brief CONTENTSpart one Introduction and Overview Chapter 1 Globalization part two Country Differences Chapter 2 National Differences in Political Economy Chapter 3 Differences in Culture
Trang 38EInternational Business
COMPETING IN THE GLOBAL MARKETPLACE
Trang 48E
Trang 5International Business
COMPETING IN THE GLOBAL MARKETPLACE
Charles W L Hill
UNIVERSITY OF WASHINGTON
Trang 6INTERNATIONAL BUSINESS: COMPETING IN THE GLOBAL MARKETPLACE
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ISBN 978-0-07-813719-8
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Trang 7Hill, Charles W L.
International business: competing in the global marketplace/Charles W L Hill.—8th ed
p cm
Includes index
ISBN-13: 978-0-07-813719-8 (alk paper)
ISBN-10: 0-07-813719-5 (alk paper)
1 International business enterprises—Management 2 Competition, International I Title.HD62.4.H55 2011
658’.049—dc22
2009033378
www.mhhe.com
Trang 8For June & Mike Hill, my parents
Trang 9about the AUTHOR
Charles W L Hill University of Washington
Charles W L Hill is the Hughes M Blake Professor of International Business at the School ofBusiness, University of Washington Professor Hill received his Ph.D from the University ofManchester’s Institute of Science and Technology (UMIST) in Britain In addition to the University ofWashington, he has served on the faculties of UMIST, Texas A&M University, and Michigan StateUniversity
Professor Hill has published over 50 articles in peer-reviewed academic journals, including the
Academy of Management Journal, Academy of Management Review,
Strategic Management Journal, and Organization Science He has also published two college texts:
one on strategic management and the other on international business Professor Hill has served on the
editorial boards of several academic journals, including the Strategic Management Journal and Organization Science Between 1993 and 1996 he was consulting editor at the Academy of Management Review.
Professor Hill teaches in the MBA, Executive MBA, Management, and Ph.D programs at theUniversity of Washington He has received awards for teaching excellence in the MBA, Executive MBA,and Management programs He has also taught customized executive programs
Trang 10Professor Hill works on a consulting basis with a number of organizations His clients have includedATL, Boeing, BF Goodrich, Hexcel, House of Fraser, Microsoft, Seattle City Light, Tacoma City Light,Thompson Financial Services, and Wizards of the Coast.
Trang 11brief CONTENTS
part one Introduction and Overview
Chapter 1 Globalization
part two Country Differences
Chapter 2 National Differences in Political Economy Chapter 3 Differences in Culture
Chapter 4 Ethics in International Business
Cases: Google in China
Mired in Corruption—Kellogg, Brown & Root in Nigeria
part three The Global Trade and Investment Environment
Chapter 5 International Trade Theory
Chapter 6 The Political Economy of International Trade Chapter 7 Foreign Direct Investment
Chapter 8 Regional Economic Integration
Cases NAFTA and the U.S Textile Industry
Martin’s Textiles
Agricultural Subsidies and Development
Boeing versus Airbus
Starbucks Foreign Direct Investment
Trang 12part four The Global Monetary System
Chapter 9 The Foreign Exchange Market
Chapter 10 The International Monetary System
Chapter 11 The Global Capital Market
Case Argentina’s Monetary Crisis
part five The Strategy and Structure of International Business
Chapter 12 The Strategy of International Business
Chapter 13 The Organization of International Business
Chapter 14 Entry Strategy and Strategic Alliances
Cases The Global Automobile Industry in 2009
IKEA: Furniture Retailer to the World
Downey’s Soup
part six International Business Operations
Chapter 15 Exporting, Importing, and Countertrade
Chapter 16 Global Production, Outsourcing, and Logistics
Chapter 17 Global Marketing and R&D
Chapter 18 Global Human Resource Management
Chapter 19 Accounting in the International Business
Chapter 20 Financial Management in the International Business Cases Li & Fung
Castrol Oil in Vietnam
Trang 13China Mobile
GlossaryPhoto CreditsIndex
Trang 14The Globalization of Markets
The Globalization of Production
Management Focus
Vizio and the Market for Flat Panel TVs
The Emergence of Global Institutions
Drivers of Globalization
Declining Trade and Investment Barriers
The Role of Technological Change
