Adobe Systems 1 MPH_AIMA International Management Adobe Systems 2 Organization of the Course ̶People ̶Schedule ̶Instructions ̶Final Grade ̶Literature ̶Expectations Adobe Systems 3 People Sylva Žáková Talpová talpova@mail.muni.cz Alena Šafrová Drášilová alena.drasilova@mail.muni.cz Ondřej Částek castek@mail.muni.cz And many others! Adobe Systems 4 What to do to pass the course? ̶Lectures ̶Case Study in teams (assignment and instructions will come) ̶Peer Review of other team’s study ̶2 online tests (instructions by e-mail) ̶Final test – written, multiple-choice and open questions Adobe Systems 5 Final Grade Case Study Final Test 35% 55% 5% 5% max 15 min to pass 5 0-3 0-3 0-3 0-3 0-3 100% of Case Study 100% 0-3 pass = 60% and more 100% of Final Test 100% pass = go through both online tests with any result 0 – insufficient 1 – acceptable 2 – good 3 – excellent Adobe Systems 6 Scale for final evaluation ̶Scale for final evaluation: ̶100–93% = A ̶92.9–85% = B ̶84.9–77% = C ̶76.9–69% = D ̶68.9–60% = E ̶59.9–0% = F ̶ Adobe Systems 7 Important Deadlines ̶https://is.muni.cz/auth/el/econ/jaro2021/MKH_AIMA/index.qwarp?prejit=6803469 Adobe Systems Define footer – presentation title / department 8 Literature ̶Deresky, H. (2017). International management: Managing across borders and cultures : text and cases (Ninth edition, global edition.). Boston: Pearson. ̶Gooderham, P. N. (2003). International management: Cross-boundary challenges. Malden: Blackwell. ̶Luthans, F. (2009). International management: Culture, strategy, and behavior (7th ed.). Boston: McGraw-Hill/Irwin. ̶Phatak, A. V. (2009). International management: Managing in a diverse and dynamic global environment (2nd ed.). Boston: McGraw-Hill/Irwin. ̶Lecture notes, interactive study materials in IS!!! ̶Articles! (databases: EBSCO, ProQuest, JSTOR, etc.) ̶ Adobe Systems 9 What do you expect? What knowledge and skills do you expect after completing this course? Adobe Systems 10 Contents ̶International Management ̶Global Trends and Globalization ̶Regional Blocks ̶Open System Model ̶Political Risk ̶Economic Risk ̶Legal Environment ̶Global Managers ̶ ̶ Adobe Systems 11 International Management = ‘The process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage.’ Deresky, H. (2017). International management: Managing across borders and cultures : text and cases (Ninth edition, global edition.). Boston: Pearson. Adobe Systems 12 FDI flows Outward Million US dollars 2005–2018 OECD (2020), "FDI flows" (indicator), https://doi.org/10.1787/99f6e393-en (accessed on 18 February 2020). Adobe Systems 13 FDI flows Inward Million US dollars 2005–2018 Source: OECD (2020), "FDI flows" (indicator), https://doi.org/10.1787/99f6e393-en (accessed on 18 February 2020). Adobe Systems Define footer – presentation title / department 14 ̶ Adobe Systems 15 Should it be equal? ̶by definition, inward and outward FDI worldwide should be equal, but in practice, there are statistical discrepancies between inward and outward FDI. Adobe Systems Define footer – presentation title / department 16 Impact of the COVID 19 on FDI flows ̶FDI flows are expected to decline sharply ̶Reinvested earning drop ̶The pandemic is having much greater impacts in some sectors than others (accommodation, food service, transportation – not visible in FDI statistics; primary sector, manufacturing – drops in earnings; information and communication – increase) ̶Further drops in FDI flows are possible in the medium to long term Adobe Systems 17 Share of turnover and persons employed in foreign affiliates abroad, business economy, EU-28, 2014 (% of extra-EU total) Source: https://ec.europa.eu/eurostat/statistics-explained Adobe Systems 18 Global Trends… ̶growing number of middle-class consumers in emerging countries ̶global supply-chain management ̶environmental impacts and their solution ̶virtual marketplaces ̶global standards ̶cooperation across cultures ̶opportunities for SMEs ̶responsibility of MNCs… ̶ Adobe Systems 19 …but… ̶growing consumption of energy and resources ̶dependency on other companies, states, trading blocks ̶global costs for ‘making change’ and negotiating ̶dependency on information technologies and infrastructure ̶backlash against capitalism and rekindling of nationalism ̶trade wars and increasing of protectionism ̶management across cultures ̶abusing of weaker systems… ̶ Adobe Systems 20 Regional Trading Blocks ̶USA dominance is probably over ̶importance of the trading blocks is increasing (NAFTA, EU, ASEAN,…) ̶world trade takes place mostly within free trade blocks ̶dominant currencies (euro, yen, dollar, juan) Adobe Systems 21 Regional Trading Blocks and Other Regions ̶Asia ̶China ̶India ̶ASEAN ̶SAARC ̶Japan ̶Asian Tigers (Hong Kong, Singapore, South Korea, Taiwan) ̶ ̶political problems ̶differentiation within the region ̶Americas ̶NAFTA ̶CAFTA ̶MERCOSUR ̶Others ̶The Russian Federation ̶Middle East ̶The African Union ̶South Africa ̶ ̶Less Developed countries ̶Low GDP/GNP ̶Large, relatively unskilled workforce ̶High international debt ̶Rest of Europe ̶EU (after brexit) ̶unified market ̶over 447 million citizens ̶27 different countries ̶euro and 10 other national currencies Adobe Systems 22 Open System Model Skills OPERATING ENVIRONMENT Regulations Culture Social Responsibility Ethics Functions and People Adobe Systems 23 Global Managers What are the most important competencies, skills and knowledge of the excellent manager responsible for international operations? Adobe Systems 24 Political Risk = ‘any governmental action or politically motivated event, that could adversely affect the long-run profitability or value of a firm’ Venezuela took control of cement plants and offices belonging to Mexico, after failing to reach an agreement in nationalization talks. Bolivian president’s move to nationalize the national gas industry followed that in Venezuela. Argentina announced plans to nationalize Spanish oil company Repsol YPF and caused international arbitration. In Russia Kremlin exploited the finantial crisis to take control of energy companies. Adobe Systems 25 Political Risk Political Risks ̶expropriation and confiscation ̶nationalization ̶terrorism ̶discriminatory treatment ̶barriers to repatriation of funds ̶dishonesty by government officials ̶… Political Risk Assessment ̶consultation with experts ̶development of internal staff capabilities ̶cooperation with specialized agencies Avoidance / Adaptation ̶equity sharing ̶participating management ̶localization of the operation ̶development assistance Dependency / Hedging ̶input control ̶market control ̶position control ̶staged contribution ̶insurance ̶local debt financing Adobe Systems 26 Economic Risk ̶loss of profitability due to ̶abrupt changes in monetary and fiscal policy ̶changes in foreign investment policies ̶changes in currency exchange rate ̶connected with the political situation Quantitative approach ̶indexes ̶indicators ̶statistics Qualitative approach ̶monitoring ̶induction ̶experiences ̶assessments Checklist approach Combination Adobe Systems 27 The Legal Environment ̶local laws and legal systems of those countries in which an international company operates ̶international law, which governs relationships between sovereign countries (e.g. WTO rules, bilateral/multilateral agreements, CISG,…) ̶rules inside the free trade areas (e.g. EU law) ̶ CISG – United Nations Convention on Contracts for the International Sale of Goods Adobe Systems 28 CISG (Vienna Convention) signed ratified Source: https://commons.wikimedia.org/wiki/File:United_Nations_Convention_on_Contracts_for_the_Internationa l_Sale_of_Goods.png Adobe Systems 29 Legal Systems ̶common law ̶past court decisions as precedents ̶details must be written in the contract to be enforced ̶civil law ̶comprehensive set of laws organized into code ̶assumes promises will be enforced without specifying the details ̶Islamic law ̶based on religious beliefs ̶combination Adobe Systems By Maximilian Dörrbecker (Chumwa) - Own work, usingWorld map by Canuckguy and others UNESCO World Heritage map by NNWThe data sources are: University of Ottawa: JuriGlobe – World Legal Systems Research GroupWikipedia: List of national legal systemsEuropean legal systems map by Ain92 and others (which seems to be based on this map by C.Löser and others)World legal systems map by Robinkissac, CC BY-SA 2.5, https://commons.wikimedia.org/w/index.php?curid=40154967 Adobe Systems 31 The Technological Environment ̶Appropriability of technology ̶protecting own technology form competitors (patents, trademarks, trade names, copyrights, and trade secrets) ̶less developed countries = less protection of technology ̶The International Convention for the Protection of Industrial Property ̶Paris Convention ̶administered by WIPO (World Intellectual Property Organization) ̶risk of inappropriate use of technology ̶JV partners, licensees, employees, or stealing by competitors Adobe Systems 32 Subsidiary in the Czech Republic? Why? Why not? Source: http://emerging-markets-research.hktdc.com Adobe Systems 33 Questions? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Adobe Systems 34 Thank you for your attention!