Additional Information
Book Details
Abstract
For courses in international business.
International business through theory and practice
Balancing authoritative theory and meaningful practice, International Business engages students on the subject of conducting business in international markets. The authors’ descriptions and ideas of international business are enhanced with contemporary examples, scenarios, and cases that help students effectively apply what they’ve learned. Now in its 16th Edition, International Business remains one of the best-selling and most authoritative international business texts available. As rigorous and practical as ever, this edition remains current through updated author-written cases, including seven entirely new cases, streamlined writing, and expanded coverage of relevant global changes.
Pearson MyLabTM Management not included. Students, if Pearson MyLab Management is a recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. Pearson MyLab Management should only be purchased when required by an instructor.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Front Cover | Front Cover | ||
| Title Page | 1 | ||
| Copyright Page | 2 | ||
| Brief Contents | 3 | ||
| Contents | 4 | ||
| Preface | 22 | ||
| About the Authors | 29 | ||
| Part One: Introduction | 45 | ||
| 1 International Business and Globalization | 45 | ||
| Case: The Globalized Business of Sports | 46 | ||
| Introduction | 48 | ||
| Why Study About Globalization, IB, and Their Relationship? | 49 | ||
| How Does IB Fit In? | 49 | ||
| The Study of IB | 49 | ||
| The Forces Driving Globalization and IB | 50 | ||
| Factors in Increased Globalization | 51 | ||
| The Criticisms of Globalization | 54 | ||
| Threats to National Sovereignty | 54 | ||
| Environmental Stress | 55 | ||
| Growing Income Inequality and Personal Stress | 55 | ||
| Point-Counterpoint\rIs Offshoring of Production a Good Strategy? | 56 | ||
| Why Companies Engage in IB | 58 | ||
| Sales Expansion | 58 | ||
| Resource Acquisition | 58 | ||
| Risk Reduction | 58 | ||
| IB Operating Modes | 59 | ||
| Merchandise Exports and Imports | 59 | ||
| Service Exports and Imports | 59 | ||
| Investments | 60 | ||
| Types of International Organizations | 60 | ||
| Why Do Companies’ External Environments Affect How They May Best Operate Abroad? | 60 | ||
| Physical Factors | 61 | ||
| Institutional Factors | 61 | ||
| The Competitive Environment | 62 | ||
| Looking to the Future\rThree Major Scenarios on Globalization’s Future | 63 | ||
| Case: Transportation and Logistics: Dubai Ports World | 65 | ||
| Endnotes | 68 | ||
| Part Two: National Environmental Differences | 69 | ||
| 2 Culture | 69 | ||
| Case: Saudi Arabia’s Dynamic Culture | 70 | ||
| Culture’s Importance in IB and Trickiness to Assess | 73 | ||
| National Cultures as a Point of Reference | 73 | ||
| The People Factor | 74 | ||
| Building Cultural Awareness | 75 | ||
| Shortcomings in Cultural Assessments | 75 | ||
| Influences on Cultural Formation and Change | 76 | ||
| Sources of Change | 76 | ||
| Language as Both a Diffuser and Stabilizer of Culture | 76 | ||
| Religion as a Cultural Stabilizer | 78 | ||
| Major Behavioral Practices Affecting Business | 79 | ||
| Issues in Social Stratification | 79 | ||
| Work Motivation | 81 | ||
| Relationship Preferences | 84 | ||
| Risk-Taking Behavior | 84 | ||
| Information and Task Processing | 85 | ||
| Problems in Communicating Across Cultures | 86 | ||
| Translation of Spoken and Written Language | 86 | ||
| Silent Language | 87 | ||
| Guidelines for Cultural Adjustment | 89 | ||
| Host Society Acceptance | 89 | ||
| Degree of Cultural Differences | 89 | ||
| Ability to Adjust: Culture Shock | 90 | ||
| Company and Management Orientations | 90 | ||
