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International Business
The Challenges of Globalization

Eighth Edition

John J. Wild
University of Wisconsin, Madison

Kenneth L. Wild
University of London, England

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Library of Congress Cataloging-in-Publication Data
Wild, John J.
International business: the challenges of globalization/John J. Wild, University of Wisconsin,
Madison, Kenneth L. Wild, University of London, England, Alverne Ball.Eighth Edition.
pages cm
Includes bibliographical references and index.
ISBN 0-13-386624-6ISBN 978-0-13-386624-7
1. International business enterprisesManagement. 2. International trade. I. Wild, Kenneth L.
II. Ball, Alverne. III. Title.
HD62.4.W586 2016


10 9 8 7 6 5 4 3 2 1

ISBN 10: 0-13-386624-6
ISBN 13: 978-0-13-386624-7

Preface xix

Part 1 Global Business Environment 2
Chapter 1 Globalization 2

Part 2 National Business Environments 40
Chapter 2 Cross-Cultural Business 40
Chapter 3 Political Economy and Ethics 72
Chapter 4 Economic Development of Nations 104

Part 3 International trade and Investment 132
Chapter 5 International Trade Theory 132
Chapter 6 Political Economy of Trade 156
Chapter 7 Foreign Direct Investment 178
Chapter 8 Regional Economic Integration 200

Part 4 the International Financial System 226
Chapter 9 International Financial Markets 226
Chapter 10 International Monetary System 250

Part 5 International Business Management 274
Chapter 11 International Strategy and Organization 274
Chapter 12 Analyzing International Opportunities 296
Chapter 13 Selecting and Managing Entry Modes 320
Chapter 14 Developing and Marketing Products 346
Chapter 15 Managing International Operations 366
Chapter 16 Hiring and Managing Employees 386

Endnotes 404
Glossary 409
Name/Company Index 417
Subject Index 420

Brief Contents


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Preface xix

Part 1 Global Business Environment 2

Chapter 1 Globalization 2
apples Global iMpact 3

Key Players in International Business 5
Multinational Corporations 5

Entrepreneurs and Small Businesses 5

What Is Globalization? 6
Globalization of Markets 7

Globalization of Production 8
GloBal SuStaInaBIlIty: three Markets, three Strategies 9

Forces Driving Globalization 10
Falling Barriers to Trade and Investment 10

Technological Innovation 14

Measuring Globalization 15

Debate over Jobs and Wages 16
Against Globalization 16

For Globalization 17

Summary of the Jobs and Wages Debate 18

Debate over Income Inequality 18
Inequality within Nations 18

Inequality between Nations 19

Global Inequality 20

Debate over Culture, Sovereignty, and the Environment 21
Globalization and Culture 21

Globalization and National Sovereignty 21
CulturE MattErS: the Culture Debate 21
ManaGErS BrIEFCaSE: the Keys to Global Success 22
Globalization and the Environment 23

the Global Business Environment 23
The Road Ahead for International Business 25

BottoM lInE For BuSInESS 26
Chapter Summary 26 Key Terms 28 Talk About It 1 28 Talk
About It 2 28 Ethical Challenge 28 Teaming Up 28 Market
Entry Strategy Project 29

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: MtV Goes Global
with a local Beat 30

appendix World Atlas 31




Part 2 National Business Environments 40

Chapter 2 Cross-Cultural Business 40
Hold the Pork, Please! 41

What Is Culture? 42
National Culture 42

Subcultures 43

Physical Environment 43

Need for Cultural Knowledge 44
CulturE MattErS: Creating a Global Mindset 44

Values and Behavior 45
Values 46

Attitudes 46

Aesthetics 46

Appropriate Behavior 47
ManaGErS BrIEFCaSE: a Globetrotters Guide to Meetings 48

Social Structure and Education 48
Social Group Associations 48

Social Status 49

Social Mobility 49

Education 50

religion 51
Christianity 51

Islam 54

Hinduism 54

Buddhism 55

Confucianism 56

Judaism 56

Shinto 56

Personal Communication 57
Spoken and Written Language 57
GloBal SuStaInaBIlIty: Speaking in Fewer tongues 57
Body Language 59

