MGTC44  Int'l Business Management A 3rd year undergraduatecourse in the Division of Management,  University of Toronto at Scarborough

Good answers deserving of an "A", are answers that are neatly written so one can read your words - if one cannot read the words you write, then it is fair to say you cannot get a mark for the particular point. You should also read the question carefully and write what is being asked for - my personal penchant is to ask you to explain the "reasons why" certain things exist, not just memorize static facts about the topic. I also like students to be able to link things together so that they can make a connection , for example, between the influencing environments, FDI, globalization etc.

I'm also very keen on students being able to answer questions using an example from the real world of international business. Teaching theories and asking for students to recite facts is not as helpful as putting that into the context of a real situation which will help the student understand why they are being taught a particular point. In order to be able to answer a question using a real example therefore requires that you know some real examples - therefore you must read a national newspaper on a regular basis so that you will have some "examples in hand" if a question calls for that, eg. "explain complications of attracting FDI with an example of a real company that was enticed to invest in Canada"
 

The following where questions asked on previous  "Test # 1" tests - it is not likely these questions will be asked again - they are provided here so that you may see examples of how questions are worded and the degree of difficulty

This was question at the end of Test #1 and designed to test knowledge of current events and the ability to "apply" what we have discussed thus far in the context of a current event.
Subject: U.S. – Canada relations.
In several Canadian newspapers, (end of the 2nd week and beginning of the 3rd week of October 2003) there were stories carried about the APEC summit in Thailand. In a story carried in the Toronto Star on Monday Oct 20th there was an article about President Bush further pushing his agenda and P.M. Chretien was noted for using his meeting with China’s President Hu to discuss something important.

• What are some of the economic concerns the U.S. presently have with China, as profiled by Bush in his meeting with Hu? (2 marks)
  answer, the U.S. concerned about trying to get China to let its currency trade freely instead of being pegged to the U.S. dollar. President Hu is resisting this since cheap exports from China are, in his opinion, needed to contine to drive the economy of China since in Hu's opinion China is not yet ready to float its currency
  - other points can be mentioned like the balance of trade deficit and the U.S. concern of software and music CD piracy but the currency issue is the main issue presently
• What Canadian export situation is Chretien trying to facilitate by his meeting with Hu? (2 marks)
  Chretien is trying to get China to buy some CANDU nuclear reactors - this would be a big sale for Canada's high tech industry
  - you could mention exporting beef and other things but it is actually Japan that buys most of the Canadian beef
• What is the current relationship between Canadian and U.S. leaders as evidenced by U.S. action, or inaction on a matter of political significance, at the summit? – and how can this effect Canadian political and economic relations (2 marks)
  Bush's people indicated they would not set up a 1on1 meeting with Chretien at the summit. In the end they only sat beside each other briefly but it was not official, just a simple photo-op for the Cdn press. Bush has made no secret of disliking Chretien (partly because we would not support the war in Iraq) and this effects the development of communication for discussing particular trade problems, like Cdn beef into the U.S. market after the Mad Cow scare in Alberta, or Cdn softwood lumber exports

• From material in Section A. of the online course outline, or using any other sources you may know - comment on Sept 11th and note some specific effects on Canada-U.S. trade. If you work in business in Canada - why do you need to know this?

 
• Approximately once a year the President of the United States gives a State of the Union Address. Why would it be important for a person studying International  Business Management in Canada, to know some of the things said in such a speech by POTUS?

 
• Presuming you know the difference between a Spot Transaction and the Forward Contract - why would knowing this help you? and can you give a practical example of understanding this distinction? You can create any scenario you like - just make sure you explain the relevant advantages and disadvantages for your choice of solution.

 
• March 2003: If there is a war in Iraq, after the war there will obviously be efforts at rebuilding the country. Canada has historically a well-known role using its military for Peacekeeping Troops. Canada’s role in Peacekeeping in Iraq may earn Canada some opportunities to be involved in humanitarian and economic aspects of rebuilding Iraq. It is expected that you understand the basic differences between the World Bank and the IMF. Which of these institutions is it most likely that Canadian businesses would deal with in this scenario of rebuilding Iraq? Give an example of what a Canadian company involved in international business, might actually do in this scenario? (you can pick any type of Canadian company you like). If you do not know of a real company, make one up that might be relevant. Make sure the example you pick is realistic.

