According to Transparency International, the United States is the least corrupt country in the world.

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Question 2 (4 points)

If a company does not hold any patents, then they do not have any intellectual property issue to deal with abroad.

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Question 3 (4 points)

While increased regional economic integration means that markets that were once protected and not open to foreign trade and investment are increasingly opening, it also means both domestic and foreign companies will

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Question 4 (4 points)

If a U.S. company files and receives a patent from the U.S. Patent and Trademark Office, they do not have to file for patent and other intellectual property protection in other countries.

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Question 5 (4 points)

When entering international partnership agreements (i.e., distribution or sales rep agreements), those non-U.S. partners are not subject to U.S. laws against corruption, as long as they are not directly employed by the U.S. company.

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Question 6 (4 points)

A primary challenge that Netshoes.com faced and corrected was:

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Save

Question 7 (4 points)

When building websites, most languages will appear the same within website templates

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Question 8 (4 points)

A common challenge to rural market development, particularly in developing countries, is

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Question 9 (4 points)

Arcelik held a significant amount of market share domestically in Turkey. As a result, this brand recognition was a strength when they entered other markets, as they were well known globally.

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Question 10 (4 points)

A primary method company use to market their products abroad, build relationships and meet potential new business partners is:

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Among the benefits offered by corporations, at least in the United States, is health insurance. One explanation for why corporations offer such insurance is that this benefit is tax favored: Companies can compensate employees with health-insurance benefits that are treated as nontaxable income. Also, health care providers and insurers (such as Blue Shield) have historically offered better rates to employers for their employees than to individuals who ask for the same coverage. Why is this?

The SBD Dauntless was a dive-bomber that was used by the United States Navy during World War II. Consider one such aircraft flying with a velocity of 103 m/s at an angle θ below the horizontal. The aircraft releases a bomb when its altitude is 2.15 km above sea level. At the point when the bomb is released, the magnitude of the displacement from the bomb to its target at sea level is 2.68 km. What is the angle θ? (Give your answer in degrees. Consider θ to be a positive value, measured downward from the horizontal axis.)

_________ ° downward from the horizontal

A company whose operations (and costs) are located in the United States has most of its sales in the United Kingdom. The company’s managers think the main effect on the pound-dollar rate will be Brexit but there are three possible scenarios: a messy Brexit causes a sharp depreciation of the pound, a post-Brexit investment boom causes an appreciation of the pound, or a delay of Brexit causes the pound-dollar rate to remain stable. a) Which of the three scenarios would be costly to the company? Which would be advantageous? Explain briefly. b) The manager considers the Brexit delay to be the most likely and the Brexit scenario advantageous to the company to be very unlikely. She wants to hedge against the scenario that is costly to the company. Under these circumstances, would futures or options be a better way to hedge? Why is the fact that the advantageous scenario is unlikely relevant to the decision?

Comcast is the largest cable provider in the United States. This activity is important because despite its impressive power, influence, and politics, Comcast failed to effectively influence stakeholders including customers, employees, regulators, networks, and other content providers.

The goal of this activity is to apply the knowledge of OB in order to understand why Comcast failed in its bid to acquire Time Warner, and allow you to provide realistic solutions for future acquisition attempts.

Read the case about Comcast’s failure to influence key stakeholders. Then, using the 3-step problem-solving approach, answer the questions that follow.

Like many companies in the telecom industry, Comcast has chosen to grow by buying competitors. After acquiring AT&T’s Internet business in 2001, the company has remained on the acquisition train ever since. Its largest purchase to date was NBC Universal in 2011 for $18 billion, but its most notable was its thwarted 2015 attempt to buy Time Warner for $45 billion. Despite its impressive power, influence, and politics, Comcast failed to effectively influence stakeholders including customers, employees, regulators, networks, and other content providers. More than 300,000 comments were filed with the Federal Communication Commission (FCC) by customers who opposed the merger. For perspective, the merger between AT&T and T-Mobile drew just over 40,000 comments.¹

Why Bother in the First Place?

