International Business

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

• ISBN13: 9780131432758
• ISBN10: 0131432753
• Edition: 3rd
• Format: Paperback
• Copyright: 2006-01-01
• Publisher: Prentice Hall

Summary

Lively, topical, and accessible, this text is written integrating culture early and often to allow all students to grasp difficult conceptual material. The inclusion of numerous interesting and diverse examples of the intersection of business and culture motivates students to read on and learn. International Business: The Challenges of Globalizationis the fastest growing international business book available today.It presents international business in a comprehensive, yet concise framework. Recent, real-world examples and engaging feature boxes really do bring the concepts of international business to life for readers. User feedback reveals that the reason this book is so popular is that it offers a fresh approach to international business that responds to the readers'requests and needs. A main goal in this third edition is to continue the progress made in the previous twodelivering the most readable, current, and concise international business book on the market.A must-read for anyone involved in International Business.

Table of Contents

Preface	xiii
About the Authors	xxiv
part one Global Business Environment	2	(46)
Globalization	2	(46)
Breaking Views: The E-Biz Surprise	5	(1)
Globalization	6	(4)
Globalization of Markets	7	(1)
Globalization of Production	8	(1)
Global Manager's Toolbox: The Keys to International Success	9	(1)
Forces Driving Globalization	10	(5)
Falling Barriers to Trade and Investment	10	(2)
Technological Innovation	12	(1)
Measuring Globalization	13	(2)
Untangling the Globalization Debate	15	(12)
Today's Globalization in Context	15	(1)
The Current Globalization Backlash	16	(1)
Global Challenges: Investing In Security Pays Dividends	17	(1)
Globalization's Impact on Jobs and Wages	18	(3)
Globalization's Impact on Labor and Environmental Regulation	21	(1)
Globalization and Income Inequality	22	(3)
Globalization and National Sovereignty	25	(1)
Globalization's Influence on Cultures	26	(1)
Key Players in International Business	27	(2)
Multinational Corporations	27	(2)
Entrepreneurs and Small Businesses	29	(1)
Why International Business is Special	29	(3)
The Global Business Environment	29	(1)
Entrepreneur's Survival Kit: Four Myths Keeping Small Businesses from Export Success	30	(1)
The Road Ahead for International Business	31	(1)
Bottom Line for Business	32	(16)
Summary	34	(1)
Talk It Over	35	(1)
Teaming Up	35	(1)
Key Terms	36	(1)
Take It to the Web	36	(1)
Ethical Challenges	36	(2)
Practicing International Management Case: MTV: Going Global with a Local Beat	38	(1)
Appendix: World Atlas	39	(9)
part two National Business Environments	48	(102)
Cross-Cultural Business	48	(36)
What Is Culture?	50	(3)
National Culture and Subcultures	51	(2)
Components of Culture	53	(21)
Aesthetics	53	(1)
Entrepreneur's Survival Kit: Give Your Web Site a Local Feel	54	(1)
Values and Attitudes	54	(4)
Manners and Customs	58	(1)
Global Manager's Toolbox: A Globetrotter's Guide to Manners	59	(1)
Social Structure	60	(2)
Religion	62	(4)
Personal Communication	66	(1)
Global Challenges: Speaking in Fewer Tongues	67	(2)
Body Language	69	(1)
Education	70	(2)
Physical and Material Environments	72	(1)
Breaking Views: Crossing the Digital Divide	73	(1)
Classifying Cultures	74	(4)
Kluckhohn--Strodtbeck Framework	74	(1)
Hofstede Framework	75	(3)
Bottom Line for Business	78	(6)
Summary	79	(1)
Talk It Over	80	(1)
Teaming Up	81	(1)
Key Terms	81	(1)
Take It to the Web	81	(1)
Ethical Challenges	82	(1)
Practicing International Management Case: Modernization or Westernization? You Make the Call	83	(1)
