NYU Stern School of Business

Undergraduate College

C50.0004.001: INT'L BUSINESS MGMT

Spring 2011

Instructor Details

Nachum, Lilach

lnachum@stern.nyu.edu

By appointment

KMC 7-154

 

Course Meetings

MW, 8:00am to 9:15am

Tisch T-LC21

 

Course Description and Learning Goals

Course Overview

This course is designed to examine the strategies that companies engage in in international business pursue. It focuses on specific strategic issues that are pertinent to the international context such as the challenge of adaptation to foreign cultures, acquisition of legitimacy in host countries, and the integration of the international firm's various parts.

Course Objectives

Companies increasingly expand their horizons from local to global markets and resources, and the playing field in a growing number of industries is becoming global. This course will equip you with tools to understand the challenges and opportunities that these changes open up for companies operating internationally. A combination of case studies, readings and class discussions will enable you to gain an understanding of the managerial tasks confronting the international manager in a protected classroom environment.

By the end of the course, you can expect to:

-          Have a better understanding of a range of opportunities available for companies to create value worldwide, as well as the complexities associated with managing international operations

-          Acquire tools and frameworks to craft strategies and create value from international activity

-          Gain basic knowledge of the specific challenges and opportunities that activities in major global markets represent

-          Improve your ability to deal with cultural and personal career issues in international business.

Course Structure and Underlying Principles

The course is built around the strategic process and focuses on the aspects of strategy that are specific to the international context. We begin by identifying the distinctive characteristics of Multinational Enterprises (MNEs) and the unique aspects of international business strategy. We proceed with the identification of the objectives of MNEs, followed by the evaluation of their competitive advantages and the environments in which they operate. We then go on to evaluate the strategic options and choices facing MNEs and conclude by addressing a number of issues associated with the implementation of international strategy and the organizational structure of MNEs. In each of these stages, the emphasis is on those aspects of strategy that are particularly salient in international competition.

Much of the course work is built around analyses of individual companies of your own choosing. As future managers, you will need to have a good understanding of the company you choose to work for. I want you to experience the idiosyncratic elements that are required in strategic management, and be able to apply generic concepts to concrete companies and circumstances. Feedback from potential recruiters of Baruch College students suggests that one of their major concerns is our graduates’ lack of industry- and company-specific knowledge.

I see the learning process in this course to be a result of mutual contributions from you and me. The learning essentially takes place through case discussions, debates and exchange of views. For such learning to be effective, you need to take active part in the discussions. I would like you to see this as a commitment, not an option. Come prepared for each class - there are cases and preparatory readings for almost every class. It is essential that you familiarize yourself with the material for the day in order to be able to take part in class discussions and make meaningful contributions. Do not hesitate to ask questions and raise issues for debate. All constructive efforts to participate in class discussions are welcome and will be viewed favorably.

I would also like you to acquire the habit of regularly following the business press so that you stay current on issues relevant to our topic. The most important sources of reference for this course include: Business Week, Wall Street Journal, The Economist, Fortune.

 

Course Pre-Requisites

Students are expected to have taken basic courses in all of the major functional areas of business such as accounting, finance, marketing, operations management, and organizational analysis. It is also assumed that you already understand how each of these functional areas relates to each other. If you are not sure whether you have taken the proper prerequisite courses for this class, please contact the instructor. In addition to the prerequisites, you are expected to have acquired basic analytical and communication skills. In particular, you should be able to demonstrate high proficiency in reading comprehension, and written and oral presentations.

 

Course Outline

Class/Date

Topic

Preparatory readings (extracts) (posted on Blackboard)

Cases/assignments[1]

1) 1/24

International Business and Multipnational Enterprises (MNEs)

 

 

 

2) 1/26

What is different about international business strategy?

C.A. Bartlett, S. Ghoshal and J. Beamish, Expanding abroad, Transnational Management. 5th edition, McGraw-Hill 2008, Chapter 1; M. Porter. Competition in Global Industries: A Conceptual Framework. In M. E. Porter (Ed.), Competition in Global Industries, Harvard Business School Press, 1986, Chapter 1

Company exercise given (for class 5)

3) 1/31

Strategic Objectives of Multinational Companies

A. Marcus and K. Harry. When you shouldn't go global. Harvard Business Review, 2008, 86(12); C.A. Bartlett, S. Ghoshal and J. Beamish, Motivations, means and mentalities, Transnational Management. 5th edition, McGraw-Hill 2008, Chapter 1

Globalization of CEMEX. Harvard Business School case # 701017-PDF-ENG

 

4) 2/2

Strategic Objectives of Multinational Companies

W. Kuemmerle, The drivers of foreign direct investment into research and development, Journal of International Business Studies, 1999, 30(1); L. Nachum & S. Zaheer, The persistence of distance? The impact of technology on MNE motivations for foreign investment.  Strategic Management Journal 2005.

