WAYNE STATE UNIVERSITY
School of Business Administration
Winter 2003
MKT7460 INTERNATIONAL BUSINESS
Professor Attila Yaprak
307 Prentis Building
E-mail: attila.yaprak@wayne.edu
Website address: http://www.cis.wayne.edu/cibs/yaprak/home.html
Tel: (313) 577-4842 or (313) 577-4525; Fax: (313) 577-5486
Office Hours: Mondays
13-18; Tuesdays 13-18 or by appointment
TEXTS:
REFERENCE TEXTS AND COURSE MATERIALS ON
THE WEB:
Ricky W. Griffin and M.W. Pustay, International Business: A
Managerial Perspective, 2rd ed., Addison Wesley, 1999.
Attila Yaprak and Hulya Tutek, Editors, Globalization,
the Multinational Firm and Emerging Economies, The JAI Press, 2000.
George S.Yip, Total Global Strategy,
Prentice Hall, Inc. Englewood Cliffs, New Jersey, 2002.
Visit
http://www.cis.wayne.edu/cibs/yaprak/home/.html
for course materials and handouts.
RELEVANT SCHOLARLY JOURNALS AND
PERIODICALS:
Journal of International Business
Studies, Journal of Business Research, Journal of International Marketing,
Management International Review, Journal of World Business, Sloan Management
Review, Harvard Business Review,California Management Review, International
Business Review, Business Week, the Economist, Financial Times, Wall Street
Journal.
COURSE OBJECTIVES AND CENTRAL THEME:
My
objective in this course is to inspire young managers in global, multinational,
or internationalizing enterprises to integrate their firms more effectively into
the world economy. To achieve this objective, I present an integrated treatment
of conceptual and managerial issues in contemporary international business based
on the state of the art research in the field. I have aimed the course at a wide
range of students: those planning careers in internationalizing firms, small,
medium or large; those already along careers in large globalized firms; and,
those preparing for careers in government policy-making institutions, whether
national (eg., the US Department of the Treasury) or transnational (eg., the
World Trade Organization).
The
course is designed to provide an appreciation for cross-functional and
interdisciplinary perspectives. This is because today’s global operations
increasingly require these proficiencies in managing core business processes.
For example, product development teams today include managers from finance and
engineering, even from disciplines such as anthropology and sociology. They also
include professionals from multiple national cultures, such as German and
American managers working together at Daimler Chrysler and American, British,
and German engineers working with anthropologists and demographers on new car
projects at Ford Motor Company.
In
light of these objectives, the course is designed so that you will learn about:
§
Diagnosing industry globalization
and measuring globalization drivers
§
Building global market
participation and localizing activities
§
Designing and marketing global
products and services
§
Designing a global strategy and
executing it effectively
§
Conducting cross-national and
cross-cultural analyses
§
Building the global organization
and assuring high performance
§
Rationalizing the firm’s global
value chain to more effectively compete worldwide
§
Organizing and controlling global
operations, and
§
Coping with challenges in emerging
markets
While
in the course, you will also:
The
course is built around a central theme, that developing
and sustaining a superior value proposition
and delivering it effectively to customers worldwide is the key to creating
value for the firm and its stakeholders. We focus on
the role that business might play in creating that superior value for the
firm, on strategy, strategizing and global competitiveness, and on the delivery
of the firm’s value proposition more efficiently and effectively than
competitiors in relevant world markets. Our premise is that due to the
confluence of globalization and technology, customers today are becoming
increasingly sophisticated, their preferences and expectations are constantly
changing, and new opportunity segments are continuously evolving around the
globe. To compete effectively in this world, and thus in sustaining long term
growth in both profitability and market share, the global business must learn to
provide superior value to customers worldwide through attracting and retaining a
loyal customer base. We also believe that effective competition around the globe
requires a global business orientation; that is, developing and executing
strategy based on a thorough understanding of the firm’s goals and
capabilities, its customers and relevant competitors, and the business context
within which the firm competes. We believe that it is this mindset that provides
the foundation for developing superior competitive strategy, drives long-term
profitability, and builds competitiveness and growth for the firm around the
world.
In
sum, the course is built around the premise that competing successfully in the
global environment will require that managers (a) excel in identifying and
serving market opportunities effectively; (b) are able to create and sustain
operational capabilities and relationship networks with partners in both inside
and outside the firm; and (c) are capable of guiding and communicating the
firm’s value proposition to current and future customers more effectively and
efficiently than relevant competitors.
COURSE
PEDAGOGY, RESOURCES AND GRADING:
The
course is designed to help students develop problem solving skills in global
business contexts. To help achieve this, it is taught in a lecture
and case discussion format. The
lectures present key concepts in global strategic thinking while case
discussions sharpen students’ skills in analytical problem-solving situations.
