volume 4 issue 9 december 2013/january 2014...

Dear Professor, Welcome to the December 2013/

January 2014 IB Monthly.

In this issue we offer you an array of

resources on one focused topic: Inter-

national Joint Ventures (IJVs). We

made this decision based on the re-

quest of one of our readers for re-

source materials on this timely topic.

We hope you also find it of value for

your classes. For December/January:

HOT TOPICS offers IJV insights

into:

International Joint Ventures

International Joint Ventures at

BMW, PepsiCo, and Kellogg

International Joint Ventures, A

Practical Approach

Why Joint Ventures Fail

GLOBAL REACH looks into Car-

refour S.A.

GLOBE TROTTING & CULTURE

CUE provides insights into

Doing Business in the Czech

Republic

DIGITAL RESOURCES offers

three timely digital IB resources

and cases on IJVs in China and

Peru.

IB TEACHING RESOURCES

PowerPoint Slides offers three

highly-detailed student activi-

ties to assist in teaching the

intricacies of IJVs.

G. Bernard Yevin With special assistance from:

Lisa Stanley-Smith,

Forsyth Technical Community College, Winston-Salem, NC

&

Michael Gedatus McGraw-Hill Education

[email protected]

And remember to always keep remind-

ing your students to...

ISSUE 9 DECEMBER 2013/JANUARY 2014 VOLUME 4

A NEWSLETTER FOR EDUCATORS

International Business Monthly

Contents

HOT TOPICS DIGITAL RESOURCES

A GLOBAL PERSPECTIVE IB TEACHING RESOURCES CHAPTER KEY

Please note that hyperlinks are not static and may have changed since this newsletter was published.

McGraw-Hill International Business Monthly Volume 4 Issue 9 December 2013/January 2014 Top of Document

mailto:[email protected]?subject=IB%20Newsletter

TAKEN from the TRADES:

International Joint Ventures An IJV is a strategic alliance between two or more com-panies in different countries. IJVs can be short orlong term, and used for various activities including product development, manufacturing, marketing, and distribu-tion, to just name a few. For decades, companies' legal departments secretly developed their own tailor-made joint venture contracts because no international models existed, nor did any models proposed due to the diver-

sity of legal cultures and practices around the world. In 1998, ITC conducted a worldwide survey on trade contracts. Over 245 trade promotion organizations (TPOs) from 125 countries responded. The survey showed that joint venture model con-tracts were requested and considered a priority by 77% of TPOs. In less than two years, a group of some 55 specialists from 45 countries, representing all legal cultures agreed on two models where one creates a third company and the other does not:

Incorporated Joint Venture Contract. This is a model to create one or more joint venture companies, which

are legal entities established to carry out a common activity.

Contractual Joint Venture Contract. This model regulates cooperation between parties. A legal entity is not

created, but a collaborative group exists. You can access the full article at: http://www.tradeforum.org/International-Joint-Ventures/

International Joint Ventures at BMW, PepsiCo, and Kellogg

Here are articles offering insight into three MNCs and their recent IJV initiatives. Have your students read these articles to gain a greater understanding of IJVs and the strategic plans of these highly recognizable companies.

http://www.chinacartimes.com/2012/11/07/joint-venture-contracts-bmw-brilliance/

http://www.pepsico.com/PressRelease/PepsiCo-and-Strauss

-Group-to-Establish-Joint-Venture-to-Bring-Healthier-Dips-

and03162011.html

http://newsroom.kelloggcompany.com/2012-09-24-Kellogg-Company-And-Wilmar-International-Limited-Announce-China-Joint-Venture

Hot Topics in International Business



http://www.tradeforum.org/International-Joint-Ventures/

http://www.chinacartimes.com/2012/11/07/joint-venture-contracts-bmw-brilliance/

http://www.pepsico.com/PressRelease/PepsiCo-and-Strauss-Group-to-Establish-Joint-Venture-to-Bring-Healthier-Dips-and03162011.html








International Joint Ventures, A Practical Approach In this publication, international law firm, Davis Wright Tremaine LLP, succinctly, and not in legalese, outlines factors to consider when planning to enter into an IJV. A few of the topics addressed are:

1. A working definition of an IJV 2. Legal structures and attributes of IJVs 3. Advantages and disadvantages of IJVs 4. IJV “facts of life” – 50% fail 5. Mistakes to avoid 6. The role of preliminary and definitive IJV agreements, including ownership transfer, termi-

nation clauses, non-compete and non-disclosure clauses, and provisions for intellectual property.

