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International Business: The Challenges of Globalization, Fifth Edition

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International Business: The Challenges of Globalization, Fifth Edition

by John J. Wild; Kenneth L. Wild; Jerry C.Y. Han

Publisher: Prentice Hall

Copyright Year: 2010

Publishing Date: 2009/02/24

eText ISBN-10: 0-13-715383-X

eText ISBN-13: 978-0-13-715383-1

Print ISBN-10: 0-13-715375-9

Print ISBN-13: 978-0-13-715375-6

Course: International Business

Pages: 512

eTextbook $54.94

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Table of Contents | Description

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ABOUT THIS TITLE - TABLE OF CONTENTS

Dear Friends and Colleagues, xv

About the Authors, xxvii

Part 1. Global Business Environment, 2

Chapter 1. Globalization, 2

International Business Involves Us All, 4

Technology Makes It Possible, 4

Global Talent Makes It Happen, 5

Globalization, 6

Globalization of Markets, 6

Globalization of Production, 7

Forces Driving Globalization, 8

Global Challenges: Investing in Security Pays Dividends, 9

Falling Barriers to Trade and Investment, 9

Technological Innovation, 11

Measuring Globalization, 14

Untangling the Globalization Debate, 15

Today’s Globalization in Context, 15

Introduction to the Debate, 16

Globalization’s Impact on Jobs and Wages, 17

Globalization’s Impact on Labor, the Environment, and Markets, 19

Global Manager’s Briefcase: The Keys to Global Success, 20

Globalization and Income Inequality, 20

Globalization and National Sovereignty, 22

Globalization’s Influence on Cultures, 23

Culture Matters: The Global Consumer, 24

Key Players in International Business, 24

Multinational Corporations, 24

Entrepreneurs and Small Businesses, 25

Entrepreneur’s Toolkit: Debunking the Myths of Small Business Exporting, 26

Why International Business Is Special, 26

The Global Business Environment, 26

The Road Ahead for International Business, 28

Bottom Line for Business, 29

Chapter Summary, 30

Talk It Over, 31

Take It to the Web, 32

Ethical Challenges, 32

Practicing International Management Case: MTV Goes Global with a Local Beat, 33

Appendix: World Atlas, 35

Part 2. National Business Environments, 44

Chapter 2. Cross-Cultural Business, 44

What Is Culture?, 46

Culture Matters: Creating a Global Mind-set, 47

National Culture and Subcultures, 47

Components of Culture, 49

Values and Attitudes, 50

Entrepreneur’s Toolkit: Localize Your Web Site, 50

Manners and Customs, 54

Global Manager’s Briefcase: A Globetrotter’s Guide to Manners, 55

Social Structure, 56

Personal Communication, 63

Global Challenges: Speaking in Fewer Tongues, 64

Physical and Material Environments, 68

Classifying Cultures, 69

Kluckhohn–Strodtbeck Framework, 70

Hofstede Framework, 71

Bottom Line for Business, 73

Chapter Summary, 74

Talk It Over, 75

Take It to the Web, 76

Ethical Challenges, 76

Practicing International Management Case: A Tale of Two Cultures, 77

Chapter 3. Politics, Law, and Business Ethics, 78

Political Systems, 80

Politics and Culture, 80

Political Participation, 80

Political Ideologies, 81

Global Challenges: From Civil War to Civil Society, 83

Political Systems in Times of Change, 86

Political Risk, 86

Types of Political Risk, 86

Global Manager’s Briefcase: Your Global Security Checklist, 90

Managing Political Risk, 91

Legal Systems, 93

Culture Matters: Playing by the Rules, 94

Theocratic Law, 95

Standardization, 95

Intellectual Property, 96

Product Safety and Liability, 98

Antitrust Regulations, 98

Entrepreneur’s Toolkit: The Long Arm of the Law, 99

Ethics and Social Responsibility, 100

Philosophies of Ethics and Social Responsibility, 100

Corporate Social Responsibility Issues, 101

Business and International Relations, 106

The United Nations, 106

Bottom Line for Business, 107

Chapter Summary, 108

Talk It Over, 110

Teaming Up, 110

Take It to the Web, 111

Ethical Challenges, 111

Practicing International Management Case: Pirates of Globalization, 112

Chapter 4. Economics and Emerging Markets, 114

Economic Systems, 116

Centrally Planned Economy, 116

Emerging Market Focus: China, 118

Global Manager’s Briefcase: Guidelines for Good Guanxi, 119

Mixed Economy, 120

Market Economy, 121

Development of Nations, 126

Culture Matters: Foundations of Development, 127

National Production, 127

Purchasing Power Parity, 131

Human Development, 131

Classifying Countries, 132

Global Challenges: Public Health Goes Global, 133

Economic Transition, 134

