Seven C’s of Effective Communication

Management Study Guide

There are 7 C’s of effective communication which are applicable to both written as well as oral communication. These are as follows:

Completeness - The communication must be complete. It should convey all facts required by the audience. The sender of the message must take into consideration the receiver’s mind set and convey the message accordingly. A complete communication has following features:

Complete communication develops and enhances reputation of an organization.
Moreover, they are cost saving as no crucial information is missing and no additional cost is incurred in conveying extra message if the communication is complete.

A complete communication always gives additional information wherever required. It leaves no questions in the mind of receiver.

Complete communication helps in better decision-making by the audience/readers/receivers of message as they get all desired and crucial information.

• It persuades the audience.

Conciseness - Conciseness means wordiness, i.e, communicating what you want to convey in least possible words without forgoing the other C’s of communication. Conciseness is a necessity for effective communication. Concise communication has following features:

• It is both time-saving as well as cost-saving.
• It underlines and highlights the main message as it avoids using excessive and needless words.
• Concise communication provides short and essential message in limited words to the audience.
• Concise message is more appealing and comprehensible to the audience.
• Concise message is non-repetitive in nature.

Consideration - Consideration implies “stepping into the shoes of others”. Effective communication must take the audience into consideration, i.e, the audience’s view points, background, mind-set, education level, etc. Make an attempt to envisage your audience, their requirements, emotions as well as problems. Ensure that the self-respect of the audience is maintained and their emotions are not at harm. Modify your words in message to suit the audience’s needs while making your message complete. Features of considerate communication are as follows:

• Emphasize on “you” approach.
• Empathize with the audience and exhibit interest in the audience. This will stimulate a positive reaction from the audience.
• Show optimism towards your audience. Emphasize on “what is possible” rather than “what is impossible”. Lay stress on positive words such as jovial, committed, thanks, warm, healthy, help, etc.

Clarity - Clarity implies emphasizing on a specific message or goal at a time, rather than trying to achieve too much at once. Clarity in communication has following features:

• It makes understanding easier.
• Complete clarity of thoughts and ideas enhances the meaning of message.
• Clear message makes use of exact, appropriate and concrete words.

Concreteness - Concrete communication implies being particular and clear rather than fuzzy and general. Concreteness strengthens the confidence. Concrete message has following features:

• It is supported with specific facts and figures.
• It makes use of words that are clear and that build the reputation.
• Concrete messages are not misinterpreted.

Courtesy - Courtesy in message implies the message should show the sender’s expression as well as should respect the receiver. The sender of the message should be sincerely polite, judicious, reflective and enthusiastic. Courteous message has following features:

• Courtesy implies taking into consideration both viewpoints as well as feelings of the receiver of the message.
• Courteous message is positive and focused at the audience.
• It makes use of terms showing respect for the receiver of message.
• It is not at all biased.

Correctness - Correctness in communication implies that there are no grammatical errors in communication. Correct communication has following features:

• The message is exact, correct and well-timed.
• If the communication is correct, it boosts up the confidence level.
• Correct message has greater impact on the audience/readers.
• It checks for the precision and accurateness of facts and figures used in the message.
• It makes use of appropriate and correct language in the message.

Awareness of these 7 C’s of communication makes you an effective communicator.

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WHAT THE DEATH OF THE T.P.P. MEANS FOR AMERICA

Donald Trump signs an executive order in the Oval Office. On Monday, he withdrew the United States from the Trans-Pacific Partnership. PHOTOGRAPH BY SAUL LOEB / AFP / GETTY

By Adam Davidson - January 23, 2017 - The New Yorker

President Donald Trump today signed the death warrant for the Trans-Pacific Partnership. Throughout the Presidential campaign, the T.P.P. was discussed almost exclusively at high volume, with exclamation points present or implied. Its opponents, who include those in the Bernie Sanders wing of the Democratic Party, as well as Trump, argued variously that it would destroy jobs and the environment and strengthen China. Pro-trade members of the Obama Administration argued that the T.P.P. would “help increase Made-in-America exports, grow the American economy, support well-paying American jobs, and strengthen the American middle class.” These words were on the Web site of the Office of the United States Trade Representative on Monday morning, but by midday they had disappeared, replaced by “America First Trade Policy.”

The T.P.P. would have created a Pacific trade zone not unlike the zone that nafta created in North America, but comprising a dozen countries bordering the Pacific—Japan, Vietnam, Brunei, Singapore, Malaysia, Australia, New Zealand, Canada, the U.S., Mexico, Peru, and Chile. By 2030, those countries would have been able to access one another’s ports with next to no tariffs or other restrictions.

Both proponents and detractors exaggerated the effects of the T.P.P., the impact of which was always going to be modest in measurable economic terms. The Peterson Institute for International Economics, a reputable but strongly pro-T.P.P. research organization, for instance, estimated that U.S. national income would grow by a hundred and thirty-one billion dollars a year by 2030 under the trade deal, a number that many T.P.P. advocates repeat as evidence of its magnitude. But, even if the estimate turned out to be right, it would represent just half a per cent of the over-all U.S. economy—outweighed by even slight changes in, say, the average price of oil or the Federal Reserve’s key interest rate—and would have essentially no measurable impact on almost anybody’s life. In other words, it could easily be seen as somewhere between worthless and barely measurable in economic terms.

For a trade deal to have a major impact, good or bad, it would have to change the trade dynamics with a previously closed but potentially immense trading partner. Such a seismic shift happened when China joined the world trading system. But the U.S. already engages in trade with most of the T.P.P. countries. Instead, the deal would have meant marginally more trade with a set of second- and third-tier trading partners.

Why did the Obama Administration fight so hard for T.P.P.? The trade agreement was central to long-term U.S. interests around the world. It was the first step in engineering a single interlocking trade system to span North America, a significant portion of South America, and a decent chunk of Southeast Asia, as well as Japan. Modern products—from cheaper goods such as clothes to expensive and durable products such as computers, cars, and medical devices—are no longer made in one country. They require stable, predictable international supply chains, and the T.P.P. would have encouraged C.E.O.s, logistics managers, and others to place their bets on the world’s single largest trading zone, one that would have been dominated by the U.S., the largest and most developed economy in it.

By imposing a single legal regime on trade throughout its area, the T.P.P. would have offered incentives to firms to partner with others in the region. As the dominant party in the pact, the U.S. would have controlled future access to that zone. Labor and environmental activists in America had already won major victories, insuring that the T.P.P. would force a new set of standards on trading partners. For the poorer countries, especially Vietnam, these would have meant real advances for workers and the environment. After passage, other countries in the Pacific and in South America would have been anxious to join this large and growing trading zone and would have wanted to make sure they stayed on the good side of the United States. The zone would have all but surrounded China, which was not part of the pact, and would have served to pressure that country to change its own practices.

