INTERNATIONAL BUSINESS

Cover
Title Page
Copyright
Brief Contents
Contents
Preface
About the Authors
Atlas
Part One: Background for International Business
	Chapter 1: Globalization and International Business
		Case: The Globalized Business of Sports
		The Why, What, and How of Studying International Business (IB)
			Why Study IB?
			What to Study in IB
			How to Study IB to Develop a Critical Set of Skills
		The Relationship Between Globalization and IB
			How Does IB Fit In?
		The Forces Driving Globalization and IB
			Factors in Increased Globalization
		The Criticisms of Globalization
			Threats to National Sovereignty
			Environmental Stress
			Growing Income Inequality and Personal Stress
			Point-Counterpoint Is Offshoring of Production a Good Strategy?
		Why Companies Engage in IB
			Sales Expansion
			Resource Acquisition
			Risk Reduction
		IB Operating Modes
			Merchandise Exports and Imports
			Service Exports and Imports
			Investments
			Types of International Business Organizations
		Why Do Companies’ External Environments Affect How They May Best Operate Abroad?
			Physical Factors
			Institutional Factors
			The Competitive Environment
			Looking to the Future Three Major Scenarios on Globalization’s Future
			Case: Transportation and Logistics: Dubai Ports World
Part Two: Comparative Environmental Frameworks
	Chapter 2: The Cultural Environments Facing Business
		Case: Saudi Arabia’s Dynamic Culture
		Culture’s Importance in IB and Trickiness to Assess
			National Cultures as a Point of Reference
			The People Factor
			Building Cultural Awareness
			Shortcomings in Cultural Assessments
		Influences on Cultural Formation and Change
			Sources of Change
			Language as Both a Diffuser and Stabilizer of Culture
			Religion as a Cultural Stabilizer
		Major Behavioral Practices Affecting Business
			Issues in Social Stratification
			Work Motivation
			Relationship Preferences
			Risk-Taking Behavior
			Information and Task Processing
		Problems in Communicating Across Cultures
			Translation of Spoken and Written Language
			Silent Language
		Guidelines for Cultural Adjustment
			Host Society Acceptance
			Degree of Cultural Differences
			Ability to Adjust: Culture Shock
			Company and Management Orientations
			Strategies for Instituting Change
			Point-Counterpoint Does IB Lead to Cultural Imperialism?
			Looking to the Future Scenarios on the Evolvement of National Cultures
			Case: International Students and International Business
	Chapter 3: The Political and Legal Environments Facing Business
		Case: China: Big Opportunities, Complicated Risks
		Politics, Laws, and Operating Internationally
		The Political Environment
			Individualism
			Collectivism
			Political Ideology
			Democracy
			Totalitarianism
		The State of Freedom
			The Prevalence of Political Freedom
			Freedom Struggles
			The Allure of Authoritarianism
			Looking to the Future Political Ideology and MNEs’ Actions
		Political Risk
			Classifying Political Risk
			Point-Counterpoint Proactive Political Risk Management: The Superior Approach
		The Legal Environment
			Types of Legal Systems
			The Context of Legality
			The Basis of Rule: Legacies and Trends
			Implications to Managers
		Legal Issues Facing International Companies
			The Legality of Business Practices
			The Legality of Business Strategies
		Politics, Law, and Business
			Case: It’s a Knockoff World
	Chapter 4: The Economic Environments Facing Businesses
		Case: Emerging Economies: Comeback or Collapse?
		International Economic Analysis
			Making Choices, Navigating Challenges
		Who’s Who in the Global Business Environment
			Developed Economies
			Developing Economies
			Emerging Economies
		Economic Freedom
			The Value of Economic Freedom
			The Prevalence of Economic Freedom
			Economic Freedom by Type of Economic Environment
			The Paradox of Promise Versus Prevalence
			Looking to the Future State Capitalism: Detour or Destination?
		Types of Economic Systems
			The Market Economy
			The Command Economy
			The Mixed Economy
		Assessing Economic Development, Performance, and Potential
			Monetary Measures
			Improving Economic Analytics
			The Wildcard: The Shadow Economy
			Sustainability and Stability
			Sustainability
			Stability
			Point-Counterpoint Growth: Positive and Productive?
		Elements of Economic Analysis
		Integrating Economic Analysis
			Economic Freedom, Innovation, and Competitiveness
			Case The European Union’s Green Deal and Blueprint for a Circular Economy
	Chapter 5: Globalization and Society
		Case: The Battle of the Clothing Giants for Sustainable Manufacturing
		Stakeholder Trade-Offs
		The Economic Impact of the MNE
			Balance-of-Payments Effects
			Growth and Employment Effects
		The Foundations of Ethical Behavior
			Why Do Companies Care About Ethical Behavior?
