internation

al usiness

Nguyen Hai Ninh. Dr.

Hanoi Foreign Trade University International
Business Department
Cell: (+84) 0915139839
Email: nguyen.haininh@hotmail.com

Class regulations
#1 On time (if you are late than teachers, pls wait until the
break)
#2 No voice in class (pls show the respect for lecturer and
others)
#3 No sleep (if you feel sleepy, feel free to go out, no need to ask
for lecturers permission)
#4 No food (but drinks are permitted)
#5 No cellphone (switch off your phone ring before class starting)
#6 No laptop, ipad, ipod.
#7 No need to ask for the permission to be absence for class
(dont cheat or tell lie)
#8 No mark bargaining!!!

COURSE
STRUCTURE

PART 1: INTERNATIONAL BUSINESS INTRO ^ GLOBALIZATION

PART 2: NATIONAL DIFFERENCES
PART 3: INTERNATIONAL MARKET SELECTION

PART 4: IB STRATEGIES

PART 6: INTERNATIONAL MARKET ENTRY MODES

PART 5: IB ORGANIZATIONAL STRUCTURE

International
Business (IB) intro

PART 1

Kick-off activity
By your own understanding, answer these
following questions:
1.
2.
3.

what is the international business?

What do you want to get from this course
Why do you want to join in this course?

Time allowance: 10 minutes

Write all of the answers on a clean paper and
remember keeping it until the end of the course.

nternational business
.all business transactions take place across the
national borders

In which:
-

Business transaction: Trade, Investment ,

Manufacture
National borders: Geographic, Culture,
Race

reaso
ns

WHY
compa
engage in
nies
INTERNATI

ONAL
BUSINESS
Expand

Expand
sales
Acquire, diversify production
resources
Reborn the product
life cycle
Reduce the dependence on the
existing market

OPTIMIZE PROFIT

ernational Business Companies

. companies that have significant assets and activities in
multiple countries

INTERNATIO
NAL
1

- Importer/Expor
ter
- No Investment
outside home

MULTINATIO
NAL
2

- Investments in other
countries
- Focus on Local
Demand adaptation

GLOBAL
3

- Invested in many
countries
- Market one-size fit
product/service in

TRANSNATIO
NAL
4

- More complex
organization
- Decentralized decision
making,

ternational Business Issues

GLOBALIZAT
ION

GLOBALIZATIO
N=

nterdependence
nterconnectio
ntegration
n

of regions, nations, economies and corpora

Friedman
The Stages of Globalization Thomas
Author of The World is Flat

UNCATEGORIZED
GLOBALIZATION V1.0GLOBALIZATION V2.0GLOBALIZATION V3.0
(before 1492) (from 1492 to 1800) (from 1801 to 2000)(from 2001 to present)

Cultural & Social globalizat

Geographical globalization
Economical globalization

ASIAN
APPROACH

HUMAN
APPROACH

In focus
- Business concept
- Economies

Broad view
- Emerging trend
- Transparency
- Economies, Politics,
Cultures

Changing political

Driven - factors of
Globalization

situations
Growing
consumer
pressures

Increase in and expansion of

technology

Expanded cross-national cooperation

Increase in and expansion of

technology
Development of services that
support
international business

Increased

global
competition

G LO B A LLiberalization
I Z AT ofI
cross-border trade
ON
and
resource
movements

Globalization of Markets
the merging of historically distinct and separate national markets
into one huge global marketplace

Falling trade barriers easier to sell globally

Consumer tastes and preferences are converging

Promoting same basic products worldwide

NATIONAL MARKET , only the GLOBAL MARKET

Globalization of Production
the sourcing of goods and services from
locations around the globe to take
advantage of national differences in the
cost and quality of factors of production
like land,
labor, and capital
Lowering the over
cost structure

Improve quality and functionality of

products/services

been said that arguing against

OBALIZATION

e arguing against

LAWS OF GRAVITY
Annan Former UN Secretary General)

GLOBALIZATION creates
economic policies where
the Transnationals lord over
us, and the result is misery
and unemployment
(Evo Morales President of

Globalizations Pros &

Cons

New production and

- Firms collapse, job losses

business opportunities

- Wealth - Poverty gap

New markets, new

- Child, women labor

production sources
-

Lower prices for goods and

- Environmental

services.

degradation

Greater economic growth

Higher consumer income,

- The cultural imperialism

and more jobs

of MNEs
- Financial crisis

Go Global activity
Working in group to discuss the below topic:
In your point of view, you support of against
the Globalization.
Present on class to express your ideas
Time allowance: not over 10 minutes (main
presentation) + discussion time
Group selection: by chance

National PART 2
Difference

TERNATIONAL BUSINE

!
BLUNDERS

FORD in Europe
Between 1988 and 2000, U.S.-based Ford Motor Company acquired
European boutique brands Aston Martin, Jaguar, Volvo and Land Rover.
But the automotive mammoth struggled with the luxury brands and in
2007 and 2008 sold them all off.