President Trump, like many others, is right to be concerned about people losing factory jobs, particularly in the Rust Belt, which delivered his victory. The T.P.P. probably would have killed some jobs there, and it surely would have created some others. Estimates suggest that it would have been a wash. But, over all, it wouldn’t have had much direct impact on blue-collar workers. The global shift away from tariffs and other trade barriers began in 1964 and was, largely, complete by the mid-two-thousands. There are a few real fights left, particularly over trade involving finance, entertainment, and pharmaceuticals, but, for American manufacturing companies and their workers, there just aren’t that many high trade barriers left. No deal is likely to have a significant impact on the number of jobs or on the wages workers receive. Jobs ultimately follow economic activity. Where are the customers? Where does it make the most sense to produce the goods those customers want?

Multinational corporations do have a backup plan, now that the T.P.P. is dead. It’s called R.C.E.P., the Regional Competitive Economic Partnership. It is made up of sixteen countries, all in Asia. Many were signatories to the T.P.P. The trade zone is not quite as big—R.C.E.P. represents less than a third of the global economy—but, in many ways, it’s a lot easier to join. The U.S. is not a member, and there are virtually no environmental or labor standards required. One country that is a member of R.C.E.P. is China, and it will be the nation that will dominate what will soon become the world’s largest trade zone.

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How to Use Social Networking Sites as a Business Tool

By Adesoji Published on Jun 10, 2014

I believe that the principle behind social networking sites like Facebook and many others is to connect with the people in our lives. These sites can also be used ethically for business. Now, the question is. Is leveraging your connections on social networks for business purposes ethical? Yes it is only if you do it in a way to meet the needs of your connections on the social networking sites.

We’ve all heard plenty about social network marketing strategies. It seems everything has a social networking component and we all need to know how to leverage these sites if we expect to be successful professionally or personally. But, it’s not as easy as signing up and spewing one long sales pitch.

When you leverage social networking for business purposes, it’s a bit more than that. When you choose to join a social network to use as a business tool, you want to keep a few things in mind. There are millions of people on every social networking site and they won’t pay attention to you if they don’t think there is something in it for them. Below are seven social networking business strategies that we use, that you can use to build your business most effectively.

1. Find your niche

Whether you choose to focus on a specific market segment or product, you will achieve the greatest success (and the largest audiences) if you find your niche rather than speaking broadly on a topic. Niche means your area of focus.

2. Have Something to Say

As stated earlier, your social business strategy should be more than sales pitch. Focus on a niche, link to current events and offer expertise to illustrate your thought leadership. These things are useful to people and they will come back to read more of what you have to say. I have heard and read countless of comments from people who thank me for providing them information constantly with respect to my niche.

3. Be Part of the Community

Social networking is a give and take. If you expect others to be part of your network, you need to be part of theirs. Comment on people’s post, re-post and share what you like. People like it when their updates are picked up by others and will respond in kind. Extend your reach and get involved.

4. Keep it Professional

While your favourite social network site may refer to those in your network as “friends,” they are not. You should keep your personal and business social networking accounts separate. This would help you a lot to differentiate your friends from your fans. Otherwise, you can use the same account for both. This depends on what you are building a brand on/about. If you are building a brand around your business, then keep accounts separate. If you are building a bran around your name, then you can use the same account. This is what I do and I do my best to keep my account professional.

5. Update regularly

The great thing about social networking sites is that you can share a link to a news story or another site and call it an update. Don’t get bogged down in too much content or you won’t update regularly. If you want to use social networking sites as a business tool, then you must make it an habit to update regularly, let say between 10 and 20 times a day. With this, you would keep your clients updated. Constant updates will help them stay in touch with you in the midst of too much updates and attention from other businesses.

6. Don’t take it personal

If someone says something you don’t like, ignore it. Your social network presence is an extension of your personal brand and you want to maintain a good image. Report anything intensely inflammatory but do so behind the scenes.

7. Hashtag everything

Whenever you upload a pic, write a note, publish a blog posts etc, make sue you hashtag them with appropriate keywords. Hashtags will help you connect with more people on your social networking sites. This gives you a leverage to use for your business.

Social networks are an integral part of your overall business strategies. They offer low-cost, high-visibility campaigns with proven success. As you leverage them as part of your own business strategies, always remember that these are marketing tools. With that in mind, every word should be as cautiously chosen as it would be for a brochure, newsletter or Web site. While the vehicles may have changed over the years, the message must still remain consistent. Your social network marketing strategies will yield far greater returns and increase traffic more effectively when you choose one message, one voice and one target audience.

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How Algorithms run Amazon's Warehouses

Amazon's vast, 40,000 sq m, fulfilment centre in Hemel Hempstead (Credit: Amazon)

By Chris Baraniuk, 18 August 2015

When you click “buy’ on Amazon, a flurry of activity begins inside a nearby warehouse – all managed by smart computer code. What’s it like to work there?

“Work Hard. Have Fun. Make History.” So reads a sign above the entrance to Amazon’s newest UK “fulfilment centre” (or warehouse) in Hemel Hempstead.

Inside lies more than 40,000 sq m of shelving, packing lines and millions of products. One area where larger products are stored is known as “pallet land” and adjacent, at another end of the space sits “the tower”, where several floors of shelving are stacked on top of each other. Pickers constantly, and more or less silently, walk up and down the tower’s lengthy aisles, pushing carts into which they deposit items purchased by someone, somewhere online.

Founded at the dawn of the web in 1994, Amazon is now reportedly worth $247bn (£157bn). But the company is not, in fact, hugely profitable. What keeps Amazon afloat? As for any business with tight margins, efficiency is key.

A recent New York Times investigation revealed that the corporate culture inside Amazon is highly driven by data: personal performance, for example, is continually checked with a software system called the Anytime Feedback Tool that allows employees to share praise or criticism about their colleagues.

At the company’s warehouses, the workers are also guided and monitored by software, but in a much more direct way. When you order an item online, the Amazon system quickly works out where the item sits in its inventory, and dispatches a human picker to go fetch it. “It’s not about learning where things are, in your head, or having to memorise,” explains general manager Henry Low. “We make the task as simple as possible.”

One of the first things that strikes you about the Amazon fulfilment centres is that the products aren’t organised logically – or at least in the kind of fashion that a human would use. For instance, products on shelves are not organised by category. Instead, they are placed on shelves as if by random. An HDMI cable lies near to five copies of some Harry Potter sheet music. A brand of baby’s bottle is across the aisle from a drain water diverter. But there is method to this apparent madness. “Imagine picking one model of HDMI cable from a shelf of hundreds of them,” says Low. The pickers are not meant to have to think too long about what they’re retrieving – the whole process is designed to be as streamlined as humanly possible.

Preparing for Christmas in Peterborough, Cambridgeshire (Credit: Rex)

When an item is collected by hand, the picker scans it with a handheld device to ensure that the correct object has been taken. And every item’s progress throughout the warehouse is constantly monitored thanks to a series of points at which it is scanned again – for example at the moment of being labelled with the customer’s name and address. “We are able to track where the item is at any one time at the fulfillment center,” says Low, who is both confident and clearly proud of the attention to detail.