		The Cultural Foundations of Ethical Behavior
			Relativism Versus Normativism
		The Legal Foundations of Ethical Behavior
			Legal Justification: Pro and Con
		Corruption and Bribery
			Corruption with a Global Twist
			The Consequences of Corruption
			What’s Being Done About Corruption?
		Ethics and the Environment
			What Is “Sustainability”?
			Global Warming and the Paris Agreement on Climate Change
		Ethical Dilemmas of Labor Conditions
			Point-Counterpoint Should MNEs Accept Full Responsibility for the Unethical Behavior of Their Employees?
			What MNEs Can and Can’t Do
		Corporate Codes of Ethics: How Should a Company Behave?
			Motivations for Corporate Responsibility
			Developing a Code of Conduct
			Looking to the Future Dealing with Ethical Dilemmas in the Global Economy
			Case: Anglo American PLC in South Africa: How Can You Make a Difference in the Fight Against HIV/AIDS?
Part Three: Theories and Institutions: Trade and Investment
	Chapter 6: International Trade and Factor Mobility Theory
		Case: South Korea’s Success Story in the Post-WWII International Economy
		Why Do Policymakers and Managers Rely on International Trade and Factor Mobility Theories?
		Interventionist and Free Trade Theories
			Mercantilism
			Neomercantilism
			Free Trade Theories
			Theory of Absolute Advantage
			Theory of Comparative Advantage
			Free Trade Theories: Some Assumptions and Limitations
		Theories to Explain National Trade Patterns
			How Much Does a Country Trade?
			What Types of Products Does a Country Trade?
			With Whom Do Countries Trade?
		The Dynamics of Export Capabilities
			Product Life Cycle (PLC) Theory
			The Diamond of National Competitive Advantage
		The Theory and Major Effects of Factor Mobility
			Point-Counterpoint Should Nations Use Strategic Trade Policies?
			Why Production Factors Move
			Effects of Factor Movements
		The Relationship Between Trade and Factor Mobility
			Substitution
			Complementarity
			Looking to the Future Scenarios That May Change Trade Patterns
			Case: The Australian Beef Industry
	Chapter 7: Governmental Influence on Trade
		Case: Trade Disputes and Protectionist Measures for Strategic Materials: The Case of REEs
		Conflicting Outcomes of Trade Protectionism
			The Role of Stakeholders
		Economic Rationales for Governmental Trade Intervention and Outcome Uncertainties
			Fighting Unemployment
			Protecting “Infant Industries”
			Developing an Industrial Base
			Improving Comparative Economic Positions
		Noneconomic Rationales for Governmental Trade Intervention and Outcome Uncertainties
			Maintaining Essential Industries
			Promoting Acceptable Practices Abroad
			Point-Counterpoint Should Governments Impose Trade Sanctions?
			Maintaining or Extending Spheres of Influence
			Preserving National Culture
		Major Instruments of Trade Control
			Tariffs: Direct Price Influences
			Nontariff Barriers: Direct Price Influences
			Nontariff Barriers: Quantity Controls
		How Companies Deal with Import Competition
			Convincing Decision-Makers
			Preparing for Changes in the Competitive Environment
			Looking to the Future Dynamics and Complexity of Future World Trade
			Case: Doing Business in Singapore
	Chapter  8: Cross-National Cooperation and Agreements
		Case Regional Integration and the Different Modalities of a Custom Union Divorce
		Forms of Economic Integration
		The World Trade Organization—Global Integration
			GATT: Predecessor to the WTO
			What Does the WTO Do?
		Regional Economic Integration
			Bilateral Agreements
			Geography Matters
			The Effects of Integration
		Major Regional Trading Groups
			The European Union
			The U.S.-Mexico-Canada Agreement (USMCA)
			Regional Economic Integration in the Americas
			Regional Economic Integration in Asia
			Regional Economic Integration in Africa
			Point-Counterpoint Is Regional Economic Integration a Good Idea?
			The United Nations and Other NGOs
		Commodity Agreements
			Commodities and the World Economy
			Consumers and Producers
			The Organization of the Petroleum Exporting Countries (OPEC)
			Looking to the Future Will the WTO Overcome Bilateral and Regional Integration Efforts?
