The International. Business. Environment. Third Edition. Leslie Hamilton and. Philip Webster OXFORD UNIVERSITY PRESS

Transcription

1 The International Business Environment Third Edition Leslie Hamilton and Philip Webster OXFORD UNIVERSITY PRESS

2 Detailed Contents List of figures List of tabl.es Guide to the book How to use this book How to use the Online Resource Centre About the authors Map of the world xiv xvi xviii xx xxii xxv xxvi 1 Globalization 3 Introduction 5 The Process of Globalization 5 Globalization is not Global (yet) 7 The Indicators of Globalization 7 International Trade 7 Financial Flows 9 Foreign indirect Investment 9 Foreign Direct Investment 12 Greenfield and Brownfield Investment 16 Migration 17 Globalization is All-Pervasive 19 The Drivers of Globalization 21 Political/Regulatory 22 Technological 23 Economic 24 Barriers to Globalization 25 Government Regulation 25 Tariffs and Subsidies 26 Foreign Aid 26 Controls on Capital 26 Public Procurement 26 Border and Immigration Controls 27 Technical Standards 27 Protection of Intellectual Property Rights 27 Cultural and Geographical Distance 27 Culture 27 Corruption 28 Geography 28 The Benefits and Costs of Globalization for Business 29 The Benefits for Business 30 The Costs for Business 30 Chapter Summary 32

3 2 The Global Economy 38 Introduction 40 Measuring the Size of the Global Economy 40 GDP as an Indicator of the Standard of Living 41 Economic Growth 43 The Changing World Economy 46 International Trade 52 The Pattern of Trade 52 Why do Countries Trade? 54 The Competitive Advantage of Nations 56 Trade Intervention 58 Why Intervene? 59 Control of Trade 60 Exchange Rates 63 Chapter Summary 65 3 Analysing Global Industries 71 Introduction 73 The Market and the Industry 73 Market Structures 75 Market Power 78 Measuring Market Concentration 78 Analysing Industries A Framework 80 Force 1 Industry Rivalry 81 Force 2 Competition from New Entrants 85 Force 3 Substitutes 88 Force 4 Customers 88 Force 5 Suppliers 89 A Sixth Force: Comptementary Products 91 Chapter Summary 93 4 The Global Business Environment 99 Introduction 101 The External Environment 101 Opportunities and Threats 103 Opportunities 103 Threats 104 Scanning the Environment 107 The Macroenvironment 113 Political and Legal Environment 114 Economic and Financial Environment 117 Socio-cultural Environment 119 Technological Environment 121 The Ecological Environment 122 Chapter Summary Assessing Country Attractiveness 127 Introduction 129 The Internationalization Process 129

4 The Reasons for FDI 131 Market Access 132 Lower Production Costs 132 Natural Resources 134 Competition from Developing Country MNCs 134 Other assets 135 Screening and Evaluating Foreign Markets 136 Collecting Data 138 IMD World Competitiveness Yearbook 138 The Economist Intelligence Unit (Ell)) 138 GlobalEDGE 139 The World Economic Forum (WEF) 139 Döing Business 140 Other useful sources 143 International Data Problems 144 The Process of Assessing Country Attractiveness 144 Initial Screening 145 Assessing General Market or Site Potential 145 Assess the General Business Environment 147 Product/Service Market Assessment 150 Production Site Assessment 151 Risk 152 Chapter Summary The Socio-cultural Framework 165 Introduction 167 Culture 168 Hofstede and National Cultures 170 Implications for Business 171 Religion 173 Language 175 Time 177 The Social Environment 178 Social Models 178 Demography 185 Changes in Population Size 186 Chapter Summary The Technological Framework 198 Introduction 200 What is Technology? 201 Waves of Innovation 204 Information and Communications Technology 205 Web The Cloud 207 Who Innovates? 207 Geographical Location of R&D 210