| Strategies for Instituting Change | 91 | ||
| Point-Counterpoint\rDoes IB Lead to Cultural Imperialism? | 92 | ||
| Looking to the Future\rScenarios on The Evolvement of National Cultures | 94 | ||
| Case: Tesco PLC: Leveraging Global Knowledge | 96 | ||
| Endnotes | 99 | ||
| 3 Governmental and Legal Systems | 101 | ||
| Case: China: Big Opportunities, Complicated Risks | 102 | ||
| Politics, Laws, and Operating Internationally | 104 | ||
| The Political Environment | 106 | ||
| Individualism | 106 | ||
| Collectivism | 106 | ||
| Political Ideology | 107 | ||
| Democracy | 108 | ||
| Totalitarianism | 109 | ||
| The State of Political Freedom | 111 | ||
| The Prevalence of Political Freedom | 112 | ||
| The Struggles of Political Freedom | 112 | ||
| The Allure of Authoritarianism | 115 | ||
| Looking to the Future Political Ideology and MNEs’ Actions | 116 | ||
| Political Risk | 118 | ||
| Classifying Political Risk | 118 | ||
| Point-Counterpoint\rProactive Political Risk Management: The Superior Approach | 120 | ||
| The Legal Environment | 122 | ||
| Types of Legal Systems | 123 | ||
| The Foundation of Legality | 124 | ||
| Mapping the Basis of Law | 125 | ||
| Which Rule When? | 126 | ||
| Implications to Managers | 128 | ||
| Legal Issues Facing International Companies | 128 | ||
| Operational Concerns | 129 | ||
| Strategic Concerns | 130 | ||
| Politics, Law, and the Business Environment | 132 | ||
| Case: It’s a Knockoff World | 133 | ||
| Endnotes | 135 | ||
| 4 Economic Systems and Market Methods | 137 | ||
| Case: Emerging Economies: Comeback or Collapse? | 138 | ||
| International Economic Analysis | 139 | ||
| Navigating Challenges | 140 | ||
| Who’s Who in the Global Business Environment | 141 | ||
| Developed Economies | 141 | ||
| Developing Economies | 142 | ||
| Economies in Transition | 144 | ||
| The Issue of Different Degrees of Development | 145 | ||
| Economic Freedom | 147 | ||
| The Value of Economic Freedom | 149 | ||
| The Prevalence of Economic Freedom | 150 | ||
| Economic Freedom and Type of Economic Environment | 151 | ||
| The Paradox of Promise Versus Prevalence | 151 | ||
| Looking to the Future\rState Capitalism: Detour or Destination? | 154 | ||
| Types of Economic Systems | 155 | ||
| The Market Economy | 155 | ||
| The Command Economy | 156 | ||
| Mixed Economy | 157 | ||
| Assessing Economic Development, Performance, and Potential | 158 | ||
| Monetary Measures | 158 | ||
| Improving Economic Analytics | 160 | ||
| The Wildcard: The Shadow Economy | 162 | ||
| Sustainability and Stability | 163 | ||
| Sustainability | 163 | ||
| Stability | 164 | ||
| Point-Counterpoint\rGrowth: Positive and Productive? | 165 | ||
| Elements of Economic Analysis | 167 | ||
| Integrating Economic Analysis | 167 | ||
| Economic Freedom, Innovation, and Competitiveness | 169 | ||
| Case: The BRICs: Vanguard of the Revolution | 170 | ||
| Endnotes | 172 | ||
| Part Three: Connecting Countries through Trade and Factor Movements | 173 | ||
| 5 Trade and Factor Mobility Theory | 173 | ||
| Case: South Korea’s Success Story in the Post-WWII International Economy | 174 | ||
| Introduction: Why Do Policymakers Rely on International Trade and Factor Mobility Theories? | 176 | ||
| Interventionist and Free Trade Theories | 178 | ||
| Mercantilism | 178 | ||
| Neomercantilism | 178 | ||
| Free Trade Theories | 179 | ||
| Theory of Absolute Advantage | 179 | ||
| Theory of Comparative Advantage | 181 | ||
| Theories of Specialization: Some Assumptions and Limitations | 182 | ||
| Theories to Explain National Trade Patterns | 184 | ||
| How Much Does a Country Trade? | 184 | ||
| What Types of Products Does a Country Trade? | 186 | ||
| With Whom Do Countries Trade? | 187 | ||
