MGTC44

Int'l Business Management

A 3rd year undergraduatecourse in the Division of Management, University of Toronto at Scarborough

.updated 2008 Apr 02
.

The following where questions asked on previous Final Exams

March 2008

the answers from the March 2008 m-choice end of term quiz

http://www.witiger.com/test/MGTC44test3-2008-Apr-MChoice-AnswersMarch26.pdf

August 2007

China – counterfeit products - it was reported in the media (2nd week of August) that Chinese companies were selling fake Canadian alcoholic beverages. What was the story about, and what was the beverage. What are the possible ramifications for all other Canadian beverages in this category? (this was on the front page of the business section of the Toronto Star Aug 18th)

China – Olympics – China worked so hard to get the Olympics, now it seems that they are frustrated by one of the consequences being that the world media has been all over Beijing and exposed many challenges to life and work in China. What are some of the living conditions that will effect athletes coming to train and compete in the forthcoming games? Why is this potentially an int’l business issue?

China – Europe. China claims that the EU’s measures to block it’s exports are politically motivated. What is the issue? What type of consumer product started this trade conflict with the E.U.? (FYI, in 2006, China became the EU’s second largest trading partner displacing the U.S.)

NGOs – David Crane wrote a story in the Toronto Star about non-governmental organizations titled “Global Institutions no longer reflect reality”. What did Crane suggest that would assist a student understanding the future of the WTO, IMF and World Bank in C44?

What giant Asian auto company turned down locating in Richmond Hill and made a big announcement (3rd week of August) it would set up an FDI investment in Markham – much to the delight of the Mayor of Markham. We talked about several classic types of FDI in this course – which type is this one? What are the implications to the sector and the community?

Associated Press ran a story (carried in many Canadian newspapers) Aug 21 in which they commented about China’s campaign to restore international trust in its products with a week long TV series (in China, in Chinese) defending the country’s safety standards. At the same time AP reported new allegations of unsafe Chinese products when New Zealand said it was investigating children’s clothing found to contain dangerous levels of formaldehyde (it can cause skin cancer). Considering all these stories in 2007 (bad pet food, poisoned toothpaste, lead paint in toys, etc. etc.) what may be the consequence for trade with China?

December 2006 I wrote "It is desirable that students in C44 recognize the diversity and breadth of the geographic environment and appreciate the impact of changes in the geographic environment on many types of international business." - then I gave the students a one page article to read. the article was titled "Wanted: Crops that can stand the heat: Scientists rush to adapt food to climate change". They were told to read the article then answer 1 of 2 questions.

Q8-A Using your knowledge of any company (it may or may not be the one you studied for this exam) discuss how changes in the geographic environment influenced circumstances of the companies exporting, importing or FDI. (8 marks)
Q8-B Using your knowledge of any company (it may or may not be the one you studied for this exam) discuss how extremes of weather, as caused by the geographic environment influenced, or might influence, circumstances of the companies exporting, importing or FDI. (8 marks)

December 2005 Canada-U.S. Relations: At the time of writing this question, Prime Minister Martin was facing an election , and relations with the U.S. were, frankly, not that good. Discuss 4 problems (excluding softwood lumber) you see in the Canada-U.S. relationship and comment on how this might effect the Canadian exporter you studied for this exam?

April 2004 In the 1980’s and 1990’s Japan was Canada’s largest trading partner in Asia. Japan is still very important but China has, in the opinion of many people, become the key focus for Canada in Asia – even though Japan remains important and India is also important and growing in influence. One of the topics very much “In the news” in the 2nd and 3rd week of April 2004 is the visit to Canada of the Dalai Lama. This social/cultural event has taken on enormous “International business” implications and clearly stands as an example of how a situation in the social/cultural environment can effect the political environment and in turn international business.

The circumstance of the Dalai Lama’s visit to Canada (which includes stops in Vancouver, Toronto and Ottawa) has raised uncomfortable questions about how Canadian political leaders want to keep in good favour with the Chinese leaders in the People’s Republic + the Chinese community in Vancouver and Toronto, at the same time appear to be an independent country free to meet and talk with any world leader they wish. When this story first became public weeks ago, the Chinese Embassy in Ottawa issued very strong statements regarding whether the Canadian prime minister and the mayor of Toronto should meet with the Dalai Lama. Some people in Canada found this offensive because it implied Chinese politics could have power over what Canadian leaders wished to do.

