International Business: Competing in the Global Marketplace

Cover
Title Page
Copyright Page
Dedication
About the Authors
Brief Contents
Contents
Acknowledgments
part one Introduction and Overview
	CHAPTER 1 Globalization
		Opening Case Globalization of BMW, Rolls-Royce, and the MINI
		Introduction
		What Is Globalization?
			The Globalization of Markets
			The Globalization of Production
		Management Focus Boeing’s Global Production System
		The Emergence of Global Institutions
		Drivers of Globalization
			Declining Trade and Investment Barriers
			Role of Technological Change
		The Changing Demographics of the Global Economy
			The Changing World Output and World Trade Picture
			The Changing Foreign Direct Investment Picture
		Country Focus India’s Software Sector
			The Changing Nature of the Multinational Enterprise
		Management Focus Wanda Group
			The Changing World Order
			Global Economy of the Twenty-First Century
		The Globalization Debate
			Antiglobalization Protests
			Globalization, Jobs, and Income
		Country Focus Protesting Globalization in France
			Globalization, Labor Policies, and the Environment
			Globalization and National Sovereignty
			Globalization and the World’s Poor
		Managing in the Global Marketplace
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Uber: Going Global from Day One
		Endnotes
part two National Differences
	CHAPTER 2 National Differences in Political, Economic, and Legal Systems
		Opening Case The Decline of Zimbabwe
		Introduction
		Political Systems
			Collectivism and Individualism
			Democracy and Totalitarianism
		Country Focus Putin’s Russia
		Economic Systems
			Market Economy
			Command Economy
			Mixed Economy
		Legal Systems
			Different Legal Systems
			Differences in Contract Law
			Property Rights and Corruption
		Country Focus Corruption in Brazil
		Management Focus Did Walmart Violate the Foreign Corrupt Practices Act?
			The Protection of Intellectual Property
		Management Focus Starbucks Wins Key Trademark Case in China
			Product Safety and Product Liability
		Focus on Managerial Implications: The Macro Environment Influences Market Attractiveness
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Economic Transformation in Vietnam
		Endnotes
	CHAPTER 3 National Differences in Economic Development
		Opening Case Economic Development in Bangladesh
		Introduction
		Differences in Economic Development
			Map 3.1 GNI per capita, 2016
			Map 3.2 GNI PPP per capita, 2016
			Map 3.3 Average annual growth rate in GDP (%), 2007–2016
			Broader Conceptions of Development: Amartya Sen
			Map 3.4 Human Development Index, 2015
		Political Economy and Economic Progress
			Innovation and Entrepreneurship Are the Engines of Growth
			Innovation and Entrepreneurship Require a Market Economy
			Innovation and Entrepreneurship Require Strong Property Rights
			The Required Political System
		Country Focus Emerging Property Rights in China
			Economic Progress Begets Democracy
			Geography, Education, and Economic Development
		States in Transition
			The Spread of Democracy
			Map 3.5 Freedom in the world, 2017
			The New World Order and Global Terrorism
			The Spread of Market-Based Systems
			Map 3.6 Index of economic freedom, 2017
		The Nature of Economic Transformation
			Deregulation
			Privatization
		Country Focus India’s Economic Transformation
			Legal Systems
		Implications of Changing Political Economy
		Focus on Managerial Implications: Benefits, Costs, Risks, and Overall Attractiveness of Doing Business Internationally
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case The Political and Economic Evolution of Indonesia
		Endnotes
	CHAPTER 4 Differences in Culture
		Opening Case The Swatch Group and Cultural Uniqueness
		Introduction
		What Is Culture?
			Values and Norms
			Culture, Society, and the Nation-State
			Determinants of Culture
		Social Structure
			Individuals and Groups
			Social Stratification
		Country Focus India and Its Caste System
		Religious and Ethical Systems
			Map 4.1 World Religions
			Christianity
			Islam
		Country Focus Secularism in Turkey
			Hinduism
			Buddhism
			Confusianism
		Management Focus China and Its Guanxi
		Language
			Spoken Language
			Unspoken Language
		Education
		Culture and Business
		Cultural Change
		Focus on Managerial Implications: Cultural Literacy and Competitive Advantage
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case The Emirates Group and Employee Diversity
		Endnotes
	CHAPTER 5 Ethics, Corporate Social Responsibility, and Sustainability
		Opening Case Woolworths Group’s Corporate Responsibility Strategy 2020
		Introduction
		Ethics and International Business
			Employment Practices
		Management Focus “Emissionsgate” at Volkswagen
			Human Rights
			Environmental Pollution
			Corruption
		Ethical Dilemmas
		Roots of Unethical Behavior
			Personal Ethics
			Decision-Making Processes
			Organizational Culture
			Unrealistic Performance Goals
			Leadership
			Societal Culture
		Philosophical Approaches to Ethics
			Straw Men
			Utilitarian and Kantian Ethics
			Rights Theories
			Justice Theories
		Focus on Managerial Implications: Making Ethical Decisions Internationally
		Management Focus Corporate Social Responsibility at Stora Enso
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case UNCTAD Sustainable Development Goals
		Endnotes
part three The Global Trade and Investment Environment
	CHAPTER 6 International Trade Theory
		Opening Case Donald Trump on Trade
		Introduction
		An Overview of Trade Theory
			The Benefits of Trade
			The Pattern of International Trade
			Trade Theory and Government Policy
		Mercantilism
		Country Focus Is China Manipulating Its Currency in Pursuit of a Neo-Mercantilist Policy?
