International Business Management : For Anna University

Description

Cover Contents Preface About the Author Part 1: Concept of International Business Chapter 1: Overview of International Business 1.1 The Concept and Process of Globalisation 1.1.1 Meaning 1.1.2 Evidence 1.1.3 The Impact 1.2 Meaning and Importance of International Business 1.3 Domestic Business versus International Business 1.4 Multinational Corporation 1.5 Evolution and Development of International Business 1.5.1 Process of Evolution 1.5.2 Early Developments 1.5.3 Post-War Developments 1.5.4 Recent Trends 1.6 Factors Leading to Growth in International Business in Recent Decades 1.7 Structure of Book Summary Review Questions References Select Further Readings Chapter 2: Modes of International Business 2.1 Determinants of Entry Mode 2.2 Trade Mode 2.2.1 Direct and Indirect Export 2.2.2 Counter-trade 2.3 Contractual Entry Modes 2.3.1 Licensing 2.3.2 Franchising 2.3.3 Management Contracts 2.3.4 Turnkey Projects 2.4 Foreign Investment 2.4.1 Foreign Portfolio Investment and Foreign Direct Investment 2.4.2 Mergers and Acquisitions (M&As) 2.5 Strategic Alliance 2.6 FDI Compared with Trade 2.7 FDI Compared with Contractual Entry Mode 2.8 Greenfield Investment (GI) versus M&As 2.8.1 Substitutability between GI and M&As 2.8.2 Differing Impact of GI and M&As Summary Review Questions References Select Further Readings Chapter 3: Theories of International Trade 3.1 Mercantilists’ Version 3.2 Absolute and Comparative Advantage 3.2.1 Theory of Absolute Advantage 3.2.2 Ricardian View of Comparative Advantage 3.2.3 Comparative Advantage based on Opportunity Cost 3.2.4 Production Possibilities Schedule 3.2.5 Static and Dynamic Gains from Trade Re-examined 3.3 Factor Proportions Theory 3.3.1 Heckscher-Ohlin Theorem 3.3.2 Factor Price Equalisation 3.3.3 Leontief Paradox 3.3.4 Distribution of Income 3.4 Neo-factor Proportions Theories 3.5 Country Similarity Theory 3.6 Intra-industry Trade 3.6.1 Nature of Intra-industry Trade 3.6.2 Measures of Intra-industry Trade 3.6.3 Gains from Intra-industry Trade 3.7 Trade in Intermediate Products and Services: Outsourcing 3.7.1 Outsourcing and Off-shoring 3.7.2 Bases of Outsourcing 3.7.3 Gains from Outsourcing 3.7.4 Outsourcing of Services 3.8 The National Competitive Advantage 3.9 Terms of Trade Summary Review Questions Study Topic References Chapter 4: Balance of Payments 4.1 Structure of Balance of Payments 4.1.1 Current Account Transactions 4.1.2 Capital Account Transactions 4.1.3 Official Reserves Account 4.2 Equilibrium, Disequilibrium and Adjustment 4.2.1 Accounting Equilibrium 4.2.2 Disequilibrium and the Focus of Adjustment 4.3 Different Approaches to Adjustment 4.3.1 The Classical View 4.3.2 Elasticity Approach 4.3.3 Keynesian Approach 4.3.4 Monetary Approach Summary Review Questions Study Topic References Select Further Readings Part 2: International Business Environment Chapter 5: National Regulation of International Business 5.1 Free Trade versus Protection 5.1.1 Case for Free Trade 5.1.2 Arguments for Protection 5.1.3 Move from Inward-looking to Outward-looking Trade Policy Regimes 5.2 Forms of Trade Regulation at the National Level 5.3 Instruments of Trade Regulation 5.3.1 Tariff 5.3.2 Quota 5.3.3 Subsidies 5.3.4 Dumping 5.3.5 Some Other Forms of Non-tariff Barriers 5.4 Regulation of FDI 5.4.1 Rationale behind Regulation 5.4.2 Modalities of Regulation in Host Country 5.4.3 Modalities of Regulation in Home Country Summary Review Questions Study Topic References Select Further Readings Chapter 6: Multilateral Regulation of Trade and Investment 6.1 Basic Principles of Multilateral Trade Negotiations 6.2 GATT and Its Early Rounds 6.3 Uruguay Round 6.3.1 Main Features 6.3.2 Agreements at the Uruguay Round 6.4 World Trade Organisation 6.4.1 Basic Difference between GATT and WTO 6.4.2 Organisational Structure 6.4.3 Functions of the WTO 6.4.4 Settlement of Disputes 6.4.5 Challenges before WTO 6.5 WTO and India 6.6 United Nations Conference on Trade and Development (UNCTAD) 6.6.1 Origin of UNCTAD 6.6.2 Major Areas of Negotiations 6.6.3 Some Recent Developments Summary Review Questions Study Topic References Select Further Readings Chapter 7: Regional Economic Integration 7.1 Levels of Economic Integration 7.2 Benefits and Cost of Economic Integration 7.2.1 Trade Creation and Trade Diversion 7.2.2 Inter-commodity Substitution and Consumption Gains 7.2.3 Trade Deflection in a Free Trade Area 7.2.4 Dynamic Effects 7.2.5 Collective Self-reliance 7.2.6 