The BBC’s Panorama programme has reported in the past on the high levels of accuracy and productivity expected of employees in Amazon warehouses. Reportedly, the pickers’ handheld devices in some warehouses count down the seconds that they have to retrieve the next product, in order to meet their performance targets.

Scanners instruct the pickers where to go, and reportedly count down in seconds how long it should take (Credit: Rex)

Initially, Low denies this is the case at Hemel Hampstead. However, when asked to see one of the scanners it becomes immediately apparent that such a countdown does indeed exist.

Thomas Owens, a picker at the centre estimates that he picks, on average, 1,000 items a day. “It depends on what process path you’re doing. But between break-times it’s normally between 200 and 300, so I’d say it’s about 1,000 or 1,200 a day,” he explains. In a 10-hour shift, that equates to almost two items every minute. Still, Owens adds that missing a handful of these countdowns is perfectly acceptable, and does not prevent pickers from meeting their overall productivity targets.

Workers in Peterborough prepare for 'Cyber Monday', the busiest online shopping day of the year (Credit: Rex)

Even so, the human element is arguably the weak link in the efficiency chain, and new computer-based systems that promise to automate Amazon’s operations even further might one day take over the ferrying of products themselves. Kiva Systems is a little-known Amazon subsidiary which develops hi-tech warehouse robotics. Instead of human pickers going to and from shelves in a large space, the shelves themselves are mobile and travel on wheels to stationary pickers who simply lift off the required item. Dutifully, the robot shelves then return to their place.

Another company, called Sick, has invented sophisticated sensing equipment that can be used in highly automated warehouses. Human eyes may be less and less useful in the future since, as a company press release about a visual sensor boasts, “the Sick Inspector P30 […] enables the automated crane system to pick and place more quickly, saving typically 10 seconds per pick (potentially 15% extra picking cycles per hour).”

Pickers, here at Peterborough, wander the shelves almost silently (Credit: Rex)

And yet, human involvement in the whole business of getting Amazon products from these massive fulfilment centres to your doormat is, for the time being, still crucial and evident. Human workers don’t just lift items off the shelves at the centre, they’re also responsible for packing products in boxes (the size of which is predetermined by an algorithm) and stuffing packing paper and vouchers in along with the purchased item.

Several rows of workers tasked with this part of the process are busily filling boxes, keeping packages moving onto conveyor belts at a steady pace. Later, of course, these packages will be driven to homes and businesses up and down the country by human drivers for delivery. Still, with Amazon now experimenting with the idea of delivery-by-drone, it’s not clear for how long exactly that part of the chain will go unmodified.

Items on shelves are not organised logically, by category, but seemingly at random (Credit: Rex)

When it’s time for a break, a notification sounds and the workers flood dutifully to the canteen, which seats at least 100 of them easily. There they enjoy the mid-shift break, eating, reading, chatting quietly.

“Work Hard,” said the sign near the entrance. On the warehouse floor, it’s apparent that the largely anonymous people who handle your online purchases take the first part of this mantra seriously.

Amazon's software tracks progress of your item delivery at every stage (Credit: Getty Images)

Workers often collect more than 1,000 items per day (Credit: Rex)

Will human pickers eventually be replaced? (Credit: Rex)

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Opening Case: Who Makes the Apple iPhone?

1. How has Apple capitalized on the globalization of production? What advantages does manufacturing in China offer the company?

Hundreds of different parts in the Apple iPhone are designed and manufactured in foreign countries such as Germany, Taiwan, Korea, Japan, Europe, Africa, and Asia and then the parts are transferred to the Taiwanese multinational firm, Foxconn, to assemble

Except the lowly labor costs, which occupy a small proportion of the total value of the Apple iPhone, there are three the various advantages. The Chinese subcontractor can respond quickly to being appropriate for requesting from Apple when it wants to scale production up or down. The subcontractor is easy to hire more engineers in China to oversee than to hire the engineers in the U.S., and finally, Apple through the subcontractor can easily find the components for its products since other factories are within close proximity to one another.

2. Why do you think Apple continues to keep activities like product design, software engineering, and marketing in the United States?

I think Apple continues to keep the activities in the United States because it wants to keep the secret of technology, the trade name of a U.S. company for competition, and under the effects of the laws. Nowadays, the global competition is more violent, so the secret of technology and business is kept strictly. Therefore, it is better if it is produced in the motherland in where the company headquarters. Second, the U.S. is still a pioneering country in the software technology, so that helps the company is more competitive on the global market.

Closing Case: Legal Outsourcing

1. What are the benefits to a law firm of outsourcing legal services to a foreign country? What are the potential costs and risks?

The benefits are to lower the payments for a lawsuit, and concurrently, the clients also compel the law firms to find the lower legal costs by means of outsourcing.

The potential costs are common costs of law services. The potential risks are risks of legal businesses when their costs are expensive, but their efficiencies are low. By outsourcing, the legal costs are lower, so they make an opportunity to expand the legal market through the potential costs lower, concurrently, the potential risks of the law firms are minimized.

2. On balance, do you think that this kind of outsourcing is a good thing, or a bad thing? Why?

A good thing is to lower the legal cost, but the efficiency is improved because the legal firm often used the fresh law graduates to do grunt work, low efficiency, but their costs are expensive because the firm always wants to raise its profit. In the case, the clients get more benefits, so the services will increase and be much more common.

A bad thing is the law students are more difficult to find a job after they graduate. They must compete with experienced lawyers who are paid lowlier in other countries. As the textbook, India is a country which has the common law inherited as similarly as the U.S.'s common law, and its education helps students speak English well. Those are two crucial reasons to compete with the U.S. students.

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Closing Case: The Polish Surprise

QUESTION: How was Poland able to avoid the worst effects of the economic crisis that gripped most of Europe during 2008-2009?

Poland, which avoided the impacts of the economic crisis during 2008-2009, had the subjective and objective reasons. In 1989, the country had a first democratic government after some decades under the totalitarian Communist regime. The new government opened its market for the international trade and foreign investment, as well as privatized state-run companies. After some years, the country became a major exporter and was considered as a country had the highest growth in the region.

The subjective factor was Poland's government strictly controlled public debt without allowing to expand, regardless of the status of recession could happen. Some other counties in the region, such as Greece, acted otherwise, and as a result, the foreign investors ran away its markets to lead the public debt continued to rise and the currencies down. This caused the full-blown economic crisis, which needed helping of international organizations.

The objective factor was the early tight monetary policy helped the country avoid asset price bubbles. Although before that it was criticized, it was right at the stage of 2008-2009 crisis. Another objective factor was the country benefited from the economic stimulus of the neighbor Germany, which had a policy to exchange an old car for a new car.

QUESTION: From the perspective of international business, what is attractive about the Polish economy? What are the weaknesses and risks associated with doing business there?