		Absolute Advantage
		Comparative Advantage
			The Gains from Trade
			Qualifications and Assumptions
			Extensions of the Ricardian Model
		Country Focus Moving U.S. White-Collar Jobs Offshore
		Heckscher–Ohlin Theory
			The Leontief Paradox
		The Product Life-Cycle Theory
			Product Life-Cycle Theory in the Twenty-First Century
		New Trade Theory
			Increasing Product Variety and Reducing Costs
			Economies of Scale, First-Mover Advantages, and the Pattern of Trade
			Implications of New Trade Theory
		National Competitive Advantage: Porter’s Diamond
			Factor Endowments
			Demand Conditions
			Related and Supporting Industries
			Firm Strategy, Structure, and Rivalry
			Evaluating Porter’s Theory
		Focus on Managerial Implications: Location, First-Mover Advantages, and Government Policy
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case The Trans Pacific Partnership (TPP)
		Appendix International Trade and the Balance of Payments
		Endnotes
	CHAPTER 7 Government Policy and International Trade
		Opening Case Boeing and Airbus Are in a Dogfight over Illegal Subsidies
		Introduction
		Instruments of Trade Policy
			Tariffs
			Subsidies
		Country Focus Are the Chinese Illegally Subsidizing Auto Exports?
			Import Quotas and Voluntary Export Restraints
			Export Tariffs and Bans
			Local Content Requirements
			Administrative Policies
			Antidumping Policies
		The Case for Government Intervention
		Management Focus Protecting U.S. Magnesium
			Political Arguments for Intervention
			Economic Arguments for Intervention
		The Revised Case for Free Trade
			Retaliation and Trade War
			Domestic Policies
		Development of the World Trading System
			From Smith to the Great Depression
			1947–1979: GATT, Trade Liberalization, and Economic Growth
			1980–1993: Protectionist Trends
			The Uruguay Round and the World Trade Organization
			WTO: Experience to Date
			The Future of the WTO: Unresolved Issues and the Doha Round
		Country Focus Estimating the Gains from Trade for America
			Multilateral and Bilateral Trade Agreements
			The World Trading System under Threat
		Focus on Managerial Implications: Trade Barriers, Firm Strategy, and Policy Implications
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Is China Dumping Excess Steel Production?
		Endnotes
	CHAPTER 8 Foreign Direct Investment
		Opening Case Foreign Direct Investment in Retailing in India
		Introduction
		Foreign Direct Investment in the World Economy
			Trends in FDI
			The Direction of FDI
			The Source of FDI
		Country Focus Foreign Direct Investment in China
			The Form of FDI: Acquisitions versus Greenfield Investments
		Theories of Foreign Direct Investment
			Why Foreign Direct Investment?
