International Business 8th Edition PDF (2020)

Simon Collinson Rajneesh Narula Alan M. Rugman INTERNATIONAL BUSINESS Eighth Edition INTERNATIONAL BUSINESS  At Pearson, we have a simple mission: to help people make more of their lives through learning. We combine innovative learning technology with trusted content a...

Simon Collinson Rajneesh Narula Alan M. Rugman INTERNATIONAL BUSINESS Eighth Edition INTERNATIONAL BUSINESS  At Pearson, we have a simple mission: to help people make more of their lives through learning. We combine innovative learning technology with trusted content and educational expertise to provide engaging and effective learning experiences that serve people wherever and whenever they are learning. From classroom to boardroom, our curriculum materials, digital learning tools and testing programmes help to educate millions of people worldwide – more than any other private enterprise. Every day our work helps learning flourish, and wherever learning flourishes, so do people. To learn more, please visit us at www.pearson.com/uk  INTERNATIONAL BUSINESS Eighth Edition Simon Collinson Rajneesh Narula Alan M. Rugman University of Birmingham University of Reading University of Reading Harlow, England London New York Boston San Francisco Toronto Sydney Dubai Singapore Hong Kong Tokyo Seoul Taipei New Delhi Cape Town São Paulo Mexico City Madrid Amsterdam Munich Paris Milan PEARSON EDUCATION LIMITED KAO Two KAO Park Harlow CM17 9SR United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk _____________________________ First published by McGraw-Hill Inc. 1995 Second edition published by Pearson Education Limited 2000 (print) Third edition published 2003 (print) Fourth edition published 2006 (print) Fifth edition published 2009 (print) Sixth edition published 2012 (print and electronic) Seventh edition published 2017 (print and electronic) Eighth edition published 2020 (print and electronic) © Pearson Education Limited 2000, 2003, 2006, 2009 (print) © Pearson Education Limited 2012, 2017, 2020 (print and electronic) The rights of Simon Collinson, Rajneesh Narula and Alan M. Rugman to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN. The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law. 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To find out more, visit www.ft.com/pearsonoffer. ISBN: 978-1-292-27415-7 (print) 978-1-292-27416-4 (PDF) 978-1-292-27417-1 (ePub) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for the print edition is available from the Library of Congress Names: Collinson, Simon, author. | Narula, Rajneesh, 1963- author. | Qamar, Amir, author. | Rugman, Alan M. International business. Title: International business / Simon Collinson, University of Birmingham, Rajneesh Narula, Henley Business School, the University of Reading, Amir Qamar, Previously at Henley Business School, the University of Reading. Description: 8th Edition. | Hoboken : Pearson, 2020. | Revised edition of International business, 2017. | Includes bibliographical references and index. | Identifiers: LCCN 2019048205 (print) | LCCN 2019048206 (ebook) | ISBN 9781292274157 (paperback) | ISBN 9781292274171 (epub) Subjects: LCSH: International business enterprises--Management. Classification: LCC HD62.4.C6255 2020 (print) | LCC HD62.4 (ebook) | DDC 658/.049--dc23 LC record available at https://lccn.loc.gov/2019048205 LC ebook record available at https://lccn.loc.gov/2019048206 10 9 8 7 6 5 4 3 2 1 24 23 22 21 20 Front cover image: ImageFlow/Shutterstock Print edition typeset in 10/12.5 Times LT Pro by SPi Gobal Print edition printed and bound in Slovakia by Neografia NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION CONTENTS IN BRIEF List of Figures and Tables xiv Preface xvii About the Authors xix Guide to the Case Studies xxii Publisher’s Acknowledgements xxviii Frameworks for this Book: Our Approach to the Study of International Business xxxi Part One THE WORLD OF INTERNATIONAL BUSINESS Chapter 1 An Introduction to International Business 3 Chapter 2 General Frameworks in International Business 39 Chapter 3 Multinational Enterprises, Innovation and Competitiveness 88 Part Two THE ENVIRONMENT OF INTERNATIONAL BUSINESS Chapter 4 International Politics 125 Chapter 5 International Culture 147 Chapter 6 International Trade 179 Chapter 7 International Financial Markets and Institutions 215 Part Three INTERNATIONAL BUSINESS STRATEGIES Chapter 8 Multinational Strategy 251 Chapter 9 Organising Strategy 282 Chapter 10 Corporate Strategy and National Competitiveness 309 Part Four FUNCTIONAL AREA STRATEGIES Chapter 11 Production Strategy 335 Chapter 12 Marketing Strategy 365 Chapter 13 Human Resource Management Strategy 396 Chapter 14 Political Risk and Negotiation Strategy 424 Chapter 15 International Financial Management 459 Part Five REGIONAL STRATEGIES Chapter 16 European Union 497 Chapter 17 Japan 527 Chapter 18 North America 562 Chapter 19 Emerging Economies 588 Chapter 20 China 620 Glossary 649 Index 660 v CONTENTS IN DETAIL List of Figures and Tables xiv 1990–2017: the rise of new players and Preface xvii forms of activity 26 About the Authors xix Modularisation, outsourcing and value chains 27 Guide to the Case Studies xxii The continuing importance of the Publisher’s Acknowledgements xxviii state-owned enterprise 27 Frameworks for this Book: Our Approach to Emerging economy MNEs – significant but the Study of International Business xxxi exaggerated 28 Dominance of the triad continues 30 Small and medium-sized enterprises 32 The fragmented firm: global value Part One chains and production networks 33 THE WORLD OF INTERNATIONAL Outsourcing, offshoring and nearshoring 35 BUSINESS Key points 36 Key terms 36 Notes 37 Chapter 1 Bibliography 38 An Introduction to International Business 3 Chapter 2 Objectives of the chapter 3 General Frameworks in Introduction 5 International Business 39 What is international business? 5 Objectives of the chapter 39 Globalisation 6 The outcomes of globalisation 6 Active Learning Case Understanding interdependence in globalisation 8 Starbucks: a global ‘coffee culture’ 41 Regional integration 9 Introduction 42 Mapping globalisation 10 Firm-specific advantages/ownership advantages 43 Technology and innovation 11 A classification of O advantages 43 New technologies 12 Location advantages/country-specific The knowledge-intensive, multi-technology firm 13 advantages 46 Socio-political developments 14 A classification of L advantages 46 What are institutions? 14 International Business Strategy in Action Institutions and supranational agreements 15 US manufacturing: from China to Mexico 49 Globalisation and liberalisation 16 The eclectic paradigm: putting it all together 51 Multinational enterprises 17 Strategic management of MNEs: an introduction 52 Proto-globalisation and the MNE in Steps in the strategic management process 52 historical context 19 A framework for global strategies: The industrial revolutions and the the FSA–CSA matrix 54 growth of private firms 20 The FSA–CSA matrix 55 Foreign direct investment 21 Why firms become MNEs 57 Measuring FDI and MNE activity 21 How do firms engage in international activities? 