The attractiveness of the Polish economy is the country has continued to change its policies to be appropriate for the market economy and the foreign investments, such as simplifying tax laws, reducing tax rates, and removing bureaucratic obstacles, as well as intensifying to privatize the state-run companies which have been often inevitable consequences of the post-Communist countries. The weaknesses and risks to do business in the country are the unemployment rate is high, and the tax system is complex. However, as above saying, the struggling of the democratic government can overcome the difficulties.

Management Focus: Starbucks Wins Key Trademark Case in China (p. 53 (custom)/p.103 (standard)

Discuss the concept of property rights protection and why it is so important to companies. What does the court ruling against Xing Ba Ke mean for other companies that are already doing business in China, or are considering entering the market?

The property rights protection is to protect the possession and exploitation of the property. The protection is based on the culture's customs and the laws of the country because the laws cannot cover all the culture's customs and behaviors of everyone. What is right or wrong, accepted or unaccepted sometimes is based on the modal behaviors rather than the rules of the laws. For companies, their tangible assets are able to see, touch, and evaluate them, but the intangible assets, such as trademarks, copyrights, and patents, are intelligent properties which affect the success or failure of a company, especially today, when the economy has significant features of knowledge and high-technology. Therefore, culture's customs which haven't respected the intelligent property rights will be easier to violate the rights intentionally or unintentionally.

By the end of the suitcase of Starbucks, when the court ruled against Xing Ba Ke, it shows that China is following international laws. Perhaps, in the case, China was being pressurized by the foreign government and WTO to respect the intellectual property rights, but the beginning is good for all parties participating in the game of global business. It is not only warning to the "clearly malicious" companies, but also encouragement over which companies are trading genuinely or are considering entering the market. China's market is very big, so the China's responsible behavior would help to attract more than the foreign investment.

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Opening Case: Burberry’s Global Brand Strategy

1. Comment on Burberry’s target customer base. How would Theodore Levitt characterize Burberry’s approach to global markets?

Theodore Levitt believed that multinational businesses would be replaced by the global corporations, and at that time, global markets were for the standardized global products. The reason of the argument is increasing development of technology, such as communication, transport, and travel. It seems to be right in a way of Burberry's approach over the fashion products. It applied the digital technology to promote marketing campaigns concurrently in the world's wealthy fashion markets. After the success of two American CEOs to transform Burberry, which attempted to build a unified global brand, Burberry's revenue increased as a right assertion of Levitt's argument.

2. How does Burberry’s target market help the company appeal to new customers? What are the drawbacks of this approach?

Burberry hired the world-class designers to renew its brand name and to carry out a strategy directing its fashion products toward a younger hipper demographic and being conscious of fashion. To reach the potential young customers, it also focused on the world's wealthier cities. For the products, it built a unified global brand and opened many retail stores to control the unified global products. Finally, it applied the digital technology to advertise products concurrently over its shows in fashion cities. Also, it creates a sales website to sell its products directly and uses the social network for its customers' feedback. However, Burberry can take the risks of keeping away from older consumers when it is focusing on a younger generation or making its products more accessible to the tech-savvy consumer. The younger generation is often unstable. That means that what is a fashionable product today, can be unfashionable the next day.

Closing Case: Domino’s Pizza

1. Do you think it is wise for Domino’s to stick to its traditional “home delivery” business model, even when that is not the norm in a country, and when its international rivals have changed their format?

I support for using its traditional “home delivery” business model, but it should have an improvement father based on the technology. It can use a table with its surface being a touch screen. The touch screen is a computer equipped software to link to a computer server to order. Its customers can sit at the table and wait for their turn to take the order.

2. What do you think Domino’s does from an organizational perspective to make sure that it accommodates local differences in consumer tastes and preferences?

Domino’s has not unified its products and allows local stores to change a little bit of products so that it creates a better fit with the local preferences. For example, Domino’s has made minor changes to its menu to be appropriate to local preferences like more spicy and vegetarian foods offered in India. In Japan, its store offer premium toppings like foie gras, snow crab, or Mangalitsa pork with Bordeaux sauce.

3. How does the marketing mix for Domino’s Pizza in Japan differ from that in the United States? How does that in India differ from the U.S. marketing mix?

If considering Domino’s Pizza in the U.S. market is normal and traditional, the following is some differences in the Japanese market and the Indian market. In Japan, premium toppings are offered because the Japanese customers pay attention to the appearance of the products. Similarly, although standardized, changes of products are made at the local level, such as the heart-shaped pizzas used for Valentine’s Day and Mother's Day in Japan.

In India, a special spicy or vegetarian option is available. Although managing to keep the basic distribution strategy, Domino’s changed the way of its distribution properly to the local market, such as it uses mopeds to distribute, instead of cars.

4. What lessons can we draw from the Domino’s case study that might be useful for other international businesses selling consumer goods?

It seems Domino’s has been successful in the international market when it has created a right balance between keeping its basic method and earning the benefits of standardization, but at the same time, responding to changes in tastes and preferences of the local markets. Not to standardize fully as Levitt's proposal and not to customize fully to mislay the brand seems as a way to maintain a strong brand in the market.

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Opening Case: Making the Amazon Kindle

1. What were Amazon’s objectives with the Kindle? Why did the company decide to outsource much the product to companies in Asia rather than build its own production facilities?

Amazon’s objectives are the attempt to produce the Kindle with low price, high reliability, high functionality, and design elegance. Amazon hopes to able to compete with competitors and turns the Kindle into a digital library for everyone. A fact that Amazon decides to outsource almost its products in Asia is Amazon's strategy. Building Amazon's own production facilities enables to increase costs and decrease its competition while its priority is low price.

2. How did Amazon choose its suppliers? What does your response tell you about finding optimal suppliers? How does today’s almost instantaneous communication facilitate Amazon’s production strategy? What risks does Amazon incur as a result of its decision to outsource to foreign suppliers?

Amazon chose its suppliers based on their considerable expertise, and they had to be efficient and reliable manufacturers. For example, designing was fulfilled in a lab in California, where is seen as the high R&D expertise. I think finding an optimal supplier is not easy. Maybe Amazon shows requirements based on its objectives to challenge the suppliers, and then which suppliers prove to meet the requirements will be chosen. In the next step, Amazon will negotiate with chosen suppliers about cost of production because low price is its important goal. Today’s almost instantaneous communication helps Amazon catch instant information from production to sale, as well as control the transmission of materials and products from a point to another point in its production and distribution chain. The risks can be late deliveries and poor qualities because its suppliers can be affected by human resources or other changes in their country.

Closing Case: The Rise and Fall of the Indian Automobile Industry

1. What are the attractions of India as a base for producing automobiles both for domestic sale, and for export to other nations?

India is a large country and developing, so it has a potential big domestic market for all goods, including cars. It also has a labor force with high skills, productivity, and low price in comparison with a labor force of other developed nations. The labor force contributes to the automotive field not only to manufacture, but also to design automobile. The features are the attractions of India to produce automobiles for domestic and export market.