Here is the link for the article: http://www.dwt.com/files/Publication/1b841dbe-3453-4983-97cd-d6f5b44e5b2f/Presentation/PublicationAttachment/47d38fc0-1cc3-4c3e-b91f-d8aacd2ce6d1/International%20Joint%20Ventures%20Article_Stewart.pdf

Why Joint Ventures Fail

IJVs are a time-tested vehicle for companies to expand their business globally by gaining access to markets where establishing a presence, yet alone a profit, may be a formidable challenge. For MNCs, or even small firms, proper planning is critical. Though the allure of having a foreign partner may be an exciting business proposition, knowing why IJVs fail is critical to avoiding the pitfalls and the 50% IJV failure rate. These pitfalls include:

1. Bad Ideas 2. Insufficient Planning 3. Inadequate Capitalization 4. Lack of Leadership 5. Lack of Commitment 6. Cultural and Ideological Differences.

To explore these pitfalls in detail, follow this link: http://www.saul.com/media/article/1134_pdf_29.pdf

Bonus: 40+ Free PowerPoint Presentations on Various As-pects of IJVs to Use in Class

Here is the link:

http://www.slideshare.net/onkarsatam/joint-venture

-success-failure

http://www.dwt.com/files/Publication/1b841dbe-3453-4983-97cd-d6f5b44e5b2f/Presentation/PublicationAttachment/47d38fc0-1cc3-4c3e-b91f-d8aacd2ce6d1/International%20Joint%20Ventures%20Article_Stewart.pdf



http://www.saul.com/media/article/1134_pdf_29.pdf

http://www.slideshare.net/onkarsatam/joint-venture-success-failure

http://www.slideshare.net/onkarsatam/joint-venture-success-failure

Here are this month’s Digital Resources recommendations for use in your lectures as examples or to provoke discussions on topics related to IB and global trade.

How to Develop a Successful Joint Venture in China This set of slides without audio (2:00) allows you to present and discuss the elements of a comprehensive checklist of factors necessary for estab-lishing a joint venture in China (or any country). This is a very thorough resource for planning the IJV. Here is the link: http://www.youtube.com/watch?v=QznZbvR3E7o

Made in Germany: An Airport for Peru

Due to limited growth opportunities in Germany, Fraport, owner and operator of the Frankfurt Airport and Hahn Airport, has been active abroad through IJVs where the company has successfully taken over full or partial operation of several airports. The IJV at Lima Interna-tional, showcased in this 5:05 video, has gone quite well because this South American country is experiencing rapid growth. Fraport’s stra-tegic global expansion plan will increase its holdings in India and oth-er Asian countries, because of the strong growth potential there as well. Joint ventures now account for a more than a fifth of its profits. Here is the link: http://www.youtube.com/watch?v=4yPt6lk9GSU

Caterpillar Joint Venture — China This 9:46 video in both Mandarin and English, offers a case history into Caterpillar’s 30+ year history of FDI and IJVs in China and gives an overview of their newest IJV in China, An Qing CSSC. Here is the link to the video in Mandarin (left): http://www.youtube.com/watch?v=qOa9NaMI0DU and the link to the video in English (right): http://www.youtube.com/watch?v=UDCNmNNIgos FYI: Both videos have some of each language.

Digital Resources



http://www.youtube.com/watch?v=QznZbvR3E7o

http://www.youtube.com/watch?v=4yPt6lk9GSU

http://www.youtube.com/watch?v=qOa9NaMI0DU

http://www.youtube.com/watch?v=UDCNmNNIgos

http://www.youtube.com/watch?v=UDCNmNNIgos

A Global Perspective

GLOBAL REACH: MNC Profile — Carrefour S.A.

France’s Carrefour Group: One of the World’s Leading Retailers Since is beginning over 50 years ago, the Carrefour Group, the French retail MNC with global HQ in Boulogne Ballin-court, France, has become a world leader in the retail sector. Carrefour is the largest retail group in Europe and the second largest in the world. Today, the Carrefour Group operates targeted regions globally through four major grocery retail formats: hypermarkets, supermarkets, cash & carry, and convenience stores. The Carrefour Group currently has 10,000 company-owned and franchise stores and employs over 360,000 personnel in the global country markets it serves. Carrefour, as it is commonly called, is one of the largest hypermarket chains globally with over 1,452 hypermar-kets. In terms of revenue, Carrefour is the second largest global retail group, following Wal-Mart, and third in global profits following Wal-Mart and Tesco, from the UK. A Global Leader in Retail After Carrefour made significant inroads countries such as Brazil in 1975 and China in 1995, the Carrefour Group now operates in three major global market regions: Europe, Latin America, and Asia. With a presence in more than 30 coun-tries, it generates more than 55% of its sales outside France. Carrefour’s largest operations are located throughout Eu-rope, and in the countries of Argentina, Brazil, China, Dominican Republic, United Arab Emirates, Qatar, and Saudi Ara-bia, and also operates smaller shops in North Africa and parts of Asia. The majority of Carrefour outlets are stores smaller in size than the hypermarkets or the supermarkets they operate. Here is a map of Carrefour’s global opera-tions:

