Examiners’ commentaries 2015
Examiners’ commentaries 2015
MN1178 Business and management in a global context
Important notes
This commentary reflects the examination and assessment arrangements
for this course in the academic year 2014–15. The format and structure
of the examination may change in future years, and any such changes
will be publicised on the virtual learning environment (VLE).
Information about the subject guide and the Essential reading
references
Unless otherwise stated, all cross-references will be to the latest version
of the subject guide (2013). You should always attempt to use the most
recent edition of any Essential reading textbook, even if the commentary
and/or online reading list and/or subject guide refers to an earlier
edition. If different editions of Essential reading are listed, please check
the VLE for reading supplements – if none are available, please use the
contents list and index of the new edition to find the relevant section.
Additional examinable material
Note that for Summer 2016 and all subsequent examinations the taught
subject of Exchange Rates and the International Monetary System –
Chapter 6 of the MN1178 subject guide – is examinable.
General remarks
Learning outcomes
At the end of the course, and having completed the Essential reading and
activities, candidates should be able to:
• demonstrate knowledge of, and the ability to assess, core institutions
of international business and how firms manage on the global stage
• assess regional, cultural and institutional differences in how business is
conducted globally
• apply core understandings, frameworks and management principles to
specific business contexts
• formulate choices and decisions in international business strategy and
operations
• operate as an informed employee in an international firm.
In summer 2015 the first large-scale examination, consisting of over 2,000
students, of MN1178 Business and management in a global
context took place. This gave the examiners an opportunity to comment
in detail on the results, processes and lessons learned. Therefore the
Examiners’ commentaries will be quite detailed, and will be useful not
just to next year’s cohort but to those in the future, as it lays down some
guidelines that may well be perennial.
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MN1178 Business and management in a global context
We have spent some time analysing in detail reasons for failure and
underperformance, and I will discuss the emerging points and lessons now.
First, all too many candidates had not read the subject guide carefully. As
a result they did not act on its guidelines and advice. All the instructions
needed for preparing to study the content and being successful in the
examinations are contained within the subject guide.
Secondly, candidates who failed, or underperformed significantly,
demonstrated through the brevity and poor quality of their answers that,
unlike the more successful candidates, they had not interacted with the
subject guide, and with the tasks and activities recommended, and had
not read, digested and used in their answers material from the textbook
written specifically for this course, namely L. Willcocks, Global business
management foundations (Stratford: Steve Brookes Publishing, 2013)
[ISBN 9780956414533]. Failing and underperforming candidates, instead,
seem to have been over-reliant on their course teacher (if they were
studying at an educational institution), and the slides provided by their
institution, and seem to have spent quite a lot of time studying the sample
questions and answers spread through the subject guide as a substitute
for engaging with the subject areas of the course in detail. Candidates, I
would suggest, need to take more responsibility for their own learning,
and the subject guide and textbook give them a very rich set of resources
for self-study which, when allied to teaching, will enable a strong
performance in any future examination.
Third, as readers of these Examiners’ commentaries look through the
comments on the examination questions below, they will notice that
marks are given in every question for illustrative examples. Spending time
working at illustrative examples is a good way of making learning stick,
and illustrative examples earn marks in the examination. The subject
guide has many activities which enable the candidate to engage with cases
and examples, while the Willcocks (2013) text includes many illustrative
examples. In addition, candidates are guided to cases in the Essential
reading text: M. Peng and K. Meyer, International business (London:
Cengage Learning, 2011) [ISBN 9781408019566].
Fourthly, there was some evidence that candidates tried to question spot
based on past Sample examination papers and last year’s examination
questions. In fact, our only objective each year is to represent all the
subjects in the syllabus as best we can. We can understand that candidates
might choose to focus on certain subject areas and, given our objective,
it is likely that, whatever focus they choose will be represented in any
examination paper. However, failing and underperforming candidates
invariably gamble far too much on preparing too few subject areas for
the examination. We had plenty of examination scripts where one or two
questions were done well, and the remaining two questions scored very
few marks indeed, not through time pressure but because the candidate
manifestly just did not know the subject. I refer such candidates back
to the first three points I make above. The examination requires the
candidate to answer four questions, and candidates are advised to
prepare for many more questions than just four. A poor strategy is hoping
to do two questions well and scrape by on the other two. Note also that if
a candidate wishes to gamble, they should be aware that a question area
may well cross several chapters in the subject guide and textbook.
Fifthly, a real discriminator between candidates with good to very good
results and those who fail and underperform is examination technique.
Appendix 1 and Appendix 2 of the subject guide has explicit and detailed
2
Examiners’ commentaries 2015
advice on this, and candidates who are planning to sit an examination are
advised to read these carefully.
I will detail the major discriminators in the 2014–15 examination:
• Candidates must answer all the questions set. Quite simply, no
answers, no marks.
• The best candidates allocate the appropriate time to each question.
If each question stands to earn up to 25 marks, then each question
should receive your attention for approximately one quarter of the
time of the examination.