5 Sources of Technological Advance 210 What Motivates Business to Innovate? 213 The Intensity of Competition 213 Customers and Suppliers 213 Government Policy 214 Why Technology is Important for Business 215 Opportunities 215 Threats and Chaüenges 219 R&D A Guarantee of Success? 220 Protecting Technology 221 Methods of Protection 221 Problems in Protecting Technology 223 Chapter Summary The Political Environment 229 Introduction 231 What is the Political Environment? 232 The Institutions of the State 232 Different Political Systems 235 Liberal Democracy 235 Authoritarian and Absolutist Systems 237 Communis! Regimes 238 Theocratic Regimes 239 Unitary and Federal Systems 239 The Size of the State 240 Public Expenditure 240 Where does the Money Go? 242 How the Money is Raised-Taxation and ßorrowing 242 The Global Crisis and Government Finances 242 The Demise of the Nation State? 244 Functions of the State and their Importance for Business 245 Law of Contract 246 Law and Order and Externa! Attack 247 Spending and Taxation 247 Negotiator 248 Regulator 248 Deregulator 248 Arbitrator 249 Customer for Goods and Services 249 Supplier of Goods and Services 250 Competitor 250 Subsidizer 251 How Organization Influence the State 252 Methods of Influencing the State 253 Lobbying 253 State Consultation with Business 254 Promises or Threats 254 Direct Access to Government Ministers and Civil Servants 255 Employment and Exchange of Personnel 255 Giving Money or Gifts 256 Chapter Summary 257

6 9 The Legal Environment 262 Introduction 264 The Importance of Law for Business 265 Systems and Sources of Law 269 Civil Law Systems 269 Common Law Systems 270 Customary Law Systems 273 Muslim Law Systems 273 Important Aspects of the Law for Business 273 Contra et Law 274 Tort Law 275 Criminal Law 276 International Law 276 International Law and IPRs 280 European Union 280 Single Market Programme 281 Competition Law 282 The Internet 283 Chapter Summary The Financial Framework 290 Introduction 292 Money 292 The Importance of Confidence 292 Inflation and Interest Rates 293 Inflation 293 Interest Rates 295 Financial Institutions Who Are They and What Do They Do? 295 International Financial Institutions 295 Private Financial Institutions 298 Functions of Financial Institutions 298 Mobilizing Savings and Providing Credit 298 Payment Facilities 299 Reconciling Liquidity and Long-Term Finance Needs 301 Spreading the Risk 301 Industry Restructuring and Diversification 302 Domestic Consolidation and International Expansion 302 Product Diversification 304 Product Innovation 304 Derivatives, Swaps, and Options 304 Motives for Industry Restructuring and Diversification 305 Financial Markets 307 The Major Markets 308 Financial Crises 308 Anatomy of the Financial Crisis 2007 Onwards 309 Easy Credit and Bad Loans 309 Complex Financial Products and Subprime Mortgages 310 Tipping Point, Impact, and Government Response 310 Financial Regulation 313 Different Systems of Regulation 314

7 The Regulatory Challenge 315 Chapter Summary Corporate Social Responsibility 323 Introduction 324 Debates about CSR 325 The Moral Case for CSR 328 The Business Case 329 Global CSR 334 Whose Standards? 334 The 10 Principles 336 Corruption 338 Child Labour 340 Why do Children Work? 343 Millennium Development Goals 344 Social Entrepreneurship/Intrapreneurship 346 Chapter Summary The Ecological Environment 353 Introduction 355 The Ecological Problem 355 The Economic Approach to Explaining the Ecological Problem 356 Business as Usual 357 Perspectives on the Role of Business 358 Views from the Right 358 Views from the Left 358 Green Views 359 Environmental Regulation 360 Global Cooperation Establishing Effective Environmental Regimes 364 Risk and Uncertainty 366 The Role of Science 366 The Notion of Sustainable Development 366 Global Climate Change 367 The Effects of Climate Change 372 The Sceptical Environmentalists 374 The Progress on Climate Change Action 374 Chapter Summary 376 Glossary Index