61 MNEs before World War II 22 Entry modes 65 The rise of the modern MNE 23 Non-equity entry modes 65 International business in the modern era 25 Equity entry modes 66 1950–90: the rise of the triad 25 Collaborative agreements/strategic alliances 69 vi  CONTENTS IN DETAIL vii International new ventures and ‘born global’ firms 73 Part Two The international activities of SMEs 73 The practical challenges for internationalising SMEs 75 THE ENVIRONMENT OF International Business Strategy in Action INTERNATIONAL BUSINESS Worrying times for Singapore’s SMEs 76 How do SME managers know Chapter 4 which markets to enter? 77 International Politics 125 Modes of entry and adaptation for success in foreign markets 78 Objectives of the chapter 125 Key points 80 Active Learning Case Key terms 81 How risky is foreign investment in Russia? 126 Real Cases Introduction 127 Walmart Inc. 81 Political ideologies and economics 128 Back again? IKEA’s re-entry into Japan 83 Political systems 128 Notes 84 Economic systems 129 Bibliography 86 Government control of assets 130 International Business Strategy in Action Greece: third (bailout) time lucky 130 Chapter 3 Government–business cooperation 131 Multinational Enterprises, Japan and EU assistance 131 Innovation and Competitiveness 88 US competitiveness 132 Objectives of the chapter 88 Economic integration 132 Active Learning Case Trade creation and trade diversion 133 GE Healthcare in India: locally driven innovation 89 Levels of economic integration 133 Introduction 90 Economic integration: an overall perspective 135 Trends in innovation at the country and firm level 91 Ethics, environment, MNEs and the civil society 135 The resource-based view (RBV) and the International Business Strategy in Action VRIO framework 97 Businesses and NGOs work together Resources and capabilities 97 on climate change 136 The VRIO framework 97 The European Union (EU) 137 Dynamic capabilities 102 Other examples of economic integration 140 Quick learning/incremental learning 103 Key points 141 Integration of new assets/radical learning 103 Key terms 142 Modification and transformation of Review and discussion questions 142 new organisational assets 104 Real Cases Dynamic capabilities and small firms 104 How environmental regulations can be used International Business Strategy in Action as trade barriers 143 Spreadshirt: open innovation 105 Turkish lira in crisis: record low in 2018 144 Innovation and location advantages 106 Notes 145 International dimensions of innovation 108 Bibliography 145 The location of innovation activities in the MNE 110 International Business Strategy in Action Chapter 5 Innovation networks at IBM 113 International Culture 147 The innovative MNE as a differentiated network 115 Objectives of the chapter 147 Key points 116 Active Learning Case Key terms 116 Cultures clash as big pharma gets bigger 148 Real Cases Introduction 149 Canon Group 116 What is culture? 150 R&D at Hewlett-Packard 118 The importance of culture in different Notes 119 business contexts 151 Bibliography 121 Culture has always been important 153  viii CONTENTS IN DETAIL International Business Strategy in Action International Business Strategy in Action McDonald’s 153 Brexit: A sharp lesson in the importance of trade National stereotypes and key dimensions of culture 155 interdependencies 193 Culture at two levels 155 Non-tariff barriers to trade 195 Hofstede’s four dimensions of culture 155 Quotas 196 Trompenaars’ seven dimensions of culture 156 ‘Buy national’ restrictions 196 The GLOBE project’s nine dimensions of culture 158 Customs valuation 196 Applying the national culture frameworks 159 Technical barriers 196 ‘The way we do things here’: the implications Anti-dumping legislation, subsidies and of cultural differences for organisations countervailing duties 197 and managers 160 Agricultural products 197 Cross-cultural management 162 Export restraints 197 Organisation 163 Other economic developments 198 Leadership 163 Countertrade 198 Communication 164 Trade in services 198 The corporate response 164 Free trade zones 199 Multinational organisation structures: imperialist or Key points 200 independent? 165 Key terms 200 Culture clash in cross-border M&A and Review and discussion questions 201 joint ventures 167 Real Cases International Business Strategy in Action China’s Rare Earth Minerals 202 The collective culture of John Lewis & Partners 168 Dumping on trade complaints 203 Culture embodied in national institutions 169 Notes 204 France: cultural and social characteristics that Bibliography 204 create a national distinctiveness 170 Appendix: Balance of payments 205 Key points 171 Key terms 172 Chapter 7 Review and discussion questions 172 International Financial Markets Real Cases and Institutions 215 Konami is watching its employees 173 Objectives of the chapter 215 Sport can be local and global: Manchester United 174 Notes 176 Active Learning Case Bibliography 177 Barclays Bank international financial dealings 216 Introduction 217 Chapter 6 Foreign exchange markets 218 International Trade 179 Foreign exchange markets in the United States 219 Determination of the exchange rate 224 Objectives of the chapter 179 Purchasing power parity 224 Active Learning Case International Fisher effect 225 US—China trade war: battle of the giants 180 Combined equilibrium relationships 225 Introduction 182 Other factors determining exchange rates 226 International trade theory 183 Protecting against exchange risk 227 Theory of absolute advantage 183 Alternatives to minimise exchange risk 228 Theory of comparative advantage 184 International Business Strategy in Action Factor endowment theory 186 The Big Four 228 International product life cycle theory 186 Foreign money and capital markets 231 Other important considerations 187 MNEs and national money markets 231 International Business Strategy in Action MNEs and national capital markets 232 Microsoft shows the world is not flat 188 Regional money and capital markets 232 Barriers to trade 190 The eurocurrency market 232 Reasons for trade barriers 190 Eurocurrency interest rates 233 Commonly used barriers 190 Other market characteristics 234 Tariffs 192 Criticisms of the euromarkets 234  CONTENTS IN DETAIL ix Eurobonds and euroequities 235 Bibliography 276 International Business Strategy in Action Appendix: Regional aspects of AngloGold Ashanti 236 multinationality and performance 277 The IMF system 236 Unresolved problems with the IMF system 238 Chapter 9 MNEs and international financial markets and Organising Strategy 282 institutions 238 Objectives of the chapter 282 Key points 239 Key terms 239 Active Learning Case Review and discussion questions 239 Procter & Gamble 283 Introduction 284 Real Cases Organisation structures 285 HSBC 240 Early organisation structures 285 Slowdown in China: Global financial markets and contagion effects 241 International Business Strategy in Action Notes 245 Sanofi-Aventis 287 Bibliography 246 The international division 288 Global organisation structures 289 International Business Strategy in Action Part Three Baker Tilly changes its name to RSM 294 Strategic management and organising strategy 297 INTERNATIONAL BUSINESS Analysis of key structural variables 297 STRATEGIES Coordination 298 Key points 301 Chapter 8 Key terms 302 Multinational Strategy 251 Review and discussion questions 302 Real Cases Objectives of the chapter 251 LVMH: organising luxury products in the Active Learning Case international arena 303 Vodafone and the triad telecom market 252 Maersk Group 304 Introduction 253 Notes 307 Strategic orientations 255 Bibliography 307 International Business Strategy in Action Tesco at home and abroad 256 Chapter 10 