Microprocessors and Telecommunications
The Changing Demographics of the Global Economy
The Changing World Output and World Trade Picture
Country Focus
India’s Software Sector
The Changing Foreign Direct Investment Picture The Changing Nature of the Multinational Enterprise
Management Focus
China’s Hisense—An Emerging Multinational
The Changing World Order
The Global Economy of the 21st Century
The Globalization Debate
Antiglobalization Protests
Globalization, Jobs, and Income
Country Focus
Trang 15Protesting Globalization in France
Globalization, Labor Policies, and the Environment Globalization and National Sovereignty
Globalization and the World’s Poor
Managing in the Global Marketplace
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Globalization at General Electric
part two Country Differences
CHAPTER 2 National Differences in Political Economy Opening Case Egypt, the Troubled Giant
Introduction
Political Systems
Collectivism and Individualism
Democracy and Totalitarianism
Different Legal Systems
Differences in Contract Law
Property Rights and Corruption
Country Focus
Corruption in Nigeria
The Protection of Intellectual Property
Product Safety and Liability
Management Focus
Trang 16Starbucks Wins Key Trademark Case in China
The Determinants of Economic Development
Differences in Economic Development
Broader Conceptions of Development: Amartya Sen Political Economy and Economic Progress
Country Focus
Emerging Property Rights in China
Geography, Education, and Economic Development
States in Transition
The Spread of Democracy
The New World Order and Global Terrorism
The Spread of Market-Based Systems
The Nature of Economic Transformation
Deregulation
Privatization
Legal Systems
Implications of Changing Political Economy
Implications for Managers
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case India’s Transformation
CHAPTER 3 Differences in Culture
Opening Case McDonald’s in India
Introduction
What Is Culture?
Values and Norms
Culture, Society, and the Nation-State
The Determinants of Culture
Social Structure
Individuals and Groups
Social Stratification
Country Focus
Trang 17Breaking India’s Caste System
Religious and Ethical Systems
Trang 18Closing Case Wal-Mart’s Chinese Suppliers
Part Two Cases
Google in China
Mired in Corruption—Kellogg, Brown & Root in Nigeria
part three The Global Trade and Investment Environment
CHAPTER 5 International Trade Theory
Opening Case Bangladesh’s Textile Trade
Introduction
An Overview of Trade Theory
The Benefits of Trade
Trang 19The Pattern of International Trade
Trade Theory and Government Policy
The Gains from Trade
Qualifications and Assumptions
Extensions of the Ricardian Model
Country Focus
Moving U.S White-Collar Jobs Offshore
Heckscher-Ohlin Theory
The Leontief Paradox
The Product Life-Cycle Theory
Evaluating the Product Life-Cycle Theory
New Trade Theory
Increasing Product Variety and Reducing Costs
Economies of Scale, First-Mover Advantages, and the Pattern of Trade Implications of New Trade Theory
National Competitive Advantage: Porter’s Diamond
Factor Endowments
Demand Conditions
Related and Supporting Industries
Firm Strategy, Structure, and Rivalry
Evaluating Porter’s Theory
Management Focus
The Rise of Finland’s Nokia
Implications for Managers
Trang 20International Trade and the Balance of Payments
CHAPTER 6 The Political Economy of International Trade Opening Case The Global Financial Crisis and Protectionism
Subsidized Wheat Production in Japan
Import Quotas and Voluntary Export Restraints
Local Content Requirements
Administrative Policies
Management Focus
U.S Magnesium Seeks Protection
Antidumping Policies
The Case for Government Intervention
Political Arguments for Intervention
Economic Arguments for Intervention
Country Focus
Trade in Hormone-Treated Beef
The Revised Case for Free Trade
Retaliation and Trade War
Domestic Policies
Development of the World Trading System
From Smith to the Great Depression
1947–1979: GATT, Trade Liberalization, and Economic Growth 1980–1993: Protectionist Trends
The Uruguay Round and the World Trade Organization
WTO: Experience to Date
The Future of the WTO: Unresolved Issues and the Doha Round
Country Focus
Estimating the Gains from Trade for America
Implications for Managers
Chapter Summary
Trang 21Critical Thinking and Discussion Questions
Research Task
Closing Case Why Did Global Food Prices Rise?
