END-OF-CHAPTER GUIDE
*Review Questions and Answers
*Critical Discussion Questions and Answers
*Global Action
*Closing Case
REVIEW QUESTIONS AND ANSWERS
1. What is the traditional definition of IB? How is global business defined in this book?
International business (IB) is defined as (1) a business firm that engages in international
Global business is defined in this book as business around the globe. The activities
2. Compare PengAtlas Maps 2.1 (Top Merchandise Importers and Exporters), 2.2 (Top
Service Importers and Exporters), and 2.3 (FDI Inflows and Outflows) and note that the
United States is number one in all categories except one. What is it? Many people feel
that is a big problem—do you? In your opinion, what—if anything—should be done
about that?
The U.S. is not the top merchandise exporter. One can argue that while it would be good
to improve exports, the total wealth created for the U.S. does not consist only of exports
3. Compare PengAtlas Maps 2.1 (Top Merchandise Importers and Exporters), 2.2 (Top
Service Importers and Exporters), and 2.3 (FDI Inflows and Outflows) once again and
note the BRIC countries that are referenced in this chapter. Which of the BRIC countries
is most often among the categories in those maps? Do you think that the long-term trend
will be for that country to continue to become more important and perhaps surpass the
United States, or do you think that it may decline, and one of the other BRIC countries
will become more important? Why?
China stands out among the BRIC countries. If the future is anything like the past, no
country is dominant forever so it is possible that China’s GDP could eventually pass that
4. ON CULTURE: Not all people in your country support globalization, and some feel that
globalization is an economic threat. However, to what extent could it be they may also
feel that it is a threat to their culture?
The purpose of this question is not so much to resolve whether globalization is or is not a
5. Discuss the importance of emerging economies in the global economy. Use current news.
Emerging economies already command a significant part of global GDP. However, the
6. What is your interest in studying global business? How do you think it may help you
succeed in the future?
7. If you were to work as an expatriate manager, where would you like to go? Why?
8. How would you describe an institution-based view of global business?
Institutions are the “rules of the game.” Doing business around the globe requires
9. How would you describe a resource-based view of global business?
10. After comparing the three views of globalization, which seems the most sensible to you
and why?
The three views are as follows:
A new force sweeping through the world in recent times.
11. What is semiglobalization? What factors contribute to it?
Semiglobalization is a perspective that suggests that barriers to market integration at
Do those who protest against globalization make any valid point(s) that all people, whether for or
against globalization, should consider?
They do raise a valid point when they insist that firms, especially MNEs, should have a
12. You may view yourself as objective and neutral regarding globalization, but do you sense
any bias that you may have, one way or the other? What bias most likely exists on the
part of other students taking this course?
The important thing is not so much the answer as the extent to which the student
demonstrates thought in providing the answer. Opponents of globalization might mention
13. Given the size of the global economy and the size of some of the large corporations, do
you think it is possible to carve out a niche that you can exploit as a small
businessperson? Or do you feel that the most practical way to participate in the global
economy is to do so as an employee or manager in a global corporation?
The student does not have to look far to find that small business people have indeed been
CRITICAL DISCUSSION QUESTIONS AND ANSWERS
1. A classmate says: “Global business is relevant for top executives such as CEOs in large
companies. I am just a lowly student who will struggle to gain an entry-level job,
probably in a small domestic company. Why should I care about it?” How do you
convince her that global business is something to care about?
Even if you do not aspire to compete for the top job at a large company and instead work
at a small firm or are self-employed, you may find yourself dealing with foreign-owned
2. ON CULTURE: Thomas Friedman in his book The World Is Flat (2005) suggests that the
world is flattening—meaning it is increasingly interconnected by new technology, such as
the Internet. On the other hand, this presents significant challenges for developed
3.ON ETHICS: What are some of the darker sides (in other words, costs) associated with
globalization? How can business leaders make sure that the benefits of their various
actions outweigh their costs?
There should be a variety of answers, including some that are not practical. This is a
4. ON ETHICS: Some argue that aggressively investing in emerging economies is not only
economically beneficial but also highly ethical because it could lift many people out of
poverty. However, others caution that in the absence of decent profits, rushing to
emerging economies is reckless. What do you think?
The response to this question may depend on how the student perceives the purpose and
GLOBAL ACTION
1. Chemical companies are among the largest firms worldwide. Two approaches to
evaluating their operations are by capital spending and by research and development
(R&D) spending. Access a resource that provides this information about top global
chemical producers. Then compare the top five capital-spending and R&D-spending
chemical companies. Are any companies found on both lists? What insights does this
information provide?
Exercise 1 Answers
One resource that can be used is “Chemical and Engineering News: Global Top 50
Chemical Producers”. This website can be found by entering the search term “chemical
and engineering” or “chemical producers” at the globalEDGE™ Resource Desk search
Search Term: “chemical and engineering” or “chemical producers”
Resource Name: Chemical and Engineering News: Global Top 50 Chemical Producers
Website: http://pubs.acs.org/isubscribe/journals/cen/87/i31/html/8731cover.html
globalEDGE™ Tags: Chemicals, Industries, Industry Specific
2. One important aspect of globalization is the fundamental stability of the global economic
order currently in place. Thus, FDI intentions can be influenced by its perceived
Exercise 2 Answers
One resource which can be used is “A.T. Kearney: FDI Confidence Index”. This website
can be found by entering the search term “foreign direct investment intentions” at the
globalEDGE™ Resource Desk search box located at
Search Term: “foreign direct investment intentions”
Resource Name: A.T. Kearney: FDI Confidence Index
Website:
globalEDGE™ Tag: Rankings
CLOSING CASE DISCUSSION GUIDE AND ANSWERS
Emerging Markets: Two Scenarios of the Global Economy in 2050 can be used to help
students evaluate the role of globalization in the future. The first scenario is an optimistic
view of the future in which globalization continues to spread. The second scenario can be
labeled de-globalization. Poor or negative economic growth and civil unrest result. In both
scenarios, an increase in global competition is predicted.
1. Which of the two scenarios is more plausible for the global economy in 2050? Why?
How does that affect you as a consumer, as a professional, and as a citizen of your
country?
2. From a resource-based view, what should firms do to better prepare for the two
scenarios?
3. ON ETHICS: From an institution-based view, what should firms do to better prepare for
the two scenarios? (HINT: For example, if they believe in “continued globalization,” they
may be more interested in lobbying for reduced trade barriers. But if they believe in
“de-globalization,” they may lobby for higher trade barriers.)
Students should consider the factors they can change in the business environment. Laws,