International Business and Trade Course

Subject Code: BAINBUSX
Subject Title: INTERNATIONAL BUSINESS AND TRADE ORGANIZATION
Subject Description:
This course focuses on the core concepts and techniques for entering the international
marketplace. Emphasis is on the effect of sociocultural, demographic, economic, technological, and
political-legal factors in the foreign trade environment. As an introductory survey course, we will
cover a variety of topics to illustrate the unique nature of international business including the
patterns of world trade, currency exchange and international finance, globalization of the firm,
international marketing, and operating procedures of the multinational enterprise.
No. of Units: 3
Class Schedule: Asynchronous ACT103 Monday 7:00am - 9:00am / RM 316

Synchronous Thursday 7:00am - 9:00am / RM 316
Asynchronous ACT102 Monday 11:00am - 1:00pm / RM 316

Synchronous Thursday 11:00am - 1:00pm / RM 316
DISCLAIMER:
The information content provided in this course material is designed to provide helpful
information on the subjects discussed. Some information is compiled from different materials and
summarized from different books. Some information is based from contributors' perspective and
understanding. References are provided for informational purposes only and do not constitute
endorsement of websites or other sources. Readers should be aware that the websites/electronic
references listed in this course material may change. Hence, the contributors do not claim any
information presented in the materials and do not reflect their own work.
Course Learning Outcomes:
At the end of the course, the student must be able to:
1. To demonstrate variations of capitalism, the role of culture history, labor and social policy,
government and other institutions in economic performance and social decisions in international
economies.
2. To evaluate financial reporting standards, currency, exchange rates, foreign financial statements,
managerial accounting, auditing, taxation issues, accounting for changing prices and geographic,
environmental and social reporting in international capital markets.
3. To analyze how country’s focus on issues and stage of their economic development of their
constituent countries to become internationally competitive and he smooth exchanges between
countries.
4. To distinguish international management and multiple factors which impact functional and
regional management decisions and practices through the cross-section of global cultures.
SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 admissions-nubaliwag@nu.edu.ph
5. To analyze financial reporting standards , currency issues for changing prices and geographic,
About the Instructor: Dr. Rolando R. Calma

Master in Business Administration (Baliuag University)
Doctor in Business Administration (PUP – Manila)
Contact Information: rrcalma@nu-baliwag.edu.ph
Topics: (Week 8-13)
Module 6 INTERNATIONAL BUSINESS

Global Entrepreneurship and Intrapreneurship
Module 7 WINNING EFFECTIVE THROUGH GLOBAL TALENT MANAGEMENT

Harnessing the Engine Global Innovation
The objectives of human resource management in an international firm
How the HR function changes as a firm goes global
Differences and similarities of training employees in different countries
Module 8 COMPETING EFFECTIVELY THROUGH GLOBAL MARKETING,

DISTRIBUTION AND SUPPLY CHAIN MANAGEMENT:
International logistics
The usefulness of free trade zones
Module 9 GLOBAL COMPETITIVE ADVANTAGE

How a foreign exchange market functions
The advantages of specialization
The concept of comparative advantage
MODULE 6: INTERNATIONAL BUSINESS
I. Pre-test / Activity:
II.
One-Sentence Summary
On your OneNote, write a one-sentence summary of your understanding about business strategy.
II. Learning Outcomes
To distinguish international management and multiple factors which impact functional

and regional management decisions and practices through the cross-section of global cultures.
To analyze financial reporting standards , currency issues for changing prices and
geographic, environmental and social reporting in international capital markets.
III. Content:
What is Global Entrepreneurship?