CHAPTER 7 Foreign Direct Investment
Opening Case Spain’s Telefonica
Foreign Direct Investment in China
The Source of FDI
The Form of FDI: Acquisitions versus Greenfield Investments The Shift to Services
Theories of Foreign Direct Investment
Why Foreign Direct Investment?
Management Focus
Foreign Direct Investment by Cemex
The Pattern of Foreign Direct Investment
The Eclectic Paradigm
Political Ideology and Foreign Direct Investment
The Radical View
The Free Market View
Pragmatic Nationalism
Shifting Ideology
Management Focus
DP World and the United States
Benefits and Costs of FDI
Host-Country Benefits
Host-Country Costs
Home-Country Benefits
Home-Country Costs
International Trade Theory and FDI
Government Policy Instruments and FDI
Home-Country Policies
Host-Country Policies
Trang 22International Institutions and the Liberalization of FDI
Implications for Managers
Levels of Economic Integration
The Case for Regional Integration
The Economic Case for Integration
The Political Case for Integration
Impediments to Integration
The Case against Regional Integration
Regional Economic Integration in Europe
Evolution of the European Union
Political Structure of the European Union
Management Focus
The European Commission and Media Industry Mergers
The Single European Act
Country Focus
Creating a Single European Market in Financial Services
The Establishment of the Euro
Enlargement of the European Union
Regional Economic Integration in the Americas
The North American Free Trade Agreement
The Andean Community
MERCOSUR
Central American Common Market, CAFTA, and CARICOM Free Trade Area of the Americas
Regional Economic Integration Elsewhere
Association of Southeast Asian Nations
Trang 23Asia-Pacific Economic Cooperation
Regional Trade Blocs in Africa
Implications for Managers
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case The Euro Energy Market
Part Three Cases
NAFTA and the U.S Textile Industry
Martin’s Textiles
Agricultural Subsidies and Development
Boeing versus Airbus
Starbucks Foreign Direct Investment
part four The Global Monetary System
CHAPTER 9 The Foreign Exchange Market Opening Case Caterpillar Tractor
Volkswagen’s Hedging Strategy
The Nature of the Foreign Exchange Market
Economic Theories of Exchange Rate Determination
Prices and Exchange Rates
Country Focus
Anatomy of a Currency Crisis
Summary
Exchange Rate Forecasting
The Efficient Market School
Trang 24The Inefficient Market School
Approaches to Forecasting
Currency Convertibility
Implications for Managers
Management Focus
Dealing with the Rising Euro
Reducing Economic Exposure
Other Steps for Managing Foreign Exchange Risk
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Hyundai and Kia
CHAPTER 10 The International Monetary System Opening Case Economic Turmoil in Latvia
Introduction
The Gold Standard
Mechanics of the Gold Standard
Strength of the Gold Standard
The Period between the Wars, 1918–1939
The Bretton Woods System
The Role of the IMF
The Role of the World Bank
The Collapse of the Fixed Exchange Rate System
The Floating Exchange Rate Regime
The Jamaica Agreement
Exchange Rates since 1973
Fixed versus Floating Exchange Rates
Country Focus
The U.S Dollar, Oil Prices, and Recycling Petrodollars
The Case for Floating Exchange Rates
The Case for Fixed Exchange Rates
Who Is Right?