Increased Foreign Direct Investment 7.2.7 Polarisation of Benefits 7.3 Some Economic Integration Schemes 7.3.1 The European Case 7.3.2 The American and Caribbean Schemes 7.3.3 Integration Schemes in Africa and the Middle-East 7.3.4 Economic Co-operation Schemes in Asia and Pacific Summary Review Questions References Select Further Readings Chapter 8: Political and Legal Environment 8.1 Concept of Political Environment 8.1.1 Political Diversity and Political Similarity 8.1.2 Democracy Versus Totalitarianism 8.2 Home Country Perspective 8.3 Host Country Perspective 8.3.1 Meaning and Forms of Political Risk 8.3.2 Evaluation of Political Risk 8.3.3 Management of Political Risk 8.4 Legal Environment 8.4.1 Legal System 8.4.2 Principles of International Business Law 8.4.3 Wide Variance in National Business Laws and the Issue of Legal Standardisation Summary Review Questions Study Topic References Select Further Readings Chapter 9: Economic Environment 9.1 Forms of Economic System 9.2 Preliminary Economic Indicators 9.2.1 Level of Income and Its Distribution 9.2.2 Inflation 9.2.3 Consumption Behaviour 9.2.4 Availability of Human and Physical Resources 9.2.5 Network of Infrastructure 9.2.6 Fiscal, Monetary, and Industrial Policies 9.2.7 Strength of External Sector 9.3 Process of Analysing Economic Environment Summary Review Questions Study Topic References Select Further Readings Chapter 10: Socio-Cultural and Ethical Environment 10.1 Concept of Culture 10.1.1 Meaning of Culture 10.1.2 Elements of Culture 10.2 Cultural Diversity 10.2.1 Basis of Cultural Diversity 10.2.2 Diverse Culture and Competitive Advantage 10.3 Management of Cultural Diversity 10.3.1 Two Schools of Thought 10.3.2 Management Process 10.4 Ethics and Social Responsibility 10.4.1 Concept 10.4.2 Normative and Relative Ethics 10.4.3 Some Ethical Issues in International Business Summary Review Questions References Select Further Readings Chapter 11: International Financial Environment: Exchange Rate 11.1 International Monetary System 11.1.1 Early System 11.1.2 Bretton Woods System of Exchange Rates 11.1.3 Exchange Rate Regime since 1973 11.2 Exchange Rate Quotation 11.2.1 Direct and Indirect Quotes 11.2.2 Buying and Selling Rates 11.2.3 Forward Rates 11.2.4 Cross Rates 11.3 Determination of Exchange Rate in Spot Market 11.3.1 Process of Determination 11.3.2 Factors Influencing Exchange Rate 11.4 Exchange Rate Determination in Forward Market 11.4.1 Interest Rate Parity Theory 11.4.2 Covered Interest Arbitrage 11.5 Theories of Exchange Rate Behaviour 11.5.1 Balance of Payments Approach 11.5.2 Monetary Approach of Flexible Price Version 11.5.3 Monetary Approach of Sticky-price Version 11.5.4 Portfolio Balance Approach 11.6 Exchange Rate Forecasting 11.6.1 Relevance of Exchange Rate Forecast 11.6.2 Problems in Exchange Rate Forecast 11.6.3 Techniques of Forecasting 11.6.4 Forecast Error Summary Review Questions References Select Further Readings Part 3: Straegy of International Business Chapter 12: Strategy, Planning, Organisation and Control 12.1 Strategies 12.1.1 Different Approaches to Strategy Formulation 12.1.2 Spectrum of Strategy Formulation 12.1.3 Various Levels of Strategy Formulation 12.2 Planning 12.2.1 Nature of Planning Process 12.2.2 Steps in the Process of Strategic Planning 12.2.3 Centralised versus Decentralised Planning 12.3 Organisational Structure 12.3.1 Absence of Formal Organisational Structure 12.3.2 Creation of Export Department 12.3.3 International Division 12.3.4 Global Division 12.3.5 Multidimensional/Matrix Structure 12.3.6 Some other Structures 12.3.7 Coordination among the Sub-units 12.4 Process of Control 12.4.1 Features of an Effective Control System 12.4.2 Design of Control Summary Review Questions References Select Further Readings Chapter 13: Management of International Operations 13.1 Location for Production 13.1.1 Options for Location 13.1.2 Factors behind Selection of Location 13.1.3 Selecting a Location 13.2 Management of Inventory 13.2.1 Deviation from the Economic Order Quantity 13.2.2 Shifting of Re-order Point 13.2.3 Just-in-time System 13.3 Sourcing of Inputs 13.3.1 Modes of Procurement 13.3.2 Make or Buy Decision 13.4 International Logistics 13.4.1 Transportation Issue 13.4.2 Packaging of Products 13.4.3 Storage Facility 13.4.4 Centralised and Decentralised Logistics management 13.4.5 Present State of Logistics in India 13.5 International Services 13.5.1 Goods and Services 13.5.2 Some Flourishing International Services 13.5.3 Internationalisation