Loyola Marymount University

LOYOLA MARYMOUNT UNIVERSITY

College of Business Administration

MBAB/MBAG 641

INTERNATIONAL MANAGEMENT

Fall 2006

TR 4:25 - 7:05 p.m., Hilton 103

Instructor: Dr. Yongsun Paik

Office: Hilton 215

Phone: (310) 338-7402

E-mail:

Office Hours: / TU, 8:15 - 9:15 a.m.
TR, 8:15 – 9:15 a.m., 12:15 – 4:15 p.m.

Course Goal and Objectives

U.S. business is intertwined with the world as never before. Competition is increasingly global, and firms have become international in their sales, production, investment, financing and sourcing. Foreign competition has seriously affected some industries (turbine generators, shoes, sewing machines), fundamentally changed others (automobiles) and seriously challenged even the "best" (semiconductors, computers, aircraft).

Different economic, political and socio-cultural environments around the world challenge managers with opportunities and risks. The goal of this course is to help you achieve understanding of the international business environment and evaluate the agenda facing managers operating in international business contexts.

Specifically, the course has the following learning objectives:

1.  To familiarize students with the major concepts and paradigms in international management.

2.  To enhance an awareness of the impact of internationalization on firms

3.  To develop the ability to analyze MNC’s strategies and behaviors

The course will build on concepts developed in the MBA core courses, but no previous international coursework is required.

The basic pedagogical approach of the course will be case discussion. Short lectures and discussions of reading assignments will supplement the case analysis. Reading assignments are your responsibility and they will in many cases not be discussed specifically in class.

Course Materials

TEXT

Beamish, et al., International Management: Text and Cases, 5th ed. (hereafter abbreviated IM), Irwin McGraw-Hill, 2003

READING

A collected set of readings and cases (hereafter abbreviated RR) is available on Eres and in class.

Grading and Requirements

The course grade will be based on:

Individual Work:
* Class participation / 30 pts
* Midterm Exam / 40 pts
* Final Exam / 40 pts
Group Work:
* Group written report / 50 pts
* Group oral presentations / 40 pts
(20 points each)
* Total / 200 pts

The following is the grading scales for this course. It is generally assumed that every student will make his/her best effort and therefore will seldom fall below a B-.

Grading Scales

186 & above: A

175 - 185: A-

166 - 174: B+

158 - 165: B

150 - 157: B-

Class participation will be graded based on the quality of contributions to class discussion, including useful questions addressed to the instructor or to students making presentations. Preparation is critical¾I expect you to complete the reading assignments prior to the class meeting. Students are strongly encouraged to participate in class discussion. With regard to quality, some of the criteria normally applied are;

1. Are the points that have been made relevant to the discussion?

2. Are the points simple recitations of case facts or have implications been drawn?

3. Is there evidence of analysis rather than expressions of opinions?

4. Are the comments linked to those of others?

5. Did the contribution further the class' understanding of the issues?

Each student will begin the course with 21 points in class participation, and can lose points by repeated absence from class or complete lack of class participation.

Two exams will be given in class. The final exam will NOT be cumulative. The exams will consist of essay questions. Material for the exams will come from the following sources: 1) class lecture 2) assigned readings, 3) class discussion, 4) in-class video, and 5) any in-class exercises and handouts. Lectures are primarily designed to address the major points from the readings. Consequently, students who keep up with readings are expected not only to understand lectures better but also to earn a better grade. Please bring a blue book to each exam.

The group written report is a team project that studies a specific topic related to the subjects covered in class. For example, you may research corporate and/or business strategies of an MNC in the U.S. consumer electronics market. As the top competitors in the U.S. consumer electronics market are all foreign companies (e.g., Sony, Matsushita, Philips, Samsung), it would be interesting to study their foreign market entry and expansion strategies. Specifically, how do they design and manage international joint ventures with a U.S. firm? How do they acquire the services of the domestic distributors to market their products? Another example would be to study a U.S. firm operating overseas. How does China’s entry into the WTO affect business strategies (e.g. outsourcing) of the firm operating in East Asia? Followings are some more examples you may choose from:

Entry mode strategies of U.S. firms

Expatriate management - training and development

Comparative study on performance appraisal and compensation

Ethical issues facing an MNC

Cross-cultural negotiation

All supporting documentation and data analyses should be included in the appendices. The written report should be typed, double spaced, and no more than 20 pages (excluding any appendices). The sources for all material used in your report should be cited along with a bibliography. Each group should submit a one-page memo by September 28 which summarizes its research plan, including the title of the topic, the name of a company, a target region, etc. I will be glad to discuss your group project before you turn it in if you any have questions.

