnam is high. Why is this the case? How do you think this affects Vietnam’s economic performance? What should the government do about this?

> Describe the shifts in the world economy over the last 30 years. What are the implications of these shifts for international businesses based in Great Britain? North America? Hong Kong?

> If a firm is changing its strategy from an international to a transnational strategy, what are the most important challenges it is likely to face in implementing this change? How can the firm overcome these challenges?

> What is the most appropriate organizational architecture for a firm that is competing in an industry where a global strategy is most appropriate?

> Describe the organizational architecture a transnational firm might adopt to reduce the costs of control.

> Discuss this statement: “An understanding of the causes and consequences of performance ambiguity is central to the issue of organizational design in multinational firms.”

> Can a company be good at corporate social responsibility but not be sustainability oriented? Is it possible to focus on sustainability but not corporate social responsibility? Based on reading the section on Implications for Business Practice, discuss ho

> Milton Friedman stated in his famous article in the New York Times in 1970 that “the social responsibility of business is to increase profits.” Do you agree? If not, do you prefer that multinational corporations adopt a focus on corporate social responsi

> A manager from a developing country is overseeing a multinational’s operations in a country where drug trafficking and lawlessness are rife. One day, a representative of a local “big man” approaches the manager and asks for a “donation” to help the big m

> Do you think facilitating payments (speed payments) should be ethical? Does it matter in which country, or part of the world, such payments are made?

> Are the EU and the United States correct to impose significant antidumping duties on imports of Chinese steel? What will the benefits of such policy be? Are there any drawbacks?

> Under what conditions is it ethically defensible to outsource production to the developing world where labor costs are lower when such actions also involve laying off long-term employees in the firm’s home country?

> Drawing upon John Rawls’s concept of the veil of ignorance, develop an ethical code that will (a) guide the decisions of a large oil multinational toward environmental protection, and (b) influence the policies of a clothing company in the potential deci

> The choice of strategy for a multinational firm must depend on a comparison of the benefits of that strategy (in terms of value creation) with the costs of implementing that strategy (as defined by organizational architecture necessary for implementation

> What do you see as the main organizational problems that are likely to be associated with implementation of a transnational strategy?

> In what kind of industries does a localization strategy make sense? When does a global standardization strategy make most sense?

> Plot the position of the following firms on Figure 13.6: Procter & Gamble, IBM, Apple, Coca Cola, Dow Chemical, Intel, and McDonald’s. In each case justify your answer.

> In a world of zero transportation costs, no trade barriers, and significant differences between nations with regard to factor conditions, firms must expand internationally if they are to survive. Discuss.

> Reread the Country Focus on Secularism in Turkey, then answer the following questions: a. Can you see anything in the values and norms of Islam that is hostile to business? b. What does the experience of the region around Kayseri teach about the relation

> Choose two countries that appear to be culturally diverse. Compare the culture of those countries and then indicate how cultural differences influence (a) the costs of doing business in each country, (b) the likely future economic development of that cou

> What alternative policy might China pursue? What are the costs and benefits of this alternative policy to China?

> Do you think that business practices in an Islamic country are likely to differ from business practices in a Christian country? If so how?

> Outline why the culture of a country might influence the cost of doing business in that country. Illustrate your answer with examples.

> Reread the Management Focus on China and Its Guanxi, then answer the following questions a. Why do you think that it is so important to cultivate guanxi and guanxiwang in China? b. What does the experience of DMG tell us about the way things work in Chin

> Happy Company wants to raise $2 million with debt financing. The funds are needed to finance working capital, and the firm will repay them with interest in one year. Happy Company’s treasurer is considering three options: a. Borrowing U.S. dollars from S

> A firm based in Mexico has found that its growth is restricted by the limited liquidity of the Mexican capital market. List the firm’s options for raising money on the global capital market. Discuss the pros and cons of each option, and make a recommenda

> In 2008‒2009, the world economy retrenched in the wake of a global financial crisis. Did the globalization of capital markets contribute to this crisis? If so, what can be done to stop global financial contagion in the future?

> Why has the global capital market grown so rapidly in recent decades? Do you think this growth will continue throughout the next decade? Why?

> Reread the Country Focus on the U.S. dollar, oil prices, and recycling petrodollars, then answer the following questions: a. What will happen to the value of the U.S. dollar if oil producers decide to invest most of their earnings from oil sales in domes

> Imagine that Canada, the United States, and Mexico decide to adopt a fixed exchange rate system. What would be the likely consequences of such a system for (a) international businesses, and (b) the flow of trade and investment among the three countries?

> Debate the relative merits of fixed and floating exchange rate regimes. From the perspective of an international business, what are the most important criteria for choosing between the systems? Which system is the more desirable for an international busi

> Uber’s strategy has been to break these regulations, establishing its service first, and then fighting attempts by regulators to shut the service down. This goes along with the old saying, “do first, ask questions later.” Is this business approach viable

> Do you think the standard IMF policy prescriptions of tight monetary policy and reduced government spending are always appropriate for developing nations experiencing a currency crisis? How might the IMF change its approach? What would the implications b

> What opportunities might current IMF lending policies to developing nations create for international businesses? What threats might they create?

> Why did the gold standard collapse? Is there a case for returning to some type of gold standard? What is it?

