Pedagogy Newsletter

    – A Periodic Publication for Teaching Resources – 

The following Current Concepts in IB issues are intended to provide international business educators with cutting-edge, pedagogical tools for important contemporary and evolving IB topics.  They are intended for classroom use as a supplemental resource for your teaching. Each issue contains a brief summary of the topic, PPTs, exercises, links to videos and topic discussion items.

Global Project Teams

Advances in technology have made it time and cost effective to organize and manage dispersed employees, and have increased the role of project teams in organizations.  Unfortunately, studies show that between 27% and 70% of all project teams still fail to meet their goals!

In this edition of Current Concepts, we take a closer look at how educators can help students prepare to effectively work in project teams.

The rich reference materials in this newsletter include a case study on the failure of the Airbus A380 Global Project Team.  Also included is a virtual, global project team exercise that can be conducted in the classroom, as well as a presentation and other documents for building effective project teams.

As always, we welcome your feedback and suggestions.

Sincerely,

Tamer Cavusgil, Gary Knight & John Riesenberger     

This is the 19th Issue of 'Current Concepts in IB' 
For past issues of this newsletter please click HERE

 

Even before the global COVID-19 pandemic hit and many people were forced to work from home, 70% of business professionals were working remotely at least one day per week.  24% of employees spent 80% or more of their time working remotely and participating in many virtual meetings and virtual project teams¹.   It's safe to say this number only increased in the last year.

A primary goal of today’s educators is to prepare students for employability and success in the workplace, including working in project teams.

Student experiences with classroom project team exercises have been mixed.  A recent survey indicated several reasons for the student’s negative reaction:

  1. Teammates not doing their fair share of the work,
  2. Determination that the projects were considered busy work,
  3. Feelings that the classroom projects were poorly designed with inadequate instructor support, and
  4. Difficulty meeting with project team members outside the classroom due to conflicting schedules.

So, what competencies (skills) are required to ensure project team success?  We propose that these fall into five categories:  a) team effectiveness, b) cross-cultural proficiency, C) stakeholder communications, d) project planning and e) technical project management.

We have provided more details on each of these competencies in a short PowerPoint presentation, which you can access to through this link. The presentation also includes information on the rationale behind developing strong project team skills, statistics on failure rates, among other information.

1. DeRosa, Darleen. The Top 5 Reasons Why Virtual Teams Fail (March 25, 2019)

The following two case exercises were designed to be carried out by project teams:

CASE STUDY ‘The Airbus A380 Design Project Team’
Airbus first launched the €9.5 billion ($10.7 billion) A380 program in 2000. The first aircraft was delivered on October 15, 2007 with design and production several billion euros over budget.  Major design work was conducted in Hamburg, Germany with production in Toulouse, France.  There were issues of compatibility between the two plants and one consequence was that design specs could not flow electronically between both plants.   As a result, when it came time to install hundreds of miles of wiring cables into the aircraft, they failed to fit.

This case examines team effectiveness, team planning, technical project management, cross-cultural proficiency, risk tolerance, member identity, unit integration, reward criteria, and means versus ends orientation.  Full details of the case, including background for instructors and student handouts, can be found here.

GLOBAL PROJECT TEAM EXERCISE  ‘Reynolds EV Battery Corporation'  (fictitious company)
This classroom exercise involves a virtual team meeting with students participating via ZOOM, MICROSOFT TEAMS or other technology.  Individual students (2-3), representing remote team members, will locate in different areas around the building or campus!  The ‘Corporate Headquarters Team,’ (2-3) will be in the classroom.  Also in the classroom will be the remainder of the students who will form the “Observation Team.’

Each of the Student Team participants will receive a ‘Background Handout’ and a ‘Specialized Sheet’ which is UNIQUE for the part they will play.  All the Observation Team Students will receive a ‘Background Handout’, ‘Competencies/Skills Summary Sheet’ and an ‘Evaluation Sheet’.  Materials for this unique case can be found here.

 


Project Teams can be organized around virtually all topics in our textbook and is a very appropriate way to help prepare students for a career in international business.

Here are some resources that can help you run successful project teams in your classroom.

Reference materials 

Academic articles 

  1. “Wiring Loom on Airbus A380 Test Aircraft 2014” Hassan Zerrouk (2014) Length 0:47
  2. “Most Common Project Management Challenges” OrangeScrum (2018) Length 3:20
  3. Managing Diverse Remote Teams SkillSoft (2020) Length 3:07
  4. Optimizing Virtual Teamwork Percipient Partners—Madeline Boyer (2016)  Length 4:30

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
CKR5 is available as a digital rental, hardbound rental and hardbound purchase.  Prices start at $39.96.  Instructors can contact their Pearson representative for a free Instructor’s copy. Contact us directly with any questions or concerns. 

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Team-Based Learning

The importance of building strong and diverse teams who can work together efficiently and collaboratively (online or in-person) has arguably never been more important for success in IB.

The myriad of complex challenges that international businesses now face, from supply chain issues, to restrictions on movement, to uncertain demand for products and services, all call for well-functioning teams.

Learning how to collaborate effectively in multi-cultural teams starts in school. In this issue, we take a closer look at the tools, best practices and resources that are available to facilitate Team-Based Learning, both in the physical and virtual classroom.

As always, we welcome your feedback and suggestions

Sincerely,

Tamer Cavusgil, Gary Knight & John Riesenberger     

*  With thanks to Dr. Margaret Fletcher, Sarah Honeychurch and Iyke Ikegwuonu from the University of Glasgow for helping prepare this edition of Current Concepts in IB.

This is the 18th Issue of 'Current Concepts in IB' 
For past issues of this newsletter please click HERE

 

Watch a recent CIBER Webinar on 'Team-Based Learning in IB programs' by the authors of this newsletter HERE

Team-Based Learning (TBL) was first developed at the University of Oklahoma in 1979 by Larry Michaelsen, in order to address the issue of increased class sizes.  It has since gained widespread attention and adoption and is now used across all levels of education.

In 2020, many educators had to adjust and rewire TBL learning activities for online teaching.

Yet, even as the methods changed, the principles of TBL remain the same, which is technically defined as “collaborative learning that uses a sequence of individual work, group work and immediate feedback to create a motivational framework in which students increasingly hold each other accountable for coming to class prepared and contributing to discussion.”

Benefits of TBL are many, including better engagement, reducing freeloaders, building learning communities, increased accountability, inter-cultural learnings (where possible) and, importantly, higher order thinking skills in preparation for life after school.  Problem solving, collaboration, engagement and accountability are all key to successful teams AND to successful careers.

Key features of Team-Based learning approach are

  1. Properly formed and managed teams
  2. Well prepared students.
  3. Authentic learning
  4. Accountability
  5. Feedback

To learn more about the team-based building approach, including an overview of the different stages of Team-Based learning, application activities and peer evaluation click here

Team-Based Approach Case Study – Brompton Bicycles

This case is approximately 2-hours, comprising an hour of pre-reading/quiz and another hour of in-class (live online) session.   To begin with, have your students review the following 2-page case about Brompton Bicycles  (from: Burns, P., 2018. New venture creation: a framework for entrepreneurial start-ups)

To ensure students – and each team – are prepared for in-class activities, the next stage is done through a virtual quiz, consisting of ten multiple-choice questions.  This stage, better known as Individual Readiness Assurance Test, or iRAT, measures the preparedness of students for the live discussion. The online quiz can be easily prepared through a tool like Kahoot, and should first be completed individually and then as a team, each time saving the answers.  Results show that students tend to do better in groups than as individuals.  The iRAT questions for the Brompton Bicycle case, in the form of 10 multiple choice questions -  can be found here

Once the iRAT is complete and students come back to class, have them watch this video about Brompton bicycles - and discuss the following questions as a group, before reporting back to class.

  1. In order of priority A-D, how should Brompton Bicycle adopt the AM options?
  2. Agree in your group, which strategic option should come first; explain why your preferred option is the best alternative.
  3. Use the chat function to declare your priority when back in session.

Additional tips for educators can be found here.  A PowerPoint presentation which introduces Team-Based learning and includes the case study can be found here.

