FACULTY OF ADMINISTRATIVE SCIENCE AND POLICY

STUDIES BACHELOR OF ADMINISTRATIVE SCIENCE

INTERNATIONAL BUSINESS ENVIRONMENT (ADM602)

PROBLEM-BASED LEARNING: TO BE OR NOT TO BE

PREPARED BY:

STUDENT NAMES STUDENT ID

MUAZZAM SHAH BIN MOHMAD SHAH 2020968049

GROUP: N4AM2286A

PREPARED FOR:
MADAM YUS AZNITA BINTI USTADI
Questions: The steps in problem-based learning are -

1. Identify the problem

When Mr. Rajagopal considers the prospect of carrying on his father's curry powder business in
the United States as mentioned by his wife. However, due to the severe economic crisis that has been
occurring in the United States, it could be a challenge or risk for him. These challenges include a
reduction in the value of the currency as well as rising gas prices. It is common knowledge that in order
for a company to be successful in facilitating international business to other nations, particularly in
domestic nations such as the United States, it is necessary for the company to have an understanding of
the political, economic, and social conditions that exist in those nations. As has been mentioned
previously, the country's economy is in a state of complete chaos, and the challenges it is facing cannot be
rectified in the foreseeable future. Therefore, as a result of this, Mr. Rajagopal will have a more difficult
time maintaining his business there, and it will be much more detrimental to Mr. Rajagopal if he will face
a large risk that will not yield him any profit.

2. Explore the pre-existing knowledge

Rajagopal is advised to examine a few factors that will directly impact his family's economic life
if he decided to sell his business and emigrate to the United State. Rajagopal is aware of the domestic
competition for curry powder as foreign hypermarkets are able to bring their own brand of curry powder.
This situation will directly or indirectly disrupt his business although his business has survived twice the
global economic crisis. He is also informed about the current economic issues in the US and he found
that the US economy level is not convincing for his family to emigrate. This situation is vice versa with
India as India’s economy seems to face rapid growth for production and is able to become the 2nd world's
largest economy after China. Rajagopal believes that the development of technology is able to create
more awareness for his curry powder business.

3. Generate hypothesis and possible mechanisms

In this situation, he needs to stay and improve the management of the family business. He can
improve his business through the development of technology. For example, the use of technology in his
business can promote curry powder in other countries. It helps the business to
expand not only within the country but also outside of the country. Therefore, the development of
technology can help Rajagopal to extend his family business even though he did not immigrate to the
United State. Hence, there is a strong reason Rajagopal needs to stay and improve the management of the
family business since the development of technology can bring benefit to his curry powder business.

4. Identify learning issues

Learning issues that occur in this article is where Rajagopal needs to learn on the economic terms
such as the dollar is weak, gas prices are moving up, and the country is expanding significant resources.
This is due to the information that he received where India will be one of the dominant countries
compared to the US. This means that Rajagopal needs to have knowledge and information due to the
country that he wants to emigrate to in terms of politics, cultures, target market, populations, and
competitors. This means that Rajagopal needs to think from all aspects, including consequences that
might occur and all the solutions. For example, Rajagopal has to study a few things about the country that
he chooses to make a comparison between the US and India such as demography, political issues,
economic problems, cultures, and norms.

5. Self-study

Rajagopal knows that the family company that inherited would have some challenges to survive.
He is wondering whether to keep the company and improve the business or sell it after observing some
issues. This is somehow a part of critical thinking that he adapts and learns by himself. Critical thinking is
the intellectually disciplined process of actively and skillfully conceptualizing, applying, analyzing,
synthesizing, or evaluating information gathered from or generated by observation, experience, reflection,
reasoning, or communication, as a guide to belief and action. Besides, Rajagopal also gets to know about
the political & economic risk by looking at the company situation & current countries' development. This
makes him learn how to take risks & make decisions properly by himself.
6. Re-evaluation and application of new knowledge to the problem

Re-evaluation of the problem

Rajagopal's level of awareness of economic risks that he will face when doing business in the
United States is quite high, as he is aware of current economic conditions in the United States. According
to Multiplier (2022), organizations planning or having established a foreign branch in a foreign country
face economic risk. The mortgage crisis is wreaking havoc on the economy, the dollar is weak, gas prices
are rising, and the US is spending a lot of money on two wars, which are all economic risks that
Rajagopal was aware of and acknowledged occurring in the US. These economic risks would be harmful
to Rajagopal if he decided to immigrate to the United States. For example, the economic issue of rising
gas prices in the United States has a significant impact on many industries. Higher gas prices mean we all
pay more at the pump, leaving us with less money to spend on other goods and services (AmTrust
Financial, 2022). As a result, as customers' purchasing power declines, so will business sales and profits.
Besides, Rajagopal also compares and contrasts the economic situations in the United States and India,
concluding that the Indian economy appears to be doing well. In the nutshell, Rajagopal should stay in
India and possibly improve the management of his family business, as it is clear that immigrating to the
United States would be disadvantageous to his business.