Amazon.com

5) 2/7

Becoming Corporate Globalization Officer

 

Company exercise due

6) 2/9

MNE adventages and their Value in International Competition S.Hymer, The International Operations of National Firms: A Study of Direct Foreign Investment. MIT Press 1960/1976; Y.S. Hu, The international transferability of the firm’s advantages. California Management Review Summer 1995.

Starbucks and Toyota 

7) 2/14

Multinationality Advantages

Creating and leveraging knowledge: The worldwide learning challenge. C.A. Bartlett, S. Ghoshal and J. Beamish, Transnational Management. 5th edition, McGraw-Hill 2008, (Chapters 3&5)

 

Innovation and Collaboration at Merrill Lynch, Harvard Business School case 406081-PDF-ENG, 2007

 

Assignment #1 given: Beer Case

8) 2/16

Multinationality Disadvantages

S. Zaheer, The liability of foreignness, Academy of Management Review 1995; Strategic Management Journal 1997

 

9) 2/23 Guest speaker Mr. Mark Szalkiewich, Manager, Knowledge Management, Microsoft  

10) 2/28

The external environment and MNE competitive advantage

Borders are so 20th century, Business Week, September 22, 2003; Hu S.Y. Global or stateless corporations are national firms with international operations. California Management Review Winter 1992; Jones, G. G. The Rise of Corporate Nationality. Harvard Business Review, 2006, Vol. 84, Issue 10; M. Desai, The decentralizing of the global firm. HBS working paper 09-054, 2009

1st round of the beer case due;

2nd round of the beer case distributed

 

11) 3/2

Wrap up: MNE advantages and disadvantages

The beer case

 

12) 3/7

Global Industry Analysis 

M. Porter, ‘Competition in global industries: A conceptual framework’, In M. Porter (Ed.), Competition in Global Industries Harvard Business School Press 1986

 

13) 3/9

International Competition

I.C. MacMillan, A.B. van Putten and R.G. McGrath, Global gamesmanship. Harvard Business Review May 2003

 

The Cola War: F. Yoffie, Cola war continue: Coke and Pepsi in the twenty-first century, HBR case #9-702-442; A. Marcus, ‘Pepsi vs. Coke’, Winning Moves, Marsh Publications 2006.

2nd round of the beer case due

14) 3/21

The competition between MNEs and domestic firms

 

The US automobile industry’s new platform for competition, the ‘American’. What’s ‘American’ anyway? ecch case #306-501-1, 2006

15) 3/23

Selection of Countries

 

Taking Wal-Mart global. V. Govindarajan and A.K. Gupta, The Quest for Global Dominance, 2nd edition, 2008.

16) 3/28

Selection of Countries and the Regional Challenge

 

 

17) 3/30

Selection of Entry Modes

 

 

eBay strategy in China: Allinance or acquitions. Asia Case Research Center, The University of Hong-Kong, HKU701

18) 4/4

Selection of Strategic Orientation: local adaptation

T. Levitt, ‘The globalization of markets’, Harvard Business Review May/June 1983; R. Tomkins, Happy Birthday Globalization, Financial Times May 6th, 2003; P. Ghemawat. The forgotten strategy. Harvard Business Review November 2003

 

19) 4/6

Selection of Strategic Orientation

 

Assignment #2 given: Strategic Plan for your company

20) 4/11

Selecting Organizational Structure

Daniels J.D., Radebaugh L.H. and Sulliva D.P. International Environment: Business and Operations. Prentice Hall, 2010, 13th edition, Chapter 15

Organizational challenges of BNP Paribas

21) 4/13

Organizational Structure and Affiliates-HQs relationships


Developing coordination and control: The organizational challenge, C.A. Bartlett, S. Ghoshal and J. Beamish, Transnational Management. 5th edition, McGraw-Hill 2008, Chapter 4

Chilton K.W. Lincoln Electric’s incentive system: Can it be transferred overseas?  Compensation Benefits Review, 1993 + 1994

22) 4/18

Selecting and Changing Organizational Structures

 

 

 

 

Philips versus Matsushita: The competitive battle continues Harvard Business School case #9-910-410

23) 4/20

Class preparation for assignment #2

 

 

24) 4/25

Presentations assignment #2

 

 

25) 4/27

Presentations assignment #2

 

 

26) 5/2

Presentations assignment #2

 

Evaluating your strategy  exercise distributed

27) 5/4

Assessment of International Business Strategy

 

Evaluating your strategy  exercise due

28) 5/9

Career in International Business

 

 

Exam week

Final exam

 

 



[1]Discussion questions for the cases in bold appear on the last pages of this syllabus. Non-bolded cases with discussion questions will be posted on Blackboard.

 

Required Course Materials

Course Material and Communication

Most of the course material is distributed during the semester on Blackboard.

You have to purchase a few cases (in bold below) in the book store.

During the course we maintain intensive communication on Blackboard, where course materials are posted regularly. Make sure to check announcements on Blackboard during the semester.

