IB 303: International Business Operations (3 credits): A survey of the major aspects of international business environment and operations with an emphasis on the cultural dimension. Prerequisite: fifth-semester standing

Course Overview

International Business addresses the manager's perspective in the areas of international trade, cultural adaptation and international investment. Emphasis is placed on materials and concepts that focus on the strategies, structure, practices, and effects of multinational enterprises. Key areas analyzed include: politics, regulations, legalities, economics, culture, foreign direct investment, modes of entry and competition. Comparison between domestic and international departmental functions, such as marketing, manufacturing, finance, human resources, supply chain managements and logistics, are investigated.

Course Objectives

The objective of IB 303 is to prepare students to understand the differences and complexity between domestic and international organizations to compete successfully in this global environment. IB 303 will:

• Assist students in understanding what globalization is by assessing the differences between domestic and international operations.
• Promote understanding of international institutions and practices.
• Introduce students to the impact of cultural differences on the organization.
• Develop in students an awareness of the impact of environmental forces including politics, regulations, legalities, economics, culture, technology and competition.
• Assess the importance of market research in key areas such as market entry, market selection and market strategies in different regions of the world.
• Analyze a company’s international operations including manufacturing, supply-chain management (SCM), marketing, finance and human resources.
• Help students understand the impact of international operations on local businesses

Required Course Materials

Most World Campus courses require that students purchase materials (e.g., textbooks, specific software, etc.). To learn about how to order materials, please see the Course Materials page. You should check LionPATH approximately 3–4 weeks before the course begins for a list of required materials.

Library Resources

• access magazine, journal, and newspaper articles online using library databases;
• borrow materials and have them delivered to your doorstep—or even your desktop;
• get research help via email, chat, or phone using the Ask a Librarian service; and
• much more.

You can view the Online Students' Library Guide for more information.

You must have an active Penn State Access Account to take full advantage of the Libraries' resources and services. Once you have a Penn State account, you will automatically be registered with the library within 24–48 hours. If you would like to determine whether your registration has been completed, visit the Libraries home page and select  My Account.

Technical Specifications

If you need technical assistance at any point during the course, please contact the Service Desk.

For registration, advising, disability services, help with materials, exams, general problem solving, visit World Campus Student Services!

Formal instruction will end on the last day of class. Provided that you have an active Penn State Access Account user ID and password, you will continue to be able to access the course materials for one year, starting from the end date of the academic semester in which the course was offered (with the exception of library reserves and other external resources that may have a shorter archival period). After one year, you might be able to access the course based on the policies of the program or department offering the course material, up to a maximum of three years from the end date of the academic semester in which the course was offered. For more information, please review the University Course Archival Policy.

Assignments

Foreign Exchange Rate Project Game Details & Rules

Objective: To inform and educate students about the various exchange rates used in international business. The objective is not to focus 100% on the gaming itself, but rather to make students aware of how different currencies work and how they influence international business performance; how organizations use their best efforts to maintain control through the use of hedging to try and avoid drastic fluctuations.

• The game will be played weekly.
• Each team is allotted 10,000 US dollars at the beginning of the project.
• The team is allowed one "practice week" (week 1) after which all actions are canceled and students begin again with $10,000.
• Rates will be updated weekly before class.
• The 6 most widely used currencies will be used: Euro, Swiss Franc, Canadian Dollar, UK Pound, Australian Dollar, Japanese Yen
• An Excel spreadsheet will be used to tabulate weekly purchases and sales.

Definitions
Before the project begins certain terms need to be defined as these will be used throughout the project.

LONG: Simply put, “long” means you own it. Holding securities in expectation of a rise in prices.

SHORT /SELL SHORT: When you do not own something at the time it is “contractually” sold in expectation of a fall in prices. A short sale involves selling currencies of a company that you do not own at that time. You hope the price will drop so you can buy the same currency back at a later time -at a lower price. The difference between the two prices would be your profit. The currencies are borrowed from a broker and will need to be repaid at some point in the future.

