Republic of the Philippines

Surigao del Sur State University

Cantilan Campus
Cantilan,Surigao del Sur
Telefax No. 086-212-5132
Website: www.sdssu.edu.ph

Instructional Module on
International Business and Trade

MARGE ETHAN A. URBIZTONDO, MBA

Module 1: International Business and Trade Page 1

Assessment.
Instructions: Answer the following questions. Minimum of five sentences and no
erasures.

1. What is the difference between global trade and international trade?

Answer:
The difference between global trade and international trade is international trade
is one that includes and involves only two or more countries. Companies import
or export the other's products. While global trade has a much larger scope which
includes the whole world.
Global trade is concerning the whole world and not just one or two regions. It has
unlimited, unbounded, general and comprehensive. In global trade there is Free
trade, migration, technological, political, military, and socio-cultural interaction
and sharing between nations.
International trade is concerning two or more nations. It is the interaction
between countries regardless of national borders. It affects only the countries
that are involved. In international trade they don't hold any investments in each
other's country.

2. What are the basic international business activities? Elaborate your answers.
Answer:
The basic international business activities is categorized into four basic types;
importing and exporting, licensing, strategic alliance and joint venture, and direct
investment.
*importing and exporting - The most fundamental and largest business that cross
national boundaries. Importing is bringing goods, capital, and services into your
home country from other countries. Exporting is making product from your home
country and sell it to another country.
* Licensing - Arrangement between companies of different countries. A company
allows other companies to use its brand name, copyright, patent, technology and
tradement.
*Strategic alliance and joint ventures - A cooperation of two or more companies
for mutual gain. A special type of this is joint venture when the partners mutually
Module 1: International Business and Trade Page 2
 found a new company. Example is Samsung and Nokia will joint and form a new
manufacturing processes for microprocessors and other parts of the phone.
Although they are not same company but they are mutually beneficial to the joint
venture.
*Direct Investment - Is a company's physical investment allows access of
companies from another country. Building a plant in another country. Direct
investment allows access of company from foreign markets and acts as domestic
businesses. And it has a full scale of activities from manufacturing to selling.

3. What is the role of United Nations in global trade?

Answer:
The role of united nations in global trade is to maintain international peace and
security, to friendly relationship between nations, and to foster international
cooperation in solving economic, social, humanitarian, and cultural issues. With
Un, countries have a good relationship and trade between countries is now easy
and organized. Un helps trade faster in every country and helps to organize
trades to avoid trade war. UN regulates laws on trades between its members. UN
also prioritize trade on developing countries.

4. What is the difference between United Nations and ASEAN Integration

economically?
Answer:
All members of the ASEAN are member of the United Nations while ASEAN is
focused on Southeast Asia. UN has many member and focused on all of its
member countries. The objective of the UN is world peace while ASEAN is on a
trading cooperation agreement. UN is capable of sending aid to just anywhere.
While ASEAN does not interfere between the problems of others nation. The
interfere only the problems of the member nations. Overall UN is a wide
organization while ASEAN is focused on southeast Asian countries.

Module 1: International Business and Trade Page 3

Activity 1: Case Analysis

Google Ends Censorship in China

In 2010, Google announced that it was no longer willing to censor search results
on its Chinese service. The world’s leading search engine said the decision followed a
cyberattack that it believes was aimed at gathering information on Chinese human
rights activists. Jessica E. Vascellaro, Jason Dean, and Siobhan Gorman, “Google
Warns of China Exit over Hacking,” January 13, 2010, accessed November 12, 2010,
http://online.wsj.com/article/SB126333757451026659.html#ixzz157TXi4FV. Google also
cited the Chinese government’s restrictions on the Internet in China during 2009.Tania
Branigan, “Google to End Censorship in China over Cyber Attacks,” Guardian, January
13, 2010, accessed November 12, 2010,
http://www.guardian.co.uk/technology/2010/jan/12/google-china-ends-censorship
Google’s announcement led to speculation whether Google would close its offices
in China or would close Google.cn. Human rights activists cheered Google’s move,
while business pundits speculated on the possibly huge financial costs that would result
from losing access to one of the world’s largest and fastest-growing consumer markets.
In an announcement provided to the US Securities and Exchange Commission,
Google’s founders summarized their stance and the motivation for it. Below are
excerpts from Google Chief Legal Officer David Drummond’s announcement on
January 12, 2010.David Drummond, “A New Approach to China,” Official Google Blog,
January 12, 2010, accessed January 25, 2010,
http://googleblog.blogspot.com/2010/01/new-approach-to-china.html.
Like many other well-known organizations, we face cyberattacks of varying
degrees on a regular basis. In mid-December, we detected a highly sophisticated and
targeted attack on our corporate infrastructure originating from China, resulting in the
theft of intellectual property from Google. However, it soon became clear that what at
first appeared to be solely a security incident—albeit a significant one—was something
quite different.
First, this attack was not just on Google. As part of our investigation, we have
discovered that at least twenty other large companies from a wide range of businesses
—including the Internet, finance, technology, media, and chemical sectors—have been