The History of Carrefour The first Carrefour store opened on 1 January 1958 in Annecy, France, near a crossroads. The founders, Marcel Fournier, Jacques and Denis Def-forey, adopted the French word “carrefour,” which means "crossroads," as the company name, and it grew into a chain from this first sales outlet. In 1999, Carrefour merged with one of its major com-petitors, Continent and became stronger in the French market in outlets and distribution. The Car-refour group was the first in Europe to open a hy-permarket, a combination of a large supermarket and department store under one roof. Carrefour opened its first hypermarket in Sainte-Geneviève-des-Bois, near Paris, on 15 June 1963. Planned growth and expansion based on Carrefour’s in-creasing profits took them into the next decade. In April 1976, Carrefour launched its own private la-bel, “Produits libres,” a line of fifty food products consisting of oil, biscuits (crackers and cookies), milk, and pasta, sold in unbranded white packages



http://en.wikipedia.org/wiki/Sainte-Genevi%C3%A8ve-des-Bois,_Essonne

http://en.wikipedia.org/wiki/Sainte-Genevi%C3%A8ve-des-Bois,_Essonne

at substantially lower prices. In May 2011, Carrefour reviewed its situation under condi-tions of stagnant growth and increasing com-petition in France, and planned to invest €1.5 billion ($2.1 billion) to change the supermarket with the new concept of Carrefour Planet in Western Europe markets. On 15 October 2013, Carrefour China opened its 224th hy-permarket, the Zhuozhou Fanyang Carrefour store. This new store has a sales area of 9048 m², 22 check-outs, and parking for 470 cars. On 22 October 2013, Carrefour China opened its 225th hypermarket – the Liaoning Fushun

Xiyi Carrefour store. This new store has a sales area of 6734 m², 27 check-outs and a car park with space for 500 cars. For a Timeline History of Carrefour: http://www.carrefour.com/content/history

Carrefour Retail Formats Hypermarkets: Hypermarkets are large stores offering a wide range of food and non-food items, low prices, and targeted promotions: the ideal store format for anyone doing a major shopping trip. Supermarkets: The Carrefour Group's supermarkets have become a standard in convenience food retail by offering convenience for the day-to-day items people purchase to eat and take care of daily needs. Carrefour supermarket business is guided by two guarantees:

The “Lowest Price Guarantee” campaign launched by Carrefour in France in 2012 and then rolled out to all supermarkets trading under the Carrefour name. It targets a differ-ent fruit, vegetable, fresh/cured meat product, fish, and cheese every day. Carrefour promises to refund customers twice the difference if they find the same products on sale at a lower price anywhere within a 15-kilometre radius of their store.

The “Freshness Guarantee” commitment which covers meat, fish, bread, traditional cakes and pastries, delicatessen items, and cut-to-order cheese. All fresh products can be exchanged and refunded within 72 hours for customers who hold a Carrefour loyalty card if they are unhappy with the freshness of the products they have bought.