There is no perfect answer here, I am looking for how you think in answering this question. (In marking this question, the personal opinion of the professor will not effect your mark, so feel free to write your honest opinion)

QB1 Given the context of Canada-China trade, present and future potential , - and all the ramifications, what would you advise the Mayor of Toronto and the Prime Minister of Canada if you were in a position to give such advice. (At the time of writing this question April 26th, the City of Toronto has backed away from giving an Official Reception for the Dalai Lama). (8 marks)
or
QB2 If you were working for a Markham based company, that did a lot of business in China (PRC), and your company president was invited to a meeting in Toronto, with the Mayor, to meet the Dalai Lama, would you go …. If the Chinese Embassy sent a letter to members of the Canada-China Trade Council saying something about the Dalai Lama? (8 marks)

QB1 Answer Some students that got good marks on this question mentioned a recent David Crane article in the Toronto Star that talked about the importance of developing more trade with China and our overdependence on trade with the U.S. Students who "answered the question" are students that specifically phrased their answer in terms of advice to give to the Mayor and the P.M. A number of students spent too much space talking about what a peaceful guy the Dalai Lama is and did not get around to the advice part. Keep in mind that my questions are not just asking you to remember some story, they are also challenging you to takle knowledge of a story and turn it into information you can use to make a decision - in this case the decision of what the Mayor and PM should do.

A big part of the education of a management student at UTSC is learning how to understand info in order to make a decision - that's what managers do, they make decisions. It is no use to learn a lot of facts without having the ability to apply those facts to solving a problem.

Most students did OK on this question with many getting 6/8 or 6.5/8. Some students did poorly because they did not know the story - one person discussed the Dalai Lama as being a spiritual leader in China, [he is from TIBET] another person mentioned trade with Japan ??

An example of a good point here came from a Chinese-Canadian student who said "at a time when China is in need of natural resources for manufacturing it would not be in China's best interests to break their ties with Canada.."

Another student pointed out the thousands and thousands of Chinese-Canadian business people from Hong Kong and China who would keep business going no matter what Beijing said. This students says China-Canada trade is too complex to be effected by a threat like this and they seriously doubted whether the Chinese government would do anything if the P.M. met the Dali Lama.

I gave this student an A+ because they recognized that in international business sometimes things get said, for the purposes of negotiating, that will not really happen, and, you have to look at the big picture and not be frightened by short term situations.

QB1 Answer - interestingly, a surprising number of students answered that they would NOT meet the Dalai Lama - the threat of the Chinese government seemed to be to strong. Many students responded by saying how powerful the Chinese government was over its people and said China could hurt Canda's trade. I found this a bit hard to understand since China's trade with Canada is actually small compared to trade with Japan and in turn very small compared to the U.S. My personal opinion is highly critical of this perspective but I gave good marks to students who argued this way if they showed good logic in their points - this is a good example of how you can disagree with the professor, and still do OK on a question.

One student said "It would be nearly impossible for my company to reverse the PRC's attitude towards the Dalai Lama ... the weight of the PRC government is too strong to stage a cultural revolt"

He is correct - thousands of Chinese are living and breathing capitalism in the PRC, but it is still a communist country with a strong central authority.

Another student wrote "The Chinese government is very tough on political issues especially when Taiwan and Tibet are concerned. That's why they are threatening with billions of dollars of trade"

Students who said they would not meet te Dali Lama because of threats from the Chinese - received little marks unless they explained what the threat might be and how important it could actually in terms of Canada's total trade.

Dec 2003 F-1 FTA – NAFTA – next? There have been several stories talk about the Free Trade Area of the Americas talks “hitting a snag” – which means things have not been going well. Does Canada think the talks are going well, or poorly vis a vis the Canadian government’s objectives?

Answer: Canada thinks the talks are going poorly - there was a big story in the Toronto Star Nov 18th "Free Trade Area of the Americas talks hit snag". The U.S. says agricultural subsidies should be decided by the WTO - Canada wants them decided in the FTAA - farming is still big business for Canadian exporters

Dec 2003 F-2 First week in December (2003) we have heard that a softwood deal might be possible between Canada and the U.S. What are the main issues? What does Canada want?

Answer: Witiger picked this story cause lumber exported like this is primarily used for building houses. The business of building houses is BIG BUSINESS and the rate at which houses are built is always a critical economic indicator of how strong the economy is - when the U.S. economy is going well, people move into houses from apartments.

There was a big story in the Toronto Star Dec 7th "Softwood Deal Nears" The terms of an agreement give Canadian exports a duty-free ceiling slightly below Canada's current share of the U.S. lumber market - so, this means we have to cut back the volume of our exports cause if we go above this we will have to pay tariffs. Presently, without this "deal", the duties on Canadian exporters to the U.S. are "punishing" - many companies in B.C. are struggling to make a profit and this is putting thousands of B.C. loggers out of work - which effects the political environment and makes new Prime Minister Paul Martin think about his ability to win the next election - particularly if he can get his Liberal MPs relected in B.C. You may remember B.C. had a tough time this year with the wild fires and their economy has been hit bad in 2003.

