International Business: A Managerial Perspective, 9th Edition PDF by Ricky W. Griffin and Michael W. Pustay

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International Business: A Managerial Perspective, Ninth Edition

By Ricky W. Griffin and Michael W. Pustay

International Business A Managerial Perspective Ninth Edition

Contents:

Maps 19

Preface 21

Acknowledgments 28

About the Authors 29

PART 1 The World’s Marketplaces 30

Chapter 1 An Overview of International Business 30

The Business of the FIFA World Cup 31

What Is International Business? 32

■ BRINGING THE WORLD INTO FOCUS: Borders Do Matter 33

Why Study International Business? 33

International Business Activities 35

■ BRINGING THE WORLD INTO FOCUS: The Early Era of International Business 35

Exporting and Importing 36

International Investments 36

Other Forms of International Business Activity 37

The Contemporary Causes of Globalization 38

Strategic Imperatives 40

The Environmental Causes of Globalization 41

Globalization and Emerging Markets 41

■ EMERGING OPPORTUNITIES: Is Globalization Good for Us? 42

An Overview of the Contents of This Book 44

CHAPTER REVIEW 46 • Summary 46 • Questions for Discussion 46

  • Building Global Skills 47

■ CLOSING CASE: Demography Is Destiny 47

Endnotes 50

Chapter 2 Global Marketplaces and Business Centers 52

The Northwest Passage 53

The Marketplaces of North America 54

The United States 54

■ EMERGING OPPORTUNITIES: Classifying Countries by Income Levels 56

Canada 57

Mexico 58

Central America and the Caribbean 58

■ BRINGING THE WORLD INTO FOCUS: The Canals of Commerce 58

The Marketplaces of Western Europe 59

■ BRINGING THE WORLD INTO FOCUS: The EU’s Growth Engine 61

The Marketplaces of Eastern Europe and Central Asia 62

The Marketplaces of Asia 65

Japan 65

Australia and New Zealand 65

The Four Tigers 67

China 69

India 71

Southeast Asian Countries 71

The Marketplaces of Africa and the Middle East 71

Africa 72

Middle East 72

■ EMERGING OPPORTUNITIES: Location, Location, Location 74

The Marketplaces of South America 75

CHAPTER REVIEW 77 • Summary 77 • Questions for Discussion 78 •

Building Global Skills 78

■ CLOSING CASE: Fracturing the Energy Market 79

Endnotes 81

Chapter 3 Legal, Technological, and Political Environments 82

Tiny Islands, Big Trouble 83

The Legal Environment 84

■ E-WORLD: Cyber Privacy 85

Differences in Legal Systems 85

■ VENTURING ABROAD: How Important Is the Rule of Law? 88

Domestically Oriented Laws 89

Laws Directly Affecting International Business Transactions 89

Laws Directed against Foreign Firms 90

The Impacts of MNCs on Host Countries 91

Dispute Resolution in International Business 92

The Technological Environment 94

■ VENTURING ABROAD: Technology Transfer: Does China Play Fair? 95

The Political Environment 98

Political Risk 98

CHAPTER REVIEW 101 • Summary 101 • Questions for Discussion 101 •

Building Global Skills 102

■ CLOSING CASE: Sour Oil, Soured Deal 102

Endnotes 104

Chapter 4 The Role of Culture 106

Bollywood, Hollywood, and Nollywood 107

Characteristics of Culture 108

■ E-WORLD: The Internet, National Competitiveness, and Culture 109

Elements of Culture 109

■ BRINGING THE WORLD INTO FOCUS: Japan’s Demographic and Cultural

Challenges 110

Social Structure 111

Language 112

Communication 116

Religion 118

■ BRINGING THE WORLD INTO FOCUS: Islamic Finance 120

Values and Attitudes 121

Seeing the Forest, Not the Trees 123

Hall’s Low-Context–High-Context Approach 123

The Cultural Cluster Approach 124

Hofstede’s Six Dimensions 126

Social Orientation 126

Power Orientation 128

Uncertainty Orientation 129

Goal Orientation 131