Culture in the Global Workplace 60
Perception of Time 60

View of Work 60

Material Culture 61

Cultural Change 62

Studying Culture In The Workplace 63

BottoM lInE For BuSInESS 67
Chapter Summary 67 Key Terms 68 Talk About It 1 69 Talk
About It 2 69 Ethical Challenge 69 Teaming Up 69 Market
Entry Strategy Project 70

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: a tale of two
Cultures 71

Chapter 3 Political Economy and Ethics 72
PepsiCos Global Challenge 73

Political Systems 75
Totalitarianism 75
GloBal SuStaInaBIlIty: From Civil War to Civil Society 77
Democracy 77
ManaGErS BrIEFCaSE: your Global Security Checklist 79


Economic Systems 80
Centrally Planned Economy 80

Mixed Economy 81

Market Economy 83

legal Systems 85
CulturE MattErS: Playing by the rules 85
Common Law 88

Civil Law 88

Theocratic Law 89

Global legal Issues 89
Intellectual Property 89

Product Safety and Liability 91

Taxation 91

Antitrust Regulations 92

Ethics and Social responsibility 93
Philosophies of Ethics and Social Responsibility 93

Bribery and Corruption 94

Labor Conditions and Human Rights 94

Fair Trade Practices 95

Environment 95

BottoM lInE For BuSInESS 99
Chapter Summary 100 Key Terms 101 Talk About It 1 101 Talk
About It 2 101 Ethical Challenge 101 Teaming Up 102 Market
Entry Strategy Project 102

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Pirates of
Globalization 103

Chapter 4 Economic Development of Nations 104
Indias tech King 105

Economic Development 106
Classifying Countries 106

National Production 107

Purchasing Power Parity 110

Human Development 111

Economic transition 112
Managerial Expertise 112

Shortage of Capital 112

Cultural Differences 113

Sustainability 113

Political risk 113
GloBal SuStaInaBIlIty: Public Health Goes Global 114
Conflict and Violence 114

Terrorism and Kidnapping 115

Property Seizure 115

Policy Changes 118

Local Content Requirements 119

Managing Political risk 119
Adaptation 119

Information Gathering 120

Political Influence 120

International Relations 121

The United Nations 121


Emerging Markets and Economic transition 122
Chinas Profile 122

Chinese Patience and Guanxi 123

Chinas Challenges 123
CulturE MattErS: Guidelines for Good Guanxi 124
Russias Profile 125
ManaGErS BrIEFCaSE: russian rules of the Game 125
Russias Challenges 126

BottoM lInE For BuSInESS 126
Chapter Summary 127 Key Terms 128 Talk About It 1 128 Talk
About It 2 129 Ethical Challenge 129 Teaming Up 129 Market
Entry Strategy Project 129

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Cuba Comes
off Its Sugar High 131

Part 3 International trade and Investment 132

Chapter 5 International Trade Theory 132
From Bentonville to Beijing 133

Benefits, Volume, and Patterns of International trade 134
Benefits of International Trade 134

Volume of International Trade 134

International Trade Patterns 135

Trade Interdependence 138
CulturE MattErS: Business Culture in the Pacific rim 138

Mercantilism 139
How Mercantilism Worked 140

Flaws of Mercantilism 140

theories of absolute and Comparative advantage 141
Absolute Advantage 141

Comparative Advantage 143

Factor Proportions theory 145
Labor Versus Land and Capital Equipment 146

Evidence on Factor Proportions Theory: The Leontief Paradox 146

International Product life Cycle 146
Stages of the Product Life Cycle 146

Limitations of the Theory 147
ManaGErS BrIEFCaSE: Five Fulfillment Mistakes 148

new trade theory 148
First-Mover Advantage 149

national Competitive advantage 149
Factor Conditions 149
GloBal SuStaInaBIlIty: Foundations of Development 150
Demand Conditions 150

Related and Supporting Industries 150

Firm Strategy, Structure, and Rivalry 151

Government and Chance 151

BottoM lInE For BuSInESS 151
Chapter Summary 152 Key Terms 153 Talk About It 1 153 Talk
About It 2 154 Ethical Challenge 154 Teaming Up 154 Market
Entry Strategy Project 154

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: First in asia
and the World 155


Chapter 6 Political Economy of Trade 156
Lord of the Movies 157

Why Do Governments Intervene in trade? 158
Political Motives 158
GloBal SuStaInaBIlIty: Managing Security in the age of Globalization 159
Economic Motives 160

