INSTRUCTOR MANUAL
International Management Culture, Strategy, and
Behavior, 12th Edition by Fred Luthans
Chapter 1-14 with Cases (I II III IV)
Chapter 1
Globalization and International Linkages
Learning Objectives and Brief Summaries
Since the environment of international management is all-encompassing, this chapter is mostly
concerned with economic dimensions, while the following two chapters focus on the political,
legal, and technological dimensions and ethical and social dimensions, respectively. The specific
objectives of this chapter, and their summaries, follow.
1. Assess the implications of globalization for countries, industries, firms, and
communities.
Globalization—the process of increased integration among countries—continues at an
accelerated pace. More and more companies—including those from developing
countries—are going global, creating opportunities and challenges for the global economy
and international management. Globalization has become controversial in some quarters
due to perceptions that the distributions of its benefits are uneven and due to the questions
raised by offshoring. As a result, anti-globalization sentiments have grown stronger in
, many parts of the world including in the developed economies of North America and
Europe which were the initial proponents of globalization -. Despite growing criticism of
globalization, globalization and integration continues unabated.
2. Review the major trends in global and regional integration.
Economic integration is most pronounced in the triad of North America, Europe, and the
Pacific Rim. The North American Free Trade Agreement (NAFTA) and its successor, the
United States–Mexico–Canada Agreement (USMCA), have turned the region into one giant market.
In South America, there is an increasing amount of intercountry trade, sparked by
Mercosur. Additionally, trade agreements such as the Central American Free Trade
Agreement (CAFTA) are linking countries of the Western Hemisphere together. In Europe,
the expansion of the original countries of the European Union (EU) is creating a larger and
more diverse union, with dramatic transformation of Central and Eastern European
countries such as the Czech Republic, Poland, and Hungary. Asia is another major regional
, power, as reflected in the rapid growth shown not only by Japan, but also the economies of
China, India, and other emerging markets. The Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP) links together 11 major Asian and Asian-facing economies. Similarly, the
Transatlantic Trade and Investment Partnership (T-TIP), a proposed trade agreement between the European
Union and the United States, could further promote trade and multilateral economic growth in Europe and
North America.
Countries in Africa and the Middle East continue to face complex problems but still hold
economic promise for the future. Emerging markets in all regions present both
opportunities and challenges for international managers. With a few notable exceptions
such as the United Kingdom‘s withdrawal from the EU, regional integration across the
world has improved over the years with many new bilateral and multilateral trade
agreements facilitating the free flow of goods, labor and information.
3. Examine the changing balance of global economic power and trade and investment
flows among countries.
Different growth rates and shifting demographics are dramatically altering the distribution
of economic power around the world. Notably, China‘s rapid growth will make it the
largest economic power in the world by as early as 2030. India will be the most populous
country in the world, and other emerging markets will also become important players.
International trade and investment have been increasing dramatically over the years. Major
multinational corporations (MNCs) have holdings throughout the world, from North
America to Europe to the Pacific Rim to Africa. Some of these holdings are a result of
direct investment; others are partnership arrangements with local firms. Small firms also
are finding that they must seek out international markets to survive in the future. MNCs
from emerging markets are growing rapidly and expanding their global reach. The
internationalization of nearly all business has arrived.
4. Analyze the major economic systems and recent developments among countries that
reflect those systems.
Different economic systems characterize different countries and regions. These systems,
which include market, command, and mixed economies, are represented in different
nations and have changed as economic conditions have evolved.
The COVID-19 crisis and recent geo-political events such as Russia‘s invasion of Ukraine
have threatened the stability of the current global economic order as countries face
domestic challenges to maintain economic growth. The COVID Pandemic impacted every
aspect of the economic and social lives of millions around the world. Faced with severe
disruptions to global supply chains, multinational firms were forced to consider
reconfiguring their supplier relationships and returning some of their international
operations to home regions.
