Contents Topic Page 1. Key Information 1 2. Introduction to the Module 1 3. Intended Learning Outcomes 2 4. Outline Delivery 2 5. Assessment 3 6. How is My Work Marked? 5 7. Assessment Offences 8 8. Reading Lists 9 9. Module Evaluation 10 2. Introduction to the Module This module aims to provide a comprehensive approach to international business issues and their relationship to domestic practice. The module explores the definitions of international business and the way in which globalisation and the tensions which exist within international trade and commerce as a result of changes in the business environment have impacted upon businesses and organisations worldwide. 3. Intended Learning Outcomes Anglia Ruskin modules are taught on the basis of intended learning outcomes and that, on successful completion of the module, students will be expected to be able to demonstrate they have met those outcomes. LO1. Critically describe and evaluate international business practices and discuss how they are being shaped by economic theories, financial, socio-cultural and political forces; with particular emphasis on the business practices of UK’s major trading partners and international business contexts; LO2. Critically discuss and evaluate the way in which globalisation and international business practices, strategies, tactics and management roles interact and the ways in which management practices and functions have evolved in response to these changes. LO3.Demonstrate critical understanding of international trade and globalisation issues and the management skills required to operate effectively within these contexts LO4. Demonstrate the ability to formulate an international operational plan or strategy which is appropriate to particular organisations or business contexts 4. Outline Delivery Session Topic Covered Recommended Reading 1 Introduction to International Business Hill (2011) Chap 1; Griffin and Pustay (2012) Chap 1 International Business and Globalisation Hill (2011) Chap 1; Griffin and Pustay (2012) Chap 1 2 Theories of International trade: Classical theories of international trade Hill (2011) Chap 5 Contemporary theories to international trade Hill (2011) Chap 5 Barriers of trade Hill (2011) Chap 6 3 SEMINAR 1- Globalisation Case study analysis Strategies for analysing and entering foreign markets Griffin and Pustay (2012) Chap 12; Hill (2011) Chap 12 International market entry modes Griffin and Pustay (2012) Chap 12; Hill (2011) Chap 14 SEMINAR 2- International market entry modes Case study analysis 4 International Strategic Alliances Griffin and Pustay (2012) Chap 13; Hill (2011) Chap 14 The role of culture in international business Griffin and Pustay (2012) Chap 4; Hill (2011) Chap 3 SEMINAR 3-The role of culture in international business Case study analysis 5 International Human Resource Management Griffin and Pustay (2012) Chap 19 ; Hill (2011) Chap 18 Ethics and CSR in international business Griffin and Pustay (2012) Chap 5; Hill (2011) Chap 4 6 Leadership and Employee Behaviour in IB Griffin and Pustay (2012) Chap 15 SEMINAR 4-Revision Seminar Assignment Question: Maximum 2000 words Read the following case study and answer ALL two questions: (Question 1-60 marks and Question 2-40 marks) Strategic Alliances in the Global Airline Industry: from Bilateral Agreements to Integrated Networks Following the process of economic globalisation and regional integration, strategic alliances have become increasingly common in the last twenty years around the world. After the rapid development of corporate linkages in manufacturing industries, the 1990s have witnessed an increase in alliances in service industries. The progressive deregulation of many service sectors has considerably facilitated the development of corporate linkages. Since the early 1990s, airline companies appear to be particularly active in forming alliances. Available studies show that a number of alliances signed by airline companies has continuously increased and that signed agreements have become more complex. This case study analyses the evolution of alliances established by major airline companies. Strategic alliances: a condition for success? In the era of economic globalisation, strategic alliances can be regarded as a sine qua non condition for success. They represent an important source of competitive advantage and increasingly determine the global performance of firms. Strategic alliances can have different purposes. They can be a means to turn actual and potential competitors into allies and to develop new business by associating with providers of complementary goods and services. The objective is to reach critical mass and global presence needed for effective competition. Cooperative agreements also allow to create value through the combination of previously separate resources, positions, skills, and knowledge sources. Firms can also learn quickly about unfamiliar markets. The competitive environment of airline companies Following the process of deregulation, the competitive environment of airlines