You also have to know Canadian geography here - the story explains that while B.C. accounts for more than 50% of the softwood lumber to the U.S., Quebec accounts for 25% - there are a lot of logging companies in the forests north of Montreal and Quebec City. This is not just a "West Coast" issue, it also involved Quebec politics and Ottawa has always been very sensitive to doing anything in international business that negtively effects the economy in Quebec

Dec 2003 F-3 Second week in December (2003) we have heard that Premier Wen Jiabo warned the Bush administration against erecting further trade barriers against Chinese products. How does the current U.S. – China situation effect Canadian exporters and importers?

Answer: There was a small story in the Toronto Star Dec 7th "Chinese Premier warns against Protectionism"
Canada's ability to successfully do business with China depends on the good/bad relations between Washington and Beijing. The U.S. is our largest trading partner, and China is our fastest growing source of imports. The Chinese Premier said "reducing Chinese exports to the United States will not bring jobs back to the U.S.". The Americans are upset that China exports a lot of cheap consumer products to the U.S., but appears to be making it difficult for Americans to export products and services to China. This is history repeating itself - this is just like how the Americans complained about the Japanese in the 1980's.

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?

Dec 2002 Why did we talk about TQM and Kaizen in this course on International Business - 2002

(5 marks)

Answer: 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

Dec 2003 Why did we talk about TQM and Kaizen in this course on International Business. Are there any issues of TQM and Kaizen in the Canadian exporter you researched for this exam – explain one way or the other - 2003

(6 marks)

The difference between the question in 2002 and 2003 is that in 2003 you are asked to explain with an example

- 3 marks would be for explaining Why did we talk about TQM and Kaizen

- 3 marks for working in the Canadian exporter

.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?

Answer: 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

also, we did not specifically identify it as an environment, but competition from other companies (competitive environment) also determines what you do

Your answers should not be just describing the environments, but phrased in terms of giving advice because that is what the question is about "a consulting contract to advise their office"

example, cultural environment - Canadian companies in international business should be better advised on cultural considerations

- you could note the role of the Dept. of Foreign Affairs and how embassies and consulates could be helpful

"Ex-PM pushes security accord Mulroney [former Canadian Prime Minister] wants NAFTA extended”

- as reported in the both the Toronto Star and National Post Dec 10th

- during this course you were constantly encouraged by the professor to read international topics in a major newspaper on a regular basis

- this is the heading of a story widely reported in the second week of December 2002

- the topic has been around since Sept 11th 2001 when the Americans expressed concern that Canada was too lax in controlling its borders and therefore there was a perceived risk from non-North Americans crossing the border from Canada into the U.S.

The Question.

You are requested to discuss the consequence of NAFTA being extended as suggested by Mulroney ; what are the ramifications for Canadians involved in International Business?

Write your answer on the paper provided.

April 2003: SARS – Comment on how the current circumstances of SARS [first and second week of April 2003] may effect a medium sized Canadian company involved in international business. There is no expectation of a specific answer to this question, I want to see how you can apply a real world situation to the broad range of theoretical things we talked about in this course. I’m also interested in how you can take an unusual circumstance and apply it into a business context.

(12 marks)

Answer: This is the question I told everyone "read the newspaper, I'm going to ask you an international business question related to current events" - SARS was everywhere in the media in April 2003

Answer – there were a number of press stories on this – one in particular was a story in the Toronto Star April 2nd in which it was noted that “Under escalating global pressure, China agreed today to let international health investigators visit the place where severe acute respiratory syndrome is believed to have originated - the southern province of Guangdong… For months after the disease began sickening people in Guangdong in November, China kept the details quiet… As China agreed to more openness, the Geneva-based WHO advised travellers not to go to Hong Kong and Guangdong - the first time the agency has issued such an advisory in at least a decade… China's move comes after days of criticism over its secretiveness about the disease. Worldwide, at least 78 people have died and more than 2,200 are believed to be sick with severe acute respiratory syndrome, SARS, the World Health Organization said.

While it is tragic that it originated in China, in truth a disease spreading worldwide could have originated anywhere
- the nature of our world these days and the circumstances of global travel and international business are such that any medical situation like this can cause people in other countries to be at risk in a short period of time.
- If I was giving the exam several years ago, I might ask about the "mad cow" disease that effected the beef industry drastically in the U.K. and also scared the beef industry in North America - which in turn would effect fast-food chains like McDonalds