, The World of International Management: An Interconnected World
Summary
The opening vignette discusses and highlights how social networks, such as Facebook,
YouTube, and Twitter, are revolutionizing the way people and companies interact and
communicate with each other. Social networks offer companies an inexpensive, yet highly
effective means of reaching their target audiences across the globe. In fact, social networks
are rewriting the rules for marketing. Consumers today can quickly and easily get
information about products and services from trusted friends via social media and bypass
more traditional methods of gathering information. Companies must identify ways to adapt
to, and capitalize on, this new marketing reality.
Social media also impacts diplomacy. Various high-profile people have spearheaded social
causes via Twitter, thus aiding the efforts of governments to influence other nations. Such
globalization through social networks, which extends to businesses, brings the populations of
the world closer together and accelerates integration. However, the case presented at the start
of the chapter also aims to highlight the ways in which social media has gained the potential
to not only adversely impact the personal lives of users but also the social-political systems
across the world. Despite the best efforts of social media companies, social media is
increasingly being used to spread misinformation and target minorities through hate speech.
The way social media platforms were exploited to spread misinformation around the 2016
US presidential elections is one example of the potential risks associated with the increasing
rise of social media. Youth is among the most impacted by the adverse impacts of social
media in personal lives leading to an increase in anxiety levels.
Suggested Class Discussion
• Identify the challenges social media presents both at the personal and socio-economic
levels and discuss the possible safeguards social media platforms can take to protect their
users from misinformation and fake news
Discussion points:
The discussion can take place in light of the recent news around political advertising by
Cambridge Analytica, as well as the increase in anxiety and suicidal tendencies among
youth because of social media usage etc.
As with other potential online risks, social media presents a gamut of personal and socio-
economic risks for users that include - cyberbullying (bullying using digital technology),
invasion of privacy, blackmailing, financial fraud, identity theft, and offensive images
and messages specially targeted towards kids. The Cambridge Analytica‘s case highlights
how personal details of users can be easily accessed by interested parties and the same
can be exploited to manipulate opinions. The alleged Russian interference in the 2016 US
International Management Culture, Strategy, and
Behavior, 12th Edition by Fred Luthans
Chapter 1-14 with Cases (I II III IV)
Chapter 1
Globalization and International Linkages
Learning Objectives and Brief Summaries
Since the environment of international management is all-encompassing, this chapter is mostly
concerned with economic dimensions, while the following two chapters focus on the political,
legal, and technological dimensions and ethical and social dimensions, respectively. The specific
objectives of this chapter, and their summaries, follow.
1. Assess the implications of globalization for countries, industries, firms, and
communities.
Globalization—the process of increased integration among countries—continues at an
accelerated pace. More and more companies—including those from developing
countries—are going global, creating opportunities and challenges for the global economy
and international management. Globalization has become controversial in some quarters
due to perceptions that the distributions of its benefits are uneven and due to the questions
raised by offshoring. As a result, anti-globalization sentiments have grown stronger in
, many parts of the world including in the developed economies of North America and
Europe which were the initial proponents of globalization -. Despite growing criticism of
globalization, globalization and integration continues unabated.
2. Review the major trends in global and regional integration.
Economic integration is most pronounced in the triad of North America, Europe, and the
Pacific Rim. The North American Free Trade Agreement (NAFTA) and its successor, the
United States–Mexico–Canada Agreement (USMCA), have turned the region into one giant market.
In South America, there is an increasing amount of intercountry trade, sparked by
Mercosur. Additionally, trade agreements such as the Central American Free Trade
Agreement (CAFTA) are linking countries of the Western Hemisphere together. In Europe,
the expansion of the original countries of the European Union (EU) is creating a larger and
more diverse union, with dramatic transformation of Central and Eastern European
countries such as the Czech Republic, Poland, and Hungary. Asia is another major regional
, power, as reflected in the rapid growth shown not only by Japan, but also the economies of
China, India, and other emerging markets. The Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP) links together 11 major Asian and Asian-facing economies. Similarly, the
Transatlantic Trade and Investment Partnership (T-TIP), a proposed trade agreement between the European
Union and the United States, could further promote trade and multilateral economic growth in Europe and
North America.