has witnessed considerable changes over the past few decades. Until the 1980s, a majority of airlines were state owned and run for reasons of national prestige. The liberalisation of air transport markets had led to the privatisation of major airline companies such as British Airways .Moreover, national governments gradually reduced their control over route allocation and pricing, thus allowing the creation of private airline companies. Consequently, the environment of airline companies has become increasingly competitive. The global airline market has historically been dominated by US companies, which can partly be explained by the importance of their domestic market. The legal environment of airline companies As in many other sectors, critical size and global market presence have become important factors of competition. However, despite the internationalisation of civil aviation, the airline industry is still characterised by important market entry barriers. National markets are thus dominated by established by major carriers that operate at the most busiest and desirable airports. Moreover, government bilateral agreements limit the ability of airlines to minority equal investments. In the same way, prohibitive antitrust rules and strong corporate cultures represent important barriers to the formation of mergers and acquisition. Consequently, airline companies prefer to establish strategic alliances, allowing their corporate identity. These hybrid forms of organisation enable airline companies to remain cost efficient and to gain access to new markets without heavy investments. The formation of bilateral agreements In the early 1990s, interlining and code sharing agreements have proliferated as very popular forms of cooperation between airlines. When airlines practice interlining, they establish joint fares and coordinated flight schedules, but each company retains its own identity. Flight segments are clearly labelled as to which carrier is providing the service. Code sharing alliances enable airlines to sell seats on flights provided by other airline companies (e.g. flights from regional airports to an international airport, so-called ‘hub’ for onward connection to inter-continental destinations). Airlines can thus expand route networks without adding actual flights. Code sharing involves the issue of one single ticket which may reflect a single carrier through to the final destination, even if the actual passage involves two or more different airlines. Code sharing arrangements can be accompanied by other joint activities such as the coordination of flight schedules, shared airports facilities (check-ins, lounges), joint maintenance, procurement policies, staff training, and connection services (e.g. coordination of bagging checks). Interlining and code sharing agreements are contractual alliances that provide marketing advantages without requiring equality investments. The strategic alliance between KLM and Northwest Airlines In 1993, KLM and Northwest Airlines signed an extensive cooperation agreement, with the objective to create a unified global airline system. The cooperation has involved a high integration and coordination of flights through extensive code sharing and joint marketing activities, including the creation of a joint frequent flyer program. Cooperation has also been extended to group handling, sales, catering, information technology, maintenance, and joint purchasing. Covering a wide range of activities, the agreement signed by KLM and Northwest Airline can be considered as the first integrative alliance formed in the airline industry. The creation of airline networks The 1990s have also witnessed the creation of several global alliance networks. In 1994, Austrian Airlines, SAS and Swissair decided to create ‘European Quality Alliance’ (Qualiflyier). In 1997, Air Canada, United Airlines, Lufthansa, SAS (which decided to leave the European Quality Alliance) and Thai Airways launched ‘Star Alliance’. In 1999, American airlines, British Airways, Cathay Pacific, Canadian Airlines and Qantas created the ‘One World’ alliance. In 2000, AeroMexico, Air France, Alitalia, CSA, Czech Airlines, Delta Airlines and Korean Air established ‘SkyTeam’. Through multilateral cooperation, airline companies attempt to achieve global market coverage and to meet the need of international customers. Compared to bilateral interlining and code-sharing agreements, global airline networks cover a broad range of activities: code-sharing, coordination of flights, scheduling, advertising, reciprocal frequent flyer programmes, sharing of airport facilities, sharing of computer reservation systems, interchanges of flight-crew personnel and aircraft. They allow to realise added revenues and to improve passenger services and customer satisfaction. Affiliated airlines also use their membership as a marketing and communication tool. Their degree of commitment is generally higher than in bilateral agreements. The ‘Star Alliance’ network An analysis of the strategy followed by the members of