• The best students understood that each question was very explicit
about what marks would be given for what answers. For example,
Zone A question 2 gives 6 marks for part (a), 13 marks for part (b)
and 6 marks for part (c). Do not spend all your time on part (a) when
over half the marks are going for part (b), but at the same time make
sure you allocate enough time to earn the 6 marks for part (a) and the
6 marks for part (c).
• The best candidates were also very clear about answering the question
set, and not the question they hoped would be asked but was not.
Candidates must understand that examiners cannot give marks for
detail that does not actually answer the question set.
• The best candidates also realised that they would be rewarded for
defining important terms or concepts. For example, in Zone A question
1(a) a definition of resource-based view is actually called for. In
Zone A question 3(a) the types of approach need to be described/
defined. Throughout the examination candidates need to demonstrate
an understanding of the terms and concepts in use, and marks are
awarded for displaying this understanding. As we have said above,
candidates also get marks for illustrative examples. Failing and
underperforming candidates tended to offer few illustrative examples
in their answers.
Conclusion
We really do hope that these comments will be read very carefully and
acted upon in future years. As examiners we are much happier marking
good scripts than poor ones. As chief examiner, I want to see students do
well, but find all too many who underperform. Candidates themselves, as
very many have demonstrated this year, have the means to hand to put in
a good to very good – and even excellent –performance.
Read the subject guide very carefully. Interact with it, and attempt its
tasks and activities as instructed. Digest and learn from the textbook by
Willcocks (2013) and use Peng and Meyer (2011) as instructed in the
subject guide, especially for its illustrative examples.
Do not gamble on using just lecture slides and previously suggested
answers as a basis for getting a good examination result. The evidence
is that it does not work. Learn the subject and its future relevance to any
career you might choose once you get your degree.
Internalise the knowledge you gain, and make it memorable through
illustrative examples. Beware of (and write about in the examination) the
strengths and weaknesses of any course of action you recommend, or any
principle you need to talk about.
Finally, ensure you observe the principles of good examination technique
detailed in these Examiners’ commentaries and in the subject guide,
Appendix 1 and Appendix 2.
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MN1178 Business and management in a global context
Examination revision strategy
Many candidates are disappointed to find that their examination
performance is poorer than they expected. This may be due to a
number of reasons. The Examiners’ commentaries suggest ways of
addressing common problems and improving your performance. One
particular failing is ‘question spotting’, that is, confining your
examination preparation to a few questions and/or topics which
have come up in past papers for the course. This can have serious
consequences.
We recognise that candidates may not cover all topics in the syllabus
in the same depth, but you need to be aware that examiners are free
to set questions on any aspect of the syllabus. This means that you
need to study enough of the syllabus to enable you to answer the
required number of examination questions.
The syllabus can be found in the Course information sheet in the
section of the VLE dedicated to each course. You should read the
syllabus carefully and ensure that you cover sufficient material in
preparation for the examination. Examiners will vary the topics and
questions from year to year and may well set questions that have not
appeared in past papers. Examination papers may legitimately include
questions on any topic in the syllabus. So, although past papers can be
helpful during your revision, you cannot assume that topics or specific
questions that have come up in past examinations will occur again.
If you rely on a question-spotting strategy, it is likely
you will find yourself in difficulties when you sit the
examination. We strongly advise you not to adopt this
strategy.
4
Examiners’ commentaries 2015
Examiners’ commentaries 2015
MN1178 Business and management in a global context
– Zone A
Important notes
This commentary reflects the examination and assessment arrangements
for this course in the academic year 2014–15. The format and structure
of the examination may change in future years, and any such changes
will be publicised on the virtual learning environment (VLE).
Information about the subject guide and the Essential reading
references
Unless otherwise stated, all cross-references will be to the latest version
of the subject guide (2013). You should always attempt to use the most
recent edition of any Essential reading textbook, even if the commentary
and/or online reading list and/or subject guide refers to an earlier
edition. If different editions of Essential reading are listed, please check
the VLE for reading supplements – if none are available, please use the
contents list and index of the new edition to find the relevant section.
Additional examinable material
Note that for Summer 2016 and all subsequent examinations the taught
subject of Exchange Rates and the International Monetary System –
Chapter 6 of the MN1178 subject guide – is examinable.
Comments on specific questions
Candidates should answer FOUR of the following EIGHT questions. All
questions carry equal marks. Candidates are strongly advised to divide
their time accordingly.
Question 1
‘The resource based view of strategy has become the key to securing
international strategic advantage.’ Assess this statement under the following
headings:
a. Describe the main component of the resource-based view of strategy, using
examples to illustrate your points (5 marks).
b. Using examples, assess the strengths and weaknesses of the resource-based
perspective when applied to doing business internationally (10 marks).
c. Describe and assess the strengths and weaknesses of the competitive
positioning approach. Use examples to illustrate your argument (10 marks).