Cultural Motives 161
CulturE MattErS: Myths of Small Business Exporting 162

Instruments of trade Promotion 163
Subsidies 163

Export Financing 163

Foreign Trade Zones 164
ManaGErS BrIEFCaSE: Experts in Export Financing 164
Special Government Agencies 165

Instruments of trade restriction 165
Tariffs 165

Quotas 166

Embargoes 168

Local Content Requirements 168

Administrative Delays 169

Currency Controls 169

Global trading System 169
General Agreement on Tariffs and Trade (GATT) 170

World Trade Organization (WTO) 171

BottoM lInE For BuSInESS 173
Chapter Summary 174 Key Terms 175 Talk About It 1 175 Talk
About It 2 175 Ethical Challenge 176 Teaming Up 176 Market
Entry Strategy Project 176

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Down with
Dumping 177

Chapter 7 Foreign Direct Investment 178
Das auto 179

Pattern of Foreign Direct Investment 180
Ups and Downs of FDI 180
CulturE MattErS: the Cowboy of Manchuria 182
Worldwide Flows of FDI 182

theories of Foreign Direct Investment 183
International Product Life Cycle 183

Market Imperfections (Internalization) 183

Eclectic Theory 184

Market Power 184

Management Issues and Foreign Direct Investment 185
Control 185

Purchase-or-Build Decision 185
ManaGErS BrIEFCaSE: Surprises of Investing abroad 186
Production Costs 186

Customer Knowledge 187
GloBal SuStaInaBIlIty: Greening the Supply Chain 188
Following Clients 188

Following Rivals 188

Why Governments Intervene in FDI 189
Balance of Payments 189


Reasons for Intervention by the Host Country 190

Reasons for Intervention by the Home Country 191

Government Policy Instruments and FDI 192
Host Countries: Promotion 193

Host Countries: Restriction 193

Home Countries: Promotion 194

Home Countries: Restriction 194

BottoM lInE For BuSInESS 194
Chapter Summary 195 Key Terms 196 Talk About It 1 196 Talk
About It 2 197 Ethical Challenge 197 Teaming Up 197 Market
Entry Strategy Project 197

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: World Class
in the Deep South 199

Chapter 8 Regional Economic Integration 200
Nestls Global recipe 201

levels of Integration and the Debate 202
Free Trade Area 202

Customs Union 203

Common Market 203

Economic Union 203

Political Union 203

The Case for Regional Integration 203

The Case Against Regional Integration 205

Integration in Europe 206
European Union 207
CulturE MattErS: Czech list 212
European Free Trade Association (EFTA) 214

Integration in the americas 214
North American Free Trade Agreement (NAFTA) 214

Central American Free Trade Agreement (CAFTA-DR) 216

Andean Community (CAN) 216

Southern Common Market (MERCOSUR) 217

Central America and the Caribbean 217

Free Trade Area of the Americas (FTAA) 218

Integration in asia and Elsewhere 218
Association of Southeast Asian Nations (ASEAN) 218

Asia Pacific Economic Cooperation (APEC) 218
ManaGErS BrIEFCaSE: the Ins and outs of aSEan 219
Closer Economic Relations (CER) Agreement 219

Gulf Cooperation Council (GCC) 219

Economic Community of West African States (ECOWAS) 220

African Union (AU) 220

BottoM lInE For BuSInESS 221
Chapter Summary 221 Key Terms 222 Talk About It 1 222
Talk About It 2 223 Ethical Challenge 223 Teaming
Up 223 Market Entry Strategy Project 223

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Global trade Deficit
in Food Safety 225


Part 4 the International Financial System 226

Chapter 9 International Financial Markets 226
Wii Is the Champion 227

Importance of the International Capital Market 228
Purposes of National Capital Markets 229

Purposes of the International Capital Market 229
GloBal SuStaInaBIlIty: Big results from Microfinance 230
Forces Expanding the International Capital Market 230

World Financial Centers 231

International Capital Market Components 232
International Bond Market 232

International Equity Market 233

Eurocurrency Market 233

the Foreign Exchange Market 234
Functions of the Foreign Exchange Market 234

Currency Quotes and rates 236
Quoting Currencies 236

Spot Rates 239

Forward Rates 239

Swaps, Options, and Futures 240

Market Instruments and Institutions 240
Trading Centers 241

Important Currencies 241

Interbank Market 242

Securities Exchanges 242

Over-The-Counter Market 242
ManaGErS BrIEFCaSE: Managing Foreign Exchange 243
Currency Restriction 243

