Global Business Strategy: A
Systems Approach
,This work is licensed under a Creative Commons-ShareAlike 4.0 International License
,Contents
PREFACE ...........................................................................................................................1
THE APPROACH OF THIS BOOK...............................................................................................1
STRUCTURE OF THE TEXT.........................................................................................................2
FEATURES OF THE BOOK ........................................................................................................3
SUPPLEMENTARY MATERIAL ..................................................................................................3
ACKNOWLEDGMENTS ..............................................................................................................3
PART 1...............................................................................................................................6
Chapter 1 THE SUBJECT ..................................................................................................7
Chapter 2 THE FIELD AND THE FRAMEWORK ...............................................................9
2.1 OVERVIEW............................................................................................................................9
LEARNING OBJECTIVES ..................................................................................................11
2.2 INTRODUCTION ...............................................................................................................11
2.3 THE FIELD OF INTERNATIONAL BUSINESS.....................................................................12
2.3.1 EXCHANGE OF GOODS .........................................................................................13
2.3.2 EXCHANGE OF SERVICES AND INFORMATION FOR COMMERCIAL
PURPOSES........................................................................................................................13
2.3.3 EXCHANGE OF MONEY (INVESTMENT) ...............................................................14
2.4 THE INTERNATIONALIZATION/GLOBALIZATION PROCESS..........................................16
2.4.1 PHASE A: EXPORT/IMPORT ENTRY MODES .......................................................18
2.4.2 PHASE B: CONTRACTUAL ENTRY MODES ...........................................................18
2.4.3 PHASE C: INVESTMENT ENTRY MODES ..............................................................19
2.4.4 PHASE D: GLOBAL CONSORTIA ...........................................................................19
2.5 GLOBAL BUSINESS STRATEGY: AN OVERVIEW .............................................................20
2.5.1 THE SYSTEMS APPROACH.....................................................................................20
2.5.2 A BRIEF LOOK AT STRATEGIC MANAGEMENT ....................................................23
2.6 THE CHALLENGING TASK OF THE GLOBAL MANAGER.................................................30
2.7 THE CONCEPTUAL FRAMEWORK: THE ORGANIZATION OF THE BOOK .....................32
2.8 RECAPITULATION..............................................................................................................35
2.9 REVIEW QUESTIONS .........................................................................................................36
2.10 SUGGESTED READINGS..................................................................................................37
2.11 EMERGING ISSUE 1: The Internationalization of Uncle Sam .....................................38
ISSUES FOR DISCUSSION ..............................................................................................43
Chapter 3 THE MULTINATIONAL CORPORATION.......................................................45
3.1 OVERVIEW..........................................................................................................................45
LEARNING OBJECTIVES ..................................................................................................46
3.2 INTRODUCTION ................................................................................................................47
3.3 THE EVOLUTION OF THE MULTINATIONAL CORPORATION........................................51
3.3.1 THE DEFINITIONAL PROBLEM .............................................................................51
3.3.1.1 THE ACADEMIC DEFINITIONS....................................................................52
3.3.1.2 THE BUSINESS DEFINITIONS .....................................................................52
3.3.1.3 THE INSTITUTIONAL DEFINITIONS ...........................................................53
3.3.2 THE DECISION TO INVEST ....................................................................................53
3.3.2.1 THE ACADEMIC VIEWPOINT ......................................................................54
, 3.3.2.2 THE PRACTITIONERS' VIEWPOINT ............................................................57
3.4 CHARACTERISTICS OF THE MULTINATIONALS ..............................................................59
3.5 A CLOSER LOOK AT THE U.S. MNCs................................................................................62
3.6 THE ROLE OF THE MNC IN HUMAN SURVIVAL..............................................................66
3.6.1 THE ACADEMIC VIEWPOINT .................................................................................67
3.6.1.1 THE SOVEREIGNTY AT BAY SCHOOL ........................................................68
3.6.1.2 THE DEPENDENCIA SCHOOL ....................................................................68
3.6.1.3 THE MERCANTILIST SCHOOL ....................................................................69
3.6.2 THE PRACTITIONERS' VIEWPOINT .......................................................................69
3.6.2.1 THE OPTIMISTS ...........................................................................................72
3.6.2.2 THE PESSIMISTS .........................................................................................72
3.6.2.3 THE MELIORlSTS .........................................................................................72
3.7 THE BASIC PREMISES OF THE NEW PRAGMATIC VISION .............................................73
3.8 RECAPITULATION..............................................................................................................75
3.9 REVIEW QUESTIONS .........................................................................................................75