While the lectures are key in
internalizing salient content knowledge in global business, case discussions are key in developing the problem-solving and
communication skills valued so highly in management practice. Discussions of
cases are also valuable in familiarizing you (today’s young managers and
tomorrow’s executives) with the kinds of problems typically faced by decision
makers, and all the risks and rewards involved in implementing a chosen decision
alternative, whether in the technology-driven or service industries.
Given
our focus on decision-making contexts and
the case method, the course is very action-oriented. That is, in addition to the general analysis of decision
making in the firm’s product/market strategy contexts, the course also
addresses tactical issues such as those involved in balancing
global integration and local responsiveness or rationalizing the firm’s supply chain worldwide. Critiques of recommended readings and the cases,
completed often in groups, will help you question the findings of frontier
knowledge in the field, and lead you to new discoveries based on current
knowledge. Readings and cases will help
shape your thinking about the subjects we discuss in class, help you grasp
these better, and increase the value you will gain from the course. This will
facilitate deepening and integration of your understanding of concepts and
analytical tools used in international business management. Intellectual
involvement is, therefore, a key ingredient of effective learning in the
course.
It
is essential that you read the textbook,
and prepare for the cases regularly, along with the assigned readings. The
textbook is perhaps the best reference available on the fundamentals of
international business management; it provides an encyclopedia of the concepts,
frameworks and tools that are used in the practice of contemporary international
business management. Co-authored by two very highly regarded Harvard Business
School professors of international business, the casebook is clearly the most
comprehensive available on the market today on the practice of international
business.
As
already-successful young managers, you are no doubt reading popular business
periodicals, such as Business Week (www.businessweek.com),
the Economist (www.economist.com), the
Wall Street Journal (www.wsj.com), and the
Financial Times (www.ft.com), regularly. In
addition, you could consult many other resources readily available in electronic
format. Among these, perhaps the best resource is Michigan State University
CIBER’s website (http://globalEDGE.msu.edu).
This resource provides an easy-to-use index, a search engine, and other features
such as the Resource Desk, which serves as an electronic international business
library. Through this site, you can access international business periodicals,
conduct industry or firm-specific research, gather information about specific
markets of interest, and discover both public and private sources of information
about international business that you never thought existed! You can also gain
access to several computer-assisted decision tools for international business
professionals. These tools, which facilitate more effective decision making by
management teams, include CORE V (Company Readiness to Export), DISTRIBUTOR
(used in selecting a foreign agent or distributor), PARTNER (used in selecting
potential foreign joint venture partners), FREIGHT (used in assessing the
capabilities of a foreign freight forwarder), and MAPS (co-developed by myself,
and used in evaluating the feasibility of 15 different entry modes, ranging from
exporting to joint ventures, when entering foreign markets).
There
are also other data sources you might find useful while working on your projects
in this course, and indeed, in your professional lives now and in the future.
These include country-level, trade and direct investment-focused industry-level,
and firm-specific data. Descriptions of these and their website addresses are
given in the Appendix to this
syllabus, under the titles Select List
of Secondary Datat Sources and Web-Based
Exercises and Projects for Internationalizing Business Courses.
Your
course grade, totaling 500 points, will be a function of the following
ingredients:
1.
Two case analyses, typically 10-12 typewritten pages, due on the date
the case is discussed in class(100 points each, for a total of 200 points). You
will write up the Mary Kay
Cosmetics and the Sony Corporation
cases, either individually or as a member
of a group, to fulfill this requirement.
2.
A course exam, scheduled for
April 28 (120 points). Make-up exams are given only in extraordinary,
health-related circumstances.
3.
Involvement,
which includes regular attendance,
meaningful contribution to class discussion, and demonstrated interest in
the course (60 points). As class participation leads to significant
cross-fertilization of ideas, regular attendance is required.
Withdrawals and incompletes are given in extraordinary, health-related
circumstances.
4.
A group Term Project,
typically 15-20 pages, due on April 14,
2003 (120 points). To fulfill this requirement, each team will identify an international
business issue discussed in the literature (balancing global integration
with local responsiveness, for example), and write a position paper analyzing
its relevant dimensions, and proposing solution alternatives. A one-page
description of your topic is due me on March 3, 2003.
Your completed paper is due on April 14, 2003.
My
expectations from each of these course grade components are described in greater
detail in the Appendix to this Syllabus. This document is also available on my
website. Further, samples of each of these are available in my office for
review.
I
will scale the course grade as
follows: 90% and above = A; 80%-89% = B; 70%-79% = C; 60%-69% = D; and 60% and
below = E
As
always, you will get out of the course what you put into it. Active
participation in reasoning and decision making is as important in
this course as writing articulately. Active listening and critical
thinking are essential skills you should develop in your graduate education.
Discussing cases and preparing the team project can be valuable individual
learning experiences outside of class. You should be prepared to present your
analysis and reasoning behind it to the class when called upon. You should also
learn to listen to, and critique, your classmates’ ideas objectively, and be
prepared to debate the merits of their viewpoints. Understanding, challenging,
and defending points of view leads to better understanding of others’ ideas,
the factors considered by them, and their interpretations. This type of constructive
conflict often leads to a clearer understanding of the problem, the merits
of alternative courses of action, and most importantly, to the syntheses of
ideas that are being considered. In light of these, I will be evaluating
your contribution to class discussion based on whether your ideas are
reasonable, defensible, and supported by theory or fact; whether your
contribution is adding value to the current discussion; and whether your
solution alternatives are action-oriented contributions.
