Chapter 1

Nature of International Business

 Learning Objectives
After reading this chapter, you should be able to:

understand the nature of international
business
 state and explain drivers of international

business
 compare and contrast international business

with domestic business

 understand reasons why you should study

international business
 understand to ripple effects of globalisation


point out the routes of internationalisation

trace the evolution of international business2
Assessing Corporate Globality

3
 World View (Percentage Regional
Distribution of IT Sales for Selected
Companies in 1993)

4
Globalisation’s Top 20 Nations

5
Average tariff rates on manufactured
Products (%)

6
Five Currents of Globalisation

7
 The World’s Top 25 Non-financial
MNEs Ranked by Foreign Assets, 2004

8
Effects of Globalisation

9
Employment in Manufacturing

10
Number of US Jobs Moving Offshore

11
Income of rich and poor countries

12
Routes of Globalisation

13
Exports of Goods and Services as a Percentage
of GDP of Select Countries (2004)

14
Plan of the Book

15
Chapter 2
Multinational Corporations
 Learning Objectives
After reading this chapter, you should be able to:

understand the nature of multinational
companies
 list the goals of MNCs

 point out the criticisms and defenses from

MNCs

2
The World’s Largest Corporations

3
MNCs Spread

4
Extent of Overseas Earnings in Total
Revenues of Indian Companies

5
Select Indian MNCs

6
Indian Companies in the Fortune 500
Hall of Fame (2008)

7
 The World’s Top 25 Non-financial
MNEs Ranked by Foreign Assets, 2004

8
Seven Key Disputed Issues About The Role and Impact of
Multinational Corporations on Developing Countries

9
International Comparison (Export-Imort
Ratio Percent, 1994)

10
Chapter 3
Global Trade and its Theories
 Learning Objectives
After reading this chapter, you should be able to:

appreciate the benefits of foreign trade
 understand the trade policies

 understand and evaluate several trade theories

and their implications on international

business
 understand the usefulness of trade theories to

an international manager
 list protectionist measures and argue for trade

protectionism

2
Growth of Auto Componens Industry

3
Top 10 Exporters

4
Ranking of India

5
Barriers to Trade

6
Arguments for Protectionism

7
World’s Top Exporters

8
Trade Theory Timeline

9
Absolute Advantage

10
Comparative Advantage

11
World Steel Dynamics on 12
World-Class Steel Makers

12
Porter’s Diamond

13
Chapter 4
Foreign Direct Investment
 Learning Objectives
After reading this chapter, you should be able to:

understand the nature of FDI
 justify the need for FDI

 explain theories of FDI

 describe the factors impacting FDI

 explain Inida's share in FDI

2
Theories of FDI

3
The Eclectic Theory of FDI

4
Factors Affecting the FDI Decision

5
Market Size/Growth and Investment
Priorities

6
FDI Flows, by Region and Selected Countries,
1993-204 (Billions of Dollars and per cent)

7
FDI Flows by region, 2003-2004
(Billions of dollars)

8
Number of Mergers and
Acquisitions

9
FDI Flow

10
Chapter 5
Political and Legal Environment
 Learning Objectives
After reading this chapter, you should be able to:

identify the environmental forces influencing
international business
 describe the nature of political environment