Instruments for Restricting Currencies 244

BottoM lInE For BuSInESS 244
Chapter Summary 245 Key Terms 246 Talk About It 1 246 Talk
About It 2 246 Ethical Challenge 247 Teaming Up 247 Market
Entry Strategy Project 247

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Should We Cry
for argentina? 248

appendix Calculating Percent Change in Exchange Rates 249

Chapter 10 International Monetary System 250
Euro rollercoaster 251

Importance of Exchange rates 252
Desire for Predictability and Stability 253

Efficient versus Inefficient Market View 253

Forecasting Techniques 254

Difficulties of Forecasting 254
CulturE MattErS: the long arm of the law 255

What Factors Determine Exchange rates? 255
Law of One Price 255

Purchasing Power Parity 256


Fixed Exchange rate Systems 260
The Gold Standard 260

Bretton Woods Agreement 262

System of Floating Exchange rates 264
Todays Exchange-Rate Arrangements 264

European Monetary System 265
ManaGErS BrIEFCaSE: adjusting to Currency Swings 265
Recent Financial Crises 266

Future of the International Monetary System 269

BottoM lInE For BuSInESS 269
Chapter Summary 270 Key Terms 271 Talk About It 1 271 Talk
About It 2 271 Ethical Challenge 272 Teaming Up 272 Market
Entry Strategy Project 272

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Banking on
Forgiveness 273

Part 5 International Business Management 274

Chapter 11 International Strategy and Organization 274
Flying High with Low Fares 275

Company analysis 276
Company Mission and Goals 276

Core Competency and Value-Creation 277
ManaGErS BrIEFCaSE: ask Questions before Going Global 279

Strategy Formulation 280
Two International Strategies 280

Corporate-Level Strategies 281

Business-Level Strategies 282

Department-Level Strategies 284

Issues of organizational Structure 285
Centralization versus Decentralization 285

Coordination and Flexibility 286

types of organizational Structure 287
International Division Structure 287

International Area Structure 288

Global Product Structure 289

Global Matrix Structure 289

Work Teams 290

a Final Word 291
Chapter Summary 292 Key Terms 293 Talk About It 1 293 Talk
About It 2 293 Ethical Challenge 293 Teaming Up 294

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: IKEas Global
Strategy 295

Chapter 12 Analyzing International Opportunities 296
Starbucks Causes Global Jitters 297

Basic appeal and national Factors 298
Step 1: Identify Basic Appeal 298

Step 2: Assess the National Business Environment 300
ManaGErS BrIEFCaSE: Conducting Global e-Business 304

Measure and Select the Market or Site 304
Step 3: Measure Market or Site Potential 304

Step 4: Select the Market or Site 307


Secondary Market research 310
International Organizations 310

Government Agencies 310

Industry and Trade Associations 312

Service Organizations 312

Internet 312

Problems with Secondary Research 313

Primary Market research 314
Trade Shows and Trade Missions 314

Interviews and Focus Groups 314
CulturE MattErS: Is the World your oyster? 315
Surveys 315

Environmental Scanning 316

Problems with Primary Research 316

a Final Word 316
Chapter Summary 317 Key Terms 317 Talk About It 1 318 Talk
About It 2 318 Ethical Challenge 318 Teaming Up 318

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Vietnams Emerging
Market Potential 319

Chapter 13 Selecting and Managing Entry Modes 320
License to thrill 321

Exporting, Importing, and Countertrade 322
Why Companies Export 322

Developing an Export Strategy: A Four-Step Model 323

Degree of Export Involvement 324

Avoiding Export and Import Blunders 325

Countertrade 326

Export/Import Financing 327
Advance Payment 327

Documentary Collection 328

Letter of Credit 329

Open Account 330
ManaGErS BrIEFCaSE: Collecting International Debts 330

Contractual Entry Modes 331
Licensing 331

Franchising 332

Management Contracts 334

Turnkey Projects 334

Investment Entry Modes 336
Wholly Owned Subsidiaries 336

Joint Ventures 336

Strategic Alliances 338

Strategic Factors in Selecting an Entry Mode 339
Selecting Partners for Cooperation 339