Reading for this question
Relevant material and references for Question 1 are in pp.99–109 of the
subject guide, and L. Willcocks Global business management foundations.
(Stratford: Steve Brooks Publishing, 2013) [ISBN 9780956414533]
Chapter 5. Candidates who accessed these sources did well on the whole.
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MN1178 Business and management in a global context
Approaching the question
For a), resource use VRIO (valuable, rare, inimitable, organization) or
VRIN (non-substitutable) model as a definition of the basis of temporary
and sustainable competition. Good candidates gave illustrative examples.
For b), there are many strengths and weaknesses that could have been
included. Two would be: conceptual blurring of resources and capabilities;
a capability is only potential and has to be directed and proven in
performance. Try to give six points here. Again note there are at least 2
marks for illustrative examples.
For c), again there are many strengths and weaknesses of the competitive
positioning approach mentioned in the sources. The examiners expected
a description of Porter’s Five Forces and all the strengths and weaknesses
related to it. Some 4 marks were allocated for the description of this
or another relevant model. Another 6 marks went to strengths and
weaknesses, to include illustrative examples. Strengths and weaknesses
included: needs to be applied at the right level – not necessarily industry
level but useful lense for most important issues; neglects complementors
which could be a sixth force needing analysis; may assume too much
stability; and needs to be revisited frequently.
Question 2
For managers of international firms, research and development (R&D) strategy is
an issue of major concern. Using appropriate examples, explain the following:
a. Why is R&D activity so necessary for many global companies?
(6 marks)
b. What are the major factors that should determine where a company locates
its R&D facilities? (13 marks)
c. Why is it necessary for new product development efforts to involve close
coordination between R&D, marketing and production?
(6 marks)
Reading for this question
The material appears in the subject guide, Chapter 10, and Willcocks
(2013) Chapter 7, as well as M. Peng and K. Meyer International business.
(London: Cengage Learning, 2011) [ISBN 9781408019566], cases and
Chapter 17.
Approaching the question
For a), the necessity comes from a number of factors, for example
intensifying competition in most industries needs ever more products.
Globalisation requires different versions of a product for different markets.
The examiners expected at least six points with illustrative examples.
For b), major factors for location of basic and applied research gained 13
marks. Good answers included factors like: where new product demand is
strong; where consumers are affluent; where competition is intense.
The good answers often had more than seven points and a good answer
was best arrived at through illustrative examples. No additional marks
were given if the answers to b) duplicated points made in a).
For c), close coordination is needed across R and D, marketing and
production because, for example: customers need to drive product
development; new products need to be designed for ease of manufacture.
The examiners expected about six points to be made to earn the marks
allocated to this part of the question.
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Examiners’ commentaries 2015
Question 3
Globalisation exposes transnational corporations to complex ethical issues and
requires them to create appropriate corporate social responsibility (CSR) policies.
Discuss this assertion under the following headings:
a. Using appropriate illustrations, explain the three approaches that companies
can adopt to deal with ethical dilemmas that arise when operating
internationally. (12 marks)
b. Using appropriate examples, describe the four strategies that an
international business can adopt with respect to CSR. (13 marks)
Reading for this question
The material is contained in the subject guide, Chapter 3, p.41, Peng and
Meyer (2011) Chapter 3, and Willcocks (2013) Chapter 3.
Approaching the question
For a), candidates should be familiar with three approaches:
• ‘ethical relativism’
• ‘ethical imperialism’
• ‘middle of the road’
and be able to describe each with suitable examples of their use and the
dilemmas created (3 marks for each approach). Other named approaches
are acceptable. The examiners expected a discussion of ethics and ethical
dilemmas for international businesses, with examples for a total of 3
marks.
For b), on CSR the answer should include some discussion of what
CSR is and the notion of a triple bottom line – economic, social and
environmental – and provide examples of CSR in action (for 3 marks). The
main part of the answer should be on CSR strategies. The four that need to
be described are:
• reactive
• defensive
• accommodative
• proactive
each with an illustrative example (for 2 marks each).
Additional marks were assigned for strong answers in the strategies, or for
additional discuss on the challenges in CSR.
Question 4
The phenomenon of globalisation has given rise to major benefits and costs
for countries and companies in the contemporary world economy. Discuss this
statement by considering the following questions:
a. What are the major trends underlying contemporary globalisation? (8 marks)
b. What are the major issues in the debate about the pros and cons of
globalisation in the twenty-first century? (17 marks)
Reading for this question
Relevant material and references are in pp.14-21 of the subject guide. See
also Willcocks (2013) Chapter 1.
Approaching the question
For a), a definition of globalisation was needed (something like ‘the
shift towards a more integrated and interdependent world economy’),
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MN1178 Business and management in a global context
with elaborations on the basic definition and a discussion of trends, for
example, reduced barriers to trade, and capital investment, increased FDI,
growing affluence in many countries creating more attractive markets
globally. The examiners expected candidates to make around eight points.
Mention of Friedman’s ten flatteners gains some marks, depending on
detail.
