What Is the Role of the Main International Trade Organizations?

Course / 8721 Principles of Business and Finance / Unit A / Principles of Business and Finance
Essential Standard / 1.00 / B2 / 16% / Understand the role of business in the global economy.
Objective / 1.03 / B2 / 6% / Understand business in the global marketplace.
Essential
Questions /

• Which factors and regulations must be considered when conducting business in the global marketplace?
• What are main entry modes for businesses to enter the global marketplace?
• What is the role of the main international trade organizations?

UNPACKED CONTENT

1. Global or multinational companies (MNC) operate in several countries.These companies have to consider several factors and regulations when conducting business in the global marketplace. These factorsare:
2. Absolute advantage
3. Comparative advantage
4. Importing
5. Exporting
6. Measuringof trade relations
7. International currency exchange rate
8. International business environment
9. International trade barriers
10. Encouragement of international trade
11. The main entry modes for businesses to enter the global marketplace vary by intent of involvement with daily operations and expected monetary rewards. The main entry modes are:

1. Franchising
2. Licensing
3. Joint venture

1. The main international trade organizations assist multinational companies with global trading. The areas of assistance provided are in regulation, economics, and finance. The main organizations are:
2. International Monetary Fund
3. World Bank
4. World Trade Organization

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

INSTRUCTIONAL ACTIVITES / RELEVANCE TO OBJECTIVE / RESOURCES
1 / Global Marketplace Introduction

• Have students read Focus on Real Life on pages 54, 60,and 65 in Intro to Business, 6e, Thomson South-Western textbookoruse a current event covering U.S. involvement in the global marketplace.
• Facilitate students identifying items in the classroom made in other countries.NOTE: Students may be allowed to move around to place sticky-notes on items OR you may point to the items and have students identify the countries.
• Facilitate a discussion using these questions:

1. Does anyone rememberwhen a product was recalled that was made in another country? If so, please describe the situation.
2. What should be in place to protect consumers from incorrect label information?

/ Helps students begin to UNDERSTAND (B2) the factors and regulations to consider when conducting business in the global marketplace / Textbook
2 / Global Marketplace Reading and PowerPoint Presentation

• Present an overview of factors and regulations to consider when conducting business in the global marketplace.
• Facilitate students completing Business in the Global Marketplace Organizer.
• Students may obtain information byreading pages 54-68 in Intro to Business, 6e, Thomson South-Western textbook OR by participating during presentation of PowerPoint Presentation 1.03.

• Facilitate students completingExitTicket Activity. See teacher directions on activity.NOTE: This activity is a formative assessment.

/ Helps students UNDERSTAND (B2)the factors and regulations to consider when conducting business in the global marketplace / Business in the Global Marketplace Organizer
Textbook
PowerPoint Presentation 1.03
Exit Ticket Activity
Current events (Supplemental)
3 / Absolute or Comparative Advantage Activity

• Review the differences between absolute and comparative advantages.
• Facilitate students completing Absolute or Comparative Advantage Activity.
• Select students to present their responses. Monitor the responses for accuracy and facilitate the other students recording notes as necessary.

/ Helps students CLASSIFY (B2) absolute and comparative advantages / Absolute or Comparative Advantage Activity
Absolute or Comparative Advantage Activity Key
Instructional Activities continued on the next page.
INSTRUCTIONAL ACTIVITES / RELEVANCE TO OBJECTIVE / RESOURCES
4 / Business in the Global Economy

• Facilitate students completing Business in the Global Economy Activity. NOTE: Use the Linking School and Home Activity on page 72in Intro to Business, 6e, Thomson South-Western textbookas a guide.
• Allow each student to share his/herresponses with another student. While working together, the students should look for similarities and differences in places of manufacturing. They should note advantages and disadvantages for the places.
• Facilitate groups sharing their responses with the class.
• Based on shared responses of students, review the advantages and disadvantages of importing goods.NOTE: This activity is a formative assessment.