including how political risk assessment is made

 explain how firms manage political risks

 explain the different legal systems prevailing

across the globe

 explain how international disputes are resolved


listed the areas (legal) of concern for MNCs

2
Environment of International Business

3
The Ris of Democratic Regimes

4
Political and Civil Liberties Around the
World

5
Examples of Political Risks and their
Impact on International Business

6
Expropriation Acts – 1970-92

7
International Attacks, by Region
(1995-2000)

8
International Terrorist Attacks
(1981-2000)

9
Risks of Cross-Border Business

10
Classification of Political Risks

11
Composite Score

12
An illustration of select criteria for
Evaluating political risk

13
Comparative Country Risk Rankings

14
Comparative Country Risk Rankings

15
Managing Risks

16
Relative Bargaining Power over Time

17
 Use of Integrative and Protective and
Defensive Techniques by Firms in Select Industries

18
Systems of Law

19
Methods of Dispute Settlement

20
MNC and the Legal Environment

21
Growth of Environmental Markets
in Selected Asia-Pacific Countries
($ Billion)

22
Chapter 6
Cultural Environment
 Learning Objectives
After reading this chapter, you should be able to:

explain the meaning of culture
 describe the different levels of culture

 delineate and explain the various elements of

culture
 describe the implications of culture for

international business

2
Levels of culture in multinational management

3
Elements of Culture

4
Language Distribution of the World

5
Major World Religions

6
Multiculture and International Business

7
Six Arguments for Managing Culture
Diversity

8
Chapter 7
Managing Across Cultures
 Learning Objectives
After reading this chapter, you should be able to:

understand the cultural predispositions
 describe cultural models

 identify and describe challenges in managing

multicultures

2
Cultural Predispositions

3
Cultural Predispositions

4
GLOBE Cultural Variable Results

5
Hofstede’s Cultural Dimensions

6
Country Classification

7
Country Classification

8
The 7d Cultural Dimensions
Model

9
Universalism versus Particularism

10
Individualism versus Collectivism

11
Neutral versus Affective

12
Specific versus Diffuse

13
Achievement vs Ascription

14
Past versus Future

15
International Control versus External Control

16
Cultural Dimensions

17
Cultural Contrasts in Motivation

18
Leadership Behaviours and their
Acceptability from 60 countries

19
Leader’s Role and Cultural Impact

20
Dimensions of Multicultural Corporation

21
 Constrasting patterns of
communication in low versus high
context cultures

22
Strategies for managing
multicultural teams

23
Framework of Work Values

24
Chapter 8
Negotiating Across Culture
 Learning Objectives
After reading this chapter, you should be able to:

understand the nature of negotiating
 describe the negotiating process

 draw conclusions on the international

negotiations

2
Negotiating process

3
Information Exchange and First-Offer
Strategies

4
Chapter 9
Technological Environment
 Learning Objectives

understand the nature of science and
technology, and compare one with another

 describe the impact of technology on society,

economy and plant

2
Black Box

3
The Tehchnology Cycle

4
Impact of Technology

5
Spinnigout Technology

6
Phasis in Development of Techology

7
Life Cycle of an Organization

8
First University Degrees and Share of
S&E Degrees in Selected Counteries

9
Technical Complexity and Organisation Design

10
Filling Maximum No. of Patents in FY07
& FY08

11
Operational Sequences fo Technology
Transfer

12
Technology Issues

13
Technology Acquisition Routes

14
Comparative Advantages of the Internal,
External and Combined Sources

15
Types of Restrictive Clauses

16
Pros and Cons of Alternative Possibilities
of Technology Transfer

17
Chapter 10
Economic Environment
 Learning Objectives
After reading this chapter, you should be able to:

Classification countries based on their
respective incomes and understand the
significance of such classification
 classify countries on the basis of economic

system and describe the implications of such

classification
 classify countries on the basis of geography

 explain trade policies—inword looking or

outward looking, case for trade protectionism

2
Exports (Goods + Services) to GDP Ratio

3
The explosive growth in phone lines
(million lines)

4
Delays at Ports and Airports in India

5
Elements of Economic Environment

6
Economic Status of Different Countries

7
Relative size and wealth of different
economies in percent of total

8
Percentage share of world
population and economy

9
Continuum of Economic System

10
Model of Economic Management in India

11
Major US Firms doing Business in
Russia

12
Chapter 11
International Strategic Management
 Learning Objectives
After reading this chapter, you should be able to:

understand and define strategic management
 explain how crucial strategic management is to