		Management Focus Foreign Direct Investment by Cemex
			The Pattern of Foreign Direct Investment
			The Eclectic Paradigm
		Political Ideology and Foreign Direct Investment
			The Radical View
			The Free Market View
			Pragmatic Nationalism
			Shifting Ideology
		Benefits and Costs of FDI
			Host-Country Benefits
			Host-Country Costs
			Home-Country Benefits
			Home-Country Costs
			International Trade Theory and FDI
		Government Policy Instruments and FDI
			Home-Country Policies
			Host-Country Policies
			International Institutions and the Liberalization of FDI
		Focus on Managerial Implications: FDI and Government Policy
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Burberry Shifts Its Strategy in Japan
		Endnotes
	CHAPTER 9 Regional Economic Integration
		Opening Case Renegotiating NAFTA
		Introduction
		Levels of Economic Integration
		The Case for Regional Integration
			The Economic Case for Integration
			The Political Case for Integration
			Impediments to Integration
		The Case against Regional Integration
		Regional Economic Integration in Europe
			Evolution of the European Union
			Map 9.1 Member states of the European Union in 2017
			Political Structure of the European Union
		Management Focus The European Commission and Intel
			The Single European Act
			The Establishment of the Euro
		Country Focus The Greek Sovereign Debt Crisis
			Enlargement of the European Union
			British Exit from the European Union (BREXIT)
		Regional Economic Integration in the Americas
			Map 9.2 Economic integration in the Americas
			The North American Free Trade Agreement
			The Andean Community
			Mercosur
			Central American Common Market, CAFTA, and CARICOM
		Regional Economic Integration Elsewhere
			Association of Southeast Asian Nations
			Map 9.3 ASEAN countries
			Regional Trade Blocs in Africa
			Other Trade Agreements
		Focus on Managerial Implications: Regional Economic Integration Threats
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case The Push toward Free Trade in Africa
		Endnotes
part four The Global Monetary System
	CHAPTER 10 The Foreign Exchange Market
		Opening Case The Mexican Peso, the Japanese Yen, and Pokemon Go
		Introduction
		The Functions of the Foreign Exchange Market
			Currency Conversion
			Insuring against Foreign Exchange Risk
		Management Focus Embraer and the Gyrations of the Brazilian Real
		The Nature of the Foreign Exchange Market
		Economic Theories of Exchange Rate Determination
			Prices and Exchange Rates
		Country Focus Quantitative Easing, Inflation, and the Value of the U.S. Dollar
			Interest Rates and Exchange Rates
			Investor Psychology and Bandwagon Effects
			Summary of Exchange Rate Theories
		Exchange Rate Forecasting
			The Efficient Market School
			The Inefficient Market School
			Approaches to Forecasting
		Currency Convertibility
		Focus on Managerial Implications: Foreign Exchange Rate Risk
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Apple’s Earnings Hit by Strong Dollar
		Endnotes
	CHAPTER 11 The International Monetary System
		Opening Case Egypt and the IMF
		Introduction
		The Gold Standard
			Mechanics of the Gold Standard
			Strength of the Gold Standard
			The Period between the Wars: 1918–1939
		The Bretton Woods System
			The Role of the IMF
			The Role of the World Bank
		The Collapse of the Fixed Exchange Rate System
		The Floating Exchange Rate Regime
			The Jamaica Agreement
			Exchange Rates since 1973
		Country Focus The U.S. Dollar, Oil Prices, and Recycling Petrodollars
		Fixed versus Floating Exchange Rates
			The Case for Floating Exchange Rates
			The Case for Fixed Exchange Rates
			Who Is Right?
		Exchange Rate Regimes in Practice
			Pegged Exchange Rates
			Currency Boards
		Crisis Management by the IMF
			Financial Crises in the Post–Bretton Woods Era
		Country Focus The IMF and Iceland’s Economic Recovery
			Evaluating the IMF’s Policy Prescriptions
		Focus on Managerial Implications: Currency Management, Business Strategy, and Government Relations
		Management Focus Airbus and the Euro
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case China’s Exchange Rate Regime
		Endnotes
	CHAPTER 12 The Global Capital Market
		Opening Case Saudi Aramco
		Introduction
		Benefits of the Global Capital Market
			Functions of a Generic Capital Market
			Attractions of the Global Capital Market
		Management Focus The Industrial and Commercial Bank of China Taps the Global Capital Market
			Growth of the Global Capital Market
			Global Capital Market Risks
		Country Focus Did the Global Capital Markets Fail Mexico?
