Chapter 1 The challenging world of international business môn English | Trường Đại học Kinh Tế Quốc Dân

CHAPTER 1
THE CHALLENGING WORLD OF INTERNATIONAL BUSINESS Section 1
– Match the words on the left with the right explanations on the right 1 D – 5 B – 9 P – 13 O – 2 G – 6 I – 10 – J 14 A – 3 N – 7 F – 11 – C 15 E – 4 M – 8 L – 12 – H 16 K –
Section 2 Fill in each of the gaps with a suitable word or phrase. – 1- Global company 5- Advances 9- Affiliate 2- Multidomestic company 6- Economies of scale 10- Domestic environment 3- International company 7- Foreign competitors 11- Foreign environment 4- Political 8- Interaction 12- International environment
Section 3 Find the best answer. – 1- A 8- B 15- B 2- B 9- C 16- C 3- B 10- D 17- D 4- D 11- A 18- D 5- C 12- D 19- C 6- C 13- C 20- B 7- D 14- A 21- C Section 4
– Decide whether the following sentences are true or false and correct if they are false 1
– False → that is the definition of a Multidomestic company, not a Global company. A
Global company integrates operations worldwide and seeks to standardize. 2 True – 3 True – 4 True – 5 True – 6 True – 7
– False → International business is not new it has existed for centuries (think Silk Road, –
colonial trade, etc.). What’s new is the scale and speed of globalization today. 8
– False → The five drivers are , not
Political, Technological, Market, Cost, and Competitive culture. 9 True – 10
– False → To achieve economies of scale, companies usually move to countries where costs are lower, not higher. 11 True – 12
– False → That is Exporting. Importing is bringing goods/services into a country. 13 True – 14
– False → Management can control internal (controllable) forces (like personnel, finance,
production), not external (uncontrollable) forces. 15 True – 16
– False → Even domestic-only companies must pay attention to globalization (e.g., foreign
competitors entering their home market). 17
– False → That is International business Foreign business . means operations conducted
within a foreign country, not across borders. 18 True – 19 True –
Section 5 Short-answered questions –
1. What are the differences among international, global, and multi-domestic companies?
- International company: General term for firms doing business in more than one country (either global or multi-domestic).
- Global company: Standardizes and integrates operations worldwide, seeks similarities, coordinates from HQ.
- Multi-domestic company: Decentralized; affiliates in each country adapt strategy to local market differences.
2. Take examples of Preferential Trading Arrangements and explain their meanings.
- EU (European Union) – members remove trade barriers among themselves.
- ASEAN Free Trade Area (AFTA) – lowers trade restrictions among Southeast Asian nations.
→ Meaning: PTAs are agreements among a group of countries to lower barriers (tariffs/quotas)
and give each other preferential access to markets.
3. What is the difference between international business and international trade?
- International trade: Exchange of goods and services across borders (exporting/importing).
- International business: Broader; includes trade plus investment, licensing, franchising,
management of operations abroad, etc.
4. Are companies such as Exxon Mobil, BP and Royal Dutch/Shell MNEs? What criteria do they meet that makes them MNEs?
CORRECT. They are multinational enterprises (MNEs) because they:
• Operate in multiple countries.
• Own/Control assets abroad (oil fields, refineries, distribution).
• Coordinate activities on a global scale.
5. The study of international business is fine if you are going to work in a large multinational
enterprise, but it has no relevance for individuals who are going to work in small firms. Do you
agree or disagree with this statement? Explain.
I don’t think so . Even small firms are influenced by globalization:
- Compete with foreign companies at home.
- May source materials from abroad.
- Have opportunities to export or partner internationally.
→ Knowledge of international business helps managers adapt, survive, and grow. Section 6 Case study –
1. Why is the manufacturing of flat panel TVs migrating to different locations around the world?
- To reduce costs (labor, operations).
- To use local advantages (e.g., glass in Korea/Japan, assembly in Mexico).
- To respond to crises (Japan’s recession → Korea; Asian crisis → Taiwan).
- To optimize global supply chains for speed & efficiency.
2. Who benefits from the globalization of the flat panel display industry? Who are the losers? *Winners:
- Consumers → cheaper TVs, better quality.
- Efficient firms (e.g., Vizio, Samsung, Sharp) → use global sourcing & logistics.
- Retailers (Costco, Sam’s Club) → low-cost products attract buyers. * Losers:
- Traditional TV makers (CRT producers) → obsolete tech.
- Workers in high-cost countries (e.g., U.S. factories of Sanyo, Hitachi, Sony) → layoffs.