| The Dynamics of Export Capabilities | 188 | ||
| Product Life Cycle (PLC) Theory | 188 | ||
| The Diamond of National Competitive Advantage | 190 | ||
| The Theory and Major Effects of Factor Mobility | 192 | ||
| Point-Counterpoint\rShould Nations Use Strategic Trade Policies? | 192 | ||
| Why Production Factors Move | 194 | ||
| Effects of Factor Movements | 195 | ||
| The Relationship Between Trade and Factor Mobility | 196 | ||
| Substitution | 196 | ||
| Complementarity | 196 | ||
| Looking to the Future\rScenarios That May Change Trade Patterns | 197 | ||
| Case: LUKOIL: Foreign Trade and Investment | 199 | ||
| Endnotes | 202 | ||
| 6 Trade Protectionism | 203 | ||
| Case: The Case of REEs: Trade Disputes and Protectionist Measures for Strategic Materials | 204 | ||
| Conflicting Outcomes of Trade Protectionism | 206 | ||
| The Role of Stakeholders | 207 | ||
| Economic Rationales for Governmental Trade Intervention and Outcome Uncertainties | 207 | ||
| Fighting Unemployment | 207 | ||
| Protecting “Infant Industries” | 208 | ||
| Developing an Industrial Base | 209 | ||
| Economic Relationships with Other Countries | 210 | ||
| Governments’ Noneconomic Rationales and Outcome for Trade Intervention | 212 | ||
| Maintaining Essential Industries | 212 | ||
| Promoting Acceptable Practices Abroad | 213 | ||
| Point-Counterpoint\rShould Governments Impose Trade Sanctions? | 213 | ||
| Maintaining or Extending Spheres of Influence | 215 | ||
| Preserving National Culture | 215 | ||
| Major Instruments of Trade Control | 215 | ||
| Tariffs: Direct Price Influences | 215 | ||
| Nontariff Barriers: Direct Price Influences | 216 | ||
| Nontariff Barriers: Quantity Controls | 218 | ||
| How Companies Deal with Governmental Trade Influences | 221 | ||
| Tactics for Dealing with Import Competition | 221 | ||
| Convincing Decision-Makers | 221 | ||
| Involving the Industry and Stakeholders | 221 | ||
| Preparing for Changes in the Competitive Environment | 222 | ||
| Looking to the Future\rDynamics and Complexity of Future World Trade | 222 | ||
| Case: Doing Business in Singapore | 223 | ||
| Endnotes | 225 | ||
| 7 Economic Integration and Cooperation | 227 | ||
| Case: Regional Integration and the Different Modalities of a Custom Union Divorce | 228 | ||
| Forms of Economic Integration | 229 | ||
| The World Trade Organization—Global Integration | 230 | ||
| GATT: Predecessor to the WTO | 230 | ||
| What Does the WTO Do? | 230 | ||
| Regional Economic Integration | 231 | ||
| Bilateral Agreements | 231 | ||
| Geography Matters | 231 | ||
| The Effects of Integration | 232 | ||
| Major Regional Trading Groups | 233 | ||
| The European Union | 234 | ||
| The North American Free Trade Agreement (NAFTA) | 238 | ||
| Regional Economic Integration in the Americas | 241 | ||
| Regional Economic Integration in Asia | 243 | ||
| Regional Economic Integration in Africa | 245 | ||
| Point-Counterpoint\rIs Regional Economic Integration a Good Idea? | 246 | ||
| The United Nations and Other NGOs | 247 | ||
| Commodity Agreements | 249 | ||
| Commodities and the World Economy | 249 | ||
| Consumers and Producers | 249 | ||
| The Organization of the Petroleum Exporting Countries (OPEC)) | 250 | ||
| Looking to the Future\rWill the WTO Overcome Bilateral and Regional\rIntegration Efforts? | 251 | ||
| Case: Unilever Goes East | 252 | ||
| Endnotes | 254 | ||
| Part Four: The Global Monetary Environment | 255 | ||
| 8 Markets for Foreign Exchange | 255 | ||
| Case: Going Down to the Wire in the Money-Transfer Market | 256 | ||
| What Is Foreign Exchange and Who Are the Major Players in the Market? | 257 | ||
| Some Aspects of the Foreign-Exchange Market | 258 | ||
| How to Trade Foreign Exchange | 258 | ||