Convenience Stores: Smaller, convenience stores offer longer hours, an array of products for eve-ry need, and a wide range of services to respond to lifestyles now and in the future. Each of the Group’s convenience store banners is designed for a specific purpose: Express is for daily purchas-es; City features a range of ready-to-eat products aimed at urban dwellers in a hurry; Contact stores are in rural areas and stock everything one needs for the family; and Montagne stores make shop-ping in ski resorts simpler. These highly successful and popular convenience store formats are achieving exceptional growth globally. In 2012, 559 new Carrefour convenience stores were opened, including 192 in France where the Group has just opened its 1,000th under the Carrefour banner, 166 in Argentina, and 149 in Poland. Cash & Carry: Carrefour’s entered the wholesale segment of the channels of distribution with their Cash & Carry stores. These stores offer a range of food and non-food items at wholesale prices alongside tailor-made services that make doing business easier and support the work of caterers and convenience food stores. Carrefour Cash & Carry stores are developing all over the world. In France they are called Promocash, and is France’s largest network of franchised cash & carry deliv-ery services. In Italy, they are called Docks Market, and in India they are Carrefour Wholesale Cash & Carry. These cash & carry stores feature major-brand products alongside Carrefour’s pri-vate brand items, fresh products, and more specific products for use in catering such as food assem-bly and resale, plates, serving items, and hygiene products for clean-up, as well as products to be resold to grocers. There are over 160 Carrefour Cash & Carry stores worldwide. Hypercash Stores: The model for the hypercash stores Carrefour operates in some of its markets is based on products presented on pallets and sold in large volumes at wholesale prices in stores open to both trade customers and individuals. The background to Carrefour’s hypercash stores is linked to the history of Atacadão, the Brazilian mass merchandiser formed in 1962 in Maringá, Brazil.



http://www.carrefour.com/content/history

Its original trade was selling door-to-door selling to businesses in the sardines and cheese industry. In the early 1970s, it opened a branch in São Paulo and, ten years later, launched its first self-service and wholesale stores. It started to grow rapidly in the 2000s, selling Atacadão-brand prod-ucts throughout the country and opening 23 stores. In 2007, the Carrefour Group took over Ata-cadão and initiated a sustained program to develop its network. It opened retail outlets and con-verted some Carrefour Group hypermarkets to reach a total of 90 stores by the end of 2012, with over 26,000 employees. Atacadão’s growth strategy together with its growing sales and Brazil’s encouraging economic forecasts make it one of the country’s most promising retail names.



Carrefour Multichannel Retail - Mobile, In-store, and Online: Through this initiative, Carrefour is exploiting the complementary nature of its stores and e-commerce solutions to offer the best possible service. Customers can shop online at their convenience 24/7 and pick up their purchases at a conveniently located and easily-accessible drive-in collection point. In France, the portal carrefour.fr offers instant access to any of the Carrefour Group’s e-commerce sites. The 5.5 mil-lion Carrefour customers who visit the site every month get access to a real online store. The site also offers a wide range of non-food products to complement the in-store range, with goods ranging from televisions to phones, high-tech items and household appliances. Carrefour’s Ooshop.com, their online food store, offers a range of over 8,000 products and access to promotions and a personal customer area in a single click. Users are guided by product sheets and purchase tips help them make the most of their household budget. In Spain, Carrefour’s food e-commerce site covers around 80% of the country and offers over 14,000 products, which are about as many as are found in its hypermar-kets. The Spanish non-food website sells over 9,000 products consisting primarily of household appliances, photography, cinema, sound, and multimedia items. Carrefour’s online traffic is meas-ured at over 5 million unique visitors to carrefour.fr every month.

To Learn More About Carrefour: To download an interactive copy of the 2012 Annual Activity and Responsible Commitment Re-port: http://www.ecobook.eu/carrefour/2013/ra2012en/index.html Carrefour Website in English: http://www.carrefour.com/ Carrefour Website in French: http://www.carrefour.fr/

KNOW YOUR WORLD — Relevant, Fun, Quirky, but Totally True Facts about the World in Which We Live for You and Your Students to Enjoy

http://www.usatoday.com/media/

cinematic/gallery/2981499/

http://www.usatoday.com/media/cinematic/

gallery/2911563/


cinematic/gallery/3000453/rain-

forests-around-the-world/


cinematic/gallery/2968441/italys-

romantic-cinque-terre/

http://

www.usatoday.com/media/cinematic/gallery/2883757/

http://www.ecobook.eu/carrefour/2013/ra2012en/index.html

http://www.carrefour.com/

http://www.carrefour.fr/

http://www.usatoday.com/media/cinematic/gallery/2981499/




http://www.usatoday.com/media/cinematic/gallery/3000453/rain-forests-around-the-world/



http://www.usatoday.com/media/cinematic/gallery/2968441/italys-romantic-cinque-terre/





GLOBE TROTTING: Doing Business in Plzeň, Ostrava, Brno, Prague (Praha), and throughout the Czech Republic Country Name: Conventional long form: Czech Republic Conventional short form: Czech Republic

Capital: Prague

Currency: koruny (CZK)