of Service Firms 13.5.4 Barriers to Internationalisation of Services 13.5.5 Management Aspect 13.5.6 Off-shoring of Corporate Service Functions Summary Review Questions Study Topic References Select Further Readings Chapter 14: International Market Strategy 14.1 Market Identification and Demand Estimation 14.1.1 Selection of Market 14.1.2 Estimation of Demand 14.1.3 Market Concentration versus Market Diversification 14.2 Product Strategy 14.2.1 Standardisation versus Adaptation 14.2.2 Factors behind Adaptation 14.3 Pricing Strategy 14.3.1 Basis of Pricing in the International Market 14.3.2 Price Discrimination 14.3.3 Skimming Price versus Penetration Price 14.3.4 Bundling/Unbundling of Product 14.3.5 Dumping 14.3.6 Price Control 14.3.7 Transfer Pricing 14.4 Selecting Channel of Distribution 14.4.1 Direct and Indirect Channels 14.4.2 Suitability of Channel 14.4.3 Adaptability of the Distribution Channel 14.4.4 Costs Involved in Overseas Distribution Channel 14.5 Sales Promotion 14.5.1 Modes of Sales Promotion 14.5.2 Adaptability of Advertising 14.6 Foreign Trade Documentation 14.6.1 Objectives of Foreign Trade Documents 14.6.2 Letter of Credit 14.6.3 Draft 14.6.4 Bill of Lading 14.6.5 Additional Documents Summary Review Questions References Select Further Readings Chapter 15: Global Human Resource Management 15.1 Complexities of International Firms 15.2 Staffing Policy 15.2.1 Ethnocentric, Polycentric, and Geocentric Policies 15.2.2 Culture Shock, Reverse Culture Shock, and Compensation 15.3 The Process of Recruitment and Training 15.3.1 Estimation of Human Resource Requirements 15.3.2 Sources of Recruitment 15.3.3 Process of Selection 15.3.4 Training 15.4 Management of Industrial Relations 15.4.1 Relevance of Industrial Relations Issue 15.4.2 Employees’ Participation in Management 15.4.3 Role of Trade Unions Summary Review Questions References Select Further Readings Chapter 16: International Investment and Financing Strategy 16.1 International Capital Budgeting 16.1.1 Computation of the Cash Flow 16.1.2 Cost of Capital 16.1.3 Adjusted Present Value Approach 16.1.4 Non-financial Factors in Capital Budgeting 16.2 Selection of the Sources and Forms of Funds 16.2.1 Minimisation of Cost of Funds 16.2.2 Borrowing to Conform to Capital Structure Norms 16.2.3 Selection of an Optimal Maturity 16.2.4 Avoidance of Legal and Procedural Formalities 16.3 Financial Swap 16.3.1 Interest-rate Swap 16.3.2 Currency Swap 16.4 International Cash Management 16.4.1 Assessment of Cash Requirements 16.4.2 Optimisation of Cash Needs 16.4.3 Investment of Surplus Cash Summary Review Questions Study Topic References Select Further Readings Chapter 17: Management of Exchange Rate and Interest Rate Risk 17.1 Nature and Measurement of Exchange Rate Exposure 17.1.1 Translation Exposure 17.1.2 Transaction Exposure 17.1.3 Real Operating Exposure 17.2 Management of Exchange Rate Exposure 17.2.1 Transaction Exposure 17.2.2 Hedging of Real Operating Exposure 17.2.3 Managing Translation Exposure 17.3 Nature of Interest Rate Risk 17.4 Techniques of Managing Interest Rate Exposure 17.4.1 Mismatched Borrowings 17.4.2 Forward Rate Agreements 17.4.3 Interest-rate Swap 17.4.4 Interest Rate Futures 17.4.5 Interest Rate Caps 17.4.6 Interest Rate Floors 17.4.7 Interest Rate Collars 17.4.8 Interest Rate Corridors 17.4.9 Options on FRAs 17.4.10 Options on Swaps Summary Review Questions Study Topic References Select Further Readings Chapter 18: Host Country Heterogeneity and International Business Strategy 18.1 Developed Market Economies 18.1.1 Basic Economic Indicators 18.1.2 Entry and Operating Strategy for the MNCs 18.1.3 International Business Strategy for EU 18.2 Business with a Less Developed Country 18.2.1 Income-based Classification of Developing Countries and their Broad Features 18.2.2 Entry and Operating Strategies 18.3 Less Developed Countries: A Functional Classification 18.3.1 Tax Havens 18.3.2 Least Developed Countries 18.3.3 Emerging Market Economies 18.3.4 Transition Economies 18.4 The Five Emerging Market Economies 18.4.1 FDI in China and India 18.4.2 Strategy of MNCs 18.5 Transition Economies 18.5.1 Early Experiences 18.5.2 Reforms during 1990s 18.5.3 International Business Strategy in Transition Economies Summary Review Questions Study Topic References Select Further Readings Model Question Papers Model Question Paper I Model Question Paper II Model Question Paper III Model Question Paper IV Answers to Model Question Paper I Answers to Model Question Paper II