2. Both Hyundai and Nissan made their investments in the southern Indian city if Chennai. What is the advantage to be had by investing in the same region as rivals?

The investments of rivals, Hyundai and Nissan, in Chennai have advantages. For example, they create a chain of the automotive manufacturers and parts suppliers with high quality and low cost to supply for the rivals. The competition fosters to create a proficient workforce to contribute to the companies. For example, engineers and suppliers are attracted to the region to create it stronger.

3. What are the drawbacks of basing manufacturing in a country such as India? What other locations might be attractive?

In the area of India, the poor road and traffic are an effect of manufacturing automobile because it causes the practice of the just-in-time difficulty to implement. The failure of the just-in-time leads to the local parts suppliers to be difficult to follow the same high-quality standards, a common requirement of automobile manufacturers. The companies could avoid some of these drawbacks by finding a production location where the infrastructure is better developed, however, the companies may also be burdened with higher costs.

4. If Hyundai, Nissan, their suppliers and other automobile companies continue to make investments in the Chennai region of India, how might this region evolve over time? What does this suggest about manufacturing location strategy?

When automobile companies continue to invest in Chennai in India, the region can develop into the Detroit of India, where many global automobile companies present at here and have the network of suppliers and supporting industries established well. These factors can change over time, so the manufacturing location strategy should consider the importance of the country factors in the choice of production location. Consequently, the companies should continually reevaluate their manufacturing strategy.

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Opening Case: JCB in India

1. Why do you think JCB chose to enter India via a joint venture, as opposed to some other entry mode? Why did JCB not simply license its technology to Escorts?

At the time of 1979 JCB investing in India, whose rules didn't permit foreign companies to invest directly, so JCB had to invest under a joint venture with a company in India, Escorts. Escorts and JCB invested a corresponding rate of 60% and 40%. The joint venture manufactured backhoe loaders to sell in India. JCB didn't license its technology to Escorts because it feared to lose its valuable technologies, which Escorts is the biggest company could acquire the know-how to become a direct competitor in the future. Even during the joint venture, JCB also hesitated to transfer the valuable technologies because it feared to leak out the know-how when it was not enough authority to control the joint venture.

2. What were the benefits of gaining full control of the Indian joint venture in 2002? Can you think of any drawbacks?

After gaining full control of the joint venture in 2002, JCB raised its investment in India, such as building a second factory, expanding its dealer network, localizing production. Especially in 2007, based on the prediction of the global economic crisis, JCB expanded the original India factory in Ballabgarh and made major repairs. Its amount of the dealer network increased twofold in 2011, and concurrently, it also localized production of the parts more than 80%. The process worked, so it kept costs low, and as a result, its revenue increased tenfold in India. A drawback that can affect the profit of the investors is changes of foreign exchange rate. If India rupee loses its value in comparison with the pound sterling, the profit of the investor in British will decrease.

Management Focus: Tesco’s International Growth Strategy

1/ Why did Tesco’s initial international expansion strategy focus on developing nations?

The Tesco's international expansion strategy focused on developing nations to avoid strong local competitors existing, but Tesco also saw the strong growth potential of retailing market of the nations in the future.

2/ In Asia, Tesco has a long history of entering into joint venture agreements with local partners. What are the benefits of doing this for Tesco? What are the risks? How are those risks mitigated?

In Asia, Tesco's great experiences over joint venture agreements with local partners help it get more advantages in negotiation with other Asian partners to enter the markets, especially entering the large Chinese market. Surely, Tesco understands strong and weak points of the partners to bring useful assets to the ventures. The understanding helps to increase the chances of success both Tesco and its partners. The risks can be loss of control if its stake is less than its partners, and the partners acquire understanding over the local retailing market or steal its ideas. In other case, if the partners go bankrupt, they also affect Tesco with debt. The risks can also come from the government, when the ventures concern state-owned companies. To mitigate the risks, Tesco should involve a rate of the investment of either 50% or 100%.

3/ In March 2006, Tesco announced that it would enter the United States. This represented a departure from its historic strategy of focusing on developing nations. Why do you think Tesco made this decision? How is the U.S. market different from others Tesco has entered? What are the risks here? How do you think Tesco has been doing?

Tesco's traditional strategy focuses on developing nations with weak indigenous competition, so it represents a departure when it announced that it would enter the United States. The way is a traditional strategy which it has used in the developing nations. The U.S. market is more competitive than others Tesco has entered, so it has used Tesco Express as a way to avoid the head-to-head competition. The risk is the local U.S. competitors can win Tesco in the market. However, it seems the strategy is successful when it avoids confronting the competitors, and then it learns from the experiences in the crowded U.S. market to apply for its traditional markets in the developing nations.

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Opening Case: Ford’s Global Strategy

1. Describe Ford’s international strategy prior to the arrival of CEO Alan Mulally in 2006. What were the advantages of this approach? What were the drawbacks of the company’s strategy?

When CEO Alan Mulally participated in Ford in 2006, he realized a product which was produced in Europe was more different from the product produced in the U.S. It meant the product was similar to each other, but it was different from the designs, parts, and processes of the plant. The difference was to satisfy the customers' various preferences and tastes, being a style of common thoughts. It made a feeling of satisfaction for the customers. What if the products satisfied both customers in Europe and the U.S, but were still produced in the different ways, implying for Ford Focus. It seemed Ford moved in a rut of the thoughts. The Mulally's approach could get decreased costs of production based on the advantages of the economy of scale. However, it needed to restructure the Ford's organization, and it could decrease the diversity of the products.

2. How did Ford’s international strategy evolve after Alan Mulally took on the leadership role at Ford in 2006? Why did the company change its approach to foreign markets? How will Ford’s new strategy help the company compete going forward?

Mulally realized the same product, such as Ford Focus, was produced in different ways when it was sold in the Europe and the U.S., so he thought of Ford's international strategy by the unification of the producing process in the different markets. And then the global financial crisis happened in 2008, as well as Ford's care came from the competition with other firms in cheap car markets of China and India. Both incidents strengthened the Mulally's approach and urged Ford to carry out Mulally's One Ford strategy, being a car platform used for every Ford plant in the world. The strategy could help Ford to decrease costs of production in the global market, inherit experiences of plants in different places, and strengthen the competition in new market such as China.

Management Focus: Local Responsiveness at MTV Networks

1. How would you characterize MTV’s initial strategy in Europe? Why was the strategy unsuccessful?

MTV's products are a style of culture, such as using languages, stimulating preferences and tastes, but it was subjective to lead the initial strategy didn't understand the tastes of its audiences. It seemed it brought American programs to Europe without proper changes for its audiences. Although the European audiences liked the programs, they also more liked local programs with local tastes, produced by local competitors. Therefore, the strategy failed.

2. What type of strategy has MTV implemented today? What did MTV learn from its mistakes in Europe? How did it apply this knowledge to other markets?