Population: 10,162,921 (July 2013 est.) Profile of At the close of World War I, the Czechs and Slo-vaks of the former Austro-Hungarian Empire merged to form Czechoslovakia. During the inter-war years, having rejected a federal system, the new country's predominantly Czech leaders were frequently preoccupied with meeting the increas-ingly strident demands of other ethnic minorities within the republic, most notably the Slovaks, the Sudeten Germans, and the Ruthenians (Ukrainians). On the eve of World War II, Nazi Germany occupied the Czech part of the country and Slovakia became an independent state allied with Germany. After the war, a reunited but trun-cated Czechoslovakia (less Ruthenia) fell within the Soviet sphere of influence. In 1968, an inva-sion by Warsaw Pact troops ended the efforts of the country's leaders to liberalize communist rule and create "socialism with a human face," ushering in a period of repression known as "normalization." The peaceful "Velvet Revolution" swept the Communist Party from power at the end of 1989 and inaugurated a return to democratic rule and a market economy. On 1 January 1993, the country underwent a nonviolent "velvet divorce" into its two national components, the Czech Repub-lic and Slovakia. The Czech Republic joined NATO in 1999 and the European Union in 2004.

The Czech Republic is a stable and prosperous market economy closely integrated with the EU, especially since the country's EU accession in 2004. While the conservative, inward-looking Czech financial system has remained relatively healthy, the small, open, export-driven Czech economy remains sensitive to changes in the economic performance of its main export markets, especially Ger-many. When Western Europe and Germany fell into recession in late 2008, demand for Czech goods plunged, leading to double digit drops in industrial production and exports. As a result, real GDP fell 4.7% in 2009, with most of the decline occurring during the first

quarter. Real GDP, however, slowly recovered with positive quarter-on-quarter growth starting in the second half of 2009 and continuing throughout 2011. In 2012, however, the economy fell into a re-cession due to a slump in external demand. The auto industry remains the largest single industry, and, together with its upstream suppliers, accounts for nearly 24% of Czech manufacturing. The Czech Republic produced more than a million cars for the first time in 2010, over 80% of which were exported. Foreign and domestic businesses alike voice concerns about corruption especially in pub-lic procurement. Other long term challenges include dealing with a rapidly aging population, funding an unsustainable pension and health care system, and diversifying away from manufacturing and toward a more high-tech, services-based, knowledge economy. The CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/ez.html



http://en.wikipedia.org/wiki/Plze%C5%88

http://en.wikipedia.org/wiki/Prague

https://www.cia.gov/library/publications/the-world-factbook/geos/ez.html

CULTURE CUE: Negotiating the Cross-Culture Quagmire – Doing Business in the Czech Republic

Czech Society and Culture The Family Throughout the Czech Republic, the family is the center of the social structure and obligation to the family is a person's first priority. This carries over to any organization, business or governmental, and is the foundation for the expected behaviors of their members. Czechs are pragmatic people who place great value on forward thinking, as well as being logical, practical, and efficient. To the Czech, careful planning, in both one's business and personal life, provides a sense of security. Rules and regulations allow people to know what is expected and to plan their life accordingly. Privacy Czechs are private people until they get to know you. Initially they will be reserved and their behav-ior will be noticeably formal. Once Czechs develop a personal relationship, they open up a bit, but they are never overly emotional in these relationships. Although always polite, Czechs rarely move to a first-name basis with people outside their extended family or very close friends. Czechs tend not to acknowledge people whom they do not know as they walk along the street or ride the train. These factors play a dominant role in establishing and moving business relationships forward. However, it must be noted that younger, worldlier Czechs may be a bit more relaxed than their less experienced elders, especially those who were under Communist rule.

Etiquette and Customs in the Czech Republic Protocols for Meeting and Greeting the Czechs When meeting the Czechs, their initial greetings are formal and reserved. Most greetings include a handshake, direct eye contact, and the appropriate greeting for the time of day. Wait to be invited before using someone's first name or an informal greeting, as these are all signs of friendship, which will take time to establish. The offer to move to the informal is generally offered by the wom-an, the older person, or the person of higher status. To move to the informal without an invitation is seen as an insult to the person you are dealing with and may be viewed as an attempt to humiliate them. Irreparable damage will result is this happens. Protocols for Giving and Accepting Gifts

If you are invited to dinner in a Czech home, a gift is expected as a sign of appreciation for the invitation and the courtesy your Czech hosts are offering you. Suitable gifts are a box of high quality chocolates or flowers to the hostess or a bottle of wine or good brandy to the host. Giving gifts to both the host and hostess is quite appropriate. One should be cautious about giving flowers, since people over the age of 35 often see flowers as having a romantic meaning, which is totally inappropriate. If one brings flowers, always give an odd num-ber offering good luck. Never bring 13, which is considered unlucky by the Czechs. Never give calla lilies as they are used at funerals. Gifts are usually opened when received.