> You are the CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufactures component parts for your U.S. assembly operations. The subsidiary has been financed by bank borrowings in the United States. One of your analysts told you that the Mexica

> You manufacture wine goblets. In mid-June you receive an order for 10,000 goblets from Japan. Payment of ¥400,000 is due in mid-December. You expect the yen to rise from its present rate of $1 = ¥130 to $1 = ¥100 by December. You can borrow yen at 6 perc

> Reread the Management Focus on Embraer, then answer the following questions: a. What does the recent economic history of Brazil tell you about the relationship between price inflation and exchange rates? What other factors might determine exchange rates

> Two countries, Great Britain and the U.S., produce just one good: beef. Suppose that the price of beef in the U.S. is $2.80 per pound, and in Britain it is £3.70 per pound. a. According to PPP theory, what should the $/£ spot exchange rate be? b. Suppo

> The interest rate on South Korean government securities with one-year maturity is 4 percent and the expected inflation rate for the coming year is 2 percent. The interest rate on U.S. government securities with one-year maturity is 7 percent, and the exp

> Read the Management Focus feature in this chapter, “NAFTA’s Tomato Wars,” then answer the following questions: a. Was the establishment of a minimum floor price for tomatoes consistent with the free trade principles enshrined in the NAFTA agreement? b. W

> After a promising start, Mercosur, the major Latin American trade agreement, has faltered and made little progress since 2000. What problems are hurting Mercosur? What can be done to solve these problems?

> Are cities around the world doing a disservice to citizens or visitors, or both, by banning it outright from operating in their community?

> How should a firm with self-sufficient production facilities in several ASEAN countries respond to the creation of a single market? What are the constraints on its ability to respond in a manner that minimizes production costs?

> How should a U.S. firm that currently exports to only ASEAN countries respond to the creation of a single market in this regional grouping?

> What were the causes of the 2010–2012 sovereign debt crisis in the EU? What does this crisis tell us about the weaknesses of the euro? Do you think the euro will survive the sovereign debt crisis?

> Do you think it is correct for the European Commission to restrict mergers between American companies that do business in Europe? (For example, the European Commission vetoed the proposed merger between WorldCom and Sprint, both U.S. companies, and it ca

> What in general was the effect of the creation of a single market and a single currency within the EU on competition within the EU? Why?

> What are the economic and political arguments for regional economic integration? Given these arguments, why don't we see more substantial examples of integration in the world economy?

> The world’s poorest countries are at a competitive disadvantage in every sector of their economies. They have little to export. They have no capital; their land is of poor quality; they often have too many people given available work opportunities; and t

> Drawing on the new trade theory and Porter's theory of national competitive advantage, outline the case for government policies designed to build a national competitive advantage in biotechnology. What kind of policies would you recommend the government

> Reread the Country Focus on moving white-collar jobs offshore. a. Who benefits from the outsourcing of skilled white-collar jobs to developing nations? Who are the losers? b. Will developing nations like the United States suffer from the loss of high-ski

> Reread the Country Focus feature, Is China Manipulating Its Currency in Pursuit of a Neo-Mercantilist Policy? a. Do you think China is pursuing an economic policy that can be characterized as neo-mercantilist? b. What should the United States, and othe

> Companies like Uber, Lyft (one of Uber’s main competitors), and Airbnb (an online marketplace that enables people to lease or rent short-term lodging) are innovating in fields that traditionally have been very complex and regulated. Can Uber’s business m

> What are the potential costs of adopting a free trade regime? Do you think governments should do anything to reduce these costs? What?

> Unions in developed nations often oppose imports from low-wage countries and advocate trade barriers to protect jobs from what they often characterize as “unfair” import competition. Is such competition “unfair”? Do you think that this argument is in the

> Is free trade fair? Discuss.

> Mercantilism is a bankrupt theory that has no place in the modern world. Discuss.

> NAFTA has produced significant benefits for the Canadian, Mexican, and U.S. economy. Discuss.

> You are the international manager of a U.S. business that has just developed a revolutionary new personal computer that can perform the same functions as existing PCs but costs only half as much to manufacture. Several patents protect the unique design o

> Read the Management Focus on Cemex and then answer the following questions: a. Which theoretical explanation, or explanations, of FDI best explains Cemex’s FDI? b. What is the value that Cemex brings to the host economy? Can you see any potential d

> What are the strengths of the eclectic theory of FDI? Can you see any shortcomings? How does the eclectic theory influence management practice?

> Compare and contrast these explanations of FDI: internalization theory and Knickerbocker's theory of FDI. Which theory do you think offers the best explanation of the historical pattern of FDI? Why?

> In 2008, inward FDI accounted for some 63.7 percent of gross fixed capital formation in Ireland, but only 4.1 percent in Japan (gross fixed capital formation refers to investments in fixed assets such as factories, warehouses, and retail stores). What do

> If you lived in a city with such diversity of people as Dubai, would you assimilate yourself with the people who are like you, or would you try to integrate into the overall community of all people?

> Reread the Management Focus, “Protecting U.S. Magnesium.” Who gains most from the antidumping duties levied by the United States on imports of magnesium from China and Russia? Who are the losers? Are these duties in the best national interests of the Uni