WAL-MART in
Germany
After opening 85
stores over the course
of eight years, the U.S.
retail giant abandoned
the German market in
2006 at an estimated
cost of US$1 billion.
Walmart's domestic
success is built on
streamlined
distribution channels,

German policy and attitudes favor the

"mittelstand," small and medium-sized
retailers that know the ins and outs of the
country's restricted business hours,
intricate labor laws and multi-layered
distribution systems.
"Unless the German laws and the culture
change, the whole thing that sustains
Walmart's model which is their ability to
discount heavily and to operate in some
cases 24 hours a day doesn't work
there. If you don't allow them to
differentiate themselves, it makes it very
difficult for them to operate,"

PEPSI Cola in Asia

Pepsi Cola lost its dominant
market share to the Coke in
South East Asia when Pepsi
changed the color of its
vending machine and coolers
from deep Regal Blue to light

FIAT in China
Fiat released an ad in Italia in which actor

Richard Gee drives a Lancia Delata from

Hollywood to Tibet. Gere is hated in China for
being an outspoken supporter of Dalai Lamathere was a huge on-line uproar on Chinese
message boards commenting that they would
never buy a Fiat car

WPP in Argentina
The ad featured a member of the Argentine
Olympic hockey team training in the Falkland
Islands. The hockey player was filmed doing
step-up exercises on a British war memorial and
included the line, "To compete on English soil,
we train on Argentine soil.

..coming from the lack of international market awa

and... not everyone fits the one

Globalization?not really

Semi-Globalization

C
A
G
E

ulture

Nations have

differences

dministration

in

eography

conomy

There are three ways to

add value in a world
where differences still
matter

ADAPTATION
AGGREGATION
(Pankaj Ghemaw
ARBITRAGE
Professor of Barcelona Univers

Cultural

facing International business

Cultural awareness activity

Discuss in group and answer 2 questions below
What is culture?
Why do we study about culture
environment in international business
context?
Time allowance: 10 minutes

Culture eats strategy for

breakfast..
Peter Drucker

(1909-2005)
Austrian-born American management
consultant, educator, and author, whose
writings contributed to the philosophical
and practical foundations of the modern

Perception of each other

Self perception

Lifestyle

Sunday on street

Noise in a restaurant

Attitude towards punctuality

The boss

Complexity of self-expression

Connections and contacts

Problem-solving approach

Feeling expression

Ideal of beauty

Culture is more often a source of conflict than of

synergy. Cultural differences are a nuisance at best
Prof. Geert Hosftede
and often a disaster

WHAT IS CULTURE?
.is the system of

Values, Norms and

Beliefs

being shared among group of people

Not right or wrong. Culture is relative.

There is no cultural absolute.
Different nationalities simply perceive the world
differently.

Not inherited.
Culture is derived from the social environment.
We are not born with a shared set of values and
attitudes;

CULTURE IS:.
Not about individual behavior.
Culture is about groups.
It refers to a collective phenomenon of shared values

LEARNED, ACQUIRED, TRANSFERRED, ADJUSTED, ADOPTED

ELEMENTS OF CULTURE

Religion

2
Language

Aesthetic

44
Education

Education

5
EcoPolitical
philosoph
ies

Social
structure

WHAT YOU MIGHT KNOW

WHAT YOU KNOW

WHAT YOU
REALLY
SHOULD KNOW
WHAT YOU
MAY

Culture is like an icebe

4 Main religious: Christianity, Islam, Hinduism, Buddhism

Master Kong: 551

Confucianism is not a religion, but influences
behavior and shapes
478 BC
culture in many parts of Asia

Look 4 the key of the

Diversify
There are many misunderstandings coming
from the differences in the interpretation of
body language.
Look 4 some examples to prove the above
facts
Preparing at home and present on the next
class
(***) Encourage recording video clip to

WORKING IN CROSS CULTURAL

ENVIRONMENT

A nations culture resides in

the heart and the soul of its
people

Geert Hosftede

how values in the workplace are influenced by

culture:
1967 1973, more than 50 countries

Power distance
The extent to which the less powerful members of institutions and
organizations within a country expect and accept that power is