Today, MTV has implemented locally proper programs to attract the interest of its audiences. The localization has gotten the audiences back from the local competitors. MTV learned a great lesson from its mistakes in Europe when it realized its programs lacked the local taste and preference, a significant factor of an entertainment program. After that, it changed its strategy from 1990s. It has produced the programs with more local contents, although the programming ideas have stemmed from in the United States. From then on, when MTV invested the programs in other countries, such as India, Italy, and Brazil, it has used the local language, such as Hindi and English, Italian, and Portuguese. Also, "MTV Kitchen" follows the tastes of Italian, and "Erotica" and discussing sex for the youngsters broadcast in Brazil. Through the new strategy, MTV has gotten the audiences back.

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Closing Case: Billabong

1. Why does a fall in the value of the Australian dollar against the U.S. dollar benefit Billabong?

Billabong locates in the Australia and is a big exporter its products to the United States. Therefore, its profit is calculated in the Australian dollar over gathered foreign currency depending on an exchange rate. The foreign currency is the U.S. dollar, so if the Australian dollar falls in the value against the U.S. dollar, the value of gathered Australia dollar becomes greater than after exchanging from the U.S. dollar. Therefore, Billabong is enjoyed.

2. What might Billabong have done in order to better protect itself against the unanticipated rise in the value of the Australian dollar that occurred in 2009?

In 2008, when the Australian dollar fell in the value against the U.S. dollar, Billabong was enjoyed from changes of exchange rate between the two currencies. Billabong should accumulate its profit from the changes of exchange rate to provide for adverse changes if they happened in the future. It is a general principle of the accounting. In 2009, when the Australian dollar's value increased against the U.S. dollar's value, the accounting department would recalculate to compensate for the deficit from the reserve profit of changes in exchange rate in 2008. Only if the reserve profit cannot compensate for the deficit by the changes of the exchange rate of foreign currency, Billabong should increase its product's price to compensate for the deficit. It seems the increase of product price should be a final solution of companies in the market economy.

Management Focus: Volkswagen’s Hedging Strategy

1. Explain how Volkswagen’s failure to fully protect itself against foreign exchange fluctuations had a negative effect on the company. What can Volkswagen and other companies learn from this experience?

The problem of the exchange rate of foreign currency is unable to predict the rate's unusual changes. It seems like a gamble rather than limited in range of calculation. Volkswagen knew the problem, so it bought a forward contract to stabilize exchange rate for dollars at the future time. It seemed Volkswagen executed hedging in many passed years, and it realized the expense of the hedging was not cheap. And perhaps the euro would decrease its value against the dollar. Therefore, in 2003 it cut to decrease the expanse of the hedging down at 30%, instead of 70% as every passed year. Unfortunately, the decision caused a cost of about 1 billion euro stemmed from the fall in the value of the dollar against the euro. After failing, Volkswagen bought a forward contract for the dollars to keep the stably exchange rate in the future. This is a difficult lesson to learn. Simply, people say exporters should buy the forward contract for foreign currency in their export market, as Volkswagen did after failing, regardless of predicting of the foreign currency values. Or, perhaps the exporters should exchange the foreign currency at once as possible in short period of time in the foreign market, without waiting for the end of the fiscal year.

2. Volkswagen saw its fourth quarter 2003 profits tumble 95 percent after losing €1.2 billion in currency losses after the euro rose relative to the U.S. dollar. Why was Volkswagen so vulnerable to the change in the value of the euro relative to the U.S. dollar?

Volkswagen is a company located in the Germany, manufactures its products in Germany, and then exports them to the United States. Therefore, its profits are drawn in the balance sheet in euro at the end of the fiscal year. That is why its profit earned in the United States has to be exchanged from the U.S. dollar for the euro, even thought the exchange causes Volkswagen much vulnerability. If Volkswagen invests a plant to manufacture in the United States, the profit transfers back to Germany still vulnerable by changes of the exchange rate.

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Opening Case: Exporting Used Batteries to Mexico

1. Are U.S companies that export used batteries to Mexico and follow local regulations in their recycling acting in a socially and ethically responsible way?

If U.S. companies which export used batteries to Mexico cause serious diseases over children of lead exposure, the export action is not ethical and lacks social responsibility. According to the textbook, New York Times reporters have documentations of lead exposure children because the children are living nearly the plants which recycle batteries by rough technology. The plants also cause a high level of lead pollution into the air and soil around them, so that it will stay subsequent effects. I think the ethical concept is easy to lead arguments. The plants can plead from the gap of regulations in Mexico, or they require a concrete witness which leads the serious diseases, even challenging to proceedings.

2. Should the companies be held to the higher standards the United States demands?

The U.S. companies should follow the United States demands which limit lead pollution, including export batteries and recycled batteries at foreign countries. First, it is a case of ethics and social responsibility. Second, it is a U.S. trade mark which is believed on the world. The belief built is not only the quality but also the source of a product. Customers can boycott the goods whose source is from extremely low pay, 12-hour workdays, labors affected by toxic chemicals, and environment pollution. Although lead pollution only causes disease over children living around the plants, people don't know whether it is the infectious disease or the genetic disease over the next generation. Generally, environment pollution is a global problem, and it doesn't have the border.

Closing Case: Working Conditions in a Chinese Factory

1. What enables the owners of the Metai factory profiled in this case to get away with such awful working conditions?

I think the Metai's owners constrained every unfavorable information of the harsh working conditions to avoid checking of the government. The workers could not contact with the appropriate people to report the harshness of work in the factories. They can be punished or corrupted to keep calm. Moreover, I guess the workers don't have their own labor union which is independent without under a control of the government. Usually, the dictatorial government feared the independent unions because they can topple the government as similarly as the Polish trade union - Solidarity - toppled the Polish communist government in 1989, beginning of collapse of Communism in the countries of Eastern Europe.

2. Should U.S. companies like Microsoft, Dell, and Hewlett-Packard be held responsible for working conditions in foreign factories that they do not own, but where subcontractors make products for them?

I think Microsoft and the other U.S companies are not held responsible because these foreign factories don't work under the U.S. companies' possession and control, otherwise, process under a quality standard and are contracted by these companies. If they buy a part of the factories and participate to control them, their concern and responsibility will stronger, and they can be held responsible for the labor conditions. I think the U.S. companies shouldn't purchase the factories, but they should get involved because of the ethical responsibility and because they have the right to claim the right source for their processed products. They can use their money which is keeping the factories running to get involved.

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Management Focus: Foreign Direct Investment by Cemex

1.

Cement is a heavy product, so if being exported, it will be burdened with a big expense of transportation and lead to increase its cost. Moreover, when being exported, it can be added tariffs from importing countries. The importing countries often impose the tariffs to increase cost of imported goods, protect domestic producers, and also to promote the international companies to directly invest into the countries. By investing directly from the foreign countries, it helps to increase jobs, competition with domestic companies, and stimulus of economic development, so the countries often encourage foreign direct investments, rather than imports.

