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International Business

Book Description

Designed specifically for postgraduate students of management, International Business provides a well-rounded perspective on all important topics in the subject by emphasizing conceptual debates alongside contemporary research and up-to-date examples. It uses multiple frameworks that include the concept, environment, structure, and strategy of international business to examine the global business scenario. Comprising 23 chapters, the book traces the consequences of globalization, analyses the framework and strategies of international business, and discusses emerging issues in international business. Students can also access the online question bank.

Table of Contents

  1. Cover
  2. Title Page
  3. Brief Contents
  4. Contents
  5. About the Author
  6. Dedication
  7. Preface
  8. The Development of this Book
  9. Unit I: Foundations
    1. 1. Globalization and International Business
      1. Introduction
      2. Elements of Globalization
        1. Economic Globalization
        2. Cultural Globalization
        3. Political Globalization
      3. Drivers of Globalization
        1. Political Forces
        2. Economic Forces
        3. Technological Forces
      4. Industry Focus Social Networking
        1. Emergence of Global Governance
        2. Competitive Forces
      5. Region Focus Civets
      6. International Orientations
        1. Ethnocentric Orientation
        2. Polycentric Orientation
      7. International Business in Action Multi-Latinas
        1. Regiocentric Orientation
        2. Geocentric Orientation
      8. International versus Domestic Business
      9. Motives for Internationalization
      10. Two Decades of Shifting Wealth
      11. The Globalization Debate
        1. Arguments in Support of Globalization
        2. Concerns with Respect to Globalization
      12. Managerial Implications: Managing a Global Enterprise
        1. Terrorism
        2. Corruption
        3. Cultural Adjustment
      13. Closing Case The Japanese Road to Success
      14. Summary
      15. Key Terms
      16. Discussion Questions
      17. Mini Projects
    2. 2. Globalization of Business Structures: The Transnational Corporation
      1. Introduction
        1. Transnational Corporations
        2. TNCs from Developed and Developing Countries
      2. Non-Equity Modes of International Production
      3. Transnationality of Firms
      4. Changing Face of TNCs
      5. Evolution of TNCs
        1. Dragon TNCs
        2. Born Globals
      6. Industry Focus Accelerated Internationalization of the White Goods Sector
        1. Global Niche Players
        2. Micro TNCs
        3. State-Owned TNCs
      7. International Business in Action Changing Face of the Family Business in the Middle East
      8. Theories of Firm Internationalization
      9. Closing Case Globalization of the Brazilian Enterprise
      10. Summary
      11. Key Terms
      12. Discussion Questions
      13. Mini Projects
  10. Unit II: Global Business Environment
    1. 3. Economic Environment
      1. Introduction
      2. Economic Systems
        1. Free Market Economy
        2. Command Economy
        3. Mixed Economy
        4. Transition Economy
      3. Asian Capitalism
        1. Japan
        2. East Asian Countries
        3. China
      4. Economic Indicators
        1. Income Level and Distribution
        2. Economic Growth: GDP
      5. International Business in Action Daimler Expands in India
        1. Alternatives to GDP
        2. Inflation
        3. Infrastructure
      6. Region Focus The Making of a Global Giant
        1. Population
        2. Economic Stability
      7. Industry Focus Internationalization of Argentina's Manufacturing Sector
      8. Closing Case Index of Economic Freedom
      9. Summary
      10. Key Terms
      11. Discussion Questions
      12. Mini Projects
    2. 4. Political and Legal Environment
      1. Introduction
      2. Political Environment
        1. Political Ideologies and Systems
        2. Political Risk
      3. International Business in Action Google in China