		The Eurocurrency Market
			Genesis and Growth of the Market
			Attractions of the Eurocurrency Market
			Drawbacks of the Eurocurrency Market
		The Global Bond Market
			Attractions of the Eurobond Market
		The Global Equity Market
		Foreign Exchange Risk and the Cost of Capital
		Focus on Managerial Implications: Growth of the Global Capital Market
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Alibaba’s Record-Setting IPO
		Endnotes
part five The Strategy and Structure of International Business
	CHAPTER 13 The Strategy of International Business
		Opening Case Sony’s Global Strategy
		Introduction
		Strategy and the Firm
			Value Creation
			Strategic Positioning
			The Firm as a Value Chain
		Global Expansion, Profitability, and Profit Growth
			Expanding the Market: Leveraging Products and Competencies
			Location Economies
			Experience Effects
			Leveraging Subsidiary Skills
			Profitability and Profit Growth Summary
		Management Focus Leveraging Skills Worldwide at ArcelorMittal
		Cost Pressures and Pressures for Local Responsiveness
			Pressures for Cost Reductions
			Pressures for Local Responsiveness
		Management Focus Viacom International Media Networks
		Choosing a Strategy
			Global Standardization Strategy
			Localization Strategy
			Transnational Strategy
			International Strategy
		Management Focus Evolution of Strategy at Procter & Gamble
			The Evolution of Strategy
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case IKEA’s Global Strategy
		Endnotes
	CHAPTER 14 The Organization of International Business
		Opening Case Unilever’s Global Organization
		Introduction
		Organizational Architecture
		Organizational Structure
			Vertical Differentiation: Centralization and Decentralization
		Management Focus Walmart International
			Horizontal Differentiation: The Design of Structure
			Integrating Mechanisms
		Management Focus Dow—(Failed) Early Global Matrix Adopter
		Control Systems and Incentives
			Types of Control Systems
			Incentive Systems
			Control Systems, Incentives, and Strategy in the International Business
		Processes
		Organizational Culture
			Creating and Maintaining Organizational Culture
			Organizational Culture and Performance in the International Business
		Management Focus Lincoln Electric and Culture
		Synthesis: Strategy and Architecture
			Localization Strategy
			International Strategy
			Global Standardization Strategy
			Transnational Strategy
			Environment, Strategy, Architecture, and Performance
		Organizational Change
			Organizational Inertia
			Implementing Organizational Change
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Organizational Architecture at P&G
		Endnotes
	CHAPTER 15 Entry Strategy and Strategic Alliances
		Opening Case Gazprom and Global Strategic Alliances
		Introduction
		Basic Entry Decisions
			Which Foreign Markets?
		Management Focus Tesco’s International Growth Strategy
			Timing of Entry
			Scale of Entry and Strategic Commitments
			Market Entry Summary
		Management Focus The Jollibee Phenomenon
		Entry Modes
			Exporting
			Turnkey Projects
			Licensing
			Franchising
			Joint Ventures
			Wholly Owned Subsidiaries
		Selecting an Entry Mode
			Core Competencies and Entry Mode
			Pressures for Cost Reductions and Entry Mode
		Greenfield Venture or Acquisition?
			Pros and Cons of Acquisitions
			Pros and Cons of Greenfield Ventures
			Which Choice?
		Strategic Alliances
			Advantages of Strategic Alliances
			Disadvantages of Strategic Alliances
			Making Alliances Work
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Starbucks’ Foreign Entry Strategy
		Endnotes
part six International Business Functions
	CHAPTER 16 Exporting, Importing, and Countertrade
		Opening Case Tata Motors and Exporting
		Introduction
		The Promise and Pitfalls of Exporting
		Management Focus Ambient Technologies and the Panama Canal
		Improving Export Performance
			International Comparisons
			Information Sources
		Management Focus Exporting with Government Assistance
			Service Providers
			Export Strategy
		Management Focus 3M’s Export Strategy
			The globalEDGE™ Exporting Tool
		Export and Import Financing
			Lack of Trust
			Letter of Credit
			Draft
			Bill of Lading
			A Typical International Trade Transaction
		Export Assistance
			Export-Import Bank
			Export Credit Insurance
		Countertrade
			The Popularity of Countertrade
			Types of Countertrade
			Pros and Cons of Countertrade
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Embraer and Brazilian Importing
		Endnotes
	CHAPTER 17 Global Production and Supply Chain Management
		Opening Case Alibaba and Global Supply Chains
		Introduction
		Strategy, Production, and Supply Chain Management
		Where to Produce
			Country Factors
		Management Focus IKEA Production in China
			Technological Factors
			Production Factors
			The Hidden Costs of Foreign Locations
		Management Focus H&M and Its Order Timing
		Make-or-Buy Decisions
		Global Supply Chain Functions
			Global Logistics
			Global Purchasing
		Managing a Global Supply Chain
			Role of Just-in-Time Inventory
			Role of Information Technology
			Coordination in Global Supply Chains
