Fundamentals of International Business With Infotrac

by Czinkota, Michael R.; Ronkainen, Ilkka A.; Moffett, Michael H.

• ISBN13: 9780324259643
• ISBN10: 0324259646
• Edition: Map
• Format: Paperback
• Copyright: 2003-04-07
• Publisher: South-Western College Pub

Summary

Fundamentals of International Business is a concise introduction to international business with special emphasis on the environmental and cultural issues facing global organizations. The distinguished author team's academic and practitioner experience both in business and government ensures a balance of research and practical insight. The text includes the latest trade data presented in easy to understand tables and graphs. Contemporary business situations and critical events are featured and discussed in each chapter-with special attention to the impact technology. Throughout the text every effort has been made to present complex ideas in an easy-to-understand language and format. The brief length, balance, and reader-friendly features make this an affordable and manageable choice.

Table of Contents

Preface	vii
PART 1 GLOBALIZATION	1	(22)
Globalization	2	(21)
International Business: Opportunity and Conflict	2	(1)
Welcome to the World of Global Business	3	(2)
What Is Global Business?	4	(1)
Global Links Today	5	(4)
U.S. International Trade Position	9	(6)
Global Business Imperative	10	(5)
International Business in a New Era of Risk and Uncertainty	15	(1)
The International Reaction	15	(1)
Structure of the Book	16	(3)
Summary	19	(4)
PART 2 GLOBALIZATION DRIVERS	23	(112)
Cultural Environment	24	(27)
Russian Rap, Mando-pop, and Telenovelas: TV's Cross-cultural Reach	24	(1)
What Is Culture?	25	(3)
Elements of Culture	28	(14)
Language	28	(3)
Nonverbal Language	31	(1)
Infrastructure	32	(1)
Education	33	(1)
Social Institutions	34	(2)
Religion	36	(3)
Values and Attitudes	39	(1)
Manners and Customs	40	(1)
Aesthetics	41	(1)
Understanding Cultural Differences	42	(2)
Gaining Cultural Knowledge	44	(4)
Developing Cultural Competence	44	(1)
Formal Training Programs	45	(1)
Culture Shock	46	(2)
Summary	48	(3)
Global Trade Environment	51	(28)
Bioengineering or Bioprofiteering?	51	(1)
What Are Trade and Investment Policies?	52	(2)
Influence of Domestic Policy	52	(1)
Influence of Foreign Policy	53	(1)
Conflicting Policies	53	(1)
Post-War Global Trade Regulation	54	(2)
The World Trade Organization	55	(1)
Changes in the Global Policy Environment	56	(4)
Reduction of Domestic Policy Influences	56	(4)
Weakening International Institutions	60	(1)
Conflict between Industrialized and Developing Nations	61	(2)
Policy Responses to Changing Conditions	63	(1)
Import Restrictions	63	(6)
Tariffs and Quotas	66	(1)
Nontariff Barriers	66	(1)
Effects of Import Restrictions	67	(1)
Export Restrictions	68	(1)
Export Promotion	68	(1)
Import Promotion	69	(1)
Investment Policies	69	(4)
Host-Country Perspective on Investment Policies	70	(1)
Positive Effects	70	(1)
Negative Effects	71	(2)
Home-Country Perspective on Investment Policy	73	(2)
Restrictions on Investment	74	(1)
Investment Promotion	74	(1)
Summary	75	(4)
Politics and Laws	79	(25)
Guns, Corruption, and Terrorism	79	(1)
Home-Country Perspective	80	(7)
Embargoes and Sanctions	82	(1)
Export Controls	83	(2)
Regulating International Business Behavior	85	(2)
Host-Country Perspective	87	(11)
Political Action and Risk	87	(5)
Economic Risk	92	(2)
Managing Risk	94	(1)
Legal Differences and Restraints	95	(3)
Influencing Politics and Laws	98	(1)