I encourage you to get in touch outside the formal office hours as necessary, via e-mail or meetings, so that we can work together to ensure that you get the most out of this course and reach your highest possible potential. I will be happy to assist you with any course- or career-related issues.

 

Guiding Questions for the Cases (that should be purchased on-line)[1]

The Globalization of CEMEX.

-   Identify the various reasons for the international expansion of CEMEX? Do they differ across countries? if so what explains the differences?

-   Compare and contrast the reasons for the international expansion of CEMEX with those of its major competitions Lafarge and Holderbank. What explains the differences?

-   Compare and contrast the reasons for the international expansion of CEMEX with those of the Taiwanese PC producer ACER. Relate them to the characteristics of the industries in which these companies operate.

Innovation and Collaboration at Merrill Lynch

-          What are the additional advantages of cross-border collaboration entail, above those awarded by collaborations taking place within a single country?

-          Two of the three Capital Structure reports that Merrill Lynch prepared were implemented only by analysts in New York while the third involved analysts in New York and London. What explains this difference? What can we learn from it regarding the nature of collaboration and knowledge sharing?

-          The case describes the challenges associated with establishing collaboration in a domestic context (practically within the same building) and in creating the incentives for individuals to collaborate. Think about these issues in an international context, when the individuals involved are separated in space and time. What actions could be taken to overcome these challenges in a global context? 

-          Cross-border collaboration can create value but could also destroy value. What circumstances affect the outcome of such collaborations? What are the major sources of value creation and value destruction? Refer to different industries, regions/countries and company-specific strategies

-          Moving ahead, outline broad principles for the design of a cross-border knowledge sharing system in Merill Lynch. Refer to the type of projects, countries and industries that are appropriate for sharing, as distinguished from those that are better handled locally in a single country. As you make this distinction, make explicit reference to the balance between the costs and benefit of cross-border knowledge sharing.

The US automobile industry’s new platform for competition, the ‘American’. What’s ‘American’ anyway?

-          Which specific advantages enable foreign (Japanese) firms in the US to overcome the multinationality disadvantages and succeed in the US? Distinguish between generic and multinationality advantages.

-          In which ways does this case deviate from our expectations regarding the position of MNEs vs. domestic firms in the home country and overseas?

-          How does the fact that the US firms concerned (the Big Three) are MNEs themselves change the expectations regarding the competitive dynamics between MNEs and domestic firms?

-          Which of the three components of the MNE advantage (generic, multinationality advantages, multinationality disadvantages) are reversed in this case and how do they work to assist the foreign firms in competition with US firms?

-          Why the ‘Buy American cars in order to save American jobs’ campaign did not help the Big Three?

eBay strategy in China: Alliance or Acquisition.

-    eBay acquired EachNet but created (via EachNet) strategic alliances with several local Chinese internet portals, including Sina, Sohu, NetEase, and Shanda.  What are the advantages and disadvantages of these different entry modes? Do you think eBay made the right choices in that regard?

-    eBay’s expansion strategy in China is based on various forms of relationships with other firms (acquisition, joint venture). Is that strategy better than the alternative of establishing their own operations? What are the trade-offs involved with this strategy?

-    Given the current situation of eBay in China, should exit be considered as an option? Why? Why not? Would it be a better alternative for the TOM EachNet joint venture which eliminates eBay brand name?

Philips versus Matsushita: A New Century, a New Round

-  What explains the different organizational structures adopted by the two companies?

    Think about the product portfolios of the companies when they expanded overseas, their ‘age’, the timing of their international expansion and the heritage of their home countries.

-  The two companies started at very different types of organizational structures and have moved away from them. What were the rationales for these changes? Can we draw any broader conclusions regarding the level at which the choice of organizational structure should be made (i.e. industry vs. company?) 

-  As MNEs modify their organizational structure the basis for their competitive advantage shifts. What were the implications of the organizational changes for the competitive advantages of Philips and Matsushita?

- Continuous reorganization attempts, over decades, have failed. Should Philips and Matshusita adopt a different path? Is there a way to turn the strong ‘Administrative Heritage’ (see readings of the last class) that appears to be the major barrier to the re-organization, into an asset? What would you advice Philips and Matshusita to do in order to improve their competitive position?


[1] Guiding questions for the other cases are posted along with the cases on Blackboard as the course progresses.

 

Assessment Components

Performance Evaluation:

- Beer case - 15%

- Strategic Plan for your company - 25% 

 

Group Projects

Guidelines for Group Projects

Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.

Every member is expected to carry an equal share of the group’s workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole:   its different components will not be graded separately. Your exams may contain questions that are based on aspects of your group projects.

It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution.

You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of each project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.

 

Grading

At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges  as a guide, the actual distribution for this course and your own grade will depend upon how well  you actually perform in this course.

 

Re-Grading

The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.

 

Professional Responsibilities For This Course

Attendance

 

Participation

In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:

 

Assignments

 

Classroom Norms

 

Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 

 

Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 

 

Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.

 

Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.

 

Recording of Classes

Your class may be recorded for educational purposes

 

Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.

 

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