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I Foundation Concepts 1. Introduction: What is International Business? 2. Globalization of Markets and the Internationalization of the Firm Page proof Chapter 2 does not have "the" in the title. Lena will ask Production to add "the" to page proofs 3. Organizational Participants that Make International Business Happen ` 4. Theories of International Trade and Investment II The Environment of International Business 5. The Cultural Environment of international Business 6. Political and Legal Systems in National Environments 7. Government Intervention in International Business 8. Regional Economic Integration 9. Understanding Emerging Markets 10. The International Monetary and Financial Environment III Strategy and Opportunity Assessment for International Business 11. Global Strategy and Organization 12. Global Market Opportunity Assessment IV Entering and Operating in International Markets 13. Exporting and Countertrade 14. Foreign Direct Investment and Collaborative Ventures 15. Licensing, Franchising and other Contractual Strategies 16. Global Sourcing V Functional Area Excellence 17. Marketing in the Global Firm 18. Human Resource Management in the Global Firm 19. Financial Management and Accounting In the Global Firm Preface xxii Part I: Foundation Concepts 2 Introduction: What Is International Business? 2 A Day in the Global Economy 2 What Is International Business? 4 What Are the Key Concepts in International Trade and Investment? 5 The Nature of International Trade 5 The Nature of International Investment 6 Services as Well as Products 8 The International Financial Services Sector 10 How Does International Business Differ from Domestic Business? 11 The Four Risks in Internationalization 11 Who Participates in International Business? 13 Multinational Enterprise (MNE) 13 Global Trend: DIESEL S.p.A.: A Smaller Firm¿s Smashing Success in International Markets 15 Non-governmental Organizations (NGOs) 16 Why Do Firms Pursue Internationalization Strategies? 16 Why Should You Study International Business? 18 Facilitator of the Global Economy and Interconnectedness 18 Contributor to National Economic Well-Being 19 A Competitive Advantage for the Firm 20 An Activity with Societal Implications 20 Gaining Managerial Skills in International Business Will Provide a Competitive Advantage for You 21 Recent Grad in IB: Ashley Lumb 22 Closing Case: Whirlpool¿s Dramatic Turnaround Through Internationalization and Innovation 23 Chapter Essentials: Key Terms 25 Summary 25 Apply Your Understanding 26 Test Your Comprehension 26 Global EdgeInternet Exercises 27 Globalization of Markets and the Internationalization of the Firm 28 Bangalore: The New Silicon Valley 28 Why Globalization Is Not a New Phenomenon 31 Phases of Globalization 31 An Organizing Framework for Market Globalization 34 Dimensions of Market Globalization 35 Drivers of Market Globalization 37 Technological Advances as a Driver of Market Globalization 40 Information Technology 42 Communications 42 Global Trend:Globalization and E-Business in the Online World 43 Manufacturing 44 Transportation 44 Societal Consequences of Market Globalization 44 Loss of National Sovereignty 44 Offshoring and the Flight of Jobs 45 Effect on the Poor 46 Effect on the Natural Environment 47 Effect on National Culture 47 Firm-Level Consequences of Market Globalization: Internationalization of the Firm¿s Value Chain 51 Closing Case: Closing Case 53 Diverse Perspectives on Globalization of Markets 53 Chapter Essentials: Key Terms 55 Summary 55 Test Your Comprehension 56 Apply Your Understanding 56 Global Edge Internet Exercises 57 MSB What is a C/K/R Management Skill Builder©? 58 MSBCorporate Social Responsibility: Coffee, Ethiopia, and Starbucks 59 Organizational Participants that Make International Business Happen 60 Born Global Firms 60 Three Types of Participants in International Business 62 Participants Organized by Value-Chain Activity 63 An Illustration of an International Value Chain: Dell Inc. 64 Focal Firms in International Business 66 The Multinational Enterprise 66 Small and Medium-Sized Enterprises 68 Born Global Firms 68 Foreign Market Entry Strategies of Focal Firms 69 A Framework for Classifying Market Entry Strategies 69 Focal Firms other Than the MNE and SME 71 Distribution Channel Intermediaries in International Business 75 Intermediaries Based in the Foreign Market 75 Intermediaries Based in the Home Country 76 Online Intermediaries 79 Global Trend: Online Retailers: Contemporary Global Intermediaries 80 Facilitators in International Business 81 Recent Grad in IB: Cynthia Asoka 82 Closing Case: DHL International: An Ambitious Competitor in Global Logistics Services 85 Chapter Essentials: Key Terms 87 Summary 88 Test