(6 marks)
• The student should comment that it would be the World bank, not the IMF which is most likely to be involved because the World Bank (which is actually 5 institutions) was historically created to help countries re-build after war, and also after such "Acts of God" such as a hurricane, famine, earthquake, etc. The World Bank provides the money so that schools, hospitals, bridges etc. can be re-built. Often the people that do such projects are from another country - which is an opportunity for Canadian companies involved in civil engineering, road building, architects, water sanitation - etc.

 
• March 2003: You were told on a number of occasions to read the newspaper on a regular basis. You were also told there would be a question covering a widely reported story – well,,,, the budget was “in all the papers”. The question is, “Discuss the Federal budget and its effect on Canadian companies involved in International Business”. You would be advised to answer this by breaking down the question into parts related to things we have discussed thus far. You will be marked on your knowledge of the budget and you ability to link it to what we have been studying.

(7 marks)

Fiirst - you should have read about the budget - it is an obvious thing that will effect Canadian international business, and "it was in all the papers" as they say

Second - you do not have to know a lot about the budget - just a few things - then use common sense to think about what would be the things about intl businss in Canada, that would be effected by  budget - which is the same as saying what are the thing effected by the political / regulatory environment

Some of the things you could have noted in an answer to a question about the budget are

• currency exchange rate issues
• things to make us attractive for Foreign Direct Investment
• foreign aid
• small business
• entertainment industry
• oil industry
• + anything else that makes sense you would have received a mark for


- currency exchange rate issues are effected by federal government policy – currency exchange rates are important to Canadians since we have a very high proportion of business involving importing and exporting
- Some of the things in the Feb 2003 budget relate to making Canada a more attractive country for Foreign Direct Investment
“reduces employment insurance premium rates to $1.98 from $2.10 for 2004”
- this means Canada becomes more attractive for foreign Direct Investment

Canada’s Role in the World
“$1.4 billion over this and the next two fiscal years to boost Canada’s    aid to poor countries—an increase of 8 per cent annually.”
- this will help Canadian companies involved in international development aid projects

Small business is a leading source of new international business
“supporting small business and entrepreneurs through a number of tax  changes, including a 50-per-cent increase in the small business   deduction limit to $300,000 over four years”

The Entertainment business is a very big part of international business
“Manley announced that he is increasing the refund from 11 per cent of    the cost of Canadian labour to 16 per cent — an incentive to foreign movie  producers to shoot in Canada that is expected to cost taxpayers $25 million next  year.”
“Finance officials estimate that there was $4.7 billion in film production in Canada  in 2001”

One of the things that Canada has is oil.
“$2 billion in today’s budget to help implement the Climate Change  Plan for Canada. This includes $250 million for Sustainable Development   Technology Canada to encourage the development of greenhouse gas reducing technologies”
the budget will effect opportunities for Canadian companies in the petroleum industry with respect to their development of new technologies, which has implications for new international business

• April 2003: In one of the most recent issues of CanadExport [April 2003] there was an article about “Changes to Japan's Building Standards Law” and it also an “Advisory to Canadian exporters of building products to Japan”. What is the information supplied in this article that would be of use to Canadian exporters.

(4 marks)
The basics are - Japan's Building Standard Law was amended last year to require that  technical standards be developed to regulate air quality in 'habitable  rooms'--defined as rooms in residences, commercial office space, restaurants, or hotels, etc.--by restricting building materials that contain VOCs - volatile organic compounds
- the objective here is not just to repeat the points of the article - but explain how the information supplied in this article that would be of use to Canadian exporters.
 
• April 2003: In one of the most recent issues of CanadExport [April 2003] there was an article about “China's wood products industry expands”. What is the information supplied in this article that would be of use to Canadian exporters.

(4 marks)
The basics are - According to the Chinese Ministry of Construction (MOC), there will be  over 5 billion square metres of new housing projects between 2000 and 2005. Although the majority of these new projects will be for low- to middle-income housing, there will also be a strong market for high-income housing--an important part of the wood-frame construction industry. The market for value-added wood products for home interiors will also be strong. A new middle class is developing in China. Currently, there are over 50 million people in China's middle class and the projection is that by 2012,    40% of the population will be middle class. The Chinese economy is   booming, growing by some 10% per year. Moreover, China has become   the world's largest destination for foreign direct investment (FDI). All these     factors make China a viable market for wood-frame houses and imported  wood products.
- Canada is a noted exporter of forest products - this is a viable target for our important forest products industry
- the objective here is not just to repeat the points of the article - but explain how the information supplied in this article that would be of use to Canadian exporters
 
• April 2003: In one of the most recent issues of CanadExport [April 2003] there was an article about “Central Europe boom: EU-bound countries come of age” What is the information supplied in this article that would be of use to Canadian exporters.