 


Team-Based learning can be applied to virtually all topics our textbook and is a very appropriate way to help prepare students for a career in international business.  
Here are some resources that can help you prepare to implement a TBL approach in your classroom.Reference materials 

Academic articles 

  1. Team-Based Learning at Anglia Ruskin University Business School.
  2. How Team-Based Learning works in practice, by Nanyang Technological University
  3. How Duke School of Medicine embraced Team-Based Learning

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
CKR5 is available as a digital rental, hardbound rental and hardbound purchase.  Prices start at $39.96.  Instructors can contact their Pearson representative for a free Instructor’s copy. Contact us directly with any questions or concerns. 

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

International Marketing

Led by a rise in e-commerce, advances in digital marketing, changing consumer preferences and new cultural trends, the world of international marketing is undergoing a profound transformation.

Connecting with and understanding customers remains the central purpose of marketers worldwide.  However, the future success of international marketers, and of international businesses generally, depends ultimately on how fast marketers adapt to emergent trends.

In this issue, we explore international marketing and the tools, techniques, and frameworks that support international marketers.  We also provide a host of useful links and resources for teaching this important topic.
(btw, we'll shortly share a link to 3-question survey on this topic - thanks in advance for your participation!)

Sincerely,

Tamer Cavusgil, Gary Knight & John Riesenberger     

*  With thanks to Billur Akdeniz, Associate Professor of Marketing at the University of New Hampshire, for leading the development of this issue.

This is the 17th Issue of 'Current Concepts in IB' 
For past issues of this newsletter please click HERE

 

Join us for a free Webinar on 'Understanding Contemporary China'
When:  Date: March 18, 11 am ET
Registration & details available soon through this link!

Join us for a free Webinar on 'Understanding Contemporary China'
When:  Date: March 18, 11 am ET
Registration & details available through this link!

Covid-19 triggered at least a temporary decline in the movement of products, people, and investments. Instead of de-globalization, however, a more accurate depiction of this new era is new globalization.  In this new global environment, services, ideas, data, information, and R&D are increasingly shared across borders, setting the stage for global commerce.

Even before the pandemic hit in 2020, a survey of Chief Marketing Officers (CMO Survey 2019) revealed that they spent over three quarters of their budgets on domestic rather than international marketing.   While this signals risk aversion and a focus on home markets, firms are also investing more heavily in technologies, resources, and capabilities to adapt to the new phase of globalization.

The 2019 survey and a more recent version (Survey 2021) suggest the contemporary phase of globalization is being driven by numerous evolutionary trends. These include the rise in e-commerce and the corresponding decline of brick-and-mortar retailing, the rise of big data and digitalization, subscription-based selling, greater emphasis on experience-based marketing, sustainability, and other trends.

Capitalizing on new technology and increased data, some brands are even combining artificial intelligence with more traditional influencer strategies, in partnership with IBM.

Another key factor in the new phase of globalization is culture, along with the rise of emerging markets and nation brands.  Long a staple of international marketing teachings, the impact of culture can still surprise us. Recently, South Korea has begun promoting and branding their culture in food, music, and entertainment (BTS in Kpop, Parasite in movies, and Bibigo in food)

Exercise 1: Reasons for Failure in International Marketing 

Even the most successful global companies face challenges and struggles in international marketing. Ask students to review examples from companies such as Starbucks in AustraliaTesco in the United StatesMcDonald’s in Iceland or Netflix in India, then ask them to do research and analyze on why these companies failed.  Was it cultural, logistical, lack of market research, or did they pick the wrong market? Based on the answers and the examples, the instructor can classify the reasons for failure and discuss them in conjunction with this HBR article.

Exercise 2: Create an International Marketing Plan 
Separate your class into teams of two or three students and have them work on a mini International Marketing Plan for a (preferably public) company.

  1. Ask teams to conduct market research on the given firm and identify two or three target markets for international expansion. Ask them to introduce this company to the class and explain why they see potential in international expansion.
  2. Ask students to propose a specific entry mode considering the company’s past choice of entry modes and the purpose for the current international expansion.
  3. Ask the teams to develop a marketing plan, including product portfolios, marketing mix, and an evaluation of standardization versus adaptation strategy in the foreign market entry.

Exercise 3: IKEA – Retail Furniture on a Global Scale:
IKEA is the world’s largest furniture retailer with about 400 stores in 30 countries. Ask students to conduct research into the company, and facilitate a classroom discussion around these questions:

  1. Who are IKEA’s key competitors?
  2. What competitive advantages do they have?
  3. Why do they follow a standardization vs. adaptation approach?  Do you recommend that they focus more on adaptation in some markets, and why?
  4. What were some of the initial environmental concerns IKEA faced?   After addressing these issues (video), do you believe they should market their sustainability approach, and why?

 


Discussion on international marketing aligns with numerous class topics in our textbook and the issue can be raised almost any time.In addition, here are some resources:Reference / Teaching materials 

New (!) Book

  • Doing Business in Emerging Markets. Third edition. London: Sage Publications. Cavusgil, S.T., Ghauri, P., & Liu, L.A. 2021. ISBN: paperback 9781526494559, hardback 9781526494566, eBook 9781529760279. pre-order on Amazon 

Academic articles

  1. CNBC - Why Starbucks Failed in Australia
  2. CNBC - Why Netflix is Struggling in India
  3. TEDX - Humor and culture in international business
  4. TED Institute Which country does the most good for the world?
  5. TED Institute - IKEA growing its business while shrinking its emissions
  6. TED Institute - Global Business Next Door

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

The Continuing Rise of China

As China celebrates the Lunar New Year, welcoming the year of the Ox, there is much to be grateful for. China’s economy has weathered the COVID-19 crisis rather well, its GDP per capita is now above $10,000, and 2021 growth is forecast at 8%.

At current rates, this means China will overtake the United States (US) as the largest economy in the world by 2028, five years ahead of previous forecasts.

This growth is not without risks. A trade war with the US, an aging population, limited success of its multinationals abroad, and continued reliance on foreign-made computer chips, are among some of the factors that could hold China back.

In this issue we take a closer look at the continuing rise of China and provide you with links to a host of useful resources for teaching this important topic.

Sincerely,

Tamer Cavusgil, Gary Knight & John Riesenberger     

* With thanks to Professor Edward Wang of Georgia State University for leading the development of this issue.

This is the 16th Issue of 'Current Concepts in IB' 
For past issues of this newsletter please click HERE

 

Join us for a free Webinar on 'Understanding Contemporary China'
When:  Date: March 18, 11 am ET
Registration & details available soon through this link!

For much of the past 40 years, China’s geopolitical rise has been built on a foundation of double-digit economic growth. Even last year, China's GDP grew 2.3%, making it the only major economy to achieve GDP growth. Indeed, China's share of global GDP increased by 1.1%, the largest increase since the 1970s.

While the Covid-19 pandemic put the brakes on international trade, exports from China hit all-time highs, reaching $2.6 trillion. Meanwhile, its imports fell 1.1%, resulting in a $535 billion trade surplus, the highest since 2015.

Global Fortune 500 companies doubled down on China. Even as some declared an intent to diversify their supply chains, China overtook the US as the world's No.1 destination of new Foreign Direct Investment. Big multinationals – e.g., Tesla, Adidas, Walmart, and PepsiCo – expanded their operations, calculating that the benefits of China, as a domestic market and as a manufacturing center, far outweighed potential supply chain risks.

Still, China's economy faces various headwinds, starting with the US-China trade war.  China’s total cumulative FDI still lags far behind the US, and the Chinese economy relies heavily on state-owned enterprises (SOEs). In 2018, the share of SOE capital was 194% of China's GDP, far exceeding all other major economies.

The IMF estimates that the productivity of Chinese SOEs is only about 80% that of their privately-owned competitors. Unless China can increase total factor productivity, its new investment return rate likely will continue to diminish. China's current total factor productivity is only 30% that of most advanced economies such as the US, Japan, and Germany.

China is also aging. By the end of the 2030s, the 20-65 age group will decline by 10%, and the older population dependency ratio will surpass the US by 2035.

But as China enters the new year, there is much to be positive about. As was evident in its COVID-19 response, China’s unique combination of capitalism and state control allows it to adapt quickly to change.

Exercise 1: Tracking sector specific news
In this assignment, students are assigned to follow specific industries in China. Students should research and follow news updates about their chosen industry and share updates with classmates. Students should then submit a portfolio of articles and article summaries at the end of the term, along with an integrative reflective paper.  This exercise can be done individually or in groups.