international business
 diagrammatically present the strategic

management process
 explain each stage in strategic management

process

2
Stell Makers in Fortune 500 Global Ranking

3
The Experience Curve

4
Orientation of an MNC under different Profiles

5
International Strategic Management
Process

6
Group Assessment of SBUs

7
Evaluating Corporate Regional Performance
on A Market Size-Growth Matrix

8
Value Chain

9
Areas for Formulation of MNC Goals

10
Different Strategies

11
Indicators of Market Potential

12
Chapter 12
International Organisation Structure
 Learning Objectives
After reading this chapter, you should be able to:

define international organisation design
 describe the basic international designs,

bringing out merits and demerits of each

 point out the factors that help choose a

structure
 explain several related issues in designing a

structure

2
Factors Influencing Organisation Structure

3
 Relationship between Environmental
Uncertainty and Organisational Structure

4
Four Strategies for Global Expansion

5
Input Conversion and Output Process

6
International Division Structure

7
Worldwide Functional Structure

8
Geographic Area Structure

9
Global Product Division

10
Mixed Structure

11
Matrix Structure

12
Issues in Organisation Design

13
Importance of Subsidiary Boards over the Next
5 to 10 Years—Mean Ratings (1=Low; 5=High)

14
Formal Integrating Mechanisms

15
Chapter 13
International Strategic Alliances
 Learning Objectives
After reading this chapter, you should be able to:

give the meaning of a strategic alliance
 list the benefits and pitfalls of strategic alliances

 bring out the scope of strategic alliance

 suggest ways of making alliances work

 understand how alliances are evaluated

2
Types of Strategic Alliances

3
Drawbacks of Strategic Alliances

4
Scope of Strategic Alliance

5
Alliance Process Curve

6
Structuring Alliances to Reduce Opportunism

7
Alliance Checklist

8
Managing Strategic Alliances

9
Chapter 14
Integration Between Countries
 Learning Objectives
After reading this chapter, you should be able to:

write, in your own words, about the nature of
integration between nations and describe the
stages in integration
 explain the impact of economic integration

among countries
 describe the various integrations across the

globe together with the problems and prospects

of each

2
Levels of Integration between Countries

3
Impact of Integration

4
Important Trading Groups

5
Major Regional Trade Association

6
Contd. - Major Regional Trade….

7
The European Union, 2004 Data

8
Development of the European Union

9
EU’s Major Trading Partners

10
India’s Top Ten Commodities Exported to EU

11
Ket Data on NAFTA Members

12
Merchandise Trade between the United
States and Canada and between the
United States and Mexico

13
Promises and Realities of NAFTA

14
Key Data on APEC Members

15
India’s Trade Agreement

16
Chapter 15
Institutional Support to
International Business
 Learning Objectives
After reading this chapter, you should be able to:

identify the institutions that promote world trade
 describe the role played by each institution in

promoting business across the globe

 delineate the treaties and conventions that are

active in international trade

2
Treaties and Conventions

3
Chapter 16
World Trade Organisation
 Learning Objectives
After reading this chapter, you should be able to:

trace the origin of WTO and describe its
structure, objectives, and functions
 compare WTO with GATT

 explain the principles of WTO

 describe the agreements of WTO

 point out certain apprehensions about WTO and

clear them too


identify implications for India

review the performance of WTO

2
Structure of the World Trade
Organisation

3
Principles of WTO

4
Users of Anti-dumping Measures (1995-2007)

5
Doubts and Clarifications

6
Contd… Doubts and Clarifications

7
International Comparison of Select Drugs Prices

8
Chapter 17
International Operations
Management
 Learning Objectives
After reading this chapter, you should be able to:
 describe, in your own words, the nature of

international operations management

 compare and contrast international operations

management with domestic operations

management
 highlight how operations management can be a

source of competitive advantage for an

international business
 understand why international operations

management needs to be integrated with

corporate strategy
 understand the various strategic issues involved

in international operations management 2

Strategic Issues

3
Reasons for and Risks of Outsourcing

4
Basic Make or Buy Options

5
Considerations in Facilities Location

6
Supply Chain for a Manufacturer

7
Supply Chain for a Service Provider

8
Potential Materials Management Linkages

9
ISO 9000 Standards, their Areas of Application
in Production Flow and Guidelines for Use

10
Li & Fung: Global Network

11
Li & Fung: Sales by Geographical
Region (1999)

12
Li & Fung: Sales Growth (1995-1999)

13
Political and Civil Liberties Around the World

14
Li & Fung: Examples of Sourcing
Streategy

15
Chapter 18
International Marketing
 Learning Objectives
After reading this chapter, you should be able to:

explain the nature of international marketing
 compare international marketing with domestic