Module 1: International Business and Trade Page 4

similarly targeted. We are currently in the process of notifying those companies, and we
are also working with the relevant US authorities.
Second, we have evidence to suggest that a primary goal of the attackers was
accessing the Gmail accounts of Chinese human rights activists. Based on our
investigation to date, we believe their attack did not achieve that objective. Only two
Gmail accounts appear to have been accessed, and that activity was limited to account
information (such as the date the account was created) and subject line, rather than the
content of emails themselves.
Third, as part of this investigation but independent of the attack on Google, we
have discovered that the accounts of dozens of US-, China- and Europe-based Gmail
users who are advocates of human rights in China appear to have been routinely
accessed by third parties. These accounts have not been accessed through any
security breach at Google, but most likely via phishing scams or malware placed on the
users’ computers.
We have taken the unusual step of sharing information about these attacks with a
broad audience, not just because of the security and human rights implications of what
we have unearthed, but also because this information goes to the heart of a much
bigger global debate about freedom of speech. In the last two decades, China’s
economic reform programs and its citizens’ entrepreneurial flair have lifted hundreds of
millions of Chinese people out of poverty. Indeed, this great nation is at the heart of
much economic progress and development in the world today.
The decision to review our business operations in China has been incredibly hard,
and we know that it will have potentially far-reaching consequences. We want to make
clear that this move was driven by our executives in the United States, without the
knowledge or involvement of our employees in China who have worked incredibly hard
to make Google.cn the success it is today. We are committed to working responsibly to
resolve the very difficult issues raised.
Source: https://saylordotorg.github.io/text_international-business/

Module 1: International Business and Trade Page 5

Case Analysis Questions:

1. Introduction
a. Identify the key problems and issues in the case study.

Answer:

The key issues in the problem are:

 Cyber-attacks on Chinese human rights activists

 Detected a highly sophisticated and targeted attack of corporate
infrastructure originating from China
 Theft of intellectual property from Google
 Cyber-attacks not just on Google but also other twenty large
companies from a wide range of business.
 Dozens on Google - and - Europe based Gmail users who
advocates human rights in China, have been accessed by third
parties.
 Phishing scams or illegal malware placed on the user's computer.

b. Formulate and include a thesis statement, summarizing the outcome of

your analysis in 1–2 sentences.

Answer:

Google, the world's leading search engine, warns China by no longer to

censor search results on its Chinese servers. Google said the decision
after the cyber-attack on the Chinese human rights activist and also on
wide range cyber-attacks happening in China.

2. Background
a. Set the scene: background information, relevant facts, and the most
important issues.

Module 1: International Business and Trade Page 6

 Answer:

In 2010, Google announced that it was no longer censor search results on

its Chinese service. The world's leading search engine said the decision
followed a cyber-attack and hacking on company.

Google Chinese search engine launched in 2006.

In 2010 Google begins offering a Chinese-language version on

Google.com

In autumn 2002- Google.com becomes unavailable in China. And largely

restored within about two weeks. In 2003 Google.com blocked again in
China.

In January 2006, Google.cn is launched amid widespread criticisms.

b. Demonstrate that you have researched the problems in this case study.

Answer:

By thus background information, relevant facts, and issues. It will be

analyzed then understand. Based on my research on some articles in
Google that help me to identify the problems and issues.

3. Evaluation of the Case

a. Outline the various pieces of the case study that you are focusing on.

 Hacking on major companies

 Cyber attacks
 Google Ends its censorship in china
 Agreements between Google and China to continue operate
Google.com in China.

Module 1: International Business and Trade Page 7

 b. Evaluate these pieces by discussing what is working and what is not
working.

