FISCAL POLICY

When the government spends more than it collects in
revenues, the government has a budget deficit. Deficits
generally stimulate the economy. However, excessive
stimulation can lead to demand in excess of resource supplies,
resulting in inflation. They also add to the national debt.

When the government collects more than it spends, the
government has a budget surplus. Surpluses generally
dampen the economy and are politically unpopular.

Costs

FIXED COSTS  -  Costs that are not influenced by the volume of production
VARIABLE COSTS  -  Costs that are influenced by the volume of production
ECONOMIC COSTS  -  Costs that may be influenced by, and therefore are relevant to, a decision by the firm
ACCOUNTING COSTS  -  Costs that are reported on financial statements or tax returns

SUNK COSTS  -  These are amounts that have already been committed and will be unaffected by a decision.  They are often included in accounting costs, but never included as economic costs.
OPPORTUNITY COSTS  -  These are the amounts that productive resources could earn for the owners if used in the best alternative way.  They are included as economic costs if those resources could be redeployed; they may not be treated as accounting costs or may be valued differently.

The breakeven point is the production level that earns just enough revenue to offset costs.

Market Equilibrium

The market demand curve is usually downward sloping (price drops as the quantity that buyers are willing to purchase increase). The market supply curve is usually upward sloping (price increases as quantity that sellers are willing to provide increases). In most cases, there is one price at which the amount that buyers are willing to purchase equals that amount sellers are willing to provide.

Invisible Hand: If there is a higher demand that supply at any given price, some buyers will be willing to pay more than the going price, causing some sellers to raise the price and increase output. This process will continue until the market is in equilibrium. If there is more being produced than demanded at any price, sellers will reduce prices and cut back on output, repeating this process until the market is in equilibrium.

Auctions

English Auctions: buyers keep raising bid until no one raises in higher.
Dutch Auctions: Auctioneer starts at a very high price and continues to lower price until a buyer announces a bid at that price.
Sealed Auction: buyers put bid in an envelope. At designed time, envelopes are opened and the buyer submitting the highest bid wins at that price
Vickrey Auction: Like sealed bid auction, but highest bidder only has to pay the 2nd highest amount bid.

International Business (5)

International Marking:
Unique factor: political, culture, legal system, economic, distribution
4P: Product, Pricing, Promotion, Place
Product: Legal issues, culture perception (use), economic, brand name
Pricing: standard, two tiers, markinting
Promotion mix: advertising, personal sales, promotions, public relations
Place (distribution): length & step, amount of development, v-integration, direct sale
Operations management:
transforming input to output, using technology to create value.
value: cost, feature, durability/reliability, standard/customized, centralized/decentralized
Operations issues:
1. Supply chain:v-integration, steps, make or buy, risk-capital, technology, control, flexibility
2. location: country factor(resource, infrastructure) , product factors(value to weight, efficient size, customer feedback, and cycle time)
3. logistics (distance, safety, needs)
Service business:
intangible, not storable, customer usually participates(capacity plan, location plan, facilities plan, operations scheduling), downstream business, readiness to server.

International Financial Management:
1 choice of currency (hard, soft), 2. credit check-risk remedies, 3. Method of payment (pay in adv. open account, doc collection, letter of credit, cc, countertrade)
Manage working capital: 1 minimize balance, 2. min conversion cost, 3. min exchange risk.
Transaction exposure:1. go naked, 2. forward contracts, 3. option contracts, 4. offsetting assets.
Accounting:
FASB, GAP, SEC.
issues: asset evaluation, taxation, reserves, capitalization of leases &R&D, consolidation.
Transfer pricing:avoid taxes, repatriation limits, tax heavens, foreign sale corp.
Human Resource:
Problems: cultures, economic, legal systems.
PCN: parent country national, expatriate, trust, CEO
HSN: host country national
TCN: third
Labor relations: trends, cultural, political, national union, international Union
Industry democracy: collective bargaining, codetermination, workers councils, shop floor participation, employee compensation.

