International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
BONUS ACTIVITIES (additional resources not in the text)
This section provides you with support of your course above and beyond what’s found in the
text. We have developed these resources to support your course, to support your traditional,
hybrid, online, flipped class.
VIDEO SUGGESTIONS
McGraw Hill’s collection of international business videos is available on pinterest at
https://pinterest.com/mheibvideos. The International Trade Theory board is rich and varied,
updated monthly, as is the Foreign Direct Investment board. Both represent a great resource.
See https://www.pinterest.com/pin/387591111656465664/ for a discussion of “will falling euro
end up boosting Europe’s economy” to discuss how currency fluctuations affect international
competitiveness of nations.
The video on “World Bank: Let Africa Trade with Africa” helps to highlight regional trade
opportunities as well as potential growth of trade between developing countries (rather than
between developing and developed countries); this video can be found at:
https://www.pinterest.com/pin/387591111650417128/.
The video “How Currency Choices ‘Made in China’ have Big Impact on U.S. Economy,” at
https://www.pinterest.com/pin/387591111650417123/, helps to highlight currency fluctuations
and economic mercantilism.
The video “India Economy to Overtake China but Many Still in Poverty,” at
http://www.bbc.com/news/world-asia-india-31668217, discusses issues of economic growth
and social welfare.
MapsofWorld.com has an interesting series of facts and discussion about the history of
international business and trade, which you can find at
http://finance.mapsofworld.com/trade/history-international.html.
GlobalEdge and the Academy of International Business provide links to a number of
organizations that offer videos about international business. You can find these links at
https://aib.msu.edu/resources/videodepositories.asp.
YouTube has many international business-related videos in its collection. For example, you can
find a 31:03 minute video on How Beneficial is World Trade at
https://youtu.be/xRJZWfqWcs0?list=PL9E6D9764746EA546.
TEAM EXERCISES
These may be done individually or in groups or teams, either in or out of class, for later class
presentation. Some are also appropriate for hybrid and online courses.
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
1. Ask the students to check advertisements in The Wall Street Journal, the Financial Times
and New York Times, for ads in which investment inducements are offered by foreign
governments. Similar ads also appear in The Economist, Business Week, and Fortune. Students
can also search the web to find such inducements for various countries. What kinds of
inducements are offered? Does your city and state offer foreign firms inducements to invest in
your area? How successful have they been in attracting foreign FDI into your state, region, or
local area?
2. Students typically understand that products are exported and imported because of their
tangible nature and the benefits derived through their consumption are apparent. The import
and export of services are more difficult for students to grasp. Have students research this and
explain their findings. Have them rank the volume of U.S. services’ imports and exports, the
countries, and the top 10 types of services involved. Have them do the same for an EU and an
Asian country and compare their findings. Then, have them answer the question, “Why export
services?”
3. You can check the students’ comprehension of trade theory through the following
activity:
This is the output of cigars and calculators for countries A and B.
Output/Man/Day
Country:
A
B
Calculators:
6
2
Cigars:
20
10
$30
6 calculators
=
$5/calculator
cigars 20
$30
=
$1.50/cigar
120 pesos
2
=
60 pesos/calculator
120 pesos
10
=
12 pesos/cigar
a. Would it be advantageous for B and A to trade?
b. What would be the range of values within which trading of cigars for calculators would
make economic sense? (Answer: 3-1/3 cigars/calculator to 5 cigars/calculator).
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
c. Total production costs per day are $30 in A and 120 pesos in B. If the exchange rate is 10
pesos in B = $1 in A, will trade still place in the same direction as for part a?
Converting to dollars:
Country:
A
B
Calculators:
$5/Calculator
$6/calculator
Cigars:
$1.50/cigar
$1.20/cigar
d. What change must be made in the exchange rate to change the flow of trade?
Answer:
(1) If rate goes to 12 pesos = $1, calculator will cost $5 in B, which is the same price as in A, so
based on price alone, B will not import from A. B can still sell cigars to A because their price has
improved and gives them a greater price advantage.