Group oral presentations will be based on the assigned cases and will be part of the class discussion. Each group will make two presentations: one on its selected case and the other on its group written report. First, each group will have maximum of 30 minutes to present and discuss the assigned case for the class, with supporting analysis and evidence from the case. Please choose one of the six cases numbered on this syllabus starting from September 28. Each group needs to get an approval from the instructor before it proceeds with the project so that every group can work on a different project. A guideline for group presentations on the case is attached to the end of this syllabus. Second, the other presentation will be made on major findings of a group project. Presentation time will be restricted to 20 minutes, with another 5 minutes for questions and answers. A more specific guideline on your final presentation will be distributed later in class. Groups presenting will be given group grades. Groups will be formed in the first class.

A Guideline for Success in the Course: This course is designed for MBA students who are fully motivated to take an elective course of their choice. Please keep up with your reading so that you can avoid excessive overnight reading right before an exam. A general rule of thumb is that study and preparation time should take between three and four hours for every class meeting. Understanding the main points of each article and integrating these points with your notes from my lecture is critical to your success in this course. Please divide your work wisely throughout the semester, and start on your group project as early as possible. Finally, to control free riders, peer evaluations will be given using a standard form at the end of the semester. A negative evaluation from your group members may lower your course grade.

CLASS SCHEDULE AND ASSIGNMENTS

Date /

Topic

8/31 / Introduction: How Globalized Are You?
Discussion of recent developments in the global environment and key issues in the management of MNCs; Exercises and quizzes to assess your exposure to globalization

Reading: IM, Chapter 1 and 2; Business Week, Outsourcing Innovation; Future of Outsourcing; Birdsall, Asymmetric Globalization

Video: Globalization – Winners and Losers

9/7 /

World of International Trade and Competitive Advantage of Nation

Readings: IM, Chapters 3; RR,; Buffett, America’s Growing Trade Deficit Is Selling the Nation Out from Under Us; Business Week, Shaking Up Trade Theory; Grant, Porter’s Competitive Advantage of Nations: An Assessment
Video: Video: Outsourcing – White Collar Exodus
9/14 / Cultural Clash in International Management
Who are we? Who are they? How can we minimize the risks of miscommunication and misinterpretation by understanding different cultures?
Readings: IM, Chapter 15, RR, Hampden-Turner, The Boundaries of Business: The Cross-Cultural Quagmire; Markoczy, Us and Them (in-class handout).
Video: Managing the Overseas Assignment Valuing Diversity - Communicating across Cultures
9/21 / Internationalization and Overseas Manufacturing
The case provides information related to factors that Ted Telford and other members of Intel site selection team considered in their visit to each of four countries in Latin America. The case demonstrates the importance of operating in a country with predictable, transparent rules of the game.
Class Case (Chapter 24): “Intel’s Site Selection Decision in Lain America” in IM (pp.402-420)
Questions:
§  Why is Intel interested in investing overseas? Why does the company want to invest in Lain America?
§  What characteristics does the company seek in a country where it will locate its investment?
§  What are the pros and cons of each country on Intel’s short list?
Readings: IM, Chapter 5 & 10; RR, Ferdows, Making the Most of Foreign Factories: Kotabe, Efficiency vs. Effectiveness Orientation of Global Sourcing Strateg;
9/28 / Foreign Market Entry and Expansion
The case presents the internationalization issue facing a U.S.-based fast food chain in the mid-1990s. Issues involve whether or not the company should enter China, if so when, and through which joint venture partner.
Case 1 (in RR): “Kenny Rogers Roasters in China (A)”
Questions:
§  Has Tony Wang made a valid assumption that China is a high potential market for KRR?
§  Evaluate the timing of Wang’s decision to find a joint venture partner.
§  At what point in this process should a partner be selected?
§  Of the companies identified as potential partners-East City, China Great Wall Trading, and D&D¾which would be the best joint venture partner for KRR?
Readings: IM, Chapter 7, pp. 120-129; RR, Hill et al., An Eclectic Theory of the Choice of International Entry Mode; Vanhonacker, Entering China: An unconventional Approach; Peng, Making M & A Fly in China.
Video: Interview with Tony Wang
A one-page group project memo is due.
10/5 / Management of International Joint Venture: International Negotiation
The case presents the perspective of a Malaysian company, Nora Holdings Sdn Bhd (Nora), which was in the process of trying to establish a joint venture company with a Finnish company, Sakari Oy (Sakari). The formation of a joint venture seemed feasible since it would serve the needs of the two parent companies that would offer complementary contributions to the joint ventures. Despite parent companies' efforts, the negotiations had broken down.
Class Case (Chapter 28): “Nora-Sakari: A Proposed Joint Venture in Malaysia” in IM (pp.469-484).
Questions:
§  How important is the joint venture to Nora and Sakari?
§  If the joint venture was important, why have the negotiations failed to this point?
§  Should Nora and Sakari renegotiate?
§  If yes, how should they restructure the deal to reach a win-win situation?
Readings: IM, Chapter 7, pp. 129-139; RR, Yan, Structural Stability and Reconfiguration of International Joint Ventures; Paik, Negotiating with East Asians; International Negotiating Styles (in-class handout).
10/12 /