Cultural Environment 340
CulturE MattErS: negotiating Market Entry 340
Political and Legal Environments 341

Market Size 341

Production and Shipping Costs 341

International Experience 341

a Final Word 342


Chapter Summary 342 Key Terms 343 Talk About It 1 343 Talk
About It 2 343 Ethical Challenge 344 Teaming Up 344

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: telecom Ventures
unite the World 345

Chapter 14 Developing and Marketing Products 346
Wings for Life 347

Developing Product Strategies 348
Laws and Regulations 348

Cultural Differences 349

Brand and Product Names 349

National Image 350

Counterfeit Goods and Black Markets 351

Shortened Product Life Cycles 351

Creating Promotional Strategies 352
Push and Pull Strategies 352
ManaGErS BrIEFCaSE: Managing an International Sales Force 353
International Advertising 353

Blending Product and Promotional Strategies 355
CulturE MattErS: localizing Websites 357

Designing Distribution Strategies 358
Designing Distribution Channels 358

Influence of Product Characteristics 359

Special Distribution Problems 359

Developing Pricing Strategies 360
Worldwide Pricing 360

Dual Pricing 361

Factors That Affect Pricing Decisions 361

a Final Word 362
Chapter Summary 363 Key Terms 363 Talk About It 1 364 Talk
About It 2 364 Ethical Challenge 364 Teaming Up 364

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Psychology of Global
Marketing 365

Chapter 15 Managing International Operations 366
toyota races ahead 367

Production Strategy 368
Capacity Planning 368

Facilities Location Planning 368

Process Planning 370

Facilities Layout Planning 371

acquiring Physical resources 371
Make-or-Buy Decision 371

Raw Materials 374

Fixed Assets 374

Key Production Concerns 375
Quality Improvement Efforts 375
ManaGErS BrIEFCaSE: World-Class Standards 376
Shipping and Inventory Costs 376

Reinvestment versus Divestment 377

Financing Business operations 377
Borrowing 378

Issuing Equity 378


CulturE MattErS: Financing Business from abroad 380
Internal Funding 380

Capital Structure 381

a Final Word 382
Chapter Summary 382 Key Terms 383 Talk About It 1 383 Talk
About It 2 383 Ethical Challenge 384 Teaming Up 384

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: toyotas Strategy for
Production Efficiency 385

Chapter 16 Hiring and Managing Employees 386
Leaping Cultures 387

International Staffing Policies 388
Ethnocentric Staffing 388

Polycentric Staffing 390

Geocentric Staffing 390

recruiting and Selecting Human resources 391
Human Resource Planning 391
ManaGErS BrIEFCaSE: Growing Global 391
Recruiting Human Resources 392

Selecting Human Resources 392

Culture Shock 393

Reverse Culture Shock 393
CulturE MattErS: a Shocking ordeal 394

training and Development 394
Methods of Cultural Training 395

Compiling a Cultural Profile 396

Nonmanagerial Worker Training 397

Employee Compensation 397
Managerial Employees 397

Nonmanagerial Workers 398

laborManagement relations 399
Importance of Labor Unions 399

a Final Word 400
Chapter Summary 400 Key Terms 401 Talk About It 1 402 Talk
About It 2 402 Ethical Challenge 402 Teaming Up 402

PraCtICInG IntErnatIonal ManaGEMEnt CaSE: Expatriation or
Discrimination? 403

Endnotes 404
Glossary 409
Name/Company Index 417
Subject Index 420

Dear Friends and Colleagues,

As we roll out the new edition of International Business: The Challenges of Globalization,
we thank each of you who provided suggestions to enrich this textbook. This edition
reflects the advice and wisdom of many dedicated reviewers and instructors. Together,
we have created the most readable, concise, and innovative international business book
available today.

As teachers, we know how important it is to select the right book for your course.
Instructors say that this books clear and lively writing style helps students learn international
business. This books streamlined and clutter-free design is a competitive advantage that will
never be sacrificed.

This books cutting-edge technology package also helps students to better understand
international business. MyManagementLab is an innovative set of course-management
tools for delivering all or part of your course online, which makes it easy to add meaningful
assessment to your course. Whether youre interested in testing your students on simple
recall of concepts and theories or youd like to gauge how well they can apply their new
knowledge to real-world scenarios, MyManagementLab offers a variety of activities that
are applied and personalized with immediate feedback. You and your students will find these
and other components of this books learning system fun and easy to use.

