Preface

PREFACE

We are pleased to present the eighth edition of International Business: The Challenge of Global Competition. We thank everyone who has called or written us, or made in-class suggestions for improvement.

Purpose and Scope of this Text

Students ask a number of questions in an international business course: about different cultures, why products are the same (or different) in different countries, why different peoples have different rituals, about the effect of the Internet on international business, and many more. We wrote this book to provide answers to those questions and more, whether the students are advanced undergraduates or in an MBA program. Earlier in our careers we, the authors, had similar questions. We still don't know all the answers, but in this text we hope to both provide answers and to convey our continuing fascination with the subject matter. There are always new questions, and sometimes there are new answers to old questions.

International Business 8/e is organized into four sections in order to maximize its utility to instructors and students alike. The opening section defines the nature of international business and the three environments in which it is conducted. Section Two is devoted to the continuing importance of international organization and the international monetary system, and how they affect business. Section Three focuses on the uncontrollable forces at work in all business environments, and discusses their inevitable impact on business practice. We devote the final section to a discussion of how managers deal with all of the forces affecting international business.

Authorship

You may have noticed that the number of authors of the 8th edition has swelled considerably. Those who have used prior editions may have seen the names of these new authors in the acknowledgement section, as the author of a case, or in other capacities. Paul Franz, Mike Geringer, and Michael Minor each bring new perspectives and new energy to the considerable task of revising such a large text. They each also bring their individual strengths and areas of expertise to this new edition. Paul specializes in international law, international employment, and immigration. Mike focuses on strategy and international management. And Michael's research is mainly in comparative consumer behavior, international marketing strategy, and political risk issues. This new author team brings a dynamic new focus to this edition.

Changes to the Eighth Edition

With each new edition we have been blessed by an expanding network of those making helpful suggestions. Professors, reviewers, businesspeople who bought the book or received it at a conference, and our own graduate and undergraduate students have made useful and constructive comments. We believe that International Business 8/e continues to offer you a superior text in terms of quality, currency, and the infusion of current topics relevant to current challenges.

1. A resounding comment in the reviews of the seventh edition was that the strategy chapter needed to come earlier. We have moved the chapter on strategic planning from Chapter 20 to Chapter 14, where itintroduces the fourth and final section of the text.
2. Another consistent comment we received concerned chapter 13. We have moved the discussion of distributive forces - long a part of Chapter 13 -to Chapter 2.
3. Also, our presentation of the Internet has changed. In the 7th edition we viewed the Internet primarily as a source of materials for research. In this edition we reflect the current reality. The Internet is a concrete part of a firm's international strategy, across the marketing mix, across production issues - in fact, its influence is pervasive across the functions of the firm.
4. As we already mentioned, the addition of 3 new authors to this edition brings a great deal of change, particularly to the strategy, marketing, and legal chapters of this text. This new author team has worked together to make sure this edition retains the style and strengths from the previous editions, but also has made sure that this edition is a current, comprehensive, and relevant textbook for International Business students.

Key Features and Areas of Importance:

1. The Internet Appendix: As with the 7th edition, a comprehensive list of Internet addresses and resources is included at the end of chapter 1. This helps to make researching international business topics much easier for students. This comprehensive list is also included on the 8th edition web site, and will be updated/expanded periodically.
2. Relevance for Businesspeople: This feature links the concepts introduced in the text to real-world experiences by international businesspeople. Through these examples, students learn 'why' these concepts are relevant and important.
3. Student CD-Rom: With every copy of the text, students will receive a free CD-Rom that contains what used to be the exam prep disk (15-20 questions per chapter for review), video clips, and ...
4. Online Learning Center: The International Business web site is a great resource for students and professors alike. It has been greatly enhanced since the 7th edition. The 8th edition site provides company and e-commerce updates, book features, a career center, professional resources, downloadable supplements, a discussion board for instructors and students, chapter quizzes, and much more!

We have updated the material in each chapter to reflect recent world events and new International Business issues.

Chapter 1: There is a new discussion of the continual broadening of the term "globalization" by social scientists and businesspeople. A new word "globality" is introduced. New evidence of the rapid growth of global and multinational firms is offered by an UNCTAD report. Also, the Internet Appendix has been completely updated. This will also appear on the book's web site, so it can be updated if any links change or are deleted.

