University Of Finance & Administration INTERNATIONAL BUSINESS RELATIONS [BA_IBR] Pavla Břečková [Ing., Ph.D.]

2.2. INTERNATIONAL BUSINESS RELATIONS – main areas Full-time course = 12 lectures per 90 mins. INTERNATIONAL BUSINESS [IB], characteristics, indicators. WORLD BUSINESS TERRITORIES, challenges, integration, main trading blocks [TRIAD, BRIC] GLOBAL BUSINESS ENVIRONMENT. EMERGING MARKETS, characteristics, features, selected markets in detail BRICS Doing business in ASIA Foreign market analysis PREDISPOSITIONS for working in IB, expatriation and HR in IB

EXAM terms BA_IBR 12 lectures (per 90 mins) - Finished by: exam Completion CONDITIONS = min. 12 points out of 30 Active participation in the lectures [active listening, discussing, reading, analyzing & interpreting of economic articles or case study results, presence at lectures – 50%] Case study elaboration & it’s active professional prezentation Knowledge test ALL BASED ON POINTS AS FOLLOW 5 points = 3/5 presence (if less = 0 points) up to 10 points = success at CASE study & its prezentation up to 15 points = TEST TOTAL max – 14 points = E 15 – 17 = D 18 – 20 = C = B 24 – 30 = A

CASE study / team project CASE study on one of these topics: 1. BUSINESS RELATIONS … worldwide. The world economy structuring nowadays, may be compared with the past / possible prospects for future. Examples of certain (political) decisions => concrete influence on business or business relations. 2. SMEs (Small & Medium Enterprises) and their role in a globalizing world Companies up to 250 employees (acc.to European definition), their specifics, positives x negatives, could contain some statistics or comparison in various countries. Their major role in society, comparison of views on them in various countries or contexts. 3. FAMILY BUSINESS …and their role in global business, positives x negatives, examples, specifics, problem of handing over to next generations, comparisons in various countries etc. 4. PRODUCT PLACEMENT – market study Placing of a product into a foreign market, including product description + argument why it is suitable for export, analyses of the preferential market (why this market, structure and potential of the target group), mapping competition, potentials + risks, argument why you think your product will succeed. 5. NOT WIDELY KNOWN (UNUSUAL INFORMATION) about BRICS / EU / ASEAN or another international trade grouping

CASE study - elaboration CASE study on one of these topics: 1. Business Relations 2. SMEs and their role in a globalizing world 3. Family Business 4. PRODUCT placement – market study 5. Not widely known information about an international grouping ELABORATION:  Elaboration in teams per up to 8 people  Presentation of the results - ppt possible, cca 10 min., structured way, clear outcomes (solutions, results) PREZENTATION: - up to 10 min. / all the team members should be involved

Team projects presentation - schedule 6/10/2014introductory lesson, setting the teams, choosing topics 20/10/2014guest lecture - Ananta Giri: Rethinking Economics: With and Beyond Globalization and Towards Planetary Realizations / consulting on the team projects 3/11/2014lecture / consulting on the team projects 17/11/2014Czech bank holidays 1/12/2014presentation of teams /12/2014presentation of teams 3 + 4, concluding the course

7.7. LITERATURE SOURCES Povinná literatura / Mandatory reading: Charles W. L. Hill: Global Business Today, McGraw-Hill/Irwin, 7th edition, 2011 Doporučená literatura / Recommended reading: Allan Sitkin, Nick Bowen: International Business, January Stuart Wall, Dr. Bronwen Rees: International Business: A First Course, September Wild, J., Wild, K., Han, J.: International business: the challenges of globalization. 4th ed. – Pearson, Upper Saddle River, ISBN: Woods, M.: International business. Basingstoke, Palgrave, ISBN: Griffin, R.W., Pustay, M.W.: International business: a managerial perspective. 5th int. ed. - Upper Saddle River, Prentice Hall, ISBN:

state decides about their imposition TARIFF x NON-TARIFF state’s intention: either reduce IMPORT or support EXPORT AUTONOMOUS (independent, one-sided) result of negotiations BILATERAL (business agreements, credit / loan agreements etc.) MULTILATERAL (integration unions) bilaterální (dvoustranné): CONTRACTUAL 8.8. State IB policy INSTRUMENTS