Trang 25Exchange Rate Regimes in Practice
Pegged Exchange Rates
Currency Boards
IMF Crisis Management
Financial Crises in the Post–Bretton Woods Era Mexican Currency Crisis of 1995
The Asian Crisis
Evaluating the IMF’s Policy Prescriptions
Country Focus
Turkey and the IMF
Implications for Managers
Closing Case China’s Managed Float
CHAPTER 11 The Global Capital Market
Opening Case Global Capital Markets in Crisis
Introduction
Benefits of the Global Capital Market
Functions of a Generic Capital Market
Attractions of the Global Capital Market
Management Focus
Deutsche Telekom Taps the Global Capital Market
Growth of the Global Capital Market
Global Capital Market Risks
Country Focus
Did the Global Capital Markets Fail Mexico?
The Eurocurrency Market
Genesis and Growth of the Market
Attractions of the Eurocurrency Market
Drawbacks of the Eurocurrency Market
Trang 26The Global Bond Market
Attractions of the Eurobond Market
The Global Equity Market
Foreign Exchange Risk and the Cost of Capital
Country Focus
The Search for Capital in the Czech Republic
Implications for Managers
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Industrial and Commercial Bank of China
Part Four Case
Argentina’s Monetary Crisis
part five The Strategy and Structure of International Business
CHAPTER 12 The Strategy of International Business
Opening Case The Evolving Strategy of IBM
Introduction
Strategy and the Firm
Value Creation
Strategic Positioning
Operations: The Firm as a Value Chain
Global Expansion, Profitability, and Profit Growth
Expanding the Market: Leveraging Products and Competencies Location Economies
Experience Effects
Leveraging Subsidiary Skills
Summary
Cost Pressures and Pressures for Local Responsiveness
Pressures for Cost Reductions
Pressures for Local Responsiveness
Trang 27Evolution of Strategy at Procter & Gamble
The Evolution of Strategy
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Coca Cola
Appendix Profitability, Growth, and Valuation
CHAPTER 13 The Organization of International Business
Opening Case Nestlé
The International Division at Wal-Mart
Horizontal Differentiation: The Design of Structure
Management Focus
The Rise and Fall of Dow Chemical’s Matrix Structure
Integrating Mechanisms
Control Systems and Incentives
Types of Control Systems
Incentive Systems
Control Systems, Incentives, and Strategy in the International Business
Trang 28Organizational Culture
Creating and Maintaining Organizational Culture
Organizational Culture and Performance in the International Business
Management Focus
Culture and Incentives at Lincoln Electric
Synthesis: Strategy and Architecture
Closing Case A Decade of Organizational Change at Unilever
CHAPTER 14 Entry Strategy and Strategic Alliances
Opening Case General Electric’s Joint Ventures
Introduction
Basic Entry Decisions
Which Foreign Markets?
Timing of Entry
Management Focus
Tesco’s International Growth Strategy
Scale of Entry and Strategic Commitments
Trang 29Franchising
Joint Ventures
Wholly Owned Subsidiaries
Selecting an Entry Mode
Core Competencies and Entry Mode
Pressures for Cost Reductions and Entry Mode
Greenfield Ventures or Acquisition?
Pros and Cons of Acquisitions
Pros and Cons of Greenfield Ventures
Greenfield or Acquisition?