global airline networks reveals that most of them had already been linked by bilateral agreements before the creation of the multilateral alliance. It appears that the network had emerged from several bilateral agreements. In order to improve their global market presence, member airlines of the Star Alliance network have extended their cooperation to other important carriers: Varig Brazilian Airlines joined in 1997, ANA All Nippon Airways, Ansett Australia, and Air New Zealand in 1999, Austrian Airlines Group (Austrian Airlines, Lauda Air and Tyrolean Airways), Singapore Airlines, British Midland and Mexicana in 2000, Asiana Airlines and Spanair in 2003. The Star Alliance network has become the first airline network worldwide. The 16 affiliated airlines allow a broad geographic coverage. In 2002, the network offered 688 destinations in 124 countries and transported 292 million passengers reaching total revenues of 67.5 million US dollars. The Star Alliance network appears to be the most integrated airline network. In order to improve the coordination of activities the members of the network recently decided to appoint an ‘Alliance Management Team’ (AMT), which represent the executive body of partnership. The funding and supervision of this entity are shared by the alliance partners .Its function is to observe contributions and benefits of members, to collect information about member performance and to maintain behaviour norms with the networks through neutral coordination. The entity has also become a focal point for communication and exchange between alliance partners. The ‘One World’ network After its creation in 1999, the OneWorld alliance has been extended to Finnair and Iberia in 1999 and to Aer Lingus and LanChile in 2000. After the merger of Air Canada (member of Star Alliance) and Canadian Airlines (member of One World), Canadian Airline left OneWorld in order to integrate the ‘Star Alliance’ network. The OneWorld alliance has become the second largest airline network in the world. Eight member airlines allow to serve in 550 destinations in 135 countries. In 2002, they transported 230 million passengers, and total revenues reached 50 billion US dollars. The ‘SkyTeam’ network SkyTeam has become the third global alliance network: its six members offer 512 destinations in 114 countries. In 2002, affiliated airlines transported 228 million passengers, and total revenues approached 40 billion US dollars. The geographic coverage of SkyTeam is certainly less extensive, but the coordination of activities seems to be easier because of limited number of members. Table 1: Major networks established in the global airline industry Name of network Affiliated airline companies Year of foundation Fleet size Number of destinations Number of passengers Star Alliance • Air Canada • Air New Zealand • ANA All Nippon Airlines • Asiana Airlines • Austrian Airlines Group (Austrian Airlines, Lauda Air, Tyrolean Airlines) • Bmi britishmidland • Lufthansa • Mexicana Airlines • SAS Scandinavian Airlines • Singapore Airlines • Spanair • Thai Airways International • United Airlines • Varig Brazilian Airlines 1997 2058 688 (124 countries) 292 million per year (10700 daily flights) One World • Aer Lingus • American Airlines • British Airways • Cathay Pacific • Finnair • Iberia • LanChile • Quantas 1999 2000 550 (in 135 countries) 230 million per year (8500 daily flights) Sky Team • AeroMexico • Air France • Alitalia • CSA Czech Airlines • Delta Airlines • Korean Air 2000 1224 512 (in 114 countries) 228 million per year (8200 daily flights) The ‘European Quality Alliance’ network The European Quality Alliance network ceased to exist, mainly because of management difficulties and because of insufficient geographic coverage. In fact, the multilateral character and the relatively high degree of integration make alliance networks relatively difficult to manage: coordination problem and conflicts concerning contributions and benefits are more likely to arise than in bilateral agreements. Moreover, given the increasing globalisation of the airline market, it seems necessary to achieve global and not only regional market presence. Major airline networks The global airline market is currently dominated by three major airline networks: Star Alliance, OneWorld and SkyTeam. Over the past few years, competition between these three global networks has increased considerably. The analysis shows that strategic alliances formed in the global airline sector have considerably changed over time: bilateral interlining and code-sharing agreements have gradually evolved into integrated airline networks. Airline companies collaborate within networks while remaining competitors. Moreover, competition between different airline networks has considerably increased. The evolution of the alliance policy of airline companies shows that competition between individual airlines coexists with competition between groups of airlines. Because of the dominant position the three major airline networks, the membership of one of these