Solution Manual for International Business 17th Edition
by by John Daniels, Lee Radebaugh and Daniel Sullivan.
All Chapters 1-20 | Newest Version
1
Copyright © 2022 Pearson Education, Inc.
, PART ONE
BACKGROUND FOR INTERNATIONAL BUSINESS
Chapter 1
Globalization and International Business
OBJECTIVES
1-1 Explain why and how the study of international business (IB) is important
1-2 Understand the relationship between globalization and IB
1-3 Grasp the forces driving globalization and IB
1-4 Discuss the major criticisms of globalization
1-5 Assess the major reasons companies seek to create value by engaging in IB
1-6 Define and illustrate the different operating modes for companies to accomplish their
international objectives
1-7 Recognize why national differences in companies' external environments affect how they
may best improve their IB performance
CHAPTER OVERVIEW
Globalization has become a major socioeconomic force and topic of debate in the twenty-first
century. Chapter One examines the forces that are driving this phenomenon, as well as the often-
passionate criticisms of the process. The chapter reviews the objectives that firms pursue when
they engage in international business activities and describes the various modes of entry that may
be used. It also notes the terminology that has come into existence as new types of organizations
have evolved. The chapter concludes with a discussion of the conditions in a company's external
environment that may affect its international operations.
CHAPTER OUTLINE
OPENING CASE: THE GLOBALIZED BUSINESS OF SPORTS [see Map 1.1]
Although not everyone agrees that the unbridled globalization of professional sports is all for the
good, the process and possibilities are definitely far reaching. Today's satellite television
broadcasts enable fans to watch top players and teams in nearly any sport from almost anywhere
on earth. Professional teams scour the world to find and develop the most talented athletes, and
players forsake home country allegiances in their pursuit of the world's highest salaries. Further,
the more people that tournaments can attract through attendance and television, the more money
that sponsors and advertisers are willing to pay—and the greater the likelihood that those
sponsors and advertisers will have business operations that span the globe. In addition, sports and
nonsports companies alike pay famous athletes and teams generous sums to endorse their
2
Copyright © 2022 Pearson Education, Inc.
,products. Successful teams have opened shops both domestically and internationally to sell
3
Copyright © 2022 Pearson Education, Inc.
, souvenirs bearing their logos and may make more money on merchandise than from TV rights
and sponsorships combined. Most recently, as teams and leagues have begun to seek income
opportunities outside their home countries, foreign investors have acquired a U.S. baseball team;
another group of foreign investors acquired controlling interest in a British soccer (football)
team, and the National Football League (NFL) of the United States underwrites flag football
games in Chinese schools and is playing some regular season NFL games in Europe. Map 1.1
outlines national sports in a variety of countries and can be used to discuss how culture impacts
globalization.
Questions
1-1 Professional athlete A is a star. Professional athlete B is an average player. How has the
globalization of professional sports affected each of these both positively and negatively?
Being a star, professional athlete A can become a target for endorsement deals from local
and international companies and organizations that would use such an athlete in advertising.
They also get substantial financial contracts (salaries and bonuses) from their clubs. The
endorsements and salary deals get more lucrative if professional athlete A reaches strong
positive visibility in major sport events or if he/she develops a global brand such as
Cristiano Ronaldo. Advertisers will pay them considerably for endorsing a product or
service. However, the same athlete might be dropped if his/her performance decline or if
scandals damage his/her image.
For the average player such as professional athlete B, professional sports globalization has
afforded them higher salaries than before. Globalization has led to a rise in professional
sports interest and viewership and, consequently, robust growth in professional athletes'
salaries. At the same time, the fierce competition between athletes and the growing demands
from clubs and fans have put intense pressure on athletes to perform regularly. Today's
athletes have little room for mistakes. (LO1-2: Understand the relationship between
globalization and IB, AACSB: Analytical Skills).
1-2 As you read the chapter, identify and show an example of each international mode of
operations that is illustrated in the globalization of professional sports.
Sport is a major source of service exports and imports. Countries compete to organize major
global events such as the world cup or the Olympics for many business and political
reasons. Chief among them is tourism. Let's say that some American fans fly on Qatar
Airlines to watch the upcoming world cup in Qatar in 2022. Their travel expenses in Qatar
are service exports for Qatar and service imports for the U.S. (LO1-2: Understand the
relationship between globalization and IB, AACSB: Analytical Skills).
Teaching Tips: Carefully review the PowerPoint slides for Chapter One. A good
Internet source of information on globalization can be found at
http://www.globalization101.org/. Finally, review the atlas provided in the text, where
you will find maps of the world and its continents, as well as a country index.