Strategic Alliances
The Advantages of Strategic Alliances
The Disadvantages of Strategic Alliances
Management Focus
Cisco and Fujitsu
Making Alliances Work
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case JCB in India
Part Five Cases
The Global Automobile Industry in 2009
IKEA: Furniture Retailer to the World
Downey’s Soup
part six International Business Operations
CHAPTER 15 Exporting, Importing, and Countertrade Opening Case MD International
Introduction
The Promise and Pitfalls of Exporting
Improving Export Performance
Trang 30Strategy, Production, and Logistics
Where to Produce
Trang 31Locating Production Facilities
The Strategic Role of Foreign Factories
Management Focus
Hewlett-Packard in Singapore
Outsourcing Production: Make-or-Buy Decisions
The Advantages of Make
The Advantages of Buy
Trade-offs
Strategic Alliances with Suppliers
Managing a Global Supply Chain
The Role of Just-in-Time Inventory
The Role of Information Technology and the Internet
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Building the Boeing 787
CHAPTER 17 Global Marketing and R&D
Opening Case Microsoft in India
Trang 32Distribution Strategy
Differences between Countries
Choosing a Distribution Strategy
Communication Strategy
Barriers to International Communication
Management Focus
Overcoming Cultural Barriers to Selling Tampons
Push versus Pull Strategies
Regulatory Influences on Prices
Configuring the Marketing Mix
Management Focus
Levi Strauss Goes Local
New-Product Development
The Location of R&D
Integrating R&D, Marketing, and Production
Closing Case Dove—Building a Global Brand
CHAPTER 18 Global Human Resource Management Opening Case AstraZeneca
Trang 33Expatriate Managers
Management Focus
Managing Expatriates at Royal Dutch/Shell
The Global Mind-Set
Training and Management Development
Training for Expatriate Managers
Performance Appraisal Problems
Guidelines for Performance Appraisal
Compensation
National Differences in Compensation
Expatriate Pay
Management Focus
Global Compensation Practices at McDonald’s
International Labor Relations
The Concerns of Organized Labor
The Strategy of Organized Labor
Approaches to Labor Relations
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Lenovo
CHAPTER 19 Accounting in the International Business Opening Case Chinese Accounting
Introduction
Country Differences in Accounting Standards
Relationship between Business and Providers of Capital Political and Economic Ties with Other Countries
Inflation Accounting
Level of Development
Trang 34The Consequences of Different Accounting Standards
Multinational Consolidation and Currency Translation
Management Focus
Novartis Joins the International Accounting Club
Consolidated Financial Statements
Currency Translation
Current U.S Practice
Accounting Aspects of Control Systems
Exchange Rate Changes and Control Systems
Transfer Pricing and Control Systems
Separation of Subsidiary and Manager Performance
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Adopting International Accounting Standards
CHAPTER 20 Financial Management in the International Business Opening Case Global Treasury Management at Procter & Gamble
Introduction
Investment Decisions
Capital Budgeting
Project and Parent Cash Flows
Adjusting for Political and Economic Risk
Management Focus
Black Sea Energy Ltd
Risk and Capital Budgeting
Financing Decisions
Source of Financing
Financial Structure
Trang 35Global Money Management: The Efficiency Objective
Minimizing Cash Balances
Reducing Transaction Costs
Global Money Management: The Tax Objective
Moving Money across Borders: Attaining Efficiencies and Reducing Taxes
Closing Case Brazil’s Gol
Part Six Cases
Trang 36list of MAPS
Map 2.1 GNI per Capita, 2007
Map 2.2 GNI Purchasing Power Parity per Capita, 2007
Map 2.3 Growth Rate in GDP per Capita, 1998–2007
Map 2.4 The Human Development Index, 2006
Map 2.5 Political Freedom, 2006
Map 2.6 Distribution of Economic Freedom in 2007
Map 3.1 World Religions
Map 8.1 Member States of the European Union in 2009
Map 8.2 Economic Integration in the Americas
Map 8.3 ASEAN countries
Map 8.4 APEC Members
Trang 37It is now two decades since I began work on the first edition of International Business: Competing
in the Global Marketplace By the third edition the book was the most widely used international business
text in the world Since then its market share has only increased I attribute the success of the book to anumber of goals I set out for myself when I embarked on the first edition of the book Specifically, Iwanted to write a book that (1) was comprehensive and up-to-date, (2) went beyond an uncriticalpresentation and shallow explanation of the body of knowledge, (3) maintained a tight, integrated flowbetween chapters, (4) focused on managerial implications, and (5) made important theories accessibleand interesting to students