Exercise 2: FDI Growth in China
Read the article " China Passes US as No. 1 Destination for New Foreign Investment” (or similar articles – see teaching materials below) and discuss the following questions:

  • How did the Covid-19 pandemic affect China's economy?
  • Why did MNEs increase their investment in China during the pandemic?
  • In your view, what are the biggest strengths and weaknesses of the Chinese economy?
  • Do you think China's economic growth is sustainable in the future? Why or why not?

Exercise 3: Debating current hot topics  
Select a hot topic, such as the case of Huawei in the US, the sale of Tik Tok, NBA in China, or the current US/China trade war – all of which have been widely reported in the news.  Assign roles to different students or teams as multiple stakeholders to represent a particular perspective of the issue at hand. For example, for Huawei:
Team A is assigned to represent Huawei (you can further divide the team – one student to represent Huawei China, others to represent Huawei US, Huawei's legal team, etc.);
Team B represents the US government;
Team C represents the US competitors;
Team D represents the US customers.

Reading material and suggested questions must be distributed to students in advance, so they can prepare for the debate.


Discussion on global competencies aligns with numerous class topics in our our textbook and the issue can be raised almost any time.
In addition, here are some resources:Reference materials 

New (!) Book

  • Doing Business in Emerging Markets. Third edition. London: Sage Publications. Cavusgil, S.T., Ghauri, P., & Liu, L.A. 2021. ISBN: paperback 9781526494559, hardback 9781526494566, eBook 9781529760279. pre-order on Amazon 

Academic articles:

  • Feng, J.B., Liu, L.A., & Jiang, C. 2019. Parochialism and implications for Chinese firms’ globalization. Management and Organization Review, 15(4): 705-736
  • Cooke, F.L., Liu, M., Liu, L.A., & Chen, C. 2019. Human resource management and industrial relations in multinational corporations in and from China: Challenges and new insights. Human Resource Management, 58(5): 455–471.
  • Xia, T.J., and Liu, X.H., 2017, Foreign competition, domestic competition and innovation in Chinese private high-tech new ventures, Journal of International Business Studies, Vol. 48, No. 6 (August 2017), pp. 716-739 

  1. The Outlook for China’s Economy in 2021 (Bloomberg, 7mins)
  2. How China's Economy Bounced Back One Year After First Covid Warning? (CNBC, 12mins)
  3. Is America Right to Fear Huawei? (The Economist, 9mins)
  4. Wall Street Moves Into China, Despite Tech and Trade Battles (WSJ, 5mins)

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Global Skills & Competencies

In today’s globalized business environment, managers need to effectively engage with people from all kinds of backgrounds and cultures.  Sometimes referred to as ‘soft skills’, these global competencies can have a hard impact on the bottom line of any company, helping maximize opportunity and minimize risk.

Global competency refers to the ability to navigate, communicate, and connect effectively when encountering cultural differences.  Today, there are a host of cutting-edge assessment tools, trainings, and other resources available to would-be managers to help them prepare for successful international careers.

In this issue we take a closer look at the concept of global competency, and provide you with links to a host of useful resources for teaching this important topic.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

* Consortium includes the University of Colorado Denver, Florida International University, George Washington University, Georgia State University, Indiana University, Loyola Marymount University, University of Maryland, Michigan State University, Temple University, and Texas A&M University.

With thanks to Professor Leigh Anne Liu of Georgia State University for leading the development of this issue.

Note that this is the 13th Edition of 'Current Concepts in IB'
For past editions of this newsletter please click HERE

The COVID-19 global pandemic magnified uncertainty and risks in the global marketplace.  The world today might be termed the new ‘VUCA’ - Volatile, Uncertain, Complex and Ambiguous.

To navigate this VUCA world, managers need to understand cultural differences in values, behaviors, and assumptions.  Not just between regions and countries, but also among people from different racial and ethnic groups, socio-economic backgrounds, and even different religious and political affiliations.

Advances in technology and the proliferation of social media have made it easier to connect with others, especially those who share our beliefs and interests, something which doesn’t always help prepare managers to deal with a VUCA world.  Fortunately, multiple tools are now available to help managers learn about global competencies, including cultural learning and perceptions, relational connections, self-awareness, world orientation, resilience and hardiness, as well as intercultural development stages.

For international business educators, the emergence of this field presents a unique opportunity to integrate global or intercultural competency into the business curriculum as a soft skill, and identify extra-curricular activities to supplement classroom efforts.

For students and managers, developing global competencies will help enhance new skill acquisition, improve motivation, commitment, leadership, and increase the chances of successful expatriate assignments.

Exercise 1: Personal Development Plan 

Select one or more of the assessment tools listed below in the ''teaching materials' section. Have students conduct a self-assessment of their own strengths and weaknesses using one or more of these tools.  Based on the results, ask each student to choose one area of improvement and submit a brief Personal Development Plan. At a minimum, ask them to focus on a target area to work on (e.g., world orientation) and specific actions to take during the length of the course (e.g., seek news from multiple sources, watch foreign movies, etc).  Lastly, ask students to form a buddy system (dyad, triad, etc.) to support each other’s personal development.

Exercise 2 – The Global Career of Carlos Ghosn

As a class, watch this 11 minute INSEAD video from 2008 where Carlos Ghosn speaks about being a transcultural leader.  Ask students to do research on Carlos Ghosn and come prepared the following class to discuss the following questions:

  1. What role did experience play in helping Carlos Ghosn become a globally competent person?
  2. What are his key attributes as a business leader?
  3. What is the update of his legal struggles in Japan and other countries?
  4. How does culture and trust influence his case in Japan?
  5. Are there downsides to developing global competency?

Discussion on global competencies aligns with numerous class topics in our our textbook and the issue can be raised almost any time.
In addition, here are some resources:Assessment tools & teaching materials:

New (!) Book

  • Doing Business in Emerging Markets. Third edition. London: Sage Publications. Cavusgil, S.T., Ghauri, P., & Liu, L.A. 2021. ISBN: paperback 9781526494559, hardback 9781526494566, eBook 9781529760279.

Academic articles:

  • Bird, A., Mendenhall, M.E., Stevens, M., & Oddou, G. 2010. Defining the content domain of intercultural competence for global leaders. Journal of Managerial Psychology, 25(8): 810–828.
  • Bird, A., & Osland, J. 2004. Global competencies: An introduction. In H. Lane, M. Maznevski, M. Mendenhall, & J. McNett (Eds.), Handbook of global management: 57–80. Oxford: Blackwell.
  • Corner, A.J., Liu, L.A., & Bird, A. Intercultural competencies for emerging markets: A contextualized approach. Forthcoming in International Business Review.

  1. EduSkills OECD: Preparing Youth for an Inclusive & Sustainable World
  2. Erin Meyer The Culture Map
  3. Erin Meyer CNN Interview with Fareed Zakaria
  4. The Danger of a Single Story – TED Talk with Chimamanda Adichie

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Doing Business in Africa

Africa, the world’s second largest and second most populous continent, is well-known for its vast potential.  Rich in history, natural resources, and cultural heritage, the continent also boasts the youngest population in the world, with a median age of just 19.7 years.

Yet, for all its promise, practitioners of international business will be keenly aware of its relative instability and lack of consistent legal, taxation and governance standards.  Moreover, its immense scale means there are major differences in the business environment of the continent’s five regions, let alone the individual countries within these regions.

In this issue, we look at the prospects of doing business on the African continent, including a promising new Africa-wide trade agreement, and offer you links to a host of different teaching resources on this important topic.

As always, we welcome your feedback and suggestions.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

* Consortium includes the University of Colorado Denver, Florida International University, George Washington University, Georgia State University, Indiana University, Loyola Marymount University, University of Maryland, Michigan State University, Temple University, and Texas A&M University.

Note that this is the 13th Edition of 'Current Concepts in IB'
For past editions of this newsletter please click HERE

Even before the pandemic struck in 2020, FDI inflows were on the decline in Africa, as lower commodity prices hit the continent hard.  Africa is richly endowed with mineral reserves and many of its economies rely heavily on the extraction of natural resources.