BUY to COVER: A buy order made on a currency that closes out an existing short position. This purchase means you are buying an equal number or less (if you prefer to reduce your short positions but not all) of currencies as borrowed under “sell short” and this purchase "covers" the sale for the purposes of returning them to the broker.

The professor will act as the broker for this project. There will be no transaction charges (fees).

Pointers:
1. If you believe the currency is going to gain value, you should buy it.
2. If you believe the currency is going to lose value, you should short sell it.

RULES
1. Short sell-cannot go beyond the maximum total portfolio value. Thus, you cannot borrow extensively.
2. You cannot short sell the US dollar because that means you are going to have to buy the other currency.
3. If you short sell, the debt stays in the particular currency that you did the short sell in–the debt does not change to US dollars. For example, if you short sell in euros, the broker will keep those dollars in euro dollars.
4. Currency will be tracked online in real time.
5. You do not want to have both short and long positions on the same currency at same time because that means you are betting against and betting for the same currency.
6. You cannot buy more than the amount of US$ you have “at hand.”
7. You can trade as many currencies as you want in a given transactions (i.e., buy Euro, sell Yen, short Pound).

GRADING.
This is not a win or lose situation. Final grades will be based on the entire classes’ results. The team who ranks the highest will get the total amount of points regardless of the results of your buying and selling efforts. The remaining grades will be prorated accordingly. You can lose and still do well. Do not try to totally avoid risk. On the other hand, do not be overly risk aggressive.

Updated information
Students should listen or read the news regarding the international financial situation and what analysts predict-- maybe something The Fed decided to do regarding the money supply. Also, students should be reading various articles to explain why they bought, sold, sold short etc. based on that information.

Paper Assignments

*Individual Regional Analysis Paper

Select a regional trading bloc (NAFTA, EU, APEC, ASEAN, MERCOSUR, etc.). (If you select a large regional trading bloc such as the European Union, (EU), select only one large and two small countries or two large and one small country to focus your paper on. You should focus on a total of three countries.)

Prepare a 1,000-1,500-word paper in which you analyze the role of regional integration in promoting global business.

All of the following need to be addressed:

• Discuss the role of regional integration in general in promoting global business. 
• Discuss the advantages and disadvantages of regional integration for your selected regional trading bloc.
• Compare and contrast the economic development stages of each of the three selected countries within your chosen region.
• Provide the ramifications of your region’s economic development on global business overall.

Be sure to use APA formatting for your paper. 

Team Papers

Select a country (other than the United State or Canada) and a product or service on which to focus your cumulative International Business Plan Team project. Get approval for the country and product/service before you begin.
The purpose of the assignment is to come-up with your own company (not one already in existence) in order to learn all the different aspects required to expand internationally. Your company currently only operates in the U.S. and has been in existence for 3 years or less and has revenue of no more than $20 million.
You can use a generic product or service, like beer, candy, financial services, but you cannot use a name brand such as Iron City beer, Hershey chocolate or Prudential Financial Services. More so, your selected product MUST have some differentiation factor that makes it different than the generic product.

Be sure to follow APA formatting for all of your team papers.   

Organization & Country Analysis Paper

Organization & Country Analysis. Conduct country, and product/service analyses for your new global venture. Prepare a 1,000-word paper illustrating the following:

Be sure to use the following business plan outline for your project:

(1) Introduction
(2) Description of your organization
(3) Mission statement
(4) Product/service analysis

• Describe your product/service in detail
• Explain the need for this product/service in your selected country
• Explain how your product/service meets that need

(5) Country analysis

1)   Political structure and stability
2)   Economic condition
3)   Financial stability
4)   Social and cultural environment
5)   Physical conditions
6)   Regional alliances involved

Be sure to:

(a) back up your statements with facts
(b) watch for correct grammar, punctuation, spelling and formatting; use citations as needed according to the University Academic Policy.
(c) use APA formatting

Organizational Structure & Risk Analysis Paper

Organizational Structure & Risk Analysis. Prepare a 1,500-1,750 word paper in which you provide a strategic planning process and conduct a business risk analysis for your selected product or service.