Countries in Africa and the Middle East continue to face complex problems but still hold
economic promise for the future. Emerging markets in all regions present both
opportunities and challenges for international managers. With a few notable exceptions
such as the United Kingdom‘s withdrawal from the EU, regional integration across the
world has improved over the years with many new bilateral and multilateral trade
agreements facilitating the free flow of goods, labor and information.
3. Examine the changing balance of global economic power and trade and investment
flows among countries.
Different growth rates and shifting demographics are dramatically altering the distribution
of economic power around the world. Notably, China‘s rapid growth will make it the
largest economic power in the world by as early as 2030. India will be the most populous
country in the world, and other emerging markets will also become important players.
International trade and investment have been increasing dramatically over the years. Major
multinational corporations (MNCs) have holdings throughout the world, from North
America to Europe to the Pacific Rim to Africa. Some of these holdings are a result of
direct investment; others are partnership arrangements with local firms. Small firms also
are finding that they must seek out international markets to survive in the future. MNCs
from emerging markets are growing rapidly and expanding their global reach. The
internationalization of nearly all business has arrived.
4. Analyze the major economic systems and recent developments among countries that
reflect those systems.
Different economic systems characterize different countries and regions. These systems,
which include market, command, and mixed economies, are represented in different
nations and have changed as economic conditions have evolved.
The COVID-19 crisis and recent geo-political events such as Russia‘s invasion of Ukraine
have threatened the stability of the current global economic order as countries face
domestic challenges to maintain economic growth. The COVID Pandemic impacted every
aspect of the economic and social lives of millions around the world. Faced with severe
disruptions to global supply chains, multinational firms were forced to consider
reconfiguring their supplier relationships and returning some of their international
operations to home regions.
, The World of International Management: An Interconnected World
Summary
The opening vignette discusses and highlights how social networks, such as Facebook,
YouTube, and Twitter, are revolutionizing the way people and companies interact and
communicate with each other. Social networks offer companies an inexpensive, yet highly
effective means of reaching their target audiences across the globe. In fact, social networks
are rewriting the rules for marketing. Consumers today can quickly and easily get
information about products and services from trusted friends via social media and bypass
more traditional methods of gathering information. Companies must identify ways to adapt
to, and capitalize on, this new marketing reality.
Social media also impacts diplomacy. Various high-profile people have spearheaded social
causes via Twitter, thus aiding the efforts of governments to influence other nations. Such
globalization through social networks, which extends to businesses, brings the populations of
the world closer together and accelerates integration. However, the case presented at the start
of the chapter also aims to highlight the ways in which social media has gained the potential
to not only adversely impact the personal lives of users but also the social-political systems
across the world. Despite the best efforts of social media companies, social media is
increasingly being used to spread misinformation and target minorities through hate speech.
The way social media platforms were exploited to spread misinformation around the 2016
US presidential elections is one example of the potential risks associated with the increasing
rise of social media. Youth is among the most impacted by the adverse impacts of social
media in personal lives leading to an increase in anxiety levels.
Suggested Class Discussion
• Identify the challenges social media presents both at the personal and socio-economic
levels and discuss the possible safeguards social media platforms can take to protect their
users from misinformation and fake news
Discussion points:
The discussion can take place in light of the recent news around political advertising by
Cambridge Analytica, as well as the increase in anxiety and suicidal tendencies among
youth because of social media usage etc.
As with other potential online risks, social media presents a gamut of personal and socio-
economic risks for users that include - cyberbullying (bullying using digital technology),
invasion of privacy, blackmailing, financial fraud, identity theft, and offensive images
and messages specially targeted towards kids. The Cambridge Analytica‘s case highlights
how personal details of users can be easily accessed by interested parties and the same
can be exploited to manipulate opinions. The alleged Russian interference in the 2016 US