International Business (4)

Supply & Demand
spot market: how quick to sell? now. market is determined by payment in long term. Determined in that day in short term, why US$ is higher with EU recently?
Current future: you can buy future. future is a guarantee people get the exchange, you have to do it, to excise.
current choose option: to protect yourself. option: you have a right to do or not do it. If you have extremely high risk, go option. call option: buy money, put option: sell money

Price of export: price of goods, currency exchange, transaction fee.

Banks:
commercial bank: they lend their own money and do the transaction by themselves
investment bank: they arrange the lender and borrower together, the money they use are borrowed from lenders
component relationship: somebody you have agreement with, they have great common, for many companies the bank has the agreement.
subsidiary: overseas banking separately incorporated from the parent. Usually in large money center, if you following BOA, you will find it in HK, Sg.
LIBOR: London interbank offered rate. banks offer to lend funds to other banks in the Europe (London) money market. It is a filtered average of inter-bank deposit rates offered by designated contributor banks, for maturities ranging from overnight to one year.
Foreign capital market:

Protectionism (formulation of national trade policy)
national defense: normally you don't want free trade here. The gov wants to protect some specific industries. A country must be self-sufficient in critical raw materials, tech etc, or else be vulnerable to foreign threat.
Infant industry.
Jobs
Strategic trade theory: (mature/oligopoly) Boeing, there are only only have two major competitors, airbus&boeing, we dont' want them to be out of business. BTW, we consumers dont' want it out of buzz either(if one wins, we pay more money).

barriers
tariffs: is a tax placed on a good that is traded internationally. who pay it? customers
quotas: numerical limit on the quantity of a good that my be imported into a country during some time period. Earlier, Toyota was limited to import to US
product standard: require foreign good to meet a county's product standard before the good can be offered for sale. Russia insists that imported telecommunications equipment be tested by two separate gov agencies, a process takes 12-18 months
local purchase(content laws): require the exporting firms to purchase good or services from local suppliers.
restrict access: restricting foreign supplier's access to the normal channels of distribution. China requires that imported sugar be distributed only by state-owned trading enterprises.

GATT: agreement, allow free trade
WTO: an organization, promote free trade, reduce remaining barriers
Why join WTO: members get the same preference as all the other members
power of WTO: it has multi-level power, every country has one vote, if one country has fault, all countries punish you, now you get the attention.

Regional economic integration:
Free trade areas: agree to protect each other, reduce barriers. member of free trade areas are often vulnerable to trade deflection. To prevent this, they specify rules of roigin. Jp to US with 6% duty, can they go to Mexico, then go to US? NO because duty free only made in MX.
customs union: allow labor travel between countries, US is not here because it not allow labor moving around. members also adopt common trade policies towards nonmember countries.
Common Market:members also eliminate barriers that restrict among themselves
Economic Union: members fully integrate their economies by coordinating their economic policies, have common currency.
Political Union: the union effectively transforms itself into one country

What is strategic planning? what's going to do in long term, usually 5 years. For IT, maybe 1-2-3 years

Broad strategies:
Home replication: it takes what it does very well in its home market and attempts to duplicated foreign markets. Walmat,
Multi-domestic: modify myself each time I go to another country, understand the local economic. It is decentralized. Not cost effective
Global: it is opposite of mulitdomestic, it is inexpensive and centralized. view the world as a single market, create one strategy for the world. cost effective, Boeing.
transnational strategy: use several strategies simultaneously. It is not centralized or decentralized, it carefully assigns responsibility for various roganizational task to achieve the goal efficient. MS: RnD in US, marketing to its subsidiaries. It is the most effective way, but not efficient.
Regional: company be part of the world. sometimes centralize (marketing), sometimes decentralized (manufacturing).

Environmental scan
SWOT: strength, weakness, opportunities, threats. the strength of walmart is buying power, low cost. They try to transfer this and it works. But it failed in German, coz they don't want drive to far, or buy big box.
value chain is a breakdown of the firm into its important activities: production, marketing, human resource, ... to enable its strategists to identify its competitive advantages and disadv.
core competence: what I do very well to use it globally. BOA.