MIDTERM

10/19 / Ethics in International Business
The case deals with the ethical dilemmas managers often face in international business. It focuses on the challenges of building a business in a depressed, post-devaluation economy as a young American manager contemplates how to respond to a questionable request by a potential customer.
Case 2 (Chapter 45): “DSL de Mexico S.A.de C.V.” in IM (pp.693-703)
Questions:
§  What criteria will likely be used to judge Lane Cook’s performance in Mexico?
§  What Strategic options does Lance Cook have in turning DSL de Mexico around?
§  In evaluating Hernandez’s proposal, how important is it that Cook adhere to U.S. standards?
§  What action would you recommend for Lane Cook?
Readings: IM, Chapter 14, Kohls, RR, Resolving Cross-cultural Ethical Conflict: Exploring Alternative Strategies; Sethi, Standards for Corporate Conduct in the International Arena: Challenges and Opportunities for Multinational Corporations. Carroll, Managing Ethically with Global Stakeholders: A Present and Future Challenge
Video: Ethics in International Business.
10/26 /

MNC Strategy and Organizational Structure

This case involves the efforts of a president and CEO of an MNC as she struggles with a major reorganization that does not seem to be working. Students are asked to evaluate the role of headquarters in determining and coordinating business level strategy as well as an optimal organizational structure.
Case 3 (Chapter 42): “GLOBAL Enterprises, Inc.” in IM (pp. 669-680)
Questions:
§  How would you describe GLOBAL’s strategy?
§  How would you describe GLOBAL’s formal and informal organization?
§  What are the strengths and weaknesses of GLOBAL’s organization?
§  What action would you recommend for Jennifer Copperman-Williams?

Readings: IM, Chapters 8 & 9; RR, Ashkenas, Creating the Boundaryless Organization; Paik & Sohn, Global integration and local responsiveness: The use of regional headquarters in Japanese MNCs

11/2 /

No Class (Professor Out of Town)

11/9 / The Global Manager: How to Manage Political Risk
The case involves the decision on whether to continue to operate or abandon the company's Nigerian joint venture. It also focuses on the role of the subsidiary managers who is handling an LDC-based joint venture.
Case 4 (Chapter 38): “Larson in Nigeria – 1994” in IM (pp. 615-620)
Questions:
§  What are the three major issues confronting David Larson?
§  How would you recommend each of these issues be handled?
§  How do the roles of a subsidiary general manager differ between a joint venture in a developed country and one in a developing country?
Readings: IM, Chapter12; RR, Conklin, Analyzing and Managing Country Risks; Akhter & Choudry, Forced Withdrawal from a Country Market: Managing Political Risk; Frayne and Geringer, Challenges Facing General Managers of International Joint Ventures (in-class handout).
11/16 / Expatriate Management (1): Overseas Assignment and Training
The case focuses on the efforts of the President of the Asia-Pacific region, and his Management Committee, as they try to increase the quality and quantity of managers in the region. The region represents a huge, largely untapped market and the lack of talented local managers has threatened Bristol Compressors’ position there.
Case 5 (Chapter 37): “Bristol Compressors, Asia-Pacific” in IM (p.602-614)
Questions:
§  How important is the Asia-Pacific region to the future of Bristol Compressors?
§  To what do you attribute Bristol Compressors’ performance problems in the Asia-Pacific region?
§  Which option should Woods pursue?
§  What criteria are most important in making this decision?
Readings: IM, Chapter 11; RR, Black & Gregersen, The Right Way to Manage Expats; Vance & Paik, One Size Fits All in Expatriate Pre-departure Training?
Comparing the Host Country Voices of Mexican, Indonesian and US Workers
Video: Beyond Culture Shock
11/23 / No Class (Thanks Giving Holidays)
11/30 / Expatriate Management (2): Repatriation
The case centers on Japanese executive’s personal and family problems after returning from a successful international assignment in the U.S. Students are asked to investigate why Yutaka and his family are having such repatriation adjustment difficulties.
Case 6: “Yutaka Nakamura: A Foreigner in His Native Land” in RR.
Questions:
§  Why is Yutaka Nakamura having such repatriation adjustment difficulties?
§  Why is his family having trouble re-adjusting?
§  What could the Nakamura's or the company have done differently?
§  How generalizable are these problems beyond Japan and the Japanese?
Readings: Stroh et al., Closing the Gap: Expectations Versus Reality among Repatriates; Paik et al., How to improve repatriation management
Video: Welcome Home, Stranger
12/7 / Students Presentation (Group written reports are due.)
12/14 / FINAL EXAM

Guidelines for Group Presentation on an Assigned Case Analysis