1. 国际商务导论与沟通 Fundamentals of Global Business and Business Communication Lecture 1: Introduction

2. What to cover today ： 1.Course modules 2.What is business? 3.Forms of business ownership 4.Franchising 5.Business mission and company profile 6.International business 7.International economic organizations Exercises

3. 1. Survey of course modules Have your say in what to learn in this course!

4. What is business? money (capital & profit) company products (goods & services) people market countries & cultures conferences, negotiations & trips communication

5. 2. What is business? Business is:  the exchange or trade for things people want or need  the production, distribution and sale of goods and services for a profit  a goal-directed behaviour aimed at getting and using productive resources to buy, make, trade, and sell goods and services that can be sold at a profit (Source: Jones, 2007. Introduction to Business: How Companies Create Value for People)

6. productive resources land capital enterprise labor

7. 3. Forms of business ownership Three basic legal (vs. organizational) forms of business ownership ： 1.sole proprietorship ( 个人 ) 独资企业 2.partnership 合伙企业 3.company 公司  Unlimited Liability Company 无限责任公司  Limited Liability Company (LLC) 有限责任公司  Limited Liability Company by Share/corporation 股份有限公司 enterprise > company > corporation

8. 3.1 Factors to be weighed in decision-making  ease of formation  liability for business debts  control over the operation  management expertise available  financial resources available  taxation policies  continuity  legal capacity

9. 3.2 Sole proprietorship advantages & disadvantages D4: lack of continuity If the owner dies or becomes too ill to manage the business, there is no separate legal entity in existence with which the public, creditors, suppliers or employees can deal to ensure the continuity of the business.

10. 3.3 Partnership 3.3.1 Oral vs. written agreement articles of partnership 合伙章程  names of the partners  name of the partnership  location of the partnership  purposes of the partnership  duration of the partnership  capital contributions by partners  rights and responsibilities of partners  allocation of profits and losses among partners  dissolution procedures

11. 3.3.2 General partnership 普通合伙 企业 vs. limited partnership 有限 合伙企业 3.3.3 Advantages & disadvantages

12. 3.4 Company company publicly owned （ corporation ） quasi-publicly owned (corporation) private profit privately held (LLC) publicly held (corporation) non-profit

13.  publicly owned companies: established by the government, e.g. the U.S. Postal Service  quasi-publicly owned companies: established privately, but operated for public service and with high degree of government regulation and protection, e.g. private schools and hospitals  private companies: established privately and operated for private interests; including the bulk of existing companies

14.  profit private companies: established to carry out business for profit-making purposes  non-profit private corporations: established for charitable or religious purposes

15.  privately held profit private companies: LLC; do not publicly offer their stock; owned by one or a few shareholders who normally have family or other close ties and also manage the business  publicly held profit private companies: LLC by share; publicly offer and freely trade their shares on stock exchanges; owned by a number of unrelated shareholders who do not actively manage the company (passive investors, cf. limited partners); go public, IPO 首次公开募股

16. 3.4.1 Corporation Proportion of Existing Businesses under Each Form of Ownership Proportion of Business Revenue Generated by Each Form of Ownership

17. 3.4.1.1 Corporate structure and management incorporators/shareholders board of directors president/CEO other officers owners managers

18. 3.4.1.2 Corporate charter & legal person  Corporate charter 公司章程 : a document used to incorporate a business, and filed with the state government  The charter describes important aspects of the corporation, e.g. the name of the firm, the stock issued, and the firm’s operations

19. 3.4.1.3 Advantages & disadvantages A4: continuous life (perpetual continuity) Theoretically, a corporation has a perpetual existence; it continues until dissolved, merged, or terminated for other reasons.

20. 3.4.2 Limited liability company (LLC)  a firm that has all the favorable features of a typical general partnership, but also offers limited liability for the partners  has fewer restrictions on the type of owners and on the liability protection than S corporation  the precise rules on liability protection vary among states

21.  According to United States federal income tax, an S corporation is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code.  has 35 or fewer owners and satisfies other criteria  the owners have limited liability  the earnings are distributed to the owners and taxed at the respective personal income tax rate of each owner 3.4.3 S corporation S 公司

22. 4. Franchising 特许经营 budding period: the early 1900s, filling stations, car dealerships growth period: since the mid-1960s, paralleling the enormous expansion of the fast food industry

23. Three basic types of franchising:  product franchising: licensing for the right to sell trademarked goods purchased from the franchiser and resold by the franchisee, e.g. car dealers, gasoline stations  manufacturing franchising: licensing for the right to produce and distribute products, using supplies purchased from the franchiser, e.g. soft-drink bottling plants  business-format franchising: licensing for the right to open a business using the franchiser’s name and format for doing business, e.g. fast food chains

24. Advantages of franchising: triple benefits of franchising according to the president of the International Franchise Association: “The franchiser wins because he builds a strong foundation for his company. The franchisee wins because he can take advantage of the franchiser’s proven business system. And the general public benefits from the consistency of the product or service.”

25. Case study: A Godsend

26. 5. Business mission and company profile 5.1 Business mission/vision -- a brief statement that tells stakeholders and the public why the firm is in business, how it intends to satisfy customer needs, and why it will satisfy their needs better than its competitors

27. Sample mission statements Starbucks Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Dell Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: Highest quality Leading technology Competitive pricing Individual and company accountability Best-in-class service and support Flexible customization capability Superior corporate citizenship Financial stability

28. Sample mission statements Nike Our mission for the Nike brand is: To bring inspiration and innovation to every athlete in the world. Alibaba Alibaba Group (Alibaba for short) is a global e- commerce leader basing in China. Alibaba has 7 subsidiary companies, business involving the B2B, C2C, online payments, software service, search engine, online advertising, local living and consumption community etc. Alibaba is committed to building the world ‘ s leading e-commerce infrastructure and high quality online living platform.

