INTERNATIOAL BUSINESS IN THE GLOBAL CONTEXT
1. AIMS AND OBJECTIVES
The purpose of this course is to provide a basis for understanding the international
business environment. More specifically, the objectives will be to
1. Define international business environment and describe how it differs from
domestic business environment.
2. Illustrate the impact of external environmental factors such as culture, financial
and economic systems, entry barriers and risk assessment which affect firms in
their markets, acquisition of material and other cross-border business activity.
3. Appreciate critically the relevant business environmental issues such as business
ethics, social responsibility in the global context.
Globalization, as we experiencing it, is in many respects not only new but also
revolutionary …Globalization is political, technological and culture, as well as economic
(Giddens A. 1999, ‘Runaway World: How Globalization is Shaping our Lives’, Ch.10).
As globalization is evolving rapidly, understanding international business environment is
increasingly important. Firms simultaneously face pressures to "go global" in response
to global markets and global competitors, and to "think local" because of distinctive
national cultures and governments. An appreciation for the complexities of the
international environment facing businesses at the beginning of the 21st century is
essential to both private and public decision makers.
This course, International business environment, introduces concepts and theories
relevant to all actors involved in international business, imparts knowledge of factors
that affect business substantially, and addresses the key emerging issues which arise in
cross-border business activities. The course is both theoretical and practical; it is
designed to develop student understanding of the issues, opportunities, and
complexities associated with doing business internationally.
The course covers ten selected topics which spread over almost the entire spectrum of
international business environment. Among the topics to be covered are culture factors
in international business, ethics and social responsibility, foreign direct investment,
international trade, international monetary system, regionalization, globalization and
emerging economies.
At the end of this course, the participants will possess an awareness of international
business environment, and be able to demonstrate analytical and strategic thinking
skills in appreciating the cost and opportunities associated with changes in external
environment. In addition, this course will also help students sharpen their skills in
analysis and problem solving, research, academic writing and teamwork.
2 READING
2.1 recommended reading
Griffin, R. W. and Pustay, M. W. (2008) International Business: A Managerial
Perspective, 6/E. Prentice Hall, London.
Hill, Charles W.L. (2009) International Business: Competing in the Global Marketplace,
7/E, McGraw-Hill Irwin.
Rugman Alan M. and Simon Collinson (2006) International Business, 4/E, FT Prentice
Hall.
Ian Brooks et. Al. (2004) The International Business Environment, FT Prentice Hall.
Peter Dicken (2003) Global Shift: Reshaping the Global Economic Map in the
21st Century, 4/E, London: Sage Publications Ltd.
Mike Peng (2009), Global Business, Cincinnati: South-Western Cengage
Learning
2.2 Other Useful Books
John H. Dunning (Ed.) (1999) Globalization, Trade and Foreign Direct Investment, Oxford.
Czinkota Michael R., Ronkainen Ilkka A., Moffett Michael H. and Moynithan Eugene, (2001)
Global Business, 3/E. Harcourt, Orlando.
Krugman, Paul R. and Maurice Obstfeld (2003), International Economics: theory and policy,
Addison-Wesley, 2003.
Ravenhill, John (2005) Global Political Economy, Oxford University Press, Oxford.
Schneider Susan and Barsoux Jean-Louis (1997) Managing Across Cultures, Prentice-Hall, New
York.
Jagdish Bhagwati (2004). In Defense of Globalization. Oxford University Press.
J. Stiglitz (2002)., Globalization and its Discontents, Norton, New York
DM Walker, J Schmitz, T Brake (2003), Doing Business Internationally: The guide to Crosscultural Success. (Free Online access).
Raymond Vernon (1998), In the hurricane's eye: the troubled prospects of multinational
enterprises,
UNCTAD (various years) World Investment Reports, UNCTAD, Geneva.
2.3 Magazines and Journals
Weekly Readings: The Economist
Financial Times
Academic Journals: Harvard Business Review
International Business Review
Journal of International Business Studies
Journal of World Business
Journal of World Trade
Periodicals:
Fortune
Multinational Monitor
Far Eastern Economic Review
Business Week
2. CONTENTS
1) Introduction: The globalisation/deglobalisation of the World Economy
2) National Differences in Political Economy
3) The Culture Context of International Business
4) Ethics and Social Responsibility
5) Theories of International Trade
6) Political Economy of International Trade
7) Theories of Foreign Direct Investment
8) Political Economy of Foreign Direct Investment
9) International Monetary System
10) Globalization & Regionalization
11) Emerging Economies
Extra Reading
Topic 1
Extra Reading
*ANON (2009), “Turning their backs on the world”, the Economist, Feb 19th.
*Beinhocker, E. I. Davis and L. Mendonca (2009), “The 10 trends you have to watch”, Harvard
Business Review, July-August, 55-60.
*Cohen, S.D. (2007), Multinational corporations and foreign direct investment: avoiding
simplicity, embracing complexity, Oxford University Press. Chapter 3
Richard D. Robinson (1981), “Background Concepts and Philosophy of International Business
from World War II to the Present”, Journal of International Business Studies12(1), 13-21.
World Investment Report (Geneva: United Nations), Overview chapters. (available electronically
at: www.unctad.org/fdistatistics)
Class discussion
Globalisation debate
Topic 2
Extra Reading
*Bremmer, I. (2005), “Managing risk in an unstable world”, Harvard Business Review, June, 5160.
*Meschi, P. and E.L. Riccio (2008), “Country risk, national cultural differences between partners
and survival of international joint ventures in Brazil”, International Business Review 17, 250266.
Class discussion
Position you and a group of your fellow classmates work as a research team for a company that
is seeking the opportunity of doing or expanding its international business activities in a host
country/region.