In the words of The Global Entrepreneurship Institute, a global entrepreneur is someone
that “seeks out and conducts new and innovative business activities across national borders. These
activities may consist of exporting, licensing, opening a new sales office or acquiring another
venture.”
In the modern world, most of the key aspects of business are highly globalised. While
companies used to start out small and expand to incorporate international services into the business
over a period of time, they are now often classed as ‘global’ from the moment they begin trading.
This is because entrepreneurs have all the information they need at their fingertips to source the
best suppliers, manufacturing locations, investors and employees. It is no longer the norm to
automatically opt to use the products and services of individuals and businesses in the local area.
Global Entrepreneurs
For this reason, it is vital that global entrepreneurs maintain a thorough and up-to-date
understanding of the regions where aspects of the business’ operations are carried out. They must
also have the vision and leadership skills to take the company to new markets, as well as the ability
to identify lucrative opportunities, negotiate deals and set up advantageous partnerships.
Intrapreneurship and Its Roots

The power and spirit of entrepreneurs and entrepreneurship are also felt in the context of
established businesses. In 1992, for instance, The American Heritage
Dictionary brought intrapreneurship and intrapreneur into the mainstream by adding intrapreneur to
its dictionary, defining it as “a person within a large corporation who takes direct responsibility for
turning an idea into a profitable finished product through assertive risk taking and innovation.”The
American Heritage Dictionary (Orlando, FL: Houghton Mifflin, 1992), s.v. “intrapreneur.”
IV. Activity
Create a 1 slider presentation answering the question “Which is better? To be a Global

Entrepreneur or to be a Global Intrapreneur?”
V. Evaluation / Assessment
Presentation of Student’s Understanding
VI. Other Reading Materials
VII. References
Vaynerchuk, Gary. (2018) Crushing It!: How Great Entrepreneurs Build Their Business and
Influence-and How You Can, Too. HarperCollins Publishers
Cateora, Philips. (2016) International Marketing 17th Edition. Mcgraw Hill
Keegan, Waren J. and Green, Mark C. (2017). Global Marketing. Pearson Education Limited
Casey, Michael J. (2012). The unfair Trade: How our Broken Global Financial System Destroys the
Middle Claa. Crown Business.
MODULE 7: WINNING EFFECTIVELY THROUGH GLOBAL TALENT
MANAGEMENT
On your OneNote, write a one paragraph stating your initial understanding about talent
management.

To demonstrate variations of capitalism, the role of culture history, labor and social policy,
government and other institutions in economic performance and social decisions in international
economies.
To evaluate financial reporting standards, currency, exchange rates, foreign financial

statements, managerial accounting, auditing, taxation issues, accounting for changing prices and
III. Content:
What is Global Innovation?

Global innovation is turning an idea into a solution for a global problem that adds value
from a customer’s perspective.
Process Innovations
We typically think of new products and services as the innovation output of investments in
research and development (R&D). However, a significant amount of innovation yields no new
products or services, not because of R&D failure, but because the innovations are not related to a
company’s core processes. A process innovation is an innovation in the way a company does any
process, such as taking a customer order. A process is defined as “a specific ordering of work
activities across time and place, with a beginning and end, and clearly identified inputs and
outputs.”Thomas Davenport, Process Innovation (Cambridge, MA: Harvard Business School Press,
1993), 5. Processes can be simple activities (e.g., filling out a travel expense report), longer
processes (e.g., issuing an insurance policy), or a broad set of activities (e.g., inventory management
and distributions). The broader the process, the more impact innovating that process will have. For
example, UPS made a process change when designing the routes its drivers follow when making
deliveries. The company’s routes give preference to making right turns rather than left turns
whenever possible. The reason is that right turns are easier, faster, and safer—and they save fuel
compared to left turns. This “right turn” process innovation doesn’t involve the customer, but it
helps UPS operate more efficiently.
Open Innovation
Among the latest developments in corporate innovation is the concept of open
innovation. Open innovation is the intentional leveraging of the research, ideas, or technologies of
outsiders—that is, people or companies that are not part of the corporate entity—rather than relying
solely on innovations that are generated from inside the company. Open innovation takes innovation
beyond a company’s R&D lab and lets customers and partners participate in the creation of new
product and services.
International Human Resource Management (IHRM) is “the process of procuring, allocating,

and effectively utilizing human resources in a multinational corporation”.
What is International Human Resource Management?