Google ends censorship in China is working, because in this issue both

parties agreed to end stop cyber hacking and hacking on Google
websites. They deal how to stop the problem in China. And also the
Google has a prototype called "project dragonfly" to be tested in the
future. The agreement between Google and China is not working because
Google has no step to negotiate in China. Also China has many filtering
and internet laws that Google has a difficulty in adapting thus rules.

c. State why these parts of the case study are or are not working well.

These parts of case study are not working well because it has a long
process. It really hard to get access in Chinese, because of its strict
internet laws, internet providers competition on search engines, and also
on US-China relation.

4. Proposed Solution/Changes
a. Provide specific and realistic solution(s) or changes needed.

For me, my proposed solution is, Google should have thick layer of strong
security systems. Like scanners, verifying systems, security questions,
fingerprint scanners, and face recognition. Then create an anti-phishing
and anti-hacking system. And Google should monitor daily the system.

b. Explain why this solution was chosen.

I choose this solution because it is the best solution that I know. It can
protect users from hackers and secure their privacy. It will benefit the
company and also the users. More security means less risks from
hackers. Through thus proposed solutions hackers will not easily hack the
Google systems.

Module 1: International Business and Trade Page 8

 c. Support this solution with solid evidence, such as:
i. Concepts from class (text readings, discussions, lectures)

According from my teacher in computer, if you have strong security

in your account you are likely safe from cyber hacking. In our
discussion only users can access the works in face recognition,
fingerprints scanners and verifying systems. By that only Google
and authorized person can access their system.

ii. Outside research

I did not do any research on my own, but I researched it on internet

and it supports my proposed solutions. Using those solutions
mentioned, it can protect your system from cyber-attacks and
secure the system away from hackers.

iii. Personal experience (anecdotes)

In my own experience, my Google account is used on all of my

games and apps like rules of survival, mobile legends and many
more. It is also my Gmail used for my academics. Last year my
Google account was hacked; it is mainly because of gaming. I
shared my account to my friend so that he can play but my friend
shared it to other friend and my account was hacked. Luckily I have
all he recovery methods, the recovery email, recovery phone
number, recovery questions and trusted devices. I did recover my
account because of verifications that myself only knows. Strong
security system is one of my proposed solution.

5. Recommendations
a. Determine and discuss specific strategies for accomplishing the proposed
solution.

 Strong security systems

Module 1: International Business and Trade Page 9

  Agreement between the two parties.
 Create an anti-hacking software
 Strong monitoring on systems

b. If applicable, recommend further action to resolve some of the issues.

If China will not accept Google. Google must not invest on that country
because they are sleeping giant and spying on every country in a secret
way. Privacy is at risk if you agreed at China.

c. What should be done and who should do it?

It should be done by following the proposed solution. It will be

implemented and test its effectiveness, it will lower the risk of hacking.
Everyone should do it, everyone should cooperate to gain the desired
outcome. Everyone must be responsible on their daily task and activity to
avoid being hack.

Assessment.
Instructions: Answer the following questions in brief and concise. Minimum of five
sentences and no erasures.

1. What is the role of ASEAN integration in international business and trade? Is it a

favorable action of the countries involved? Why or why not? Elaborate your
answer.
Answer:
The role of ASEAN integration in international business and trade is to promote
collaboration and cooperation among member states. ASEAN to aims to
accelerate the economic growth, social progress and cultural development.
Through ASEAN members are economically develop and can compete in
international business and trade. It is favorable to the member countries because
ASEAN members can reduce cost, ensure efficiency, easier for administration,

Module 1: International Business and Trade Page 10

 better analysis, accelerated growth and innovation. ASEAN members can take
advantage in international business because they are organized and helping
each other's countries.

2. Give me at least two recent changes in the international business environment

that include:
- Cultural Dynamics
- Political Environment
- Economic Environment
- Legal Aspects
- Technological Environment
-
Answer:
 Cultural Dynamics - the two changes in cultural dynamics are
acceptability and no barriers in culture. This past Yeats culture is
one of the barrier in trades but now people are now socializing, they
adopt and accept every countries cultural differences. They are
eliminating trade barriers so that every country can compete. And
can trade without being judge and bullied by another culture.

 Political environment - The two recent changes in political

environment are the trade agreements and trade barriers. They
agreed to eliminate barriers on trade and avoid trade war and
making peace. Some politics conduct deals to another country in
order to make the trade easier in every country and lesser on risk.
In trade barriers, barriers are making trade harder between
countries, so politics in this generation allows and agreed to
eliminate trade barriers.