Part b) can be approached in many ways. On pros and cons, these may
well be different for a company as opposed to a nation or an individual.
A candidate may well choose one or two of these stakeholders, in which
case we looked for a richer answer on the stakeholder(s) chosen. However,
the examiners did expect country advantages and disadvantages, and also
company advantages and disadvantages to be addressed.
Advantages for a country got up to 4 marks (e.g more inward investment).
Disadvantages for a country got up to 3 marks (e.g. increasing economic
instability and dynamism due to connected world). Advantages for an
international business using globalisation to its advantage got 4 marks
(e.g. technological advances promote international trade; lower barriers
to trade and investment). Challenges for an international business got 3
marks (e.g globalisation promotes protectionism and regional barriers as
a reaction; heightened competition from diverse countries and industries).
The examiners allowed 3 marks for illustrative examples.
Question 5
Marketing is key to competing internationally. Therefore:
a. Describe the four main types of marketing strategies available. Use examples
to illustrate your answer.
(5 marks)
b. Describe the four main components of the marketing mix.
(6 marks)
c. Discuss the challenges and ways of developing the marketing mix for each
type of marketing strategy you have identified. (14 marks)
Reading for this question
The material for this question is covered in the subject guide, Chapter 10,
and Willcocks (2013) Chapter 7.
Approaching the question
For a), 1 mark was given for each of: market penetration, market
development, product development and diversification or similar
vocabulary that includes a brief description of the strategy, and 1 mark for
illustrative example(s).
For b), the four main components are Price, Place, Product and Promotion.
The examiners gave 1 mark each for a description with 2 marks assignable
for good detail.
8
For c), the examiners expected a strong discussion of how the marketing
mix is established for each strategy in a). This had to cover the four Ps
though the points made might vary. For Price, relevant points included
pricing for different markets; finding what the market will bear. For Place,
challenges include establishing distribution channels that are cost efficient
and get goods to customers in timely fashion; choosing between the
logistics options. On Product – definitions of product helped here – what
are customers buying; need to look at physical product, features, quality
levels, accessories, installation, instructions, fit in overall product line and
fit with other of the 4 Ps. For Promotion, as just some examples, good
answers included different types of communication and different types
of channels; standardised or customised messaging; uses of online, social
media.
Examiners’ commentaries 2015
The examiners gave 3 marks for the discussion of challenges and ways
forward for each strategy. We assigned up to an additional 2 marks for any
good illustrative examples.
Question 6
Types of international business strategy imply types of organization structure
and organization architecture. Therefore:
a. What are the four main types of international business strategy? Give
examples of each.
(5 marks)
b. Define and discuss, using illustrative examples, the main types of
organization structure, which strategies they support, the advantages and
disadvantages of each, and when each is best used. (10 marks)
c. Structure is part of organization architecture. Describe, using examples, the
other four components of organization architecture, and the importance of
the concept of ‘fit’ when designing organization architecture. (10 marks)
Reading for this question
The content of the answer is covered in the subject guide, Chapters 7 and
11, and Willcocks (2013) Chapters 4 and 8, as well as in Peng and Meyer
(2011).
Approaching the question
For a), the four main types of strategy are international, global
standardisation, localisation, transnational (1 mark each). Other
terminology could be used, provided the descriptions embraced the idea
that these are different responses to different combinations of pressure for
cost reduction and pressure for local responsiveness (for 1 mark).
For b), definition of structure got 1 mark. The four main types of structure
and the strategies they support got a total of 4 marks. Advantages and
disadvantages of these got 1 mark per structure = 4 marks, and 1 mark for
illustrative examples.
For c), the components of organisation architecture, apart from structure,
are people, processes, culture, incentives and controls. A definition and
description got 2 marks each. The importance of the concept of ‘fit’, with
any examples got 2 marks.
Question 7
It is very important for a business to consider why and when to enter new
markets effectively. Therefore:
a. Assess the factors a business would need to consider when deciding whether
to enter a foreign country market, which market to enter, when to enter, and
the scale and ownership required. Use examples to illustrate your points. (8 marks)
b. What is a strategic alliance? Using examples, assess its advantages and risks
as a mode of foreign market entry for the internationalising business.
(6 marks).
c. When are fully owned subsidiaries an attractive market entry mode? When
are they less attractive?
(6 marks)
d. Describe what a turnkey project is, and the conditions under which it is an
attractive mode of entering a foreign market. What potential problems make
a turnkey project approach less attractive?
(5 marks).
Reading for this question
The material for this question is covered in the subject guide, Chapter 9,
and Willcocks (2013) Chapter 6.
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MN1178 Business and management in a global context
Approaching the question
a. The main factors to be considered include:
Will it increase sales and/or improve competitive positioning?
Can we sell on products developed for saturated domestic markets?
Does it help us to evolve to a larger international business?
Are there location factors that give us an advantage (e.g. cheaper
labour, resources, favourable government policies or local
institutions; is it part of an economic cluster of related industries)?