(a) Reasons why your company should invest in the country/region of your choice.
(b) Reasons why your company shouldn’t invest in the country/region of your choice.
Topic 3
Extra Reading
*ANON (2008), “Going global”, the Economist, Jan 17th.
*Pothukuchi, V., F. Damanpout, J. Choi, C.C. Chen, and S.H. Park (2002), “National and
organizational culture differences and international joint venture performance”, Journal of
International Business Studies 33(2), 243-265.
Case studies
1. How to get an international management assignment right?
2. When the East goes West: the case of Lenovo-IBM
Topic 4
Extra Reading
Maignan, Isabelle and David A. Ralston (2002) “Corporate social responsibility in Europe and
the U.S.: Insights from businesses' self-presentations”, Journal of International Business
Studies 33(3), 497-514.
van Tulder, Rob and Ans Kolk (2001) “Multinationality and corporate ethics: Codes of conduct in
the sporting goods industry”, Journal of International Business Studies 32(2), 267-283.
Debate
The Pharmaceutical Industry and the AIDS epidemic
Topics 5 & 6
Extra Reading
*Bhagwati, Jagdish (1994), “Free trade: Old and new challenges”, Economic Journal 104(423),
231-246.
*Culbertson (1986), “The folly of free trade”, Harvard Business Review, September-October,
122-128.
*Dollar, David and Art Kraay (2002), “Spreading the wealth”, Foreign Affairs 81(1), 120-132.
*Rodrik, Dani (2001), “Trading in illusions”, Foreign Policy, March-April, 55-62.
Baldwin, Robert E. (1989) “The political economy of trade policy”, Journal of Economic
Perspectives 3(4), 119-135.
Howse, Robert and Michael J. Trebilcock (1996) “The fair trade-free trade debate: Trade, labor,
and the environment”, International Review of Law and Economics 16(1), 61-79.
Debate
Fair trade is better than free trade
Topics 7 & 8
Extra Reading
*Cohen, S.D. (2007), Multinational corporations and foreign direct investment: avoiding
simplicity, embracing complexity, Oxford University Press. Chapters 12-14
*Dunning, JH (2000), “The eclectic paradigm as an envelope for economic and business
theories of MNE activities”, International Business Review 9, 163-90. [An excellent survey of
FDI and MNE theories].
Görg, H. and Greenaway, D. (2004) “Much Ado about Nothing? Do Domestic Firms Really
Benefit from Foreign Direct Investment?” World Bank Research Observer 19(2): 171-197.
Mariotti, S.; M. Mutinelli; L. Piscitello (2003) “Home country employment and foreign direct
investment: evidence from the Italian case”, Cambridge Journal of Economics 27(3), 419431(13)
Saggi, K (2002), “Trade, foreign direct investment, and international technology transfer: a
survey”, The World Bank Research Observer 17(2), 191-235.
Class discussion
Position you and a group of your fellow classmates work as a research team for a company that
is seeking the opportunity of doing or expanding its international business activities in a host
country/region.
Explain why your company should undertake investment in the country of your choice in the
context of OLI framework.
Topic 10
Extra Reading
*Hill: Chapter 8
*Dunning, John H., Masataka Fujita and Nevena Yakova (2006), “Some macro-data on the
regionalisation/globalisation debate: a comment on the Rugman/Verbeke analysis”, Journal
of International Business Studies 38, 177-199.
*Rugman, Alan M. (2003), “Regional strategy and the demise of globalization”, Journal of
International Management 9(4), 409-417.
Arribas, Iván, Francisco Pérez and Emili Tortosa-Ausina (2009), “Measuring globalization of
international trade: Theory and Evidence”, World Development 37(1), 127-145.
Stevens, Michael J. and Bird, Allan (2004), “On the myth of believing that globalization is a
myth: or the effects of misdirected responses on obsolescing an emergent substantive
discourse”, Journal of International Management 10(4), 501-510.
Selen Sarisoy Guerin (2006), “The role of geography in financial and economic integration: A
comparative analysis of foreign direct investment, trade and portfolio investment flows”,
World Economy 29(2), 189–209.
Class discussion
What benefit would a Free Trade Agreement (FTA) with other Asian countries bring to China?
How might such FTA impact a multinational corporation’s strategy in China?
Topic 11
Extra Reading
*Doh, J.P. (2005), “Offshore outsourcing: implications for international business and strategic
management theory and practice”, Journal of Management Studies 42(3), 695-704.
*Ghemawat, P. and T. Hout (2008), “Tomorrow’s global giants: not the usual suspects”, Harvard
Business Review, November, 80-88.
*Hoskisson, R.E., L. Eden, C.M. Lau and M. Wright (2000), “Strategy in emerging economies”,
Academy of Management Journal 43(3), 249-267.
*Javalgi, R.G., A. Dixit and R.F. Scherer (2009), “Outsourcing to emerging markets: Theoretical
perspectives and policy implications”, Journal of International Management 15, 156-168.
*Khanna, T., K.G. Palepu and J. Sinha (2005), ”Strategies that fit emerging markets”, Harvard
Business Review, June, 63-76.
*Mankiw, N.G. and P. Swagel (2006), “The politics and economics of offshore outsourcing”,
Journal of Monetary Economics 53, 1027-1056.
*The Economist Special Reports September 18 2008.
*Witt, M.A. and A.Y. Lewin (2007), “Outward foreign direct investment as escape response to
home country institutional constraints”, Journal of International Business Studies 38, 579594.
Farrell, D. (2005), “Offshoring: value creation through economic change”, Journal of
Management Studies 42(3), 675-683.
Case Studies
1. Unilever in emerging markets
2. Haier (China)