Politics and Law in Business	84	(36)
Political Systems	86	(8)
Politics and Culture	86	(1)
Political Participation	87	(1)
Political Ideologies	87	(5)
Global Challenges: From Civil War to Civil Society	92	(1)
Political Systems in Times of Change	93	(1)
Political Risk	94	(7)
Types of Political Risk	95	(2)
Global Manager's Toolbox: Your Global Security Checklist	97	(2)
Managing Political Risk	99	(2)
Legal Systems	101	(3)
Breaking Views: Governments Take the `E-nitiative'	102	(1)
Types of Legal Systems	103	(1)
Global Legal and Ethical Issues	104	(8)
Standardization	104	(1)
Intellectual Property	104	(3)
Product Safety and Liability	107	(1)
Taxation	108	(1)
Antitrust Regulations	108	(1)
Entrepreneur's Survival Kit: The Long Arm of the Law	109	(1)
Ethics and Social Responsibility	110	(2)
Business and International Relations	112	(2)
The United Nations	112	(2)
Bottom Line for Business	114	(6)
Summary	115	(1)
Talk It Over	116	(1)
Teaming Up	117	(1)
Key Terms	117	(1)
Take It to the Web	117	(1)
Ethical Challenges	118	(1)
Practicing International Management Case: Caveat Emptor: Who Said Latin Was Dead?	119	(1)
Economic Systems and Development	120	(30)
Economic Systems	122	(10)
Centrally Planned Economy	123	(3)
Global Manager's Toolbox: Guidelines for Good Guanxi	126	(1)
Mixed Economy	127	(1)
Market Economy	128	(4)
Development of Nations	132	(8)
Breaking Views: IT Matters to Productivity	133	(1)
National Production	133	(3)
Purchasing Power Parity	136	(1)
Human Development	137	(1)
Classifying Countries	138	(1)
Global Challenges: Public Health Goes Global	139	(1)
Economic Transition	140	(4)
Obstacles to Transition	140	(2)
Focus on Russia	142	(1)
Entrepreneur's Survival Kit: The Rules of the Game	143	(1)
Bottom Line for Business	144	(6)
Summary	146	(1)
Talk It Over	147	(1)
Teaming Up	147	(1)
Key Terms	147	(1)
Take It to the Web	148	(1)
Ethical Challenges	148	(1)
Practicing International Management Case: Talkin 'Bout a Revolution	149	(1)
part three International Trade and Investment	150	(108)
International Trade	150	(26)
Overview of International Trade	152	(6)
Benefits of International Trade	153	(1)
Volume of International Trade	153	(1)
International Trade Patterns	153	(3)
Global Manager's Toolbox: Building Good Relations in the Pacific Rim	156	(1)
Trade Dependence and Independence	157	(1)
Theories of International Trade	158	(13)
Mercantilism	158	(2)
Absolute Advantage	160	(2)
Comparative Advantage	162	(2)
Factor Proportions Theory	164	(1)
International Product Life Cycle	165	(2)
Entrepreneur's Survival Kit: Five Common Fulfillment Mistakes	167	(1)
New Trade Theory	167	(1)
National Competitive Advantage	168	(3)
Bottom Line for Business	171	(5)
Summary	172	(1)
Talk It Over	173	(1)
Teaming Up	173	(1)
Key Terms	173	(1)
Take It to the Web	174	(1)
Ethical Challenges	174	(1)
Practicing International Management Case: DHL Worldwide Express Is First in Asia and the World	175	(1)
Business--Government Trade Relations	176	(26)
Why Do Governments Intervene in Trade?	178	(5)
Political Motives	178	(2)
Economic Motives	180	(2)
Cultural Motives	182	(1)
Methods of Promoting Trade	183	(4)
Subsidies	183	(1)
Export Financing	184	(1)
Entrepreneur's Survival Kit: Ex-Im Bank: Experts in Export Financing	185	(1)
Foreign Trade Zones	185	(1)
Special Government Agencies	186	(1)
Global Manager's Toolbox: Surfing the Regulatory Seas	187	(1)
Methods of Restricting Trade	187	(5)
Tariffs	187	(1)
Quotas	188	(2)
Embargoes	190	(1)
Local Content Requirements	191	(1)
Administrative Delays	191	(1)
Currency Controls	191	(1)
Global Trading System	192	(4)
General Agreement on Tariffs and Trade (GATT)	192	(2)
World Trade Organization (WTO)	194	(2)
Bottom Line for Business	196	(6)
Summary	197	(1)
Talk It Over	198	(1)
Teaming Up	199	(1)
Key Terms	199	(1)
Take It to the Web	199	(1)