Strategy formulation 258 Corporate Strategy and National External environmental assessment 258 Internal environmental assessment 262 Competitiveness 309 Goal setting 265 Objectives of the chapter 309 Strategy implementation 266 Active Learning Case Location 266 Worldwide operations and local International Business Strategy in Action strategies of ABB 310 Fuji Xerox and Xerox 266 Introduction 311 Ownership 267 The single diamond 312 Functional strategies 269 Determinants and external variables 312 Control and evaluation 269 Critique and evaluation of the model 313 Common methods of performance measurement 270 The double diamond 315 Key points 272 Canada and the double diamond 315 Key terms 272 International Business Strategy in Action Review and discussion questions 272 Nokia and Ericsson: moving beyond mobiles 318 Real Cases Mexico and the double diamond 319 3M 273 Integration and responsiveness 322 Social media: Serengetee 274 Integration versus national Notes 275 responsiveness 322  x CONTENTS IN DETAIL International Business Strategy in Action Chapter 12 Renewed advantage through vertical integration at Marketing Strategy 365 Floreal Knitwear 323 Balancing the trade-offs 324 Objectives of the chapter 365 Key points 325 Active Learning Case Key terms 326 Adidas: promoting a global sports brand 366 Review and discussion questions 326 Introduction 369 Real Cases International market assessment 369 The global beer industry: decline and Initial screening: basic need and potential 369 growth at the same time? 327 Second screening: financial and IBM 329 economic conditions 370 Notes 331 Third screening: political and legal forces 371 Bibliography 331 Fourth screening: socio-cultural forces 371 Fifth screening: competitive environment 371 Final selection 371 Part Four Product strategies 372 Little or no modification 372 FUNCTIONAL AREA Moderate to high modification 373 STRATEGIES International Business Strategy in Action Weeby buys Tappy 375 Chapter 11 Promotion 376 Production Strategy 335 Nature of the product 376 Advertising 377 Objectives of the chapter 335 International Business Strategy in Action Active Learning Case The 2018 retail crisis catches up with GE production: from Six Sigma to the GE Store 336 Marks & Spencer 377 Introduction 337 Personal selling 379 Research, development and innovation 338 Pricing 380 Speed-to-market 340 Government controls 380 Generation of goods and services 342 Market diversity 380 Global sourcing 342 Currency fluctuations 381 International Business Strategy in Action Price escalation forces 381 H&M learning from Zara 343 Place 382 Manufacturing of goods 346 Different distribution systems 382 International Business Strategy in Action Choosing the best distribution system 383 Magna International Inc. 346 Strategic management and marketing strategy 383 Developing a strong service orientation 352 Ongoing market assessment 383 International logistics 354 Internet marketing and ‘open innovation’ 387 Transportation 354 Key points 389 Packaging 355 Key terms 389 Storage 356 Review and discussion questions 390 Different kinds of global production systems 356 Real Cases Strategic management and production Bang & Olufsen 390 strategy 357 Mirum – never lose your sense of wonder! 392 Technology and production design 358 Notes 393 Continuous improvement 358 Bibliography 393 Productivity 358 Key points 359 Chapter 13 Key terms 359 Human Resource Management Review and discussion questions 360 Strategy 396 Real Cases Flextronics 360 Objectives of the chapter 396 Nike 362 Active Learning Case Notes 363 The Coca-Cola Company thinks local 397 Bibliography 363 Introduction 398  CONTENTS IN DETAIL xi Selection and repatriation 399 International Business Strategy in Action International screening criteria and selection Intel effect 442 procedures 399 Transparency and corruption: politically Repatriation of expats 401 sensitive political risk 446 Training and development 403 Strategic management and political risk 448 Types of training 403 Use of integrative and protective/defensive International Business Strategy in Action techniques 448 The glass ceiling 404 Key points 451 Compensation 406 Key terms 452 Common elements in an international Review and discussion questions 452 compensation package 406 Real Cases Compensation trends and comparisons 408 Huawei accused of spying 453 Labour relations 409 Problems with ports 454 Labour relations practices 410 Notes 456 International Business Strategy in Action Bibliography 457 Primark: putting global stakeholders first 411 www resources 458 Industrial democracy 413 Strategic management and IHRM strategies 414 Chapter 15 Language training 414 International Financial Cultural adaptation 415 Management 459 Competitive compensation 416 Objectives of the chapter 459 Specially designed HRM programmes 417 Key points 417 Active Learning Case Key terms 418 Financial transparency at Siemens 460 Review and discussion questions 418 Introduction 461 Determining parent–subsidiary Real Cases relationships 463 India’s role in the global offshoring economy 419 Polycentric solution 463 Executive search firms 420 Ethnocentric solution 463 Notes 422 Geocentric solution 463 Bibliography 422 Managing global cash flows 464 Internal funds flows 464 Chapter 14 Funds positioning techniques 465 Political Risk and Negotiation Multilateral netting 467 Strategy 424 International Business Strategy in Action Worldwide tax havens 470 Objectives of the chapter 424 Managing cash 471 Active Learning Case International Business Strategy in Action Nestlé in Nigeria 425 Sovereign wealth funds 473 Introduction 426 Exchange risk management 475 Generic PEST analysis 426 Transaction risk 475 Political risk 428 Translation risk 475 Deregulation and political risk 429 Economic risk 475 The nature of political risk 430 An example of exchange risk management 477 Sources of political risk 431 Developing forecasting and reporting systems 479 Country analysis and political risk assessment 432 Capital budgeting in the MNE 480 Online risk information resources 432 Use of NPV 481 Quantifying risk vulnerability 433 Institutional features 483 Accounting for country risk 437 International financing in the MNE 483 Negotiation strategies 438 Financial structure 484 Behavioural characteristics of the Control: identifying objectives, evaluating participants in negotiations 440 affiliate performance and making performance International Business Strategy in Action consistent with goals 485 From riches to rags: the decline of Strategic international finance 486 the Venezuelan oil industry 441 Establishing overseas operations 486  xii CONTENTS IN DETAIL Reducing financial risk 487 Political, social and cultural characteristics 530 Key points 487 A traditionally strong government Key terms 487 role in the economy 530 Review and discussion questions 488 Distinctive cultural characteristics 531 Real Cases Economy and business 533 Carillion’s collapse 489 Japan and China: the new Asian powerhouse? 