      4. Legal Environment
        1. Legal Systems
        2. Legal Jurisdiction
      5. Region Focus Industrial Carnage in Bhopal
      6. Ethics in International Business
        1. Human Rights
      7. Industry Focus Articulating Corporate Values
        1. Environmental Issues
        2. Corruption and Bribery
      8. Closing Case Ethical Survival of TNCs
      9. Summary
      10. Key Terms
      11. Discussion Questions
      12. Mini Projects
    3. 5. Cultural Environment
      1. Introduction
        1. Culture and its Relevance for International Business
        2. Cultural Environment
      2. Elements of Culture
        1. Language
        2. Non-Verbal Communication
        3. Religion
        4. Values and Attitudes
      3. International Business in Action Islamic Banking
        1. Customs and Manners
        2. Aesthetics
      4. Industry Focus Emergence of the Creative Industry
      5. Cultural Dimensions in International Business
        1. Hofstede's Dimensions of Culture
        2. Schwartz's Classification
        3. Trompenaars' and Hampden-Turner's Classification
      6. Region Focus Hispanic Culture and Business
      7. Managerial Implications for International Business
      8. Closing Case Indianization of the World
      9. Summary
      10. Key Terms
      11. Discussion Questions
      12. Mini Projects
  11. Unit III: Framework of International Business
    1. 6. Strategizing Foreign Entry
      1. Introduction
        1. Motives of Firm Internationalization
        2. International Location Choice
      2. Entry-Mode Selection
        1. Trade-Related Entry Modes
      3. International Business in Action China Exports Power Equipment to India
        1. Contractual Entry Modes
      4. Region Focus Donut King in China
        1. Investment-Related Entry Modes
      5. Foreign Entry: An Evolutionary Process
      6. Managerial Implications
      7. Closing Case Challenges Faced by Chinese Companies Going Global
      8. Summary
      9. Key Terms
      10. Discussion Questions
      11. Mini Projects
    2. 7. International Trade Theories and Applications
      1. Introduction
      2. International Trade Theories
        1. Mercantilist Doctrine
        2. Classical Approach
        3. Factor Proportions Theory
        4. Leontief Paradox
        5. Linder's Income-Preference Similarity Theory
      3. International Business in Action US–China Trade Accord
        1. Human Skills and Technology-Based Views
        2. Product Life-Cycle Theory
        3. New Trade Theory
        4. National Competitive Advantage
      4. Theory Assessment
      5. Region Focus China's New Trade Partners
      6. Developments in World Trade
        1. Volume
        2. Composition
        3. Direction
        4. Service Trade
      7. Closing Case Fruit Salad from India
      8. Summary
      9. Key Terms
      10. Discussion Questions
      11. Mini Projects
    3. 8. Political Economy of International Trade
      1. Introduction
      2. Government Intervention in Trade
        1. Economic Rationale
        2. Non-Economic Rationale
      3. Instruments of Trade Control
        1. Tariff Barriers
      4. International Business in Action Banana Wars
        1. Non-Tariff Barriers
      5. Region Focus Brazilian Beef Exports
      6. Industry Focus Setting up Legal Shop in India
      7. International Trade Regulation
        1. General Agreement on Tariffs and Trade (GATT)
        2. World Trade Organization
      8. WTO Agreements
        1. General Agreement on Tariffs and Trade (GATT)
        2. General Agreement on Trade in Services (GATS)
        3. Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
        4. Agreement on Trade-Related Investment Measures (TRIMS)
      9. WTO: An Evaluation
        1. Developing-Country Issues
        2. Dispute-Resolution Mechanism
        3. Subsidies in Agriculture
        4. Trade in Services
        5. Future Challenges for WTO
      10. United Nations Conference on Trade and Development
        1. Functions of UNCTAD
        2. UNCTAD over the Years
      11. Foreign Trade in India
        1. Organizations for Export Promotion
