International Business

Cover
Title Page
Copyright Page
Contents in Brief
Contents in Detail
List of Figures and Tables
Preface
Dedication
Acknowledgements
About the Authors
Guide to the Case Studies
Publisher\'s Acknowledgements
Frameworks for This Book Our Approach to the Study of International Business
Part One The World of International Business
	Chapter 1 An Introduction to International Business
		Objectives of the chapter
		Introduction
		What is international business?
		Globalization
			The outcomes of globalization
			Understanding interdependence in globalization
			Regional integration
			Mapping globalization
		Technology and innovation
			New technologies
			The knowledge-intensive, multi-technology firm
		Socio-political developments
		What are institutions?
			Institutions and supranational agreements
			Globalization and liberalization
		Multinational enterprises
			Proto-globalization and the MNE in historical context
			The industrial revolutions and the growth of private firms
		Foreign direct investment
			Measuring FDI and MNE activity
			MNEs before World War II
			The rise of the modern MNE
		International business in the modern era
			1950–90: the rise of the triad
			1990–2014: the rise of new players and forms of activity
			Modularization, outsourcing, and value chains
			The continuing importance of the state-owned enterprise
			Emerging economy MNEs—significant but exaggerated
			Dominance of the triad continues
			Small and medium-sized enterprises
			The fragmented firm: global value chains and production networks
		Key points
		Key terms
		Notes
		Bibliography
		Appendix: The largest importers and exporters
	Chapter 2 General Frameworks in International Business
		Objectives of the chapter
		Active Learning Case
			Starbucks: a global “coffee culture”
		Introduction
		Firm-specific assets/ownership advantages
			A classification of O advantages
		Location advantages/country-specific assets
			A classification of L advantages
		International Business Strategy in Action
			US manufacturing: from China to Mexico
			Internalization advantages
		The eclectic paradigm: putting it all together
		Strategic management of MNEs: an introduction
			Steps in the strategic management process
		A framework for global strategies: the FSA–CSA matrix
			The FSA–CSA matrix
		Why firms become MNEs
			How do firms engage in international activities?
		Entry modes
			Non-equity entry modes
			Equity entry modes
			Collaborative agreements/strategic alliances
			International new ventures and “born global” firms
		The international activities of SMEs
			The practical challenges for internationalizing SMEs
		International Business Strategy in Action
			Worrying times for Singapore’s SMEs
			How do SME managers know which markets to enter?
			Modes of entry and adaptation for success in foreign markets
		Key points
		Key term
		Real Cases
			Toys “R” Us
			Tesco at home and abroad
		Notes
		Bibliography
		Appendix: The largest global MNEs
	Chapter 3 Multinational Enterprises, Innovation, and Competitiveness
		Objectives of the chapter
		Active Learning Case
			GE Healthcare in India: locally driven innovation
		Introduction
		Trends in innovation at the firm and country level
		The resource-based view (RBV) and the VRIO framework
			Resources and capabilities
			The VRIO framework
		Dynamic capabilities
			Quick learning/incremental learning
			Integration of new assets/radical learning
			Modification and transformation of new assets
			Dynamic capabilities and small firms
		International Business Strategy in Action
			Spreadshirt: open innovation
		Connecting FSAs to CSAs
		Systems of innovation
		International dimensions of innovation
		The location of innovation activities in the MNE
		International Business Strategy in Action
			Innovation networks at IBM
			The innovative MNE as a differentiated network
		Key points
		Key terms
		Real Cases
			Canon Group
			R&D at Hewlett-Packard
		Notes
		Bibliography
Part Two The Environment of International Business
	Chapter 4 International Politics
		Objectives of the chapter
		Active Learning Case
			How risky is foreign investment in Russia?
		Introduction
		Political ideologies and economics
			Political systems
			Economic systems
		Government control of assets
			Privatization in action
		International Business Strategy in Action
			Greece: third (bailout) time lucky
		Government–business cooperation
			Japan and EU assistance
			US competitiveness
		Economic integration
			Trade creation and trade diversion
			Levels of economic integration
		Economic integration: an overall perspective
			Ethics, environment, MNEs, and the civil society
		International Business Strategy in Action
			Non-governmental organizations and political power
			The European Union (EU)
			Other examples of economic integration
			Economic integration and strategic management
			Strategic alliances and acquisitions
			Localization of business operations
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			How environmental regulations can be used as trade barriers
			Embraer versus Bombardier
		Notes
		Bibliography
	Chapter 5 International Culture
		Objectives of the chapter
		Active Learning Case
			Cultures clash as big pharma gets bigger
		Introduction
		What is culture?
