Queens College GLOBAL ECONOMICS. Professor: Queens College Faculty

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1 . Queens College GLOBAL ECONOMICS Professor: Queens College Faculty Texts: Global Business Today, 4 th edition, by Charles W. L. Hill, McGraw-Hill, 2006 Additional Reading Materials: The Company, by John Mickelthwait and Adrian Wooldrige, Modern Library--Random House, 2003 Other assorted and timely photocopies Objectives: To obtain a thorough introduction to the issues that affect businesses that act on the Global stage especially in regards to International Trade and currency markets To trace the history of the Global companies and the implications that face them when acting on a Global scale To fully understand the term Globalization and the consequences intended and/or unintended for the winners and losers of this phenomena and the inherent policy problems Assessment: Reading assignments are to be prepared before the class. Don t get caught unprepared. This, of course, means that we will call on people at random. Don t forget the 1:3 ratio: 1 class hour = 3 study hours. The course is structured to provide some opportunities for classroom interaction. We are overseas so let s take advantage of the International flavor and share thoughts and experiences about the topics. Participation is not only encouraged but also mandatory. It is usually the variable the settles the difference between a C+ and a B- for example. There will also be four case studies to complete as homework assignments. They will not be graded. However, failure to turn them in on the due date will lower your final grade by a third. The dates for the three Exams two Midterms and a Final and the Term Paper will be respected as programmed in the details of the class schedule. * Midterm 1 and Midterm 2 each * They were not chosen with the intention falling on the same dates as other exams you might have. However, they were chosen with our class in mind and the natural breaks in the organization of the course. 1

2 represent 30% of your grade, the Term Paper is 25% and the Final which is not cumulative is worth 15% for a total of 100%. Attendance Policy: Attendance is clearly expected for all classes. Don t arrive late. Grading Policy: The standard grade scale is in force: A (100-93), A- (92-90), B+ (89-87), B (86-83), B- (82-80), C scale (79-70), D scale (69-60), F (< 59). Academic Honesty Policy: All USAC Policies regarding Academic Honesty will be followed in this class. If you have questions regarding these policies, please contact the instructor or consult the university s pamphlet entitled, Policies and Procedures on Academic Honesty ( Course Outline: I The course is divided into three areas. The first is dedicated to the Global Monetary System. It s a mix of the history of International Trade Theories and the consequences for the Political Economy, mainly the US but we will try to look at things from the EU point of view, too. Midterm 1 will be at this point. It will be in two parts: (1) The definitions of new terms and their applications and (2) a theoretical question or two regarding the arguments in favor of free trade in spite of competitive intellectual thoughts that have become almost political in nature like Strategic Trade Policy NB: Besides the text, the book/novel that accompanies this section and the next is called The Company. It traces the history of the company, from Mediterranean Sea traders to the MNCs of today. Not only does it introduce the theme of the Global Company for the next section but it also serves to review the class s first area the history of International Trade but from the company s point of view given the backdrop of the different playing fields and managerial cultures that evolved in the USA, Europe and Japan. We have a couple copies of the book here but there is a little time to still get it sent over the pond. II The second area concentrates on how a business should go about planning a global strategy given the external environment that exists as was touched upon in the first part of the course. The possibility of entering foreign markets is discussed and the appropriate changes to the Marketing Mix that would be necessary. It also includes a discussion of Expatriates vs. Locals to get the job done and what compensation programs are needed. Finally, we can debate whether business ethics is an oxymoron. Midterm 2 will take place after this section. It will be in two parts, with one to do at home. The in-class part will be similar to Midterm 1: Terms to define and their applications. The takehome part will ask you several questions about The Company and should be prepared as a report. 2