Time Orientation 131

Indulgence-Restraint Orientation 132

International Management and Cultural Differences 133

Understanding New Cultures 133

■ VENTURING ABROAD: Mcdonald’s Fits In 133

CHAPTER REVIEW 134 • Summary 134 • Questions for

Discussion 135 • Building Global Skills 135

■ CLOSING CASE: Quacking Up a Storm of Business 136

Endnotes 137

Chapter 5 Ethics and Social Responsibility in International

Business 140

A Fair Trade for Tea 141

The Nature of Ethics and Social Responsibility in

International Business 142

Ethics in Cross-Cultural and International Contexts 145

How an Organization Treats Its Employees 145

How Employees Treat the Organization 147

How Employees and the Organization Treat Other Economic Agents 147

Managing Ethical Behavior across Borders 148

Guidelines and Codes of Ethics 148

■ VENTURING ABROAD: Paying the Price? 149

Ethics Training 149

Organizational Practices and the Corporate Culture 150

Corporate Social Responsibility in Cross-Cultural and International

Contexts 151

The Economic Mission 151

Sustainability and the Natural Environment 151

■ PEOPLE, PLANET, AND PROFITS: Lions and Tigers and Bears, Oh My! 152

General Social Welfare 153

Managing Social Responsibility across Borders 155

Approaches to Social Responsibility 155

Managing Compliance 156

■ PEOPLE, PLANET, AND PROFITS: E-Waste 157

Informal Dimensions of Social Responsibility 158

Evaluating Social Responsibility 159

Difficulties of Managing CSR across Borders 160

The Anglo-Saxon Approach 160

The Asian Approach 160

The Continental European Approach 160

Regulating International Ethics and Social Responsibility 161

■ EMERGING OPPORTUNITIES: Conflict Diamonds 162

CHAPTER REVIEW 163 • Summary 163 • Questions for

Discussion 163 • Building Global Skills 164

■ CLOSING CASE: Rana Plaza 164

Endnotes 166

■ PART 1: CLOSING CASES: A Pipeline of Good Intentions 168

The Oil Curse 170

PART 2 The International Environment 172

Chapter 6 International Trade and Investment 172

Trade is Blossoming 173

International Trade and the World Economy 174

Classical Country-Based Trade Theories 175

Mercantilism 176

Absolute Advantage 176

Comparative Advantage 177

Comparative Advantage with Money 178

■ BRINGING THE WORLD INTO FOCUS: The Lincoln Fallacy 179

Relative Factor Endowments 180

Modern Firm-Based Trade Theories 183

Product Life Cycle Theory 183

Country Similarity Theory 185

New Trade Theory 185

Porter’s Theory of National Competitive Advantage 187

■ VENTURING ABROAD: Birds of a Feather Flock Together 189

An Overview of International Investment 189

Types of International Investments 189

■ VENTURING ABROAD: The New Player in Global Capital Markets: Sovereign

Wealth Funds 191

The Growth of FDI 192

FDI and the United States 192

International Investment Theories 193

Ownership Advantages 194

Internalization Theory 194

Dunning’s Eclectic Theory 194

Factors Influencing FDI 195

Supply Factors 195

Demand Factors 196

Political Factors 197

CHAPTER REVIEW 197 • Summary 197 • Questions for

Discussion 198 • Building Global Skills 198

■ CLOSING CASE: The Growing Trade in Growing Grapes 199

Endnotes 201

Chapter 7 The International Monetary System and the Balance of

Payments 202

It ain’t Necessarily so 203

History of the International Monetary System 204

The Gold Standard 204

The Collapse of the Gold Standard 205

The Bretton Woods Era 207

The End of the Bretton Woods System 210

Performance of the International Monetary System since 1971 211

■ BRINGING THE WORLD INTO FOCUS: Fixed Versus Flexible Exchange Rates 213

■ BRINGING THE WORLD INTO FOCUS: Should Bretton Woods Be Restored? 215