For features of the Cemex, it efficiently developed a system of information technology which could control the production and distribution of cement, which other companies could not be more competent than. The system helped Cemex to be good at customer service, information technology, marketing, and production management. Based on the advantage, Cemex could transfer its skills to an acquired company to improve its performance. Clearly, the acquisition was faster to execute than to establish its own operations.

2.

The system of information technology of Cemex helped to be lower costs and better customer services, so it would bring the system to host countries. Concurrently, it also brought the efficient production. Moreover, as a foreign direct investor, Cemex brought to host countries capital, management sources, and jobs.

It seemed there was Cemex's dispute with the Indonesian government because Cemex had been promised a majority position in the state-owned cement company, but without being fulfilled. Perhaps that was why the Indonesian government was suspicious of the company's intentions. Surely, the dispute affected Cemex's operation in the Indonesian market.

I don't know if Cemex tried to stay in the Indonesia. However, I think a promise also has a value as a contract. Breaking the promise cannot be accepted, but it happened, so Cemex should pull out.

Opening Case: Foreign Retailers in India

1.

For a big amount of the population, the Indian retailing market has a big potential to develop, which was estimated of $500 billion at the time of publishing the textbook. Moreover, the amount of companies which have participated in the retailing market was only 6%. The proportion was too small if compared with the corresponding proportion of China, Brazil, or the United States.

The poor road system was a challenge for the companies because it would lead to the distribution only based on the single trucks which would not gain economies of scale and scope. Another challenge was lack of support of left-wing politicians because they believed the large retailing companies would cause a loss of jobs and small retailers.

2.

Advocates of investment of the large retailing companies believed the companies would positively affect on the India's distribution system such as decreasing the logistic costs. The companies would invest cold storage facilities and warehouses to avoid damages of agricultural products which would bring benefits to farmers. Furthermore, India needs foreign direct investments as a way to develop its economy.

However, the style of coalition government often had changes to avoid its own political risks, which would be serious challenges for investors. Moreover, I think India is a country of complex culture and religion which could have disadvantage effects for businesses.

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Country Focus:

1.

For the European Union, the beef which stemmed from cattle cultured growth hormones could cause the health consequences, such as hormonal irregularities and cancer, because it thought the culture was unnatural and unknown. Known the hormones are naturally extracted in animals, and the scientists agreed that the hormones don't have any health risk. While many countries, including countries which have produced big meat, have accepted to use the hormones as a way to decrease costs and satisfy demands of consumers, the European Union has banned applying of the cultural technology in its countries and the importation of the hormone-treated beef. The behavior of international trade didn't satisfy concerned parties in the WTO, such as the United States, Australia, and Canada, so the countries filed formal complaints to WTO finally.

2.

In both the court of first instance and the court of appeal, the WTO ruled against the European Union because its ban over the importation of the hormone-treated beef was illegal, without any convincing evidences to justify the ban. Under the WTO's verdict, the European Union either repealed the ban or was imposed punitive sanctions. The European Union chose to do nothing, so it was imposed punitive tariffs by the United States. The European Union accepted the punitive tariffs rather than repealing the ban on the importation of the hormone-treated beef. I don't know whether or not the punitive tariffs over the European Union affected the U.S. consumers' benefits. On the other hand, if another country could not power to impose the punitive tariffs over the EU, the WTO's verdict became unenforceable.

Closing Case:

1.

There two groups benefitted from the imposition of U.S. tariffs over the tire imports from China. First, after 6 months of imposing the U.S. tariffs, the U.S. tire producers increased their productions of 15% and promised to increase more than their capacity of the production. However, they didn't seem to increase the capacity as what they said. Second, some other export countries, such as Indonesia, Thailand, and Mexico increased their tire exportation to the U.S. because their tire cost was lower than the cost of Chinese tire, being affected by the U.S. tariffs. According to the Chinese officials, the groups which suffered from the U.S. tariffs were small and medium-size wholesalers and dealers, which could go out their business, and low-income consumers in the U.S. when the average of Chinese tire cost increased from 10% to 20%. Of course, the Chinese producers also suffered from the U.S. tariffs because the tire exports to the U.S decreased 34% during the same period of the 6 months.

After the response of the U.S. by using the tariffs, the China imposed the tariffs over some the U.S. export products to China. The move caused a complex matter which could be looked like a trade war. I mean the two countries raised and created their tariffs on each other for a purpose retaliated against each other.

2.

I think the United States should file the Chinese tariffs to WTO and require that both parties should comply with and enforce the WTO's verdict, rather than other actions which are like a retaliation each other by using the trade barriers. The fact that the Chinese are raising tariff rates on the importation of the goods of the U.S. is like a retaliation against the U.S. for the tire tariffs, so it has proved that China could potentially be violating WTO rules.

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Opening Case: The Rise of India’s Drug Industry

1.How has free trade and globalization changed the pharmaceutical industry in India?

Adhering to the World Trade Organization is an important step to help India attend the international trade, and as a result, it promotes to change the pharmaceutical industry of India. With rules of WTO, the pharmaceutical companies have to respect to the intellectual property rights, and as a reward, the Indian companies achieve agreements with the Western companies as commercial partnerships in India's pharmaceutical sector. Those have made a big change in India's pharmaceutical industry. Before signing the WTO agreement, India is a country manufacturing cheap knockoff of drugs stemmed from copying Western patents illegal. The violence of the intellectual property rights caused an isolation of the Indian market in the international market, especially the Western market.

2. What factors have contributed to the growth of India’s pharmaceutical industry?

First, the agreements of outsourcing from the Western firms are the production and packaging of pharmaceutical products, while research and development, marketing, and sales activities are kept on the firms' home market. The outsourcing helps the dramatic development over India's pharmaceutical sector. According to the textbook, more than 10 years from 2000 to 2011, India's pharmaceutical export increased more than 10 times, from $1 billion to $11.5 billion. Second, India has an educated workforce with good English and a low level in pay. The workforce and local start-ups experienced a stage of the international pariah in the pharmaceutical market, so they help to make a market of investigation and work in the pharmaceutical products as well as expertise in negotiating with regulatory agencies in Western countries. Third, Indian plants are accepted by FDA to product the pharmaceuticals for the U.S. market, today.

Closing Case: The Rise in Bangladesh's Textile Trade

1.What international trade theory, or theories, best explain the rise of Bangladesh as a textile exporting powerhouse?

Cost of direct labor and allocated overhead are two of the main factors in structure of product cost, so when the costs lows, the product cost will lower. Bangladesh's textile has the two advantages of costs, cost of direct labor and overhead. The overhead is low and efficient by three-quarters of all inputs stemmed from the country which help to save transportation costs, import taxes, and storage costs. According to Ricardo's theory of comparative advantage, if the production of Bangladesh's textile is more efficient in comparison with the textile production in the U.S. and other Western countries, the countries should buy Bangladesh's textile, and the trade happened in stage of the economic crisis in 2008. That helped Bangladesh's exports of textile continued to increase and overcame the stage of the economic crisis.