3.10 SUGGESTED READINGS..................................................................................................76
3.11 EMERGING ISSUE 2: Foreign Multinationals in the United States ............................77
3.11.1 A BRIEF LOOK AT FOREIGN INVESTMENT IN THE UNITED STATES................78
ISSUES FOR DISCUSSION ......................................................................................84
Chapter 4 THE ENVIRONMENT.....................................................................................85
4.1 OVERVIEW..........................................................................................................................85
LEARNING OBJECTIVES ..................................................................................................86
4.2 INTRODUCTION ................................................................................................................87
4.3 THE MACROENVIRONMENT ...........................................................................................89
4.3.1 THE PHYSICAL ENVIRONMENT ............................................................................89
4.3.1.1 FOOD ...........................................................................................................90
4.3.1.2 MINERALS ...................................................................................................91
4.3.1.3 ENERGY .......................................................................................................91
4.3.1.4 ECOLOGY.....................................................................................................92
4.3.2 THE HUMAN ENVIRONMENT ..............................................................................93
4.3.2.1 POPULATION ..............................................................................................93
4.3.2.2 RELIGION .....................................................................................................94
4.3.2.3 LANGUAGE .................................................................................................96
4.3.2.4 POLITICS ......................................................................................................96
4.3.2.5 ECONOMICS............................................................................................. 100
4.4 THE MICROENVIRONMENT........................................................................................... 101
4.4.1 THE ENSCAN ASSISTANT EXPERT SYSTEM ....................................................... 103
4.4.1.1 COMPONENT A: THE DATABASE ........................................................... 104
4.4.1.2 COMPONENT B: THE KNOWLEDGE BASE............................................. 105
4.4.1.3 COMPONENT C: THE INFERENCE ENGINE ........................................... 106
4.5 RECAPITULATION........................................................................................................... 107
4.6 REVIEW QUESTIONS ...................................................................................................... 108
4.7 SUGGESTED READINGS................................................................................................. 109
4.8 EMERGING ISSUE 3: The State of the World: Crossing Some Perceptual
Thresholds ............................................................................................................................ 110
Systems Approach
,This work is licensed under a Creative Commons-ShareAlike 4.0 International License
,Contents
PREFACE ...........................................................................................................................1
THE APPROACH OF THIS BOOK...............................................................................................1
STRUCTURE OF THE TEXT.........................................................................................................2
FEATURES OF THE BOOK ........................................................................................................3
SUPPLEMENTARY MATERIAL ..................................................................................................3
ACKNOWLEDGMENTS ..............................................................................................................3
PART 1...............................................................................................................................6
Chapter 1 THE SUBJECT ..................................................................................................7
Chapter 2 THE FIELD AND THE FRAMEWORK ...............................................................9
2.1 OVERVIEW............................................................................................................................9
LEARNING OBJECTIVES ..................................................................................................11
2.2 INTRODUCTION ...............................................................................................................11
2.3 THE FIELD OF INTERNATIONAL BUSINESS.....................................................................12
2.3.1 EXCHANGE OF GOODS .........................................................................................13
2.3.2 EXCHANGE OF SERVICES AND INFORMATION FOR COMMERCIAL
PURPOSES........................................................................................................................13
2.3.3 EXCHANGE OF MONEY (INVESTMENT) ...............................................................14
2.4 THE INTERNATIONALIZATION/GLOBALIZATION PROCESS..........................................16
2.4.1 PHASE A: EXPORT/IMPORT ENTRY MODES .......................................................18
2.4.2 PHASE B: CONTRACTUAL ENTRY MODES ...........................................................18
2.4.3 PHASE C: INVESTMENT ENTRY MODES ..............................................................19
2.4.4 PHASE D: GLOBAL CONSORTIA ...........................................................................19
2.5 GLOBAL BUSINESS STRATEGY: AN OVERVIEW .............................................................20
2.5.1 THE SYSTEMS APPROACH.....................................................................................20
2.5.2 A BRIEF LOOK AT STRATEGIC MANAGEMENT ....................................................23
2.6 THE CHALLENGING TASK OF THE GLOBAL MANAGER.................................................30
2.7 THE CONCEPTUAL FRAMEWORK: THE ORGANIZATION OF THE BOOK .....................32
2.8 RECAPITULATION..............................................................................................................35