        2. Export Incentives
        3. Marketing Assistance
        4. Production Assistance/Facilities
        5. Special Economic Zones (SEZs)
      12. Analysis of India's Foreign Trade
        1. Volume of India's Foreign Trade
        2. Composition of India's Foreign Trade
        3. Direction of India's Foreign Trade
      13. Closing Case Liberalization or Protectionism? The BRIICS Story
      14. Summary
      15. Key Terms
      16. Discussion Questions
      17. Mini Projects
    4. 9. Foreign Direct Investment: Theory and Application
      1. Introduction
      2. FDI: A Classification
        1. Asset-Based View
        2. Nature of Business Activity
        3. Motive-Based View
      3. Industry Focus Kobe Steel's Multi-Pronged Strategy for the Indian Market
      4. Modes of FDI Entry
        1. Branch Offices
        2. Strategic Alliances
        3. Wholly Owned Subsidiaries
        4. Umbrella Holding Companies
        5. Differences between Joint Ventures and Mergers
      5. International Business in Action Suzlon Energy: Post-Merger Blues
      6. Traditional Theories of FDI
        1. Perfect Market Hypothesis
        2. Industrial Organization Approach
        3. Transaction Cost Approach
        4. Eclectic Paradigm
      7. FDI Theories for Emerging-Market Firms
      8. Effects of FDI
        1. Host-Country Perspective
        2. Home-Country Perspective
      9. Region Focus Indian FDI in Africa
      10. Global FDI Patterns
        1. Trends in FDI
        2. Direction of FDI
        3. FDI Outflows
      11. Foreign Investment in India
        1. Policy Perspective
        2. Sectoral Dimensions of FDI Flows
        3. Geographical Composition
        4. Outward Indian FDI
      12. Closing Case Chinese Investment in Africa
      13. Summary
      14. Key Terms
      15. Discussion Questions
      16. Mini Projects
    5. 10. Regional Economic Integration
      1. Introduction
      2. Levels of Economic Integration
      3. Effects of Integration
        1. Trade Creation and Trade Diversion
        2. Reduced Import Prices
        3. Increased Competition and Economies of Scale
        4. Higher Factor Productivity
      4. Regional Trading Agreements
        1. European Union (EU)
      5. International Business in Action EU Restriction on the Use of Pesticides
        1. North American Free Trade Agreement (NAFTA)
      6. Region Focus US–South Korea Trade Pact
        1. Caricom
        2. Mercosur
        3. Andean Pact
        4. Association of Southeast Asian Nations (ASEAN)
        5. Asia-Pacific Economic Cooperation Forum (APEC)
        6. South Asian Association for Regional Cooperation (SAARC)
        7. Closer Economic Relations (CER)
        8. Economic Integration in Africa
      7. Commodity Arrangements
        1. Multi Fibre Arrangement (MFA)
        2. Organization of Petroleum Exporting Countries (OPEC)
      8. Closing Case The Future of OPEC
      9. Summary
      10. Key Terms
      11. Discussion Questions
      12. Mini Projects
  12. Unit IV: Global Monetary Environment
    1. 11. International Monetary and Financial System
      1. Introduction
      2. Basics of Foreign Exchange
        1. Exchange Rate Determination
        2. Currency Convertibility
      3. Monetary Systems till the Present
        1. The Gold Standard (1876–1914)
        2. The Inter-War Years and World War II (1914–44)
        3. The Bretton Woods System (1944–73)
        4. The Post–Bretton Woods System: 1973–Present
      4. Contemporary Exchange Rate Systems
        1. Fixed Rate System
        2. Independent Float System
        3. Arguments for the Fixed Exchange Rate System
      5. Exchange Rate Arrangements in Practice
        1. Hard Pegs
        2. Soft Pegs
        3. Floating Arrangements
        4. Target-Zone Arrangement
        5. Evaluation of the Floating System
      6. Currency Convertibility
      7. Industry Focus Currency Controls in Practice
      8. Region Focus Lessons from the Asian Financial Crisis
      9. Currency Crisis
      10. International Financial Systems
        1. Foreign Exchange Markets
      11. International Business in Action Venezuela's Exchange Rate Policy
