This new edition of an already well established international business text, maintains its unique strategic focus and the use of the triad (US/Europe/Far East) as a framework within which international business is explored. There is an emphasis on economic and multinational approaches throughout. The real strength of this book lies in the use of case material much of which has now been revised or replaced to include more European examples. All data had now been revised to be fully up-to-date. Each chapter has common pedagogy which includes: objectives, active learning case, international business strategy in action, key points, key terms, review and discussion questions, real case(s)
Preface
Students of international business are fortunate enough to be living in a laboratory where the principles in this book can be used on a daily basis. Virtually every management decision being made today is influenced by global events, and naive thinking about international politics, economics, cultures, exchange rates and foreign competitors can have quick and adverse effects on a firm's bottom line. The objective of this introduction to international business is to provide relevant theoretical and practical insights to management students so that the real world of global business is better understood. We do this in three ways.
First, the text has an extremely strong emphasis on relevance. In each of the 20 chapters there are at least five "cases", so the book has a total of over 100 real-world examples of international business issues to provide insight and perspective.
Second, this text incorporates the latest theoretical advances in a manner easily comprehensible for university and college students, from BA to MBA level. For example, the text discusses such important material as Michael Porter's "diamond" theory of international competitiveness, the latest work on the theory of multinational enterprises and new research on organizational learning within corporations.
Third, and most important, the text integrates both the practical and theoretical issues through a sustained use of the concepts of strategic management. Indeed, this is the first text to have a strategic management focus in the teaching of introductory international business. This unique feature helps students choose from the extraordinarily broad menu of events in the international environment by building confidence in understanding which ones are useful for strategic management analysis at the firm level.
The three elements — relevance, strong theoretical foundation and strategic synthesis — reinforce each other and provide the student with the opportunity to gain deep and lasting insights into the management of international business. In short, this book paints a broad yet detailed picture on the canvas of the global practice of international business. Distinctive features of International Business:
A Strategic Management Approach
There are six distinctive features, in particular, that make this book different from competing textbooks.
First, the book examines international business with an integrative framework, using the strategic management viewpoint. The strategic management approach gives the text the integrative theme of "how to manage an international business" and ties the chapters together into a relevant framework.
Second, many of the excessively technical or mechanistic concepts found in other international business textbooks are de-emphasized. For example, we select relevant aspects of foreign exchange rate management, but we leave technical issues, such as the details of "currency swapping" for the purpose of financing international transactions, to a specialized course in international finance. Similarly, absolute and comparative advantage is covered, but these are examined in terms of their relevance to managers of multinationals in formulating and implementing strategy. We have one chapter on international economics, not an entire course. In short, the technical concepts that business majors are learning in their discipline courses are not reinvented in this book; instead, we select analysis that is of relevance to international business students.
Third, each chapter has an opening "Active Learning Case" that is revisited throughout the chapter. The purpose of this "real life" case is to illustrate how the chapter material is used by multinational enterprises in implementing their strategies. The case also breaks the chapter into subparts and helps to reinforce student learning.
Fourth, there are two "Real Cases" at the end of each chapter. These cases are drawn from recent newspaper and journal sources and provide the student with an opportunity to apply the chapter concepts to real-world situations. The cases also offer additional information on subjects covered in the chapter.
Fifth, throughout each chapter there are two "International Business Strategy in Action" boxes. These are drawn from the current literature and provide specific strategy applications of the material being discussed.
Sixth, Part Four of the book is devoted to doing business in particularly important geographic regions of the world, especially in the "triad" of North America, the European Union (EU), and Japan. In this unique feature, the focus is on illustrating how the concepts already presented in the previous parts are being used by multinationals to establish market positions worldwide. Listening to the market
Our vision of a practical, thematically integrated text built upon a solid theoretical foundation was further refined through an extensive market research effort. We queried the international business market in several important ways:
Hundreds of international business instructors participated in a detailed editorial survey during the formative stages of the project. Our survey revealed many important market trends, including some useful insights about international business professors. In recent years, the international business course has grown in popularity and is now often taught by professors with degrees in areas other than international economics or finance. At many universities, professors of management (especially business strategy and general management) are responsible for the course. We believe that our unique strategic management focus will appeal to traditional economics professors as well as management professors; indeed, international business now combines these approaches.
We also learned that numerous professors with "real-world" experience were finding that older text offerings do not "tell it like it is". In recent years there has been a dramatic increase in the number of international business professors who travel to international meetings and engage in joint international research and dialogue with colleagues from other countries. This book, with its macro-oriented approach, will appeal to this market niche.
