Global Economic Environment

Question 1 (35 marks; Max 2 pages)

Read the following article and answer the questions that follow:

(a) Examine the behavior of the managers who tampered with the emissions systems of the cars sold in the United States from the perspective of the appropriate roots of such unethical behavior. Please apply relevant concepts and provide evidence from the article in support of your answer. (15 marks)

(b) Upper-level managers at Volkswagen were apparently unaware of the tampering that was going on in order to ensure that Volkswagen vehicles sold in the United States met EPA regulations. How does this reflect on the decision making process at Volkswagen with regard to its emphasis on ethics? Please apply relevant concepts for your explanation. (10 marks)

(c) Evaluate VW’s tampering of the emission system of its vehicles purely from the perspective of appropriate economic considerations based ethical practices. Please apply relevant conceptsand provide explanation. (10 marks)

Question 2 (30 marks; Max. 2 pages)

 (a)Consider Burberry’s licensing arrangement with Sanyo Shokai in Japan. What are the main benefits of such an arrangement from the perspective of Burberry? Please apply relevant concepts and use evidence from the article in support of our explanation. (10 marks)

(b)What were the main problems with the licensing arrangement that prompted Burberry to shift to a new strategy in Japan? Which FDI theory/theories provide(s) the most appropriate explanation for this new strategy? Please use relevant concepts supplemented with appropriate evidence from the article in support of your answer. (12 marks)

(c)  Evaluate the new strategy that Burberry is undertaking in Japan from the perspective of both short-term and long-termimpact on Burberry’s profitability, in Japan and globally. Please provide relevant explanation in support of your answer. (8 marks)

Question 3 (35 marks; Max. 2 pages)

 (a)  How did being a Eurozone member hinder Greece’s ability to resolve its debt crisis through domestic policy measures? Why are bailouts, that Greece eventually received, difficult to execute within an economic union like the Eurozone? Provide explanationsthrough relevant concepts.  (15 marks)

(b)How would thecurrent account surplus of the Eurozone countries with the US affect the value of the Euro vis-à-vis the US$ eventually? What would be the impact of this change in Euro/US$ exchange rate be on Eurozone bloc companies either exporting to US or having operations through direct subsidiaries in the US? Please explain your answer using relevant concepts. (12 marks)

(c) Why does President Trump regard the trade surplus that the Eurozone countries have with the US adversely? How would the tariffs he has imposed on the European goods impact the trade surplus? Please explain your answer using relevant concepts. (8 marks)

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