        1. International Capital Markets
      12. International Financial Institutions
        1. International Monetary Fund (IMF)
        2. World Bank Group
        3. Asian Development Bank
        4. African Development Bank
        5. African Development Fund (ADF)
        6. Nigeria Trust Fund (NTF)
      13. Closing Case The Indian Experience with Convertibility
      14. Summary
      15. Key Terms
      16. Discussion Questions
      17. Mini Projects
    2. 12. Financing of Global Operations
      1. Introduction
      2. Multinational Financial Management
        1. Capital Budgeting
        2. Global Business Finance
        3. Financial Structure of the TNC
      3. International Trade Payment and Finance
        1. International Trade Payment
        2. International Trade Finance
      4. International Trade Credit
      5. Region Focus US EXIM Bank
      6. Foreign Exchange Risk and Exposure
        1. Transaction Exposure
      7. Industry Focus Hedging in the Shipping Industry
      8. International Business in Action Forex Losses for HCL
        1. Economic Exposure
        2. Translation Exposure
      9. Working Capital Management
        1. Cash Management
        2. Foreign Receivable Management
      10. Closing Case The Brave New World of Sovereign Wealth Funds
      11. Summary
      12. Key Terms
      13. Discussion Questions
      14. Mini Projects
    3. 13. International Balance of Payments
      1. Introduction
      2. Fundamentals of Balance of Payments Accounting
        1. Defining International Economic Transactions
        2. The BOP as a Cash Flow Statement
        3. BOP Accounting: Double-Entry Bookkeeping
      3. Types of Balance of Payments Accounts
        1. Current Account
      4. International Business in Action Capital Controls in Chile
        1. Capital and Financial Account
        2. Net Errors and Omissions
        3. Official Reserves Account
      5. Region Focus The Vulnerability of Foreign Credit
      6. The Balance of Payments in Totality
      7. Different Approaches to Adjustment
        1. Classical Viewpoint
        2. Elasticity Approach
        3. Keynesian Approach
        4. Monetary Approach
      8. Closing Case Managing Capital Flows in Emerging Market Economies (EMEs)
      9. Summary
      10. Key Terms
      11. Discussion Questions
      12. Mini Projects
  13. Unit V: Global Business Strategy
    1. 14. Alliances and Acquisitions
      1. Introduction
      2. Strategic Alliances
        1. Equity-Based Alliances
        2. Contractual Alliances
      3. International Business in Action R&D in Canadian Aerospace
      4. Industry Focus Cisco and Tata Consultancy Services Announce Strategic Alliance
      5. Rationale for Strategic Alliances
        1. Risk Reduction and Cost Spreading
        2. Acquisition of Knowledge and Resources
        3. Benefits of Economies of Scale and Scope
        4. Bypassing Barriers to Entry
        5. Acceptance in the Local Market
        6. Ability to Face Competition
      6. Building Strategic Alliances
        1. The Decision to Cooperate
        2. Contract or Equity
        3. Alliance Evolution
        4. Performance of the Alliance
        5. Alliance Management
      7. Alliances: An Evaluation
      8. Acquisitions
        1. Reasons for Acquisitions
        2. Acquisitions: An Evaluation
      9. Region Focus India's Cross-Border M&As
      10. Closing Case Forging Links in Israel
      11. Summary
      12. Key Terms
      13. Discussion Questions
      14. Mini Projects
    2. 15. Technology and Innovation
      1. Introduction
      2. Technology
      3. Region Focus Globalization of the Indian IT Industry
      4. Technological Innovation
      5. The National Innovation System
        1. Education and Training
        2. Science and Technology Capabilities
        3. Research and Development
        4. Interactions within the Innovation System
      6. Patents and Innovation
      7. Technology Transfer
      8. Information and Communications Technology (ICT)
      9. The Internet
      10. Industry Focus Computers and Cakes Give Cash and Confidence to Peruvian Housewives