			Interorganizational Relationships
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Amazon’s Global Supply Chains
		Endnotes
	CHAPTER 18 Global Marketing and R&D
		Opening Case ACSI and Satisfying Global Customers
		Introduction
		Globalization of Markets and Brands
		Market Segmentation
		Management Focus Marketing to Afro-Brazilians
		Product Attributes
			Cultural Differences
			Economic Development
			Product and Technical Standards
		Distribution Strategy
			Differences between Countries
			Choosing a Distribution Strategy
		Communication Strategy
			Barriers to International Communication
			Push versus Pull Strategies
		Management Focus Unilever among India’s Poor
			Global Advertising
		Pricing Strategy
			Price Discrimination
			Strategic Pricing
			Regulatory Influences on Prices
		Configuring the Marketing Mix
		International Market Research
		Product Development
			The Location of R&D
			Integrating R&D, Marketing, and Production
			Cross-Functional Teams
			Building Global R&D Capabilities
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Global Branding, Marvel Studios, and Walt Disney Company
		Endnotes
	CHAPTER 19 Global Human Resource Management
		Opening Case Building a Global Diverse Workforce at Sodexo
		Introduction
		Strategic Role of Global HRM: Managing a Global Workforce
		Staffing Policy
			Types of Staffing Policies
			Expatriate Managers
		Management Focus Expatriates at Royal Dutch Shell
			Global Mindset
		Training and Management Development
			Training for Expatriate Managers
			Repatriation of Expatriates
		Management Focus Monsanto’s Repatriation Program
			Management Development and Strategy
		Performance Appraisal
			Performance Appraisal Problems
			Guidelines for Performance Appraisal
		Compensation
			National Differences in Compensation
		Management Focus McDonald’s Global Compensation Practices
			Expatriate Pay
		Building a Diverse Global Workforce
		International Labor Relations
			The Concerns of Organized Labor
			The Strategy of Organized Labor
			Approaches to Labor Relations
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case AstraZeneca
		Endnotes
	CHAPTER 20 Accounting and Finance in the International Business
		Opening Case Shoprite—Financial Success of a Food Retailer in Africa
		Introduction
		National Differences in Accounting Standards
		International Accounting Standards
		Management Focus Chinese Accounting
		Accounting Aspects of Control Systems
			Exchange Rate Changes and Control Systems
			Transfer Pricing and Control Systems
			Separation of Subsidiary and Manager Performance
		Financial Management: The Investment Decision
			Capital Budgeting
			Project and Parent Cash Flows
		Management Focus Black Sea Oil and Gas Ltd
			Adjusting for Political and Economic Risk
			Risk and Capital Budgeting
		Financial Management: The Financing Decision
		Financial Management: Global Money Management
			Minimizing Cash Balances
			Reducing Transaction Costs
			Managing the Tax Burden
			Moving Money across Borders
		Chapter Summary
		Critical Thinking and Discussion Questions
		Research Task
		Closing Case Tesla, Inc.—Subsidizing Tesla Automobiles Globally
		Endnotes
part seven Integrative Cases
	Global Medical Tourism
	Venezuela under Hugo Chávez and Beyond
	Political and Economic Reform in Myanmar
	Will China Continue to Be a Growth Marketplace?
	Lead in Toys and Drinking Water
	Creating the World’s Biggest Free Trade Zone
	Sugar Subsidies Drive Candy Makers Abroad
	Volkswagen in Russia
	The NAFTA Tomato Wars
	Subaru’s Sales Boom Thanks to the Weaker Yen
	The IMF and Ukraine’s Economic Crisis
	The Global Financial Crisis and Its Aftermath: Declining Cross-Border Capital Flows
	Ford’s Global Platform Strategy
	Philips’ Global Restructuring
	General Motors and Chinese Joint Ventures
	Exporting Desserts by a Hispanic Entrepreneur
	Apple: The Best Supply Chains in the World?
	Domino’s Global Marketing
	Siemens and Global Competitiveness
	Microsoft and Its Foreign Cash Holdings
Glossary
Organization Index
Name Index
Subject Index
Copyright
Title Page
Dedication
Contents
Chapter 1: ‘I’m thinking’ – Oh, but are you?
Chapter 2: Renegade perception
Chapter 3: The Pushbacker sting
Chapter 4: ‘Covid’: The calculated catastrophe
Chapter 5: There is no ‘virus’
Chapter 6: Sequence of deceit
Chapter 7: War on your mind
Chapter 8: ‘Reframing’ insanity
Chapter 9: We must have it? So what is it?
Chapter 10: Human 2.0
Chapter 11: Who controls the Cult?
Chapter 12: Escaping Wetiko
Postscript
Appendix: Cowan-Kaufman-Morell Statement on Virus Isolation
Bibliography
Index
Copyright
Title Page
Dedication
Contents
Chapter 1: ‘I’m thinking’ – Oh, but are you?
Chapter 2: Renegade perception
Chapter 3: The Pushbacker sting
Chapter 4: ‘Covid’: The calculated catastrophe
Chapter 5: There is no ‘virus’
Chapter 6: Sequence of deceit
Chapter 7: War on your mind
Chapter 8: ‘Reframing’ insanity
Chapter 9: We must have it? So what is it?
Chapter 10: Human 2.0
Chapter 11: Who controls the Cult?
Chapter 12: Escaping Wetiko
Postscript
Appendix: Cowan-Kaufman-Morell Statement on Virus Isolation
Bibliography
Index