Business Etiquette and Protocol in the Czech Republic

A Little Background As with all the former Soviet bloc countries, the Czech Republic needs to be viewed as a transition-al economy which is in the process of moving from a state-controlled, centrally planned economy to one which is moving toward a more Western-style capitalist model. Although the Czech Republic appears to have moved faster and more successfully in this direction than some of its neighbors, this transition is not complete. One of the strongest legacies of the former Soviet-style system is in the area of trust in the business environment. All observers of Czech business culture focus on the difficulty of developing deep levels of trust within any business relationship. Czechs typically start from a level of deep distrust when they start with a new contact. This mistrust can only be broken down through time, perseverance, and proving to the Czech that you are a trustworthy associ-ate. Therefore, one of the key recommendations to those considering to work with Czechs is the need for patience. Trying to do too much, too quickly will prove very counterproductive.

Traditionally, Czech management styles have been char-acterized by a paternalistic style which reflects the hierar-chical, bureaucratic nature of the former Soviet State mo-nopolies which were the norm in the economy. Managers kept somewhat aloof from their subordinates and issued direct commands which people were expected to follow without question. This approach is still very evident in the larger, locally-run Czech enterprises. This paternalistic style accounts for the lack of initiative which expatriates may feel they encounter when working with Czech col-leagues. If managers expect their subordinates to follow

direct instructions unquestioningly, it is hardly surprising if those subordinates feel they have no authority to go beyond the direct instructions they have been given. This is the nature of many Czech business and governmental organizations and the foreigner must deal with this reality.

Business Meeting Etiquette and Protocol Business Dress in the Czech Republic As the Czech Republic and its business people become more Westernized and cosmopolitan, it can be difficult to define a common approach to business dress in the Czech Republic. The best guide will be the nature of the industry you are working in, the individual business you are dealing with, and how your Czech counterparts choose to dress. Except in financial institutions or law firms, there is a trend for business dress tends to be informal with ties and jackets not required. Pay attention to your hosts and follow suit. However, one will never be out of place if they dress conservatively. It is prudent to check before travelling if you are not sure of the correct dress code and remember to factor in seasonal changes as winters can be cold and harsh and summers quite hot. Women in Business in Czech Republic Under Czech law, women have equal rights in the workplace and Czech women have made great ad-vances for independence and professional status in recent years. Women employees can be found in all areas of commerce and industry. However, most sen-ior positions in the Czech Republic are still occupied by men. Visiting foreign business women should en-counter little or no gender bias and will be judged on their professional abilities. If a woman, just as a man, proves they are trustworthy and professional they will be treated with great courtesy and respect by their Czech counterparts.



Protocols for Setting Business Meetings in the Czech Republic Appointments are mandatory. Czechs like to plan meetings well in advance and are typically ar-ranged through formal channels. Letters should be addressed to the company rather than a specific person. This prevents a letter from being held up if the person it is addressed to is away from the office. Due to Czech value for formality, it is difficult to arrange a meeting on short notice. This need to plan ahead stems from the fact that Czechs do not like to arrive at a meeting unpre-pared. Czechs are highly detail-oriented people and prefer to come to a meeting with the feeling that they have all the facts and figures which might be needed at their disposal. Friday afternoon is not a good time to try to organize a meeting in the Czech Republic and should be avoided because many Czechs leave for their country cottages after lunch. The month of August should be avoided because this is the time many Czechs close their businesses for holiday. To the Czech, meetings are a serious business and lack of punctuality typically implies a lack of professionalism and your commitment will be questioned. In a country where everyone is seeming-ly mistrusted in the early stages, it would be foolish to diminish yourself even further over such a simple matter as punctuality. Always plan to be on time, but if there is an emergency, call and let you counterpart know so they understand that the situation is beyond your control. Protocols for Business Cards Business cards are exchanged at the start of a meeting. In the Czech Re-public, there is no particular ritual which goes along with exchanging them, other than common courtesies and treating the card with a certain level of respect. Since Czechs place importance on titles and one’s educa-tional background, it is recommended to have this information is printed on your business card. Business cards do not need to be printed in either English or the language of your home country, and Czech, as is expected in some countries. Business Meetings with the Czechs Initial meetings are scheduled to get to know each other and to see if your Czech associates be-lieve that you are trustworthy and have serious business intentions. The first meeting may be with a gatekeeper rather than the actual decision maker. Expect some small talk and “getting-to-know-you” conversation before business is discussed. Even in follow-up meetings, of which there will be several before a decision is reached, there will always be some small talk at the beginning of every meeting but the scope and duration of small talk will decline as friendships and trust are established and the nature of the business-at-hand becomes more serious. Always maintain direct eye contact while speaking because this indicates sincerity and commit-ment, both highly valued traits. Remain formal and never remove your suit coat unless the highest-ranking Czech in the meeting does so first. Always be thoroughly prepared. Presentations should be accurate, detailed, and thorough. Your claims and business propositions should always be sub-stantiated with data, charts, and figures to back up your claims. Bring ample copies of these materi-als to leave with your Czech associates as they will review them in detail before any decision is reached. Czechs will not express much emotion during a business meeting. This, coupled with limited body language and facial expressions, can make your Czech associates difficult to read. Do not interpret lack of emotion or physical feedback as a sign of lack of interest. On the whole, Eng-lish language levels are very good in the Czech Republic and it is unlikely that a translator would be necessary. But remember that some older managers might struggle a little with English and these people might be the ultimate decision makers.



