Blog 10 CH 14

       Chapter 14 discusses managing corporate social responsibility globally. Corporate social responsibility can be defined as consideration of and response to issues beyond the narrow economic, technical and legal requirements of the firm to accomplish social benefits along with the traditional economic gains that the firm seeks.  Within the heart of corporate social responsibility lies the stakeholder. The stakeholder is any group or individual who can affect or is affected by the achievement of the organization's objectives. A key goal for CSR is global sustainability which is the ability "to meet the needs of the present without compromising the ability of future generations to meet their needs." It refers not only to a sustainable social and natural environment but sustainable capitalism as well.
      When it comes to stake holding there is primary and secondary stakeholder groups. Primary stake holding are constituents on which the firm relies for its continuous survival and prosperity. In contrast secondary stakeholder groups are defined as "those who influence or affect, or are influenced or affected by, the corporation, but they are not engaged in transactions with the corporation and are not essential for its survival. An example of a secondary stakeholder group are groups such as Environmental Groups they often take it upon themselves to promote pollution reduction technologies. Firms should be pursuing a triple bottom line, consisting of economic, social, and environmental performance that simultaneously satisfies the demands of all stakeholder groups. Alot goes into when you are trying to run a successful company overseas. On top of choosing successful expatriates you also must live up to a certain corporate social responsibility. There are numerous factors which go into making a company run smoothly overseas.

Blog 9 CH 13

       Managing human resources globally is one of the most difficult elements when working globally. There are many decisions that go into staffing for international positions. Staffing refers to the human resource management activities that are associated with hiring employees and filling positions. In multinational enterprises there are two types of employees. Host-country nationals which are from the host country and often known as "locals," and expatriates which are individuals working in a foreign company. Expatriates come in two types parent-country nationals which come from the parent country of the MNE and work at its local subsidiary. and then third country nationals (TCNs) which come from either the parent country nor the host country.
     In Chapter 13 they go on to inform you that there are three approaches for making staffing decisions for top positions at subsidiaries. An ethnocentric approach emphasizes the norms and practices of the parent company. In contrast a poly centric approach is the opposite of an ethnocentric approach it focuses on the norms and practices of the host country. "When it Rome, do as the Romans do." The third and final approach is a geocentric approach which focuses on finding the most suitable managers who can be PCNs, HCNs, or TCNS. A geocentric approach is considered color-blind, the color of a manger's passport does not matter.

     Expatriation is leaving one's home country to work in another country. Only few of the selected expatriates within companies can play the challenging multidimensional roles effectively. Unfortunately, it is not surprising that expatriate failure rates are high. Expatriate failure can be defined in several ways including premature (earlier then expected) return,  unmet business objectives, and unfulfilled career development objectives. Expatriation can fail for a variety of reasons. The leading cause is the spouse and family's inability to adjust to life in a foreign country. In a different case such as Japanese MNEs the leading cause is the inability to cope with the larger scope of responsibilities overseas. It is usually a combination of work-related and personal-related problems that lead to expatriate failures.
   I myself, am unaware if I am capable of being an expatriate or not. I know within my major it usually is common for one to go and experience living overseas whether it be as an exchange student or expatriate, however I have not come to terms with it yet. I am an extremely family-oriented person and am unsure as to whether or not I would be capable of being away for so long. My family as well as my boyfriend are in my life everyday. I do not know if I am capable from one day to the next not seeing them or experiencing anything with them for who knows how long. I give a lot of credit to those people who are willing to travel overseas for employment opportunities.

Alliances && Acquistions

      Chapter 11 focuses on making alliances and acquisitions between companies that actually work. Unfortunately, many firms find it difficult to evaluate the true intentions and capabilities of their prospective partners until it is too late. Chapter 11 not only introduces equity-based joint ventures but it also illustrates this further depicting alliances as degrees of compromise between pure market transactions and acquisitions. The first alliance that is introduced is contractual (non-equity based) alliances these are associations between firms that are based on contracts and do not involve the sharing of ownership. In contrast equity-based alliances are based on ownership or financial interest between the firms. These include strategic investment and cross-shareholding. Cross shareholding is when each partner invests in the other. I am familiar with cross shareholding, because my father, an entrepreneur, currently practices this alliance within a few of his companies.
       Currently, my father has a business which involves real estate in Florida. He and his partner both invest money in order to flip houses that have been foreclosed on in the real estate market. My father has the background knowledge and connections in order to remodel homes cheap, quick, yet, efficiently. His partner is a previous real estate agent who has the knowledge of what homes are currently on the market and for what price. My father and his partner both invest money in order to purchase the homes and then split the profit right down the middle. However, after being working with this company for a year they both decided to move up on the housing market and begin purchasing larger homes which also cost more money. Therefore, they decided to form alliances with multiple business men but just as investors. They needed more start-up money in order to purchase this higher level of real estate. After forming alliances with several other investors they needed to figure out how the profit would be divided up. Unfortunately, sometimes homes would not sell and therefore they would have to let them go at a lower asking price creating them to lose more money then expected. When these situations would occur, they would then find themselves in deeper debt then where they began owing more alliances money then just themselves.
      Alliances create more opportunities however they do not always play out as planned. I have observed from my father's mistakes and have gathered when I go to start up a service or business I will eventually practice cross-shareholding but make sure to have all possibilities planned out on paper to know how to deal with these issues as they come up. Four factors that may influence alliance performance is (1) equity (2) learning and experience (3) nationality and (4) relational capabilities. Before I experiment with cross-shareholding I will make sure I exhaust all possible outcomes and also perfect the factors that may influence our alliance.