International Relations and Laws	98	(2)
International Politics	99	(1)
International Law	99	(1)
Summary	100	(4)
Economic Integration	104	(31)
Building Blocks toward Worldwide Free Trade	104	(1)
Levels of Economic Integration	105	(3)
The Free Trade Area	106	(1)
The Customs Union	107	(1)
The Common Market	107	(1)
The Economic Union	107	(1)
Costs and Benefits of Economic Integration	108	(2)
Trade Creation and Trade Diversion	108	(1)
Reduced Import Prices	109	(1)
Increased Competition and Economies of Scale	109	(1)
Higher Factor Productivity	109	(1)
Regionalism versus Nationalism	110	(1)
European Integration	110	(7)
Development of the European Union	110	(3)
Evolution of European Economic Union into European Community	113	(2)
Implications of the Integrated European Market	115	(2)
North American Economic Integration	117	(3)
U.S.--Canada Free Trade Agreement	117	(1)
North American Free Trade Agreement	117	(1)
Gains and Losses	118	(2)
Other Economic Alliances	120	(3)
Integration in Latin America	120	(1)
South American Trading Bloc---Mercosur	120	(1)
Andean Common Market---ANCOM	121	(1)
Central American Common Market---CACM	122	(1)
Caribbean Common Market---CARICOM	122	(1)
Free Trade Area of the Americas---FTAA	122	(1)
Integration in Asia	123	(7)
Association of Southeast Asian Nations (ASEAN)	123	(1)
Integration of Indian Subcontinent	123	(3)
Integration in Africa	126	(1)
Integration in the Middle East	127	(1)
Other Cooperative Trace Relationships	127	(1)
Cartels	128	(1)
Commodity Price Agreements	129	(1)
Economic Integration and the International Manager	130	(2)
Effects of Change	130	(1)
Long-Term Strategic Planning	130	(1)
Reorganization	131	(1)
Lobbying	131	(1)
Summary	132	(3)
PART 3 GLOBAL TRADE AND INVESTMENT	135	(55)
Trade and Investment Theory	136	(31)
Made in China	136	(2)
The Age of Mercantilism	138	(1)
Why Countries Trade	138	(1)
Absolute Advantage and the Division of Labor	139	(8)
Comparative Advantage	141	(1)
A Numerical Example of Classical Trade	141	(1)
National Production Possibilities	142	(2)
The Gains from International Trade	144	(2)
Applying Classical Trade Theory	146	(1)
Factor Proportions Trade Theory	147	(4)
Factor Intensity in Production	147	(2)
Factor Endowments, Factor Prices, and Comparative Advantage	149	(1)
The Leontief Paradox	150	(1)
Linder's Overlapping Product Ranges Theory	150	(1)
International Investment and Product Cycle Theory	151	(4)
Stages of the Product Cycle	152	(1)
Trade Implications of the Product Cycle	152	(2)
Contributions of Product Cycle Theory	154	(1)
The New Trade Theory	155	(3)
Economies of Scale and Imperfect Competition	155	(1)
The Competitive Advantage of Nations	156	(2)
Theory of International Investment	158	(5)
The Theory of Foreign Direct Investment	159	(1)
Firms As Seekers	159	(1)
Firms As Exploiters of Imperfections	160	(1)
Firms As Internalizers	161	(1)
Strategic Implications of Foreign Direct Investment	162	(1)
Summary	163	(4)
The International Economic Activity of the Nation	167	(23)
China Joins the Club	167	(1)
International Transactions and the Balance of Payments	168	(3)
Basics of BOP Accounting	169	(1)
Identifying International Economic Transactions	169	(1)
BOP As a Flow Statement	169	(1)
BOP Accounting: Double-Entry Bookkeeping	170	(1)
BOP Current Account	171	(2)
Goods Trade	171	(2)
BOP Capital and Financial Account	173	(8)
Direct Investment	175	(3)
Portfolio Investment	178	(1)
Current and Financial Account Balance Relationships	178	(2)
Net Errors and Omissions	180	(1)