Ethical Challenges	200	(1)
Practicing International Management Case: Unfair Protection or Valid Defense?	201	(1)
Foreign Direct Investment	202	(26)
Patterns of Foreign Direct Investment	204	(4)
Ups and Downs of Foreign Direct Investment	204	(3)
Entrepreneur's Survival Kit: Cowboy Candy Rides into Manchuria	207	(1)
Worldwide Flows of FDI	207	(1)
Explanations for Foreign Direct Investment	208	(2)
International Product Life Cycle	208	(1)
Market Imperfections (Internalization)	209	(1)
Eclectic Theory	209	(1)
Market Power	210	(1)
Management Issues in the FDI Decision	210	(5)
Control	210	(2)
Purchase-or-Build Decision	212	(1)
Production Costs	212	(1)
Global Manager's Toolbox: Investing Abroad? Be Prepared for Surprises	213	(1)
Customer Knowledge	214	(1)
Following Clients	214	(1)
Following Rivals	215	(1)
Government Intervention in Foreign Direct Investment	215	(4)
Balance of Payments	216	(1)
Reasons for Intervention by the Host Country	217	(1)
Reasons for Intervention by the Home Country	218	(1)
Government Policy Instruments and FDI	219	(2)
Host Countries: Restriction	219	(1)
Host Countries: Promotion	220	(1)
Home Countries: Restriction	221	(1)
Home Countries: Promotion	221	(1)
Bottom Line for Business	221	(7)
Summary	223	(1)
Talk It Over	224	(1)
Teaming Up	224	(1)
Key Terms	225	(1)
Take It to the Web	225	(1)
Ethical Challenges	225	(2)
Practicing International Management Case: Mercedes-Benz: Footloose in Tuscaloosa	227	(1)
Regional Economic Integration	228	(30)
What Is Regional Economic Integration?	230	(2)
Levels of Regional Integration	230	(2)
Effects of Regional Economic Integration	232	(3)
Benefits of Regional Integration	232	(1)
Drawbacks of Regional Integration	233	(2)
Integration in Europe	235	(6)
European Union	235	(3)
Entrepreneur's Survival Kit: Czech List	238	(2)
European Free Trade Association (EFTA)	240	(1)
Integration in the Americas	241	(7)
North American Free Trade Agreement (NAFTA)	241	(2)
Andean Community	243	(2)
Latin American Integration Association (ALADI)	245	(1)
Southern Common Market (MERCOSUR)	245	(1)
Central America and the Caribbean	245	(1)
Free Trade Area of the Americas (FTAA)	246	(1)
Transatlantic Economic Partnership (TEP)	247	(1)
Integration in Asia	248	(2)
Association of Southeast Asian Nations (ASEAN)	248	(1)
Asia Pacific Economic Cooperation (APEC)	249	(1)
Global Manager's Toolbox: The Ins and Outs of ASEAN	250	(1)
Integration in the Middle East and Africa	250	(2)
Gulf Cooperation Council (GCC)	251	(1)
Economic Community of West African States (ECOWAS)	251	(1)
Bottom Line for Business	252	(6)
Summary	253	(2)
Talk It Over	255	(1)
Teaming Up	255	(1)
Key Terms	255	(1)
Take It to the Web	255	(1)
Ethical Challenges	256	(1)
Practicing International Management Case: Tainted Trade: Increasing Imports Brings Increase in Illness	257	(1)
part four The International Financial System	258	(58)
International Financial Markets	258	(28)
International Capital Market	260	(5)
Purposes of National Capital Markets	260	(1)
Purposes of the International Capital Market	261	(1)
Forces Expanding the International Capital Market	262	(1)
Entrepreneur's Survival Kit: Where Microcredit Is Due	263	(1)
World Financial Centers	263	(2)
Main Components of the International Capital Market	265	(2)
International Bond Market	265	(1)
International Equity Market	266	(1)
Eurocurrency Market	267	(1)
Foreign Exchange Market	267	(3)
Functions of the Foreign Exchange Market	268	(2)
How the Foreign Exchange Market Works	270	(5)
Quoting Currencies	270	(3)
Spot Rates	273	(1)
Forward Rates	274	(1)
Swaps, Options, and Futures	275	(1)
Foreign Exchange Market Today	275	(4)
Trading Centers	276	(1)
Important Currencies	276	(1)
Institutions of the Foreign Exchange Market	277	(1)
Global Manager's Toolbox: Five Strategies for More Effective Foreign Exchange Management	278	(1)