2. How secure is Bangladesh’s textile industry from foreign competition? What factors could ultimately lead to a decline?

Bangladesh's textile is attractive to the Western countries' importers because of its low cost, and because it also offers a chance for replacing on the imported garment from China, which can be too risky because of as a unique source. However, despite there is a good position in the international market, Bangladesh is still facing some serious challenges over its infrastructure, such as roads, ports, and power generation, which could affect its exports of textile. To keep the advantage, securely, Bangladesh should invest the infrastructure to avoid disruptions which can affect its supplies and discourage the importers.

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Opening Case: Why Did Wal-Mart Fail in Germany?

1.Why did Wal-Mart have such a difficult time connecting with consumers in Germany?

Wal-Mart had difficulties in approaching to consumers in Germany because it used a style of different culture, a US culture, in both managing business and connecting with the consumers. For the management, the managers imposed to use English at management level in Germanic Wal-Mart and ignored cultural differences between Germany and the U.S., such as paying a low basic wage to managers, moving the managers to other positions after a few years, sharing rooms of the executives, nor establishing unions of employees. For the consumers, Wal-Mart made to mislead that a low-priced merchandise are low-value, being an advantage for rivals to identify with American junk. Some Wal-Mart's different behaviors over consumers caused unfamiliar effects because of the cultural differences, such as greeting shoppers when they enter or exit a Wal-Mart store, bagging groceries which customers bought, smiling at shoppers after they checkout. Clearly, in struggling to make familiar with consumers, but imposing a way of behavior, and ignoring cultural differences, Wal-Mart made a serious contrast to its consumers.

2. What could Wal-Mart have done to better meet the needs of German consumers?

To better meet the needs of consumers in German, Wal-Mart should understand and apply proper behaviors over managers, employees, and consumers. What is right or wrong, accepted or unaccepted is different from American habits and culture, so the best way it should spend more time to learn and to adapt to Germanic culture. For its employees, the ethics code is different from different cultures, so Wal-Mart cannot impose the code over its employees if not to be adjusted properly.

Closing Case: Culture and Business in Saudi Arabia

1.What kinds of misunderstanding are likely to arise between an American company and a Saudi enterprise, neither of which has experience dealing with the other?

The kinds of misunderstanding between American companies and Saudi enterprises stem from cultural differences. The Saudi Arabia culture is strictly tied to Islamic values and Bedouin traditions, which lead to habits and customs differences from American's. Those cause misunderstandings which are difficult to deal with. First, Saudi enterprises operate based on the family and friend relationships, rather than the managerial and technical competence. Second, Saudi enterprises make business decisions based on the relationships, rather than experts. Otherwise, American companies behold the relationships negatively. Moreover, the misunderstanding comes from Saudi habits of evaluating trust and the value of time, which also stems from Bedouin tradition. For example, a Saudi enterprise only trusts its partner after a lot of times to meet face to face, or it uses time for meetings and business decisions without precise and hasty. Those cause more embarrassment for the American companies.

2. If you were in a position to advise a Western company that was considering doing business in Saudi Arabia for the first time, what would your advice be?

Surely, a Western company should spend more time learning the Saudi culture and habits of doing business to avoid any misunderstandings which can emerge. The Western company should be patient, rather than evaluating the value of time, because time in the Saudi Arabia is not the best value for the business. Especially, women are less free, so they cannot participate to make a business decision. Therefore, the Western company only talks about business with men. Finally, the Western company should also spend some time to understand Islam, exchange ideas and perceive the pulse of the business and social environment to prepare for a long run of doing business.

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Closing Case: Japan’s Economic Malaise

QUESTION 1: In the 1980s Japan was viewed as one of the world’s most dynamic economies. Today it is viewed as one of its most stagnant. Why has the Japanese economy stagnated?

According to the textbook, there are two reasons to lead the Japan's economy stagnated. First, it is the beginning of the collapse of the stock exchange and of bubble of real asset to lead the deflation, which has lasted more than 20 years, defying all attempts of the government to stimulate the country's economy. The deflation is like a vicious circle, so it seems the more the people and business respond, the more the deflation comes. The attempts of the government didn't bring a better result, otherwise, it led the public debt higher. Second, the Japan's population has an older age in comparison with the working age. It means the amount of people in the working age is decreasing and the amount of the people in the retiring age is increasing, so it leads to a trend of more saving than spending. That continues in the deflationary circle and stagnation.

QUESTION 2: What lessons does the history of Japan over the last 30 years hold for other nations? What can countries do to avoid the kind of deflationary spiral that has gripped Japan?

By the cause of the deflation, technologically, I think the government should find a way to prevent imaginary values of the real asset and shares on the stock market. The too hot development of the economy always contains potential risks of collapse, which is revealed by the market of real assets and stocks, so it is time the government is needed to watch over the manifestation. By a psychological look, I think the government and politicians should rouse continuous changes and innovations in the thoughts of the people and businesses, as well as the businesses are always encouraged for the success in the future when they are bankrupt. The concepts are affected by not only policies, but also culture and political viewpoint of a country.

Country Focus: India’s Economic Transformation

a. What kind of economic system did India operate during 1947 to 1990? What kind of system is it moving toward today? What are the impediments to completing this transformation?

During 1947-1990, the India's kind of economic system was mixed economy. It was overwhelming of the state-owned companies with centralized planning and subsidies by the government. Concurrently, it also permitted private companies operated under policies which seemed disadvantage for the private companies, such as postponing to expand the company and to develop a new product, or causing difficulties for firing workers.

After 1990, India's economy is toward the market economy by some moves, such as the repeal of the industrial licensing system, the expansion of private companies into some sections which were prohibited before, the permission of the investment by foreign companies, the reduction in tariff, and especially, privatization of state-owned companies.

However, India still remains difficulties, such as worrying in competition with inexpensive Chinese products, still remaining a big amount of state-owned companies being less efficient and India's laws causing difficulties for private companies, and especially, obstructing in privatization.

b. Why do you think India is developing strength in these areas? How might success in these industries help to generate growth in other sectors of the Indian economy?

The software development jumped from $150 million in 1990 to $70 billion in 2010, occupying about 5.1% of GDP. Moreover, in the pharmaceutical industry, India is credible in the global market. The figures indicate the India's economy is developing strength in these areas. When these industries succeed, they contribute significant taxes to the India's economy to help for development of other sections.

c. Given what is now occurring in the Indian economy, do you think the country represents an attractive target for inward investment by foreign multinationals selling consumer products? Why?

India has a second population in the world, so it is attractive for foreign investment in selling consumer products. However, if there is a decreasing of the tariff, China's inexpensive products will overwhelm the Indian market. This will affect employment in India and make it become an importing country. That's why political oppositions are opposing reducing import tariffs.

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