International Management Assignment

Employment Opportunities : Regional integration can expand employment opportunities by allowing people to move from one country to another to find work or to earn a higher wage. Corporate savings : Trade agreements can allow companies to alter their strategies resulting in companies that do business throughout a free trade area to save a lot of money annually from removal of import tariffs. Disadvantages: Trade diversion : Diversion of trade from nations not belonging to a trading bloc and toward member nations. Shifts in employment : formation of a trading bloc promotes efficiency by significantly reducing or eliminating barriers to trade among its members. The surviving producer of a particular good or service, then, is likely to be the bloc's most efficient producer. Loss of National Sovereignty : Some people argue that they will lose their unique national identity if their nation cooperates too much with others. The best global companies display sensitivity toward cultural differences across markets, but global companies are also typically lightning rods for nationalist forces and those warning of cultural homogenization. 7.3 Discuss European Union in detail. Include its origin, evolution, the five primary institutions and their functions. Did EU benefit the international business and member countries of the union? Support your answer with reasons. Origin : in European monetary is the EU plan to establish its own central bank and currency in January 1999. Evolution : Enlargement of the bloc occurred in 1973, 1981, 1986, 1995, 2004, 2007, and 2013. In 1994, the bloc once again changed its name to the European Union (EU). Today, the 27-member EU has a population of around 450 million people and a gross domestic product (GDP) of around $16 trillion. Five main institutions : European parliament : The European Parliament debates and amends legislation proposed by the European Commission. It exercises political supervision over all EU institutions, including supervising commissioner appointments. European Council : The EC decides the overall foreign and security policy of the European Union but does not pass laws. It appoints candidates to EU-level roles in institutions such as the European Central Bank. The European Council is headquartered in Brussels, Belgium. Council of the EU : is the legislative body of the EU, when it meets, it brings together representatives of member states at the ministerial level. European Commission : The Commission has the right to draft legislation, is responsible for managing and implementing policy, and monitors member nations’ compliance with EU law. Each commissioner is assigned a specific policy area, such as competitive policy or agricultural policy. Court of Justice : T he Court of Justice hears cases such as a member nation being accused of not meeting its treaty obligations, or the Commission or Council charged with not fulfilling their responsibilities under the terms of a treaty. European Central Bank : The European Central Bank (ECB) is the central bank of the European Union eurozone. Its primary objective is to stabilize prices and safeguard the value of the euro, thereby supporting economic growth and job creation. Court of Auditors : The Court is assigned the duty of auditing the EU accounts and implementing its budget. It also aims to improve financial management in the EU and to report to member nations’ citizens on the use of public funds.

long as dollar remained strong, the system worked well but when dollar weakened, the system failed to perform well. 8.5 Explain in brief the system of floating exchange rates, Free and managed float system of foreign exchange. Discuss very briefly, present-day exchange rate mechanisms (Pegged Exchanged rate, Currency Board and European Monetary System) The system of floating exchange rates : initially viewed as a temporary fix from the collapse of the Bretton Woods system, and is determined by supply and demand on the open market. Free float system : a system in which currencies float freely against one another without governments intervening in currency markets. Managed float system : a system in which currencies float against one another, with governments intervening to stabilize their currencies at particular target exchange rates. Pegged exchange-rate arrangements : “peg” a country’s currency to a more stable and widely used currency in international trade. Currency board : is a monetary regime that is based on an explicit commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate. European monetary system : is established to stabilize exchange rates, promote trade among nations, and keep inflation low through financial control. 8.6 Discuss very briefly the role and functioning of International Monetary Fund (IMF) and world bank and their effect on international business (include SDRs in the IMF discussion). International Monetary fund : an agency to regulate the fixed exchange rates and to enforce the rules of international monetary system. Functions include:  Promoting international monetary cooperation  Facilitating expansion and balanced growth of international trade  Promoting exchange stability, maintaining orderly exchange arrangements, and avoiding competitive exchange devaluation.  Making the resources of the fund temporarily available to members  Shortening the duration and lessening the degree of disequilibrium in the international balance of payments of member nations. The World Bank : is created to provide financing for national economic development efforts. Special Drawing Right : an IMF asset whose value is based on a weighted “basket” of five currencies, including the US dollar, European Union euro, Chinese renminbi, Japanese yen, and British pound. Module 9: Analyzing International Opportunities and selecting a country for international entry. (Chapter 5 section 5.7 and Chapter 12 in the textbook) 9.1 Explain in brief Michael Porter’s diamond model. You have shortlisted 4 countries Botswana, UAE, Philippines, Peru for international entry. You have resources to enter only one country. Ose diamond model to select the best country to enter. Michael Porter’s diamond model : is designed to illustrate the factors that provide a competitive edge for one country’s economy over another. The Porter’s diamond model consists of the following four elements: 1. Factor conditions 2. Demand conditions