(4 marks)
The European Union (EU) accession in May 2004 of Poland, Hungary the  Czech Republic, Slovakia, and Slovenia--65 million consumers  strong--will provide Canadian firms in the region with a stepping stone to  what will become the largest free trade zone in the world--the EU… There are excellent opportunities in Central Europe for Canadian exporters  and investors who wish to approach new local markets from a base within   the region. Generally, growth in Central Europe has been higher on  average than in other European countries
- the objective here is not just to repeat the points of the article - but explain how the information supplied in this article that would be of use to Canadian exporters
 
• April 2003: In one of the most recent issues of CanadExport [April 2003] there was an article about “NAFTA and the Tex-Mex region” What is the information supplied in this article that would be of use to Canadian exporters.

(4 marks)
Since its inception in 1994, NAFTA has transformed the way business  operates. The traditional definition of the border no longer holds true   for small and medium-sized enterprises (SME). The phenomenon of  integration is taking place at the most basic level within the NAFTA  community. The 3,141 kilometre border that separates the powerful U.S. and emerging   Mexican economies can no longer be viewed in the same way. The   Texas-Mexico border region is a culture and an economy unto itself--not  entirely Mexican nor American. The presence of Canadian trade commissioners on both sides of the border provides Canadian exporters   with the tools and support needed to be successful in this burgeoning part  of the world.
- the objective here is not just to repeat the points of the article - but explain how the information supplied in this article that would be of use to Canadian exporters
 
• Licensing. From the textbook, we know that in a standard situation in Licensing, a Licenser grants rights to intangible property to a licensee to use in a specified geographic area for a specified period. That is the standard definition. Additionally, Licensing often has an economic motive. Comment briefly on what that economic motive might be. If never read this in the text - then try to guess what "an economic motive" might be - its sort of common sense.
• Trade and FDI are interlinked. Interestingly, Canada's merchandise exports with the rest of the world (non-USA) have declined between 1988 and 1996 and have risen with the U.S. The reasons are more than just NAFTA. Based on your overall readings for the course, and your personal knowledge from current events, what are some of those additional reasons
• When we discussed Supply Chain  Management in class,  we noted that the ten points listed ..."...A comprehensive supply chain should include...", sounds very much like a list of  the entire functions of a company. Why did we say this? (you don't have to list ALL 10 points to get three marks - answer what the question is asking). Which points, in your opinion, on this list would seem to be important for international business considerations?
• Why did we talk about TQM and Kaizen in this course on International Business

(5 marks)

First, it would make sense to begin the answer by defining what TQM and Kaizen is - worth 2 marks
Secondly, it would be sharp for the student to point out that these considerations are part of globalization and an increasingly competitive marketplace where customers are offered an increasing array of products at ever lower prices
Third it would be wise to note that although TQM and Kaizen are good things to try to achieve, they come from Japanese business practices which work best in a homogenous culture and there have been problems adopting them to a multi-cultural North American workforce.
Fourth - the Japanese economy, after the U.S. economy, is the most dynamic in the Western World and some of things they have done to develop their business competitively would obviously be of interest to North Americans and Europeans

• You're sitting in the Toronto airport waiting for a flight to the Caribbean to rest up after finishing your April exams at UofT. You strike up a conversation with a person who works in Jean Chretien's office. This PMO staffer says the Canadian government has a disorganized approach to international business - too many things all over the place; they need to have a simple way of looking at international situations in a framework for decision making , (back to basics) especially re: international business and the things that effect it. What would you recommend to him if he gave you a consulting contract to advise their office?

They key to answering this question is keying in on the phrase " ...the things that effect it"
Most appraoches to international business can first be sorted out by looking at the effects of the various environments.
This makes sense since no matter what you plan - these environments will effect it.
So your answer should have some way of explaining the environments
Cultural   Environment, Political  and Legal Environments, The Economic Environment<