| Global OTC Foreign-Exchange Instruments | 259 | ||
| Size, Composition, and Location of the Foreign-Exchange Market | 259 | ||
| Foreign-Exchange Trades and Time Zones | 261 | ||
| Major Foreign-Exchange Markets | 263 | ||
| The Spot Market | 263 | ||
| The Forward Market | 264 | ||
| Options | 264 | ||
| Futures | 265 | ||
| The Foreign-Exchange Trading Process | 265 | ||
| Banks and Exchanges | 265 | ||
| Top Exchanges for Trading Foreign Exchange | 266 | ||
| How Companies Use Foreign Exchange | 267 | ||
| Cash Flow Aspects of Imports and Exports | 267 | ||
| Other Financial Flows | 268 | ||
| Point-Counterpoint\rIs It OK to Speculate on Currency? | 269 | ||
| Looking to the Future\rWhere Are Foreign-Exchange Markets Headed? | 271 | ||
| Case: Do Yuan to Buy Some Renminbi? | 272 | ||
| Endnotes | 275 | ||
| 9 Factors that Influence Exchange Rates | 277 | ||
| Case: Venezuela’s Rapidly Changing Currency | 278 | ||
| Introduction | 279 | ||
| The International Monetary Fund | 280 | ||
| Origin and Objectives | 280 | ||
| The IMF Today | 280 | ||
| The Role of the IMF in Global Financial Crises | 281 | ||
| Evolution to Floating Exchange Rates | 281 | ||
| Exchange-Rate Arrangements | 282 | ||
| Three Choices: Hard Peg, Soft Peg, or Floating Arrangement | 282 | ||
| Hard Peg | 283 | ||
| Soft Peg | 283 | ||
| Floating Arrangement | 283 | ||
| The Euro | 283 | ||
| Point-Counterpoint Should Africa Develop a Common Currency? | 285 | ||
| Determining Exchange Rates | 286 | ||
| Nonintervention: Currency in a Floating-Rate World | 286 | ||
| Intervention: Currency in a Fixed-Rate or Managed Floating-Rate World | 287 | ||
| Black Markets | 288 | ||
| Foreign-Exchange Convertibility and Controls | 288 | ||
| Exchange Rates and Purchasing Power Parity | 289 | ||
| Exchange Rates and Interest Rates | 291 | ||
| Other Factors in Exchange-Rate Determination | 292 | ||
| Forecasting Exchange-Rate Movements | 292 | ||
| Fundamental and Technical Forecasting | 292 | ||
| Fundamental Factors to Monitor | 292 | ||
| Business Implications of Exchange-Rate Changes | 293 | ||
| Marketing Decisions | 293 | ||
| Production Decisions | 294 | ||
| Financial Decisions | 294 | ||
| Looking to the Future\rChanges in the Relative Strength of Global\rCurrencies | 294 | ||
| Case: Welcome to the World of Sony—Unless the Falling Yen Rises (or Falls) Again | 295 | ||
| Endnotes | 298 | ||
| 10 Global Debt and Equity Markets | 299 | ||
| Case: Tax Wars: Pfizer Versus the U.S. Government | 300 | ||
| The Finance Function | 301 | ||
| The Role of the CFO | 301 | ||
| Capital Structure | 302 | ||
| Leveraging Debt Financing | 302 | ||
| Factors Affecting the Choice of Capital Structure | 302 | ||
| Global Debt Markets | 304 | ||
| Eurocurrencies and the Eurocurrency Market | 304 | ||
| International Bonds | 305 | ||
| Global Equity Markets | 306 | ||
| The Size of Global Stock Markets | 307 | ||
| Taxation of Foreign-Source Income | 309 | ||
| International Tax Practices | 309 | ||
| Taxing Branches and Subsidiaries | 310 | ||
| Transfer Prices | 312 | ||
| Double Taxation and Tax Credit | 313 | ||
| Dodging Taxes | 314 | ||
| Offshore Financing and Offshore Financial Centers | 314 | ||
| What Is an OFC? | 314 | ||
| Point-Counterpoint\rShould Offshore Financial Centers and Aggressive Tax\rPractices Be Eliminated? | 316 | ||
| Looking to the Future\rThe Growth of Capital Markets and the Drive by Governments\rto Capture More Tax Revenues by MNEs | 317 | ||
| Case: Does the Devil Really Wear Prada? | 318 | ||
| Endnotes | 320 | ||
| 11 Ethics and Social Responsibility | 321 | ||
| Case: Ecomagination and the Global Greening of GE | 322 | ||
| Introduction | 324 | ||
| Stakeholder Trade-Offs | 324 | ||
| The Economic Impact of the MNE | 325 | ||