(2) If the rate goes to 8 pesos = $1, then B’s cigars will cost A $1.50 and B will lose its price
advantage. Calculators in B will cost $7.50 to produce.
e. If rate goes to 8 pesos or even 7 pesos = $1, will B sell any cigars to A?
Answer:
(1) They probably will if their cigars taste better or are handmade, if A’s are machine made.
Cigars, like most products, are not bought purely on the basis of price.
SUPPLEMENTAL ACTIVITIES
Case Studies
Case studies that focus on the internationalization of business and on issues related to the
globalization debate are available through Ivey Publishing and Harvard Business School.Ivey’s
catalog is available for browsing (www. iveycases.com); the cases are downloadable and pricing
is in the U.S. $3.50 range.Harvard Business Publishing
(https://cb.hbsp.harvard.edu/cbmp/pages/home) requires an account and offers free review
copies for educators.The case prices begin in the $3.95 to $6 range.
“Free Trade vs. Protectionism: The Great Corn–Laws Debate” examines the conflict that arose
between those advocating free trade and those advocating protectionism in 19th century
Britain. The Corn Laws were a series of acts that protected British agricultural interests for
nearly 200 years, and the decision on whether to repeal the acts had significant implications for
industrialists and landowners. This is a Harvard case. There is also an abridged version available.
“Yue Yuen Industrial (Holdings) Limited: (A) Making 200 Million Pair of Shoes a Year and
Growing” describes the industry for outsourcing shoes by companies such as Nike and Adidas.
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
Yue Yuen has become the largest contract footwear maker in the world, five times larger than
its next largest competitor. The case allows students to understand the decisions for offshoring
parts of a company’s value chain, such as manufacturing, and the challenges that a company
faces in not only achieving competitiveness as an offshore supplier but being able to remain
competitive as the environment changes over time. This is a University of Hong Kong case
distributed by Harvard.
“Background and Agreements on Foreign Direct Investment” provides a brief history of foreign
direct investment, including various conflicts, issues associated with FDI-related legal
frameworks, and international agreements and principles for resolving FDI-related disputes. It
can provide a useful basis for discussing the “whys” and “hows” of FDI. This is a Harvard case.
“Foreign Direct Investment in China” examines the role that FDI has played in China in helping
that nation to achieve rapid economic growth since 1978. This is a University of Hong Kong case
distributed by Harvard.
CONTROVERSIAL ISSUES
1. Global Debate: The GLOBAL DEBATE: Comparative Advantage: Should the United
States be Sending Service Jobs to India? Boxed element described earlier in this module’s
Instructor Guide provides an excellent foundation for debating some of the issues raised in the
2. Debate on whether trade and investment are beneficial for a country’s
development
Drawing from the content in the IB in Practice box, “Are Economic and Social Development
Affected by Trade and Investment,” you can ask students to take opposing perspectives to argue
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
35
Instructor’s Manual – Module 2 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Online and Hybrid: Virtual teams can be assigned to take different perspectives to argue
for or against international trade and foreign direct investment and these assignments can be
submitted as a group and then opened up to discussion and debate on an online class discussion
site or blog, or presented and debated in a face-to-face setting.
Face-to–Face: Students can be assigned to take different perspectives to argue for or
against international trade and foreign direct investment and then they can be asked to argue
their positions within an in–class debate and discussion.
3. Current events for sources of culture controversy
A focus on current events that are relevant to the module’s topics is a good way to bring home
the concepts, review their application and build news-review habits.Five minutes at the
beginning of class is devoted to discussion of current events.Recent relevant current events
1. Students often are unaware of the rapid growth of international trade, so we discuss
Figure 2.1 in class. We point out that there have been numerous changes in trade relationships
as Table 2.1 illustrates. Most students believe that the major trade direction is between
developed and developing nations (exchanging raw materials for finished goods). Figure 2.2
shows the major trading partners of the United States, which shows that there are several
Asian trading partners in addition to the traditional European and NAFTA trade partners among
the key export markets for U.S. goods, as well as for imports into the U.S.