Official Reserves Account	180	(1)
The Balance of Payments in Total	181	(2)
The Balance of Payments and Economic Crises	183	(4)
The Asian Crisis	184	(3)
Summary	187	(3)
PART 4 GLOBAL FINANCE	190	(52)
Foreign Exchange and Global Financial Markets	191	(26)
Advent of the Euro	191	(1)
The Purpose of Exchange Rates	192	(3)
What Is a Currency Worth?	192	(1)
The Law of One Price	193	(2)
The Market for Currencies	195	(5)
Exchange-Rate Quotations and Terminology	196	(1)
Direct and Indirect Quotations	196	(2)
Cross Rates	198	(1)
Foreign Currency Market Structure	199	(1)
Evolution of the Global Monetary System	200	(6)
The Gold Standard	200	(1)
Interwar Years, 1919--1939	201	(1)
The Bretton Woods Agreement, 1944--1971	201	(2)
Times of Crisis, 1971--1973	203	(1)
Floating Exchange Rates, 1973--Present	204	(2)
International Money Markets	206	(2)
Eurocurrency Markets	206	(1)
Eurocurrency Interest Rates	206	(1)
Linking Eurocurrency Interest Rates and Exchange Rates	207	(1)
International Capital Markets	208	(3)
Defining International Financing	210	(1)
International Banking and Bank Lending	211	(1)
Structure of International Banking	211	(1)
International Security Markets	212	(1)
The International Bond Market	212	(1)
International Equity Markets	213	(1)
Gaining Access to Global Financial Markets	214	(1)
Summary	214	(3)
Global Financial Management	217	(25)
Offshore Centers Under Fire	217	(1)
Global Financial Goals	218	(1)
International Capital Budgeting	218	(3)
Capital Budget Components and Decision Criteria	219	(1)
A Proposed Project Evaluation	219	(2)
Risks in International Investments	221	(1)
Capital Structure: International Dimensions	221	(4)
The Capital Structure of Foreign Subsidiaries	223	(1)
International Working Capital and Cash Flow Management	223	(1)
Operating Cash Flows and Financing Cash Flows	223	(1)
Cash Flow Management	224	(1)
Foreign Exchange Exposure	225	(3)
Managing Transaction Exposure	225	(1)
Managing Economic Exposure	226	(2)
Managing Translation Exposure	228	(1)
International Accounting	228	(6)
Worldwide Accounting Standards	229	(2)
Principal Accounting Differences across Countries	231	(3)
International Taxation	234	(1)
Tax Jurisdictions	234	(1)
Tax Types	234	(1)
Financing Import/Export Operations	235	(4)
Trade Financing Using a Letter of Credit	235	(4)
Summary	239	(3)
PART 5 GLOBAL OPERATIONS	242	(121)
Exporting and Global Expansion	243	(35)
Epiphany Helps Find the CRM of the Crop	243	(1)
Globalization Drivers	244	(3)
Why Go Global?	246	(1)
Strategic Planning for Global Expansion	247	(3)
Management Commitment	247	(1)
Internal Organizational Factors	248	(1)
Market and Competition Analysis	249	(1)
Competitive Strategy Formulation	249	(1)
International Business Research	250	(2)
Why Conduct Research?	250	(1)
Pre-Entry Research	250	(1)
Market Expansion Research	251	(1)
Conducting Secondary Research	252	(2)
Governments Resources	252	(1)
International Organizations	252	(1)
Electronic Information Services	253	(1)
Interpreting Secondary Data	254	(1)
Conducting Primary Research	254	(7)
Determining Research Techniques	254	(1)
Interviews	255	(1)
Focus Groups	255	(1)
Observation	255	(1)
Survey Research	256	(1)
Experimentation	257	(1)
Ongoing Research	257	(2)
Target Country Selection	259	(1)
Target Market Segmentation	259	(1)
Global Program Development	260	(1)
Global Market Entry Strategies	261	(6)
Exporting and Importing	261	(4)
International Licensing	265	(2)
International Franchising	267	(1)