3 Manage your time well given the four case studies and the eight weeks provided to read The Company. Give The Company the once-over twice. That is, read it a couple of times during the eightweek period. III The third area of the class is about Globalization, the impact of FDI and the trend towards participating in economic blocks. Did 9/11 stop Globalization due to Globaphobia? The Final should be along the same lines as the Midterms: Definition of terms and their application CLASS THEME HOMEWORK Syllabus: Introduction and Class Expectations Review of Books chosen to Supplement the Text Text: Ch. 3 Photocopy: The Flight of our Lives History and Geography: Foundations for Cultural Empathy Text: Ch. 2 Case Study # 1 (p. 125 Social Structures, Religious and Ethical Systems 126) Hofstede's Model and the Future: A Clash of Case Study Suggestion: Civilizations? First read p Country Differences in Political Economy Examples of Three Different Political Economies (+ Text: Ch (p. 340 Photocopies) 352) The Company: Conditions that Favor Economic Development Introduction The Global Monetary System, part 1 Text: Ch (p. 352 Bretton Woods ends the Golden Rule 375) Institutions: the IMF, the World Bank and SDRs The Company: Ch. 1 The Global Monetary System, part 2 Fixed or Floating Exchange Rates: Which is better? Text: Ch. 9.1 (p. 308 Worse? 325) E-R Regimes in Practice: Tequilaed Tigers Tango for Rubles The Company: Ch. 2 The Foreign Exchange Market, part 1 Spot Rate and Forward Rates, Arbitrage and Hedging Text: Ch. 9.2 (p ) Theories of Exchange Rate Determination: PPP/Burger-nomics The Company: Ch. 3 The Foreign Exchange Market, part 2 Interest vs. Exchange Rates and the (International) Fisher Effect Exchange Rate Forecasting and Currency Convertibility International Trade Theory, part Years of Trade and the Evolution of Trade Theory 3 Text: Ch. 5.1 (p ) Case Study # 2 Photocopies "Collapse of the Thai Bhat in 1997" Text: Ch. 5.2 (p )

4 Mercantilism; Absolute vs. Comparative Advantage; Resources The Company: Ch. 4 International Trade Theory, part 2 Text: Ch. 6.1 (p PLC, Strategic and Competitive Advantage 214) Case Study: Beef Hormones and the US EU s point of view The Company: Ch. 5 The Political Economy of International Trade, part 1 Text: Ch. 6.2 (p ) Trade Policies and the case for Government Intervention The Company: Ch. 6 The case for Free Trade; Free Trade vs. Fair Trade The Political Economy of International Trade, part 2 The Development of the Global Trading System Prepare for Midterm I From GATT to the WTO Text: Ch. 11 Case Study # 3 (p. 413 MIDTERM I 414) Keeping it local at MTV Int l How to Develop a Global Strategy Text: Ch. 12 Creation of value, Learning Curves and Economies of Scale The Company: Ch. 7 Strategic Choices and Strategic Alliances How to enter in Foreign Markets Text: Ch. 13 Basic Entry Decisions: Where? When? The Company: Ch. 8 Methods of Entry: How? Text: Ch (p. 496 Exporting, Importing and Counter-trade 508) Exporting Promises and Problems The Company: Conclusion Export Documents, Incoterms and Counter-trade examples Global Marketing and Product Development, part 1 Text: Ch (p ) Think Global, Act Local? Innovation and Case Study # 4 (p. 527 Segmentation 528) Marketing Mix, parts 1 and 2: Product Adaptation & Distribution P&G tries to clean up Japan Global Marketing and Product Development, part 2 Text: Ch. 14 Marketing Mix, parts 3 and 4: Communication & Prices Photocopies: Political Economy New Product Development: Coca-Cola vs. Meca- Cola (handed Ch. 2 lecture) Global Operations Management Text: Ch. 16 The Company: Re-reading Where to Manufacture and the power of JIT Ch. 4 Make vs. Buy; The Importance of Supplier Relationships through the Conclusion Global Human Resource Management Text: Ch. 4 4

5 Ex-patriots or Locals? Performance Appraisal and Compensation Programs Ethics in International Business Ethical issues HR, pollution/environment, CSR Philosophical approaches to making business decisions MIDTERM II Foreign Direct Investment, part 1 The Impact of FDI on the Global Economy Global Patterns of FDI and the Free Market View Photocopies: Political Economy The Company: Rereading Prepare for Midterm II Text: Ch. 7.1 (p ) Writing TERM PAPER Text: Ch. 7.2 (p ) TERM PAPER due Foreign Direct Investment, part 2 Costs and Benefits of FDI to the Nation-State FDI and Government Policy Instruments Regional Economic Integration, part 1 Text: Ch. 8.1 (p ) Text: Ch. 8.2 (p. 289 Levels of Integration 307) The European Union Regional Economic Integration, part 2 Text: Ch. 1 NAFTA and the FTAA Other Groups: ASEAN, MERCOSUR; etc. Globalization Globalization vs. Globality vs. Globaphobia Prepare for Final Tendencies: Global Movements of People and $, money!! Good Luck FINAL 5