It
is particularly important that students with work experience in international
business, especially in industries that are experiencing rapid
internationalization, and those with experience in a specific market situation,
such as emerging markets, actively participate in class discussion. Sharing this
type of experience, along with experience in living and/or working abroad, in
class is invaluable in complementing our case analyses, lectures, and readings.
In
sum, you can achieve maximum learning in this course by doing the
following: be an active learner, make full use of the supplementary resources
provided you, use the course materials distributed in class and available on the
web to guide your study of the cases and interpretation of the text, and manage
your time effectively.
COURSE OUTLINE (with tentative dates):
1.
Globalization, the Knowledge Economy, and Implications for Management (January 13 and 27, January 20
is Martin Luther King day)
Globalization
and evolution of global business, the nature and scope of international business
operations, dimensions of world trade and investment, global competitive
advantages and value chains, global networks, global production rationalization,
internationalization patterns, and social costs and benefits of globalization,
myths about globalization. Implications of all of these on international
management.
Text: Chapter 1.
Readings #1, 2, 4, 5, 12, 32,
33.
2.
The Underlying Framework for International Operations (February
3 and 10)
The political
economy of international business, national differences, regional economic
integration, modernization, postmodernization, and value change patterns in
various societies, social, economic, and political change in emerging economies,
the international monetary system, foreign exchange and international money
markets, the balance of payments and national monetary policies, foreign direct
investment and international trade.
Text: Chapters 2, 9 and
10.
Readings # 3, 18, 24, 26.
Case
#1: Komatsu,
Ltd. (Transformation of a Japanese multinational’s strategic intent and
organizational configuration into a transnational one).
3.
Conceptual Foundations of International Business: The
Internationalization Process of the Firm
(February 17)
Classical and
contemporary theories of international trade, theories of direct foreign
investment, recent trade and investment patterns, internalization, transaction
costs, internationalization and eclectic theories of global business and the
multinational enterprise, the resource based view and social exchange
explanations of international collaboration.
Text: Chapters 4, 5 and
6.
Reading #17.
Case
#2: Orbital
Sciences Corporation (Managing satellite-based mobile data communications
applications in China, a transforming economy)
4.
The Cultural Environment of International Business and Its Analysis
(February
24 and March 3)
The psychological, sociological, and anthropological environment of
international business operations, corporate culture and its transferability to
other environmental contexts, political risk analysis, environmental scanning
methods, evolution of multinational corporate culture.
Text: Chapters 3, 7 and
8.
Readings # 10, 14.
Case
# 3: Mary
Kay Cosmetics (Transferring Corporate Culture, product lines, and marketing
programs from the US to Japan and/or China).
Due February 24, 2003.
Spring
Break is March 10 through March 17.
5.
The Search for, and Management of, Worldwide Competitive Advantages:
Strategy and Structure in International Business
(March 17 and 24)
Strategic choice,
pressures for cost reduction and local responsiveness, differentiation vs.
integration mechanisms, control systems, strategy/structure/performance
framework, multidomestic vs. global orientation, pursuit of value chain
internationalization, strategic intent and architectures, migratory vs. embedded
knowledge and learning.
Text:
Chapters 12,13.
Readings # 6, 7, 9, 10, 13, 15.
Case #5: Proctor & Gamble Europe
(New product introduction into the European market by an American multinational)
Case
# 6: Sony
Corporation Car Navigation Systems (Developing a worldwide strategy
centering on geograpical focus, product choice, and product standards for a
newly emerging technology product). Due March 24, 2003.
6.
Internationalization of the Value Chain: International Competition and
Strategic Alliances
(March 31 and April 7)
Emerging patterns of
global competition, global logic of strategic alliances, life cycles of
alliances, organizational evolution through alliances, partnerships and
networks, other forms of international involvement (exporting, licensing, joint
ventures, direct investments), global account management.
Text:
Chapters 14, 15.
Readings # 16, 18, 20, 22, 23,
28.
Case #7:
Loctite Corporation (Challenges of
building distribution and assuring market participation in international markets
through alliances and partners).
Case # 8: Koc Holding: Arcelik White
Goods (Challenges of
internationalization faced by a Turkish, an emerging market, firm)
7.
Organizing and Controlling Global Operations (April
14 and 21).
Developing
organizational capabilities and managerial competencies to implement clearly
defined strategic intent and global strategy, synthesizing differentiated roles,
jobs and responsibilities, global client management, building a global
organization.
Readings
# 28, 30, 31.
Case
# 9: ABB’s Relay Business (Building
and Managing a Global Matrix Organization)
8.
Final Exam (April 28).