Over the years, and through eight editions, I have worked hard to adhere to these goals It has notalways been easy An enormous amount has happened over the last two decades, both in the real world ofeconomics, politics and business, and in the academic world of theory and empirical research Often Ihave had to significantly rewrite chapters, scrap old examples, bring in new ones, incorporate new theoryand evidence into the book, and phase out older theories that are increasingly less relevant to the modernand dynamic world of international business That process continues in the current edition As notedbelow, there have been significant changes in this edition, and that will no doubt continue to be the case inthe future In deciding what changes to make, I have been guided not only by my own reading, teaching andresearch, but also by the invaluable feedback I receive from professors and students around the worldwho use the book, from reviewers, and from the editorial staff at McGraw Hill My thanks go out to all ofthem
COMPREHENSIVE AND UP-TO-DATE
To be comprehensive, an international business textbook must:
Explain how and why the world’s countries differ
Present a thorough review of the economics and politics of international trade and investment.Explain the functions and form of the global monetary system
Examine the strategies and structures of international businesses
Assess the special roles of an international business’s various functions
I have always endeavored to do all of these things in International Business In my view, many other
texts paid insufficient attention to the strategies and structures of international businesses and to theimplications of international business for firms’ various functions This omission has been a seriousdeficiency Many of the students in these international business courses will soon be working ininternational businesses, and they will be expected to understand the implications of internationalbusiness for their organization’s strategy, structure, and functions This book pays close attention to theseissues
Comprehensiveness and relevance also require coverage of the major theories It has always been mygoal to incorporate the insights gleaned from recent academic work into the text Consistent with this goal,
Trang 38over the last six editions I have added insights from the following research:
The new trade theory and strategic trade policy
The work of Nobel Prize–winning economist Amartya Sen on economic development
The work of Hernando de Soto on the link between property rights and economic development.Samuel Huntington’s influential thesis on the “clash of civilizations.”
The new growth theory of economic development championed by Paul Romer and GeneGrossman
Empirical work by Jeffery Sachs and others on the relationship between international trade andeconomic growth
Michael Porter’s theory of the competitive advantage of nations
Robert Reich’s work on national competitive advantage
The work of Nobel Prize–winner Douglas North and others on national institutional structuresand the protection of property rights
The market imperfections approach to foreign direct investment that has grown out of RonaldCoase and Oliver Williamson’s work on transaction cost economics
Bartlett and Ghoshal’s research on the transnational corporation
The writings of C K Prahalad and Gary Hamel on core competencies, global competition, andglobal strategic alliances
Insights for international business strategy that can be derived from the resource based view ofthe firm
In addition to including leading edge theory, in light of the fast-changing nature of the internationalbusiness environment, every effort is being made to ensure that the book is as up-to-date as possible when
it goes to press Much has happened in the world since the first edition of this book was published in
1993 The Uruguay Round of GATT negotiations was successfully concluded and the World TradeOrganization was established In 2001 the WTO embarked upon another major round of talks aimed toreduce barriers to trader, the Doha Round The European Union moved forward with its post-1992agenda to achieve a closer economic and monetary union, including the establishment of a commoncurrency in January 1999 The North American Free Trade Agreement passed into law The formerCommunist states of Eastern Europe and Asia continued on the road to economic and political reform Asthey did, the euphoric mood that followed the collapse of communism in 1989 was slowly replaced with
a growing sense of realism about the hard path ahead for many of these countries The global moneymarket continued its meteoric growth By 2009 over $2 trillion per day was flowing across nationalborders The size of such flows fueled concern about the ability of short-term speculative shifts in globalcapital markets to destabilize the world economy The World Wide Web emerged from nowhere tobecome the backbone of an emerging global network for electronic commerce The world continued to
Trang 39become more global Several Asian Pacific economies, including most notably China, continued to growtheir economies at a rapid rate Outsourcing of service functions to places like China and India emerged