			Case: Unilever Goes East
Part Four: World Financial Environment
	Chapter 9: Global Foreign-Exchange Markets
		Case: The Rise of Cryptocurrencies in Asia Pacific: The Philippines Case
		What Is Foreign Exchange, and Who Are the Major Players in the Market?
		Aspects of the Foreign-Exchange Market
			How to Trade Foreign Exchange
			Global OTC Foreign-Exchange Instruments
			Size, Composition, and Location of the Foreign-Exchange Market
			Foreign-Exchange Trades and Time Zones
		Major Foreign-Exchange Markets
			The Spot Market
			Forwards
			Options
			Futures
		The Foreign-Exchange Trading Process
			Banks and Exchanges
			Top Exchanges for Trading Foreign Exchange
		How Companies Use Foreign Exchange
			Cash Flow Aspects of Imports and Exports
			Other Financial Flows
			Point-Counterpoint Is It OK to Speculate on Currency?
			Looking to the Future Where Are Foreign-Exchange Markets Headed?
			Case: Do Yuan to Buy Some Renminbi?
	Chapter 10: The Determination of Exchange Rates
		Case: Venezuela’s Rapidly Changing Currency
		The International Monetary Fund
			Origin and Objectives
			The IMF Today
			The Role of the IMF in Global Financial Crises
			Evolution to Floating Exchange Rates
		Exchange-Rate Arrangements
			Three Choices: Hard Peg, Soft Peg, or Floating
			Hard Peg
			Soft Peg
			Floating
			The Euro
			Point-Counterpoint Should Africa Develop a Common Currency?
		Determining Exchange Rates
			Nonintervention: Currency in a Floating-Rate World
			Intervention: Currency in a Fixed-Rate or Managed Floating-Rate World
			Black Markets
			Foreign-Exchange Convertibility and Controls
			Exchange Rates and Purchasing Power Parity
			Exchange Rates and Interest Rates
			Other Factors in Exchange-Rate Determination
		Forecasting Exchange-Rate Movements
			Fundamental and Technical Forecasting
			Fundamental Factors to Monitor
		Business Implications of Exchange-Rate Changes
			Marketing Decisions
			Production Decisions
			Financial Decisions
			Looking to the Future Changes in the Relative Strength of Global Currencies
			Case: Welcome to the World of Sony—Unless the Falling Yen Rises (or Falls) Again
	Chapter 11: Global Capital Markets
		Case: The E-Giants and the European Union: New Economy Models and Traditional State Sovereignty
		The Finance Function
			The Role of the CFO
		Capital Structure
			Leveraging with Debt Financing
			Factors Affecting the Choice of Capital Structure
		Global Capital Markets
			Eurocurrencies and the Eurocurrency Market
			International Bonds
			Global Equity Markets
		Taxation of Foreign-Source Income
			International Tax Practices
			Taxing Branches and Subsidiaries
			Transfer Prices
			Double Taxation and Tax Credits
			Dodging Taxes
		Offshore Financing and Offshore Financial Centers
			What Is an OFC?
			Point-Counterpoint Should Offshore Financial Centers and Aggressive Tax Practices Be Eliminated?
			Looking to the Future The Growth of Capital Markets and the Drive by Governments to Reform Corporate Taxes
			Case: Open Sesame: Alibaba Isn’t Poor Anymore
Part Five: Global Strategy, Structure, and Implementation
	Chapter 12: The Strategy of International Business
		Case: Zara’s Disruptive Vision: Data-Driven Fast Fashion
		Strategy in the MNE
			Getting Started: Vision and Mission
			Moving Onward: Strategic Planning
		Making Sense to Make Strategy
		The Role of Resources, Capabilities, and Competencies
		The Quest to Create Value
			The Cost Leadership Strategy
			The Differentiation Strategy
			The Integrated Cost Leadership-Differentiation Strategy
			Point-Counterpoint Is Strategic Planning Productive?
		Organizing Value Creation: The Value Chain
			Configuring the Value Chain
			Looking to the Future Digits, Widgets, and Changing Location Advantages
		Global Integration Versus Local Responsiveness
			The Potential for Standardization
			The Context of Consumer Behavior
			The Agenda of Institutional Agents
			Global Integration and Local Responsiveness: Mapping Their Interaction
		International Corporate-Level Strategies
			The International Strategy
			The Localization Strategy
			Global Strategy
			Transnational Strategy
			Case: The Multinational Enterprise of the Future: Leading Scenarios
	Chapter 13: Country Evaluation and Selection
		Case: Airbus: An Aerospace Giant Born International
		The Importance of Location
		Comparing Countries Through Scanning
			Why Is Scanning Important?