538 M-Pesa: Kenya’s mobile money service Business characteristics 539 leapfrogging traditional banks 490 Manufacturing strengths 539 Notes 493 Strong applied R&D 540 Bibliography 493 Keiretsu 540 International Business Strategy in Action Kirin Beer goes international 542 Part Five Distribution, retailing and customer orientation 543 Japanese corporations 543 REGIONAL STRATEGIES A changing nation 546 Restructuring capital markets 546 Chapter 16 Deregulation, increased M&A and inward FDI 547 European Union 497 International Business Strategy in Action Objectives of the chapter 497 Walmart takes Seiyu 549 Restructuring corporations 550 Active Learning Case The decline of manufacturing and Brexit troubles for Jaguar Land Rover 498 distribution keiretsu 551 The EU: origins and environment 501 The growth of outward FDI and offshore Emergence of a Single European Market 503 manufacturing 551 Productivity and competitiveness: how does The decline of lifetime employment and changing the EU compare? 505 HRM practices 552 International Business Strategy in Action Diversification strategies 552 VW diesel dispute 509 Conclusions 553 Accessing and adapting to EU markets 510 Key points 554 Strategic acquisitions and alliances 513 Key terms 554 Marketing considerations 513 Review and discussion questions 555 International Business Strategy in Action Real Cases The future is Orange 513 Renault, Nissan and Mitsubishi Alliance: Producing products and services in the EU 516 no pain, no gain 555 Management considerations 518 Sony – diversifying into the automobile industry? 558 Barriers to EU market access 519 Notes 559 Key points 521 Bibliography 560 Key terms 521 www resources 561 Review and discussion questions 521 Real Cases Chapter 18 Accor budget hotels 522 North America 562 Carrefour 523 Notes 525 Objectives of the chapter 562 Bibliography 525 Active Learning Case FTA, NAFTA and CUSMA 563 Chapter 17 Introduction 566 Japan 527 Canada 566 Canada’s economy 567 Objectives of the chapter 527 Differences in the business environment 568 Active Learning Case International Business Strategy in Action Doing business in Japan 528 Air Canada’s bid for consolidation 568 Introduction 530 Canada’s multinationals 573  CONTENTS IN DETAIL xiii Business opportunities in Canada 574 Key points 611 Franchising 575 Key terms 612 Mexico 575 Review and discussion questions 612 Mexico’s economy 576 Real Cases Mexico, NAFTA and CUSMA 576 The Indian IT, software and services industry 612 Regional trade agreements 577 Bumrungrad International in Thailand 616 Doing business in Mexico 577 Notes 618 International Business Strategy in Action Bibliography 618 Mexico’s tomatoes 578 www resources 619 Key points 582 Key terms 583 Chapter 20 Review and discussion questions 583 China 620 Real Cases Objectives of the chapter 620 Jumex of Mexico 584 GlaxoSmithKline in the United States 585 Active Learning Case Notes 586 Oxford Instruments in China 621 Bibliography 586 Introduction 622 Unprecedented scale, scope and speed of growth 623 The role of government 626 Chapter 19 MNE investment into China 627 Emerging Economies 588 International Business Strategy in Action Objectives of the chapter 588 Airbus secures a deal with China 628 Active Learning Case Foreign R&D investment 631 Acer Taiwan goes international 589 Getting into China 633 Introduction 590 Outward investment and the new Triad firms and emerging economy firms: why multinationals from China 636 the mutual attraction? 591 International Business Strategy in Action An overview of emerging economies, by region 592 Alibaba steps up to global competition 639 Asia-Pacific and the Middle East 594 Key points 641 Central and eastern Europe 595 Key terms 641 Latin America and the Caribbean 599 Review and discussion questions 642 Africa 600 Real Cases International Business Strategy in Action China’s One Belt One Road 642 From Oserian to Tesco: the Kenyan cut flower Nanjing Auto makes the MG 644 industry 600 Notes 645 Shifting patterns of comparative and Bibliography 646 competitive advantage 602 www resources 648 Flying Geese model 603 Emerging economies as sources of innovation 606 Glossary 649 Market access to the triad 608 Index 660 International Business Strategy in Action Korean chaebols: Hyundai and Samsung 609 Supporting resources Visit go.pearson.com/uk/he/resources to find valuable online resources For instructors Instructor’s Manual PowerPoints For more information please contact your local Pearson Education sales representative or visit go.pearson.com/uk/he/resources LIST OF FIGURES AND TABLES Figures 1 The multiple, interacting levels and lenses 3.12 Global MNE structures for managing innovation 111 of international business studies xxxi 4.1 The European Union’s institutions 138 2 The internationalisation roadmap: decision 4.2 Exchange rate: US dollar against Turkey’s lira stages for global expansion xxxiii in 2018 144 3 The structure of this book xxxv 5.1 Cross-cultural business contexts 151 1.1 The consequences of globalisation 7 5.2 Hofstede’s power distance against 1.2 The dynamics of globalisation 11 individualism for 20 countries 156 1.3 Estimated stock of outward FDI by country 5.3 Excerpts from Trompenaars’ cultural of origin, 1914 23 attitudes survey 161 1.4 Estimated stock of accumulated FDI by country 5.4 Management dimensions of culture 163 of origin, 1938 25 5.5 Shared characteristics stemming from 1.5 FDI outward stock from selected developing common cultural influences 170 economies as a percentage of the world’s 6.1 The international product life cycle 187 FDI outward stock 30 6.2 Microsoft: revenues by geographic segment 2.1 Classes of FSAs or ownership (O) advantages 44 (millions of US$, 2014–18) 189 2.2 Cost of shipping a 40 ft container to the 6.3 Impacts of a tariff 193 American East Coast (US$) 49 6.4 The US current account balance and its 2.3 The OLI framework: a decision model 51 components, 2007–15 199 2.4 Frameworks for internal and external analysis 54 6.5 Rare earth mineral production: China versus 2.5 The strategic management process in action 54 rest of the world (metric tonnes) 202 2.6 The basic components of international business 55 7.1 Foreign exchange market for euros in New York 218 2.7 The FSA–CSA matrix 56 7.2 US foreign exchange markets 220 2.8 The motives of internationalisation: a decision model 61 7.3 Exchange rate determination 226 2.9 The internationalisation process of the firm 61 7.4 History of Libor rates, (2000–18) 234 2.10 The CAGE model 65 7.5 Change in the Shanghai Composite Index 2.11 Entry modes: benefits and drawbacks 68 (2015–19) 242 2.12 Organisational modes of cooperative agreements 69 7.6 Change in Japan’s TOPIX Index (2015–19) 242 2.13 Globally distributed operations – global value chain 72 7.7 Change in Hong Kong’s Hang Seng Index 2.14 Risk vs. reward: country market attractiveness (2015–19) 243 for SME managers 78 7.8 Change in Taiwan’s TAIEX Index (2015–19) 243 2.15 Foreign market selection criteria for 7.9 Change in the Brent oil price, 2014–19 243 international and non-international SMEs 79 7.10 Change in the copper price, 2014–19 244 3.1 Output of high-tech manufacturing industries 8.1 The five forces of industry competitiveness 259 for selected economies, 2003–16 92 8.2 The five-forces model applied to the 3.2 Global R&D expenditures in $ billions by semiconductor industry 261 selected countries 92 8.3 A basic value chain 263 3.3 R&D personnel per million people for selected 8.4 Competitive strategies in global shipbuilding 265 countries, 2016 93 8.5 The control and evaluation process 270 3.4 Top US patent recipients, 2010–16 95 8A Multinationality and performance 278 3.5 Top 15 US patent recipients, 2017 95 9.1 An export department structure 286 3.6 Top 15 spenders on R&D in $ billions, 2017 96 9.2 Use of subsidiaries during the early stages 3.7 The VRIO framework: a decision-making