An organization gains competitive edge when it has an efficient pool of employees. In
addition, we know that a large number of organizations conduct their businesses across national
boundaries. Therefore, there is an increasing need of managing global employees. The effective
management of global employees is a major determinant for the success or failure in international
ventures. It has become a challenge to procure, train, and retain employees for global organizations.
IHRM plays a very crucial role in terms of managing employees belonging to different geographical
locations and countries.
Training Differences
In reality training procedures will be the same but trainers must know what specific aspect
of orientation they need to adjust in order to make sure that global employees can adapt to the
system that the company have.
IV. Activity
Create a 1 pager containing your ideas and opinion about the essence of HRM in the global market.
Essay/Reaction Paper
VII. References
MODULE 8: COMPETING EFFECTIVELY THROUGH GLOBAL MARKETING,
DISTRIBUTION AND SUPPLY CHAIN MANAGEMENT
On your OneNote, write a one paragraph stating your idea about supply chain management.
To distinguish international management and multiple factors which impact functional

and regional management decisions and practices through the cross-section of global cultures.
To analyze financial reporting standards , currency issues for changing prices and
III. Content:
So What Is International Logistics?

According to the Council of Logistics Management, logistics is the management process of
'planning, implementing, and controlling the physical and information flows concerned with
materials and final goods from the point of origin to the point of usage.' International
logistics involves the management of these resources in a company's supply chain across at least
one international border.
Conceptual Framework
It may sound complicated, but logistics is basically the management of stuff, and
information regarding the stuff, from one place to another until it reaches the consumer. The
logistical management of physical items may include integration of information (such as inventory
databases and shipping schedules), material handling, production, packaging, inventory,
transportation, distribution, storage, and security for the resources.
Example of International Logistics
Let's look at a simple example. Just pretend for a moment that you work as a logistics
manager for a large American jewelry company based out of New York. Your company has an
extensive international supply chain. We'll walk through a simplified logistical process for a
diamond ring.
Your diamond supplier is in South Africa. You get your gold from a supplier in China. The
jewelry itself is assembled in Switzerland. Your job is to manage the supply chain from acquisition
of a resource through its transformation into a finished product and until it is sold to a customer.
Your responsibilities may include the following:
 Oversight of the purchase of diamonds in South Africa and gold necessary from China to
fulfill the company's production demands
 Arranging for the temporary warehousing of the purchased diamonds and gold at local
storage facilities
 Arranging for the international shipping of the gold stored in China to a subsidiary in a small
Eastern European country, where the gold will be refined and prepared for the jewelers in Geneva
 Arranging for the international shipping of the diamonds stored in South Africa to the
company's facilities in Geneva for cutting and polishing
 Arranging for the international shipping of the refined gold to the company's Geneva facility
to create rings and settings
 Once the rings are finished, arranging for their warehousing at the company's central
warehouse until they are needed to fill orders, keeping meticulous computerized inventory records,
and ensuring the facility is adequately secured
 Arranging for the shipment of an order of diamond rings to the company's flagship
Manhattan retail store
 Continued monitoring of the inventory at the retail store until the product is sold to a
customer
The Primary Purpose of a Free-Trade Zone is to remove from a seaport, airport, or

border those hindrances to trade caused by high tariffs and complex customs regulations. Among
the advantages of the system are the quicker turnaround of ships and planes through the reduction in
formalities of customs examinations and also the ability to fabricate, refinish, and store goods
freely.
PROS and CONS:
Pro: Economic Efficiency

The big argument in favor of free trade is its ability to improve economic efficiency.
According to basic economic theory, free trade policies mean that each country focuses on its
comparative advantage, lowering the price of goods and making everyone better off. If the United
States is really good at making cars and China is good at making televisions, free trade rules
should mean that each country plays to its strengths instead of wasting time and effort doing less
efficient tasks.
Con: Job Losses
Economic efficiency might be beneficial for the economy as a whole in the long run, but
that doesn't much help the factory worker who loses his job in the short-term. Free trade makes a
nation's overall economy more productive, but it also can force millions to change careers.
NAFTA, for example, may have destroyed more than 1 million jobs in the United States. When
discussing the pros and cons of protectionism, the practice of taxing imports heavily as a way to
maintain local industries, the issue of job loss is always an important point.
Pro: Less Corruption

Barriers to trade create lots of opportunities for political corruption, according to some
advocates of free trade. Powerful interest groups can convince governments to give them special
protections like tariffs or subsidies, while less powerful groups have to go it alone. That may give
established wealthy businesses huge advantages over rising entrepreneurs. Free trade proponents
say eliminating trade barriers creates a level playing field for everyone.
Con: Free Trade Isn't Fair

