SINGAPORE INSTITUTE OF MANAGEMENT

UNIVERSITY OF LONDON
PRELIMINARY EXAM 2015

PROGRAMME : University of London Degree and Diploma Programmes

MODULE CODE : MN1178

MODULE TITLE : Business and Management in a Global Context

DATE OF EXAM : 24/02/2015

DURATION : 3 HOURS

TOTAL NUMBER
OF PAGES : 4
(INCLUDING
THIS PAGE)
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INSTRUCTIONS TO CANDIDATES :-

Candidates should answer FOUR of the following EIGHT questions.

All questions carry equal marks.

Candidates are strongly advised to divide their time accordingly.

DO NOT TURN OVER THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO.

MN1178 Business and Management in a Global Context Page 1

1. In recent decades, the global economy has been characterised by impressive
growth in trade between countries. Therefore:
a) Explain the three main modern theories that seek to explain why trade
between countries takes place. (13 marks)

b) What are the main strengths of each of these modern trade theories?
(6 marks)

c) What are the main weaknesses of each of these modern trade theories?
(6 marks)

2. a) What are the risks of exchange rate fluctuations for firms engaged in
international business? (3 marks)

b) How can an international manager reduce his or her firm’s exposure to

currency exchange rate risks? (10 marks)

c) Explain the disadvantages of the alternatives identified in part (b) above.

(7 marks)

d) What are the determinants of a currency’s exchange rate? (5 marks)

3. As firms engage in more and more cross-border activities, knowledge of

cultural differences between societies becomes crucial for international
managers. Therefore:
a) Explain the context, cluster and dimensions approaches to understanding
cultural differences between societies. (6 marks)

b) What are the implications of the knowledge of cultural differences between

societies for managers of international firms? (13 marks)

c) Suggest four ways in which a Human Resource Manager might implement

his or her functions differently in a Chinese subsidiary compared to in a US
subsidiary. Please explain your reasoning. (6 marks)

MN1178 Business and Management in a Global Context Page 2

4. a) Differentiate between market-seeking, resource-seeking, efficiency-seeking
and innovation-seeking motives for firms deciding to enter new geographical
markets. (8 marks)

b) How does an international manager benefit from an understanding of

Ghemawat’s AAA model for developing international business strategy?
(17 marks)

5. International firms can make use of a variety of strategies to enter new

geographical markets. Therefore:
a) Discuss the advantages and disadvantages of international licensing.
(6 marks)

b) Explain what could go wrong in an international joint venture. (6 marks)

c) Discuss the advantages and disadvantages of international acquisitions.

(6 marks)

d) Explain the attractions of wholly owned greenfield foreign direct investment.

(7 marks)

6. a) Describe the elements of a firm’s organisational architecture. (9 marks)

b) What are the arguments for and against decentralised decision making in a
firm? (8 marks)

c) Assess the merits of a global matrix structure for an international firm.

(8 marks)

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7. In light of the fact that foreign direct investment (FDI) is a significant activity
for many international firms, discuss the following:
a) What is the meaning of the term FDI? (5 marks)

b) Explain, with suitable conceptual content and illustrative examples, the OLI
framework. (12 marks)

c) What might be the possible benefits of FDI for consumers, workers, suppliers
and the government of a country that is successful in attracting such inflows?
(8 marks)

8. Using relevant concepts and illustrative examples:

a) Identify the role of location economies, experience curve effects and
economies of scale in enabling companies to attain global cost advantages.
(6 marks)

b) With regard to international business strategy, explain the forces that create
pressures for cost reductions for firms and the forces that create pressures for
local responsiveness. (8 marks)

c) Describe the four basic international business strategies that a firm can adopt
to compete in international markets. (11 marks)

END OF PAPER

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