      11. E-Commerce: An Overview
        1. E-Commerce vs e-Business
        2. Types of E-Commerce
        3. Advantages and Disadvantages of E-Commerce
      12. Drivers of E-Commerce
        1. Global Factors
        2. Demographic Factors
        3. Economic and Financial Resources
        4. Information Infrastructure
        5. Industry Structure
        6. National Policy
      13. International Business in Action E-Commerce in Community-Based Tourism
      14. Biotechnology
      15. Virtual Worlds and the Transformation of Business
      16. Mangerial Implications
      17. Closing Case The GM Controversy
      18. Summary
      19. Key Terms
      20. Discussion Questions
      21. Mini Projects
    3. 16. International Organizational Structures and Design
      1. Introduction
      2. Early Organizational Structures
      3. International Division Structure
      4. Global Organizational Structures
        1. International Structural Stages Model
        2. Global Product Structure
        3. Global Area Structure
      5. Industry Focus Organizational Rethink at Kimberly-Clark
        1. Global Functional Structure
      6. International Business in Action Kraft Foods Adopts a Global Structure
        1. Mixed Structure
        2. Matrix Structure
        3. Transnational Network Structure
      7. Organizational Strategy and Structure
      8. Closing Case A Century of Change
      9. Summary
      10. Key Terms
      11. Discussion Questions
      12. Mini Projects
  14. Unit VI: Building Functional Excellence
    1. 17. International Marketing
      1. Introduction
      2. International Market Assessment
      3. The Marketing Mix
        1. Product
      4. Industry Focus MTV in Pakistan
        1. Promotion Strategy
      5. International Business in Action Luxury Cars Target the Indian Market
        1. Pricing Strategy
        2. Distribution
      6. Region Focus Chocolate for China
      7. Closing Case Made for India
      8. Summary
      9. Key Terms
      10. Discussion Questions
      11. Mini Projects
    2. 18. International Human Resource Management
      1. Introduction
      2. Recruitment and Selection
        1. Ethnocentric Orientation
        2. Polycentricity
        3. Geocentric Approach
      3. Region Focus Talent Management at the Tatas
        1. Regiocentricity
      4. Training and Development
        1. Cross-Cultural Training
        2. Language Training
        3. Specific Skills Training
      5. Industry Focus Developing a Global Mindset
      6. Compensation
      7. International Business in Action Gearing up to Meet China's Talent Shortage
      8. International Labour Relations
      9. International Labour Standards
      10. Closing Case The Expat Experience of Working in China
      11. Summary
      12. Key Terms
      13. Discussion Questions
      14. Mini Projects
    3. 19. International Operations
      1. Introduction
      2. Supply-Chain Management
      3. Industry Focus The Fashion Supply Chain
      4. International Logistics
      5. Global Supply Chain Decisions
        1. Quality
        2. Third-Party Logistics (3PL)
        3. Location Decisions
        4. Production Decisions
      6. Region Focus E-Sourcing
        1. Purchasing Decision
        2. Inventory Decisions
      7. International Business in Action The Bullwhip Effect in American Manufacturing
        1. International Packaging Issues
        2. International Storage Issues
        3. Transportation Decisions
      8. Closing Case Walmart's Strategy
      9. Summary
      10. Key Terms
      11. Discussion Questions
      12. Mini Projects
    4. 20. Accounting for International Business
      1. Introduction
      2. The Accounting System
      3. Region Focus Transparency in UK Banking
        1. National and International Accounting Standards
        2. The Incarnation of IFRS: How it Came into Being
        3. Consolidation and Currency Translation
        4. Taxation
      4. International Business in Action Indian FDI through Mauritius
        1. Triple Bottom Line Accounting
      5. Indian Accounting Practices
        1. IFRS: A Change for the Better