| Balance-of-Payments Effects | 326 | ||
| Growth and Employment Effects | 327 | ||
| The Foundations of Ethical Behavior | 328 | ||
| Why Do Companies Care About Ethical Behavior? | 329 | ||
| The Cultural Foundations of Ethical Behavior | 329 | ||
| Relativism Versus Normativism | 329 | ||
| The Legal Foundations of Ethical Behavior | 330 | ||
| Legal Justification: Pro and Con | 330 | ||
| Corruption and Bribery | 331 | ||
| Petrobras: Corruption in Brazil with a Global Twist | 332 | ||
| The Consequences of Corruption | 332 | ||
| What’s Being Done About Corruption? | 333 | ||
| Ethics and the Environment | 334 | ||
| What Is “Sustainability”? | 334 | ||
| Global Warming and the Paris Agreement on Climate Change | 335 | ||
| Ethical Dilemmas of Labor Conditions | 336 | ||
| Point-Counterpoint\rShould MNEs Accept Full Responsibility for the Unethical\rBehavior of Their Employees? | 336 | ||
| The Problem of Child Labor | 338 | ||
| What MNEs Can and Can’t Do | 339 | ||
| Corporate Codes of Ethics: How Should a Company Behave? | 339 | ||
| Motivations for Corporate Responsibility | 339 | ||
| Developing a Code of Conduct | 339 | ||
| Looking to the Future\rDealing with Ethical Dilemmas in the Global Economy | 340 | ||
| Case: Anglo American PLC in South Africa: What Do You Do When Costs Reach Epidemic Proportions? | 341 | ||
| Endnotes | 343 | ||
| Part Five: Corporate Policy and Strategy | 345 | ||
| 12 Strategies for International Business | 345 | ||
| Case: Zara’s Disruptive Vision: Data-Driven Fast-Fashion | 346 | ||
| Strategy in the MNE | 348 | ||
| Getting Started: Vision and Mission | 349 | ||
| Moving Onward: Strategic Planning | 351 | ||
| Making Sense to Make Strategy | 351 | ||
| The Role of Resources, Capabilities, and Competencies | 352 | ||
| The Quest to Create Value | 354 | ||
| The Cost Leadership Strategy | 354 | ||
| The Differentiation Strategy | 355 | ||
| The Integrated Cost Leadership/Differentiation Strategy | 356 | ||
| Point-Counterpoint\rIs Strategic Planning Productive? | 357 | ||
| Organizing Value Creation: The Value Chain | 358 | ||
| Configuring the Value Chain | 359 | ||
| Looking to the Future\rDigits, Widgets, and Changing Location Advantages | 363 | ||
| Global Integration Versus Local Responsiveness | 365 | ||
| The Potential for Standardization | 366 | ||
| The Characteristics of Consumer Preferences | 367 | ||
| The Effect of Institutional Agents | 368 | ||
| Global Integration and Local Responsiveness: Mapping Their Interaction | 368 | ||
| International Corporate-Level Strategies | 370 | ||
| The International Strategy | 370 | ||
| The Localization Strategy | 372 | ||
| Global Strategy | 373 | ||
| Transnational Strategy | 374 | ||
| Case: The Multinational Enterprise of the Future: Leading Scenarios | 376 | ||
| Endnotes | 378 | ||
| 13 Evaluation of Countries for Operations | 379 | ||
| Case: Burger King | 380 | ||
| The Importance of Location | 382 | ||
| Comparing Countries Through Scanning | 382 | ||
| Why Is Scanning Important? | 382 | ||
| Scanning Versus Detailed Analysis | 383 | ||
| Opportunity and Risk Variables | 384 | ||
| Opportunities: Sales Expansion | 384 | ||
| Opportunities: Resource Acquisition | 385 | ||
| Risks | 387 | ||
| Analyzing and Relating the Opportunity and Risk Variables | 392 | ||
| Sources and Shortcomings of Comparative Country Information | 394 | ||
| Some Problems with Research Results and Data | 394 | ||
| External Sources of Information | 395 | ||
| Internally Generated Data | 396 | ||
| Point-Counterpoint\rShould Companies Operate in and Send Employees\rto Violent Areas? | 396 | ||
| Alternatives for Allocating Resources Among Locations | 397 | ||
| Alternative Gradual Commitments | 397 | ||