In answering this question one should note the obvious close business links building between China and Canada – also the very large number of people in Canada from China which may make our population fearful of contact with Chinese people and Chinese products. It would be racist to accuse all Chinese of being “at risk” from SARS and as Canadians we would not tolerate this – but in the marketplace, customers “vote” with their wallets and there were many stories in the print and TV and radio media about people avoiding Chinese businesses where they feared contact with persons from Guangdong
- the situation got so bad that by the second week of April 2003, many Chinese businesses reported a drop of 70% to 80% in business as Canadian and Chinese-Canadian people feared contact
- in fact several politicians, including the Prime Minister have made a point of having their picture taken eating in a Chinese restaurant in Chinatown in Toronto to try to quell unrealistic fears
- typically Chinese companies have had a price competitive advantage importing products into Canada
- - how will this be effected by SARS – will companies try to source products from South Korea, Philippines -etc
- contingency plans
- political environment
- social / cultural environment
Your last lecture was about supply chain management – there are many things about a company in international business that would be effected if the supply chain from China was disrupted

Also, somewhere in this answer you should say directly, or indirectly that intl business is not about boxes moving around, it is people too – people do the business, not companies, so if the Canadian government restricts passengers from China (like the Americans did first week in April) this may have an effect on business people from China being able to travel to Canada and do certain things that need to be done – similarly, business people traveling to Asia to source materials and components may avoid travel to China and Vietnam and any other place that the media identify as a risk.

Also, as people move around, other demographics become effected. A story that broke in the news April 14th was about a large religious group in Toronto composed of Philipino people that all attended a particular Church - it was widely reported that hundreds of these people were placed in quarantine - which might have an effect on the Canada-Philipino business community.

It is impossible to predict how students may pick various things to answer this question so when I mark it I will be looking for

- Knowledge of the topic – does the student know what SARS is and did they read a newspaper enough to know what is happening
- Did the student use their imagination to think of how this could related to various things in the course - connectiveness
- Is their answer structured and thoughtful and written in a way that makes sense – it would not be good to just write down a bunch of points without connecting them with sentences that show some relationship
- Does the student have an understanding of the important relationship all Canadian businesses have with Asia and how anything that disrupts this (SARS, computer virus, possible war in Korea, extreme weather, earthquake, etc.) will have a wide ranging effect

Old CanadaExport Questions

December 2005 Spotlight on the trade commissioners is the title of a current CanadExport story.

I hope you read this story cause this is a specific circumstance in which a UTSC grad like you can get a very kewl job and travel around the world eating foreign food and have Her Majesty’s government pay for it. This story had a section titled “Diary of a Trade Commissioner”. It gave you a sample of what they do in a typical day. Describe the typical day in the life of a Trade Commissioner.

(If you don’t know, don’t try making it up, do another question)

December 2005 Korea to host APEC summit is the title of a current CanadExport story.

As a founding member of APEC, Canada has been involved in the organization since its creation in 1989.

What is Canada’s interest in the talks in 2005?

December 2003: In one of the most recent issues of CanadExport [Vol 21. No. 20 - Dec 2003] there was an article about “Wireless trade mission to Southeast Asia -- February 9-20, 2004”. What is the information supplied in this article that would be of use to Canadian exporters.

Quoting from the site "There are few areas that can match the dynamism and diversity of the ICT sector in Southeast Asia. With many of the Southeast Asian nations working diligently to bridge the digital divide, the door is open to Canadian suppliers of ICT solutions. The program will include pre-mission consultations, briefings by a representative of Canada's missions at each stop, a networking dinner and reception, presentation sessions and visits to local telecommunication firms."

- so what is your answer? - what do you do with this brief info?, the best thing to do is treat it as one of the "Sources of information" - trade missions are explained elsewhere on the C44 website (www.witiger.com/internationalbusiness/countryinfo.htm) and there are certain advantages to participating in them - which you can explain in this case - in this section witiger writes "Trade Missions have been an excellent source of information for companies trying to determine pros and cons about doing business in a new country, or expanding existing business. "

- example of something specifically useful, the CanadExport notes says there will be networking dinners and receptions - this meets the opportunity cited by witiger as one of the purposes of participating in Trade Missions, ie. "contacts you make "

- example - the CanadExport notes says there will be briefings by a representative of Canada's missions at each stop, - this is something witiger mentioned as one of the purposes of participating in Trade Missions, ie. "briefings you receive"

- example - the CanadExport notes says there will be "pre-mission consultations" - this is something witiger mentioned as one of the purposes of participating in Trade Missions, ie. economic analysis, industry profiles etc. target market demographics

April 2005 Business mission to Libya and Morocco set for June 2005; Canada-Arab Business Council (CABC) are leading a business mission to Libya and Morocco to encourage the expansion of Canadian trade and investment with both countries. Name any three of the business sectors involved?

(The reason I asked this question is that sometimes Trade Missions are set up just for specific sectors and if your company is not doing that kind of business, you are not welcome on the mission, even though you might be interested in the country)

April 2005 “FITT makes companies fit for exporting” ; This is the title of one current CanadExport story. What does FITT do? Why might it be of interest to the exporter you studied for this exam? (The reason I asked this question is that UTSC grads could get a job with FITT ! )

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