Explain the concept of guanxi. Why is it so important to businesses operating in China? How did McDonald’ s lack of guanxi raise its costs of doing business in China?( TCO 3) In 2006, two Chinese journalists reported that the working conditions at Hongfujin Precision Industries where Apple’ s iPods are produced were substandard. According to the report, not only were workers at the plant poorly paid, but they were also forced to work overtime. Apple immediately responded to the allegations and audited the factory in question. However, managers at the factory filed a defamation lawsuit against the two journalists. Despite the fact that Apple’ s audit did indeed show substandard working conditions at the factory, Hongfujin did not withdraw the lawsuit. Eventually the Reporters Without Borders group took up the case for the two reporters and the lawsuit was dropped.
Should Apple be responsible for ensuring that its suppliers are safeguarding the basic rights and dignity of its employees? How can Apple be sure that its suppliers do not employ sweatshop labor?( TCO 3) Exports are largely responsible for China’ s recent rapid economic growth. The country, capitalizing on its cheap labor force, has focused on converting raw materials into products that are exported to developed countries such as the United States. In 2008, China’ s trade surplus was a record $ 280 billion, and its holdings of foreign exchange reserves were over $ 1.95 trillion. Some critics have suggested 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 significant foreign direct investment, but more recently the government has changed its policy and actually now encourages inward investment. Wal-Mart, taking advantage of this shift in policy, acquired a large Japanese retailer in 2002. Wal-Mart’ s initial venture into Japan has been challenging and has forced the company to change its approach to better compete with local retailers and meet the needs of Japanese consumers.
Why did Japan change its position on inward foreign direct investment? How will Wal- Mart’ s investment benefit Japan?( TCO 7) Which of the following are true about the International Monetary Fund?( TCO 5) Concerning European Union’ s progress toward creating a single financial market, the quest started in 1999 was to have been completed by 2005, however, progress has been slowed by various factors related to the tradition of each member country operating autonomously. By 2007, significant progress had been made. Some 41 measures designed to create a single market were in place and others were in the pipeline. The current issue facing the EU revolves around the enforcement of the rules that have been established as law. Some experts believe that it will be at least another decade before the benefits of the new rules become apparent. Discussion of this feature can begin with the following questions. What are the benefits of creating a single financial market in the European Union for companies? Does it make sense for consumers?