Global Market Development Strategies	267	(6)
Strategic Alliances	267	(1)
Informal Alliances	268	(1)
Contractual Agreements	269	(1)
Management Contracts	270	(1)
Equity Participation	270	(1)
Joint Ventures	270	(1)
Consortia	271	(1)
Elements of Successful Alliances	272	(1)
Full Ownership	272	(1)
A Comprehensive View of International Expansion	273	(1)
Summary	274	(4)
Global Marketing	278	(28)
A Global Product Launch	278	(1)
Standardization for Global Markets	279	(1)
Product Policy	280	(7)
Regional, Country, or Local Characteristics	280	(2)
Product Characteristics	282	(2)
Company Considerations	284	(1)
Product Line Management	285	(1)
Product Counterfeiting	285	(2)
Pricing Policy	287	(3)
Export Pricing	287	(1)
Quoting Export Prices	288	(1)
Foreign Market Pricing	288	(1)
Transfer Pricing	289	(1)
Distribution Policy	290	(5)
Channel Design	290	(5)
Promotional Policy	295	(8)
Advertising	297	(2)
Personal Selling	299	(3)
Sales Promotion	302	(1)
Public Relations	302	(1)
Summary	303	(3)
Global Supply Chain	306	(27)
Speeding the Supply Chain	306	(1)
Global Logistics	307	(3)
Supply-Chain Management	308	(1)
New Dimensions of Global Logistics	309	(1)
Global Transportation Issues	310	(11)
Transportation Infrastructure	310	(1)
Availability of Modes	311	(1)
Ocean Shipping	311	(1)
Air Shipping	312	(1)
Selecting a Mode of Transport	313	(4)
Export Documentation	317	(2)
Terms of Shipment and Sale	319	(2)
Global Inventory Issues	321	(5)
Order Cycle Time	321	(3)
Desired Customer Service Levels	324	(1)
Inventory As a Strategic Tool	325	(1)
Global Packaging Issues	326	(1)
Global Storage Issues	327	(3)
Storage Facilities	327	(2)
Special Trade Zones	329	(1)
Summary	330	(3)
Managing Globally	333	(30)
Procter & Gamble: Organization 2005	333	(2)
Organizational Structure	335	(7)
Stage 1 and 2---Little or No Formal Organization	335	(1)
Stage 3---The International Division	336	(1)
Stage 4---The Global Organization	337	(5)
Organizational Structure and Decision Making	342	(5)
Locus of Decision Making	342	(1)
Factors Affecting Structure and Decision Making	343	(1)
Global Networks	344	(1)
Promoting Internal Cooperation	345	(1)
Role of Country Organizations in Decision Making	346	(1)
Controls	347	(2)
Types of Controls	347	(1)
Bureaucratic/Formalized Control	348	(1)
Cultural Control	348	(1)
Managing a Global Workforce	349	(6)
Early Stages of Globalization	349	(1)
Advanced Stages of Globalization	349	(1)
Interfirm Cooperative Ventures	350	(1)
Selecting Managers for Overseas Assignments	351	(1)
Compensating Global Managers	352	(2)
Nonsalary-Related Allowances	354	(1)
Managing a Global Workforce	355	(5)
Labor Participation in Management	357	(1)
Labor Participation in Decision Making	357	(1)
The Role of Labor Unions	358	(1)
Human Resource Policies	358	(2)
Summary	360	(3)
PART 6 THE FUTURE	363
The Future	364
Key Concerns of CEOs	364
The Global Business Environment	365
The Political Environment	365
Planned versus Market Economies	366
The North-South Relationship	366
Emerging Markets	368
The Effects of Population Shifts	369
Financial Environment	369
Technological Environment	371
Global Trade Relations and Government Policy	372
Government Policy	374
Crisis and Change	375
The Future of Global Business Management	378
Global Strategy Development	378
Global Product Policy	379
Global Pricing	380
Distribution Strategies	380
Global Communications	382
Careers in Global Business	382
Further Training	382
Employment Experience	382
Self-Employment	385
Summary	385
Glossary
Name Index
Subject Index