Obstacles to Transition, 134

Emerging Market Focus: Russia, 135

Entrepreneur’s Toolkit: Russian Rules of the Game, 136

Bottom Line for Business, 137

Chapter Summary, 138

Talk It Over, 139

Teaming Up, 139

Take It to the Web, 140

Ethical Challenges, 140

Practicing International Management Case: Cuba Comes Off Its Sugar High, 141

Part 3. International Trade and Investment, 142

Chapter 5. International Trade, 142

Overview of International Trade, 144

Benefits of International Trade, 144

Volume of International Trade, 144

International Trade Patterns, 145

Trade Dependence and Independence, 148

Global Manager’s Briefcase: Building Good Relations in the Pacific Rim, 149

Theories of International Trade, 150

Mercantilism, 150

Absolute Advantage, 152

Comparative Advantage, 154

Factor Proportions Theory, 156

International Product Life Cycle, 157

Entrepreneur’s Toolkit: Five Fulfillment Mistakes, 159

New Trade Theory, 160

National Competitive Advantage, 160

Bottom Line for Business, 163

Chapter Summary, 164

Talk It Over, 165

Teaming Up, 165

Take It to the Web, 166

Ethical Challenges, 166

Practicing International Management Case: First in Asia and the World, 167

Chapter 6. Business–Government Trade Relations, 168

Why Do Governments Intervene in Trade?, 170

Political Motives, 170

Economic Motives, 172

Cultural Motives, 174

Methods of Promoting Trade, 175

Export Financing, 175

Entrepreneur’s Toolkit: Experts in Export Financing, 176

Foreign Trade Zones, 177

Special Government Agencies, 177

Global Manager’s Briefcase: Surfing the Regulatory Seas, 178

Methods of Restricting Trade, 178

Local Content Requirements, 181

Administrative Delays, 182

Currency Controls, 182

Global Trading System, 182

General Agreement on Tariffs and Trade (GATT), 183

World Trade Organization (WTO), 184

Bottom Line for Business, 187

Chapter Summary, 188

Talk It Over, 189

Teaming Up, 189

Take It to the Web, 189

Ethical Challenges, 190

Practicing International Management Case: Down with Dumping, 191

Chapter 7. Foreign Direct Investment, 192

Patterns of Foreign Direct Investment, 194

Ups and Downs of Foreign Direct Investment, 194

Worldwide Flows of FDI, 196

Entrepreneur’s Toolkit: The Cowboy of Manchuria, 196

Explanations for Foreign Direct Investment, 197

International Product Life Cycle, 197

Market Imperfections (Internalization), 197

Eclectic Theory, 198

Market Power, 199

Management Issues in the FDI Decision, 199

Purchase-or-Build Decision, 201

Production Costs, 201

Customer Knowledge, 202

Following Clients, 202

Following Rivals, 202

Global Manager’s Briefcase: Surprises of Investing Abroad, 203

Government Intervention in Foreign Direct Investment, 204

Balance of Payments, 204

Reasons for Intervention by the Host Country, 206

Reasons for Intervention by the Home Country, 207

Government Policy Instruments and FDI, 208

Host Countries: Promotion, 208

Host Countries: Restriction, 209

Home Countries: Promotion, 209

Home Countries: Restriction, 210

Bottom Line for Business, 210

Chapter Summary, 211

Talk It Over, 212

Teaming Up, 212

Take It to the Web, 213

Ethical Challenges, 213

Practicing International Management Case: World Class in Dixieland, 214

Chapter 8. Regional Economic Integration, 216

What Is Regional Economic Integration?, 218

Levels of Regional Integration, 218

Effects of Regional Economic Integration, 221

Benefits of Regional Integration, 221

Drawbacks of Regional Integration, 222

Integration in Europe, 223

European Union, 223

Entrepreneur’s Toolkit: Czech List, 228

European Free Trade Association (EFTA), 230

Integration in the Americas, 231

North American Free Trade Agreement (NAFTA), 231

Central American Free Trade Agreement (CAFTA-DR), 232

Andean Community (CAN), 233

Latin American Integration Association (ALADI), 234

Southern Common Market (MERCOSUR), 234

Central America and the Caribbean, 234

Free Trade Area of the Americas (FTAA), 235

Integration in Asia, 235

Association of Southeast Asian Nations (ASEAN), 235

Asia Pacific Economic Cooperation (APEC), 236

Global Manager’s Briefcase: The Ins and Outs of ASEAN, 236

Closer Economic Relations Agreement (CER), 237

Integration in the Middle East and Africa, 237

Gulf Cooperation Council (GCC), 237

Economic Community of West African States (ECOWAS), 237

African Union (AU), 238

Bottom Line for Business, 239

Chapter Summary, 239

Talk It Over, 241

Teaming Up, 241

Take It to the Web, 241

Ethical Challenges, 242

Practicing International Management Case: Global Trade Deficit in Food Safety, 243

