IM3081 INTERNATIONAL BUSINESS MANAGEMENT

2021-22 SEMESTER 2

INDIVIDUAL ASSIGNMENT #3

Due

Friday, 28th January 2022 at 17:00

Instructions

• Review Chapters 2, 3, 4 and 5 of the textbook.

• Prepare a response to the following Exercises.
• Submit both via the eLearning System on or before the due date/time.
• Be ready to present to the class your Individual Assignment #3. You will be randomly
picked to present to the class.
Exercises
Discussion questions

1. Free market economies stimulate greater economic growth, whereas state -directed
economies stifle growth. Discuss.
2. What is the relationship between corruption in a country (i.e. government officials taking
bribes) and economic growth? Is corruption always bad?
3. You are the CEO of a Vietnamese beverage company that has to choose between
making a $50 million investment in Russia or Poland. Both investments promise the
same long-run return, so your choice is driven by risk considerations. Asse ss the
various risks of doing business in each of these nations. Which investment would you
favor, and why?
4. You are a senior manager in a U.S. automobile company considering investing in
production facilities in China, Russia, or Germany. These facilities will serve local
market demand. Evaluate the benefits, costs, and risks associated with doing business
in each nation. Which country seems the most attractive target for foreign direct
investment? Why?
5. Compare the cultures of Myanmar and the Philippines. Indicate how cultural differences
influence (a) the costs of doing business in each country, ( b) the likely future economic
development of that country, and (c) business practices
6. A visiting American executive finds that a foreign subsidiary in a less developed country
has hired a 12-year-old girl to work in its factory floor, in violation of the company’s
prohibition on child labor. He tells the local manager to replace the child and tell her to
go back to school. The local manager tells the Amer ican executive that the child is an
orphan with no other means of support, and she will probably become a street child if
she is denied work. What should the American executive do?

Research tasks

Use the globalEDGE website (globaledge.msu.edu) to complete the following research tasks:

1. Differences in political, economic, and legal systems have considerable impact on the
benefits, costs, and risks of doing business in various countries. The World Bank’s
“Doing Business Indicators” measure the extent of business regulations in countries
around the world. Compare Brazil, Kenya, India, New Zealand, Canada, Sweden, and
Turkey in terms of how easily contracts are enforced, how property can be registered,
and how investors can be protected. Identify in which area you see the greatest
variation from one country to the next.

2. Increased instability in the global marketplace can introduce unanticipated risks in a

company’s daily transactions. As such, your company must evaluate these commercial
transaction risks for its foreign operations in Argentina, China, Poland and South Africa.
A risk analyst at your firm said that you could evaluate both the political and commercial
risk of these countries simultaneously. Provide a commercial transaction risk overview
of all four countries for top management. In your evaluation, indicate possible corrective
measures in the countries with considerably high political and/or commercial risk.

3. Typically, cultural factors drive the differences in business etiquette encountered during
international business travel. In fact, Middle Eastern cultures exhibit significant
differences in business etiquette when compared to East Asian cultures. Prior to l eaving
for your first business trip to the region, a colleague informed you that a guide named
Business Etiquette around the World may help you. Using this guide, identify five tips
regarding business etiquette in Saudi Arabia.