| Geographic Diversification Versus Concentration | 398 | ||
| Reinvestment and Harvesting | 399 | ||
| Noncomparative Location Decisions | 400 | ||
| Looking to the Future\rConditions That May Cause Prime Locations to Change | 400 | ||
| Case: The Lego Group Case | 401 | ||
| Endnotes | 403 | ||
| 14 Modes of Trading Internationally | 405 | ||
| Case: SpinCent: The Decision to Export | 406 | ||
| Introduction | 408 | ||
| Exporting: Principles and Practices | 409 | ||
| Who Are Exporters? | 410 | ||
| The Matter of Advantages | 410 | ||
| Characteristics of Exporters | 411 | ||
| Exporting: Motivation and Methods | 412 | ||
| Profitability | 412 | ||
| Productivity | 413 | ||
| Diversification | 413 | ||
| Export: Start-Up and Expansion | 414 | ||
| Incremental Internationalization | 414 | ||
| The Born-Global Phenomenon | 415 | ||
| The Influence of Time and Place | 415 | ||
| The Wildcard of Serendipity | 416 | ||
| Approaches to Exporting | 416 | ||
| Which Approach When? | 417 | ||
| Point-Counterpoint\rExporting E-waste: A Fair Solution? | 418 | ||
| Importing: Principles and Practices | 422 | ||
| Characteristics of Importers | 422 | ||
| Importing: Motivation and Methods | 423 | ||
| Import Drivers | 423 | ||
| Who Are Importers? | 424 | ||
| Importing and Exporting: Problems and Pitfalls | 424 | ||
| Financial Risks | 425 | ||
| Customer Management | 425 | ||
| International Business Expertise | 426 | ||
| Marketing Challenges | 426 | ||
| Top Management Commitment | 426 | ||
| Government Regulation | 427 | ||
| Trade Documentation | 428 | ||
| Importing and Exporting: Resources and Assistance | 429 | ||
| Public Agencies | 430 | ||
| Private Agents | 431 | ||
| Reconciling Opportunity and Challenge: An Export Plan | 434 | ||
| Looking to the Future\rTechnology Transforms International Trade | 435 | ||
| Countertrade | 437 | ||
| Costs | 437 | ||
| Benefits | 438 | ||
| Case: The Borderfree Option: Going Global—Simplified | 438 | ||
| Endnotes | 440 | ||
| 15 Forms and Ownership of Foreign Production | 441 | ||
| Case: Meliá Hotels International | 442 | ||
| Introduction | 445 | ||
| Why Export and Import May Not Suffice | 446 | ||
| When It’s Cheaper to Produce Abroad | 447 | ||
| When Transportation Costs Too Much | 447 | ||
| When Domestic Capacity Isn’t Enough | 447 | ||
| When Products and Services Need Altering | 447 | ||
| When Trade Restrictions Hinder Imports | 447 | ||
| When Country of Origin Becomes an Issue | 448 | ||
| Why and How Do Companies Make Wholly Owned FDI | 448 | ||
| Reasons for Wholly Owned Foreign Direct Investment | 448 | ||
| Acquisition Versus Greenfield | 449 | ||
| Why Companies Collaborate | 450 | ||
| General Motives for Collaborative Arrangements | 450 | ||
| International Motives for Collaborative Arrangements | 452 | ||
| Forms of and Choice of Collaborative Arrangements | 453 | ||
| Some Considerations in Choosing a Form | 453 | ||
| Point-Counterpoint\rShould Countries Limit Foreign Control\rof Key Industries? | 454 | ||
| Licensing | 455 | ||
| Franchising | 456 | ||
| Management Contracts | 457 | ||
| Turnkey Operations | 457 | ||
| Joint Ventures (JVs) | 458 | ||
| Equity Alliances | 459 | ||
| Why Collaborative Arrangements Fail or Succeed | 459 | ||
| Reasons for Failure | 460 | ||
| Helping Collaborative Operations Succeed | 461 | ||
| Looking to the Future\rGrowth in Project Size and Complexity | 464 | ||
| Case: The oneworld Airline Alliance | 465 | ||
| Endnotes | 469 | ||
| 16 The Organization and Governance of Foreign Operations | 471 | ||
| Case: Organizing Global Operations: The “Gore Way” | 472 | ||
| Introduction | 474 | ||
| Changing Times, Changing Organizations | 474 | ||
| Expanding Scope of IB | 475 | ||
| The Internet as a Design Standard | 475 | ||