Application of new knowledge to the problem

Aside from economic risk, Rajagopal, as a business owner, must consider the political risk before
migrating and doing business in the United States. According to Xuemei (2013), the three most important
risks in international business are (1) currency exchange rate risk, (2) political risk, and (3) economic risk.
Based on scenarios, Rajagopal is already aware of the economic and foreign exchange rate risks that he
would face if he decided to migrate and do business in the United States, so now is the time for him to be
aware of and investigate the political risk as well. This is because political risk can have a negative impact
on all aspects of international business, from the ability to export or import goods to the ability to own or
operate a business (Mariadoss, n.d.).

There are two types of political risk: macro-political risk and micro-political risk. Mehta (2022)
defines macro risk as "events that can occur within a country that have an impact on financial markets,"
such as political events or changes in government policies and taxation. The
U.S. Bank. (2021) stated that the new tax legislation being considered by Congress is included
in the Inflation Reduction Act, which President Biden signed into law in August 2022. Tax changes that
may affect businesses and business owners include an increase in the corporate tax rate from 21% to 28%
(proposed change), effective for tax years beginning after December 31, 2022.

Micro Political risk, on the other hand, is a type of political risk that refers to actions in a host
country that can have a negative impact on a company's international operations (Kenton, 2022).
According to Pillsbury's Insurance Recovery Law Team (2021), businesses of all sizes have felt the
impact of this over the last year, with many shuttering buildings or hiring private security because of riots,
threats, insurgency, violence, and military presence on the streets of cities across the United States. The
second half of 2020 saw racially charged riots in the aftermath of George Floyd's death and the rise of the
Black Lives Matter movement. In a nutshell, Rajagopal should consider the political risk before deciding
to immigrate to the United States. With the current situation in the United States, immigrating may not be
an option. Perhaps Rajagopal should stay in India and upgrade his business by leveraging advanced
technology and an excellent marketing strategy to increase his curry powder sales and expand his
business.

7. Assessment and reflection of learning (Walsh A, 2005)

International business environment helps and enable an individual to have a better understanding
to measure and analyze the environment, culture, ethics, economy, technology, and globalization that play
important factors in international business. The assessment given allows the student to gain exposure to a
wide range of topics, including the economic policies of various countries, language barriers, cultural
differences, and higher complexity of uncertainty and risk due to the fact that businesses operate in an
international business environment rather than a specific environment. Despite a number of problems, the
global business environment has many advantages, including the development of new technology,
infrastructure, managerial skills, the creation of jobs, the provision of better services, and the ability to
attract foreign investment capital through the export of goods.
 References

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Retrieved December 9, 2022, from

https://amtrustfinancial.com/blog/small-business/rising-gas-prices-impact-on-small-busin ess

Courage, A. (2022, June 30). Micro Risk Definition. Investopedia. Retrieved December 9, 2022, from

https://www.investopedia.com/terms/m/microrisk.asp

Hou, A. X. (2013). Risk Management in International Business. SOA. Retrieved December 9, 2022,

from

https://www.soa.org/globalassets/assets/library/newsletters/risk-management-newsletter/

2013/august/jrm-2013-iss27-hou.pdf

Mariadoss, B. J. (n.d.). 4.4 Political Risk – Core Principles of International Marketing. Open Text

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Mehta, S. (2021, June 4). Macro Risk Definition - Financial Edge. Financial Edge Training.

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https://www.fe.training/free-resources/financial-markets/macro-risk/

Multiplier. (n.d.). Managing risks in International Business | Multiplier. Multiplier. Retrieved

December 9, 2022, from

https://www.usemultiplier.com/blog/risks-and-risk-factors-in-international-business Pillsbury's

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U.S. Bank. (2021). How Biden’s Income Tax Policy Changes Could Affect You. U.S. Bank.

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