International Business

Cover......Page 1 Copyright......Page 3 Dedication......Page 4 Contents......Page 6 Preface......Page 16 About the Author......Page 21 A01_INTE1689_FM......Page 2 Chapter 1_FUNDAMENTALS OF INTERNATIONAL BUSINESS......Page 22 INTRODUCTION......Page 23 Economic Globalization......Page 24 Political Globalization......Page 25 INTERNATIONAL BUSINESS......Page 26 Economic Forces......Page 27 Technological Forces......Page 28 INTERNATIONAL VERSUS DOMESTIC BUSINESS......Page 29 MOTIVES FOR FIRM INTERNATIONALIZATION......Page 30 Trade-related Entry Modes......Page 31 Contractual Entry Modes......Page 33 Investment-related Entry Modes......Page 35 FDI Moves in Search of Energy......Page 36 Mega-regional Agreements......Page 37 Discussion Questions......Page 38 Chapter 2 POLITICAL ECONOMY OF INTERNATIONAL BUSINESS......Page 40 ECONOMIC ENVIRONMENT......Page 41 Economic Systems......Page 42 Economic Indicators......Page 44 Economic Development......Page 45 Political Ideologies and Systems......Page 46 Political Risk......Page 49 INTERNATIONAL BUSINESS NEGOTIATION......Page 50 Bargaining Power of the TNC......Page 51 Discussion Questions......Page 52 Chapter 3 THE INTERNATIONAL CULTURALAND LEGAL ENVIRONMENT......Page 54 ELEMENTS OF CULTURE......Page 55 Language......Page 56 Religion......Page 57 Values and Attitudes......Page 59 LEGAL ENVIRONMENT......Page 60 Legal Jurisdiction......Page 61 ETHICS IN INTERNATIONAL BUSINESS......Page 62 Discussion Questions......Page 63 Chapter 4_INTERNATIONAL TRADE THEORIES......Page 64 International Trade Theories......Page 65 Classical Approach......Page 66 Factor Proportions Theory......Page 71 Linder’s Income-preference Similarity Theory......Page 72 Product Life-cycle Theory......Page 73 The New Trade Theory......Page 75 National Competitive Advantage......Page 76 Theory Assessment......Page 77 DEVELOPMENTS IN WORLD TRADE......Page 78 Volume of Trade......Page 79 Direction of World Trade......Page 81 Service Trade......Page 82 Discussion Questions......Page 83 Chapter 5 COMMERCIAL POLICY INSTRUMENTS......Page 84 Economic Rationale......Page 85 INSTRUMENTS OF TRADE CONTROL......Page 86 Tariff Barriers......Page 87 Non-tariff Barriers......Page 89 Volume of India’s Foreign Trade......Page 92 Composition of India’s Foreign Trade......Page 93 Direction of India’s Foreign Trade......Page 94 Discussion Questions......Page 95 Chapter 6 MULTILATERAL REGULATION OF TRADE......Page 97 Objectives and Principles......Page 98 GATT : An Evaluation......Page 99 World Trade Organization (WTO )......Page 100 General Agreement on Tariffs and Trade (GATT )......Page 101 General Agreement on Trade in Services (GATS )......Page 102 ORGANIZATIONAL STRUCTURE OF WTO......Page 103 Principles of WTO......Page 104 National Treatment......Page 105 Developing Country Issues......Page 106 FUTURE CHALLENGES FOR WTO......Page 107 Functions of UNCTAD......Page 108 UNCTAD : An Assessment......Page 109 DISCUSSION QUESTIONS......Page 111 Chapter 7 INTERNATIONAL TRADE FINANCE AND PROMOTION......Page 112 Letter of Credit (L/C)......Page 113 Documentary Collection......Page 115 Private Sources......Page 116 Governmental Sources......Page 118 INTERNATIONAL TRADE CREDIT......Page 119 TRADE PROMOTION IN INDIA......Page 120 Export Incentives......Page 121 Trade Fairs and Exhibitions......Page 122 Free Trade Zone (Ftz)......Page 123 Special Economic Zone......Page 124 DISCUSSION QUESTIONS......Page 126 Chapter 8 REGIONAL ECONOMIC INTEGRATION......Page 127 Free Trade Area (FTA)......Page 128 Customs Union......Page 129 Common Market......Page 130 Political Union......Page 131 Trade Creation and Trade Diversion......Page 132 Higher Factor Productivity......Page 133 European Union (EU)......Page 134 Euro......Page 136 NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)......Page 137 Importance of NAFTA......Page 138 MERCOSUR......Page 139 ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)......Page 140 ASIA-PACIFIC ECONOMIC COOPERATION FORUM (APEC)......Page 141 SOUTH ASIAN ASSOCIATION FOR REGIONALCOOPERATION (SAARC)......Page 142 AFRICA......Page 143 COMMODITY ARRANGEMENTS......Page 144 Multi Fibre Arrangement (MFA)......Page 145 Organization of Petroleum Exporting Countries (OPEC)......Page 147 DISCUSSION QUESTIONS......Page 149 Chapter 9 INTERNATIONAL FINANCIAL SYSTEM......Page 150 Exchange Rate Determination......Page 151 Currency Convertibility......Page 152 The Gold Standard (1876–1914)......Page 153 The Bretton Woods System (1944–73)......Page 155 Independent Float System......Page 156 Crawling Peg......Page 157 Floating Arrangements......Page 158 Foreign Exchange Markets......Page 159 FOREIGN EXCHANGE RISK