Introduction to IB

1. Business and Economics
INTERNATIONAL
BUSINESS MGF2351

2. Getting to know each other
 Mingle and find people with similarities.
 Time: 5 minutes
 Every one comes to the front of the class, introduces themselves
and then introduces the others with most similarities.
 There is a PRIZE!

3. Kirti Mishra
PhD student
Department of Management
(MGX3100, MGF1010, MGF5020)
kirti.mishra@monash.edu (Best way to contact
me)
9903 4654,Room N5.33
Slideshare: www.slideshare.net/kirtimishra11

4. UNIT GUIDE – READ IT!!!!!
 Essay: 30 % Due on or before 5.00 pm, Friday,
September 18, 2015
LOOSE 10% each day late
 Group presentations Weeks 4-11, 20% (assessed
individually) 20 minutes to present, 10 minutes
Q&A, hard copy and reference list to be submitted
in tutorial
 Exam- 50%

5. Some tips for assessment
 References: Minimum 10 peer reviewed academic
journal articles
 Books are not counted, but use them for definitions
 Q Manual
 Will give more info in week 3
 Go to the library
 Resources on Moodle
 http://www.youtube.com/watch?v=lpvgfmEU2Ck

6. EXPECTATIONS
I EXPECT:
 Engage in all classes
 Complete the readings and
activities
 Put effort into your
assignments.
 REFERENCING!!
 If your having difficulties see
me EARLY
 Help me help you
 WHAT DO YOU
EXPECT FROM
ME???

7. Housekeeping
 Turn off our phones.
 RESPECT
 On time and prepared for tutes. This is not a
lecture.Tutes are for critical thinking and
discussion!
 Feedback

8. WHY IS
INTERNATIONAL
BUSINESS
IMPORTANT??

9. QU 1 –
INDIVIDUALISM VS COLLECTIVISM
 Individual has freedom in in
economic and political pursuits
 Aristotle- diversity and private
ownership are desirable
 David Hume, Adam Smith, Milton
Friedman
 Democracy and free markets
 Innovation and incentive
 USA
 Collective goals- the needs of
society as a whole more
important than individual
freedoms
 Plato – individuals rights
sacrificed for the good of the
majority.
 Marx and Socialism (Communism
vs Social democrats)
 State ownership, communists,
social democrats
 China, India

10. QU 2-
FREE MARKET
ECONOMY
 Property can be
privately owned
 Thus, personal
incentive to improve
and provide economic
growth
 Property generally
state-owned
 Everyone works for
“the good of society”
 No personal gain – no
incentive to improve
 Resulting in poor
efficiency and
innovation
VS STATE-DIRECTED
ECONOMY

11. QU 3- POLITICAL SYSTEMS
 TOTALITARIANISM- one person/political party
exercises all control (prohibits opposing parties)
 DEMOCRACY - Government by/of/for the people
 Allows stable transfer of power through elections
 Providing political stability for economic growth

12. QU 4- ECONOMIC SYSTEMS
 PURE MARKET SYSTEMS
 Property privately owned
 Price and production decided by supply and demand
 Gov promotes free and fair trade
 COMMAND ECONOMY
 Property state-owned
 Gov plans the quantity and price of goods and
services for “the good of the society”
 MIXED ECONOMY

13. APPLE ACCUSED OF USING
SUPPLIERS WHO ABUSE
WORKERS
 Treatment of workers at Focxonn
 http://www.theguardian.com/technology/2012/feb/13/apple-supplier-
audit-foxconn?newsfeed=true
 Whose responsibility is it anyway?
 Recently happened in Bangladesh (collapse of a building)
 https://www.youtube.com/watch?v=xuO3_yEV95U

14. INTERNATIONALISATION
ADVANTAGES DISADVANTAGES
 Cheap labour (reduced
costs)
 Thus, reduced prices,
increasing competitiveness
 Increasing profits and
satisfying shareholders
 Access to new markets
 Location advantages
 Loss of control
 Unskilled labour (cheap but
not productive) e.g.
Outsourcing
 Quality control issues
 Intellectual property issues
e.g. HP in India
 Ethical concerns e.g. Nike,
Bangladesh factory
 Damage to a company’s
brand image

15. SHOULD APPLE BE HELD RESPONSIBLE
FOR THE ACTIONS OF IT’S SUPPLIERS?
HOW SHOULD APPLE RESPOND?
• Make its overseas operations more
transparent to its various stakeholders e.g.
FLA
• Could decide to dis-continue its business
dealings with those factories that do not meet
the minimum labour standards
• Alternatively, Apple can invest resources in its
overseas operations to minimise future
violations of labour standards.

16. ANY
QUESTIONS??
• Next Week: Group Allocations, Prepare for
tutorials