The BOP Accounting System 216

The Major Components of the BOP Accounting System 217

■ BRINGING THE WORLD INTO FOCUS: Ben Franklin, World Traveler 221

The U.S. BOP in 2017 222

Defining BOP Surpluses and Deficits 224

CHAPTER REVIEW 226 • Summary 226 • Questions for

Discussion 226 • Building Global Skills 227

■ CLOSING CASE: Recent U.S. BOP Performance: Is the Sky Falling? 228

Endnotes 229

Chapter 8 Foreign Exchange and International Financial Markets 230

The Dutch Disease 231

The Economics of Foreign Exchange 232

■ BRINGING THE WORLD INTO FOCUS: A Brief Hint 234

The Structure of the Foreign-Exchange Market 235

The Role of Banks 235

Spot and Forward Markets 238

Arbitrage and the Currency Market 240

■ BRINGING THE WORLD INTO FOCUS: The Big Mac Index 242

The International Capital Market 246

Major International Banks 246

■ VENTURING ABROAD: The Carry Trade 246

The Eurocurrency Market 248

The International Bond Market 248

Global Equity Markets 249

Offshore Financial Centers 250

CHAPTER REVIEW 251 • Summary 251 • Questions for

Discussion 251 • Building Global Skills 252

■ CLOSING CASE: What Is Next for Chinese Manufacturing? 252

Endnotes 253

Chapter 9 Formulation of National Trade Policies 254

Say Cheese, Please 255

Rationales for Trade Intervention 256

Industry-Level Arguments 256

National Trade Policies 260

Barriers to International Trade 263

Tariffs 263

■ VENTURING ABROAD: Toyota’s Politics Is Local 264

Nontariff Barriers 265

■ BRINGING THE WORLD INTO FOCUS: The Fight Over Rare Earths 269

Promotion of International Trade 271

Subsidies 271

Foreign Trade Zones 272

■ PEOPLE, PLANET, AND PROFITS: Cotton Subsidies and World Poverty 273

Export Financing Programs 274

Controlling Unfair Trade Practices 274

Countervailing Duties 275

Antidumping Regulations 275

Should Countries Enforce Their Unfair Trade Practice Laws? 276

Safeguards 276

CHAPTER REVIEW 277 • Summary 277 • Questions for

Discussion 277 • Building Global Skills 278

■ CLOSING CASE: Which Way for Huawei? 278

Endnotes 280

Chapter 10 International Cooperation Among Nations 282

Trade and Prosperity: The Case of Mexico 283

The General Agreements on Tariffs and Trade and the World Trade

Organization 284

The Role of the General Agreement on Tariffs and Trade 284

■ PEOPLE, PLANET, AND PROFITS: Protecting Endangered Species 285

■ BRINGING THE WORLD INTO FOCUS: Most Nations are Favored 286

The World Trade Organization 287

Regional Economic Integration 289

Forms of Economic Integration 289

The Impact of Economic Integration on Firms 290

The European Union 291

■ BRINGING THE WORLD INTO FOCUS: How do you Unscramble

an Omelette? 293

Governing the EU 294

The Struggle to Create a Common Market 298

■ VENTURING ABROAD: Lobbying the European Union 299

From Common Market to European Union 299

■ BRINGING THE WORLD INTO FOCUS: Rodrik’s Globalization Trilemma 303

Other Regional Trading Blocs 304

The North American Free Trade Agreement 304

Other Free Trade Agreements in the Americas 304

Trade Arrangements in the Asia-Pacific Region 307

■ BRINGING THE WORLD INTO FOCUS: One Belt, One Road 309

African Initiatives 310

CHAPTER REVIEW 311 • Summary 311 • Questions for

Discussion 312 • Building Global Skills 312

■ CLOSING CASE: The European Union’s Challenges 312

Endnotes 315

■ PART 2: CLOSING CASES: Twenty-First Century Pirates 316

Jumbo Battle over Jumbo Jets 317

Green Energy and Free Trade 318

PART 3 Managing International Business 322

Chapter 11 International Strategic Management 322

Global Mickey 323

The Challenges of International Strategic Management 324

■ EMERGING OPPORTUNITIES: How Does A Japanese Firm Compete In China? . . .