Summarize your strategic planning process

1) Define 2 objectives (Be sure objectives are specific and measurable)
2) Assess internal/external environment by conducting a country SWOTT analysis
3) Consider alternative strategies: international, global, localization, transnational. Select an appropriate strategy and justify the selection
4) Select and justifyan appropriate mode of entry for your product or service

Analyze various risks:

1) Political/legal/regulatory risks
2) Currency exchange risks and tax risks
3) Market (4 Ps) risks
4) Competitive risk assessment
5) Social/cultural risks
6) Technology risks
7) Physical environment risks
You need to clearly provide the risks for each section as well how your organization or company intends to mitigate the risks. It is not acceptable to simply state there is no risk.

Be sure to:

a) back up your statements with facts
b) watch for correct grammar, punctuation, spelling and formatting; use citations as needed according to the University Academic Policy.
c) use APA formatting

International Operations Paper

International Operations. Prepare a 1,500-2,000-word paper in which you complete the following: 

Explain how you would manage the following organizational functions for your venture in the selected country:

(1) Human Resources Management (HRM) (include cultural factors)

(2) Logistics and Supply Chain Management

(3) Manufacturing OR Information Technology (IT)

(4) Marketing

For each of the above departments you need to clearly explain how your company will coordinate the functions of each department given your international expansion. What changes need to be made and how will your company handle these changes? How will you manage the main functions of each of these departments?

Be sure to:

a) back up your statements with facts
b) watch for correct grammar, punctuation, spelling and formatting; use citations as needed according to the University Academic Policy.
c) use APA formatting

 

International Business Plan Paper

International Business Plan. Prepare a 5,000-7,500-word paper integrating your previous team assignments using the previous outlines and include the following new material:

1) Financing your global venture: How will you finance your international operation? Discuss what financial organizations and resources you would use to achieve global expansion.

(a) Indicate the financial health of the country selected.
(b)  Determine investment levels needed -both domestic and international sources -for financing the project.
(c) Create a budget.

2) Identify 2 feedback mechanisms for your international venture. How will your organization track its success or failure?

3) Given the data you have collected to date, should your organization proceed with foreign expansion? Clearly indicate the viability of your business plan and justify your recommendation. 

 

Be sure to:

a) back up your statements with facts
b) watch for correct grammar, punctuation, spelling and formatting; use citations as needed according to the University Academic Policy.
c) use APA formatting

Grading

Assignments:

1. Participation in discussion forums

2. Individual project a. Regional Analysis Paper

3. Team projects: a. Foreign Exchange Rate Project (Game) b. Team Paper Organization & Country Analysis Paper Organizational Structure & Risk Analysis Paper International Operations Paper International Business Plan Paper

4. Exams a. Mid-term b. Final

Grading:

Your grade will be based on the following:

Course Components

* To meet graduation requirements, students must earn at least a C for this course.

Late Assignments will be assessed a 10% penalty per day up to two days.  After the second day, late assignments will not be accepted.

Grading Scale

The letter grade equivalent to the points earned is indicated below.

Please refer to the University Registrar's information about University grading policies.

If, for reasons beyond the student's control, a student is prevented from completing a course within the prescribed time, the grade in that course may be deferred with the concurrence of the instructor. The symbol DF appears on the student's transcript until the course has been completed. Non-emergency permission for filing a deferred grade must be requested by the student before the beginning of the final examination period. In an emergency situation, an instructor can approve a deferred grade after the final exam period has started. Under emergency conditions during which the instructor is unavailable, authorization is required from one of the following: the dean of the college in which the candidate is enrolled; the executive director of the Division of Undergraduate Studies if the student is enrolled in that division or is a provisional student; or the campus chancellor of the student's associated Penn State campus.

For additional information please refer to the Deferring a Grade page.

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