This year demand for commodities has slowed further, as did tourism revenue in countries like South Africa, Kenya and Egypt.  Nevertheless, Africa seems to have escaped the worst of the global COVID-19 pandemic, helped in part, experts say, by the relatively low rate of obesity and the fact that 60% of the population is under the age of 25.

Going forward, to capitalize on its immense potential Africa will need to further develop its agricultural, industrial, and service sectors. The ability to do so depends, in turn, on regional collaboration and political stability, issues where Africa has a mixed track record.

A quick look at 5 of its leading economies, Meet Africa’s Big Five,  (CLICK LINK TO ACCESS PP PRESENTATION) reveals that some, like Ethiopia and Nigeria, still suffer from civil and political unrest, which ultimately hold back their growth.

One of the more promising recent developments is the new African Continental Free Trade Area (AfCFTA), which will be officially launched January 2021. Already ratified by over half of Africa’s 54 countries, the free trade agreement will be one of the largest in the world and is expected to play a significant role in fostering trade and investment on the continent.  Some observers believe it will increase trade on the continent by 50% and add $76 billion in income to the rest of the world.

Exercise 1: PESTEL Analysis for selected group of African countries
This assignment works well in teams or as a phase in a term project. Ask students to complete a thorough assessment of the political, economic, sociocultural, technological, environmental, and legal environment. This assignment can be complemented with an international business investment decision and is best when all 5 major African regions (Northern, Eastern, Central, Southern and Western) are represented.

Exercise 2: Tracking News from assigned countries
In this assignment, students are assigned countries. The students research and follow news updates about their countries and share updates with their classmates. A portfolio of articles and article summaries is usually submitted at the end of the semester with an integrative reflective paper.

Exercise 3: Debating hot topics using multiple stakeholders
Select a hot topic, usually one where there are maximally different viewpoints. Assign roles to different students or teams to champion a certain perspective on the issue at hand which can generate a lively debate and make for an engaging learning experience. Topics that we recommend include Royal Dutch/Shell and human rights in Nigeria, The Nile river water dispute between Egypt and Ethiopia, the Western Sahara conflict between Algeria and Morocco, and land redistribution in South Africa.


Doing business in Africa aligns with numerous class topics. In addition to Chapter 8 (Understanding Emerging Markets) in our textbook, it can be discussed almost any time.Here are some other useful tools and resources:

Major Regional and Pan-African Organizations African Union  | Africa Development Bank | The African Continental Free Trade Area | Southern African Development Community (SADC) | Economic Community of West Africa States (ECOWAS)East African Community (EAC)  | Economic Community of Central African States (ECCAS)|The Arab Maghreb Union (UMA)

Selected News Outlets 

Africa-Focused Case Studies

  • The Janus Face of China’s Engagement in Africa: Stakeholder Perspectives [Sage] This case debates the pros and cons of China’s increasing trade and investment engagement in Africa.
  • Agility Africa [HBS] This case illustrates the challenges and opportunism faced by Agility, a global supply chain and logistics firm headquartered in Kuwait as it establishes operations in Africa.
  • Hello Healthcare: Taking a Cooperative Business into Africa [Ivey Publishing] The expansion of a Swiss healthcare provider into Africa using a cooperative business model
  • Ethiopian Airlines: Bringing Africa Together [Ivey Publishing]. Chronicles the growth of Ethiopian Airlines, one of the most successful carriers in Africa.
  • Vodafone in Egypt: National Crises and their Implications for Multinational Corporations (A)[HBS]. Examines the challenges that foreign subsidiaries face when they come under political pressure.
  • SABMiller South Africa: Contextual Leadership in Transforming Culture [Ivey Publishing] A deeper look at the challenges facing the global beer producer at its plant in South Africa.
  • Royal Dutch/Shell in Nigeria (A&B) [HBS] This is a classic and well-crafted case that addresses Royal Dutch/Shell environmental practices and role in human rights violations.
  • A Puzzle Too Complex? James Baker's Mediation Mission in Western Sahara, 1997-2004 [HBR] This case is one of the few that deals with issues that involves Algeria and its neighbor Morocco.

 

  1. A collection of videos on Energy, Infrastructure, Climate Change, Agriculture, Technology, and other areas. Africa Development Bank Video Collection:
  2. CNN Marketplace Africa What does the future look like for Airbnb in Africa?
  3. CNN Marketplace Africa This Nigerian company wants to build an Uber-like logistics enterprise in Africa
  4. France24-Eye on Africa - Chronicles from the Algerian War of Independence Africa 1960: Four faces of independence from France
  5. France24-Eye on Africa Coronavirus pandemic to push sub-Saharan Africa into recession, says World Bank:
  6. France24-Eye on Africa Special edition: US-Africa relations
  7. DW Business Africa

TThe updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Online Teaching Resources: Introducing CIBER MSI Consortium

At a time when many of us are working remotely, having access to the right online resources to teach International Business is critical.

In this issue of Current Concepts, we introduce you to some of the online resources of the Center for International Business Education and Research (CIBER) Minority Serving Institutions (MSI) Consortium -- a joint effort of 10 CIBER programs*.

These CIBER-MSI resources complement our newly updated textbook, International Business: The New Realities, and are presented in this edition along with links to a host of free online external resources.

Below are links to these teaching materials and resources.  As always, we welcome your feedback and suggestions.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

* Consortium includes the University of Colorado Denver, Florida International University, George Washington University, Georgia State University, Indiana University, Loyola Marymount University, University of Maryland, Michigan State University, Temple University, and Texas A&M University.

Note that this is the 13th Edition of 'Current Concepts in IB'
For past editions of this newsletter please click HERE

COVID 19 & Online Resources

As COVID-19 began to make its impact felt in March and April of this year, many prominent publications, like the Economist and the Wall Street Journal, took down paywalls for articles related to the pandemic. While some of these have since been reinstated,  there is still a lot of free business related COVID-19 coverage on prominent news sites, like Bloomberg.

For those looking for in-depth business insights, consider free online publications from management consulting companies such as McKinsey Quarterly and PwC’s Strategy&, or subscription based services such as the Financial Times.

Looking beyond these traditional business publications, there are many other resources available to professors and students of international business that focus on teaching resources, like Inspiring Minds from Harvard Business Publishing and those offered by CIBER MSI affiliated institutions (next column).

CIBER MSI Consortium offers, collectively, a vast array of online materials that each center prepares and curates.

For exampleMichigan State University CIBER’s globalEDGE knowledge portal is one of the most frequently consulted web-portal for international business resources.

University of Maryland CIBER also offers comprehensive resources which include podcasts, webinars, weekly videos, as well as teaching guides.

Likewise, Indiana University CIBER offers excellent lesson plans and Georgia State’s CIBER program offers weekly webinars and comprehensive pedagogy resources.

Here are the links to some of the great resources currently available:

STATISTICS & RANKINGS
INTERACTIVE MAPS
DIGITAL BUSINESS
TRADE AND INVESTMENT
BUSINESS PODCASTS
CONSULTING COMPANIES
LISTS OF WORLD NEWSPAPERS

TThe updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Doing Business in South America 

In an increasingly complex and diverse global environment, South America stands apart for its enormous untapped potential.  Investors are pouring FDI into the region, attracted by its large population, variety of emerging markets, and its openness for international business.

Many South American countries have enacted smart policies to attract investment, including privatization of state enterprises, less government intervention, and lower tariffs.  Yet, with rising commerce and industrialization comes a renewed focus on the sustainable use of its abundant natural resources.

In this issue we take a closer look at South America’s vast potential, as well as the challenges of doing business in the region. Below are links to the latest trends, teaching materials and resources on this important topic.

As always, we welcome your feedback and suggestions.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

* With thanks to Professor Salomao De Farias of Georgia State University for leading the development of this issue.

Sustainable Growth & Investment

South America’s population of 431 million is similar to that of the European Union (EU). Regional integration is progressing, led by MERCOSUR, which includes Brazil, Argentina, Uruguay and Paraguay.  Brazil ranked number four in FDI in the world in 2019.

South America is a hot prospect for international businesses. Chile unilaterally reduced tariffs to nearly zero.  Brazil’s 2019 privatization program has led to sharp increases in FDI, with investors focused on industries related to electricity production and fossil fuel extraction.