process 99 of internationalisation 286 3.8 The conventional model of an innovation system 107 9.3 An international division structure 288 3.9 International dimensions of innovation 108 9.4 A global product structure 289 3.10 MNE headquarters linked through its affiliates 9.5 A global area structure 291 in other countries to the innovation systems 9.6 A global functional structure 292 of other countries 109 9.7 A geographic matrix structure 293 3.11 Structural, strategic and organisation 9.8 A multinational matrix structure 293 dilemmas for the innovative multinational firm 111 9.9 A mixed structure 295 xiv  LIST OF FIGURES AND TABLES xv 9.10 A transnational network structure 296 15.7 The 2017 Brookings Financial and Digital 9.11 Organisational epigrams 300 Inclusion Project key findings 492 9.12 LVMH Revenue by Business Group, 2018 303 16.1 UK Automotive vehicle production, 2013–17 499 9.13 Segmentation of the Maersk Group activities 306 16.2 Key components in an average Land Rover 10.1 Porter’s single-diamond framework 312 Discovery 500 10.2 The four stages of national development 16.3 The European Union 501 and the historical position of select nations 314 16.4 Hourly compensation costs in manufacturing, 10.3 The single-diamond view 316 US dollars, 2016 506 10.4 Canadian–US double diamond 316 16.5 Where labour productivity is highest, 2017 507 10.5 The shape of North America 321 16.6 Orange consolidated financial statement 10.6 High and low levels of integration vs. (2014–18) 515 diversification 322 16.7 Competition and shelter-based strategies 520 10.7 The price of a pint around the world, 2018 327 17.1 Japan’s foreign trade by country/region, 2017 536 10.8 Beer market share by segment, 1985–2015 328 17.2 Japan’s major export and import 11.1 Global R&D: markets and hierarchies 339 commodities, 2017 537 11.2 The journey of a single Zara dress 344 17.3 Japan, 2017 538 11.3 Magna’s global operations 347 17.4 Bank group consolidation in Japan 547 11.4 Where Starbucks gets its coffee 350 17.5 Cross-border M&A activity in Japan, 1980–2017 548 11.5 Product- and service-dominated businesses 352 17.6 Top 10 Renault–Nissan–Mitsubishi alliance 11.6 Global production systems: where is the markets, 2017 556 value added? 357 17.7 Top 10 Renault, Nissan and Mitsubishi 12.1 Selected examples of product modification markets, 2017 557 in the international arena 373 18.1 North America, 2017 566 12.2 Product life cycles: two different approaches 376 18.2 Airline market share between Canada and 13.1 The management of multinational enterprises 398 Europe and Canada and Sun destinations, 2018 569 13.2 Glass-ceiling index, 2017 405 18.3 Air Transat’s seasonal strategy 569 13.3 Expatriate packages for middle managers: 19.1 What is the attraction for triad and non-triad Asia-Pacific countries compared (US$) 408 firms investing in each other’s home regions? 591 13.4 Trade union density, 2016 410 19.2 Flying Geese model: changing national-level 13.5 Primark’s key stakeholders 412 specialisation 604 14.1 PEST framework for country analysis 427 19.3 Flying Geese model: the shifting location 14.2 Types and levels of political risk 430 of industrial production 604 14.3 FDI drivers: the strategic objectives 19.4 Flying Geese model: the pattern of shifting of MNEs, host-country attractiveness, comparative advantage 605 and host-government requirements 439 19.5 Accelerated structural transformation 14.4 FDI flows in Costa Rica, 1984–2004 443 (are the geese flying faster?) 605 14.5 Costa Rica: imports and exports, 1995–2003 443 19.6 Firm-specific advantages (FSAs) for the 14.6 Zones of acceptance in the negotiating process 445 new multinationals 607 14.7 Select examples of the use of integrative 19.7 India’s IT Industry: rapid growth in the early years 613 and protective/defensive techniques 449 19.8 The growth of the Indian IT market: local 14.8 Huawei’s Revenue Growth 2009–17 ($ billions) 453 and global (US$ billion), 2010–18 614 15.1 Financial management in the MNE 462 19.9 The growth of the Indian IT market in 15.2 Common examples of internal sources and terms of revenue and employment 614 flows of funds 465 19.10 India’s IT sector overview 615 15.3 Multilateral dollar flows between subsidiaries 469 20.1 South and East Asia 623 15.4 Centralised netting process in action 469 20.2 China’s air passengers, 2007–16 (millions) 628 15.5 M-Pesa by the numbers 491 20.3 Top 10 e-commerce retailers in China, 15.6 M-Pesa around the world: launch dates 491 2018 (by sales share) 639 Tables 1.1 FDI outward stock by countries (millions of US$), 1.4 Advantages of in-house operations and 1980–2017 29 outsourcing/offshoring 35 1.2 FDI inward stock by countries (millions of US$), 2.1 A classification of L advantages 47 1980–2017 31 2.2 China’s and Mexico’s market share (%) 1.3 Internationalisation statistics of the 100 largest in the global automotive industry, 2005–13 49 non-financial MNEs worldwide and from 2.3 Growth in annual salary costs within the developing and transition economies (billions automotive OEM workforce (% change), 2009–14 50 of US$, thousands of employees and %) 32 2.4 Internationalisation motives 57  xvi LIST OF FIGURES AND TABLES 2.5 Types of international SMEs by trade and 13.1 Ratio between CEO and average worker pay, 2016 409 FDI up and down the value chain 74 13.2 Cost of living in select cities 2.6 SMEs’ internationalisation strategies 75 (New York = 100), 2017 416 2.7 Changes in SBF-DP SME Index in all four 13.3 Top executive search firms, 2017/18 421 quarters of 2018 76 14.1 Changes in national regulations on FDI, 3.1 USPTO patents granted, by location of 2003–17 429 inventor, 2006–15 93 14.2 Political risk: sources, agents and effects 431 3.2 Selected list of major developing economies 14.3 The cost/ease of doing business: cross-country in US patenting, 2010–15 94 comparisons 434 3.3 Firm-specific resources and capabilities 98 14.4 The weighted country risk assessment model 435 3.4 Top ten patent recipients, 2017 113 14.5 Twelve examples of the differences in verbal 3.5 IBM’s research labs 114 behaviours among Japanese, American and 5.1 World population percentages in terms of home Brazilian negotiators 446 region, language and religion 150 15.1 Shifting profits by transfer pricing 466 5.2 Average and intra-country ranking of 15.2 Transfer pricing through tax havens 467 work goals: a seven-nation comparison 162 15.3 The world’s top 50 tax havens based on the 5.3 Organisation types reflecting cultural predispositions 166 Financial Secrecy Index (FSI), 2018 468 6.1 The 2018 US–China Trade War: ten key events 180 15.4 Net cash positions of subsidiaries 469 6.2 Microsoft’s revenue classified by product 15.5 Largest sovereign wealth funds by assets under and service offerings in 2018 (millions of US$) 189 management, 2018 474 6.3 OPEC exports 2017 (millions of US$) 192 15.6 Exchange risk hedging techniques 476 6.4 Common non-tariff barriers to trade 195 15.7 International sources of credit (including 6A Balance of payments: IMF presentation 207 markets and intrafirm transfers) 484 6B US international transactions, 2017 15.8 Carillion’s global revenue 2014–16 489 (millions of US$) 211 16.1 European automotive manufacturers, 2017 498 6C US merchandise trade, 2017 (millions of US$) 213 16.2 Economic profile of the USA, Japan and the EU 7.1 The Barclays Group’s structural currency (in US$), 2018 502 exposures as at 31 December 2017 216 16.3 The