| Managerial Standards | 475 | ||
| Social Contract | 476 | ||
| Change and Challenge: MNEs Respond | 476 | ||
| Classical Organization Structures | 477 | ||
| Vertical Differentiation | 477 | ||
| Horizontal Differentiation | 479 | ||
| The Functional Structure | 479 | ||
| Divisional Structures | 480 | ||
| Global Matrix Structure | 483 | ||
| Mixed Structure | 484 | ||
| Neoclassical Structures | 484 | ||
| The Challenge of Boundaries | 484 | ||
| The Goal of Boundarylessness | 485 | ||
| The Network Structure | 486 | ||
| Virtual Organization | 487 | ||
| Neoclassical Structures in Action | 488 | ||
| Pitfalls of Neoclassical Structures | 488 | ||
| Point-Counterpoint\rThe Hierarchical Structure: The Superior Format | 489 | ||
| Coordination Systems | 491 | ||
| Coordination by Standardization | 492 | ||
| Coordination by Plan | 493 | ||
| Coordination by Mutual Adjustment | 494 | ||
| Control Systems | 495 | ||
| Bureaucratic Control | 495 | ||
| Market Control | 495 | ||
| Clan Control | 496 | ||
| Control Mechanisms | 496 | ||
| Which Control System When? | 497 | ||
| Organizational Culture | 497 | ||
| A Key Piece of the Performance Puzzle | 497 | ||
| The Power of Common Cause | 498 | ||
| Developing an Organizational Culture | 499 | ||
| Looking to the Future\rThe Rise of Corporate Universities | 500 | ||
| Case: Hyundai Motor Company: Expanding through Organizational Excellence | 502 | ||
| Endnotes | 504 | ||
| Part Six: Functional Management and Operations | 505 | ||
| 17 Global Marketing | 505 | ||
| Case: Tommy Hilfiger | 506 | ||
| International Marketing Strategies: Orientations, Segmentation, and Targeting | 507 | ||
| Marketing Orientations | 508 | ||
| Segmenting and Targeting Markets | 510 | ||
| Product Policies: Country Adaptation Versus Global Standardization | 511 | ||
| Why Firms Adapt Products | 511 | ||
| Alteration Costs | 512 | ||
| The Product Line: Extent and Mix | 513 | ||
| International Pricing Complexities | 513 | ||
| Potential Obstacles in International Pricing | 513 | ||
| Should Promotion Differ Among Countries? | 516 | ||
| The Push–Pull Mix | 516 | ||
| Some Problems in International Promotion | 517 | ||
| International Branding Strategies | 519 | ||
| Global Brand Versus Local Brands | 520 | ||
| Point-Counterpoint\rShould Home Governments Regulate Their Companies’\rMarketing in Developing Countries? | 521 | ||
| Distribution Practices and Complications | 523 | ||
| Deciding Whether to Standardize | 523 | ||
| Internalization or Not? | 524 | ||
| Distribution Partnership | 524 | ||
| Distribution Challenges and Opportunities | 525 | ||
| Gap Analysis: A Tool for Helping to Manage the International Marketing Mix | 526 | ||
| Usage Gaps | 527 | ||
| Product-Line Gaps | 528 | ||
| Distribution and Competitive Gaps | 528 | ||
| Aggregating Countries’ Programs | 528 | ||
| Looking to the Future\rHow Might International Market Segmentation\rEvolve? | 529 | ||
| Case: Grameen Danone Foods in Bangladesh | 530 | ||
| Endnotes | 535 | ||
| 18 Global Production and Supply Chains | 537 | ||
| Case: Apple’s Global Supply Chain | 538 | ||
| Global Supply-Chain Management | 540 | ||
| What Is Supply-Chain Management? | 540 | ||
| Global Supply-Chain and Operations Management Strategies | 541 | ||
| Operations Management Strategy | 541 | ||
| Global Sourcing | 543 | ||
| Why Global Sourcing? | 545 | ||
| Major Sourcing Configurations | 545 | ||
| The Make-or-Buy Decision | 546 | ||
| Point-Counterpoint\rShould Firms Outsource Innovation? | 546 | ||
| Supplier Relations | 548 | ||
| Conflict Minerals | 548 | ||
| The Purchasing Function | 548 | ||
| Information Technology and Global Supply-Chain Management | 549 | ||
| Electronic Data Interchange (EDI) | 549 | ||