Chapter 2: The extensive tables in Chapter 2 have been revised. New information on the role of small and medium-sized enterprises in international exporting and investment has been incorporated into the discussion. We have updated the discussion on recent changes and trends in the levels and direction of trade and investment among the major regions and nations of the world, including changes associated with China and other Asian nations. The discussion of record levels of foreign direct investment, including international mergers and acquisitions, has been expanded. We have provided updated company examples for many of the key chapter concepts. The discussion of distributive forces, which previously had been a part of Chapter 13, has been moved into this chapter to extend the discussion on ways in which companies enter into foreign markets for international trade and investment.

Chapter 3: Information on the EU ban of US beef has been updated to include the WTO authorization to retaliation given to the US. Also, new information has been added on the EU-US pact to limit government subsidies to their commercial aircraft makers.

Chapter 4: We have expanded the discussion of the European Union, as well as expanded coverage of the OECD and other international organizations. There is also a new section explaining the relationship between international organizations and international business.

Chapter 5: Obviously, the discussion of the Euro, and it's strengths and weaknesses has been updated to reflect the current developments. Also, developments in the Eurozone where the European Central Bank sets monetary policy are included in this chapter.

Chapter 6: A new discussion of the Euro and it's impact on international business is included. There is also an expanded discussion of the role of the US dollar in international transactions and of financial forces and how they affect business in countries throughout the world.

Chapter 7: The extensive tables in this chapter have been revised. New indicators of development such as cell phones, home computers, and Internet hosts are introduced. The importance of sociocultural forces is re-emphasized. To illustrate the wide variability of inflation rates, we have added an historical perspective.

Chapter 8: There are a number of updates and additions to this chapter. Information on the biggest ecological disaster since Chernobyl is presented, the impact of the new bridge connecting Sweden to Denmark is described, a report on the blockage of the Rhine Waterway caused by the NATO bombing in Yugoslavia is included, and new information on the progress made in the production of unconventional sources of petroleum has been added.

Chapter 9: The table comparing religious populations has been updated and changed to a graphical representation, which should make this information easier to understand. We changed the vignette on Disneyland Paris to reflect Disney's successful changes made there. We indicate that the influx of scientists and engineers into the United States from other countries has subsided. A new bribe payers index from Transparency International is introduced, as well as a new table describing the extent of the entrepreneurial spirit in various countries around the world.

Chapter 10: We have added the explanation of the importance to business of politics including such concepts and labels as conservative and liberal, right and left.

Chapter 11: There is now a section discussion international litigation and alternative dispute resolution mechanisms. Discussion of extraterritorial application of US laws and application of antitrust laws throughout the world has been expanded. Additionally, there is a discussion of the role of the US Department of Justice.

Chapter 12: A new section on immigration, focusing on the entry of businesspeople to the US has been added. Also, we have expanded the discussion of how technology is influencing workers and the workplace and of trends in labor movements worldwide.

Chapter 13: The discussion in Chapter 13 of competitiveness at the macro level ("national competitiveness"), has been completely revised and updated. The extensive tables in this chapter have been revised. Numerous new tables and figures have been added, including new measures of national competitiveness. Major changes in relative competitiveness of the U.S., the European Community, and Japan have been updated, including discussion of the changing role of keiretsu in Japan and the role of information and communication technologies in affecting relative rates and directions of development in the developed countries. We have included discussion of international e-commerce, as well as an expanded discussion of the newly industrialized economies and the leading developing nations of Asia, including China. The discussion of counterfeiting and piracy as important international business issues has been expanded and updated. Reflecting comments of our reviewers and prior users of this text, the discussion of distributive forces has been moved from this chapter into Chapter 2. We have provided updated examples for many of the key chapter concepts, and we have included a new mini-case at the end of the chapter.

Chapter 14: To more appropriately reflect the role of strategy and strategic planning as a key introductory and organizing focus for the discussion of how managers deal with the forces affecting international business, this chapter has been moved to the beginning of section 4. In this new Chapter 14, we have included a discussion of the concepts of strategy and competitive advantage, and their importance to international business. We have provided updated examples for many of the key concepts introduced in this chapter. The chapter includes a new strategic planning example (on 3M) and there is also a new mini-case on small and medium-sized enterprises (on ACT Manufacturing) at the end of the chapter.

Chapter 15: We shift our focus from the notion of market screening on a per-country basis only, and introduce the core idea that cross-country segments may be just as important. We re-emphasize the fact that policy stability rather than political stability per se is more important as an international business risk factor. We also introduce several political risk forecasting services for the first time. The material on sociocultural forces has been extensively changed. An in-depth vignette on market research practices has been added, as well as a new table on the marketing potential of emerging economies.