		The importance of culture in different business contexts
			Culture has always been important
		International Business Strategy in Action
			McDonald’s
		National stereotypes and key dimensions of culture
			Culture at two levels
			Hofstede’s four dimensions of culture
			Trompenaars’ seven dimensions of culture
			The GLOBE project’s nine dimensions of culture
			Applying the national culture frameworks
			“The way we do things here”: the implications of cultural differences for organizations and managers
		Cross-cultural management
			Organization
			Leadership
			Communication
			The corporate response
			Multinational organization structures: imperialist or independent?
			Culture clash in cross-border M&A and joint ventures
		International Business Strategy in Action
			The collective culture of the John Lewis Partnership
		Culture embodied in national institutions
			France: cultural and social characteristics that create a national distinctiveness
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Do not throw your meishi!
			Sport can be local and global: Manchester United
		Notes
		Bibliography
	Chapter 6 International Trade
		Objectives of the chapter
		Active Learning Case
			Trade of the triad and China
		Introduction
		International trade theory
			Theory of absolute advantage
			Theory of comparative advantage
			Factor endowment theory
			International product life cycle theory
			Other important considerations
		International Business Strategy in Action
			Microsoft shows the world is not flat
		Barriers to trade
			Reasons for trade barriers
			Commonly used barriers
			Tariffs
		International Business Strategy in Action
			Boeing versus Airbus
			US trade policy
		Non-tariff barriers to trade
			Quotas
			“Buy national” restrictions
			Customs valuation
			Technical barriers
			Anti-dumping legislation, subsidies, and countervailing duties
			Agricultural products
			Export restraints
		Other economic developments
			Countertrade
			Trade in services
			Free trade zones
		Key points
		Key terms
			Review and discussion questions
		Real Cases
			Job losses and offshoring to China
			Dumping on trade complaints
		Notes
		Bibliography
		Appendix: Balance of payments
	Chapter 7 International Financial Markets and Institutions
		Objectives of the chapter
		Active Learning Case
			Barclays Bank international financial dealings
		Introduction
		Foreign exchange markets
			Foreign exchange markets in the United States
		Determination of the exchange rate
			Purchasing power parity
			International Fisher effect
			Combined equilibrium relationships
			Other factors determining exchange rates
		Protecting against exchange risk
			Alternatives to minimize exchange risk
		International Business Strategy in Action
			China 2015: the start of the next global economic meltdown?
		Foreign money and capital markets
			MNEs and national money markets
			MNEs and national capital markets
		Regional money and capital markets
			The eurocurrency market
			Eurocurrency interest rates
			Other market characteristics
			Criticisms of the euromarkets
			Eurobonds and euroequities
		International Business Strategy in Action
			AngloGold Ashanti
		The IMF system
			Unresolved problems with the IMF system
			MNEs and international financial markets and institutions
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			HSBC
			Rigging LIBOR
		Notes
		Bibliography
Part Three International Business Strategies
	Chapter 8 Multinational Strategy
		Objectives of the chapter
		Active Learning Case
			Vodafone and the triad telecom market
		Introduction
		Strategic orientations
		International Business Strategy in Action
			The Big Four
		Strategy formulation
			External environmental assessment
			Internal environmental assessment
			Goal setting
		Strategy implementation
			Location
		International Business Strategy in Action
			Fuji Xerox and Xerox
			Ownership
			Functional strategies
		Control and evaluation
			Common methods of measurement
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Mountain Equipment Co-op: a small business
			Benetton
		Notes
		Bibliography
		Appendix: Regional aspects of multinationality and performance
	Chapter 9 Organizing Strategy
		Objectives of the chapter
		Active Learning Case
			Procter & Gamble
		Introduction
		Organization structures
			Early organization structures
		International Business Strategy in Action
			Sanofi-Aventis
			The international division
			Global organization structures
		International Business Strategy in Action
			Making the matrix work
		Strategic management and organizing strategy
			Analysis of key structural variables
			Coordination
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			LVMH: organizing luxury products in the international arena
			Command Alkon: small but increasingly global
		Notes
		Bibliography
	Chapter 10 Corporate Strategy and National Competitiveness
		Objectives of the chapter
		Active Learning Case
			Worldwide operations and local strategies of ABB
		Introduction
		The single diamond
			Determinants and external variables
			Critique and evaluation of the model
		The double diamond
			Canada and the double diamond
		International Business Strategy in Action
			Nokia and Ericsson: moving beyond mobiles
			Mexico and the double diamond
		Integration and responsiveness
			Integration versus national responsiveness
		International Business Strategy in Action
			Renewed advantage through vertical integration at Floreal Knitwear
			Balancing the trade-offs
			Competitiveness in the triad
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			There is no global beer, only local
			IBM
		Notes
		Bibliography
	Chapter 11 Multinational Enterprises as Responsible Stakeholders
		Objectives of the chapter
		Active Learning Case
			The environment, NGOs, and MNEs
		Introduction
		Developing effective strategies
			Going where the action is
		International Business Strategy in Action
			3M
		International business research frameworks
			Theories of international business
			Practical applications of the theory
		The five partners business network framework
			Forging new business networks
		Coping with changing environments
			Political environment
			Economic environment
		The trade and investment framework
			Environment and MNEs
		International Business Strategy in Action
			Is The Body Shop an ethical business?
