Challenges and Opportunities in International Business PDF

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Challenges and Opportunities in International Business v. 1.0 This is the book Challenges and Opportunities in International Business (v. 1.0). This book is licensed under a Creative Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/ 3.0/) license. See the license for more details, ...

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Challenges and Opportunities in International Business v. 1.0

This is the book Challenges and Opportunities in International Business (v. 1.0). This book is licensed under a Creative Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/ 3.0/) license. See the license for more details, but that basically means you can share this book as long as you credit the author (but see below), don't make money from it, and do make it available to everyone else under the same terms. This book was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz (http://lardbucket.org) in an effort to preserve the availability of this book. Normally, the author and publisher would be credited here. However, the publisher has asked for the customary Creative Commons attribution to the original publisher, authors, title, and book URI to be removed. Additionally, per the publisher's request, their name has been removed in some passages. More information is available on this project's attribution page (http://2012books.lardbucket.org/attribution.html?utm_source=header). For more information on the source of this book, or why it is available for free, please see the project's home page (http://2012books.lardbucket.org/). You can browse or download additional books there.

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Table of Contents About the Authors................................................................................................................. 1 Acknowledgements............................................................................................................... 3 Dedications ............................................................................................................................. 4 Preface..................................................................................................................................... 5 Chapter 1: Introduction....................................................................................................... 9 What Is International Business?................................................................................................................. 18 Who Is Interested in International Business? ........................................................................................... 23 What Forms Do International Businesses Take?....................................................................................... 28 The Globalization Debate ............................................................................................................................ 32 Ethics and International Business.............................................................................................................. 42 End-of-Chapter Questions and Exercises................................................................................................... 47

Chapter 2: International Trade and Foreign Direct Investment .............................. 50 What Is International Trade Theory? ........................................................................................................ 56 Political and Legal Factors That Impact International Trade ................................................................. 67 Foreign Direct Investment .......................................................................................................................... 82 Tips in Your Entrepreneurial Walkabout Toolkit..................................................................................... 92 End-of-Chapter Questions and Exercises................................................................................................... 94

Chapter 3: Culture and Business...................................................................................... 96 What Is Culture, Anyhow? Values, Customs, and Language.................................................................. 103 What Are the Key Methods Used to Describe Cultures? ........................................................................ 110 Understanding How Culture Impacts Local Business Practices ............................................................ 124 Global Business Ethics ............................................................................................................................... 132 Tips in Your Entrepreneurial Walkabout Toolkit................................................................................... 146 End-of-Chapter Questions and Exercises................................................................................................. 150 Additional References ............................................................................................................................... 154

Chapter 4: World Economies........................................................................................... 155 Classifying World Economies.................................................................................................................... 167 Understanding the Developed World ...................................................................................................... 181 Developing World ...................................................................................................................................... 191 Emerging Markets...................................................................................................................................... 207 Tips in Your Entrepreneurial Walkabout Toolkit................................................................................... 230 End-of-Chapter Questions and Exercises................................................................................................. 235

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Chapter 5: Global and Regional Economic Cooperation and Integration ............. 237 International Economic Cooperation among Nations............................................................................ 248 Regional Economic Integration ................................................................................................................ 257 The United Nations and the Impact on Trade......................................................................................... 280 End-of-Chapter Questions and Exercises................................................................................................. 293

Chapter 6: International Monetary System................................................................. 295 What Is the International Monetary System?......................................................................................... 301 What Is the Role of the IMF and the World Bank?.................................................................................. 321 Understanding How International Monetary Policy, the IMF, and the World Bank Impact Business Practices...................................................................................................................................................... 340 Tips in Your Entrepreneurial Walkabout Toolkit................................................................................... 345 End-of-Chapter Questions and Exercises................................................................................................. 346

Chapter 7: Foreign Exchange and the Global Capital Markets................................ 348 What Do We Mean by Currency and Foreign Exchange? ....................................................................... 353 Understanding International Capital Markets ....................................................................................... 364 Venture Capital and the Global Capital Markets .................................................................................... 380 Tips in Your Entrepreneurial Walkabout Toolkit................................................................................... 386 End-of-Chapter Questions and Exercises................................................................................................. 391

Chapter 8: International Expansion and Global Market Opportunity Assessment ......................................................................................................................... 393 Global Strategic Choices ............................................................................................................................ 400 PESTEL, Globalization, and Importing ..................................................................................................... 410 International-Expansion Entry Modes .................................................................................................... 423 CAGE Analysis ............................................................................................................................................. 433 Scenario Planning and Analysis ............................................................................................................... 442 End-of-Chapter Questions and Exercises................................................................................................. 449

Chapter 9: Exporting, Importing, and Global Sourcing ............................................ 451 What is Importing and Exporting?........................................................................................................... 456 Countertrade .............................................................................................................................................. 471 Global Sourcing and Its Role in Business................................................................................................. 475 Managing Export and Import ................................................................................................................... 483 What Options Do Companies Have for Export and Import Financing? ................................................ 491 Tips in Your Walkabout Toolkit ............................................................................................................... 498 End-of-Chapter Questions and Exercises................................................................................................. 502

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Chapter 10: Strategy and International Business ...................................................... 506 Business and Corporate Strategy ............................................................................................................. 512 Generic Strategies ...................................................................................................................................... 519 International Strategy ............................................................................................................................... 530 The Five Elements of Strategy .................................................................................................................. 539 Managing the International Business with the P-O-L-C Framework.................................................... 546 End-of-Chapter Questions and Exercises................................................................................................. 552