We owe the success of this book to our colleagues and our students who keep us
focused on their changing educational needs. In this time of rapid global change, we must
continue to instill in our students a passion for international business and to equip them with
the skills and knowledge they need to compete. Please accept our heartfelt thanks and know
that your input is reflected in everything we write.

John J. Wild
Kenneth L. Wild


Welcome to the eighth edition of International Business: The Challenges of Globalization. As in
previous editions, this book resulted from extensive market surveys, chapter reviews, and corre-
spondence with scores of instructors and students. We are delighted that an overwhelming num-
ber of instructors and students agree with our fresh approach to international business. The re-
ception of this textbook in the United States and across the world has exceeded all expectations.

This book presents international business in a comprehensive yet concise framework. Real-
world examples and engaging features bring the concepts of international business to life and
make international business accessible for all students. A main goal in this edition is to deliver
the most readable, current, and concise international business textbook available. And this
books paperback format ensures that its price matches a students budget.

This book is our means of traveling on an exciting tour through the study of international
business. It motivates the reader by making international business challenging yet fun. It also
embraces the central role of people and their cultures in international business. Each chapter is
infused with real-world discussion, while underlying theory appears in the background where
it belongs. Terminology is used consistently, and theories are explained in direct and concise
terms. This books visual style is innovative yet subtle and uses photos, illustrations, and fea-
tures sparingly. The result is an easy-to-read and clutter-free design.

Whats New in This Edition
Chapter 1 has been reorganized for a better flow of topics
We added a new section in Chapter 2 titled Culture in the Global Workplace
Chapter 2 covers the sixth and latest Hofstede dimension
Chapters 3 and 4 have been blended and redesigned into a political economy framework
Coverage of regional integration in chapter 8 is now presented as a debate
MyManagementLab is now more integrated throughout the text

MyManagementLab Suggested activities
We are excited that Pearsons MyManagement Lab has been fully integrated into the text.
These new features are outlined below. The online assessment activities enable you to quiz your
students before they come to class so that you have more time in class to focus on areas that
students find most challenging.

Watch It
Recommends a video clip that can be assigned to students for outside classroom viewing or that
can be watched in the classroom. The video corresponds to the chapter material and is accompa-
nied by multiple choice questions that reinforce student comprehension.

try It
Recommends a mini simulation that can be assigned to students as an outside classroom activ-
ity or that can be done in the classroom. As the students watch the simulation they will be asked
to make choices based on the scenario presented. At the end of the simulation the student will
receive immediate feedback based on the answers they gave. These simulations reinforce the
chapters concepts and the students comprehension of those concepts.

talk about It
These are discussion-based questions that can be assigned as an activity in the classroom.




assisted-Graded Writing Questions
These are short essay questions that students can complete as an assignment and submit to you
for grading.

Chapter by Chapter Changes
Coverage of globalization and the global business environment in Chapter 1 has been re-

organized for a better flow of topics. Some material has been compressed and other topics
rearranged within the chapter. Chapter 1 also demonstrates the new design for the learning
objectives, whereby each objective directly aligns with each major section in the chapter
and with the chapter summary.

The role of culture in business in Chapter 2 has been improved to aid student comprehen-
sion. The chapter contains a new section titled Culture in the Global Workplace, which
covers how people in different cultures view time, work, cultural change, and material cul-
ture. We listened to your feedback and replaced the complex Hofstede figures with a table
of country scores for each Hofstede dimension. We also now include coverage of the sixth
and latest Hofstede dimensionindulgence versus restraint.

The most significant change in topical coverage is a reworking of the previous Chapters 3
and 4. Chapter 3 now covers political, legal, and economic systems as integrated systems
of political economy by absorbing the topic of economic systems from Chapter 4. These
changes reflect instructor preference for a more applied approach to teaching the material
as an integrated system. Accordingly, Chapter 4 now covers the economic development of
nations more directly than in previous editions and includes relevant topics that were previ-
ously in Chapter 3, including political risk and international relations.

Coverage of regional economic integration in Chapter 8 has been streamlined in
places and coverage of the trading bloc known as ALADI has been removed. Instead
of presenting the pros and cons of regional integration as benefits and drawbacks, the
material is now presented as a debate over the effects of regional integration. Th


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