      6. Closing Case Doing Business in the Bahamas
      7. Summary
      8. Key Terms
      9. Discussion Questions
      10. Mini Projects
  15. Unit VII: Emerging Issues in International Business
    1. 21. Environmental Issues for International Business
      1. Introduction
      2. Climate Change
      3. Trans-Boundary Pollution
      4. International Business in Action Oil Pollution in Ecuadorian Rainforests
      5. International Legal Frameworks
      6. Kyoto Protocol
        1. International Emissions Trading
        2. Ethics of Carbon Trading
      7. Region Focus Biodiesel from Pongamia Pinnata429
      8. Environmental Protection and Business Strategy
      9. Industry Focus Initiatives at Hewlett-Packard
      10. Wind-Power Industry
      11. Environmental Management
      12. Closing Case French Energy Subsidies Fuel Solar Power
      13. Summary
      14. Key Terms
      15. Discussion Questions
      16. Mini Projects
    2. 22. Global Outsourcing
      1. Introduction
      2. Forms of Outsourcing
      3. Drivers of Outsourcing
        1. Theory of Comparative Advantage
        2. Concentration on Core Competency
        3. Developments in Technology
        4. Existence of Low-Cost, Skilled Manpower
        5. Changes in Regulatory Environment
        6. Infrastructural and Institutional Development
      4. Factors behind a Decision to Outsource
      5. Industry Focus Legal Outsourcing
        1. Technical and Institutional Separability
        2. Standardization and Automation
        3. Cost Minimization
        4. Market Size
      6. Software Industry in India
      7. International Business in Action Product Development in China
      8. Public Policies and the Development of India's Software Exports
      9. Developments in the IT–BPO Sector
      10. Growth Drivers of India's ITES–BPO Sector
        1. Abundant Talent
        2. Sustained Cost Competitiveness
        3. Continued Focus on Quality
        4. World-Class Information Security Environment
        5. Rapid Growth in Key Business Infrastructure
        6. Enabling Business Policy and Regulatory Environment
      11. Problems and Pitfalls of the ITES–BPO Industry
        1. Appreciation of the Rupee
        2. Poor Infrastructure
        3. Increasing Demand for Trained Manpower
        4. Employee Dissatisfaction and High Attrition Rates
        5. Intensifying Competition
        6. Future Threats
      12. IT Value Chain
      13. Region Focus Moving beyond the Back Office
      14. Managerial Perspective
      15. Closing Case Indian Software Industry: The Move up the Value Chain
      16. Summary
      17. Key Terms
      18. Discussion Questions
      19. Mini Projects
    3. 23. International Entrepreneurship
      1. Introduction
      2. New International Ventures
      3. Motives of Accelerated Internationalization
      4. Perspectives on International Entrepreneurship
        1. Strategic Management Perspective
        2. Individuals and Opportunities
        3. Entrepreneurship as a Capability
      5. International Business in Action Avapreneurship and Born Virtuals
      6. Characteristics of Accelerated Internationalization
        1. Speed of Internationalization
        2. Geographic Scope of Internationalization
        3. Foreign Sales
      7. Industry Focus The Growth of Alibaba.com
      8. Entrepreneurial Orientation
        1. Personal Factors
        2. Networks of Information
        3. Financial Resources
        4. Institutional Factors
      9. Managerial Perspective
      10. Closing Case Born Global Acquirers from India
      11. Summary
      12. Key Terms
      13. Discussion Questions
      14. Mini Projects
  16. Notes
    1. Preface
    2. Chapter 1
    3. Chapter 2
    4. Chapter 3
    5. Chapter 4
    6. Chapter 5
    7. Chapter 6
    8. Chapter 7
    9. Chapter 8
    10. Chapter 9
    11. Chapter 10
    12. Chapter 11
    13. Chapter 13
    14. Chapter 14
    15. Chapter 15
    16. Chapter 16
    17. Chapter 17
    18. Chapter 18
    19. Chapter 19
    20. Chapter 20
    21. Chapter 21
    22. Chapter 22
    23. Chapter 23
  17. Acknowledgements
  18. Copyright