CH 10 Blog

As a Junior in college I have been considering what exactly I want to do with my international business degree. I truly enjoy and am very good at geography and always was curious how I could link the two. I had a professor last semester who gave me the advice on focusing on marketing because geography is correlated with marketing. In Chapter ten the motto for international business is "location, location, location." Spatial perspective is a defining feature of international business. They also say that two sets of considerations drive the location of foreign entries: (1) strategic goals and (2) cultural and institutional distances. Location-Specific advantages are the benefits a firm reaps form features specific to a particular place. Examples that are giving include Singapore is an idea stopping point for air traffic between Europe and Australia and for sea traffic between the Middle East and East Asia. I feel with the issues of inflation and crowded cities location is key. I agree that location is key for a successful international business.

Teach a man to fish, and he'll eat for a lifetime.

       In Chapter nine we are introduced to the concept of microfinance. Microfinance is lending small sums ($50-300) used to start small businesses with the intention of ultimately lifting the entrepreneurs out of poverty. Also, in chapter nine there is an article called "Ethical Dilemma." Within this article it says that in 1976, Muhammad Yunus, an economic professor in Bangladesh lent $27 out of his own pocket to a group of poor craftsmen and helped found a village-based enterprise called the Grameen Project. This project inspired a global movement for entrepreneurial financing and would be awarded the Nobel Peace Prize.
       It is thought that microloans can make a huge difference. I agree that micro loans are a great idea for under developed places such as Bangladesh but I do not agree with interest rates that average to 35%. Unfortunate people would be incapable of moving forward with such a high interest rate with such a small loan. Also, with our modern beliefs today you can only go so long with catering to women instead of men. The fact that they will only loan to women because they are more trusted should be investigated. If I were of the men generation I would fight for this right. What about men who are single fathers, there are plenty of circumstances in which a man should be lended the money just as much as women should. I do not agree with the interest rates or preference of women when it comes to microloans. In the long run I do not think microloans or microfinance for these poor countries will help put these poor people back on top.

Integrating Globally

       I believe that integrating the global economy would be a positive move. Integration has dates back to the 1500s in Europe and 1930s in the United States. Right now I am currently enrolled in a history 112 class which teaches about western civilization since 1500. A big goal of the leading country of France at this time was to nationalize all of the nations. They believed the countries would be more successful as a whole rather than individually. Since World War II globally, General Agreement on Tariffs and Trades (GATT) and the World Trade Organization (WTO) was formed. These are the first steps to integrating the global economy. There are many political benefits for global economic integration. In chapters 4 and 6 we learned that there are economic gains when firms from different countries can freely trade and engage in foreign direct investment (FDI). Unfortunately, these insights were not accepted by our government until post WWII.
     I agree with economists when they say that the general goal to integrating the global economy is to promote world peace. Integrating globally would promote peace because generally people who purchase and sell to each other are usually reluctant to fight or kill each other. Global economic integration also seeks to build confidence. If governments are confident that other countries will not raise trade barriers they will not be tempted to do the same. The three main reasons I think we should integrate global economy includes that we can handle disputes constructively, it makes life easier for all participants, and global economic integration raises incomes, generates jobs, and stimulates economic growth. There are always two viewpoints to every situation. However in this case I am focusing on the advantages of integrating the global economy. I think more good then bad can come of it.

Revalue? CH 7

       The controversy over the value of the Chinese yuan is an ongoing one. I myself have mixed feelings about the situation. The Chinese government has kept the value of the yuan low making China's exports cheaper and therefore representing an unfair advantage. It is argued that the yuan needs to appreciate and following that the dollar will depreciate. In the long run Americans would benefit because a cheap dollar means US exports would be more price competitive when sold in China and elsewhere. In contrast US firms such as Wal-Mart are not sold on the idea because they are centered in the middle of this controversy. Walmart can sell their products at such low prices because of the current value of the yuan. I do not agree with Walmart's practices however I do agree with their low prices.
      The United States is currently experiencing a recession (depression). Stores such as Wal-mart keep it possible for families to survive. Wal-mart claims that it saves the average American household $2,500 every year. Wal-mart can only keep these prices because of China. Wal-mart's suppliers and competitors acknowledge that there is a wholesale price, a retail price, and a Wal-mart price but what they really mean is there is an "unbeatable" China price. China is the center of Wal-mart's supplier base. China is the largest exporter to the US economy and Wal-mart is the leading importer and retailer in consumer goods. Due to the current economic situation in the United States I have mixed feelings as to whether or not we could benefit on revaluing China's yuan.