Protocols for Negotiating with the Czechs

Be patient, because it will take several meetings for your Czech business counterparts to become familiar with you, lower their formal guard, and appear comfortable and friendly. Czech thorough-ness and desire for trust necessitates that business be conducted slowly and methodically. One must be patient and not appear upset by the Czech’s strict adherence to protocol. Czech business is hierarchical in structure and control. Decision-making power is held at the top of the company. Decisions are reached slowly, so accept that it may take several meetings to reach a decision. Politeness prevents many Czechs from giving an absolute “no.” However, statements such as “It is difficult” or “We will see” are often negatives. When Czech’s disagree with you, they will typically become silent and look downward, so be aware of this gesture and its meaning in meetings. Avoid high-pressure tactics as Czechs do not value them. If the Czech feels they are being forced to make a decision, a decision will be avoided. In negotiations, Czechs generally offer what they ex-pect to get and do not often give counter-offers, so negotiations are often quite limited. If a sense of fairness prevails, both parties will gain what they seek and the foundation for a long-term trusting business relationship will be established and a solid groundwork for future business will be laid. Successful Entertaining in the Czech Republic Since it is difficult to build good relations quickly in the Czech Republic, every foreigner should lev-erage every opportunity to build this new business relationship. It is strongly recommended to in-vite your Czech counterparts for a meal. Lunch or dinner works best rather than a breakfast meet-ing, which is a new, but growing, phenomenon in the Czech Republic. If you do invite Czechs for a meal, be sure that you choose a good restaurant. This will indicate how serious you are about de-veloping a deeper professional relationship. If you are not sure where to go, ask a local for recom-mendations since restaurants range in quality from excellent to really quite poor. The next ques-tion is, “Should business be discussed over lunch or dinner?” Due to the nature of the Czech Re-public, it is difficult to answer. Younger Czechs would probably be perfectly happy to discuss busi-ness issues over the meal but older, more formal Czechs may feel that it would be bad manners to do so. It is probably best to let your Czech counterparts determine if they want to discuss business over a meal. Meals are often accompanied by drinking. Also, it is typical for an evening business meal to extend into the night or early morning. Your Czech colleagues will determine when the evening ends, not you. If you are the host, you will be expected to pay and it is customary to leave a tip of 10 – 15% of the bill.

To Learn More about Doing Business in the Czech Republic

Doing Business in the Czech Republic has been prepared by the Prague office of Baker & McKenzie as a general guide for those companies or persons who wish to engage in business ac-tivities or invest in the Czech Republic. Over the past 10 years, the Czech Republic has adopted new laws in virtually every area of regulation in the Czech legal system consistent with European standards as it prepared for accession to the European Union. The Czech Republic formally joined the European Union on 1 May 2004 and its legal system continues to develop in line with European norms. Here is the link: http://www.bakermckenzie.com/bkczechrepublicdbi13/

http://www.doingbusiness.org/data/exploreeconomies/czech-republic/

The Czech Gov-ernment’s compre-hensive portal for information, data and resources on Doing Business in the Czech Republic: http://www.doingbusiness.cz/



http://www.bakermckenzie.com/bkczechrepublicdbi13/



http://www.doingbusiness.cz/

Teaching

Here are three timely resources we have selected for use in your IB classes. Each of these is also lo-cated in the PowerPoint slides for use with a brief overview and questions to either assign for a report or to discuss with your students in class. If you click the logo for each of these resources on the PPT slides, it will hyperlink to the source. After using the resources we offer in this edition of IB Monthly to introduce the topic of International Joint Ventures, have your students learn further about IJVs by applying these concepts to the following. Use these three sources as cases on various aspects of managing IJVs.

