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 - relations 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. INTERNATIONALISATION ways of COMPANIES How the companies become international (operating at more than domestic markets), what are the motives, why and how (entry modes, start ups, born globals etc.). How to get onto foreign market, could contain some statistics or comparison in various countries. Areas where it is likely to find the business opportunities for foreign expansion. 2. COMPETITIVENESS … of a company or a country. Determinants, key factors, process of finding and correct definition of the competitive advantage, and it’s ‘sale’(how to communicate it towards customers). 3. 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. 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 a recent international trade event

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 event 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 15 min. / all the team members should be involved

Team projects presentation - schedule 7/10/2015introductory lesson, setting the teams, choosing topics for team project 21/10/2015lecture / consulting on the team projects 4/11/2015 GUEST lecture (instead of regular time) in ESTONSKA site – Congress Centre downstairs opposite Reception 18/11/2015lecture / consulting on the team projects 2/12/2015lecture / presentation of teams /12/2015lecture / presentation of teams 3 + 4, concluding the course (possibly TEST writing)

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:

8.8. INTERNATIONAL BUSINESS  What is international business? = exchange of goods and services undertaken by business bodies across the national border with the foreign business bodies = cross-border commercial transactions INT business = EXCHANGE across border

Barter / Import / Export International TRADE FDI / Portfolio investment / WOS etc. International INVESTMENT Licensing / Franchising / Management contracts etc. Other forms of int. business ACTIVITY 9.9. INTERNATIONAL BUSINESS CONSISTS IN:

10. International INVESTMENTS - generally FDI = Foreign Direct Investment investments made for the purpose of ACTIVELY CONTROLLING PROPERTY, assets, or companies located in host countris home x host country Forms of FDI GREENFIELD (new facility) ACQUISITION of (or merger with existing local firm) Portfolio Investment purchases of foreign financial assets (stock, bonds, certificates, deposits) for a purpose OTHER than CONTROL

11. How IB differs from DOMESTIC business?  currencies – conversions, risks, rates securing  culture – behavior, business practice  resources  technology – way of producing  often legal system – laws

12. Basic LAW 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

13. STRUCTURE of IB TERRITORIAL COMMODITY

14. STRUCTURE of IB = portfolio of all the business territories the company or country makes business with TERRITORIAL = portfolio of all the business commodities the company or country makes business with COMMODITY

INTELLECTUAL PROPERTY: o products of the mind (SW, screenplays, music, chemical formula for a new drug). o can be protected by PATENTS, COPYRIGHTS, TRADEMARK PATENT – grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale of that invention COPYRIGHT – exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit TRADEMARK – designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products Special hot issue: INTELLECTUAL PROPERTY 15.

Features / consideration: – Dollar / Euro ZONE – Business Culture – Law enforcement – Business Barriers – Business threats / opportunities WORLD BUSINESS 16.

The interesting QUESTION [from an economic perspective] is what the above means for the future: the 19th century was dominated by Great Britain and Europe as colonial powers the 20th century by the USA as the great economic power the 21st century will be controlled by Asia, and China in particular WORLD BUSINESS possible PROSPECT 17.

GLOBAL BUSINESS ENVIRONMENT  Session one is devoted to a discussion of the global context within which IB must function in the 21 st century.  The aim is to describe the external framework which exists today and which will influence company strategies in the international arena.  There are clearly some factors that will be more important than others in determining the likelihood of success in international markets:  The state of the world economy and the rules and regulations governing INT trade and investment are critical  The political and social environment also impinges on businesses, i.e. consideration of the role of culture in IB / importance of cultural empathy to business success

19. International ENVIRONMENT GLOBAL MACRO MICRO

20. Awareness of the GENERAL ENVIRONMENT – 2 levels of understanding BROAD = relevant to most companies [includes economy, political, tech. world and sociological issues] SPECIFIC = important to the individual business [includes customer / supplier relations, investor requirements, workplace issues] GLOBAL BUSINESS ENVIRONMENT Factors at BROAD level of IB understanding – influences on the IB environment

IB OPERATIONS (micro / operational level) ManufacturingAssemblingDistributionSelling 21.

POLITICAL Integration of LDCs and Centrally planned economies into INT economy Difficulties (& oppo) raised by econ.inequalities Role of OECD, WTO, World Bank, EU commiss. -direction of INT Trade & Investment Environmental concerns ECONOMIC INT economic agreem. (liberalisated trade & capital flows) => led to establishing REGIONAL ECONOMIC GROUPINGS - 3 main trading blocks TRIAD GATT ( ) =>WTO 2 particular issues of Importance for FUTURE: -Labour standards -Environmental issues FACTORS with SIGNIFICANT INFLUENCES on IB (BROAD level of understanding IB) 22. TECHNOLOGICAL Economic cycles in 50 years waves: -Prosperity -Recession -Depression -Recovery INFROMATION & COMMUNICATION wave (1980/90’) -driven via NETWORKS (comps, tech based com., production, control systems) TRANSPORTATION

QUESTIONS to prove knowledge in IB What is International business? Characterize, please. What IB consists in? 3 main categories. What is BARTER? What is FDI? What is HOME x HOST country? What is Portfolio investment? How IB differs from DOMESTIC trade? What are the main differences? What law / legal systems do you know? What is territorial / commodity structure of IB? GLOBAL business environment – 2 levels: Broad and Specific. Can you explain? Factors influencing IB: Political / Technological / Economic

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