Business level - how to compete
cost leadership: make the strategy that the product's cost is lower than the competitors. why shopping in walmart? sell for less.
differentiation: the products or services are unique from others in the same market. Rolex sell its products very expensive, only in a few dealers in given area.
focus:find the small market I want to attack, target specific types of products for certain customer group. Convent.
integration: use some of the above strategy. target: low cost and good shopping experience.

Issues of entry strategy
Risk: different kind of risk, like dollar, current exchange..
control
profit: share, all, incremental ( I need to know my fee, fee may be critical)
speed

method of entry
export:indirect: no high risk, not lot of control, need partner to sell product, profit: need to make money, speed, should be relatively quick
license: normally give my brand. risk: light, destroy my name, be careful to choose partner. lose control a little bit, coz give name to others. profit: incremental, speed: very fast
franchising: almost the same as license. give business to others, like McDonalds and hotels. risk:same, control: still have. speed: maybe good, dont need to build. profit: incremental
contract manufacturer: source to somebody, have control, manufacturing
management contract and Turnkey Low risk, if my technology need to transfer, I need leave somebody to do it, teach others how to do it. -- build it and sell to you, not quick
Greenfield:start with nothing, high risk (need lot money for structure, get a while to produce sales, no revenue, no guarantee), control, speed very slow, profit, lose or make money.
Acquisition: something it is there already and you bought it, risk: pay already doing, yoi know the amount of risk. speed relatively quick. control: you take over, profit: make good money but need wait a while. People more prefer this one
Joint venture - synergy: manufacture well but not sell well, another one's marketing is well. these two do synergy, A & B to create a whole new independent company C. Suppose to reduce risk, speed sometimes fast, control:share, very common, income share.
Alliance: software, hardware,

International strategic alliances
Joint ventures: two companies to create 3rd one. share risk, share profit, share control, hard to say speed, why Joint venture? two come together and make more.
non-equity: two companies agree to consist each other, there are no money between them, A & B going to a country, no new company
equity: two companies agree to corporate, Large A invert small B,
tacit collusion: A, B no agreement.

Why Joint Venture? market entry, share risk (software/hardware), share knowledge, synergy. share profit, share control

Selection of partners
capable: do you have access resource? agree a long term to be partner.
Nature of business: better to work together than compete. JP cars to US, sell in Ford dealer, small cars, not competitors with SUV
relative safeness of alliance: make sure safe, know what your partner want to do.
learning potential of the alliance: need education, use other country's marketing people, Defensive: for High Tech, keep R&D outside. Integrative: get win-win condition

Organization design:
initial: global, efficient(cheap), not effective
international division: global, efficient
global design: effective, not efficient
mixed (matrix): efficient & effective

Process theories:
expectancy--Instrumentality --valence
confidence link --reward
my effort
lead to desire
result

Equity: compare people inside business and outside. Is it fare to compare NBA player with others?

Leadership style:
autocratic: communication: up-down, European union is here. Leaders tell the employees what they want done and how they want it accomplished. Worry about how to make the work done. treat people: they are my employee.
paternalistic: communication pattern: top-down, take care of you, asia, spanish country and south America. They concern the employee, there will be some communication back.
participative: down-up, ask you questions, have more feedback, employee center to people center, US, CA, England
laissez faire: bottom-up, also known as 'handoff' style. people center, clean the path for employee. The manager provides little or no direction and gives employee as much freedom as possible

International Business (3)

classical theory on country-based trade
--mercantilism: wealth is measured by its holding of gold
--absolute advantage (productive)
--comparative advantage (relatively)

Factor of endowment theory
-- 3C: conditions, connections, concepts
--county has unique advantages

Country similarity theory (trade between 2 countries of good produced by same industry)
--similar per capita income
--consumers are at the same stage of economic development

product life cycle
--new product
--maturing product
--standardized product

Porter's nation competitive advantage theory
--firm strategy, structure, and rivalry
--demand condition
--factor condition
--related supporting industries

Portfolio investment
FDI(foreign direct investment)

Internalization theory: better to own or not (transaction cost)

3 condition for FDI
--ownership advantage
--location advantage
--internalization advantage

Factors influence FDI
--supplies
--demands
--political

International monetary system

gold standard: too expensive
exchange rate: fixed, float, par value

Bretton Wood:
World bank: loans from developed countries to developing countries. help reconstruction and development.
IDA, IFC, WIGS

IMF: floated vs. pegged, flexible vs. managed, buying / borrow money. To promote international monetary cooperation. Protect currency. To promote exchange stability.