While interest in the region is increasing, it is doing so in the face of multiple crises. Wildfires in the Brazilian Amazon; the humanitarian crisis in Venezuela; the Recession in Argentina; and the high coronavirus death rate in Peru have all been making headlines around the world in the last year.  In the Amazon, natural cycles are in flux, tipping a delicate balance that affects local, regional and global businesses.

Firms doing business in South America will do well to strike the right balance between profits and sustainable business. The United Nations Sustainable Developmental Goals can help guide business towards a holistic strategy that takes into the account the long-term interests of the business and those of the community.  Doing so will not only help companies mitigate risk but will likely bring them plenty of opportunity as well.

The exercises below can be done in class or online, individually or in teams.
Exercise 1: INR – International Newspaper Report
Ask students to identify articles from South American countries related to sustainable business opportunities. Have each student write a brief summary of the article and critically comment on how it presents either an opportunity or a challenge for business in the country.  Click here for a list of major daily papers in the region with English language editions.
Exercise 2 – Debate on MERCOSUR-EU trade agreement.
Assign students the following article: EU-MERCOSUR trade agreement.  Based on the reading and on UN Sustainable Goals, ask the class to discuss the likelihood that the EU and the MERCOSUR countries will conclude a trade agreement. Stimulate discussion on the pros and cons of such an agreement for MERCOSUR countries in light of sustainable long-term growth in the region.
Exercise 3 – Culture in South America – Role Playing
Role playing is effective for inspiring students to think about the effect of culture on business customs and practices. Quirks of individual cultures can make for memorable points of comparison. Ask students to compare any South American country with the United States, using Hofstede’s culture typology. In pairs, students can play the role of a U.S. manager and a local manager in a business meeting.  For example, Brazil ranks high on power distance, collectivism, and uncertainty avoidance.  What are the implications for management, buyer behavior, and doing business in Brazil?


Doing business in South America aligns with numerous class topics. In addition to Chapter 4 (Understanding Emerging Markets) and Chapter 7 (Ethics, CSR, Sustainability & Governance) in our textbook, it can be discussed almost any time.Click on the links to access these useful tools:

  1. GSU-CIBER Webinar: “International Business in Time of Pandemic: The Case of Brazil” (58min)
  2. What is the difference between Latino and Hispanic? (9:12min)
  3. The Brazilian Way – Jeitinho Brasileiro (2:15min)
  4. The 5C’s of Marketing (1:43min)
  5. Geopolitical Analysis for the Americas (10:44min)
  6. PESTEL Analysis (9:48min)
  7. Chinese investments in Latin America (first video - 4:02min) (second video - 2:39min)

TThe updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Teaching IB During the Coronavirus Pandemic

Covid-19, the contagious virus also known as Coronavirus, has changed the way many of us will teach International Business (IB) this fall.  Gone are the days - for now - of crowded classrooms and popular back-to-school events.

Yet IB classes, virtual or otherwise, will still go on.  As educators, we must find ways to integrate the changing day-to-day external environment into our curriculum.

Fortunately, IB is as relevant as ever, even as the topics we teach, and the discussions we have with students, will differ greatly this year.

In this newsletter, we examine the IB topics that are particularly relevant in the face of the global Covid-19 crisis.  Below are links to the latest trends, teaching materials and resources on this important topic.

As always, we welcome your feedback and suggestions.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

Globalization and COVID-19

One of the great ironies about today's pandemic is that the very factors which enabled rising global prosperity in the past half century – open markets, free trade and mobility – also allowed the virus to spread worldwide at an alarming pace.

The trade in goods and services, capital flows and mobility of people have all suffered set-backs in recent months, but the question is how long will these last?   Most experts agree that this is but a bump in the road for globalization.

The underlying trends that have sustained growth in trade remain intact – rise of the middle class in emerging markets and increased urbanization, as well as improvements in technology, transport and infrastructure.

Covid-19 represents at the very least a temporary set-back.  In the medium term, globalization likely will look decidedly different as it enters a new phase, with heightened scrutiny on the mobility of people and trade of goods and services.

The exercises below can be done in class or online, individually or in teams.

Exercise 1 - Building resilience in the face of a global crisis.
Have students review this excellent article on how firms can deal with disruption to build resilience.  Engage the class in a discussion around the following questions:

  • How can organizations acquire resilience through innovation to alleviate the effects of Covid-19?
  • Describe innovation at four levels: product, process, people, and business model.
  • Provide specific examples of companies that have continued to innovate.

Exercise 2. Impact of Covid-19 on International Business
Read these two articles and answer the questions that follow:
How the Coronavirus will Reshape World Trade  (WSJ)
COVID-19: Implications for business  (McKinsey)

  • Which industries have been most affected by the coronavirus, and why?
  • What are the major likely effects of coronavirus on world trade and foreign direct investment?
  • In terms of their sales to, and revenues from, foreign markets, what can firms do to reduce the harmful effects of coronavirus?

Discussion on Covid-19 and international business will be topical for some time to come.  It can be aligned with numerous class topics. In addition to Chapter 13 in our textbook that provides background information on global sourcing and supply chain management, the issue can be raised almost any time.Click on the links to access these useful tools:

  1. Teaching IB in the post-pandemic era (GSU - CIBER WEBINAR - 59 mins) 
  2. Covid-19: what will happen to the global economy? (The Economist, 10 mins)
  3. What the future holds: COVID-19 and the world economy (World Bank, 50 mins)

TThe updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

A Black Swan: Coronavirus & Global Supply Chains

Covid-19, the contagious virus known as Coronavirus, poses significant threats to international commerce and global sourcing. The virus represents a ‘mega-disruption’ event, and will have a profound impact on international business.

In recent years, international supply chains have become very complex, with China at the center of a diverse web of suppliers of parts, components, and finished goods.

Since January, Covid-19 has caused widespread disruption to our global supply chains.  Countless Chinese manufacturers were unable to fulfill orders as trade declined dramatically.  The world’s economy has now slowed further, and entire industries are on ‘pause’ with no foreseeable end in sight.

In this newsletter, we consider the impact of Covid-19 on international business, especially global sourcing and supply chain management.

Below are links to the latest trends, teaching materials and resources on this important topic.  As always, we welcome your feedback and suggestions.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

 

Emergence of a Global Crisis

Covid-19, the infectious respiratory illness, was first identified in late 2019 in China. In an effort to control the spread of the disease, governments worldwide have restricted human mobility.  These restrictions, along with reported illnesses of workers, have led to the widespread disruption of production and shipment of goods, as well as plant closures and transportations stoppages.

China is the world’s leading supplier of products, from cars to shoes, from computers to toys. For instance, the US auto industry imports $12 billion worth of parts from China annually, and about 70% of US shoe imports come from China. China’s supplier platform is highly integrated into the global production and consumption ecosystem.

Covid-19 has severely hurt China’s supplier network and economy. Millions of companies from around the world source their materials and goods from affected regions in China.  Regardless of whether the supplier is Tier 1, 2 or 3, these companies experience production disruptions if even one supplier shuts down.  It is expected that in the coming months, many economies around the world will go into recession.

The exercises below can be done in class or online, individually or in teams.
Exercise 1.  Have your students read articles from one or both of these sites:
Site 1. https://www.kearney.com/covid-19, and
Site 2. https://www.bcg.com/en-us/featured-insights/coronavirus.aspx
Based on their research, ask the class to discuss the likely consequences of Covid-19 for international business.
Exercise 2. Firms rely on various guidelines to support the management of global sourcing for goods they do not produce themselves.   First, ask students to read the articles below:
(i) Supply-chain recovery in coronavirus times—plan for now and the future
(ii) Coronavirus and Supply Chain Disruption: What Firms Can Learn
Second, ask students to develop an internal memo for a firm in a specific industry that describes what management should do to minimize the harm of Covid-19 to their global supply chain.  Memo should include discussion of general risks to the supply chain, overview of affected operations and recommendations going forward.
Exercise 3. Risk mitigation is a key managerial function. Chapter 1 of our textbook presents a framework – The Four Risks of International Business –  Cross-Cultural Risk, Country Risk, Currency (Financial) Risk, and Commercial Risk. Using this framework, have students analyze and predict how Covid-19 might affect the operations of a given firm. Focus the discussion on the steps management can take to reduce risk and disruption. The following article can help with the exercise: Four Steps to Steer an Organization in a Time of Crisis.