Your Comprehension 89 Apply Your Understanding 89 Global EdgeInternet Exercises 90 MSBFinding and Evaluating Freight Fowarders 91 Theories of International Trade and Investment 92 Dubai¿s Successful Transformation into a Knowledge-Based Economy 92 Theories of International Trade and Investment 94 Why Nations Trade 96 Classical Theories 96 How Nations Enhance Their Competitive Advantage: Contemporary Theories 102 The Competitive Advantage of Nations 102 Michael Porter¿s Diamond Model 103 National Industrial Policy in Practice: An Example 107 New Trade Theory 108 Why and How Firms Internationalize 108 Internationalization Process of the Firm 108 Global Trend: Repositioning to Create National Comparative Advantage 109 Born Globals and International Entrepreneurship 110 How Firms Gain and Sustain International Competitive Advantage 110 FDI-Based Theories 111 Non-FDI Based Explanations 116 Closing Case: Hyundai: The Struggle for International Success 117 Chapter Essentials: Key Terms 119 Summary 119 Test Your Comprehension 120 Apply Your Understanding 121 Global Edge Internet Exercises 122 MSB Best Locations for Manufacturing 123 rt 2 The Environment of International Business 124 The Cultural Environment of International Business 124 American Football ... in Europe? 124 The Challenge of Crossing Cultural Boundaries 126 The Meaning of Culture: Foundation Concepts 129 Why Culture Matters in International Business 131 Recent Grad in IB: Zhibo (Lawrence) Yu 133 National, Professional, and Corporate Culture 134 Interpretations of Culture 135 Cultural Metaphors 135 Stereotypes 135 Idioms 135 Hall¿s High- and Low-Context Cultures 136 Hofstede¿s Research on National Culture 137 Key Dimensions of Culture 139 Values and Attitudes 139 Deal versus Relationship Orientation 139 Manners and Customs 140 Perceptions of Time 140 Perceptions of Space 141 Religion 141 Symbolic Productions 144 Material Productions and Creative Expressions of Culture 144 Language as a Key Dimension of Culture 144 Culture and Contemporary Issues 146 Culture and the Services Sector 146 Technology, the Internet, and Culture 147 Globalization¿s Effect on Culture: Are Cultures Converging? 147 Managerial Guidelines for Cross-Cultural Success 148 Global Trend: Minimizing Cross-Cultural Bias with Critical Incident Analysis 150 Closing Case: Hollywood and the Rise of Cultural Protectionism 151 Chapter Essentials: Key Terms 153 Summary 153 Test Your Comprehension 154 Apply Your Understanding 155 Global Edge Internet Exercises 156 MSBDeveloping an Incentive Plan for Sales Personnel from Different Cultures 157 Political and Legal Systems in National Environments 158 Doing Business in Russia: Evolving Legal and Political Realities 158 What Is Country Risk? 160 How Prevalent Is Country Risk? 161 What Are Political and Legal Systems? 163 Political Systems 164 Totalitarianism 164 Socialism 165 Democracy 165 Democracy¿s Link to Economic Freedom 166 How Political Systems Influence Economic Systems 167 Legal Systems 168 Five Types of Legal Systems 169 Actors in Political and Legal Systems 172 Government 172 International Organizations 172 Regional Economic Blocs 172 Special Interest Groups 172 Competing Firms 173 Types of Country Risk Produced by the Political System 173 Government Takeover of Corporate Assets 173 Embargoes and Sanctions 174 Boycotts against Firms or Nations 174 War, Insurrection, and Revolution 174 Terrorism 175 Types of Country Risk Produced by the Legal System 175 Country Risk Arising from the Host Country Legal Environment 175 Country Risk Arising from the Home-Country Legal Environment 177 Global Trend:E-Commerce and the International Legal Environment 178 Managing Country Risk 181 Proactive Environmental Scanning 181 Strict Adherence to Ethical Standards 181 Allying with Qualified Local Partners 184 Protection through Legal Contracts 184 Safeguarding Intellectual Property Rights 184 Closing Case: Pillaging Patents: The New War on Pharmaceutical Drugs 186 Chapter Essentials: Key Terms 188 Summary 188 Test Your Comprehension 189 Apply Your Understanding 189 Global Edge Internet Exercises 190 MSB Performing a Preliminary Country Risk Analysis 191 Government Intervention in International Business 192 India¿s Path Away from Government Intervention and Bureaucracy 192 Government Intervention in International Business 194 Rationale for Government Intervention 196 Defensive Rationale 197 Offensive Rationale 198 Instruments of Government Intervention 199 Tariffs 200 Nontariff Trade Barriers 202 Investment Barriers 204 Subsidies and Other Government Support Programs 205 Government Intervention, Economic Freedom, and Ethical Concerns 207 Evolution of Government Intervention 210 Global Trend: The World Trade Organization and International Services: The Doha Round 211 How Firms Should Respond to Government Intervention 212 Strategies for Managers 212 Closing Case: Airbus versus Boeing: When is Intervention Not Intervention? 