Act More American 327

Strategic Alternatives 328

■ VENTURING ABROAD: Master of the Furniture Universe 330

Components of an International Strategy 332

Distinctive Competence 332

Scope of Operations 332

Resource Deployment 333

Synergy 333

Developing International Strategies 334

Mission Statement 334

Environmental Scanning and the SWOT Analysis 334

Strategic Goals 336

Tactics 337

Control Framework 337

■ E-WORLD: Nokia: No Longer King of the Hill 338

Levels of International Strategy 339

Corporate Strategy 339

Business Strategy 341

Functional Strategies 342

CHAPTER REVIEW 343 • Summary 343 • Questions for

Discussion 344 • Building Global Skills 344

■ CLOSING CASE: The House of Tata 345

Endnotes 347

Chapter 12 Strategies for Analyzing and Entering Foreign Markets 348

The Business of Luxury 349

Foreign Market Analysis 350

Assessing Alternative Foreign Markets 350

■ EMERGING OPPORTUNITIES: The Bottom of the Pyramid 352

Evaluating Costs, Benefits, and Risks 353

Choosing a Mode of Entry 354

Exporting to Foreign Markets 357

Forms of Exporting 359

Additional Considerations 361

■ EMERGING OPPORTUNITIES: It is Important to know Your Importance 362

Export Intermediaries 363

International Licensing 364

Basic Issues in International Licensing 366

Advantages and Disadvantages of International Licensing 367

International Franchising 368

Basic Issues in International Franchising 368

Advantages and Disadvantages of International Franchising 369

Specialized Entry Modes for International Business 370

Contract Manufacturing 370

Management Contract 370

Turnkey Project 370

■ EMERGING OPPORTUNITIES: Business Process Outsourcing 371

Foreign Direct Investment 372

The Greenfield Strategy 372

The Acquisition Strategy 373

Joint Ventures 373

CHAPTER REVIEW 374 • Summary 374 • Questions for

Discussion 375 • Building Global Skills 375

■ CLOSING CASE: Whirlpool: A Global Vortex 376

Endnotes 378

Chapter 13 International Strategic Alliances 380

The Hanseatic League 381

International Corporate Cooperation 382

Benefits of Strategic Alliances 383

Ease of Market Entry 384

Shared Risk 384

Shared Knowledge and Expertise 385

Synergy and Competitive Advantage 385

Scope of Strategic Alliances 386

Comprehensive Alliances 386

Functional Alliances 386

■ VENTURING ABROAD: Sky-High Alliances: Gulf Carriers and

the Global Airline Alliances 388

Implementation of Strategic Alliances 390

Selection of Partners 390

Form of Ownership 391

■ VENTURING ABROAD: NASA takes Google into Space 391

■ PEOPLE, PLANET, AND PROFITS: Alliances for Good 392

Joint Management Considerations 393

Pitfalls of Strategic Alliances 395

Incompatibility of Partners 395

■ EMERGING OPPORTUNITIES: Xi’s in Charge 396

Access to Information 397

Conflicts over Distributing Earnings 397

Loss of Autonomy 397

Changing Circumstances 398

CHAPTER REVIEW 398 • Summary 398 • Questions for

Discussion 399 • Building Global Skills 399

■ CLOSING CASE: Look Before You Leap 400

Endnotes 401

Chapter 14 International Organization Design and Control 404

Alshaya’s Matrix Design 405

The Nature of International Organization Design 406

Global Organization Designs 407

Global Product Design 408

Global Area Design 409

Global Functional Design 410

Global Customer Design 410

Global Matrix Design 412

Hybrid Global Designs 413

Related Issues in Global Organization Design 415

Centralization versus Decentralization 415

Role of Subsidiary Boards of Directors 415

■ BRINGING THE WORLD INTO FOCUS: Lenovo Spreads Its Global Wings 416

Coordination in the Global Organization 417

The Control Function in International Business 418

Strategic Control 418

Organizational Control 420

Operations Control 423

Managing the Control Function in International Business 423

Establishing International Control Systems 423

■ PEOPLE, PLANET, AND PROFITS: Toward Zero Waste? 424

Essential Control Techniques 426

Behavioral Aspects of International Control 428

CHAPTER REVIEW 430 • Summary 430 • Questions for

Discussion 430 • Building Global Skills 431

■ CLOSING CASE: Mining a New Organization Design 431

Endnotes 432

Chapter 15 Leadership and Employee Behavior in International

Business 434

BP’s Dirty Reputation 435

Individual Behavior in International Business 436

Personality Differences across Cultures 436

Attitudes across Cultures 439

Perception across Cultures 440

Stress across Cultures 441

■ BRINGING THE WORLD INTO FOCUS: Stressing Out in the Call Centers 441

Motivation in International Business 442

Needs and Values across Cultures 442

Motivational Processes across Cultures 443

Need-Based Models across Cultures 443

Process-Based Models across Cultures 444

The Reinforcement Model across Cultures 445

Leadership in International Business 445

Contemporary Leadership Theory 445

The GLOBE Leadership Project 448

Decision Making in International Business 449

Models of Decision Making 449

The Normative Model across Cultures 450

The Descriptive Model across Cultures 451

Groups and Teams in International Business 452

The Nature of Group Dynamics 452

■ VENTURING ABROAD: Mixing and Matching in a Joint Venture 452

Managing Cross-Cultural Teams 453

CHAPTER REVIEW 454 • Summary 454 • Questions for