Comcast is the largest cable provider in the United States despite having the worst customer satisfaction ratings in its industry. It has twice earned the dubious distinction of being the “Worst Company in America,” according to Consumer Reports’ customer satisfaction arm. Comcast’s customer service was so poor as to be considered legendary. And its reputation with various networks and cable channels such as Discovery, Disney, 20th Century Fox, and the NFL Network had been declining for years.² These partners are in effect customers, and Comcast has pressured them to pay higher fees to distribute their content through its cables.³

Industry trends were affecting Comcast’s current performance and its future prospects. Consumers have been cutting the cable and instead accessing their content via streaming alternatives such as Netflix and Amazon Prime. Netflix alone accounts for one-third of all Internet traffic. But apparently believing that being No. 1 was not enough, Comcast’s leaders decided that acquiring Time Warner would enable them to better serve existing and new customers, as well as to defend against increasingly diverse competition from Google, Dish Network, and others.⁴

Attempts to Influence the Players

Comcast was determined and resourceful in its attempt to make things go its way. A major part of its efforts focused on Washington, D.C., since no merger of that size goes through without regulatory approval. Comcast employs a force of more than 100 lobbyists, and its $17 million annual lobbying budget is second only to Google’s.⁵ Lobbying efforts were largely intended to influence officials in the FCC and Department of Justice (DOJ), the regulators who would ultimately decide how the merger would affect competition and consumer choice, and who would either block it or allow it to proceed. Members of these government departments were buried in data, wined and dined, and presented with dazzling arguments highlighting the potential benefits of the merger. But Comcast did not stop there. CEO Brian Roberts courted President Obama, golfing with him on Martha’s Vineyard. And Comcast Executive Vice President David Cohen hosted three fund-raisers for the president at his home, raising more than $10 million for the Democratic party.⁶ Roberts and Cohen presumably thought that associating with key players in the government would win them favor with regulators and members of Congress who might influence the merger and other policies favorable to Comcast.

For its part, the company argued that a merger of the two largest players wouldn’t stifle competition but instead allow them to provide more services to more customers. For instance, it currently provides Internet services to low-income and rural residents. Combining with Time Warner, the company claimed, would enable it to serve even more of these customers.⁷

The Other Side and Ultimate Outcome

Ultimately, the money, the relationships, the lobbyists’ arguments, and the pressure failed to work. Its opponents used many of the same bases of power, influence, and political tactics to argue against the merger that Comcast used to promote it, and the company withdrew its bid for Time Warner. It didn’t help that Comcast already had such a poor reputation with many of the parties from whom it needed support. It is noteworthy that in mid-2016 Charter Communications successfully acquired Time Warner in a merger worth $79 billion.⁸

Assume you are CEO Roberts, and you want to successfully acquire a large competitor in the future. Drawing on what you learned from the Time Warner experience, what would you do now to improve your chances?

Apply the 3-Step Problem-Solving Approach to OB

Step 1: Define the problem.Step 2: Identify causes of the problem by using material from this chapter, which has been summarized in the Organizing Framework for Chapter 12 and is shown in Figure 12.9. Causes will tend to show up in either the Inputs box or the Processes box.Step 3: Make your recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and feasible?

1. Discuss the international benefits of harmonization of the IFRS and the United States generally accepted accounting principles.
2. Why is the analyst report important to an investor?
3. What has been the impact of the key provisions in the Sarbanes Oxley Act on the way financial reports are currently done?
4. Discuss the difference between rules based and principle based approach towards standard settings. Which method would you recommend and why?