			The pattern of MNE responses
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Dell: B2C
			Maersk Group
		Notes
		Bibliography
Part Four Functional Area Strategies
	Chapter 12 Production Strategy
		Objectives of the chapter
		Active Learning Case
			GE production: from Six Sigma to the GE Store
		Introduction
		Research, development, and innovation
			Speed-to-market
		Generation of goods and services
			Global sourcing
		International Business Strategy in Action
			Gap Inc.: a successful “hollow corporation”
			Manufacturing of goods
		International Business Strategy in Action
			End of an era: the Goodyear plant closure
			Developing a strong service orientation
		International logistics
			Transportation
			Packaging
			Storage
		Different kinds of global production systems
		Strategic management and production strategy
			Technology and production design
			Continuous improvement
			Alliances and acquisitions
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Flextronics
			Nike
		Notes
		Bibliography
	Chapter 13 Marketing Strategy
		Objectives of the chapter
		Active Learning Case
			Adidas: promoting a global sports brand
		Introduction
		International market assessment
			Initial screening: basic need and potential
			Second screening: financial and economic conditions
			Third screening: political and legal forces
			Fourth screening: socio-cultural forces
			Fifth screening: competitive environment
			Final selection
		Product strategies
			Little or no modification
			Moderate to high modification
		International Business Strategy in Action
			Weeby buys Tappy
		Promotion
			Nature of the product
			Advertising
		International Business Strategy in Action
			IKEA in international markets
			Personal selling
		Pricing
			Government controls
			Market diversity
			Currency fluctuations
			Price escalation forces
		Place
			Different distribution systems
			Choosing the best distribution system
		Strategic management and marketing strategy
			Ongoing market assessment
			Internet marketing and “open innovation”
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Bang & Olufsen
			Mirum—never lose your sense of wonder!
		Notes
		Bibliography
	Chapter 14 Human Resource Management Strategy
		Objectives of the chapter
		Active Learning Case
			The Coca-Cola Company thinks local
		Introduction
		Selection and repatriation
			International screening criteria and selection procedures
			Repatriation of expats
		Training and development
			Types of training
		International Business Strategy in Action
			The glass ceiling
		Compensation
			Common elements in an international compensation package
			Compensation trends and comparisons
		Labor relations
			Labor relations practices
		International Business Strategy in Action
			Primark: putting global stakeholders first
			Industrial democracy
			Industrial democracy in action
		Strategic management and IHRM strategies
			Language training
			Cultural adaptation
			Competitive compensation
			Specially designed HRM programs
		Key points
		Key terms
			Review and discussion questions
		Real Cases
			Offshoring to India
			Executive search firms
		Notes
		Bibliography
	Chapter 15 Political Risk and Negotiation Strategy
		Objectives of the chapter
		Active Learning Case
			Nestlé in Nigeria
		Introduction
			Generic PEST analysis
		Political risk
			Deregulation and political risk
			The nature of political risk
			Sources of political risk
		Country analysis and political risk assessment
			Online risk information resources
			Quantifying risk vulnerability
			Accounting for country risk
		Negotiation strategies
			Behavioral characteristics of the participants in negotiations
		International Business Strategy in Action
			Political risk for De Beers
		International Business Strategy in Action
			Intel effect
			Transparency and corruption: politically sensitive political risk
		Strategic management and political risk
			Use of integrative and protective/defensive techniques
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Yukos and the Russian oligarchs
			Problems with ports
		Notes
		Bibliography
		www resources
	Chapter 16 International Financial Management
		Objectives of the chapter
		Active Learning Case
			Financial transparency at Siemens
		Introduction
		Determining parent–subsidiary relationships
			Polycentric solution
			Ethnocentric solution
			Geocentric solution
		Managing global cash flows
			Internal funds flows
			Funds positioning techniques
			Multilateral netting
		International Business Strategy in Action
			Worldwide tax havens
			Managing cash
		International Business Strategy in Action
			Sovereign wealth funds
		Exchange risk management
			Transaction risk
			Translation risk
			Economic risk