world’s most competitive economies 508 7.2 Analysis of loans and advances to customers 16.4 Direction of EU trade 512 as at 31 December 2017 217 16.5 EU anti-dumping cases investigated by 7.3 Exchange rates in the interbank market, sector, 2009–17 519 29 October 2015 221 16.6 Accor Hotel portfolio by region, 2018 523 7.4 Currency futures contract specifications 17.1 Economic and trade data for Japan, 2009–17 533 at the Chicago Mercantile Exchange 223 17.2 Japan’s inward, outward and net FDI by country/ 7.5 The Big Four (2018) 228 region, 2010–17 (balance of payments basis, 7.6 IMF special drawing rights (November 2015) 237 net and flow, millions of US$) 534 8.1 Typical strategic orientations of MNEs 255 17.3 The 25 largest Japanese MNEs, 2019 ranking 8.2 Typical goals of an MNE 265 (billions of US$) 545 9.1 World’s ten largest pharmaceutical companies, 18.1 Direction of US trade, 1999–2018 564 2018 (based on revenue) 287 18.2 Direction of Canada’s trade, 1999–2018 564 9.2 Factors that encourage centralisation or 18.3 Direction of Mexico’s trade, 1999–2018 564 decentralisation of decision making in 18.4 The largest 25 Canadian-based firms, 2016 data 573 multinational operations 299 19.1 FDI inflows, by host region and economy, 9.3 Top ten container shipping companies in order 1995–2018 (millions of US$) 593 of TEU capacity, 2019 305 19.2 FDI from developing countries, 2008–18 10.1 FDI positions by Canada, the United States (billions of US$) 594 and Mexico, 2003–17 320 19.3 The top 50 non-financial TNCs from developing 10.2 Largest worldwide brewers in terms of economies ranked by foreign assets, 2018 volume, 2010–16 329 (millions of US$, number of employees) 596 11.1 The cost of arriving late to market (and still 19.4 Comparing the international costs of being on budget) 341 medical procedures 617 11.2 H&M stores and markets in 2017 344 20.1 China: key economic indicators, 2010–17 624 11.3 Magna’s aggregated external revenues 20.2 China: key trade indicators (2019) 624 by customer 348 20.3 China: direct investment flows, outward 12.1 Adidas’s marketing objectives and and inward (billions of US$), 2013–17 625 measurements 367 20.4 Common examples of synergies between 12.2 The effect of MNE pricing on final consumer costs 381 foreign multinationals and local Chinese firms 635 12.3 International market penetration: location 20.5 Top 25 Chinese (mainland) firms in the ‘Fortune of subsidiaries, holdings and joint ventures 384 Global 500’ list, 2018 ranking 637 PREFACE The eighth edition of International Business familiar to those who have used the book before. We have kept five case studies in each Chapter (except We have continued to evolve the structure and content of Chapter 1, which introduces the field of international this textbook in step with the rapidly changing world of business). Every Chapter has been thoroughly updated, international business. This includes completely revising with new data, trends, and references. A revised bibliog- several key chapters, including Chapter 6, on Interna- raphy appears at the end of each chapter. tional Trade. This is entirely updated and includes new case studies covering both the trade-war between the US Acknowledgements and China and the complex Brexit process. These and other real-world developments have made a wide range Our lead contributor and researcher on this project was of stakeholders much more aware of the significance of Dr Amir Qamar, a Lecturer (Assistant Professor) in Stra- global trade interdependencies than in the past. Chap- tegic Management in the Department of Strategy and ter 16 on the European Union is also entirely updated to International Business at Birmingham Business School, take account of Brexit and a range of new socio-political University of Birmingham (see below). He deserves a and economic events in Europe. big thank you for coordinating the revision process and Chapter 11 (‘MNEs as Responsible Stakeholders’) updating large parts of the book. has been removed, making this edition more consoli- Amir provided 17 of the new case studies and helped dated, with 20 rather than 21 chapters. In place of Chap- shape the new emphasis described above. He was lead ter 11 we have inserted new sections, frameworks and author on: ‘US manufacturing: from China to Mexico’ case studies on responsible business throughout the book (Chapter 2); ‘Worrying times for Singapore’s SMEs’ as a fundamental dimension of international business (Chapter 2); ‘R&D at Hewlett-Packard’ (Chapter 3); theory and practice across all the other chapters. New ‘Greece: third (bailout) time lucky’ (Chapter 4); ‘Busi- case studies, such as ‘Businesses and NGOs working nesses and NGOs work together on climate change’ together on climate change’ in Chapter 4, provide addi- (Chapter 4); ‘Turkish Lira in crisis: record low in tional material on this topic. Chapter 14, on ‘Political 2018’ (Chapter 4); ‘Konami is watching its employees’ Risk and Negotiation Strategy’ also features new case (Chapter 5); ‘The collective culture of John Lewis & studies ‘From riches to rags: the decline of the Venezue- Partners’ (Chapter 5); ‘US and China trade-war: battle lan oil industry’ and ‘Huawei accused of spying’. of the giants’ (Chapter 6); ‘China’s rare earth minerals’ There are 95 case studies and more new and revised (Chapter 6); ‘Slowdown in China: Global financial mar- case studies than in the last edition. Of these, 25 are kets and contagion effects’ (Chapter 7); ‘Social media: completely new and 70 have been thoroughly updated. Serengetee’ (Chapter 8); ‘Baker Tilly Changes its name The brand-new case studies represent a more diverse to RSM’ (Chapter 9); ‘The global beer industry: decline set of stories and illustrations, facts and figures, from and growth at the same time’ (Chapter 10); ‘H&M different industries and countries, from the fortunes learning from Zara’ (Chapter 11); ‘Adidas: promoting of the Turkish Lira to M-Pesa in Kenya; the signifi- a global sports brand’ (Chapter 12); ‘The 2018 retail cance of tomato exports for Mexico to the Chinese crisis catches up with Marks & Spencer’ (Chapter 12); government’s international push via the ‘Belt and ‘Primark: putting global stakeholders first’ (Chapter 13); Road Initiative’. ‘Huawei accused of spying’ (Chapter 14); ‘Intel effect’ The Introduction outlines a number of guiding frame- (Chapter 14); ‘Financial transparency at Siemens’ works to help the reader navigate, providing an overview (Chapter 15); ‘Carillion’s collapse’ (Chapter 15); ‘Brexit of our approach and the structure of the book as well as troubles for Jaguar Land Rover’ (Chapter 16); ‘VW die- the standard sections of each chapter. Figure 3 provides sel dispute’ (Chapter 16); ‘Air Canada’s bid for consoli- an outline, linked to a description of how the book is dation’ (Chapter 18); ‘Mexico’s tomatoes’ (Chapter 18); organised. Within the chapters the structure should be ‘Airbus secures new deal with China’ (Chapter 20); xvii xviii PREFACE ‘Alibaba steps up to global competition’ (Chapter 20). leapfrogging traditional banks’ (Chapter 15). We are also He is also the author for the Instructor’s Manual and grateful to Dr Roshan (Dev) Boojihawon, a Senior Lec- supplementary PowerPoint slides. turer in Strategy at Birmingham Business School, who Dr Emma C. Gardner, a Lecturer (Assistant Profes- led on Renewed advantage through vertical integration sor) in the Department of Strategy and International at Floreal Knitwear’ (Chapter 10) and ‘Mirum – never Business at Birmingham Business School, University lose your sense of wonder’ (Chapter 12). of Birmingham, also provided excellent new case stud- Considerable research support for Rajneesh Narula ies for the book. Emma was lead author for: ‘The Big was provided by Jill Juergensen, doctoral candidate Four’ (Chapter 7); ‘Tesco at home and abroad’ (Chap- at the Henley Business School, who assisted with the ter 8); ‘The glass ceiling’ (Chapter 13); ‘India’s role in updates in Chapters 1–3. We acknowledge Dr Irina the global offshoring economy’ (Chapter 13); ‘Sony- Surdu, lecturer at Henley Business School, University diversifying into the automobile industry?’ (Chapter 17); of Reading as the lead author of two cases in Chapter 2: ‘China’s One Belt One Road’ (Chapter 20). ‘Walmart Inc.’, and ‘Back again? IKEA’s re-entry into Thanks also go to Kieran Collinson for updating large Japan’. Dr Karim Kirollos, a Teaching Fellow in Inter- segments of the book, as well as providing three of the national Business at Aston University, helped edit and new cases in this edition. Kieran was lead author for update the text and cases associated with Rajneesh’s ‘Magna International Inc.’ (Chapter 11); ‘From riches chapters. Additional assistance was provided by Jong to rags: the decline of the Venezuelan oil industry’ Min Lee, lecturer at Henley Business School, University (Chapter 14); ‘M-Pesa: Kenya’s mobile money service of Reading. ABOUT THE AUTHORS Dr Simon Collinson is Deputy Pro-Vice-Chancellor, business practices and cross-cultural management, for- Director of the City-Region Economic Development eign direct investment and economic change. Simon has Institute (City-REDI) and Professor of International received research funding awards from the UK ESRC Business and Innovation at the University of and the Engineering and Physical Sciences Research Birmingham. He also a Fellow of the Royal Society Council (EPSRC), the UK government’s Department (FRSA), the Academy of Social Sciences (FAcSS) and of Trade and Industry, Japan’s Science and Technology the British Academy of Management (FBAM). Agency, the British Royal Society and European Com- Previous roles include Chair of the Chartered Asso- mission Director General (/Directorate) XII (DGXII) of ciation of Business Schools (CABS) and member of the the European Union. UK Economic and Social Research Council (ESRC). He He has research, consulting and executive teaching was Professor of International Business at Henley Busi- experience with a wide range of multinational firms. He ness School, University of Reading and Deputy Dean has published a range of books, including From Com- and Professor of International Business at Warwick plexity to Simplicity which was shortlisted for the Char- Business School, University of Warwick (UK). He was tered Management Institute (CMI) business book of the also an Academic Associate at the Centre for Interna- year prize. He has also published in refereed journals tional Business and Management (CIBAM), Judge Busi- including Journal of International Business Studies, ness School, Cambridge, and a Research Associate at the Organization Studies, Business History, Research Pol- Centre for Competitive Advantage in the Global Econ- icy, Multinational Business Review, International Jour- omy (CAGE) at Warwick University. Prior to Warwick nal of Technology Management, European Management he was Lecturer and Senior Research Fellow at Edin- Journal, R&D Management, Organization Dynamics burgh University Management School and the Assistant and Technology Analysis & Strategic Management. His Director of the Japanese–European Technology Studies research has also featured in the Independent, The Times, (JETS) Institute for seven years. The Sunday Times, BBC Radio 4, the New Statesman Simon has held visiting positions at Zhejiang Uni- and the U.S. News & World Report. versity, the Australian Graduate School of Management While continuing to publish on China, innovation and (AGSM) in Sydney, the Kelley School of Business, Indi- the evolving competitiveness of emerging economies, ana University, Hitotsubashi University and the National he has recently focused on innovation and productivity Institute of Science and Technology Policy (NISTEP) in and firms in the context of inclusive regional economic Tokyo, and the John Dunning Centre for International growth at City-REDI. Business, Henley Business School, University of Read- ing. Following a Joint BA (Hons.) in Geography and Dr Rajneesh Narula, OBE is the John H. Dunning Sociology at Leeds University and an MA in Human Chair of International Business Regulation at the Geography at the University of Florida, Gainesville, Henley Business School, University of Reading, UK. Simon was awarded his D.Phil. from the Science Policy He has previously held positions at Copenhagen Research Unit (SPRU) at Sussex University in 1991. Business School, BI Norwegian Business School, the His original research was on technology transfer and University of Oslo, and the University of Maastricht. indigenous technological capabilities in Kenyan man- He currently holds honorary appointments at UNU- ufacturing firms. Since then projects and papers have MERIT, Norwegian Business School, the University of focused on global innovation strategies, R&D, knowl- Urbino and Oxford University. edge and intellectual asset management in multinational In 2017, he was appointed an Honorary Officer of firms; the competitiveness of international UK firms; the Most Excellent Order of the British Empire (OBE). national systems of innovation and emerging econo- The honour is in recognition of his Services to Business mies; high-technology entrepreneurship, small-firm net- Research. He was elected a Fellow of the Royal Society works and regional development; Japan and China: local of Arts, Manufactures and Commerce (FRSA) in 2015. xix  xx ABOUT THE AUTHORS He is a regular commentator on business and econom- International Business and Economics from Rutgers Uni- ics issues on BBC World News, CGTN, TRT World, as versity, US. Before academia, Professor Narula worked well as a variety of print and online publications, and as an Engineer in Nigeria, and later as a Planning Analyst gives over 30 public lectures and seminars at universities at IBM Asia/Pacific Headquarters in Hong Kong. around the world every year. His research and consulting have focused on the role Dr Alan M. Rugman was, until his untimely death in of multinational firms in development, innovation and July 2014, the lead author of this book and Professor of industrial policy, R&D alliances and outsourcing. He International Business at the Henley Business School has published over a hundred articles and chapters in and Head of School, International Business and books on these themes. He was Editor-in-Chief of Mul- Strategy at the University of Reading, UK. He held vis- tinational Business Review from 2014 to 2016, and is iting positions at Columbia Business School, London currently Area Editor for the Journal of International Business School, Harvard University, UCLA, MIT, Business Studies (2016–22). He was Editor-in-Chief of Warwick Business School, the University of Paris–La The European Journal of Development Research from Sorbonne, University of Sydney, Saint Louis 2009 to 2013. University, and the University of Lyon. Dr Rugman He regularly acts as