networks can be considered as a competitive advantage. (Ghauri and Cateora, 2010) Answer all three questions: 1. Using appropriate business tools, critically analyse the relevant drivers of globalisation with examples from the case study that are responsible for the formation of these global airline networks? (60 marks) 2. Through the use of relevant examples suggest and justify two suitable alternative strategies that an individual airline can use to enter a new foreign market. (40 marks) ------------------------------------------------------------------------------------------------------- Maximum Word Limit and Assessment weighting for each aspect within the assessment: • Word Limit – Total word limit is 2000 words. Report Structure:- • Title Page • Table of Content • Executive summary-100 words (excluded from the word count) • Introduction-100 words • Question 1-1000 words • Question 2-800 words • Conclusions-100 words • References • Bibliography • Appendix-please use sparingly Description of Assessment Requirements 1. All assignments must be word processed – handwritten assignments will attract an automatic FAIL grade. 2. Assignments will be graded on the basis of research done, analysis of the facts collated, stand taken and the justification of the stand. 3. All research must be referenced using the Harvard Style of Referencing and a Reference and Bibliography list attached. Improper or lack of either of these constitutes plagiarism and students will be awarded a Zero. 4. Students found copying from other students will also be charged with collusion and awarded a Zero. Assessment Criteria: Introduction-coverage of background of the topic and the selected agency. (10 marks maximum)  Weak coverage with little or no justification: 1-3  Satisfactory coverage with some justification: 4-7  Good coverage with good justification: 8-10 Review of the related literature-Collection of data from a range of sources (25 marks maximum)  Little or no evidence of data: 1-9  Satisfactory range of sources: 10-16  Excellent range of sources: 17-25 Analysis and evaluation (25 marks maximum)  Weak analysis with little or no evaluation: 1-9  Satisfactory analysis with some evaluation: 10-16  Good analysis with good evaluation: 17-25 Conclusion and Recommendations to management (20 marks-300 words)  Poor recommendations with little or no justification: 1-7  Satisfactory recommendations with some justification: 8-13  Good recommendations with good justification: 14-20 Presentation, argument and Harvard referencing (20 marks maximum)  Poor presentation, poorly structured argument and poor Harvard referencing: 1-7  Satisfactory presentation, logically structured argument and satisfactory Harvard referencing: 8-13  Good presentation, logically structured argument and satisfactory Harvard referencing: 14-20 TOTAL MARK: 100 % ----------------------------------------------------------------------------------------------------------------- Marking Scheme Topic Marks Possible Question 1 A critical review of contemporary and academic literature Collection of data from a range of sources 24 Content and analysis Has the question been answered / is the answer focused? 30 Question 2 Critical review of contemporary and academic literature Collection of data from a range of sources 16 Content and analysis Has the question been answered / is the answer focused? 20 Overall Presentation Presentation and structure of the assignment including referencing of sources as per the Harvard style. 10 TOTAL 100 Assessment Criteria and Marking Standards 7. Assessment Offences As an academic community, we recognise that the principles of truth, honesty and mutual respect are central to the pursuit of knowledge. Behaviour that undermines those principles diminishes the community, both individually and collectively, and diminishes our values. We are committed to ensuring that every student and member of staff is made aware of the responsibilities s/he bears in maintaining the highest standards of academic integrity and how those standards are protected. You are reminded that any work that you submit must be your own. When you are preparing your work for submission, it is important that you understand the various academic conventions that you are expected to follow in order to make sure that you do not leave yourself open to accusations of plagiarism (eg: the correct use of referencing, citations, footnotes etc.) and that your work maintains its academic integrity. Definitions of Assessment Offences Plagiarism Plagiarism is theft and occurs when you present someone else’s work, words, images, ideas, opinions or discoveries, whether published or not, as your own. It is also when you take the artwork, images or computer-generated work of others, without properly acknowledging where this is from or you do this without their permission. You can commit plagiarism in examinations, but it is most likely to happen in coursework, assignments, portfolios, essays, dissertations and so on. Examples of plagiarism include: • directly copying