BUSN 427 Final Exam (Devry)

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Square to a Hong Kong developer who, thanks to relationships andconnections developed over the years, was able to persuade cityofficials to overlook the lease McDonald’s held for the property.Explain the concept of guanxi. Why is it so important to businessesoperating in China? How did McDonald’s lack of guanxi raise itscosts of doing business in China?(TCO 3) In 2006, two Chinese journalists reported that the workingconditions at Hongfujin Precision Industries where Apple’s iPods areproduced were substandard. According to the report, not only wereworkers at the plant poorly paid, but they were also forced to workovertime. Apple immediately responded to the allegations and auditedthe factory in question. However, managers at the factory filed adefamation lawsuit against the two journalists. Despite the fact thatApple’s audit did indeed show substandard working conditions at thefactory, Hongfujin did not withdraw the lawsuit. Eventually theReporters Without Borders group took up the case for the tworeporters and the lawsuit was dropped.Should Apple be responsible for ensuring that its suppliers aresafeguarding the basic rights and dignity of its employees? How canApple be sure that its suppliers do not employ sweatshop labor?(TCO 3) Exports are largely responsible for China’s recent rapideconomic growth. The country, capitalizing on its cheap labor force,has focused on converting raw materials into products that areexported to developed countries such as the United States. In 2008,China’s trade surplus was a record $280 billion, and its holdings offoreign exchange reserves were over $1.95 trillion. Some critics havesuggested that China is following a neomercantilist policy.Are the claims that China is following a neomercantilist policy valid?Why or why not?
(TCO 4) For years, Japan has been relatively closed to significantforeign direct investment, but more recently the government haschanged its policy and actually now encourages inward investment.Wal-Mart, taking advantage of this shift in policy, acquired a largeJapanese retailer in 2002. Wal-Mart’s initial venture into Japan hasbeen challenging and has forced the company to change its approachto better compete with local retailers and meet the needs of Japaneseconsumers.Why did Japan change its position on inward foreign directinvestment? How will Wal-Mart’s investment benefit Japan?(TCO 7) Which of the following are true about the InternationalMonetary Fund?(TCO 5) Concerning European Union’s progress toward creating asingle financial market, the quest started in 1999 was to have beencompleted by 2005, however, progress has been slowed by variousfactors related to the tradition of each member country operatingautonomously. By 2007, significant progress had been made. Some41 measures designed to create a single market were in place andothers were in the pipeline. The current issue facing the EU revolvesaround the enforcement of the rules that have been established as law.Some experts believe that it will be at least another decade before thebenefits of the new rules become apparent. Discussion of this featurecan begin with the following questions.What are the benefits of creating a single financial market in theEuropean Union for companies? Does it make sense for consumers?(TCO 6) In the 1980s, Caterpillar was negatively affected by a strongdollar and lost significant market share to Japanese competitorKomatsu. The situation prompted Caterpillar to revise its globalstrategy and by the 2000s, the company was in a much better positionto deal with volatile currency values. More recently, a strong dollar
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BUSN 427 Final Exam (Devry)

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