Currency Convertibility	279	(1)
Goals of Currency Restriction	279	(1)
Policies for Restricting Currencies	279	(1)
Bottom Line for Business	280	(6)
Summary	281	(1)
Talk It Over	282	(1)
Teaming Up	282	(1)
Key Terms	283	(1)
Take It to the Web	283	(1)
Ethical Challenges	284	(1)
Practicing International Management Case: Argentina: Back from the Abyss?	285	(1)
International Monetary System	286	(30)
How Exchange Rates Influence Business Activities	288	(3)
Desire for Stability and Predictability	289	(1)
Global Manager's Toolbox: Exporting Against the Odds: Key Strategies for Success	290	(1)
What Factors Determine Exchange Rates?	291	(7)
Law of One Price	291	(2)
Purchasing Power Parity	293	(5)
Forecasting Exchange Rates	298	(1)
Efficient Market View	298	(1)
Inefficient Market View	298	(1)
Forecasting Techniques	299	(1)
Difficulties of Forecasting	299	(1)
Evolution of the International Monetary System	299	(10)
Early Years: The Gold Standard	300	(1)
Bretton Woods Agreement	301	(3)
A Managed Float System Emerges	304	(1)
Today's Exchange-Rate Arrangements	304	(1)
European Monetary System	305	(1)
Recent Financial Crises	306	(2)
Future of the International Monetary System	308	(1)
Bottom Line for Business	309	(7)
Summary	311	(1)
Talk It Over	312	(1)
Teaming Up	312	(1)
Key Terms	313	(1)
Take It to the Web	313	(1)
Ethical Challenges	313	(2)
Practicing International Management Case: Banking on Forgiveness	315	(1)
part five International Business Management	316	(151)
International Strategy and Organization	316	(26)
International Strategy	318	(12)
Strategy Formulation	318	(1)
Identify Company Mission and Goals	318	(2)
Identify Core Competency and Value-Creating Activities	320	(2)
Entrepreneur's Survival Kit: Know Yourself, Know Your Product	322	(1)
Formulate Strategies	323	(6)
Global Manager's Toolbox: Competing with Giants	329	(1)
International Organizational Structure	330	(7)
Centralization versus Decentralization	330	(1)
Coordination and Flexibility	331	(1)
Types of Organizational Structure	332	(3)
Work Teams	335	(2)
A Final Word	337	(5)
Summary	337	(1)
Talk It Over	338	(1)
Teaming Up	338	(1)
Key Terms	339	(1)
Take It to the Web	339	(1)
Ethical Challenges	339	(2)
Practicing International Management Case: The Global Strategy of IKEA	341	(1)
Analyzing International Opportunities	342	(28)
Screening Potential Markets and Sites	344	(13)
Step 1: Identify Basic Appeal	345	(1)
Step 2: Assess the National Business Environment	346	(5)
Global Manager's Toolbox: Global E-Commerce Issues	351	(1)
Step 3: Measure Market or Site Potential	351	(5)
Step 4: Select the Market or Site	356	(1)
Conducting International Research	357	(8)
Difficulties of Conducting International Research	357	(2)
Sources of Secondary International Data	359	(3)
Methods of Conducting Primary International Research	362	(1)
Entrepreneur's Survival Kit: Is the World Your Oyster?	363	(2)
A Final Word	365	(5)
Summary	365	(1)
Talk It Over	366	(1)
Teaming Up	366	(1)
Key Terms	367	(1)
Take It to the Web	367	(1)
Ethical Challenges	367	(2)
Practicing International Management Case: Vietnam's Emerging Market Potential	369	(1)
Selecting and Managing Entry Modes	370	(30)
Exporting, Importing, and Countertrade	372	(10)
Why Companies Export	373	(1)
Developing an Export Strategy: A Four-Step Model	373	(1)
Degree of Export Involvement	374	(2)
Avoiding Export and Import Blunders	376	(1)
Countertrade	376	(2)
Export/Import Financing	378	(3)
Entrepreneur's Survival Kit: Global Collection Guidelines	381	(1)
Contractual Entry Modes	382	(5)
Licensing	382	(1)
Franchising	383	(2)
Management Contracts	385	(1)
Turnkey Projects	386	(1)
Investment Entry Modes	387	(6)
Wholly Owned Subsidiaries	387	(1)
Joint Ventures	388	(3)
Strategic Alliances	391	(1)