from written work, physical work, performances, recorded work or images, without saying where this is from; • using information from the internet or electronic media (such as DVDs and CDs) which belongs to someone else, and presenting it as your own; • rewording someone else’s work, without referencing them; and • handing in something for assessment which has been produced by another student or person. It is important that you do not plagiarise – intentionally or unintentionally – because the work of others and their ideas are their own. There are benefits to producing original ideas in terms of awards, prizes, qualifications, reputation and so on. To use someone else’s work, words, images, ideas or discoveries is a form of theft. Collusion Collusion is similar to plagiarism as it is an attempt to present another’s work as your own. In plagiarism the original owner of the work is not aware you are using it, in collusion two or more people may be involved in trying to produce one piece of work to benefit one individual, or plagiarising another person’s work. Examples of collusion include: • agreeing with others to cheat; • getting someone else to produce part or all of your work; • copying the work of another person (with their permission); • submitting work from essay banks; • paying someone to produce work for you; and • allowing another student to copy your own work. Many parts of university life need students to work together. Working as a team, as directed by your tutor, and producing group work is not collusion. Collusion only happens if you produce joint work to benefit of one or more person and try to deceive another (for example the assessor). Cheating Cheating is when someone aims to get unfair advantage over others. Examples of cheating include: • taking unauthorised material into the examination room; • inventing results (including experiments, research, interviews and observations); • handing your own previously graded work back in; • getting an examination paper before it is released; • behaving in a way that means other students perform poorly; • pretending to be another student; and • trying to bribe members of staff or examiners. Procedures for assessment offences An assessment offence is the general term used to define cases where a student has tried to get unfair academic advantage in an assessment for himself or herself or another student. We will fully investigate all cases of suspected assessment offences. If we prove that you have committed an assessment offence, an appropriate penalty will be imposed which, for the most serious offences, includes expulsion from Anglia Ruskin. For full details of our assessment offences policy and procedures, see the Academic Regulations, section 10 at: www.anglia.ac.uk/academicregs To see an expanded version of this guidance which provides more information on how to avoid assessment offences, visit www.anglia.ac.uk/honesty. 8. Reading List Essential Reading • Hill, C. (2012) International Business: Competing in the global marketplace McGraw-Hill Higher Education, 9th Edition Recommended Reading: • Bartlett C. A. and Beamish P. W. (2010) Transnational Business: Text and Cases McGraw-Hill Education • Burnes, B. (2009) Managing Change, (5th Ed) London: Prentice Hall • Hill C. W. (2011) Global Business Today, Global Ed, McGraw-Hill Higher Education, • Hofstede, G. (1984) Culture’s Consequences International Differences in • Hofstede, G. (1994) Cultures and Organisations Software of the Min, • London: Harper Collins. • McKenna E (2011) Business Psychology and Organisational Behaviour 5th edition) London: LEA • Mullins L (2010) Management and Organisational Behaviour (9th edition) London: FT Pitman • Peng M (2009) Global Strategic Management, International Edition, South Western College • Porter M.E. (1998) Competitive Advantage of Nations Basingstoke: Palgrave Macmillan • Trompenaars, F , Trompenaars, A and Hampden-Turner, C. (1998) Riding the Waves of Culture: Understanding Cultural Diversity in Global Business, McGraw-Hill Work Related Value, London: Sage 9. Module Evaluation During the second half of the delivery of this module, you will be asked to complete a module evaluation questionnaire to help us obtain your views on all aspects of the module. This is an extremely important process which helps us to continue to improve the delivery of the module in the future and to respond to issues that you bring to our attention. The module report in section 11 of this module guide includes a section which comments on the feedback we received from other students who have studied this module previously. Your questionnaire response is anonymous. Please help us to help you and other students at Anglia Ruskin by completing the Module Evaluation process. We very much value our students’ views and it is very important to us that you provide feedback to help us make improvements. In addition to the Module Evaluation process, you can send any comment on anything related to your experience at Anglia Ruskin to [email protected] at any time.