3Preface 24About the Authors 40PART ONE: Introduction 431 Overview of International Business and Globalization 43An Atlas 74PART TWO: National Environmental Differences 872 Culture 873 Governmental and Legal Systems 1294 Economic Systems and Market Methods 179PART THREE: Connecting Countries through Trade and Factor Movements 2295 Trade and Factor Mobility Theory 2296 Trade Protectionism 2717 Economic Integration and Cooperation 301PART FOUR: The Global Monetary Environment 3398 Markets for Foreign Exchange 3399 Factors that Influence Exchange Rates 37110 Global Debt and Equity Markets 407PART FIVE: Corporate Policy and Strategy 44111 Ethics and Social Responsibility 44112 Strategies for International Business 47513 Evaluation of Countries for Operations 52514 Modes of Trading Internationally 56115 Forms and Ownership of Foreign Production 61116 The Organization and Governance of Foreign Operations 653PART SIX: Functional Management and Operations 69717 Global Marketing 69718 Global Production and Supply Chains 73719 Global Accounting and Financial Management 77120 Global Management of Human Resources 807Brief Contents4Preface 24About the Authors 40? INTRODUCTION 431 Overview of International Business and Globalization 43CASE: The Globalized Business of Sports 44Introduction 47 How Does International Business Fit In? 47The Forces Driving Globalization 48 Factors in Increased Globalization 49The Costs of Globalization 54 Threats to National Sovereignty 55 Environmental Stress 55 Growing Income Inequality and Personal Stress 56Point-Counterpoint Is Offshoring Good Strategy? 56Why Companies Engage in International Business 58 Expanding Sales 59 Acquiring Resources 59 Reducing Risk 59Modes of Operations in International Business 60 Merchandise Exports and Imports 60 Service Exports and Imports 60 Investments 61 Types of International Organizations 61Why International Business Differs from Domestic Business 62 Physical and Social Factors 62 The Competitive Environment 64Looking to the Future Three Ways of Looking at Globalization 65CASE: Transportation and Logistics: The Case for Dubai Ports World 66Summary 71Key Terms 71Endnotes 72ContentsCases with denotes a case that emphasizes a country, cases with denotes a case that emphasizes an industry or company.CONTENTS 5An Atlas 74Map Index 82? NATIONAL ENVIRONMENTAL DIFFERENCES 872 Culture 87CASE: Saudi Arabia s Dynamic Culture 88Introduction 92 The People Factor 92Cultural Awareness 93 A Little Learning Goes a Long Way 94The Idea of a “Nation”: Delineating Cultures 95 The Nation as a Point of Reference 95How Cultures Form and Change 95 Sources of Change 95Language as Both a Diffuser and Stabilizer of Culture 96 Why English Travels So Well 98Religion as a Cultural Stabilizer 99Behavioral Practices Affecting Business 100 Issues in Social Stratification 100Does Geography Matter? Birds of a Feather Flock Together 101Work Motivation 103 Relationship Preferences 106 Risk-Taking Behavior 107 Information and Task Processing 108Communications 109 Spoken and Written Language 109 Silent Language 111Dealing with Cultural Differences 112 Host Society Acceptance 112 Degree of Cultural Differences 113 Ability to Adjust: Culture Shock 113 Company and Management Orientations 114 Strategies for Instituting Change 115Point-Counterpoint Does International Business Lead to Cultural Imperialism? 115Looking to the Future What Will Happen to National Cultures? 118CASE: Tesco PLC: Leveraging Global Knowledge 1206 CONTENTSSummary 125Key Terms 125Endnotes 1263 Governmental and Legal Systems 129CASE: ChinaComplicated Risks, Big Opportunities 130Introduction 133The Political Environment 134Individualism Versus Collectivism 135 Individualism 135 Collectivism 136Political Ideology 136 Spectrum Analysis 137 Democracy 138 Totalitarianism 139The Standard of Freedom 140Trends in Political Ideologies 141 Engines of Democracy 142 Democracy: Recession and Retreat 143 Authoritarianism s Surge 145Looking to the Future Political Ideology and MNEs Actions 146Political Risk 148 Classifying Political Risk 149 Classes and Characteristics of Political Risks 149Point-Counterpoint Proactive Political Risk Management: The Best Approach 151The Legal Environment 153 Types of Legal Systems 154 Trends in Legal Systems 155 Implications for Managers 157 The Confound of Democracy s Retreat 157 Which Rule When? 158Legal Issues in International Business 160 Operational Concerns 160 A Key Relationship: Wealth and Regulation 162Strategic Concerns 163 Country Characteristics 163 Product Safety and Liability 164CONTENTS 7Legal Jurisdiction 164 Intellectual Property 164The Basis of Political and Legal Differences 165 Historical Legacies 165 Economic Circumstances 166 Cultural Orientation 166 The Potential for Cross-National Convergence 167CASE: It s a Knockoff World 168Summary 171K