Trade barriers might create opportunities for corruption, but so do free trade agreements.
Economists may envision a society where trade barriers vanish entirely, but free trade agreements
are negotiated and signed by politicians with their own interests to worry about. As a result, the
agreements usually are immense documents full of loopholes and rules that create big advantages
for established businesses. Economic experts have noted that while NAFTA proponents said the
agreement would deregulate commerce in North America, in many cases it just replaced existing
regulations with new ones that favored the biggest corporations.
Pro: Reduced Likelihood of War

One strong advantage is that free trade reduces conflict by encouraging countries to rely
on each other for foods and services. Some economists have argued this interdependence makes
wars much less likely, since neither side would want to risk losing access to the other's markets.
Con: Labor and Environmental Abuses

Opponents of free trade often argue that it encourages businesses to move to countries
with poor environmental and labor regulations. These moves could potentially lead to systematic
labor abuses and destruction of the environment. For example, a coal mining company in the
United States might have to pay workers a high minimum wage, adopt aggressive safety policies
and protect local rivers from pollution. Free trade agreements might allow the mining company to
move operations to a country without any of those rules, allowing it to cut costs by imperiling
workers and the environment.
IV. Activity
Create a 1 pager containing your ideas and opinion about the essence of Logistics in International
Business.
Essay/Reaction Paper
VII. References
MODULE 9: GLOBAL COMPETITIVE ADVANTAGE
On your OneNote, write a one-sentence summary of your understanding about competitive
advantage.
5.To analyze financial reporting standards , currency issues for changing prices and geographic,
III. Content:
Financial Market Functions
1. Transfer Function: The basic and the most visible function of foreign exchange market is
the transfer of funds (foreign currency) from one country to another for the settlement of payments.
It basically includes the conversion of one currency to another, wherein the role of FOREX is to
transfer the purchasing power from one country to another.
For example, If the exporter of India import goods from the USA and the payment is to be made in
dollars, then the conversion of the rupee to the dollar will be facilitated by FOREX. The transfer
function is performed through a use of credit instruments, such as bank drafts, bills of foreign
exchange, and telephone transfers.
2. Credit Function: FOREX provides a short-term credit to the importers so as to facilitate
the smooth flow of goods and services from country to country. An importer can use credit to
finance the foreign purchases. Such as an Indian company wants to purchase the machinery from
the USA, can pay for the purchase by issuing a bill of exchange in the foreign exchange market,
essentially with a three-month maturity.
3. Hedging Function: The third function of a foreign exchange market is to hedge foreign

exchange risks. The parties to the foreign exchange are often afraid of the fluctuations in the
exchange rates, i.e., the price of one currency in terms of another. The change in the exchange rate
may result in a gain or loss to the party concerned.
Thus, due to this reason the FOREX provides the services for hedging the anticipated or actual
claims/liabilities in exchange for the forward contracts. A forward contract is usually a three
month contract to buy or sell the foreign exchange for another currency at a fixed date in the future
at a price agreed upon today. Thus, no money is exchanged at the time of the contract.
There are several dealers in the foreign exchange markets, the most important amongst them are the
banks. The banks have their branches in different countries through which the foreign exchange is
facilitated, such service of a bank are called as Exchange Banks.
Economies of Scale
Economies of scale describes a cost advantage achieved by a company when production
becomes efficient. Increasing production and lowering costs results in economies of scale because
the costs are spread out over a larger number of goods. Or to look at it another way, producing
additional goods does not require a significant increase in costs. Reducing the cost of units per
production is the main benefit of economies of scale.
Larger companies are more likely to achieve economies of scale than smaller companies
because they are able to produce more goods and therefore can spread out costs over a larger
number of goods.
Specialization
Specialization, in economic terms, means focusing on one task rather than multiple tasks,
which allows workers to perfect that one task. This is a basic concept of learning. When a person
attempts a specific task for the first time they may not be proficient at it. The more time spent on
practicing or learning a skill, the better an individual gets at it. And the more efficient.
Specialization Leads to Economies of Scale