Part 4. The International Financial System, 244

Chapter 9. International Financial Markets, 244

International Capital Market, 246

Purposes of National Capital Markets, 246

Purposes of the International Capital Market, 247

Entrepreneur’s Toolkit: Microfinance Makes a Big Impression, 248

Forces Expanding the International Capital Market, 249

World Financial Centers, 249

Main Components of the International Capital Market, 250

International Bond Market, 250

International Equity Market, 251

Eurocurrency Market, 252

Foreign Exchange Market, 253

Functions of the Foreign Exchange Market, 253

How the Foreign Exchange Market Works, 255

Quoting Currencies, 255

Spot Rates, 259

Forward Rates, 259

Swaps, Options, and Futures, 260

Foreign Exchange Market Today, 261

Trading Centers, 261

Important Currencies, 262

Institutions of the Foreign Exchange Market, 263

Global Manager’s Briefcase: Managing Foreign Exchange, 264

Currency Convertibility, 264

Goals of Currency Restriction, 264

Policies for Restricting Currencies, 265

Bottom Line for Business, 266

Chapter Summary, 266

Talk It Over, 268

Teaming Up, 268

Take It to the Web, 269

Ethical Challenges, 269

Practicing International Management Case: Argentina Into the Abyss, Then Out, and Now Back In?, 270

Chapter 10. International Monetary System, 272

How Exchange Rates Influence Business Activities, 274

Desire for Stability and Predictability, 275

What Factors Determine Exchange Rates?, 276

Law of One Price, 276

Purchasing Power Parity, 278

Forecasting Exchange Rates, 282

Efficient Market View, 282

Inefficient Market View, 283

Forecasting Techniques, 283

Difficulties of Forecasting, 283

Global Manager’s Briefcase: Adjusting to Currency Swings, 284

Evolution of the International Monetary System, 284

Early Years: The Gold Standard, 284

Bretton Woods Agreement, 286

A Managed Float System Emerges, 288

Today’s Exchange-Rate Arrangements, 289

European Monetary System, 289

Recent Financial Crises, 290

Future of the International Monetary System, 293

Bottom Line for Business, 294

Chapter Summary, 294

Talk It Over, 296

Teaming Up, 296

Take It to the Web, 297

Ethical Challenges, 297

Practicing International Management Case: Banking On Forgiveness, 298

Part 5. International Business Management, 300

Chapter 11. International Strategy and Organization, 300

International Strategy, 302

Strategy Formulation, 302

Identify Company Mission and Goals, 302

Identify Core Competency and Value-Creating Activities, 304

Entrepreneur’s Toolkit: Questions to Ask Before Going Global, 306

Formulate Strategies, 307

Global Manager’s Briefcase: Strategies for Emerging Market Companies, 311

International Organizational Structure, 312

Centralization Versus Decentralization, 313

Coordination and Flexibility, 314

Types of Organizational Structure, 315

Work Teams, 318

A Final Word, 319

Chapter Summary, 320

Talk It Over, 321

Teaming Up, 321

Take It to the Web, 322

Ethical Challenges, 322

Practicing International Management Case: IKEA’s Global Strategy, 323

Chapter 12. Analyzing International Opportunities, 324

Screening Potential Markets and Sites, 326

Step 1: Identity Basic Appeal, 326

Step 2: Assess the National Business Environment, 328

Global Manager’s Briefcase: Conducting Global e-Business, 332

Step 3: Measure Market or Site Potential, 333

Step 4: Select the Market or Site, 335

Conducting International Research, 338

Difficulties of Conducting International Research, 339

Sources of Secondary International Data, 340

Methods of Conducting Primary International Research, 343

Entrepreneur’s Toolkit: Is the World Your Oyster?, 344

A Final Word, 346

Chapter Summary, 346

Talk It Over, 347

Teaming Up, 347

Take It to the Web, 348

Ethical Challenges, 348

Practicing International Management Case: Vietnam’s Emerging Market Potential, 349