Chapter 11: Global Entrepreneurship and Intrapreneurship ................................. 554 Entrepreneurship....................................................................................................................................... 562 What Do Entrepreneurs Do? ..................................................................................................................... 571 Business Entrepreneurship across Borders............................................................................................. 585 From Entrepreneurship to Born-Global Firms........................................................................................ 595 From Entrepreneurship to Intrapreneurship ......................................................................................... 601 End-of-Chapter Questions and Exercises................................................................................................. 609

Chapter 12: Winning through Effective, Global Talent Management .................... 612 The Changing Role of Strategic Human Resources Management in International Business.............620 The Global War for Talent ......................................................................................................................... 631 Effective Selection and Placement Strategies ......................................................................................... 639 The Roles of Pay Structure and Pay for Performance ............................................................................ 649 Tying It All Together—Using the HRM Balanced Scorecard to Gauge and Manage Human Capital, Including Your Own ................................................................................................................................... 659 Tips in Your Walkabout Toolkit ............................................................................................................... 667 End-of-Chapter Questions and Exercises................................................................................................. 668

Chapter 13: Harnessing the Engine of Global Innovation ........................................ 671 An Introduction to Research and Development (R&D) .......................................................................... 676 Intellectual Property Rights around the Globe....................................................................................... 684 How to Organize and Where to Locate Research and Development Activities ................................... 691 Increasing Speed and Effectiveness of International Innovation ......................................................... 699 Innovation for the Bottom of the Pyramid ............................................................................................. 706 End-of-Chapter Questions and Exercises................................................................................................. 711

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Chapter 14: Competing Effectively through Global Marketing, Distribution, and Supply-Chain Management............................................................................................. 714 Fundamentals of Global Marketing.......................................................................................................... 720 Critical Decision Points in Global Marketing .......................................................................................... 734 Standardized or Customized Products .................................................................................................... 739 Global Sourcing and Distribution ............................................................................................................. 746 Global Production and Supply-Chain Management ............................................................................... 753 End-of-Chapter Questions and Exercises................................................................................................. 762

Chapter 15: Understanding the Roles of Finance and Accounting in Global Competitive Advantage.................................................................................................... 764 International Accounting Standards ....................................................................................................... 773 Accounting in International Business...................................................................................................... 778 Fundamentals of Finance .......................................................................................................................... 783 Financial Management in International Business .................................................................................. 794 Global Money Management: Moving Money across Borders ................................................................ 803 End-of-Chapter Questions and Exercises................................................................................................. 810

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About the Authors Mason A. Carpenter Mason (PhD, 1997, University of Texas at Austin) is the M. Keith Weikel professor of leadership at the Univeristy of Wisconsin Madison’s Wisconsin School of Business. His research in strategic management concerns corporate governance, top management teams, social networks, and the strategic management of global startups and is published widely in leading management and strategy journals. He is also author of numerous books used in leading undergraduate, MBA, and educutive education courses around the world, including Principles of Management published by Unnamed Publisher. He is associate editor of the Academy of Management Review and serves on the editorial board of the Strategic Management Journal. At the University of Wisconsin, he is responsible for the undergraduate, MBA, and ExecMBA courses in business, corporate, and global strategy. With others, he has also advised the top management teams and business unit leaders of Fiskars, SABMiller, GE, Harley Davidson, Rockwell International, Vivendi, Kerry Ingredients, Covance, Danisco, Badger Meter, and Banta in the areas of strategy formulation, strategy implementation, and strategic change. His teaching accomplishments include MBA Professor of the Year, notoriety as one of the two most popular professors in several BusinessWeek MBA program polls, the Larson Excellence in Teaching award from the Wisconsin School of Business, and, most recently, a Distinguished Teaching award from the University of Wisconsin-Madison. He also works to integrate experiential and behavioral perspectives of strategic management into the classroom through positions on the BPS and SMS Executive Committees, Doctoral and New Faculty BPS consortia, and the widely-used BPS Strategy Teaching Toolkit.

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About the Authors

Sanjyot P. Dunung Sanjyot is president of Atma Global (www.atmaglobal.com), a publisher of innovative learning products and solutions for the corporate, higher education, and K-12 markets. The company’s mission is to create engaging, best-of-class, global learning products and solutions focusing on countries, cultures, and global business issues. Sanjyot is a recognized leader in the field of cross-cultural learning and has more than fifteen years of extensive experience in developing leading-edge, multimedia learning solutions. Notably, she is the author of Doing Business in Asia: The Complete Guide, focusing on the cultural issues of conducting business in twenty Asian countries (1995 and 1998 by Simon & Schuster). Sanjyot periodically authors articles on doing business internationally. Further, she has appeared on CNBC-TV, CNN International, Bloomberg TV, and various radio programs and is often a guest speaker at conferences and seminars addressing international business and entrepreneurship. Her book, Straight Talk About Starting and Growing Your Own Business, was released in November 2005 by McGraw Hill; she has two entrepreneurship books, Starting Your Business and Growing Your Business with Business Expert Press. Sanjyot also worked as a banker in New York with American and Japanese banks. Sanjyot was selected as a protégé member of the Committee of 200. She’s cofounder and president of the Dunung-Singh Foundation, committed to providing educational opportunities and hope to underprivileged children. She also served as a member of the board of directors of the US Committee for UNICEF (United Nations Children’s Fund). Sanjyot mentors Afghan women entrepreneurs through Project Artemis. Sanjyot’s academic history includes a BA from Northwestern University and an MBA, with an emphasis in international finance, from Thunderbird, School of Global Management. She is the school’s 1997 recipient of the Distinguished Alumni award. Sanjyot was born in India; was raised in Liverpool, England and Chicago, and now lives in New York with her th...