			An example of exchange risk management
			Developing forecasting and reporting systems
		Capital budgeting in the MNE
			Use of NPV
			Institutional features
		International financing in the MNE
			Financial structure
		Control: identifying objectives, evaluating affiliate performance, and making performance consistent with goals
		Strategic international finance
			Establishing overseas operations
			Reducing financial risk
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Skandia
			Ford and Volvo
		Notes
		Bibliography
Part Five Regional Strategies
	Chapter 17 European Union
		Objectives of the chapter
		Active Learning Case
			The future is Orange
		The EU environment
			Emergence of a Single European Market
			The competitive status of the EU
		Conducting a strategic analysis
			Using competitive intelligence
		International Business Strategy in Action
			VW scandal
			Evaluating locations
		Strategy issues
			Overall strategic analysis for the EU
			Exporting
			Strategic acquisitions and alliances
			Marketing considerations
		International Business Strategy in Action
			Deutsche Bahn: more than a railroad
			Manufacturing considerations
			Management considerations
			Barriers to EU market access
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Accor budget hotels
			Carrefour
		Notes
		Bibliography
	Chapter 18 Japan
		Objectives of the chapter
		Active Learning Case
			Doing business in Japan
		Introduction
		Political, social, and cultural characteristics
			A traditionally strong government role in the economy
			Distinctive cultural characteristics
		Economic characteristics
			Japan and China: the new Asian powerhouse?
		Business characteristics
			Manufacturing strengths
			Strong applied R&D
			Keiretsu
		International Business Strategy in Action
			Kirin Beer goes international
			Distribution, retailing, and customer orientation
		Japanese corporations
		A changing nation
			Restructuring capital markets
			Deregulation, increased M&A, and inward FDI
		International Business Strategy in Action
			Wal-Mart takes Seiyu
		Restructuring corporations
			The decline of manufacturing and distribution keiretsu
			The growth of outward FDI and offshore manufacturing
			The decline of lifetime employment and changing HRM practices
			Diversification strategies
		Conclusions
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Renault and Nissan: no pain, no gain
			Sony: diversifying into the automobile industry?
		Notes
		Bibliography
		www resources
	Chapter 19 North America
		Objectives of the chapter
		Active Learning Case
			NAFTA
		Introduction
		Canada
			Canada’s economy
			Differences in the business environment
		International Business Strategy in Action
			Bombardier
			Canada’s multinationals
			Multilateral agreement on investment (MAI)
			Business opportunities in Canada
			Franchising
		Mexico
			Mexico’s economy
			Mexico and NAFTA
			Regional trade agreements
			Doing business in Mexico
		International Business Strategy in Action
			Mexico and NAFTA
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Jumex of Mexico
			GlaxoSmithKline in the United States
		Notes
		Bibliography
	Chapter 20 Emerging Economies
		Objectives of the chapter
		Active Learning Case
			Acer Taiwan goes international
		Introduction
		Triad firms and emerging economy firms: why the mutual interest?
		An overview of emerging economies, by region
			Asia–Pacific and the Middle East
			Central and eastern Europe
			Latin America and the Caribbean
			Africa
		International Business Strategy in Action
			From Oserian to Tesco: the Kenyan cut flower industry
		Shifting patterns of comparative and competitive advantage
			Flying Geese model
			Emerging economies as sources of innovation
		Market access to the triad
		International Business Strategy in Action
			Korean chaebols: Hyundai and Samsung
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			The Indian IT, software, and services industry
			Bumrungrad International in Thailand
		Notes
		Bibliography
		www resources
	Chapter 21 China
		Objectives of the chapter
		Active Learning Case
			Oxford Instruments in China
		Introduction
		Unprecedented scale, scope, and speed of growth
			The role of government
		MNE investment into China
		International Business Strategy in Action
			Airbus in China
			Foreign R&D investment
		Getting into China
		Outward investment and the new multinationals from China
		International Business Strategy in Action
			Haier goes global
		Key points
		Key terms
		Review and discussion questions
		Real Cases
			Citigroup in China
			Nanjing Auto makes the MG
		Notes
		Bibliography
		www resources
Glossary
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Index
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