/ Helps students UNDERSTAND (B2)theadvantages and disadvantages of importing and exporting of goods / Business in the Global Economy Activity
Textbook
5 / Balance of Trade and Payments Activity

• Facilitate students completing Balance of Trade section of Balance of Trade and Payments Activity. NOTE: Use the website listed in the resource column or most current data available as a guide that includes a graph.NOTE: Students may use graph paper or software to complete the activity.
• Select students to present their responses. Monitor the responses for accuracy.
• Facilitate students completing Balance of Payment section Balance of Trade and Payments Activity. NOTE: This is a simple balance of payment activity that will not give an entire indication of a favorable or unfavorable balance of payment for a country. This is to help students see how business activities contribute to balance of payment.
• Assign students to groups of three or four.
• Allow the groups to discuss their responses, and then allow a spokesperson representing each group to present their responses to the class.

/ Helps students UNDERSTAND (B2) how to determine if a balance of trade and balance of payment is favorable or unfavorable / Balance of Trade and Payments Activity
Website:

Balance of Payment Balance of Trade and Payments Activity Key
Graph paper or software
Instructional Activities continued on the next page.
INSTRUCTIONAL ACTIVITES / RELEVANCE TO OBJECTIVE / RESOURCES

• Summarize their responses and emphasize that this is a simple scenario that cannot dictate the balance of payment for a country. This activity shows how purchasing goods and services in other countries influences balance of payment.

6 / International Currency Activity

• Facilitate a discussion about the value of United States dollars compared to other countries using Figure 3-4on page 58in Intro to Business, 6e, Thomson South-Western textbook.
• Ask if students have used foreign currency and allow them to share their experiences.
• Facilitate students completing the International Currency Activity.NOTE: Teacher should cut each page in half.
• Review the factors that can influence the value of currencies. NOTE: Students may add notes to their Business in the Global Marketplace Organizer.

/ Helps students to UNDERSTAND (B2) the factors that may impact the value of currencies exchange rate / Business in the Global Marketplace Organizer
International Currency Activity

7 / The Global Marketplace

• Assign students to groups of three orfour, and then assign each group an entity of the international business environment.
• Facilitate a discussion about the international business environment entities.
• Facilitate each group researching and preparing a brief description of how their assigned entity could be an advantage for a global business located in North Carolina. NOTE: The groups may use the website listed in the resource column or other resources such as printed material, websites, or interview people that work in a global business.
• Facilitate each group presenting their findings. Some possible examples are:

Geography-NC has four major airports.
Advantage-Business could have goods and service providers readily imported. / Helps students UNDERSTAND (B2) the main factors of the international business environment / Website:

WhyNC/
Instructional Activities continued on the next page.
INSTRUCTIONAL ACTIVITES / RELEVANCE TO OBJECTIVE / RESOURCES
Economics-NC has a diverse and skilled workforce in the areas of financial services, information technology, and education.
Advantage-Global businesses could employ many of the of NC citizens and save money on moving other people from other countries.
Culture-NC has several sports venues such as football, hockey, basketball, and baseball teams. Advantage-The sport venues could be a means of entertainment for global business owners and family members.
Political-legal factors-NC government provides a wealth of online services.
Advantage-Business could be conducted without leaving work and be minimal intrusive of a business day
8 / Free-Trade Zones

• Assign students to groups of three to four, and then assign each group one of the free-trade zones of NC. NOTE: More than one group may be assigned the same zone.

NC Free-trade Zones

1. Charlotte Regional Partnership
2. NC Ports Authority: Wilmington
3. NC Ports Authority: Morehead City
4. Longistics
5. Global Transpark Authority
6. Piedmont Triad Regional Partnership

• Facilitate a discussion about the purpose of free-trade zones.
• Facilitate students researching services provided by the free-trade zones of NC. NOTE: Students may use the website in the resource column or other resources: printed material.
• Facilitate each group presenting a brief description of the services of each zone. NOTE: Coordinate groups working on the same zones to present consecutively.