as a major issue in developed Western nations New multinationals continued to emerge from developingnations in addition to the world’s established industrial powers Increasingly, the globalization of theworld economy affected a wide range of firms of all sizes, from the very large to the very small
Also, unfortunately, in the wake of the terrorist attacks on the United States that took place onSeptember 11, 2001, global terrorism and the attendant geopolitical risks emerged as a threat to globaleconomic integration and activity
Reflecting this rapid pace of change, in this edition of the book I have tried to ensure that all materialand statistics are as up-to-date as possible as of 2009 However, being absolutely up-to-date isimpossible since change is always with us What is current today may be outdated tomorrow.Accordingly, I have established a home page for this book on the World Wide Web atwww.mhhe.com/hill From this home page the reader can access regular updates of chapter material andreports on topical developments that are relevant to students of international business I hope readers findthis a useful addition to the support material for this book
BEYOND UNCRITICAL PRESENTATION AND SHALLOW EXPLANATION
Many issues in international business are complex and thus necessitate considerations of pros andcons To demonstrate both sides of issues to students, I have adopted a critical approach that presents thearguments for and against economic theories, government policies, business strategies, organizationalstructures, and so on
Therefore, I have attempted to explain the complexities of the many theories and phenomena unique tointernational business so the student might fully comprehend the statements of a theory or the reasons aphenomenon is the way it is I believe these theories and phenomena are explained in more depth in thisbook than they are in competing textbooks, the rationale being that a shallow explanation is little betterthan no explanation In international business, a little knowledge is indeed a dangerous thing
INTEGRATED PROGRESSION OF TOPICS
A weakness of many texts is that they lack a tight, integrated flow of topics from chapter to chapter.This book explains to students in Chapter 1 how the book’s topics are related to each other Integrationhas been achieved by organizing the material so that each chapter builds on the material of the previousones in a logical fashion
Trang 40cultures We discuss ethical issues at this juncture primarily because many ethical dilemmas flow out ofnational differences in political systems, economic systems, and culture.
Part Three
Chapters 5 through 8 investigate the political economy of international trade and investment Thepurpose of this part is to describe and explain the trade and investment environment in which internationalbusiness occurs
Part Six
In Chapters 15 through 20 the focus narrows further to investigate business operations These chaptersexplain how firms can perform their key functions—manufacturing, marketing, R&D, human resourcemanagement, accounting, and finance—in order to compete and succeed in the international businessenvironment
Throughout the book, the relationship of new material to topics discussed in earlier chapters is pointedout to the students to reinforce their understanding of how the material comprises an integrated whole
FOCUS ON MANAGERIAL IMPLICATIONS
I have always believed that it is important to show students how the material covered in the text isrelevant to the actual practice of international business This is explicit in the later chapters of the book,which focus on the practice of international business, but it is not always obvious in the first half of thebook, which considers many macroeconomic and political issues, from international trade theory andforeign direct investment flows to the IMF and the influence of inflation rates on foreign exchangequotations Accordingly, at the end of each chapter in Parts Two, Three, and Four—where the focus is onthe environment of international business, as opposed to particular firms—a section titled “Implicationsfor Business” clearly explains the managerial implications of the material discussed in the chapter Forexample, Chapter 4, “International Trade Theory,” ends with a detailed discussion of the various tradetheories’ implications for international business management
In addition, each chapter begins with a case that illustrates the relevance of chapter material for the
practice of international business Chapter 2, “Country Differences in Political Economy,” for example,opens with a case that profiles the economy of Egypt
I have also added a closing case to each chapter These cases are also designed to illustrate the
relevance of chapter material for the practice of international business The closing case for Chapter 2,for example, looks at the transformation of India’s economy