Discussion 455 • Building Global Skills 455

■ CLOSING CASE: Leadership Issues At Toyota 455

Endnotes 457

■ PART 3: CLOSING CASES: Reinventing Nissan 459

Unilever Matches Strategy and Structure 461

The European Cereal Wars 463

PART 4 Managing International Business Operations 464

Chapter 16 International Marketing 464

Conquering With Stalls 465

International Marketing Management 466

International Marketing and Business Strategies 466

The Marketing Mix 468

■ EMERGING OPPORTUNITIES: Pretty Garlic 469

Standardization versus Customization 469

Product Policy 472

Standardized Products or Customized Products? 473

Legal Forces 473

Cultural Influences 473

■ PEOPLE, PLANET, AND PROFITS: Milking Coconuts for Fun and Profit 474

Economic Factors 475

Brand Names 475

Pricing Issues and Decisions 476

Pricing Policies 476

Market Pricing 477

Promotion Issues and Decisions 479

Advertising 479

■ VENTURING ABROAD: Putting the Greek into Yogurt 480

Personal Selling 481

■ E-WORLD: ¿Qué Pasa in the Ad Agency? 482

Sales Promotion 483

Public Relations 483

Distribution Issues and Decisions 484

International Distribution 484

Channels of Distribution 485

CHAPTER REVIEW 488 • Summary 488 • Questions for

Discussion 488 • Building Global Skills 489

■ CLOSING CASE: Novica Opens Doors Across National Boundaries 489

Endnotes 490

Chapter 17 International Operations Management 492

Racing To Market 493

The Nature of International Operations Management 494

The Strategic Context of International Operations Management 495

■ PEOPLE, PLANET, AND PROFITS: Cooking up What’s Good for the World 496

Complexities of International Operations Management 496

Production Management 497

Supply Chain Management and Vertical Integration 497

Location Decisions 501

■ BRINGING THE WORLD INTO FOCUS: Unileveraging Their Strengths 501

International Logistics and Materials Management 504

■ BRINGING THE WORLD INTO FOCUS: A Stitch in Time: H&M 505

International Service Operations 507

Characteristics of International Services 507

The Role of Government in International Services Trade 508

Managing Service Operations 508

Managing Productivity in International Business 509

Managing Quality in International Business 510

Managing Information in International Business 512

CHAPTER REVIEW 513 • Summary 513 • Questions for

Discussion 514 • Building Global Skills 514

■ CLOSING CASE: From Dried Fish to Folding Phones 515

Endnotes 517

Chapter 18 International Financial Management 518

Singapore Airlines’ Worldwide Financial Management 519

Financial Issues in International Trade 519

Choice of Currency 520

Credit Checking 520

Method of Payment 520

Financing Trade 527

Managing Foreign Exchange Risk 528

Transaction Exposure 528

Translation Exposure 531

Economic Exposure 531

Management of Working Capital 534

Minimizing Working Capital Balances 534

Minimizing Currency Conversion Costs 535

Minimizing Foreign-Exchange Risk 536

International Capital Budgeting 537

Net Present Value 537

Internal Rate of Return 538

Payback Period 538

Sources of International Investment Capital 539

External Sources of Investment Capital 539

Internal Sources of Investment Capital 540

Strategic Use of Transfer Pricing 541

Tax Havens 543

■ EMERGING OPPORTUNITIES: Sun, Sand, and Shells 544

CHAPTER REVIEW 545 • Summary 545 • Questions for

Discussion 546 • Building Global Skills 546

■ CLOSING CASE: Tax Wars 547

Endnotes 549

Chapter 19 International Human Resource Management and Labor

Relations 552

An Emerging Voice for Workers 553

The Nature of International Human Resource Management 554

Strategic Significance of HRM 554

International Managerial Staffing Needs 556

Scope of Internationalization 556

Centralization versus Decentralization of Control 557

Staffing Philosophy 557

■ EMERGING OPPORTUNITIES: Competing with Local Headhunters 558

■ BRINGING THE WORLD INTO FOCUS: Schlumberger Profits from Geocentric Staffing 560

Recruitment and Selection 560

Recruitment of Managers 561

Selection of Managers 562

Expatriation and Repatriation Issues 563

Training and Development 565

Assessing Training Needs 565

Basic Training Methods and Procedures 565

Developing Younger International Managers 566

Performance Appraisal and Compensation 567

Assessing Performance in International Business 567

Determining Compensation in International Business 568

■ EMERGING OPPORTUNITIES: How about Moving to India? 571

Retention and Turnover 572

Human Resource Issues for Nonmanagerial Employees 573

■ VENTURING ABROAD: Who Gets Paid … and Who Doesn’t? 574

Recruitment and Selection 574

Training and Development 575

Compensation and Performance Appraisal 575

Labor Relations 576

Comparative Labor Relations 576

Collective Bargaining 576

Union Influence and Codetermination 577

CHAPTER REVIEW 578 • Summary 578 • Questions for

Discussion 578 • Building Global Skills 579

■ CLOSING CASE: Training for the World 579

Endnotes 580

■ Part 4: CLOSING CASES: The Aramco Advantage 582

The Power of Microfinance: The Grameen Bank 583

The Elephant Bikers 583

Glossary 586

Name Index 599

Company Index 602

Subject Index 606

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