 Economic environment - The two recent changes in economic are

the inflation and demand and supply in every country. We are
experiencing a pandemic today. In inflation some of the money are

Module 1: International Business and Trade Page 11

 overused and circulation is affected. And demand and supply, thus
two don't meet because of today's economy, it is caused mainly by
pandemic, supplies are scarce due to new normal and the demand
rises but less supplies. This unbalance creates a slow economy.

 Legal aspects - The two recent changes in legal aspects are

organizational law and consumer rights law. In organizational law,
laws are applied to maintain a fair business. Countries agreed in
this law so that every business will be legally formed in every
country. Many of consumer today are powerful because they are
covered by consumer rights laws not just like thus past years,
consumers’ rights are no longer exists and or even existed but no
implementation.

 Technological Environment - The two recent changes in technological

environment are the rise of newest gadgets, machines, apps, and
online platforms. Thus past years’ gadgets are used but not in its full
capacity. Today gadgets and machines are helpful in every trade. Like
massive cargoes, new software, AI intelligence. Technology advances
every year so it always changes the international business trades. With
advance technology, country that has the most advance technology
gains advantage.

3. How does cultural diversity impact international businesses? React and check
this link: https://www.youtube.com/watch?v=zQvqDv4vbEg

Answer:
Culture is what you learned from your society, the society you are born and
raised. International business deals not only across borders, they also across
cultures. Culture profoundly influence how people think, communicate, and
behave. It also affects the kinds of transactions they make and the way they
negotiate them. In the video, the girl speaker is from Minnesota, she was born in

Module 1: International Business and Trade Page 12

 different culture. Once she is in Japan, he interacts with another culture. She
asks a question but surprisingly for the woman no one responded to the
question. It is because in Japan they have different culture, you will ask directly
to the person if you’re asking. So cultural diversity affect how people behave and
communicate.

4. How does the technological environment affect international business? React

and check this link: https://www.youtube.com/watch?v=oQQbPhfsASI
Answer:
Technology is advancing every day, technology is growing and creating many
jobs in the future. This technological change can bring advantages and
opportunities for businesses. New technology can improve productivity and
reduce cost.
In the video, technology can create new jobs, 60 % of children today can get a
job that hasn't created in the future. Technology is advancing every day and
people should have trained to control and adjust to new technologies. In
business, technology impact on how you work to the future and impact how the
business works.

5. How does economic environment affect international businesses? React and

check this link: https://www.youtube.com/watch?v=hKGwGAHznFQ
Answer:
Economic environment will affect business in terms of demand and supply, thus
demand and supply of every country will affect their participation in international
business. In the video, economy was so up, Norway has almost perfect
economy, environments economic will affect in every way, if you have high GDP
it will affect in terms of resources and trading. It will boost a country in terms of
trading and the country in Norway will gain more money. It gains more advantage
in every countries trading.

Module 1: International Business and Trade Page 13

Activity 2: The Flash Crash: Machines Gone Wild

1. What is Black Monday Crash of 1987 and what happened?

Answer:
Black crash is the name commonly attached to the global, sudden, severe, and
largely unexpected stock market crash. Stock market crash including
stockbrokers on New York, London, Hong Kong, and just about any other city
with an exchange stared at figures running across their displays with a growing
sense of dread. A financial strut had backed, and the strain brought the world
market tumbling down. Countries stock market fall down by surprisingly rate, US
market fall more than 20% a single day.

2. What happened in the 2010 Flash Crash?

Answer:
Shortly after 2:30 p.m. EST on May 6, 2010, a flash crash began as the Dow
Jones Industrial Average fell more than 1,000 points in 10 minutes, the biggest
drop in history at that point. Over one trillion dollars in equity was evaporated,
although the market regained 70% by the end of the day. Initial reports claiming
that the crash was caused by a mistyped order proved to be erroneous, and the
causes of the flash were attributed to Navinder Sarao, a futures trader in the
London suburbs, who pled guilty for attempting to "spoof the market" by quickly
buying and selling hundreds of E-Mini S&P Futures contracts through the
Chicago Mercantile Exchange.

3. Describe the conditions that preceded the flash crash.

Answer:
There are some theories on how flash crash was happened. But it is thought the
cause of the crash is precipitated by computer program-driven models that
followed a portfolio insurance strategy. These program automatically began to

Module 1: International Business and Trade Page 14

 liquidate stocks to a certain loss targets, pushing pricing lower. Program leading
to a domino effect as the falling markets triggered more stop-loss orders. The
program automatically turned off all buying, bid vanished all around the stock
market at the same time.