4
Copyright © 2022 Pearson Education, Inc.
by by John Daniels, Lee Radebaugh and Daniel Sullivan.
All Chapters 1-20 | Newest Version
1
Copyright © 2022 Pearson Education, Inc.
, PART ONE
BACKGROUND FOR INTERNATIONAL BUSINESS
Chapter 1
Globalization and International Business
OBJECTIVES
1-1 Explain why and how the study of international business (IB) is important
1-2 Understand the relationship between globalization and IB
1-3 Grasp the forces driving globalization and IB
1-4 Discuss the major criticisms of globalization
1-5 Assess the major reasons companies seek to create value by engaging in IB
1-6 Define and illustrate the different operating modes for companies to accomplish their
international objectives
1-7 Recognize why national differences in companies' external environments affect how they
may best improve their IB performance
CHAPTER OVERVIEW
Globalization has become a major socioeconomic force and topic of debate in the twenty-first
century. Chapter One examines the forces that are driving this phenomenon, as well as the often-
passionate criticisms of the process. The chapter reviews the objectives that firms pursue when
they engage in international business activities and describes the various modes of entry that may
be used. It also notes the terminology that has come into existence as new types of organizations
have evolved. The chapter concludes with a discussion of the conditions in a company's external
environment that may affect its international operations.
CHAPTER OUTLINE
OPENING CASE: THE GLOBALIZED BUSINESS OF SPORTS [see Map 1.1]
Although not everyone agrees that the unbridled globalization of professional sports is all for the
good, the process and possibilities are definitely far reaching. Today's satellite television
broadcasts enable fans to watch top players and teams in nearly any sport from almost anywhere
on earth. Professional teams scour the world to find and develop the most talented athletes, and
players forsake home country allegiances in their pursuit of the world's highest salaries. Further,
the more people that tournaments can attract through attendance and television, the more money
that sponsors and advertisers are willing to pay—and the greater the likelihood that those
sponsors and advertisers will have business operations that span the globe. In addition, sports and
nonsports companies alike pay famous athletes and teams generous sums to endorse their
2
Copyright © 2022 Pearson Education, Inc.
,products. Successful teams have opened shops both domestically and internationally to sell
3
Copyright © 2022 Pearson Education, Inc.
, souvenirs bearing their logos and may make more money on merchandise than from TV rights
and sponsorships combined. Most recently, as teams and leagues have begun to seek income
opportunities outside their home countries, foreign investors have acquired a U.S. baseball team;
another group of foreign investors acquired controlling interest in a British soccer (football)
team, and the National Football League (NFL) of the United States underwrites flag football
games in Chinese schools and is playing some regular season NFL games in Europe. Map 1.1
outlines national sports in a variety of countries and can be used to discuss how culture impacts
globalization.
Questions
1-1 Professional athlete A is a star. Professional athlete B is an average player. How has the
globalization of professional sports affected each of these both positively and negatively?
Being a star, professional athlete A can become a target for endorsement deals from local
and international companies and organizations that would use such an athlete in advertising.
They also get substantial financial contracts (salaries and bonuses) from their clubs. The
endorsements and salary deals get more lucrative if professional athlete A reaches strong
positive visibility in major sport events or if he/she develops a global brand such as
Cristiano Ronaldo. Advertisers will pay them considerably for endorsing a product or
service. However, the same athlete might be dropped if his/her performance decline or if
scandals damage his/her image.
For the average player such as professional athlete B, professional sports globalization has
afforded them higher salaries than before. Globalization has led to a rise in professional
sports interest and viewership and, consequently, robust growth in professional athletes'
salaries. At the same time, the fierce competition between athletes and the growing demands
from clubs and fans have put intense pressure on athletes to perform regularly. Today's
athletes have little room for mistakes. (LO1-2: Understand the relationship between
globalization and IB, AACSB: Analytical Skills).
1-2 As you read the chapter, identify and show an example of each international mode of
operations that is illustrated in the globalization of professional sports.
Sport is a major source of service exports and imports. Countries compete to organize major
global events such as the world cup or the Olympics for many business and political
reasons. Chief among them is tourism. Let's say that some American fans fly on Qatar
Airlines to watch the upcoming world cup in Qatar in 2022. Their travel expenses in Qatar
are service exports for Qatar and service imports for the U.S. (LO1-2: Understand the
relationship between globalization and IB, AACSB: Analytical Skills).
Teaching Tips: Carefully review the PowerPoint slides for Chapter One. A good
Internet source of information on globalization can be found at
http://www.globalization101.org/. Finally, review the atlas provided in the text, where
you will find maps of the world and its continents, as well as a country index.
4
Copyright © 2022 Pearson Education, Inc.