What is Balance of Payment? (short term / long term)
--current account (goods, service, investment income, gift)
--capital account (portfolio, FDI)
--reserved account
--errors and omissions

International Business (2)

Legal: common law, civil law, religious law, bureaucratic law
Law affecting of international trade:--sanctions --embargo --extraterritoriality
International jurisdiction:--territorial --nationality --protective
principle of comity: forum shopping (which law to use?)
Issues of technology transfer:--patent --trademark --law/enforcement
Political risk: --ownership risk, --operating risk, --transfer risk

Culture
pervasive
characteristics : --learned --adaptive --interrelated --shared --trans-generation
element: --social structure(individual, family, group), --social stratification (class system), --language, --communication, --religion, --value&attitude(time, age, status, education),

High context, low context

Hofstede Five Dimensions
--power orientation (power respect - power tolerance)
--social (individualism - collectivism)
--uncertainty (uncertainty acceptance - uncertainty avoidance)
--goal (aggressive goal behavior - passive (what motivated people, quantity vs. quality of life, live to work vs. work to live ))
--time (long term outlook - short term outlook on work and life)

Trompenars
1. universalism vs. particularism
2. individualism vs. collectivism
3. neutral vs. emotional
4. specific vs. diffuse
5. achievement vs. ascription
6. Time
7. Environment (internal locus vs external)

International Business (1)

Economic cycle (GDP): -> capital -> business ->job, wage, product -> consumption -> profit ->capital
Interference: corruption, military/government expenditive, low productivity, low wage, protectionism

PEST
political issues, legal. -- stability, risk, laws
economic issues -- GDP,GNP, growth trend, per capita GDP, income, infrastructure, inflation, exchange rate
social issues -- culture
technology

Motives for globalization
global imperative, strategy imperative
--to leverage core competencies
--to acquire supplies and resources
--to seek new market
--to better compete rivals (economic of scale, standard for industry)
Environment change
--changes in politics of the world
--technology changes

Concept of Free Trade Association
--remove barriers
--weak perish
--strong get stronger
--overall productivity goes up
--consumer win
--country becomes a global competitor

Dale Carnegie Course (12)

Final. Perfect Atten.

Dale Carnegie Course (10)

disagree agreeably

Dale Carnegie Course (9)

Leadership
Stress ... A book

Dale Carnegie Course (8)

Enthusiasm
Enthusiastic

Dale Carnegie Course (7)

Be a leader:

1. Begin with praise and honest appreciation.
2. Call attention to people's mistakes indirectly.
3. Talk about your own mistakes before criticizing the other person.
4. Ask questions instead of giving direct orders.
5. Let the other person save face.
6. Praise the slightest improvement and praise every improvement. Be "hearty in your approbation and lavish in your praise."
7. Give the other person a fine reputation to live up to.
8. Use encouragement. Make the fault seem easy to correct.
9. Make the other person happy about doing the thing you suggest. (a book)

Dale Carnegie course (6)

moral

Dale Carnegie course (5)

A. Energize our communication
B. Unleash our full potential

Dale Carnegie course (4)

Manage Stress:

• Ask yourself, "What is the worst that can possibly happen?"
• Don't worry about the past.
• Try to profit from your losses.
• Create happiness for others.

Dale Carnegie course (3)

A. Put enthusiasm to work
B. Recognize Achievements

Basic techniques in analyzing worry:
Write out and answer the following questions:

1. what is the problem?
2. what are the causes of the problem?
3. what are the possible solutions
4. what is the best possible solution?

Dale Carnegie course (2)

A. Build on memory skills and enhance relationships
B. Increase self-confidence

T.O.U.T: Thank you, others, how effect to you, thank you.

Dale Carnegie course

Start Dale Carnegie course in Effective Communication and Human Relations.
12 weeks (or 13 weeks?)