4. What features of Black Monday Crash are different from the 2010 Flash Crash?
Answer:
The features different between 1987 and 2010 crash are the 1987 crash
precipitated by computer program -driven trading model that follows a portfolio
insurance strategy. IN 2010 It was caused by machine also Initial reports
claiming that the crash was caused by a mistyped order proved to be erroneous,
and the causes of the flash were attributed to Navinder Sarao, a futures trader in
the London suburbs, who pled guilty for attempting to "spoof the market" by
quickly buying and selling hundreds of E-Mini S&P Futures contracts through the
Chicago Mercantile Exchange. The 1987 crash different from 2010 is 1987 crash
was 1987 crash was caused by machine and computers that time is not yet
advanced while in 2010 is was caused by machine Alsop but it was mistyped and
it caused crash because of human error.

5. What are the benefits of electronic trading?

Answer:
Electronic trading has a huge benefit, first is it lowers fees. It reduces the
transaction cost and high fees associated with traditional brick-and-mortar firms.
Another benefits are more control and flexibility through electronic trading you
can execute a trade almost immediately. Using electronic trading you can save
much of your time. Also its ability to avoid brokerage bias and also you can
access online tools. You can use online tools to provide valuable information and
helping optimize trades. And also you have option to monitor investments in real
time, because many trading sites offers stocks quotes and trade information that
make easy to see how your investment are doing in real time.

Module 1: International Business and Trade Page 15

 6. How are two crashes similar?
Answer:
They are similar in terms of crash and losing of billions of moneys. Also both
crashes are caused by machines, machine is toxic. They both crashed caused by
machine toxicity. Before the machines took over, markets were a place for
human to trade, to set financial assets for buying and selling, but after the
machines took over, market become dominated in terms of volume, liquidity, and
pricing, by machines that operate time frames of millionth of a second.

7. What features of electronic trading and automated trading programs contributed

to the crash?
Answer:
It is the machine's auto trading program. The machine has the control of the
trading via its Ai and auto trade program. The program takes responsibilities of
the trade. Due to technological limits, programs are not on fill potential, program
overtrade the stocks and was not noticed by the operators, the crash began and
millions of dollars are lost. It is the machines incorrect address values in the
program counter, buffer, overflow, or bug in the system. That's how machine
caused the crash.

8. What measures did regulators take to ensure that no more future crashes would
happen again?
Answer:
Official announced that new trading curbs, also known as circuit breakers. As
securities trading has become a more heavily computerized industry driven by
complicated algorithms across global networks, the propensity for glitches,
errors, and even flash crashes has risen. That said, global exchanges like the
New York Stock Exchange, Nasdaq, and the CME have put in place stronger
security measures and mechanisms to prevent them and the staggering losses
they can lead to. They have put in place market-wide circuit breakers that trigger
a pause or a complete stop in trading activity. A decline of 7% or 13% in a

Module 1: International Business and Trade Page 16

 market's index from its previous close halts trading activity for 15 minutes. A
crash of more than 20% halts trading for the rest of the day. The SEC also
banned naked access or direct connections to exchanges. High-frequency
trading firms, who have been blamed for precipitating the flash crash's effects,
often use their broker-dealer's code in order to access exchanges directly. Such
measures cannot eliminate flash crashes altogether, but they have been able to
mitigate the damages they can cause.

9. Could this crash be prevented? Why or why not?

Answer:
Crash could be prevented if they aware of the warning signs. If they aware of the
warning signs of excesses that were similar to excesses at previous inflection
points. Economic growth had slowed while inflation was rearing to its head. Also
if there is installed computers to stop future crash, it would be helpful. This crash
could be prevented because we have the best technology to handle the stock
market. There will be no more crash to the future because of our advance
technology, computer Artificial intelligence will handle trades in the future and if
there is crash in the future it will not last long because computer's will
automatically stop the trading.

10. How has the advent of electronic trading affected those regulatory measures?
Answer:
Regulatory measures on trading is set and implemented by higher officials in
electronic trading. Electronic trading will be affected by the regulators in terms of
controlling the machine. There is an control to the machine, machine is set and
controlled by the regulators. Managing the machine, so that the machine will not
cause a crash in the future. Also machine is programed to follow the regulations
and laws.

Module 1: International Business and Trade Page 17

Many critics see international trade as a form of cultural imperialism that must be strictly
controlled.- Robert Gilpi

Module 1: International Business and Trade Page 18