Advanced International Business

Shochastic uncertainty: Describes the probability of future outcomes determied by a known random process (Rolling dices)

Epistemic uncertainty: Arises from a lack of knowledge or incomplete infromation (the unknown unknowns)

An analytic tool (graphical) that helps to structure decisions in Risk Management

Strucuting decisions allow us to:

1. Calculate the expected value of decisions
2. Calculate the value of information
3. Understandthe assumptions of experts
4. Update knowledge - by new informations

Bow Tie Analysis, Delphi Method

• Hazard Risk

Hazard Risk:

1. Fire in a warehouse
2. Natural disaster (earthquake, flood)
3. Chemical Spill

Operational Risk:

1. Equipment failure
2. Supply Chain Dissruption
3. IT Failure

Financial Risk:

1. Exchange Rate Fluctuations
2. Crediti Risk, when a major client is inable to pay
3. Interest Rate Fluctuation

Strategic Risk:

1. Strong Competitors
2. Change in regulations
3. Technological Advanceent/Shift in Consumer Preferences

• Pure Risk (Hazard Risk, Operational Risk)
• Speculatice Risk (Financial Risk, Strategic Risk)

1. Technichal Risks
2. Contractual Risks
3. Business Risks

1. Avoid the risk
2. Mitigate the risk (Porbability, Severity)
3. Transfer the risk (Insurance)
4. Accept the risk

1. Near Misses: Often unremarkable small failures in day to day business that cause no immediate harm.
2. Normalization of Deviance: Tendency to accept anomalies
3. Latent Errors: Multiple, small often seemingly uniportant human errors. 

Risk =  Likelihood (Probability) x Consequence of failure.

---> It is always an action needed to put a hazard into a risk!

Hazard: Potential harm

1. Investigate deviations
2. Demand explanations
3. Consider worst-case scenarios
4. Evaluate at every step
5. Pay attention to high pressure situations
6. Reward transparency

Analytical tool that helps to visualize risks of critical events

Left:

• Threats: Potential Cause
• Prevention: Control

Middle:

• Hazard (Critical event that we have lost control f.e flammable gas loss)

Right:

• Recovery: Mitigation
• Consequences: Potential outcome

Can the Potential cause create the event and does that create consequences

Analytical forecast tool for complex topics (expert opinion)

• Multiple rounds in which experts independently and anonym provide their opinions on a topic.
• Experts receive the summarized results of the first round and are asked to review, adjust or confirm their initial responses. The process goes till there is a consens (mostly 2-4 rounds)

1. CSR is the responsibility of enterprises for their impact on society.
2. By following the law and by integrating social, environmental, ethical rights concernes into their business strategy

He said that the social responsibility of business is to increase its profits

1. Corporate Volunteering
2. Dialogue with Stakeholders
3. Social Campaigns

• Protect, Respect and Remedy

- Protect human rights

- Respect human rights

- Remedy: Access to unbiased courts

Sustainable Development Goals: There are 17 (Agenda 2030) defined by the United Nations aiming to achieve a sustainable future for everyone by 2030.

(for country's, businesses, civil society, and individuals)

1. Corporate Values
2. Corporate Mission&Vision (Misson = Purpose, Vision = Where to be iin 10J)
3. Code of Conduct (rules and guidelines)
4. Membership in networks --> promote ethical standarts (UNGC, WBCSD)

• Compliance & Integrity are equally important
• Company rules should support peoples integrity

Complinace = criminal and regulatory law

Integrity = Company values which inlucdes law

1. Compliance: Defining whats acceptable (Rules and policies within the company that define acceptable behaviors)
2. Integrity: Being whole or undivided (moral and ethical framework, reflecting wholeness and unity in actions and decisions)
3. Diversity: Allowing people to be who they really are

1. Ethical Awareness (Develops only when you personal experienced it)
2. Ethical Priciples
3. Empathy for others & yourself
4. Self-Reflection
5. Critical Thinking

1. Problem solving, critical thinking
2. Deal with complexity 
3. Communication

• The point of ethics is to improve the decision making and & train critical reflecting skills < Most of it is Learning by doing
• The goal is critical self reflection

It means to understand both your context & yourself to make ethical decisions

A policy that outlines principles and standarts that all employees and third parties of the company must follow.

Ethics jobs is to answer a tiny question: What should I do?

1. Professional: Integrity, professionalism and fairness in the workplace.

2. Organizational: Ensuring that the organization takes into account moral values and social responsibility in its actions

3. Private & Civic: Dealing with family, friends and society in a respectful and responsible manner

UNGC = United Nations Global Compact

10 principles as a ethical framework for companies to follow in the areas of: Human rights, Labor, Environmnet, Anti-corruption.

Slogan: Protect, Respect and Remedy

1. Charismatic / Value-based Leadership
2. Team-Oriented Leadershio
3. Participative Leadership
4. Human Oriented Leadership
5. Autonomous Leadership
6. Self-Prtective Leadership

1. Psychological Capital: 

• Passion for cultural diversity, quest of adventure, self-assurance (Selbstsicherheit)

2. Social Capital

• Intercultural Empathy, Interpersonal Impact, Diplomacy

3. Intellectual Capital

• Global business experience, Cognitive Complexity, Cosmopolitan Outlook

Legal Compliance

• Save jobs for low skilled people
• To protect the domestic industry
• Acriculture more vulnerable to external shocks - governments intervene with tariffs to stabilize their markets

• A Tariff is based on the HS codes (Zolltarifnummer) - Thats how the products are categorized

The oak tree gifted by Macron to Trump was removed and later died during mandatory U.S. plant quarantine by import to prevent the spread of pests and diseases. ---> Plant Quarantine Regulation