Chapter 13. Selecting and Managing Entry Modes, 350

Exporting, Importing, and Countertrade, 352

Why Companies Export, 352

Developing an Export Strategy: A Four-Step Model, 353

Degree of Export Involvement, 354

Avoiding Export and Import Blunders, 356

Countertrade, 357

Export/Import Financing, 357

Entrepreneur’s Toolkit: Collecting International Debts, 361

Contractual Entry Modes, 361

Franchising, 363

Management Contracts, 365

Turnkey Projects, 366

Investment Entry Modes, 367

Wholly Owned Subsidiaries, 367

Joint Ventures, 368

Strategic Alliances, 370

Selecting Partners for Cooperation, 371

Global Manager’s Briefcase: Negotiating Market Entry, 372

Strategic Factors in Selecting an Entry Mode, 373

Cultural Environment, 373

Political and Legal Environments, 373

Market Size, 373

Production and Shipping Costs, 373

International Experience, 374

A Final Word, 375

Chapter Summary, 375

Talk It Over, 376

Teaming Up, 376

Take It to the Web, 377

Ethical Challenges, 378

Practicing International Management Case: Telecom Ventures Unite the World, 379

Chapter 14. Developing and Marketing Products, 380

Globalization and Marketing, 382

Standardization Versus Adaptation, 382

Developing Product Strategies, 383

Laws and Regulations, 383

Cultural Differences, 384

Brand and Product Names, 384

National Image, 386

Counterfeit Goods and Black Markets, 386

Shortened Product Life Cycles, 387

Creating Promotional Strategies, 388

Push and Pull Strategies, 388

Global Manager’s Briefcase: Managing an International Sales Force, 389

International Advertising, 389

Blending Product and Promotional Strategies, 391

Designing Distribution Strategies, 394

Designing Distribution Channels, 394

Degree of Exposure, 394

Influence of Product Characteristics, 395

Special Distribution Problems, 395

Developing Pricing Strategies, 396

Worldwide Pricing, 396

Dual Pricing, 397

Factors That Affect Pricing Decisions, 397

A Final Word, 399

Chapter Summary, 399

Talk It Over, 400

Teaming Up, 400

Take It to the Web, 401

Ethical Challenges, 401

Practicing International Management Case: Psychology of Global Marketing, 402

Chapter 15. Managing International Operations, 404

Production Strategy, 406

Capacity Planning, 406

Facilities Location Planning, 406

Process Planning, 409

Facilities Layout Planning, 409

Acquiring Physical Resources, 410

Make-or-Buy Decision, 410

Raw Materials, 413

Fixed Assets, 413

Key Production Concerns, 414

Quality-Improvement Efforts, 414

Global Manager’s Briefcase: World Class Standards, 415

Shipping and Inventory Costs, 415

Reinvestment Versus Divestment, 416

Financing Business Operations, 416

Issuing Equity, 418

Entrepreneur’s Toolkit: Financing Small Business from Abroad, 419

Internal Funding, 419

Capital Structure, 420

A Final Word, 421

Chapter Summary, 422

Talk It Over, 423

Teaming Up, 423

Take It to the Web, 424

Ethical Challenges, 424

Practicing International Management Case: Toyota’s Strategy for Production Efficiency, 425

Chapter 16. Hiring and Managing Employees, 426

International Staffing Policy, 428

Ethnocentric Staffing, 428

Polycentric Staffing, 429

Geocentric Staffing, 430

Recruiting and Selecting Human Resources, 431

Human Resource Planning, 431

Entrepreneur’s Toolkit: Growing Global, 432

Recruiting Human Resources, 432

Selecting Human Resources, 433

Culture Shock, 433

Reverse Culture Shock, 433

Global Manager’s Briefcase: A Shocking Ordeal, 434

Training and Development, 435

Methods of Cultural Training, 435

Compiling a Cultural Profile, 437

Nonmanagerial Worker Training, 437

Employee Compensation, 437

Managerial Employees, 438

Nonmanagerial Workers, 438

Labor–Management Relations, 439

Importance of Labor Unions, 440

A Final Word, 440

Chapter Summary, 441

Talk It Over, 441

Teaming Up, 442

Take It to the Web, 442

Ethical Challenges, 442

Practicing International Management Case: Expatriation or Discrimination?, 443

Name/Company Index, 461

Subject Index, 463

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by John J. Wild ; Kenneth L. Wild ; Jerry C.Y. Han

eText ISBN-10: 0-13-214853-6

eText ISBN-13: 978-0-13-214853-5

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ABOUT THIS TITLE - DESCRIPTION

For introductory International Business courses with the need for a brief, accessible text. A comprehensive yet concise framework with unrivaled clarity. International Business: The Challenges of Globalization presents international business in a comprehensive yet concise framework with unrivaled clarity. Recent, real-world examples and engaging features brings the material to life for students.

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