Global Finance Case Study Questions
GLOBAL BUSINESS
Third Edition
Mike W. Peng, Ph.D. Jindal Chair of Global Business Strategy
Executive Director, Center for Global Business Jindal School of Management University of Texas at Dallas
Fellow, Academy of International Business
Australia Brazil Japan Korea Mexico Singapore Spain United Kingdom United States
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Global Business, Third Edition Mike W. Peng
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To Agnes, Grace, and James
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Preface ix
About the Author xix
Part 1 Laying Foundations 1
Chapter 1: Globalizing Business 2
Chapter 2: Understanding Formal Institutions: Politics, Laws, and Economics 32
Chapter 3: Emphasizing Informal Institutions: Cultures, Ethics, and Norms 62
Chapter 4: Leveraging Resources and Capabilities 92
PengAtlas 1 118
Integrative Cases 124
Part 2 Acquiring Tools 139
Chapter 5: Trading Internationally 140
Chapter 6: Investing Abroad Directly 174
Chapter 7: Dealing With Foreign Exchange 204
Chapter 8: Capitalizing on Global and Regional Integration 232
PengAtlas 2 264
Integrative Cases 270
Part 3 Strategizing around the Globe 285
Chapter 9: Growing and Internationalizing the Entrepreneurial Firm 286
Chapter 10: Entering Foreign Markets 310
Chapter 11: Managing Global Competitive Dynamics 336
Chapter 12: Making Alliances and Acquisitions Work 364
Chapter 13: Strategizing, Structuring, and Learning around the World 394
PengAtlas 3 424
Integrative Cases 428
Part 4 Building Functional Excellence 465
Chapter 14: Competing on Marketing and Supply Chain Management 466
Chapter 15: Managing Human Resources Globally 492
Brief Contents
iv
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Brief Contents v
Chapter 16: Financing and Governing the Corporation Globally 522
Chapter 17: Managing Corporate Social Responsibility Globally 552
PengAtlas 4 578
Integrative Cases 582
Glossary 598
Name Index 607
Organization Index 617
Subject Index 621
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Preface ix
About the Author xix
Part 1 Laying Foundations 1
Chapter 1: Globalizing Business 2
What Is Global Business? 4
Why Study Global Business? 10
A Unified Framework 14
What Is Globalization? 18
Global Business and Globalization at a Crossroads 21
Organization of the Book 25
Chapter 2: Understanding Formal Institutions: Politics, Laws, and Economics 32
Understanding Institutions 35
What Do Institutions Do? 36
An Institution-Based View of Global Business 38
Political Systems 40
Legal Systems 43
Economic Systems 47
Debates and Extensions 48
Management Savvy 54
Chapter 3: Emphasizing Informal Institutions: Cultures, Ethics, and Norms 62
Where Do Informal Institutions Come From? 64
Culture 65
Cultural Differences 70
Ethics 78
Norms and Ethical Challenges 80
Debates and Extensions 81
Management Savvy 84
Chapter 4: Leveraging Resources and Capabilities 92
Understanding Resources and Capabilities 94
Resources, Capabilities, and the Value Chain 96
From SWOT to VRIO 100
Debates and Extensions 104
Management Savvy 109
Part 1 Integrative Cases 124
1.1 Coca-Cola in Africa 124
1.2 Whose Law Is Bigger: Arbitrating Government-Firm Disputes in the EU 126
1.3 Fighting Counterfeit Motion Pictures 128
1.4 Brazil’s Embraer: From State-Owned Enterprise to Global Leader 131
1.5 Microsoft in China 136
Part 2 Acquiring Tools 139
Chapter 5: Trading Internationally 140
Why Do Nations Trade? 143
Theories of International Trade 145
Realities of International Trade 158
Debates and Extensions 163
Management Savvy 166
Chapter 6: Investing Abroad Directly 174
Understanding the FDI Vocabulary 176
Why Do Firms Become MNEs by Engaging in FDI? 180
Realities of FDI 186
How MNEs and Host Governments Bargain 190
Debates and Extensions 192
Management Savvy 195
Chapter 7: Dealing with Foreign Exchange 204
What Determines Foreign Exchange Rates? 206
Evolution of the International Monetary System 214
Strategic Responses to Foreign Exchange Movements 218
Debates and Extensions 221
Management Savvy 225
Table of Contents
vi
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Chapter 11: Managing Global Competitive Dynamics 336
Competition, Cooperation, and Collusion 339
Institutions Governing Domestic and International Competition 343
Resources Influencing Competitive Dynamics 346
Attacks, Counterattacks, and Signaling 350
Local Firms versus Multinational Enterprises 351
Debates and Extensions 352
Management Savvy 356
Chapter 12: Making Alliances and Acquisitions Work 364
Defining Alliances and Acquisitions 367
Institutions, Resources, Alliances, and Acquisitions 368
Formation of Alliances 374
Evolution and Dissolution of Alliances 376
Performance of Alliances 378
Motives for Acquisitions 379
Performance of Acquisitions 383
Debates and Extensions 384
Management Savvy 386
Chapter 13: Strategizing, Structuring, and Learning around the World 394
Multinational Strategies and Structures 396
How Institutions and Resources Affect Multinational Strategies, Structures, and Learning 404
Worldwide Learning, Innovation, and Knowledge Management 408
Debates and Extensions 412
Management Savvy 415
Part 3 Integrative Cases 428
3.1 Wikimart: Building a Russian Version of Amazon 428
3.2 Private Military Companies 431
3.3 Amazon, Bookoff, and the Japanese Bookselling Industry 435
3.4 Huawei’s Intellectual Property War 438
3.5 Is A Diamond (Cartel) Forever? 446
3.6 The TNK-BP Joint Venture 452
Chapter 8: Capitalizing on Global and Regional Integration 232
Global Economic Integration 234
Organizing World Trade 237
Regional Economic Integration 240
Regional Economic Integration in Europe 242
Regional Economic Integration in the Americas 248
Regional Economic Integration in the Asia Pacific 250
Regional Economic Integration in Africa 252
Debates and Extensions 253
Management Savvy 256
Part 2 Integrative Cases 270
2.1 Canada and the United States Fight Over Pigs 270
2.2 Foreign Direct Investment in the Indian Retail Industry 272
2.3 The Fate of Opel 274
2.4 Jobek do Brasil’s Foreign Exchange Challenges 276
2.5 The EU–Korea Free Trade Agreement 279
Part 3 Strategizing around the Globe 285
Chapter 9: Growing and Internationalizing the Entrepreneurial Firm 286
Entrepreneurship and Entrepreneurial Firms 289
Institutions, Resources, and Entrepreneurship 289
Growing the Entrepreneurial Firm 293
Internationalizing the Entrepreneurial Firm 298
Debates and Extensions 301
Management Savvy 303
Chapter 10: Entering Foreign Markets 310
Overcoming the Liability of Foreignness 312
Where to Enter? 315
When to Enter? 318
How to Enter? 320
Debates and Extensions 326
Management Savvy 329
Contents vii
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3.7 Geely’s Acquisition of Volvo 455
3.8 Hilton Welcomes Chinese Travelers at Home and Abroad 459
Part 4 Building Functional Excellence 465
Chapter 14: Competing on Marketing and Supply Chain Management 466
Three of the Four Ps in Marketing 468
From Distribution Channel to Supply Chain Management 474
The Triple As in Supply Chain Management 475
How Institutions and Resources Affect Marketing and Supply Chain Management 478
Debates and Extensions 481
Management Savvy 483
Chapter 15: Managing Human Resources Globally 492
Staffing 495
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