AND EXPOSURE......Page 161 International Capital Market......Page 164 International Bond Markets......Page 165 International Stock Markets......Page 166 KEY TERMS......Page 167 DISCUSSION QUESTIONS......Page 168 Chapter10 INTERNATIONAL FINANCIAL INSTITUTIONS......Page 169 Objectives of the IMF......Page 170 Functions of the IMF......Page 171 WORLD BANK GROUP......Page 172 ASIAN DEVELOPMENT BANK......Page 174 AFRICAN DEVELOPMENT FUND (ADF)......Page 175 DISCUSSION QUESTIONS......Page 176 Chapter11 INTERNATIONAL BALANCE OF PAYMENTS......Page 177 FUNDAMENTALS OF BALANCE-OF-PAYMENTS ACCOUNTING......Page 178 The BOP as a Cash Flow Statement......Page 179 Current Account......Page 180 Capital and Financial Account......Page 181 Net Errors and Omissions......Page 182 THE BALANCE OF PAYMENTS IN TOTALITY......Page 183 DISCUSSION QUESTIONS......Page 185 Chapter12 FOREIGN DIRECT INVESTMENT......Page 187 Asset-based View......Page 188 Nature of Business Activity......Page 189 Motive-based View......Page 190 Branch Office......Page 191 Wholly Owned Subsidiary......Page 192 Forms of Wholly Owned Subsidiaries: Greenfield Investmentversus Mergers and Acquisitions......Page 193 Differences Between Joint Ventures and Mergers......Page 194 Trends in FDI......Page 195 FDI Outflows......Page 196 Policy Perspective......Page 197 Geographical Composition......Page 199 Outward Indian FDI......Page 200 DISCUSSION QUESTIONS......Page 202 Chapter13 INTERNATIONAL ORGANIZATION STRUCTURE AND DESIGN......Page 204 EARLY ORGANIZATIONAL STRUCTURES......Page 205 INTERNATIONAL DIVISION STRUCTURE......Page 207 Global Product Structure......Page 208 Global Area Structure......Page 210 Global Functional Structure......Page 212 Mixed Structure......Page 213 Matrix Structure......Page 214 DETERMINANTS OF THE ORGANIZATION STRUCTURE......Page 217 DISCUSSION QUESTIONS......Page 220 Chapter14 INTERNATIONAL MARKETING......Page 221 INTERNATIONAL MARKET ASSESSMENT......Page 222 THE MARKETING MIX......Page 223 PRODUCT......Page 224 Determinants of Product Adaptation......Page 225 Brand Management......Page 226 New Product Development......Page 227 Promotion Strategy......Page 228 Pricing Strategy......Page 230 Distribution......Page 231 DISCUSSION QUESTIONS......Page 232 Chapter15 INTERNATIONAL HRM......Page 233 INTRODUCTION......Page 234 Polycentric Approach......Page 235 TRAINING AND DEVELOPMENT......Page 236 Specific Skills Training......Page 237 COMPENSATION......Page 238 INTERNATIONAL LABOR RELATIONS......Page 239 INTERNATIONAL LABOR STANDARDS......Page 240 KEY TERMS......Page 242 DISCUSSION QUESTIONS......Page 243 Chapter16 INTERNATIONAL OPERATIONS......Page 244 SUPPLY-CHAIN MANAGEMENT......Page 245 INTERNATIONAL LOGISTICS......Page 247 Total Cost Concept......Page 248 Quality......Page 249 Location Decisions......Page 250 Inventory Decisions......Page 251 International Packaging Issues......Page 254 Transportation Decisions......Page 255 Transportation Infrastructure......Page 259 DISCUSSION QUESTIONS......Page 261 Chapter17 INTERNATIONAL FINANCE AND ACCOUNTING......Page 262 ACCOUNTING SYSTEM......Page 263 NATIONAL AND INTERNATIONAL ACCOUNTING STANDARDS......Page 265 The Incarnation of IFRS: How it Came into Being......Page 266 CONSOLIDATION AND CURRENCY TRANSLATION......Page 267 Transfer Prices......Page 268 IFRS: A Change for the Better......Page 270 DISCUSSION QUESTIONS......Page 273 Chapter18 GLOBAL E-COMMERCE......Page 274 E-COMMERCE VS E-BUSINESS......Page 275 B2B E-commerce......Page 276 C2C E-commerce......Page 277 M-Commerce......Page 278 E-commerce Advantages......Page 279 Disadvantages of E-commerce......Page 280 Global Factors......Page 281 Demographic Factors......Page 282 Industry Structure......Page 283 Consumer Preferences......Page 284 National Policy......Page 285 DISCUSSION QUESTIONS......Page 286 Chapter19 ENVIRONMENTAL ISSUES IN INTERNATIONAL BUSINESS......Page 287 INTRODUCTION......Page 288 CLIMATE CHANGE......Page 289 TRANS-BOUNDARY POLLUTION......Page 290 INTERNATIONAL LEGAL FRAMEWORKSFOR ENVIRONMENTAL PROTECTION......Page 291 KYOTO PROTOCOL......Page 292 International Emissions Trading......Page 295 DISCUSSION QUESTIONS......Page 296 Chapter20 GLOBAL OUTSOURCING......Page 297 FORMS OF OUTSOURCING......Page 298 Theory of Comparative Advantage......Page 299 Infrastructural and Institutional Development......Page 300 Cost Minimization......Page 301 SOFTWARE INDUSTRY IN INDIA......Page 302 Location Advantage......Page 304 DEVELOPMENTS IN THE IT–BPO SECTOR......Page 305 Sustained Cost Competitiveness......Page 306 Changing Value of the Rupee......Page 307 Future Threats......Page 308 DISCUSSION QUESTIONS......Page 309 Model Papers......Page 310