Enterprise Operations Operational level CIMA Paper E1

Aim of Paper This paper addresses several functional areas of business, as well as introducing candidates to the economic, social and political context of international business. This paper will prepare candidates for Paper E2, Enterprise Management, and Paper E3, Enterprise Strategy. This paper is a discursive paper.

Syllabus The Global Business Environment 20% Information Systems 20% Operations Management 20% Marketing 20% Managing Human Capital 20%

Exam Format Section A – 20 marks Variety of objective test questions each worth 2 to 4 marks Section B – 30 marks Six compulsory short answer questions, each worth 5 marks. A short scenario may be given to which some or all questions relate. Section C – 50 marks One or two compulsory questions. Short scenarios may be given, to which the questions relate.

1 1 Session Introduction to the Global Business Environment

Overview Session One Introduction to the global business environment Free trade and protectionism Emerging markets and multinational companies Outsourcing and offshoring Country and political risk Cross-cultural management International economic developments

Free trade and protectionism Liberalisation is a broad term that usually refers to fewer government regulations in the economy. As a result, free trade will be encouraged. Advantages of free trade Countries can specialise in goods they produce most efficiently Surpluses and deficits removed Competition improves efficiency Economies of scale Closer political links

Free trade and protectionism cont. Economic nationalism refers to a set of policies that favour the home nation, e.g. the restriction of free trade or of foreign investment. As a result, international trade will be discouraged. Advantages of protectionism (restriction of free trade) Protection of infant industries Prevents dumping Prevents establishment of a foreign based monopoly Reduces the influence of trade on consumer tastes Prevents the import of harmful goods Self-sufficiency

Free trade and protectionism cont. Barriers to free trade Embargoes Subsides Administrative regulations Tariffs Quotas Government action