			Scanning Versus Detailed Analysis
		Opportunity and Risk Variables
			Opportunities: Sales Expansion
			Opportunities: Resource Acquisition
			Risks
			Analyzing and Relating the Opportunity and Risk Variables
		Sources and Shortcomings of Comparative Country Information
			Some Problems with Research Results and Data
			External Sources of Information
			Internally Generated Data
			Point-Counterpoint Should Companies Operate in and Send Employees to Violent Areas?
		Allocating Resources Among Locations
			Alternative Gradual Commitments
			Geographic Diversification Versus Concentration
			Reinvestment Versus Harvesting
		Noncomparative Location Decisions
			Looking to the Future Conditions That May Cause Prime Locations to Change
			Case: The LEGO Group Case
	Chapter 14: Export and Import
		Case: SpinCent: The Decision to Export
		Exporting: Principles and Practices
			Who Are Exporters?
			The Matter of Advantages
			Characteristics of Exporters
		Exporting: Motivation and Methods
			Profitability
			Productivity
			Diversification
		Export: Startup and Expansion
			Incremental Internationalization
			The Born-Global Phenomenon
			The Influence of Time and Place
			The Wildcard of Serendipity
			Approaches to Exporting
			Which Approach When?
			Point-Counterpoint Exporting E-waste: A Just Solution?
		Importing: Principles and Practices
			Characteristics of Importers
		Importing: Motivation and Methods
			Import Drivers
			Types of Importers
		Exporting and Importing: Problems and Pitfalls
			Operations Management
			Strategic Management
			Financial Management
			Government Regulation
			Trade Documentation
		Importing and Exporting: Resources and Assistance
			Public Agencies
			Private Agents
		Reconciling Opportunity and Challenge: An Export Plan
			Looking to the Future Technology Transforms International Trade
		Countertrade
			Costs
			Benefits
			Case: Amazon in India: Eyeing an Enormous Potential Market
	Chapter 15: Direct Investment and Collaborative Strategies
		Case: Meliá Hotels International
		Why Export and Import May Not Suffice
			When It’s Cheaper to Produce Abroad
			When Transportation Costs Too Much
			When Domestic Capacity Isn’t Enough
			When Products and Services Need Altering
			When Trade Restrictions Hinder Imports
			When Country of Origin Becomes an Issue
		Why and How Do Companies Make Wholly Owned FDI
			Reasons for Wholly Owned Foreign Direct Investment
			Acquisition Versus Greenfield
		Why Companies Collaborate
			General Motives for Collaborative Arrangements
			International Motives for Collaborative Arrangements
		Forms of and Choice of Collaborative Arrangements
			Some Considerations in Choosing a Form
			Point-Counterpoint Should Countries Limit Foreign Control of Key Industries?
			Licensing
			Franchising
			Management Contracts
			Turnkey Operations
			Joint Ventures (JVs)
			Equity Alliances
		Why Collaborative Arrangements Fail or Succeed
			Reasons for Failure
			Helping Collaborative Operations Succeed
			Looking to the Future Growth in Project Size and Complexity
			Case: The oneworld Airline Alliance
	Chapter 16: The Organization of International Business
		Case: From the Bamboo Network to the Technology-Driven Unicorns: Chinese Corporations in Southeast Asia
		The Idea of an Organization
		Classical Organization Structures
			Vertical Differentiation
			Horizontal Differentiation
			The Functional Structure
			Divisional Structures
			The Matrix Structure
			The Mixed Structure
		Neoclassical Structures
			The Challenge of Boundaries
			The Quest for Boundarylessness
			The Network Structure
			The Virtual Structure
			Neoclassical Structures: Practical Problems
			Point-Counterpoint The Hierarchical Structure: The Superior Format
		Coordination Systems
			Coordination by Standardization
			Coordination by Plan
			Coordination by Mutual Adjustment
		Control Systems
			Bureaucratic Control
			Market Control
			Clan Control
			Control Methods
			Which Control System When?
		Organizational Culture
			A Key Piece of the Performance Puzzle
			The Power of Common Cause
			Developing an Organizational Culture
			Looking to the Future Changing Times, Changing Skills, and Changing Organizations
			Case: Hyundai Motor Company: Expanding Through Organizational Excellence
Part Six: Managing International Operations
	Chapter 17: Marketing Globally
		Case: Svendsen Sport: Marketing Globally for Healthy Business Development
		International Marketing Strategies: Orientations, Segmentation, and Targeting
			Marketing Orientations
			Segmenting and Targeting Markets
		Product Policies: Country Adaptation Versus Global Standardization
			Why Firms Adapt Products
			Alteration Costs
			The Product Line: Extent and Mix
		International Pricing Complexities
			Potential Obstacles in International Pricing
		Should Promotion Differ Among Countries?