29. 5.2 Company profile  Company history  Founders and/or current top managers  Major line of business  Location and subsidiaries  Markets  Staff size  Production capacity  Annual turnover/sales  Awards

30. Listening: Listen to a presentation delivered by the PR Department Manager of Oracle China and construct a chart for the company profile Word bank: headquarters 总部 headcount 员工总数 annual revenue 年收入

31. Oracle China Profile  Status: the world’s ____ enterprise software company, ____ global software giant in ____  Established in: ____  Headquarters: Redwood Shores, ______  Headcount: ______  Annual revenue: ____  Launched on China’s market in ____  Oracle China branches: Beijing, Shanghai, Guangzhou, ____  Services: 9i E-Business platform, E-Business Suite, consulting services, ______, and support services largest education China 1977 California 42,000 $11billion 1989 Chengdu first

32. Sample company profile GM http://www.gm.com/corporate/about/company.jsp Ecolab http://www.ecolab.com/CompanyProfile/ Philips English version: http://www.philips.com/about/company/companyprofile.p age http://www.philips.com/about/company/companyprofile.p age Chinese version: http://www.philips.com.cn/about/company/companyprofile.page http://www.philips.com.cn/about/company/companyprofile.page Alibaba English version: http://news.alibaba.com/specials/aboutalibaba/index.html?tr acelog=24581_foot_company_info Chinese version: http://page.china.alibaba.com/shtml/about/ali_china1.shtml

33. 6. International business What is ? -- business activities across national boundaries, including movements of goods, services, capital, technology, information, data and/or personnel What is the difference between and ? -- international trade is merely one form or method of international business; the later covers a much wider range of business sectors than the former

34. 6.1 Reasons for international business 6.1.1 Economic reasons: difference in the practicality or efficiency of producing something  absolute advantage 绝对优势 : comparison between two or more countries concerning a single product  comparative advantage 相对优势 : comparison between two or more products of the same country 6.1.2 Political reasons: political concerns, hostility or confederation

35. 6.2 Methods of international business  international trade 国际贸易  agents 代理  licensing arrangement 特许协议 licensing arrangement 特许协议  outsourcing 外包生产  branch offices 分支机构  foreign direct investment (FDI) 外商 直接投资 : JV & FOEJV  multinational corporations (MNCs)/transnational corporations (TNCs) 多国公司 / 跨国公司 (MNCs)/ next degree of involve- ment low high

36. Licensing arrangement case study: In order to enter the Japanese market, Xerox, the inventor of the photocopier, licensed its Xerographic know-how to Fuji Photo, the industry leader in Japan. In return, Fuji paid Xerox a royalty fee equal to 5% of the net sales revenue that it earned from the sales of photocopiers based on Xerox’s patented know-how. The license was originally granted for 10 years, and it has been renegotiated and extended several times since.

37. Licensing arrangement case study: RCA color TV RCA Corporation once licensed its color TV technology to a number of Japanese manufacturers including Matsushita and Sony. The Japanese firms quickly assimilated the technology, improved it, and used it to enter the US market. Now the Japanese brands have a much bigger share of the US market than the RCA brand. back

38. Joint venture case study:  Coca-Cola and the Swiss company Nestle are joining forces to develop the international market for “ready to drink” tea and coffee, which currently sell in significant amounts only in Japan.  Procter & Gamble has formed a joint venture with its Italian arch-rival Fater to cover babies’ bottoms in the United Kingdom and Italy. Their diaper company will give the combined group almost 60% of the U.K. market and up to 90% of the Italian market.  Domestic appliance manufacturer Whirlpool has taken a 53% stake in the Dutch electronics group Philips’ white-goods business to leapfrog into the European market. back

39. Test yourself: how many MNC logos do you know? back

40. 7. International economic organizations  WTO 世界贸易组织 : the only global international organization dealing with the rules of trade between nations, established in 1995 as the successor of the General Agreement on Tariffs and Trade (GATT, 关 贸总协定 )  APEC 亚太经济合作组织 : the premier inter- governmental forum for facilitating economic growth, cooperation, trade and investment in the Asia- Pacific region, established in 1989, 21 “Member Economies”, approximately accounting for 56% of world GDP and 48% of world trade, no treaty or legally binding obligations, by consensus and commitments undertaken on a voluntary basis

41. Exercises 1. Translation 1. 个人独资企业 2. 普通合伙人 3. 有限合伙人 4. 无限责任 5. 营业执照 6. 法人 7. 董事会 8. 股息 9. 公司章程 10. 年报 11. 股东年会 12. 特许经营 13. 合资企业 14. 外资企业 15. 专有技术 16. 外包生产

42. 2. Find out the business focus of the top 10 franchise brands in 2009 listed by Entrepreneur Magazine

44. 3. Compile the mission statement and/or company profile of a well-renowned MNC currently operating in China 4. Group project: observe and guess the business forms of shops or companies operating on your campus or in Guangzhou, and collect necessary information through interview or on the Internet to verify your thoughts

45. 5. Supplementary reading (1) Cooperative Joint Ventures in China (2) Nestle’s Global Food Empire (3) World Trade Organization (4) Asia-Pacific Economic Cooperation