Discussion on Covid-19 and international business will be topical, unfortunately, for some time to come.  It can be aligned with numerous class topics. In addition to Chapter 13 in our textbook that provides background information on global sourcing and supply chain management, the issue can be raised almost any time.Click on the links to access these useful tools:

  1. Covid-19: how bad will it be for the economy? (The Economist, 7 mins)
  2. What does the coronavirus mean for China's economy?  (CNBC, 8 mins)
  3. Chinese factories struggle to resume operations as fight against the coronavirus continues (South China Morning Post, 5 mins)
  4. We are going to see massive restructuring of supply chain  (CNBC International, 4 mins)

TThe updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Culture, Technology & Migration

Culture reflects the characteristics, values, beliefs, and customs of the people of a given society.

In prehistory, tribes and similar groups developed in relative isolation over thousands of years. Customs and traditions arose within each group based on climate, natural surroundings, and local conditions. With time, numerous countries emerged in the wake of invasion, colonization and nation building, and came to share similar characteristics.

In the past century, advances in technology and increased migration have expanded contact among peoples of the world, and culture is evolving into a blend of global and national cultures.

This newsletter examines how cultures are changing in the wake of rapid technological advancement and increased migration, and how this ultimately influences the way business is done.

Below are links to the latest trends, teaching materials and resources for this important topic.

As always, we welcome your feedback and suggestions on this month’s newsletter.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

 

Record Global Migration & 5G Technology

Two major trends influence the way people see and experience other cultures, and, in

turn, the way in which global and national cultures are evolving.

 

First, the rapid advancement of technology allows for greater sharing of information

and ability to learn from and experience other cultures without ever leaving your home.

In 2020, expect the rise of 5G, which allows for greater connectivity and sharing of data,

to continue to accelerate the speed with which we consume and share information.

 

Second, human migration is a major factor changing national culture worldwide.

In 2020, migration will reach an all time peak of more than 270 million global migrants.

On the one hand this enriches the culture of the host nations, on the other it can have a

homogenizing effect, furthering integration and hybridization of world cultures.

Here are three exercises on culture, migration, and management.

Exercise 1. Using the website of the International Organization for Migration (IOM),have students, individually or in teams, identify and explain three trends that they believewill impact international business.

Exercise 2. Ask students to read the mini-case Culture and Management: Google in China. Discuss with the class how cultural differences between

China and the United States have affected Google’s performance in China.

Exercise 3. Ask students, individually or in teams, to read the exercise Culture’s

Role in an International Joint Venture, and discuss in class.  Students can

draw on the Hofstede and GLOBE typologies (see PowerPoint presentation below),

and other resources in the exercise, to explore and frame the cultural dimensions

of an international joint venture.


Discussion on culture and the roles of technology and migration can be aligned with many topics in the classroom. In addition to Chapter 3 in our textbook, which provides the background discussion, you can raise the issue almost any time.Click on the links to access these useful tools:

  1. 10 biggest things that culture shock Americans  (WatchMojo, 7 minutes)
  2. Modern Technology and the Loss of Traditional Culture Explains how technology contributes to the loss of traditional values, beliefs, and norms. (Press Plus News, 10 mins)
  3. Culture difference in business (China) (TedX-Haarlem, 12 minutes)  Explains how connections with the right people and relationships are key to business success in China.
  4. Why Starbucks Failed in Australia  (CNBC, 7 mins) Explains how Starbucks failed in Australia, despite the firm’s success around the world.

TThe updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Global Megatrends-2020s

Happy New Year!   We dedicate the first newsletter of the 2020s to the global megatrends that are likely to dominate the coming decade.   Among these, new technologies, shifting economic power, major demographic changes and competition for resources will all affect the international business climate tremendously.

The growth in global consumption, ubiquitous connectivity, the continued rise of emerging markets, demographic trends such an aging and more urban population, and the increased competition for limited resources all pose enormous opportunities (and threats) for companies worldwide.

Below are links to the latest trends, thinking and teaching materials on this important topic.

As always, we welcome your feedback and suggestions on this month’s newsletter.

 

The top megatrends of the 2020s:

  • Accelerated technological change
  • Continued rise of emerging markets
  • Rapid expansion of the senior population
  • Continued urbanization
  • Resource scarcity / environmental harm.

To capitalize on these trends, firms will need to use the latest

technologies, and revise business models to target new markets

and new market segments.

Unfortunately, industrialization and rising affluence will likely

coincide with more pollution of the air, land, and water, making

Ethics, Sustainability and Corporate Social Responsibility (CSR)

essential components of daily business practice.

 

Second, human migration is a major factor changing national culture worldwide.

In 2020, migration will reach an all time peak of more than 270 million global migrants.

On the one hand this enriches the culture of the host nations, on the other it can have a

homogenizing effect, furthering integration and hybridization of world cultures.

Here are two exercises that can be done in class, as homework, individually, or in teams:

Exercise 1 - Firms are facing numerous global megatrends that impact internationalbusiness. Identify megatrends that are especially relevant to your students. Then haveyour students visit globalEDGETM and other websites, and research the implicationsfor business and their careers. Alternatively, divide the class into teams, one team permegatrend. Have the teams research, in-class or as a homework assignment, and thenpresent key findings to class on their assigned megatrend.

Exercise 2 - Follow this link to the Exercise: Megatrends and International

Business, which can be done individually or as student teams

 


Discussion on global megatrends can be aligned with many topics. In addition to Chapter 2 in our textbook, which provides useful background information, you can raise the issue almost any time.Click on the links to access these useful tools:

  1. Megatrends - What is a megatrend and why do they matter? (PwC, 5 mins)
  2. Megatrends (HP, 3 mins)
  3. The World in 2050: Megachange (The Economist, 18 minutes)
  4. Alison Sander: Megatrends - The Art and Science of Trend Tracking (TED Institute, 12 mins)
  5. 2019 WM Sustainability Forum - Global Environmental Trends and Local Impacts (wastemanagement, 34 mins)

TThe updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available for classroom use! 
Students can Rent a digital copy for as little as $59.99
Instructors can contact their Pearson representative for a free Instructor’s review copy today!  

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Teaching International Trade Theory

Discussing international trade theory doesn’t need to be boring.  Scholars around the world have created many sensible -and sometimes competing- theories that do a great job explaining the complex world around us.

International trade theories relate to arguments about why nations trade and the benefits from cross-border movement of goods and services; International business theories examine why and how firms internationalize their activities.

Both can stimulate plenty of interesting discussion in the classroom, especially when related to current events, like Brexit, NAFTA, the trade in services, etc.

Below are links to some of the latest theories, thinking and teaching materials on this important topic.

As always, we welcome your feedback and suggestions on this month’s newsletter.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger    

* With thanks to Assistant Professor Ilke Kardes of Valdosta State University for her valuable contributions to this issue.

Impeded by protectionism and an economic slowdown, the IMF predicts global trade will grow by just 1.1% in 2019, down from 3.6% in 2018, and the lowest level in more than a decade.

Much discussion today emphasizes protectionism and anti-trade sentiments.  This video offers five common arguments against international trade and provides arguments for trade restrictions

On the flip side, this video provides a counterview and a positive spin on international trade (from a US perspective), expressed using eight charts.

Exercise 1
Review the alternate trade theories in this presentation with your class. Divide your class into groups of four or five students per team and give each group 10 minutes to discuss one or two of the theories; invite a student representative from each group to explain the theory's main points, including real world examples and/or opinions in favor & against.

Exercise 2 
Have your students review and discuss Brazil's competitiveness in this Exercise on the World Economic Forum’s Global Competitiveness Report.


A good summary of why firms and nations internationalize and how they sustain their competitive advantage is summarized in Exhibit 5.1 of CKR 5Click on the appropriate link to access these other useful tools:

 

  1. Explanations of Absolute and Comparative Advantage: https://bit.ly/2q11MYz  (12 min)
  2. How Not to Be Ignorant About the World.  Hans Rosling: https://bit.ly/2BWTu6E (TED; 19 min)
  3. Absolute vs. Comparative Advantage Principles: https://bit.ly/2Nqc2Bt  (6 min)
  4. Related and supporting industries in Porter’s Model:  https://bit.ly/32Xmsze  (3 min)
  5. National competitiveness: https://bit.ly/34kQhtT  (WEF; 3 min)
  6. Global Competitiveness Index – Singapore: https://www.facebook.com/watch/?v=542919249797733  (WEF 1.5 min)

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available!  Rent a digital copy for as little as $59.99

or

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

Clean Energy & International Business

As world leaders gather in New York this week for the Climate Action Summit, we take a closer look at energy; reliable, affordable, and clean energy.