TRADE BARRIERS = trade barrier is a general term that describes any government policy or regulation that restricts international trade - the barriers can take many forms Most trade barriers work on the same principle: => the imposition of some sort of COST on trade that raises the price of the traded products Trade barrier Principle:

10. Tariff & Non-tariff measures NON-TARIFF Quota = qty restriction TARIFF - Fiscal - Protective - Retributive - Prohibitive  have important effects on consumption, production & structure of a domestic economy  reason for imposing = e.g. protect infant industries

TARIFF & non-TARIFF = a tax on imports, which is collected by the federal government and which raises the price of the good to the consumer. Also known as duties, tariffs usually aim first to limit imports and second to raise revenue. - Types of tariffs: Fiscal, Protective, Retributive, Prohibitive QUOTA = is a LIMIT on the amount of a certain type of good that may be imported into the country. A quota can be either voluntary or legally enforced. ADMIN = Export licence / Subsidy / Harbour permitions / Local requirements: packaging, instruction, health, safety TARIFF NON- TARIFF

12. Summary of basic IB BARRIERS WEAK IB Prohibitive TARIFFS QUOTAS IMPORT DUTIES Other PROTECTI- ONIST measures Sanctions & Embargo Dual use / ‘use conditional’ Nationali- zation

HRM in IB Human Resource Management [HRM] = activities an organization conducts to use its human resources effectively Strategic role of HRM is complex enough in DOMESTIC firm, but even more complex in IB – issues arising from: *staffing, *management development, *performance evaluation & *compensation activities Issues are complicated by profound differences between countries in:  LABOR markets – specifics, labor law, labor habits, productivity  CULTURE – elements influencing business and day-to-day work  LEGAL systems  Economic systems

14. Basic elements of Culture CULTURE Language Communi -cation Religion Values & Attitudes Social structure

15. LEGAL systems Cases create legal precedents COMMON / CASE law Detailed listing what IS and IS NOT permissible CIVIL law Based on the faith & practice of a particular religion RELIGIOUS law Often in communist and dictatorships is whatever the country’s bureaucrats say it is BUREAUCRATIC law

EXPATRIATION - REPATRIATION EXPATRIATE manager = a national of one country appointed to a management position in another country career growth experience compensate  often overlooked problem: inclusion into comp.structure after REPATRIATION of the expat Expatriate failure = premature return of an expatriate manager to the home country - Reasons in multinational companies – next slide = expatriate selection – one way to REDUCE expat failure is by improving selection procedures (within HRM)

EXPATRIATION failure reasons US multinationals: 1. Inability of spouse to adjust 2. Manager’s inability to adjust 3. Other family problems 4. Manager’s personal or emotional maturity 5. Inability to cope with larger overseas responsibilities JAPANESE multinationals: 1. Inability to cope with larger overseas responsibilities 2. Difficulties with new environment 3. Personal or emotional problems 4. Lack o technical competence 5. Inability of spouse to adjust EUROPEAN multinationals:  Inability of spouse to adjust to new environment

QUESTIONS to prove knowledge in IB What is / and what are typical TRADE BARRIERS? What state IB policy instruments do you know? What is a SANCTION, EMBARGO, DUAL USE, NATIONALIZATION? What is TARIFF and NON-TARIFF barrier to trade? What is QUOTA? What is EXPATRIATION? What is REPATRIATION? What issues are connected with expatriation most often? What are the main areas to deal with when expatriating? What is expatriate failure? What are the basic business analyses?

INTERNATIONAL BUSINESS RELATIONS Thank you for your attention Ing. Pavla Břečková, Ph.D.