CH 5 International trade Commentary

       Why do nations trade? Clearly, there are economic gains from trading Internationally. Otherwise, there would be no willing exporters and importers. As quoted in peng's Global, International trading is a "win-win" deal. Countries have different natural, human, and capital resources, and different ways of combining these resources. Some countries are not equally efficient in producing the goods or services as their residents demand. Therefore countries look else ware for goods and services they may not have the time or resources to produce.
       In Chapter 5 we are introduced to new vocabulary concerning International trade. Export means to sell abroad, while import means to purchase from abroad. Merchandise trade is tangible products being bought or sol and service trade is intangible services being bought and sold. A trade deficit is an economic condition in which a nation imports more then it exports. In the United States the government does not like this type of activity. Clearly, due to the fact that it is in profitable. You are losing money if you are purchase more from abroad then producing more for abroad. You want to export more then you import instead of vice versa. A trade surplus is an economic condition in which a nation exports more then it imports, which is ideally for all countries around the world. Currently, China has a trade surplus.
       In 1776 Adam Smith introduced free trade which is still being used today. Free trade is he idea that free market forces should determine the buying and selling of goods and services with little or no government intervention. Specifically, he introduced the theory of absolute advantage. Absolute Advantage is the economic advantage one nation enjoys because it can produce a good or service more efficiently than anyone else. For example, in Peng's Global CH 5, it states that Portugal's enjoyed absolute advantage over England in producing grapes and wines because Portugal had better soil, water, and weather. Likewise, England had a better absolute advantage in raising sheep and producing wool when compared with Portugal. These supports both of Smith's insights. Primarily, by specializing in the production of goods for which each country has an absolute advantage, each country can successfully produce more. Secondly, both can benefit more by trading. The terms of trade must be such that both countries lower the opportunity costs of the goods they are getting from the trade. Therefore, both countries are successful and profit from the trade, this is where you can call it a "win-win" situation. Free trade is a method that is still being successfully used today.

CH 3 Commentary

        In Chapter three culture is defined as the collective programming of the mind which distinguishes the members of one groupor category of people from another. I agree with this definition that was proposed from the word's of the foremost cross-cultural expert, Geert Holfsteade.
       I do not think some higher being acknowledged some particular person and assigned them a specific culture that correlated with the place in which they were from. I beleve it is the way your brain is correlated to recognize a person, and then you assign them a culture. For instance, if you meet someone that speaks spanish you may automatically assume that since they speak Spanish they are from Spain this is not always the case. I, myself speak Spanish but my father is from Havana, Cuba hence why I speak Spanish. My mother on the other hand is from the Azores but cannot speak a lick of Portuguese. I agree with the point that there is no strict one to one correspondence between cultures and nation-states exists.
        In the beginning of chapter three an opening case is presented about culture. The culture it is focused on is the religion of Muslim. Muslim is a great religion to focus in on considering their current status in the United States. It saddens me as to how uneducated my country really is when it comes to respecting other cultures or beliefs. The U.S. or majority of the U.S. automatically labeled the entire Muslim population as terrorists post September 11th. The truth is Al-Qaeda are the true terrorists. Not the Muslim families who are just trying to make it in their every-day lives such as we are in the U.S. They are human beings such as us, just people who believe in something different. I feel as if people only regress hen it comes to situations as these. It goes to show history truly does repeat itself no matter how much you try to educate a population.

CH 2 Commentary

      In Chapter two the opening case is on the subject "managing risks in New South Africa." The new democratically elected ANC government had adopted a Black Economic Empowerment, better known as BEE policy, aiming to increase Black's share in the economy. When you hear of BEE you would think it is a great way to get African Americans involved in the economy, however there are strings attached. Unfortunately, BEE sets quotas and timetables for affirmative action and achieving Black ownership, executive position, and employment. In addition foreign firms are required to invest and achieving Black ownership,executive position, and employment. In addition foreign firms are required to invest at least thirty percent of sales in local, black-owned firms. In my opinion, this is a turn-off. Bee is trying to promote something positive, but if I were a part of a foreign firm I rather work somewhere else that have to invest such a big number of sales.
      Some of these requirements are asking too much and may eventually backfire which would greater hurt South Africa's economy. For example, big firms such as SASOL complain BEE policy scares away investment and "deters" foreign firms. As stated towards the end of the article I feel as though BEE may be doing more harm than good. It is a great rough sketch but needs to be tweaked in the penalty areas. The penalties of not meeting goals are major turn offs. I think rewards for meeting goals are more effective then getting penalized for them. When companies such as South Africa's Pricewaterhouse Copper's and MSGM Masuku Jeena mered it opened more doors for lucrative policy. BEE policy has great intentions but discouraging rules and regulations.