Traditional retail in the United States, the kind you find at the malls, and urban department stores, is in trouble. The very large retailers such as Walmart, Macys, Kohls, Sears, and Nordstrom all have reported about 1% to 2% sales growth since the recession of 2008. In 2016, Target, Macys, Sears, JCPenny, and others are closing hundreds of stores. Since 2000, consumers have been shifting away from traditional retail goods like apparel and electronics(the mainstays of retail stores), and buying more services like vacations, exercise, dining, and health care. The much bigger threat to traditional retail is coming from online retail, mostly Amazon, that has gobbled up the lion’s share of online retail (about 25% of all online retail), and has been growing at astounding rates like 15% to 20% a year since 2008. Apparel and electron-ics are also the largest sales items for online retailers, so the physical stores and the online giant all compete selling the same goods. Traditional retailers have spent over a billion dollars in the last decade trying to become online retailers, and meet consumers wherever they want to buy, online, or at the store. It’s called an “omnichannel” strategy: using multiple channels like physical stores and online Web and mobile apps to sell products. Many traditional large retailers such as Walmart, Macys, and Costco, have wound up in the top ten online retail rankings. But so far the omnichannel strategy has not been especially successful in keeping up with Amazon’s growth. In what promises to be the online battle of the decade, the two biggest players, the heavy weights, Walmart and Amazon, are going head to head for the consumer dollar. In a broader sense, it’s the online-business model versus the physical- department-store busi-ness model which was invented by Macy’s in 1870. But to be fair to the traditional retailers who have developed their online and mobile sales channel, it’s more accurate to say it’s the omnichannel model versus the pure-online digital model of Amazon. Here’s how the two heavy weights shape up. Walmart’s revenues in 2015 were $485.6 billion (the largest Fortune 500 company), it had earnings of $15 billion (about a 3% margin) , and e-commerce sales of 13.7 billion (around 3% of total sales revenue). Walmart has about 5,200 stores of all kinds in the U.S. It produces around $15 billion in free cash flow a year, and has about $9 billion cash on hand. In 2016 Walmart’s market value is in the area of $230 billion. It’s sales growth in 2015 was 1.8%. Walmart employs about 2.1 million people (1.4 million in the U.S. alone), making it the largest employer in the world and the U.S. That works out to $231,000 of revenue for each employee. Amazon’s revenues in 2015 were $107 billion (the largest e-commerce company, but only 35 in the Fortune 500), it had earnings of $596 million (about a 1.8% margin), and e-commerce sales of $92 billion. Amazon has about $8 billion in cash on hand. In 2016 Amazon’s market value is about $366 billion, and its sales growth in 2015 was about 20%. Amazon employs about 222 million people. That works out to $481,000 of revenue for each employee. The retail battle of the decade shapes up as a contest between a giant traditional retailer that is growing very slowly, and has only a tiny online presence, versus the largest online retailer which is growing very rapidly, and has no physical store presence. Both companies have significant financial assets, and nearly limitless credit, to build or acquire whatever capabilities they choose. Walmart needs to develop new systems and capabilities both in-house, and through acquisitions. In 2016 Walmart bought the start up Jet.com, and small but fast-growing Amazon competitor. Videos 1 and Video 2 describe Walmart’s senior management strategy for developing a competitive online presence. The outcome will in part be determined by how well Walmart can develop a competitive logistics system to compete with Amazon. The Instructional Videos for this chapter describe how both Walmart and Amazon are devel-oping their fulfillment systems, and their plans to compete on delivery and fulfillment.

1. What are the three key assets that Walmart can leverage (build on) to compete with Amazon and other online retailers?

2. What is Walmart’s e-commerce strategy?

3. Why isn’t Walmart worried about the channel conflict between its online sales and its store sales?

Imagine you are the treasurer of a Japanese company exporting electronic equipment to the United States. All revenues are received in USD and all other expenses (e.g., R&D costs, costs of employees etc) are incurred in Japanese Yen.

Required:

(i) Discuss whether you need to hedge the foreign exchange risk and factors you need to consider when designing contracts to hedge the risks.

(ii) If the company is able to raise the price of its product in USD if Yen appreciates without affecting the sales volume, how would you adjust your recommendation in part (i) and sell your strategy to other executives?

Hint: If the company is able to raise the price of its product in USD if Yen appreciates, what does it tell you about the company’s foreign exchange exposure? Which derivative security (securities) could be used to hedge this risk? There is no model answer to this question, you just have to provide reasoned explanations.

Do you think that the United States is tolerant of “difference?” Our country was founded on the concept of religious tolerance, but...Wikipedia defines religious intolerance as:

Religious intolerance, rather, is when a group (e.g., a society, religious group, non-religious group) specifically refuses to tolerate practices, persons or beliefs on religious grounds (i.e., intolerance in practice).

What do you think? Are there some cultures more tolerant/less tolerant?

Are the U.S. experiences any different than that of other cultures? Frame your discussion within the context of the sociological perspectives.

The United States has been experiencing a dramatic spike in opioid use and overdose in the past few years, tied, in part, to prescription pain medication use. Concerns have been raised that the country has not responded quickly enough to this crisis. What role do you see for psychologists and those in related fields in halting this epidemic?