marketing
 state and explain the major benefits of

international marketing
 identify major activities of international

marketing and explain each in detail

2
Benefits of International Marketing

3
The International Marketing Mix

4
Marketing and other Functions

5
 Selected Examples of Product
Modification in the International Arena

6
Factors Favouring Standardisation
versus Adaption

7
The Trade-Off between Standardisation
and Adaptation

8
India’s 150 Most Trusted Brands

9
India’s Top 50 Most Trusted Service
Brands

10
The 10 Top Brands

11
Framework of International Pricing Strategy

12
Constraints on International Advertising

13
Top Ten Global Ad Agencies

14
Benefits of Advertising

15
Chapter 19
International Financial Management
 Learning Objectives
After reading this chapter, you should be able to:

define international financial management
 draw similarities and delineate differences

between domestic financial management and

international financial management
 explain the environment of international

financial management
 explain the investment decisions of a

multinational enterprise
 describe the financing decisions of an

international business
2
International Financial Management
Compared with Domestic Financial
Management

3
Contextual Questions

4
Environment of International Financial Management

5
Balance of Payments Accounts

6
Net International Bank Lending ($ billions)

7
International Bond Issues and the US Dollar
Exchange Rate

8
International Equity Offering an
Equity Price Developments

9
India’s Foreign Trade

10
Major Financial Markets

11
Characteristics of Stock Exchange

12
M&A’s Over Time

13
Top 10 M&A’s in 2008

14
Target Country Destination
(% to the number of deals)

15
Driving Forces Behind Cross-Border M&As

16
Alternative Paths to Internationalise the
the Cost and Availablity of Capital

17
Cash Flows before Multilateral Netting

18
Calculations of Net Receipts

19
Cash Flows after Multilateral Netting

20
Foreign Exchange Risks and Strategies
to Reduce Them

21
OECD Corporate Income Tax Rates

22
Strategies to Manage Tax

23
OECD Blacklist

24
Nature of transfer price

25
Important Future Tax Issues

26
Structure of a Fronting Loan

27
Tax-saving Propensity of Froting Loan

28
Chapter 20
Financing Foreign Trade
 Learning Objectives
After reading this chapter, you should be able to:

become familiar with payment terms in
international trade
 familiarise with documents in foreign trade

 understand the various financing techniques in

foreign trade
 list export financing facilities including

institutional support
 understand the nature of countertrade, its role in

foreign trade and its different manifestations


bring out the institutional support to foreign
trade 2
Means of Payment

3
Example of Letter of Credit Financing of
US Imports

4
Features of Modes of Payment-Comparison

5
Export/Import Flow Chart (By Ship)

6
Types of Countertrade

7
Pluses and Minuses of Countertrade

8
Chapter 21
International Accounting
 Learning Objectives
After reading this chapter, you should be able to:
 understand the nature of international accounting
 bring out the dissimilarities between domestic accounting
and international accounting

understand that national differences in accounting are
caused by several factors—political, legal, cultural, and
the like

classify accounting systems prevailing across the globe
 understand that differences in accounting standards and
practices are sought to be harmonised, obstacles
notwithstanding

understand that the key players in the harmonisation
process are the professional and regulatory bodies

understand the efforts made by Indian accounting bodies
to integrate accounting system with the rest of the world
 discuss the issues relating to accounting for international
business
2
Accounting Issues