2.9 REVIEW QUESTIONS .........................................................................................................36
2.10 SUGGESTED READINGS..................................................................................................37
2.11 EMERGING ISSUE 1: The Internationalization of Uncle Sam .....................................38
ISSUES FOR DISCUSSION ..............................................................................................43
Chapter 3 THE MULTINATIONAL CORPORATION.......................................................45
3.1 OVERVIEW..........................................................................................................................45
LEARNING OBJECTIVES ..................................................................................................46
3.2 INTRODUCTION ................................................................................................................47
3.3 THE EVOLUTION OF THE MULTINATIONAL CORPORATION........................................51
3.3.1 THE DEFINITIONAL PROBLEM .............................................................................51
3.3.1.1 THE ACADEMIC DEFINITIONS....................................................................52
3.3.1.2 THE BUSINESS DEFINITIONS .....................................................................52
3.3.1.3 THE INSTITUTIONAL DEFINITIONS ...........................................................53
3.3.2 THE DECISION TO INVEST ....................................................................................53
3.3.2.1 THE ACADEMIC VIEWPOINT ......................................................................54
, 3.3.2.2 THE PRACTITIONERS' VIEWPOINT ............................................................57
3.4 CHARACTERISTICS OF THE MULTINATIONALS ..............................................................59
3.5 A CLOSER LOOK AT THE U.S. MNCs................................................................................62
3.6 THE ROLE OF THE MNC IN HUMAN SURVIVAL..............................................................66
3.6.1 THE ACADEMIC VIEWPOINT .................................................................................67
3.6.1.1 THE SOVEREIGNTY AT BAY SCHOOL ........................................................68
3.6.1.2 THE DEPENDENCIA SCHOOL ....................................................................68
3.6.1.3 THE MERCANTILIST SCHOOL ....................................................................69
3.6.2 THE PRACTITIONERS' VIEWPOINT .......................................................................69
3.6.2.1 THE OPTIMISTS ...........................................................................................72
3.6.2.2 THE PESSIMISTS .........................................................................................72
3.6.2.3 THE MELIORlSTS .........................................................................................72
3.7 THE BASIC PREMISES OF THE NEW PRAGMATIC VISION .............................................73
3.8 RECAPITULATION..............................................................................................................75
3.9 REVIEW QUESTIONS .........................................................................................................75
3.10 SUGGESTED READINGS..................................................................................................76
3.11 EMERGING ISSUE 2: Foreign Multinationals in the United States ............................77
3.11.1 A BRIEF LOOK AT FOREIGN INVESTMENT IN THE UNITED STATES................78
ISSUES FOR DISCUSSION ......................................................................................84
Chapter 4 THE ENVIRONMENT.....................................................................................85
4.1 OVERVIEW..........................................................................................................................85
LEARNING OBJECTIVES ..................................................................................................86
4.2 INTRODUCTION ................................................................................................................87
4.3 THE MACROENVIRONMENT ...........................................................................................89
4.3.1 THE PHYSICAL ENVIRONMENT ............................................................................89
4.3.1.1 FOOD ...........................................................................................................90
4.3.1.2 MINERALS ...................................................................................................91
4.3.1.3 ENERGY .......................................................................................................91
4.3.1.4 ECOLOGY.....................................................................................................92
4.3.2 THE HUMAN ENVIRONMENT ..............................................................................93
4.3.2.1 POPULATION ..............................................................................................93
4.3.2.2 RELIGION .....................................................................................................94
4.3.2.3 LANGUAGE .................................................................................................96
4.3.2.4 POLITICS ......................................................................................................96
4.3.2.5 ECONOMICS............................................................................................. 100
4.4 THE MICROENVIRONMENT........................................................................................... 101
4.4.1 THE ENSCAN ASSISTANT EXPERT SYSTEM ....................................................... 103
4.4.1.1 COMPONENT A: THE DATABASE ........................................................... 104
4.4.1.2 COMPONENT B: THE KNOWLEDGE BASE............................................. 105
4.4.1.3 COMPONENT C: THE INFERENCE ENGINE ........................................... 106
4.5 RECAPITULATION........................................................................................................... 107
4.6 REVIEW QUESTIONS ...................................................................................................... 108
4.7 SUGGESTED READINGS................................................................................................. 109
4.8 EMERGING ISSUE 3: The State of the World: Crossing Some Perceptual
Thresholds ............................................................................................................................ 110