Much of our economic and social future depends on access to this kind of energy.  Of the 17 UN Sustainable Development Goals, one of them directly refers to affordable and clean energy, and many others are contingent upon it.

Electricity provides the power vital to daily life and to international trade & commerce. It powers all manner of devices, appliances, and equipment that make life and commerce more productive and enjoyable.

Below are links to the latest trends, teaching materials and resources for this important topic.

As always, we welcome your feedback and suggestions on this month’s newsletter.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

As of 2019, for the first time, more than 90% of the world's population can access electricity.  Rural areas of Sub-Saharan Africa and South Asia are among the only areas still lacking access.

Electricity demand is growing rapidly in developing economies and emerging markets, where electrical power drives economic development. Access to electricity facilitates innovation, rising productivity, and improved living standards. People need electricity for lighting, heating, refrigeration, telecommunications, transportation, machinery and appliances.

Rising electricity usage poses enormous opportunities for business.  But the shortage of renewable energy sources means that a lot of electricity production still harms the environment and accelerates climate change.

In this newsletter, we feature three exercises on sustainability and energy

Exercise 1 addresses the opportunities and challenges of rising electricity consumption around the world:
Electricity – Opportunities and Consequences 

Exercise 2 is a shorter examination on:
The Growing Access to Electricity

Exercise 3 discusses the rise of sustainable practices in corporations, with a focus on Unilever:
Sustainability and Unilever 


Discussion on sustainability and energy can be aligned with many topics in the classroom. In addition to Chapter 4 in our textbook, which provides the background discussion, you can raise the issue almost any time.Click on the appropriate link to access these useful tools:

 

  1. Human Population Through Time - American Museum of Natural History, 6 minutes; suggests how recent rapid population growth is creating various global challenges
  2. Martin Stuchtey - How Things Look Today - Ellen MacArthur Foundation, 3 minutes; discusses the often harmful effects of the world’s recent, rapid economic growth
  3. Outlook for Energy to 2040 - BP, 8 minutes; describes the current state and future of energy resources worldwide, and the implications for humanity
  4. Designing cleaner stoves for the developing world - PBS, 8 minutes; describes how current household cooking methods in developing economies are highly polluting and how technology can help
  5. Two TED Talks with contrasting views:

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available!  Rent a digital copy for as little as $59.99

or

CONTACT US FOR MORE INFORMATION
Tamer Cavusgil - stcavusgil@gsu.edu 
Gary Knight - gknight@willamette.edu
John Riesenberger – jriesen97@aol.com

The Changing Environment of Globalization

The landscape of globalization shifted in 2019. According to Fortune magazine’s Global 500, China is now home to the largest proportion of leading multinational firms in many industries. The new reality is that emerging markets have produced many world leading companies.

At the same time, new technologies in automation, robotics, AI, and 3D printing are boosting the productivity of local manufacturing. Lower production costs means that firms in advanced economies are doing more manufacturing in their home markets. Just as manufacturing is becoming more local, the volume of FDI and merchandise trade has slowed.

Symptomatic of the shift in globalization are growing nationalism, Brexit, and the trade war between China and the United States.

Below are links to the latest teaching materials on these important trends.

As always, we welcome your feedback and suggestions on this month’s newsletter.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     

As of 2019, China now has the largest number of companies in Fortune’s Global 500 in many industries.  China’s rise, and its huge trade deficit with the United States, coincide with the country’s trade war with the US.

Rising nationalism and protectionism are occurring in a period when China is extending its global influence. China’s GDP is on track to surpass the US. Other emerging markets are also on the rise, even as the economic influence of Europe (weakened by Brexit) and the US slowly declines.

With all these changing dynamics, globalization is undergoing a fundamental shift, with profound reprecussions 

Brexit supporters and many populists believe globalization harms opportunity for citizens at home due to unfettered global competition, job loss, and liberal immigration. They argue for increasing national autonomy, protecting the home economy, and reducing reliance on the World Trade Organization, the EU, and other supranational institutions.

Others argue that free trade raises living standards and increases the variety of goods and services, at lower prices. Workforce shortages in some industries and aging populations can be offset by mindful immigration policies.  Similarly, not all countries feel aggrieved - Brazil, China, and other emerging markets are prospering as a result of globalization.

Have your students peruse the research on these trends, then ask the class to debate the pro’s and con’s of globalization, in the exercise globalization debate (click link)

An additional exercise that can be done individually can be found here.


Teaching on the changing landscape of globalization aligns with discussion on the contemporary environment of international business, and coincides with Chapters 1, 2, 5, and elsewhere in our textbook. Globalization is the subject of Chapter 2. The book provides background that can be enhanced using the material below.Click on the appropriate link to access these useful articles and tools:

Practitioner oriented explanations on current globalization trends:

  1. The Problem with Globalization (4 minutes)
  2. Brexit explained: What happens when the UK leaves the EU? (11 minutes)
  3. Protectionism easily explained (4 minutes)
  4. Globalization Isn’t Finished, It’s Evolving (2.5 minutes)
  5. Preparing for Shifts in the Global Economy (2 minutes)

The updated and revised e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' (2020) is now available!  Rent a digital copy for as little as $59.99

The Rise in the Global Trade of Services

Of all the long-term trends in international business, perhaps none is more striking than the continued rise in the global trade of services.  In 2018, the value of world exports of services rose to $5.8 trillion, up from about $3 trillion in 2007. Meanwhile, growth in international trade of goods has slowed during this phase.

Just as new technologies support international services trade, they also increase the productivity of local manufacturing.  Cross-border data flows, new technologies including digital platforms, the Internet of Things, automation, and artificial intelligence (AI) are all reshaping global value chains. These technologies might further decrease the role of goods in trade while boosting trade in services.

Yet, for all its promises, services are also susceptible to new trade barriers, as increased regulations in the EU recently reminded us.

In this edition we take an in-depth look at the rise of trade in services.   As always, we look forward to your feedback and please let us know if you have ideas for future editions.

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger     
* With thanks to Assistant Professor Ilke Kardes of Valdosta State University for her valuable contributions to this issue.

Americans spend twice as much on services as they do on goods and fully 80% of the U.S. workforce is employed in service industries.

What about the rest of the world?   In recent years, emerging markets have also witnessed a tipping point. In countries like China and India, services now account for more than 50% of GDP.

This trend is likely to continue as their economies grow.  In advanced economies, services generally account for more than 70% of GDP.

References: India China World 

Like trade in goods, trade in services is also subject to trade barriers. These can range from outright restrictions against foreign firms participating in domestic service industries to more subtle 'non tariff' regulations designed to favor local service firms.

Read the online article about digital trade barriers to internet services and discuss the following questions:

  • Are we likely to see an increase in trade barriers on services?
  • Could you foresee instances where this is justified?
  • What are some of the methods/strategies you could use to insulate your company from the affects of trade barriers?

Trade in services is always topical and can be discussed at any time. The CKR textbook chapters 1 - Introduction and 2 - Globalization provide excellent background to this topic.  Additional material is covered throughout the book, but especially in chapters 7 - Government Intervention and 9 - International Monetary and Financial Environment.Access the following tools:

  1. Introduction to World Trade (World Bank - 3.5 minutes)
  2. How globalization is changing with technology (BCG - 2.5 minutes)
  3. The Next Phase of Globalization (Fortune/McKinsey - 34 minutes)
  4. Services Trade in the Global Economy (OECD - 2.5 minutes)
The new e-textbook 'International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger,' is now available for just $59.99 for 180 days through this LINK

China - The World's Biggest Retail Market

Home to 1.4 billion people, China is rapidly transitioning from a manufacturing to a service-based economy.  Already a huge market for food, electronics, luxury goods, and many other products, China will soon also become the world’s largest retail market.  