LOW POWER DISTANCE

Minimize the inequalities among
people
Interdependence
Flat hierarchy pyramid
Power decentralization
Narrow salary range
Subordinated expect to be
consulted
The boss is democrat

HIGH POWER DISTANCE

Inequalities among people
Less powerful people depend on
the more
Slope hierarchy pyramid
Power centralization
Wide salary range
Subordinated expect to be told
what to do
The boss is good father

POWER
DISTANCE

High

Lo
w

Viet Nam
Malaysia
Arab Countries
Mexico
India
France
Italy
Japan
Spain
Argentina
US
Germany
UK
Denmark
Israel
Austria

Example
A company from Austria is considering entering the Vietnam
market. What should they do?
81

11

1.

Give clear and explicit directions to the Vietnamese staffs

2.

Deadlines should be highlighted and stressed

3.

Do not expect subordinates to take initiative

4.

Be more authoritarian in management style

5.

Show respect to the older and the upper ladder

Uncertainty avoidance
The extent to which members of a society feel threaten by
uncertain or unknown situations

WEAK UNCERTAINTY
AVOIDANCE

STRONG UNCERTAINTY
AVOIDANCE

each day is accepted as it

comes
Low stress

continuous threat that must be

fought
High stress

Precision and punctuality have

to be learned
Tolerance to innovation

Precision and punctuality

come naturally
Resistance to innovation

Motivation by achievement

Motivation by security

DESIRE FOR
STABILITY

High

Low

VietNam
Greece
Japan
France
Korea
Arab
Countries
Germany
Australia
Canada
US
UK
India
Denmark
Singapore

Example
A company from France is considering investing in Denmark.
What should they do?
86

23

1. Try to be more flexible or open in his approach to new ideas

2. Be prepared to push through agreed plans quickly as soon as possible
3. Allow employees the autonomy and space to execute their tasks on
their own; only guidelines and resources will be expected of him

Individualism
The tendency of people to look after themselves and their
immediate family and neglect the needs of society

LOW INDIVIDUALISM
learn to think in terms of we
Diplomas provide entry to
higher status groups
Relationship employeremployee is perceived in
moral terms, like a family
Management is management
of groups
Relationship prevails over task

HIGH INDIVIDUALISM
learn to think in terms of I
Diplomas increase economic
worth and/or self- respect
Relationship employer-employee
is a contract based on mutual
advantage
Management is management of
individuals
Task prevails over relationship

INDIVIDUAL
LEVEL

Hig
h

Lo
w

Australia
US
UK
Canada
France
Germany
Spain
Japan
Mexico
Italy
Korea
Singapore

Example
A company from UK is considering investing in Mexico. What
should they do?
96

23
1.

Note that individuals have a strong sense of responsibility for their

family

2.

Remember that praise should be directed to a team rather than

individuals

3.

Understand that rewards depend upon seniority and experience

4.

Be aware that the decision making process will be rather slow, as

Masculinity
The tendency within a society to emphasize traditional
gender roles

 caring for others and

preservation
People and warm relationships
are important
Sympathy for the weak

HIGH MASCULINITY
material success and
progress
Money and things are
important
Sympathy for the strong

In family, both fathers and

mothers deal with facts and
feelings
Managers use intuition and
strive for consensus
Resolution of conflicts by
compromise and negotiation

In family, fathers deal with

facts and mothers with
feelings
Managers are expected to be
decisive and assertive
Resolution of conflicts by
fighting them out

LOW MASCULINITY

MACULINITY
LEVEL

Hig
h

Lo
w

Japan
Mexico
Germany
UK
US
Arabia
France
Korea
Portugal
Denmark
Sweden

Example
A company from Denmark is considering investing in Mexico.
91
What should they do?

1. Be aware that people will discuss business anytime, even at social

gatherings
2. Avoid asking personal questions in business situations
3. Take into account that people are not interested in developing
closer friendships
4. Communicate directly, unemotionally and concisely

Long- term orientation

A basic orientation towards time that values patience

SHORT- TERM ORIENTATION

LONG-TERM ORIENTATION

Respect for traditions

Adaptation of traditions to a

Little money available for

investment
Quick results expected
Respect for social and
status obligations
regardless of cost
Concern with possessing
the Truth

modern context
Funds available for investment
Perseverance towards slow
results
Respect for social and status
obligations within limits
Concern with respecting the
demands of Virtue

Future ahead
Give example and suggest for Long-term
orientation manager when doing business in
short term orientation country and vice
versa.
Preparing at home and present on the next
class