3
Influences on a Country’s Accounting
System

4
Cultural Differences in Measurement and
Disclosure for Accounting Systems

5
Hypothetical Classification of Accounting
System of Western Countries

6
Arguments for and against Harmonisation

7
Chapter 22
International Human Resource
Management
 Learning Objectives
After reading this chapter, you should be able to:

understand and describe the nature of
international human resource management
 draw comparison and contrast between

domestic human resource management and

international human resource management
 identify and explain the major activities in

international human resource management

 appreciate the role of women in overseas

assignments

2
Model of International HRM

3
The Advantages and Disadvantages of using
PCNs, HCNs and TCNs

4
Factors Favouring HCNs or PCNs

5
Unique Features of IHRM

6
International HR Management Process

7
Linkages of Staffing Strategies with the Life
Cycle of an MNC

8
Contd….Linkages of Staffing Strategies with
the Life Cycle of an MNC

9
The Expatriate Assignment Life Cycle

10
Criteria for Expat Selection

11
Culture Shock Cycle

12
Reasons for Expatriate Failure (in
descending order of importance)

13
Benefits and Drawbacks of CCT

14
Methods of CCT

15
Variables Influencing Performance of an
Expatriate

16
Internal and External Variables influencing
International Compensation Strategy

17
Components of International Compensation

18
Exployer Incentive Practices Around the
World

19
Balance Sheet Approach to Compensation

20
The Repatriation Process

21
Repatriation Strategies

22
Female Expats (2005)

23
Chapter 23
Social Responsibility and Ethical
Issues in International Business
 Learning Objectives
After reading this chapter, you should be able to:

define social responsibility and argue for and against undertaking
social actions
 trace the evolution of the social responsibility concept

outline the pressures leading to social responsibility

describe the basic elements of social responsibility

describe a model of social responsibility

describe how a firm can emerge as a socially responsive firm

state and explain the limits of social responsibility

define the term business ethics and outline the sources of ethics

discuss why ethics is important

outline steps to improve ethical decision-making

bring out the interface between social responsibility and ethics and
international business

explain the impact of cultural differences on ethics and social
responsibility
 explain the code of conduct of an MNC

describe ethical decision chart for an international manager 2
The Pros and Cons of CSR

3
Stakeholders of a Firm

4
Pressures Leading to Social Responsibility

5
Four Elements of Competitive Strength

6
A Four-stage Model of Corporate Social Responsibility

7
Socially Responsive Strategies

8
An Illustrative List of Voluntary Activities of
Some Companies/Groups

9
Contd…An Illustrative List of Voluntary
Activities of Some Companies/Groups

10
Contd…An Illustrative List of Voluntary
Activities of Some Companies/Groups

11
Comparing Profitability and Social
Returns from Alternative Decisions

12
Limits of Social Responsibility

13
Spending by Indian Corporate (Fiscal 2009)

14
The Triple Bottom Line

15
Sources of Ethics

16
Fraud Matrix

17
Ways of Managing Ethics

18
Cars Recalled-Worldwide

19
Whistle-blowing in Action

20
Means to Promote Ethical Conduct

21
Effectiveness of Whistleblowing to
Check Corruption

22
Components of Ethical Climate

23
Ethical Imperfections

24
Institutional and Cultural Effects on
Ethics and Management

25
Decision Flow Chart for an MNC

26
Chapter 24
Future of International Business
 Learning Objectives
After reading this chapter, you should be able to:

List the benefits of globalisation
 point out the evil effects of international

business
 show the future direction for international

business
 explain the challenges before global business

2
Seven Spheres for Managing Diversity

3
Corporate Governance Practices in the
G7 Countries

4
Chapter 25
E-Business
 Learning Objectives
After reading this chapter, you should be able to:

Understand the nature of e-business and e-
business models
 Identify the facilities required to institute e-

business and the firms which offer such

facilities
 Describe the impediments that check e-business

 Describe the different areas of application of e-

business
 Draw a decision tree that helps managers make

a choice between integration and independence

2
Internet Use for Business

3
E-Business Readiness

4
E-HR Implications

5
 Key Decision in the Web Business
Integration Versus Separation Decision