Three Popular Joint Ventures That Work

Here are three highly recognizable MNCs who have grown because of their successful IJVs:

Sony and Ericsson’s IJV

Verizon and Vodafone’s IJV

Mazda and Ford’s IJV Have your students research the IJV initiatives between these 2 pairs of MNCs and then:

1. Give an overview of the IJV relationship. What was its purpose? 2. What did each “bring to the table” that was of value to their partner? 3. How did each partner leverage their global market position by what the other brought to them? 4. What could have gone wrong that did not? 5. What is the overall result of this IJV?

Here is the link to the full article: http://www.christianfea.com/popular-joint-ventures-that-work.html

Cross-Boarder Joint Ventures

This resource is a very detailed guide to IJVs but from the perspective of UK law. Assign one or a small group of students in your class one of the seventeen headings presented in this re-source. Have them:

1. Give an overview of the relevant facts from the assigned section as it applies to successfully establishing an IJV. 2. Have them tell how each of the UK perspectives differs from a U.S. perspective.

Here is the link: http://uk.practicallaw.com/1-505-6840?sd=plc Why Do International Joint Ventures Fail? A Strategic Mismatch Explanation This Working Paper from the Copenhagen Business School, Department of International Economics and Management at-tempts to answer this question based on research into alliance formation and alliance outcomes and draws on the widely accepted exploitation/exploration dichotomy. NOTE: This is a high level working paper best suited for an undergraduate capstone course or an MBA course to explain research-based rationale for IJV failures. Here is the link: http://econpapers.repec.org/paper/hhbcbsint/2002-004.htm

For more information: Please contact your sales rep http://www.mhhe.com/reps



Resources for IB

http://www.christianfea.com/popular-joint-ventures-that-work.html

http://uk.practicallaw.com/1-505-6840?sd=plc

http://econpapers.repec.org/paper/hhbcbsint/2002-004.htm

http://econpapers.repec.org/paper/hhbcbsint/2002-004.htm

http://www.mhhe.com/reps

McGraw-Hill/Irwin Chapter Key for

Ball et al., Interna-tional Business

Hill, International Business

Hill, Global Business Today

Cateora, Internation-al Marketing

Geringer, M: Interna-tional Business

International Joint Ventures

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

International Joint Ventures at BMW, PepsiCo, and Kellogg

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

International Joint Ven-tures, A Practical Ap-

proach

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

Why Joint Ventures

Fail

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

Digital Resources: How to Develop a Successful Joint Ven-ture in China

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

Digital Resources: Made in Germany: An Airport for Peru

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

Digital Resources: Caterpillar Joint Ven-

ture — China

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

GLOBAL REACH: MNC Profile — Carrefour S.A.

Can be applied to each chapter.





GLOBE TROTTING: Doing Business in…The Czech Republic






CULTURE CUE: — Doing Business in The Czech Republic

Ch. 1, 5, 7, 11, 14, 17, 19

Ch. 1, 2, 12, 13

Ch. 1, 2, 3, 11, 12, 15

Ch. 1, 2, 4, 5, 11, 12, 13, 17, 19

Ch. 1, 4, 10, 12, 14

IB Teaching Re-sources: Three Pop-ular Joint Ventures that Work

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

IB Teaching Re-sources: Cross-Boarder Joint Ven-tures

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

IB Teaching Resources: Why IJVs Fail? A Strategic Mismatch

Ch. 1, 2, 5, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

Ch. 1, 2, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16

Ch. 1, 2, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19

Ch. 1, 2, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

International Business Texts

Supports the following International Business & Marketing texts:

International Business Monthly

Ball et al., International Business, 13th Edition, 2013 © (0077606124)

Hill, International Business, 9th Edition, 2013 © (0078029244) Hill, Global Business Today, 8th Edition, 2014 © (0078112621)

Geringer et al., M: International Business, 1st Edition, 2012 © (0078029376) Cateora et al., International Marketing, 16th Edition, 2013 © (0073529974)

volume 4 issue 9 december 2013/january 2014...

Documents