Our manuscript was subject to a rigorous editorial review process at key stages in its development. We are grateful for the incisive comments and critical suggestions by our colleagues in the profession. In particular, we appreciated assistance from:
Bharat B. Bhalla, Fairfield University
Gary N. Dicer, University of Tennessee - Knoxville
Prem Gandhi, State University of New York - Plattsburgh
J. Leslie Jankovich, San Jose State University
Robert A. Kemp, Drake University
Rose Knotts, University of North Texas
Michael Kublin, University of New Haven
Stephen Luxmore, St. John Fisher College
John L. Lyons, Pace University
David L. Mathison, Loyola Marymount University
Stanley D. Nollen, Georgetown University
Moonsong David Oh, California State University - Los Angeles
Lee E. Preston, University of Maryland
John Stanbury, Indiana University - Kokomo
Robert Vichas, Florida Atlantic University Acknowledgments for the First Edition
The high quality of this book was greatly enhanced by the dedicated secretarial assistance of Amy Ho at the Faculty of Management, University of Toronto. In addition, invaluable research assistance was provided by Samuel He, Bill Mohri, and Bill Gottlieb. Useful comments have been received from Michael Gestrin, Andrew Anderson, Michael Scott and others associated with the Center for International Business at the University of Toronto.
While Professor Rugman served as the Ross Distinguished Visiting Professor of Canada-US Economic and Business Relations at Western Washington University, he received valuable secretarial assistance from Ms Kathleen Finn and useful comments from members of the faculty, especially Robert Spich.
Professor Hodgetts is grateful for the suggestions and continued assistance from Fred Luthans; George Holmes, Professor of Management, University of Nebraska, Lincoln; Gary Dessler and Constance Bates, Management and International Business Department, Florida International University; Jane Gibson, Nova Southeastern University; and Regina Greenwood, Kettering University. Acknowledgements for the Second Edition
Invaluable research assistance has been provided by Cecilia Brain of the Rotman School of Management, University of Toronto, especially over the three summers of 199799 period when the tables, cases and Instructor's Manual were revised and updated. At Templeton College, University of Oxford, exceptional support has been provided by Denise Edwards.
We are pleased to have worked with members of the Pearson Education team in London, from Publisher Jane Powell to Commissioning Editor Sadie McClelland to Editors Nikki Bowen and Claire Brewer. Distinctive features of the Second Edition
This second edition of an already well-established international business text maintains its unique strategic focus and the use of the triad (US/Europe/Far East) as a framework within which international business is explored. There is an emphasis on the economic environment facing business and the strategies of multinationals throughout. The real strength of this book lies in its relevance, secured by the use of case material, most of which has been revised or replaced, which now offers balanced coverage of each of the triad regions. All data have been revised to be fully up to date. Each chapter retains a common pedagogy, which includes objectives, active learning cases, international business strategy in action, key points, key terms, review and discussion questions, and real cases.
The relevance of the book has been enhanced by the inclusions of 47 brand new "cases" out of the 100 which form the bedrock of the book. The other 53 cases have been updated and expanded. New cases include: Benetton, Upjohn Pharmacia, Thames Water, P&O, Nortel, IKEA, Daewoo, Nokia, Ericsson, Arthur Anderson, McKinsey, Kingfisher, HKSB, Kiwifruit, Acer, Nike, Enron, Philips, Matsushita, Fuji Xerox, Mitsubishi, Lufthansa, Tate & Lyle, Hewlett Packard and environmental capabilities, Japanese FDI in Scotland, APEC, and EMU.
These 100 real world case examples of actual multinational businesses and their operations and strategies offer balanced coverage of the "triad" regions of North America, Europe, and Asia. This is the only major international business textbook to go beyond and "American" or alternatively an "European" perspective, and offer equal treatment of all parts of the triad. Features of the second edition: strategic management approach to international business topics; unique triad framework means that each region is given balanced coverage; full updated tables and figures; 47 new cases and the other 53 expanded and updated; new material on World Trade Organization, North American Free Trade Agreement and other international institutions; new material on environmental regulations and corporate "green" strategies; website of all MNEs and international organisations, which have been added to the case discussions; expanded coverage of China, emerging economies, and the Asian financial crisis; new theoretical material on the firm-specific advantages and country-specific advantages approach.
An instructor's manual is available, which is the best in the field, with over 100 multiple choice questions for each of the 20 chapters, and with extra test banks.
Alan M. Rugman
Richard M. Hodgetts