Chapter 16: The eternal issue of standardization vs. adaptation has been tackled again with more attention given to the likelihood of the need for adaptation. Another general change is an increased focus on consumer products and services as compared to business-to-business marketing examples. We introduce a table illustrating Internet advertising agencies for the first time. We also discuss challenges to advertising, personal selling, channels of distribution and prices on the Internet. A bit less emphasis is given to transfer prices as a pricing issue.

Chapter 17: We have added a new graphic that illustrates the risk/cost trade-off of export payment terms. There is also a new discussion on the successor to the Foreign Sales Corporation. The U.S. government has agreed to eliminate the FSC after it lost an appeal to the WTO. Also, we have included information showing that large firms do export - information from a Census Bureau study confirms that a large part of the export value associated with large multinational manufacturers was between related parties. Also, the top 50 manufacturers accounted for 45 percent of the known export value.

Chapter 18:

Chapter 19:

Chapter 20: In Chapter 20, we have expanded substantially our discussion of international outsourcing, and we have expanded our discussion of the linkage among outsourcing, value chains, and cycle time. We have provided an extensive new discussion of electronic purchasing and the impact of e-commerce on international operations management, including the challenges as well as opportunities associated with emerging business-to-business electronic purchasing practices. We have introduced an expanded discussion of international standards, with an emphasis on ISO standards, and have also expanded our discussion of the management of maintenance activities in international operations. We have provided updated examples for many of the key concepts introduced in this chapter, including examples from service-based companies to complement our existing coverage of more manufacturing-oriented firms. We have included a discussion of global concurrent engineering (or "chasing the sun") and have also added an extended example of international operations management within small and medium-sized enterprises (Cognizant Technology Solutions).

The 8th Edition International Business Package
For Instructors:

Instructors' Manual: This manual, written by the authors, will help save you invaluable time preparing for the course by providing suggestions for heightening your students' interest in the material. Each chapter-by-chapter discussion presents concept previews, an overview of the chapter, suggestions and comments, student involvement exercises, suggestions for guest lecturers, video case suggestions, and a detailed chapter outline.

Test Bank: Authored by the authors, the text bank contains approximately 100 questions per chapter, in multiple choice, true/false, and short answer format. Each question is ranked for difficulty level and the page references in the textbook are given for the answers.

PowerPoint CD-Rom: Authored by Andrew Yap of Florida International University, this PowerPoint presentation includes key points from each chapter, sample figures from the text, and supplemental exhibits that help to illustrate main points in the chapter. Over 600 images are included. Students also have access to this presentation on the Student CD that accompanies each new book.

Instructor's Presentation CD-Rom: This instructor's CD collects many features of the IM, videos, PowerPoint presentation, and lecture material in an electronic format and offers a convenient tool that allows you to customize your own lecture and presentation.

Videos: We realize that time is a scarce resource for instructors, so this video program provides a carefully selected set of videos to accompany this text. The series includes videos mostly from NBC archives that focus on international business challenges, processes, and experiences. A video case highlighting each video and asking discussion questions is included with the Instructor's Manual.

For Students:
Student CD-Rom: With each new book, students receive a free CD-Rom containing what used to be the Exam Prep Disk, which has been updated to reflect the changes in the 8th edition. Students can use these test questions to prepare for exams or to review the content they have learned in each chapter. The CD also includes the complete PowerPoint presentation, and video clips that reference specific pages or sections in the text.

E-Learning Session: This 'online study guide' is a great resource for students as they review the key concept from each chapter. Each chapter includes an outline of the chapter, and the most important supplements are brought into this outline to emphasize important concepts in the chapter. Each chapter contains a quiz for review, PowerPoint slides, figures from the text, concept checks, key term definitions, and much more!

For both students and instructors:
Business Week Edition: Keep your classroom up-to-date with the latest international business news. Now you can take advantage of a 15-week subscription to the world's leading business magazine. Instructors receive a free semester subscription and a weekly newsletter summarizing the articles. The newsletter will also include application questions for incorporating current events into your curriculum.

• Easy-to-use instructor assessment for effective supplemental content.
• Self-assessment areas for students to use to check their own comprehension.
• Current and relevant articles from leading periodicals and journals for students to use in researching assigned projects.
• Periodic posting of the most recent and dynamic articles along with relevant quizzing and assessment tools. New material that can be brought into class for discussion.
• The highest quality peer-reviewed and refereed content. The content is vetted to uncover relevant course issues versus random Web-search results.
• Optional research and study still tools.