Are there companies we can work with as, for example, franchises,
alliances/JVs, or license?
Much depends on objectives and international strategy (e.g. a marketseeking firm looks for scale of market; a natural-resource-seeking firm
looks for cheaper resources), for example:
Get a first mover advantage, establish the brand early and
create switching costs in case customers think of going to later
competitors.
Scale and ownership (i.e. level of commitment) depend on
strategy. Ownership and control come from a wholly owned
greenfield. If less is needed, then choose partial acquisition or a
joint venture.
b. A description of a strategic alliance is required (e.g. collaboration
between independent firms using equity modes and/or non-equity
contractual agreements). (1 mark)
Advantages of strategic alliances for market entry are, for example:
They facilitate entry.
They function as a stepping stone to full acquisition.
Fixed costs and risks are shared.
Complementary skills/capabilities are brought together.
They are better scaled to compete in an international market.
(2 marks)
Risks may, for example, give your ally a competitive edge against you,
and may result in valuable leakage of knowledge and in a high failure
rate due to goal divergence and incompatibility. (2 marks)
Illustrative example(s) would gain candidates 1 mark.
c. Conditions under which foreign owned subsidiaries are an attractive or
less attractive market entry mode include:
They reduce the risk of losing control over core competences.
They gain all the profits.
Key technologies/knowledge/IP are protected.
They maintain tight control over operations.
The gain location and experience curve economies. (3 marks)
But:
The firm bears the full risk and costs.
Greenfield sites are slower to establish and often risky, and require
a lot of local knowledge and must fit with PESTEL factors.
Acquisitions may fail due to, for example, overpaying, clash of
cultures or synergies not being realised. (3 marks)
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Examiners’ commentaries 2015
d. Some description of what a turnkey project is and the different types
earn 1 mark.
A turnkey project is an attractive mode of entering a foreign market
because:
It is a way of earning returns from know-how the firm has
assembled (i.e. selling the service to suit local requirements).
It is less risky than a more conventional FDI. (2 marks)
Problems include:
Market growth may be small once the project finishes.
It could create a local competitor which then competes
internationally.
It may be giving away/selling IP/capability to potential
competitors. (2 marks)
Question 8
‘Formal and informal institutions greatly affect and shape the strategies that are
possible in specific countries and markets.’ Therefore:
a. Describe, using examples, the major political, economic and legal institutions
an international business needs to take into account in designing its strategy.
(7 marks)
b. Describe, using examples, the major informal institutions an international
business needs to take into account in designing its strategy. (7 marks)
c. Define PESTEL and SWOT analyses and describe, using examples, how these
can be used to develop an environmental analysis for international business
strategy development (11 marks).
Reading for this question
The material for answering this question appears in Chapters 2, 3 and 4 of
Willcocks (2013) and Chapters 2, 3 and 7 of the subject guide.
Approaching the question
For a), political system, the examiners expected a discussion of collectivism
versus individualism, different types of ‘totalitarian’ and ‘democratic’
systems, with examples (2 marks). Economic systems discussed should
include market, command and mixed economies with examples (2
marks). Legal system should include common, civil and religious law with
examples (2 marks). Some discussion as to how these impinge upon an
international business (1 mark – total 7 marks).
For b), informal institutions covers cultural, social, language, religious
and ethical dimensions. Some discussion was expected of culture, types
and their importance (2 marks) as well as of the roles of language and
social class (2 marks) and the role of different types of religion and ethics
(3 marks). Candidates were expected to point out the relevance of these
institutions to international business (total 7 marks).
For c), the examiners expected political, economic, social, technological,
environmental and legal analysis to be described. An illustrative example of
PESTEL gained 4 marks. A discussion of strengths, weaknesses, opportunities
and threats should have been illustrated with examples. The best answers
provided a worked example of how strengths and opportunities are used to
gain competitive advantage, how strengths are used to meet threats, how
opportunities are used to minimise weaknesses, and how strategies are
generated to minimise weaknesses and threats (7 marks).
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MN1178 Business and management in a global context
Examiners’ commentaries 2015
MN1178 Business and management in a global context
– Zone B
Important notes
This commentary reflects the examination and assessment arrangements
for this course in the academic year 2014–15. The format and structure
of the examination may change in future years, and any such changes
will be publicised on the virtual learning environment (VLE).
Information about the subject guide and the Essential reading
references
Unless otherwise stated, all cross-references will be to the latest version
of the subject guide (2013). You should always attempt to use the most
recent edition of any Essential reading textbook, even if the commentary
and/or online reading list and/or subject guide refers to an earlier
edition. If different editions of Essential reading are listed, please check
the VLE for reading supplements – if none are available, please use the
contents list and index of the new edition to find the relevant section.
Additional examinable material
Note that for Summer 2016 and all subsequent examinations the taught
subject of Exchange Rates and the International Monetary System –
Chapter 6 of the MN1178 subject guide – is examinable.