| Enterprise Resource Planning/Material Requirements Planning | 549 | ||
| Radio Frequency ID (RFID) | 549 | ||
| E-commerce | 550 | ||
| Quality | 551 | ||
| Zero Defects | 551 | ||
| Lean Manufacturing and Total Quality Management (TQM) | 552 | ||
| Six Sigma | 553 | ||
| Quality Standards | 553 | ||
| Looking to the Future\rUncertainty and the Global Supply Chain | 555 | ||
| Case: Nokero: Lighting the World | 555 | ||
| Endnotes | 560 | ||
| 19 Global Accounting and Financial Management | 561 | ||
| Case: Parmalat: Europe’s Enron | 562 | ||
| The Crossroads of Accounting and Finance | 565 | ||
| What Does the Controller Control? | 565 | ||
| Differences in Financial Statements Internationally | 565 | ||
| Differences in the Content of Financial Information | 566 | ||
| Factors Affecting Accounting Objectives, Standards, and Practices | 566 | ||
| Cultural Differences in Accounting | 567 | ||
| International Standards and Global Convergence | 568 | ||
| Mutual Recognition Versus Reconciliation | 568 | ||
| The First Steps in Establishing IFRS | 569 | ||
| The International Accounting Standards Board | 570 | ||
| Point-Counterpoint\rShould U.S. Companies Be Allowed to Use IFRS? | 571 | ||
| Transactions in Foreign Currencies | 572 | ||
| Recording Transactions | 572 | ||
| Correct Procedures for U.S. Companies | 573 | ||
| Translating Foreign-Currency Financial Statements | 573 | ||
| Translation Methods | 573 | ||
| International Financial Issues | 576 | ||
| Capital Budgeting in a Global Context | 576 | ||
| Internal Sources of Funds | 578 | ||
| Global Cash Management | 579 | ||
| Foreign-Exchange Risk Management | 581 | ||
| Types of Exposure | 581 | ||
| Exposure-Management Strategy | 582 | ||
| Looking to the Future\rWill IFRS Become the Global Accounting Standard? | 584 | ||
| Case: H&M: The Challenges of Global Expansion and the Move to Adopt International Financial Reporting Standards | 586 | ||
| Endnotes | 588 | ||
| 20 Global Management of Human Resources | 589 | ||
| Case: Globalizing Your Career | 590 | ||
| International Human Resource Management | 592 | ||
| The Strategic Role of IHRM | 594 | ||
| IHRM’s Mission | 595 | ||
| The Perspective of the Expatriate | 595 | ||
| Who’s Who? | 595 | ||
| Trends in Expatriate Assignments | 596 | ||
| The Economics of Expatriates | 598 | ||
| The Enduring Constant | 598 | ||
| Staffing Frameworks in the MNE | 598 | ||
| The Ethnocentric Framework | 599 | ||
| The Polycentric Staffing Framework | 600 | ||
| The Geocentric Staffing Framework | 602 | ||
| Which Staffing Framework When? | 603 | ||
| Expatriate Selection | 604 | ||
| Technical Competence | 604 | ||
| Self-Orientation | 604 | ||
| Others-Orientation | 605 | ||
| Resourcefulness | 605 | ||
| Global Mindset | 605 | ||
| Expatriate Preparation and Development | 606 | ||
| Pre-Departure Preparation Programs | 607 | ||
| In-Country Development Programs | 608 | ||
| Family Matters | 608 | ||
| Point-Counterpoint\rEnglish: Destined to Be the\rGlobal Language? | 609 | ||
| Expatriate Compensation | 611 | ||
| Types of Compensation Plans | 612 | ||
| Components of Expatriate Compensation | 613 | ||
| Compensation Complications | 614 | ||
| Expatriate Repatriation | 614 | ||
| Repatriation Challenges | 615 | ||
| Improving Repatriation | 615 | ||
| Expatriate Failure | 616 | ||
| The Costs of Failure | 616 | ||
| The Wildcard | 617 | ||
| Looking to the Future\rI’m Going Where? The Changing Locations of International\rAssignments | 617 | ||
| Case: Tel-Comm-Tek: Selecting the Managing Director of its Indian Subsidiary | 618 | ||
| Endnotes | 621 | ||
| Glossary | 623 | ||
| Company and Trademarks Index | 633 | ||
| Name Index | 639 | ||
| Subject Index | 657 | ||
| Back Cover | Back Cover |