As labor is divided amongst workers, workers are able to focus on a few or even one task.
The more they focus on one task, the more efficient they become at this task, which means that less
time and less money is involved in producing a good. Or put another way, the same time and the
same money allows for the production of more goods.
Once specialization occurs, resulting in economies of scale, a company is able to reduce the price
for its goods or services because it costs less to make their goods or provide their services. This
provides a competitive advantage in the market place.
Example of Specialized Labor and Economies of Scale
An assembly line for a manufacturing company provides a useful example of specialization
leading to economies of scale. Suppose a bicycle manufacturer has 10 workers each assembling 10
bicycles simultaneously. The time for one individual to assemble a bike could be considerable. In
addition, the know-how of having to put multiple pieces together requires the need for more skills.
If the bicycle maker switches to an assembly line in its factory, each of the 10 workers focuses on a
specialized aspect of the assembly process. For example, one worker would add the breaks, the next
worker would add the pedals, and so forth. Each worker would become proficient in their specific
task and allow the bike to be assembled faster as it moves down the assembly line. This
increases efficiency and allows for additional bicycles to be produced.
What Is Comparative Advantage?

 Comparative advantage is an economy's ability to produce a particular good or service at a
lower opportunity cost than its trading partners.
 The theory of comparative advantage introduces opportunity cost as a factor for analysis in
choosing between different options for production.
 Comparative advantage suggests that countries will engage in trade with one another,
exporting the goods that they have a relative advantage in.
 Absolute advantage refers to the uncontested superiority of a country to produce a particular
good better.
Comparative Advantage vs. Absolute Advantage

Comparative advantage is contrasted with absolute advantage. Absolute advantage refers to
the ability to produce more or better goods and services than somebody else. Comparative
advantage refers to the ability to produce goods and services at a lower opportunity cost, not
necessarily at a greater volume or quality.
Comparative advantage is a key insight that trade will still occur even if one country has an
absolute advantage in all products.
IV. Activity
Create a 1 slider presentation answering the question “How you can create an abosolute
advantage?”
Presentation of Student’s Understanding
VII. References

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Subject Code: BAINBUSX

Subject Title: INTERNATIONAL BUSINESS AND TRADE ORGANIZATION

Class Schedule: Asynchronous ACT103 Monday 7:00am - 9:00am / RM 316

Asynchronous ACT102 Monday 11:00am - 1:00pm / RM 316

Course Learning Outcomes:

At the end of the course, the student must be able to:

About the Instructor: Dr. Rolando R. Calma

Contact Information: rrcalma@nu-baliwag.edu.ph

Topics: (Week 8-13)

Module 6 INTERNATIONAL BUSINESS

Module 7 WINNING EFFECTIVE THROUGH GLOBAL TALENT MANAGEMENT

Module 8 COMPETING EFFECTIVELY THROUGH GLOBAL MARKETING,

Module 9 GLOBAL COMPETITIVE ADVANTAGE

II. Learning Outcomes

To distinguish international management and multiple factors which impact functional

What is Global Entrepreneurship?

Intrapreneurship and Its Roots

Create a 1 slider presentation answering the question “Which is better? To be a Global

VI. Other Reading Materials

II. Learning Outcomes

To evaluate financial reporting standards, currency, exchange rates, foreign financial

What is Global Innovation?

International Human Resource Management (IHRM) is “the process of procuring, allocating,

What is International Human Resource Management?

VI. Other Reading Materials

II. Learning Outcomes

To distinguish international management and multiple factors which impact functional

So What Is International Logistics?

The Primary Purpose of a Free-Trade Zone is to remove from a seaport, airport, or

PROS and CONS:

Pro: Economic Efficiency

Con: Job Losses

Pro: Less Corruption

Con: Free Trade Isn't Fair

Pro: Reduced Likelihood of War

Con: Labor and Environmental Abuses

II. Learning Outcomes

Financial Market Functions

3. Hedging Function: The third function of a foreign exchange market is to hedge foreign

Specialization Leads to Economies of Scale

Example of Specialized Labor and Economies of Scale

What Is Comparative Advantage?

Comparative Advantage vs. Absolute Advantage

VI. Other Reading Materials

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