Selecting Partners for Cooperation	392	(1)
Global Manager's Toolbox: Negotiating the Terms of Market Entry	392	(1)
Strategic Factors in Selecting an Entry Mode	393	(2)
Cultural Environment	393	(1)
Political and Legal Environments	393	(1)
Market Size	394	(1)
Production and Shipping Costs	394	(1)
International Experience	394	(1)
A Final Word	395	(5)
Summary	395	(1)
Talk It Over	396	(1)
Teaming Up	397	(1)
Key Terms	397	(1)
Take It to the Web	398	(1)
Ethical Challenges	398	(1)
Practicing International Management Case: Telecom Ventures Unite the World	399	(1)
Developing and Marketing Products	400	(24)
Globalization and Marketing	402	(1)
Standardization Versus Adaptation	402	(1)
Developing Product Strategies	403	(5)
Laws and Regulations	404	(1)
Cultural Differences	404	(1)
Brand and Product Names	404	(2)
National Image	406	(1)
Counterfeit Goods and Black Markets	406	(1)
Shortened Product Life Cycles	407	(1)
Creating Promotional Strategies	408	(6)
Push and Pull Strategies	408	(1)
Global Manager's Toolbox: Managing an International Sales Force	409	(1)
International Advertising	410	(1)
Blending Product and Promotional Strategies	411	(3)
Designing Distribution Strategies	414	(3)
Designing Distribution Channels	415	(1)
Influence of Product Characteristics	416	(1)
Special Distribution Problems	416	(1)
Developing Pricing Strategies	417	(2)
Worldwide Pricing	417	(1)
Dual Pricing	417	(1)
Factors That Affect Pricing Decisions	418	(1)
A Final Word	419	(5)
Summary	420	(1)
Talk It Over	421	(1)
Teaming Up	421	(1)
Key Terms	421	(1)
Take It to the Web	421	(1)
Ethical Challenges	422	(1)
Practicing International Management Case: Fair Game or Out-of-Bounds? You Decide	423	(1)
Managing International Operations	424	(22)
Production Strategy	426	(4)
Capacity Planning	426	(1)
Facilities Location Planning	427	(2)
Process Planning	429	(1)
Facilities Layout Planning	430	(1)
Acquiring Physical Resources	430	(4)
Make-or-Buy Decision	430	(3)
Raw Materials	433	(1)
Fixed Assets	433	(1)
Key Production Concerns	434	(2)
Quality-Improvement Efforts	434	(1)
Shipping and Inventory Costs	435	(1)
Global Manager's Toolbox: Linking TQM and ISO 9000 Standards	435	(1)
Reinvestment Versus Divestment	436	(1)
Financing Business Operations	436	(5)
Borrowing	437	(1)
Issuing Equity	437	(2)
Entrepreneur's Survival Kit: Get Global Cash: Overseas Investors Await You	439	(1)
Internal Funding	439	(1)
Capital Structure	440	(1)
A Final Word	441	(5)
Summary	442	(1)
Talk It Over	443	(1)
Teaming Up	443	(1)
Key Terms	443	(1)
Take It to the Web	444	(1)
Ethical Challenges	444	(1)
Practicing International Management Case: Toyota's Strategy for Production Efficiency	445	(1)
Hiring and Managing Employees	446	(21)
International Staffing Policy	449	(3)
Ethnocentric Staffing	449	(1)
Polycentric Staffing	450	(1)
Entrepreneur's Survival Kit: Growing Global	451	(1)
Geocentric Staffing	451	(1)
Recruiting and Selecting Human Resources	452	(4)
Human Resource Planning	452	(1)
Recruiting Human Resources	452	(1)
Selecting Human Resources	453	(1)
Culture Shock	454	(1)
Reverse Culture Shock	455	(1)
Global Manager's Toolbox: A Shocking Ordeal	455	(1)
Training and Development	456	(2)
Methods of Cultural Training	456	(2)
Compiling a Cultural Profile	458	(1)
Nonmanagerial Worker Training	458	(1)
Employee Compensation	458	(2)
Managerial Employees	459	(1)
Nonmanagerial Workers	459	(1)
Labor-Management Relations	460	(2)
Importance of Labor Unions	461	(1)
A Final Word	462	(5)
Summary	462	(1)
Talk It Over	463	(1)
Teaming Up	463	(1)
Key Terms	464	(1)
Take It to the Web	464	(1)
Ethical Challenges	464	(1)
Practicing International Management Case: Expatriation or Discrimination? You Make the Call	465	(2)
Notes, Sources, and Credits	467	(10)
Glossary	477	(6)
Name/Company Index	483	(4)
Subject Index	487