/ Helps students UNDERSTAND (B2) the services of free-trade zones / Website:

Equipment and material for presenting services of free-trade zones of NC
Instructional Activities continued on the next page.
INSTRUCTIONAL ACTIVITES / RELEVANCE TO OBJECTIVE / RESOURCES
9 / Main International Trade Organizations

• Present an overview on the purposes of the main international trade organizations.
• Present the International Trade Organizations Rubric.
• Facilitate students making a visual aid illustrating the activities of the main international trade organizations. NOTE: Students may use the websites in the resources column for additional information about the organizations.
• Allow students to present their visual aids.

/ Helps students UNDERSTAND (B2) the activities of the main internationaltradeorganizations / International Trade Organizations Rubric
Equipment and material for visual aids
Websites:



10 / Optional
A Career in a Global Business

• Facilitate a discussion about possible career opportunities in a global business.
• Have students read Planning a Career in … International Business page 53 in Intro to Business, 6e, Thomson South-Western textbook.
• Facilitate a discussion of what it may be like to work in a global business.
• Invite guest speakers that may have worked in another country for a global business.

/ Helps students UNDERSTAND (B2) career options in a global business / Textbook

Instructional Support Material

Textbook / Websites
Intro to Business, 6e, Thomson South-Western /

WhyNC/





Handouts (included) / Other

• Business in the Global Marketplace Organizer
• Exit Ticket Activity
• Absolute or Comparative Advantage Activity
• Business in the Global Economy Activity
• Balance of Trade and Payments Activity
• International Currency Activity
• Business in the Global Marketplace Organizer
• International Trade Organizations Rubric

/

• PowerPoint Presentation 1.03 (separate file)
• Current events (supplemental)
• Equipment or material for presenting services of free-trade zones of NC
• Equipment and material for visual aids to present main international trade organizations
• Assessment Prototypes (included)

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

Name ______Class ______Date ______

Business in the Global Marketplace Organizer

Directions: Provide responses to the list of items in the spaceprovided.

Domestic and InternationalBusinesses
Describe transactions of domestic businessesand where they happen. / Describe transactions ofinternational businessesand where they happen.
Business Advantage Factors
Describe when a country may have an absolute advantage.
Example country and good: / Describe when a country may have a comparative advantage.
Example country and good:
Importing and Exporting Differences
Describe the activities of importinggoods.
Example goods:
Possible advantage(s)and disadvantage(s)of importing goods / Describe the activities of exportinggoods.
Example goods:
Possible advantage(s) and disadvantage(s) of exporting goods

Business in the Global Marketplace Organizer Continued

What is foreign debt? ______

______

Measuring of Trade Relations: Balance of Trade or Payments Factor
Describe when a country may have abalance of trade.
Favorable Unfavorable
Exports Imports Exports Imports
/ Describe when a country may have a balance of payments.
Year 1
Favorable

Money into countryMoney out of country

Year 2
Unfavorable


Money into country Money out of country

Business in the Global Marketplace Organizer Continued

International Currency Exchange Rate Factor
What happens at the foreign exchange market?
Describe exchange rate
Describe the main factors that can influence the international currency exchange rate
Balance of payments
Economic conditions
Political stability

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

Business in the Global Marketplace Organizer Continued

International Business Environment Factor
Describe the elements of the international business environment and possible impact on business activities
Cultural influences
Examples:
Economic development
Examples:
Geography
Examples:
Political-legal issues
Examples:

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

Business in the Global Marketplace Organizer Continued

Main International Trade Barrier Factor
Describe the difference between formal trade barriers
What are trade barriers?
Embargoes
Why would a government impose an embargo?
Example of a good being embargoed : / Quotas
Why would a quota be set by a company or country?
Example of a good with a quota: / Tariffs
Why would a government use a tariff?
Example of a tariff imposed:

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

Business in the Global Marketplace Organizer Continued

Encouragement of International Trade Factor
Describe the differences among factors to encourage international trade.
Common markets
Example: / Free-trade agreements
Example: / Free-trade zones
Main Global Market Entry Modes
Describe the differences among the global market main entry modes.
Franchising
Examples: / Licensing
Examples: / Joint venture
Examples:
Main International Trade Organizations
Describe the purpose of the international trade organizations.
International Monetary Fund / World Bank / World Trade Organization

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

Exit Ticket Activity

Teacher Directions: Cut out each question separately as if they were on a card. Assign each student a number up to the total number of questions.Give one card to each student according to their number assigned. Depending on the class size, a student may receive more than one question. Allow students to answer questions. Check the responses to the questions. Review the factors depending on responses.

Exit Ticket Activity Continued

Name ______Class ______Date ______

Absolute or Comparative Advantage Activity

Directions: Determine if the scenarios could be absolute or comparative advantage based on the information provided, and then justify each response.

Several countries produce a good or service.Some produce more goods or services and/or at a cost less than other countries. Use the provided table of information to answer questions to determine which country has an absolute advantage and justify why.

Country / Coal production in millions
China / $2,803.93
South Africa / $282.56
United States / $1,145.57

______

______

Company / Product
A / 8 cars per worker per year
B / 7 cars per worker per year

______

______

Country / Diamond production in carats
Canada / 12,350
Congo / 5,600
Russia / 23,400

______

______

Company / Product
A / 25 units of beef per worker per hour; 60 tortillas
B / 75 units of beef per worker per hour; 50 tortillas

______

______

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

Absolute or Comparative Advantage Activity KEY

Directions: Determine if the scenarios could be absolute or comparative advantage based on the information provided, and then justify your response.

Several countries produce a good or service. Some produce more goods or services and/or at a cost less than other countries. Use the provided table of information to answer questions to determine which country has an absolute advantage and justify why.

Country / Coal production in millions
China / $2,803.93
South Africa / $282.56
United States / $1,145.57

China has the absolute advantage over South Africa and the United States according to the information provided. Also according to the information provided, China produces more coal than the other countries.

Company / Product
A / 8 cars per worker
B / 7 cars per worker

Company A has comparative advantage over Company B according to the information provided. It presented that Company A produces one more car per worker.

Country / Diamond production in carats
Canada / 12,350
Congo / 5,600
Russia / 23,400

Russia has the absolute advantage over Canada and Congo according to the information provided. Also, according to the information provided, Russia produces more diamonds than the other countries.

Company / Product
A / 25 units of beef per worker per hour; 60 tortillas
B / 75 units of beef per worker per hour; 50 tortillas

Company B has comparative advantage over Company A in producing beef according to the information provided. Company A has comparative advantage over Company B in producing tortillas. It presented that Company B produces fifty more units of beef per hour; Company A ten more units of tortillas.

8721 Principles of Business and Finance Summer 2010, Version 2 Page1

Name ______Class ______Date ______

Business in the Global Economy Activity

Directions: For this activity, you are to create a table of countries from which items were manufactured. Survey item labelssuch as clothing, electronics, furniture, and foodaround your home, job, and other frequented places.

Item / Country where manufactured

List possible advantage(s) for importing goods.

______

List possible disadvantage(s) for prevalently importing goods.

______

List possible advantage(s) for exporting goods.

______

List possible disadvantage(s) for exporting goods.

______
Business in the Global Economy Activity KEY

Directions: For this activity, you are to create a table of countries from which items were manufactured. Survey item labels such as clothing, electronics, furniture, and food around your home, job, and other frequented places.

Item / Country where manufactured
Answers will vary.

List possible advantage(s) for importing goods

Some possible advantages are that the goods were available to be purchased. The goods could have cost less since they were imported. A better quality of the good may have been imported and purchased. The satisfaction of owning goods made in other countries may have been satisfied.

Listpossible disadvantage(s)forwidely importing goods

Some goods would cost more and possibly be unavailable.______

List possible advantage(s) for exporting goods

Creates jobs and access to goods usually unavailable______

List possible disadvantage(s) for exporting goods