Comments on specific questions
Candidates should answer FOUR of the following EIGHT questions. All
questions carry equal marks. Candidates are strongly advised to divide
their time accordingly.
Question 1
Marketing is key to competing internationally. Therefore:
a. Describe the four main types of marketing strategies available. Use
illustrative examples (5 marks)
b. Describe the four main components of the marketing mix (6 marks)
c. Discuss the challenges and ways of developing the marketing mix for each
type of marketing strategy you have identified (14 marks)
Reading for this question
The material for this question is covered in the subject guide, Chapter 10,
and Willcocks (2013) Chapter 7.
Approaching the question
For a), 1 mark was given for each of: market penetration, market
development, product development and diversification or similar
vocabulary that includes a brief description of the strategy, and 1 mark for
illustrative example(s).
12
Examiners’ commentaries 2015
For b), the four main components are: price, place, product and
promotion.
The examiners gave 1 mark each for a description with 2 marks assignable
for good detail.
For c), the examiners expected a strong discussion of how the marketing
mix is established for each strategy in a). This had to cover the four Ps
though the points made might vary. For price, relevant points included
pricing for different markets; and finding what the market will bear. For
place, challenges include establishing distribution channels that are cost
efficient and getting goods to customers in a timely fashion; and choosing
between the logistics options. On product – definitions of product helped
here – include what customers are buying; the need to look at physical
product, features, quality levels, accessories, installation, instructions, fit
in overall product line and fit with other of the 4 Ps. For promotion, as just
some examples, good answers included different types of communication
and different types of channels; standardised or customised messaging;
uses of online, social media.
The examiners gave 3 marks for the discussion of challenges and ways
forward for each strategy. We assigned up to an additional 2 marks for any
good illustrative examples.
Question 2
‘Regional economic integration and multilateral trade institutions can aid but
also inhibit international business.’ Discuss this assertion under the following
headings:
a. Define and distinguish between the five main types of regional economic
integration. Use illustrative examples where possible
(5 marks)
b. Discuss, using examples such as the European Union, ASEAN and NAFTA, how
regional economic integration can help or inhibit international business (10
marks)
c. Describe the nature and roles of the World Trade Organization (WTO) and
the International Monetary Fund (IMF) in the world’s multilateral economic
system.
(6 marks)
d. Using examples, assess whether the WTO and the IMF aid or hinder
international business
(4 marks).
Reading for this question
The material appears in the subject guide, Chapter 5, and Willcocks
(2013) Chapter 2, as well as Peng and Meyer (2011) Chapters 8 and 9.
Approaching the question
For a), the focus of the answer needs to be on free trade area, customs
union, common market, economic union and political union and requires
some illustrative examples.
For b), the answer requires ways in which regional economic integration
can help international business (e.g. trade creation, bigger markets and
economies of scale, regional supply chains). Also details of ways in which
regional economic integration can hinder international business (e.g. trade
diversion, intensification of competition). We looked for arguments on
both sides, development of argument and examples rather than just the
number of points made.
Part c) required a basic description of the role of the WTO and the IMF
– see Willcocks (2013) sec 2.11, pp.45–48, and Peng and Meyer (2011)
pp.267–73 (3 marks for each institution).
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MN1178 Business and management in a global context
For d) using the references above, we expected two arguments pertaining
to the WTO and two arguments pertaining to the IMF (for 4 marks)
Question 3
‘The world is flat’ (Thomas Friedman, 2003). Assess the validity of this statement
by considering the following questions:
a. What is globalisation and what are its main trends?
(6 marks)
b. How does globalisation help companies looking to internationalise their
markets?
(6 marks)
c. Ghemawat argues that ‘distance still matters’. What distances (or differences)
does his CAGE framework refer to, and why do they matter to business?
(8 marks)
d. How do national governments intervene in markets to protect themselves
from adverse effects of globalisation?
(5 marks).
Reading for this question
The material appears in the subject guide, Chapter 1, and Willcocks
(2013) Chapter 1.
Approaching the question
For a), some meaning of the term ‘globalisation’ is required in terms of a
more integrated and interdependent global economy, and trends are many
(e.g. reduced barriers to cross border trade and investment especially
FDI; creation of global supply chains). The examiners gave 2 marks for
explaining globalisation and 4 marks for main trends.
In b), we looked for the type of arguments mentioned in the subject
guide, Section 1.5 (pp.20–21) which was also covered in Willcocks (2013)
Section 1.6 (pp.20–21).
For c), we gave 2 marks each for cultural, administrative, geographic and
economic dimensions of Ghemawat’s CAGE framework.
In d), candidates need to understand that this is not about why but
how governments intervene in markets – see Section 1.8 (pp.25–27) in
Willcocks (2013). Instruments include tariffs, subsidies, quotas, VERs,
local content requirements, administrative trade policies and antidumping
policies. We expected candidates to make five points.