a consultant and advisor to published over 300 articles dealing with the economic, the European Commission, United Nations Industrial managerial and strategic aspects of multinational enter- Development Organization (UNIDO), United Nations prises and with trade and investment policy. He is rec- Conference on Trade and Development (UNCTAD), the ognised as one of the ten most-cited scholars in the Organization for Economic Co-operation and Develop- field of international business worldwide. ment (OECD), and a variety of other international and As a leading authority in international business, Dr national organisations. He has travelled widely, having Rugman served as President of the Academy of Interna- undertaken research and consultancy projects or taught tional Business from 2004 to 2006, was elected a Fellow in Tanzania, Uganda, Thailand, China, Vietnam, Russia, of the Academy in 1991, and served as Dean of the Fel- India, Qatar, UAE, Colombia, Australia, Japan, Mauri- lows. He was also a Fellow of the Royal Society of Arts, tius, Senegal and Pakistan, Bangladesh, South Africa, in elected 1998. He served on the Editorial Board of the addition to almost all the countries of the EU. Journal of International Business Studies and was the He is listed as one of the top 20 most cited academic Editor-in-Chief of the Multinational Business Review. authors worldwide in the fields of international business, emerging markets, economics of innovation and eco- Dr Amir Qamar is a Lecturer (Assistant Professor) in nomic development. His publications with John Dun- Strategic Management in the Department of Strategy ning and Sanjaya Lall on FDI-assisted development are and International Business at Birmingham Business especially well-cited contributions on the subject. School, University of Birmingham. Amir has a back- He is the author or editor of 13 books, including ground in Economics and International Business, but Globalization & Technology (Polity Press, 2003), Mul- his more recent work has focused on Operations tinationals and Industrial Competitiveness (with John Management and Supply Chain Management as his Dunning, Edward Elgar, 2004), Understanding FDI- PhD research investigated the performance and contex- assisted Economic Development (with Sanjaya Lall, tual trade-offs between lean and agile organisations Routledge, 2004), and Multinationals on the Periphery within the automotive industry. (with Gabriel Benito, Palgrave, 2007). His publications After completing a PhD in Management at Birming- have appeared in leading journals, including the Jour- ham Business School, Amir joined the City-Region nal of International Business Studies, Oxford Develop- Economic Development Institute (City-REDI) at the ment Studies, Research Policy, Journal of Management University of Birmingham, where he worked on a Studies, Journal of World Business, and Management range of projects including low-pay and productivity. International Review. His 2003 book Globalization and As an External Associate, Amir is still closely working Technology has been translated and published in Chinese with City-REDI to better-understand the relationships and Arabic. between the regional economy and specific firms. He obtained his B.Eng. (Electrical Engineering, with Amir’s published papers appear in journals such Hons.) from Ahmadu Bello University, Zaria Nigeria, as Supply Chain Management: An International an MBA from Rutgers University and his Doctorate in Journal and the International Journal of Production  ABOUT THE AUTHORS xxi Research. Amir has edited several books and has also is also an Officer of the Academy of International Busi- worked on the seventh edition of the Collinson, Narula ness (AIB) Research Methods Shared Interest Group and Rugman International Business textbook. His and the lead organiser of the Annual Strategy and Inter- research interests include investigating multiplier effects national Business Symposium (ASIBS) at the Birming- within certain supply chains, the employment footprint ham Business School. Amir has experience of teaching a of MNEs, ambidextrous production processes, R&D ini- wide range of modules in the domains of business strat- tiatives, productivity levels and research methods. Amir egy and operations. GUIDE TO THE CASE STUDIES COUNTRY/ NEW/ CHAPTER TYPE OF CASE ORGANISATION/INDUSTRY REGION REVISED PAGE Chapter 1 (n/a) An Introduction to International Business Chapter 2 Active Learning Case Starbucks: a global ‘coffee culture’ US Revised 41 General Frameworks in International Business US manufacturing: from China to US/Emerging Revised 49 International Strategy in Action Mexico Economies: Business China/Mexico International Business Worrying times for Singapore’s Singapore Revised 76 Strategy in Action SMEs Real Case Walmart Inc. US New 81 Real Case Back again? IKEA’s re-entry into Japan New 83 Japan Chapter 3 Active Learning Case GE Healthcare in India: locally US/Asia Revised 89 Multinational driven innovation Enterprises, Innovation and International Business Spreadshirt: open innovation EU Revised 105 Competitiveness Strategy in Action International Business Innovation networks at IBM US Revised 113 Strategy in Action Real Case Canon Group Japan Revised 116 Real Case R&D at Hewlett-Packard US Revised 118 Chapter 4 Active Learning Case How risky is foreign investment in Emerging Revised 126 International Russia? Economies Politics International Business Greece: third (bailout) time lucky Greece Revised 130 Strategy in Action International Business Businesses and NGOs work Europe New 136 Strategy in Action together on climate change Real Case How environmental regulations US/Emerging Revised 143 can be used as trade barriers Economies Real Case Turkish lira in crisis: record low Turkey New 144 in 2018 xxii  GUI DE TO THE CASE STUDI E S xxiii COUNTRY/ NEW/ CHAPTER TYPE OF CASE ORGANISATION/INDUSTRY REGION REVISED PAGE Chapter 5 Active Learning Case Cultures clash as big pharma gets EU: Sweden Revised 148 International bigger and Italy/US Culture International Business McDonald’s US Revised 153 Strategy in Action International Business The collective culture of John UK Revised 168 Strategy in Action Lewis & Partners Real Case Konami is watching its employees Japan New 173 Real Case Sport can be local and global: EU/US/Asia Revised 174 Manchester United Chapter 6 Active Learning Case US–China trade war: battle of the US and China New 180 International giants Trade International Business Microsoft shows the world is not US/EU Revised 188 Strategy in Action flat International Business Brexit: A sharp lesson in Europe New 193 Strategy in Action the importance of trade interdependencies Real Case China’s Rare Earth Minerals China New 202 Real Case Dumping on trade complaints Canada/US Revised 203 Chapter 7 Active Learning Case Barclays Bank international EU: UK Revised 216 International financial dealings Financial Markets and Institutions International Business The Big Four UK Revised 228 Strategy in Action International Business AngloGold Ashanti Emerging Revised 236 Strategy in Action Economies: South Africa Real Case HSBC EU: UK Revised 240 Real Case Slowdown in China: Global Revised 241 financial markets and contagion effects Chapter 8 Active Learning Case Vodafone and the triad telecom EU Revised 252 Multinational market Strategy International Business Tesco at home and abroad US/Japan/UK Revised 256 Strategy in Action