			The Push–Pull Mix
			Some Problems in International Promotion
		International Branding Strategies
			Global Brand Versus Local Brands
			Point-Counterpoint Should Home Governments Regulate Their Companies’ Marketing in Developing Countries?
		Distribution Practices and Complications
			Deciding Whether to Standardize
			Internalization or Not?
			Distribution Partnership
			Distribution Challenges and Opportunities
		Gap Analysis: A Tool for Helping to Manage the International Marketing Mix
			Usage Gaps
			Product-Line Gaps
			Distribution and Competitive Gaps
			Aggregating Countries’ Programs
			Looking to the Future How Might International Market Segmentation Evolve?
	Chapter 18: Global Operations and Supply-Chain Management
		Case: Apple’s Global Supply Chain
		Global Supply-Chain Management
			What Is Supply-Chain Management?
		Global Supply-Chain and Operations Management Strategies
			Operations Management Strategy
		Global Sourcing
			Why Global Sourcing?
			Major Sourcing Configurations
			The Make-or-Buy Decision
			Point-Counterpoint Should Firms Outsource Innovation?
			Supplier Relations
			Conflict Minerals
			The Purchasing Function
		Information Technology and Global Supply-Chain Management
			Electronic Data Interchange (EDI)
			Enterprise Resource Planning/Material Requirements Planning
			Radio Frequency ID (RFID)
			E-commerce
		Quality
			Zero Defects
			Lean Manufacturing and Total Quality Management (TQM)
			Six Sigma
			Quality Standards
			Looking to the Future Uncertainty and the Global Supply Chain
			Case: Nokero: Lighting the World
	Chapter 19: International Accounting and Finance Issues
		Case: Parmalat: Europe’s Enron
		The Crossroads of Accounting and Finance
			What Are the Responsibilities of the Controller?
			Differences in Financial Statements Internationally
			Differences in the Content of Financial Information
		Factors Affecting Accounting Objectives, Standards, and Practices
			Cultural Differences in Accounting
		International Standards and Global Convergence
			Mutual Recognition Versus Reconciliation
			The First Steps in Establishing IFRS
			The International Accounting Standards Board
			Point-Counterpoint Should U.S. Companies Be Allowed to Use IFRS?
		Transactions in Foreign Currencies
			Recording Transactions
			Correct Procedures for U.S. Companies
		Translating Foreign-Currency Financial Statements
			Translation Methods
		International Financial Issues
			Capital Budgeting in a Global Context
			Internal Sources of Funds
			Global Cash Management
		Foreign-Exchange Risk Management
			Types of Exposure
			Exposure-Management Strategy
			Looking to the Future The Impact of Global Economic Forces on Accounting and Finance
			Case: H&M: The Challenges of Global Expansion and the Move to Adopt International Financial Reporting Standards
	Chapter 20: International Human Resource Management
		Case: Globalizing Your Career
		International Human Resource Management
			The Strategic Role of IHRM
			IHRM’s Mission
		The Perspective of the Expatriate
			Who’s Who?
			Trends in Expatriate Assignments
			The Economics of Expatriates
			The Enduring Constant
		Staffing Frameworks in the MNE
			The Ethnocentric Framework
			The Polycentric Framework
			The Regiocentric Staffing Framework
			The Geocentric Staffing Framework
			Which Staffing Framework When?
		Expatriate Selection
			Technical Competence
			Self-Orientation
			Other-Orientation
			Resourcefulness
			Global Mindset
		Expatriate Preparation and Support
			Pre-Departure Preparation Programs
			In-Country Support Programs
			Family Matters
			Point-Counterpoint English: Destined to Be the Global Language?
		Expatriate Compensation
			Types of Compensation Plans
			Compensation Components
			Compensation Complications
		Expatriate Repatriation
			Repatriation Challenges
			Managing Repatriation
		Expatriate Failure
			The Costs of Failure
			The Wildcard
			Looking to the Future I’m Going Where? The Changing Geography of International Assignments
			Case: Tel-Comm-Tek: Selecting the Managing Director of Its Indian Subsidiary
Endnotes
Glossary
Company and Trademark Index
Name Index
Subject Index