Question 4
Offshore outsourcing of production and of business and IT services has greatly
increased in the last 25 years. For business and IT services OR production,
address this issue under the following headings:
a. Define outsourcing and discuss, using examples, why an international
business would seek to outsource business and IT services or production. (9 marks)
b. What risks and challenges is an organization likely to incur when offshore
outsourcing? Use illustrative examples (7 marks)
c. How can these risks and challenges be reduced and managed? Use
illustrative examples to support your points (9 marks)
Reading for this question
The material appears in the subject guide, Chapter 12, and Willcocks
(2013) Chapter 9.
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Examiners’ commentaries 2015
Approaching the question
For a), outsourcing refers to the procurement of selected value-adding
activities, including production of intermediate goods or finished products
or services, from independent suppliers. The examiners expected a
detailed discussion of what outsourcing is, and some reasons why an
international business would seek to outsource business and IT services or
production (e.g strategic flexibility, cost).
We awarded 3 marks for describing the activity of outsourcing and 6
marks for why an international business would seek to outsource business
and IT services or production.
For b), the risks and challenges of offshore outsourcing are multiple (e.g.
not spending enough time and effort in transitioning work or choosing the
right supplier; exposure to exchange rate fluctuations). We expected up to
five points but allocated marks for good detail (5 marks) and looked for
illustrative examples in the answer (2 marks).
For c), there are many ways in which these risks and challenges can be
reduced and managed (e.g. exchange information, transfer knowledge,
troubleshoot, coordinate and monitor; close collaboration with suppliers
in terms of co-development and co-design activities). The examiners
expected up to six points but allocated marks for good detail (6 marks)
and looked for illustrative examples in the answer (3 marks).
Question 5
‘Formal and informal institutions greatly affect and shape the strategies that
are possible in specific countries and markets.’ Discuss this statement under the
following headings:
a. Describe, using examples, the major political, economic and legal institutions
an international business is likely to have to design a strategy for (7 marks)
b. Describe, using examples, the major informal institutions an international
business is likely to have to design a strategy for 7 marks)
c. Define PESTEL and SWOT analyses and describe, using examples, how these
can be used to develop an environmental analysis for international business
strategy development (11 marks).
Reading for this question
The material for answering this question appears in Chapters 2, 3 and 4 of
Willcocks (2013) and Chapters 2, 3 and7 of the subject guide.
Approaching the question
For a), political system, the examiners expected a discussion of collectivism
versus individualism, different types of ‘totalitarian’ and ‘democratic’
systems, with examples (2 marks). Economic systems discussed should
include market, command and mixed economies with examples (2
marks). Legal system should include common, civil and religious law with
examples (2 marks). Some discussion as to how these impinge upon an
international business (1 mark).
For b), informal institutions cover cultural, social, language, religious and
ethical dimensions. Some discussion of culture, types and their importance
(2 marks) as well as the roles of language and social class (2 marks) and
the role of different types religion and ethics should have been included
(3 marks). Candidates were expected to point out the relevance of these
institutions to international business.
For c), the examiners expected political, economic social, technological
environmental and legal analysis to be described. An illustrative
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MN1178 Business and management in a global context
example of PESTEL gained 4 marks. Discussion of strengths, weaknesses,
opportunities and threats should have been illustrated with examples.
The best answers provided a worked example of how strengths and
opportunities are used to gain competitive advantage, strengths are used
to meet threats, opportunities are used to minimise weaknesses, and
strategies generated to minimise weaknesses and threats (for 7 marks).
Question 6
Types of international business strategy imply types of organization structure
and organization architecture. Therefore:
a. What are the four main types of international business strategy? Give
examples of each (5 marks)
b. Define and discuss, using illustrative examples, the main types of
organization structure, which strategies they support, the advantages and
disadvantages of each, and when each is best used. (10 marks)
c. Structure is part of organization architecture. Describe, using examples, the
other four components of organization architecture, and the importance of
the concept of ‘fit’ when designing organization architecture (10 marks)
Reading for this question
The content of the answer is covered in the subject guide, Chapter 7 and
11, and Willcocks (2013) Chapters 4 and 8, as well as in Peng and Meyer
(2011).
Approaching the question
For a), the four main types of strategy are international, global
standardisation, localisation and transnational (1 mark each). Other
terminology could be used provided the descriptions embraced the idea
that these are different responses to different combinations of pressure for
cost reduction and pressure for local responsiveness (1 mark).
For b), definition of structure got 1 mark. The four main types of structure
and the strategies they support got a total of 4 marks. Advantages and
disadvantages of these were given 1 mark per structure, and 1 mark for
illustrative examples.
For c), the components of organisation architecture, apart from structure,
are people, processes, culture, incentives and controls. A definition and
description got 2 marks each. The importance of the concept of ‘fit’, with
any examples got 2 marks.
Question 7
Why and how can a business enter new markets effectively? Discuss this
question under the following headings:
a. Assess the factors a business would need to consider when deciding why to
enter a foreign country market, which market to enter, when to enter, and the
scale and ownership required. Use examples to illustrate your points.