Yet, even as the country enters a new era of technology, prosperity, and global commerce, tremendous challenges remain.  Consumer tastes, technology platforms, and the regulatory environment are evolving rapidly.  Infrastructure remains patchy, while shifting government intervention can make for uncertain business conditions.

It's also a market that is simply too big to ignore for firms like Amazon, Costco, IKEA and Walmart, despite the mixed results of foreign multinationals in recent years.   

Powered by a rising middle class of 300m people making at least $15,000 a year, in this edition we take an in-depth look at the fascinating Chinese retail market. 

As always, we welcome your feedback and suggestions.  

Sincerely,

Tamer Cavusgil, Gary Knight & John Riesenberger   

In 2019, China will become the world’s largest market for retailers.  Retail sales in China are projected to grow 7.5 percent to $5.6 trillion in 2019. In comparison, retail sales in the United States are forecast to increase 3.3 percent to $5.5 trillion. Growth is slowing in both countries, but China will outpace the U.S. for some years to come.

Current articles that address the retailing boom and other key trends in the new China:
China to Top U.S. as World’s No. 1 Retail Market in 2019

Commercial Excellence in China: Lessons from the Top CPG Companies

Consumption in China: Ten Trends for the Next 10 Years

China’s Economy Became No. 2 by Defying No. 1

Exercise 1. Read the articles in adjacent column “China to Top U.S. as World’s No. 1 Retail Market in 2019” and “Commercial Excellence in China: Lessons from the Top CPG Companies,” and then complete the exercise here, IKEA: Furniture Retailing in China (LINK), and discuss in class.

Exercise 2. Read the adjacent article “China’s Economy Became No. 2 by Defying No. 1,” and discuss the questions:

  • What factors have allowed China to become an economic and business superpower?
  • What are the implications of this shift for US companies and their international business activities?

China is topical and can be discussed at any time. Retailing in China is especially relevant to CKR Chapters 8 (Emerging Markets), 11 (Strategy), 14 (FDI), and 16 (Marketing).
Access the following tools:

  1. Introduction to China in 10 Minutes (10 minutes)    
  2. China May Replace US as World’s Largest Retailer (RT America, 6 minutes) 
  3. We Visited Alibaba's New Retail Store, Sweeping through China (CNBC, 5 minutes)
  4. What is the Belt and Road initiative? (CNBC International, 6 minutes) 

Digital rental copies of International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger, are now available for $59.99 through this LINK

Hard-bound paper textbooks are also available for rental for less than $100. Request an educator's review copy at the above link or contact your Pearson representative!
Ask your Pearson representative about their revolutionary new pricing options that, for the first time, make our text financially affordable for all students! 

The Fourth Industrial Revolution and IB 

IB is being transformed by the rise of the new digital technologies, known as The Fourth Industrial Revolution. Students and educators alike need a deeper understanding of this new reality – how it will transform globalization and how IB is conducted worldwide.

The new technology that defines this phase is blurring the lines between the digital and physical worlds.  Breakthroughs in quantum computing, the Internet of Things, artificial intelligence, robotics, autonomous vehicles, 3D printing, nanotechnology, and biotechnology are boosting the efficiency of global production and international trade.

Thanks to such trends, national borders and traditional country-based business models are losing much of their relevance; The Fourth Industrial Revolution is transforming IB and value chains in organizational activities worldwide. 

The links below highlight the latest trends, teaching materials and resources on this exciting topic.

As always, we welcome your feedback and suggestions.  

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger   

 

As of late 2018, more than half the world’s population is now online.  That’s an amazing 3.9 billion people!

According to the International Telecommunications Union, steady growth in advanced economies increased Internet penetration from about 50% in 2005 to 81% in 2018. In developing economies, this growth jumped from 8% to 45% in the same timeframe!

This development symbolizes of the Fourth Industrial Revolution - Here's some pointed reading on the subject:
Everything you need to know about the Fourth Industrial Revolution, and
The Fourth Industrial Revolution Will Bring a Massive Productivity Boom.

While the 4th Industrial Revolution holds great promise for advancing global productivity and innovation, it will also bring about profound social and environmental change.
Have your students read one or both of these articles for more on this perspective:  We can decide to live within the limits of our planet and Can we build a shared future?
Ask the class to discuss the pros and cons of the 4th Industrial Revolution. Key issues include:

  • The implications for energy use, resource sharing, and sustainability worldwide;
  • Potential threats from the Internet of Things and Big Data to global cybersecurity;
  • Implications of AI and automating technologies for jobs and global job mobility;
  • The effect of key technologies on IB, including internationalization of small and medium enterprises (SMEs).

The 4th Industrial Revolution is a broad topic that crosses numerous areas of IB. Class discussion aligns with various topics – you can raise the issue any time.Click the links below to access these useful articles and tools:

  1. What is the Fourth Industrial Revolution? (CNBC, 4 minutes)
  2. What is the Fourth Industrial Revolution? (World Economic Forum, 11 minutes)
  3. The founder of the World Economic Forum shares what he sees as the biggest threat to the global economy  (Business Insider, 9 minutes)
  4. AI & The Future of Work  (TEDx Talks, 18 minutes)

Digital copies of International Business: The New Realities, 5th Edition, by Cavusgil, Knight & Riesenberger, are now available for $59.99 through this LINK

Hard copy will be available later this month for less than $100. Request an educator's review copy at the above link or contact your Pearson representative!
Ask your Pearson representative about their revolutionary new pricing options that, for the first time, make our text financially affordable for all students! 

The Rise of the Middle Class in Emerging Markets

Welcome to the first edition of our monthly newsletter “Current Concepts in IB©.”

We received excellent feedback for the topics you’d like to see discussed, so we’re starting with one of the most popular topics – ‘The Rise of the Middle Class in Emerging Markets’. 

This is not a new phenomenon.  Undoubtedly, the rise of emerging markets has helped fuel the fast pace of globalization over the past three decades.

‘The Rise of the Middle Class in Emerging Markets’ is important in global commerce and it is an exciting topic that is not covered by most existing IB textbooks.  We hope it will be a welcome addition to your syllabus.

Below are links to the latest trends, teaching materials and resources for this important topic.

We welcome your feedback and look forward to hearing suggestions on how we can further improve this newsletter.  

Sincerely,
Tamer Cavusgil, Gary Knight & John Riesenberger       

In September 2018 something momentous happened that few  people noticed. For the first time in history, more than half the world’s population can now be considered middle class. That’s an astounding 3.8 billion people!

These new entrants, with disposable household income of at least $11/day, are mostly in emerging markets. 

We cannot understate the importance of this trend to business. Click here  for a current article on the trend.

It is ironic that, while the emerging markets have been building a robust middle class over the past several decades, the middle class in the U.S. has been diminishing.

Have your students peruse the research on this trend in the U.S. by the Brookings Institute .

Then ask the class to debate the underlying causes of these contradictory trends – rise of middle class (MC) in emerging markets (EMs), and the decline of MC in advanced economies.


Discussion on the EM Middle Class can be aligned with other topics in the classroom. In addition to the coverage in Chapter 8 in our textbook, which provides the background discussion, you can bring it up at any time.Click on the appropriate link to access these useful tools:

  • PPT Presentation on The Rise of the Middle Class in Emerging Markets
  • Facts about The Rise of the Middle Class in Emerging Markets
  • For a more scholarly treatment, see Tamer’s 2018 article in the Journal of International Marketing, here.
  • Global Market Opportunity Assessment (GMOA). Use the Market Potential Index at globalEDGE https://globaledge.msu.edu/mpi and see Chapter 12 in our textbook.
  • Ethics, Social Responsibility, and Sustainability: please see Chapter 4 in our textbook.

  1. Rise of Emerging Markets Middle Class (CNBC)
  2. Consumer Survey Emerging Markets (Credit Suisse) 
  3. Avoiding Tensions Between Emerging & Developed Markets (G20)
  4. Rise of Middle Class Spending in China (CNBC)

International Business, 5th Edition, by Cavusgil, Knight & Riesenberger, available February 2019. Contact your Pearson representative for a free Instructor’s review copy today!   Ask your Pearson representative about their revolutionary new pricing options that, for the first time, make our text financially affordable to all students!

 

Current Concepts in IB © is produced solely by the authors.  All original materials subject to copyright.