2. The material on Theories of International Trade is somewhat difficult for many students
and it is easy to lose their interest when discussing theories from the 17th century. We
emphasize in class that there are good, practical reasons for knowing the essentials as we have
also emphasized in the text. We recommend that you go slowly in discussing comparative
advantage. If you whip through it, you will probably lose most of the class. We commonly ask a
student to come to the board and create a table to explain the theory and we give him or her
all of the help required. We came across a short haiku-like summary of comparative advantage
that might help students get the general idea: Do what you do best and trade the rest.
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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
36
Instructor’s Manual – Module 2 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
3. We find it advantageous to follow the discussion of comparative advantage with the
4. Generally students are surprised to learn that the United States’ share in total foreign
investment is still as large as it is (see Figure 2.5). They often believe that China’s share is
5. The Global Debate box on, “Comparative Advantage: Should the United States be Sending
6. We often find it useful to use the International Product Life Cycle, illustrated in Figure 2.3,
to stimulate discussion. We ask questions such as, “Can you identify any products or services
7. You may be interested in discussing the IB in Practice box, “Are Economic and Social
Development Affected by Trade and Investment?” This illustrates how closely trade and FDI are
8. Guest Lecturer possibilities: Some businesspeople who could contribute to the material in
this module would be:
a. Someone in the technical department of a multinational to talk about licensing and
contract manufacturing arrangements that firm has with overseas licensees.
b. Product manager of the international division of a multinational who should be
class what motivated their company to come to the United States and your area.
e. If you have an economic development department in your state that is active in
attracting foreign investors, you may be able to get a representative to explain to the
class what it does to attract foreign investors and what foreign investors are looking for.
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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
Your chamber of commerce director of economic development may have had visits from
foreign company representatives that he or she is willing to share.
f. If you are in an area with foreign consuls, you might invite a member of the
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
38
Instructor’s Manual – Module 2 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
CONNECT TOOLS FOR ASSESSEMENT OF LEARNING
Interactive Applications
Assigning Interactives
Consider assigning only 2 interactives per chapter. Interactive applications allow students to see
concepts in practice and assess higher order thinking skills. There are numerous exercises of
different types available. Click’n’drag, video cases, and case analysis are the types you will see
most frequently in this program.
Time-Saving Hints:
• Instructors may want to give students unlimited or multiple attempts on the first few
assignments so the students have a chance to learn and navigate the system before
selecting the option for one attempt only.
• The value of each question should probably be relatively low, since multiple questions
are usually assigned for each chapter. A good rule of thumb would be to make “Quiz
Questions” worth 1 point each and “Interactives” worth 5-10 points each since these
require more time and thought.
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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
• Feedback given to students is time flexible. Selecting feedback to be displayed after the
assignment due date helps to limit students from giving the correct answers to other
students while the interactive is still available.
Connect Content Matrix
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 2
For every chapter, please refer to the Connect Content Matrix to see what application
exercises are available, what Learning Objectives they help reinforce/assess.
Module
Assignment
Type
Title
Topic(s)
Learning
Objective(s)
AACSB
Accreditati
on Tagging
Bloom’s
Taxonomy
2
Comprehension
Case
Volume and Direction
of International Trade
International
Trade
02-01; 02-02;
02–04
Analytical
Remember
2
Drag and Drop
International Trade
Direction of
Trade
02-01; 02-02
Reflective
thinking
Understand
2
Drag and Drop
International Trade
Theories
Explaining
Trade:
International
Trade Theories
02–03
Reflective
thinking
Understand
2
Video Case
Trade, Investment,
and Economic and
Social Development in
Ethiopia
Foreign
Investment
02-04; 02-05
Analytical
Understand/
Analyze
2
Decision
Generator
Exporting, Licensing
or FDI
Explaining FDI:
Theories of
International
Investment
02-04; 02-05
Analytical
Apply