(8 marks)
b. What is a strategic alliance? Using examples, assess its advantages and risks
as a mode of foreign market entry for the internationalising business.
(6 marks)
c. When are fully owned subsidiaries an attractive market entry mode? When
are they less attractive? (6 marks)
d. Describe what a turnkey project is, and the conditions under which it is an
attractive mode of entering a foreign market. What potential problems make
a turnkey project approach less attractive? (5 marks)
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Examiners’ commentaries 2015
Reading for this question
The material for this question is covered in the subject guide, Chapter 9,
and Willcocks (2013) Chapter 6.
Approaching the question
a. The main factors to be considered include:
Will it increase sales and/or improve competitive positioning?
Can we sell on products developed for saturated domestic
markets?
Does it help us to evolve to a larger international business?
Are there location factors that give us an advantage (e.g. cheaper
labour, resources, favourable government policies or local
institutions; is it part of an economic cluster of related industries)?
Are there companies we can work with as, for example, franchises,
alliances/JVs, or license?
Much depends on objectives and international strategy (e.g. a marketseeking firm looks for scale of market; a natural-resource-seeking firm
looks for cheaper resources), for example:
Get a first mover advantage, establish the brand early and
create switching costs in case customers think of going to later
competitors.
Scale and ownership (i.e. level of commitment) depend on
strategy. Ownership and control come from a wholly owned
greenfield. If less is needed, then choose partial acquisition or a
joint venture.
b. A description of a strategic alliance is required (e.g. collaboration
between independent firms using equity modes and/or non-equity
contractual agreements). (1 mark)
Advantages of strategic alliances for market entry are, for example:
They facilitate entry.
They function as a stepping stone to full acquisition.
Fixed costs and risks are shared.
Complementary skills/capabilities are brought together.
They are better scaled to compete in an international market.
(2 marks)
Risks may, for example, give your ally a competitive edge against you,
and may result in valuable leakage of knowledge and in a high failure
rate due to goal divergence and incompatibility. (2 marks)
Illustrative example(s) would gain candidates 1 mark.
c. Conditions under which foreign owned subsidiaries are an attractive or
less attractive market entry mode include:
They reduce the risk of losing control over core competences.
They gain all the profits.
Key technologies/knowledge/IP are protected.
They maintain tight control over operations.
The gain location and experience curve economies. (3 marks)
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MN1178 Business and management in a global context
But:
The firm bears the full risk and costs.
Greenfield sites are slower to establish and often risky, and require
a lot of local knowledge and must fit with PESTEL factors.
Acquisitions may fail due to, for example, overpaying, clash of
cultures or synergies not being realised. (3 marks)
d. Some description of what a turnkey project is and the different types
earn 1 mark.
A turnkey project is an attractive mode of entering a foreign market
because:
It is a way of earning returns from know-how the firm has
assembled (i.e. selling the service to suit local requirements).
It is less risky than a more conventional FDI. (2 marks)
Problems include:
Market growth may be small once the project finishes.
It could create a local competitor which then competes
internationally.
It may be giving away/selling IP/capability to potential
competitors. (2 marks)
Question 8
‘Competitive Positioning frameworks offer the best tools for arriving at
international business strategy’. Discuss:
a. Describe Porter’s five forces and generic strategies, and Ghemawat’s AAA
strategies frameworks (9 marks)
b. Critically evaluate these three frameworks, using examples to discuss the
advantages and challenges in using them (9 marks)
c. Using examples, describe the resource-based perspective on competing,
and discuss whether it complements, or substitutes for, these competitive
positioning frameworks (7 marks)
Reading for this question
Relevant material and references are in Chapters 7 and 8 of the subject
guide, and Willcocks (2013) Chapters 4 and 5. Candidates who accessed
these sources did well on the whole.
Approaching the question
a. Examiners awarded 3 marks each for: a description of Porter’s
five forces (see the subject guide, Chapter 8, section 8.2), Porter’s
generic strategies (see the subject guide, Chapter 8, section 8.3) and
Ghemawat’s AAA strategies (see the subject guide, Chapter 7, section
7.5).
b. For critical evaluation of these three frameworks, apply any arguments
that are relevant and show analytical logic. Make a couple of points
per framework. Credit will be given for detail and for use of examples.
(3 marks are awarded per framework)
c. The description should cover the VRIO (valuable, rare, inimitable
and organization) or VRIN (valuable, rare, inimitable and nonsubstitutable) concepts, and pull out how all these qualities are needed
to give sustainable competitive advantage. (3 marks)
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Examiners’ commentaries 2015
The discussion of complementarity (i.e. competitive positioning)
should include a look at external positioning, while an examination of
a resource-based perspective should include the internal formulation
of capabilities that differentiate. The results should add up to
complementarity. RBT can substitute for CPF but it is best to use both
together, along with a discussion of the institutional perspective.
(3 marks)
Including illustrative examples gain candidates 1 mark.
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