215 Chapter Essentials: Key Terms 217 Summary 217 Test Your Comprehension 218 Apply Your Understanding 218 Global Edge Internet Exercises 220 MSB Harmonized Code Tariffs as Trade Barriers for Devel 221 Regional Economic Integration 222 The European Union 222 Regional Integration and Economic Blocs 224 Types of Regional Integration 225 Leading Economic Blocs 228 The European Union (EU) 228 Global Trend: Integrating Eastern Europe and Turkey into the EU 229 European Free Trade Association (EFTA) 234 North American Free Trade Agreement (NAFTA) 234 El Mercado Comun del Sur (MERCOSUR) 236 The Caribbean Community (CARICOM) 236 Comunidad Andina de Naciones (CAN) 237 Association of Southeast Asian Nations (ASEAN) 237 Asia Pacific Economic Cooperation (APEC) 237 Australia and New Zealand Closer Economic Relations Agreement (CER) 238 Economic Integration in the Middle East and Africa 238 Why Countries Pursue Regional Integration 239 Success Factors for Regional Integration 240 Drawbacks and Ethical Dilemmas of Regional Integration 241 Management Implications of Regional Integration 243 Closing Case: Russell Corporation: The Dilemma of Regional Free Trade 246 Chapter Essentials: Key Terms 249 Summary 249 Test Your Comprehension 250 Apply Your Understanding 251 Global Edge Internet Exercises 252 MSB Entering the Retailing Sector in the New EU Member States 253 Understanding Emerging Markets 254 The New Global Challengers: Newly Internationalizing MNEs from Emerging Markets 254 The Distinction between Advanced Economies, Developing Economies, and Emerging Markets 256 Advanced Economies 257 Developing Economies 257 Emerging Market Economies 260 Global Trend: China: Growing Role in International Business 264 What Makes Emerging Markets Attractive for International Business 265 Emerging Markets as Target Markets 265 Emerging Markets as Manufacturing Bases 265 Emerging Markets as Sourcing Destinations 266 Estimating the True Potential of Emerging Markets 266 Per-capita Income as an Indicator of Market Potential 267 Middle Class as an Indicator of Market Potential 268 Use of a Comprehensive Index to Measure Market Potential 269 Risks and Challenges of Doing Business in Emerging Markets 270 Political Instability 271 Weak Intellectual Property Protection 271 Bureaucracy, Red Tape, and Lack of Transparency 271 Partner Availability and Qualifications 271 Dominance of Family Conglomerates 272 Strategies for Doing Business in Emerging Markets 272 Partnering with Family Conglomerates 273 Marketing to Governments in Emerging Markets 273 Skillfully Challenge Emerging Market Competitors 274 Catering to Economic Development Needs of Emerging Markets and Developing Economies 275 Fostering Economic Development with Profitable Projects 275 Microfinance to Facilitate Entrepreneurship 276 Closing Case: Arcelik: International Aspirations of an Emerging Market Firm 277 Chapter Essentials: Key Terms 279 Summary 279 Test Your Comprehension 280 Apply Your Understanding 281 Global Edge Internet Exercises 282 MSB Learning About and Assessing Emerging Markets 283 The International Monetary and Financial Environment 284 The Complex Monetary and Financial Relationship between China and the United States 284 Currencies and Exchange Rates in International Business 286 Convertible and Nonconvertible Currencies 287 Foreign Exchange Markets 288 Exchange Rates Are in Constant Flux 288 How Exchange Rates Are Determined 290 Economic Growth 290 Interest Rates and Inflation 291 Market Psychology 292 Government Action 292 Development of the Modern Exchange Rate System 293 Global Trend: Is the U.S. Trade Deficit Good or Bad? 294 The Exchange Rate System Today 295 The International Monetary and Financial Systems 296 International FMonetary System 296 Global Financial System 297 Key Players in the Monetary and Financial Systems 298 The Firm 298 National Stock Exchanges and Bond Markets 298 Commercial Banks 300 Recent Grad in IB: Chip Besse 301 Central Banks 302 The Bank for International Settlements 302 International Monetary Fund 302 World Bank 304 Closing Case: The European Union and the Euro 305 Chapter Essentials: Key Terms 308 Summary 308 Test Your Comprehension 309 Apply Your Understanding 309 Global Edge Internet Exercises 310 MSBIdentifying the Best Location for a Bank Branch Abroad 311 rt 3 Capabilities for Assessing the International Environment 312 Global Strategy and Organization 312 IKEA¿s Global Strategy 312 The Role of Strategy in International Business 315 Strategy in Multidomestic and Global Industries 316 The Integration-Responsiveness Framework 317 Pressures for Local Responsiveness 318 Pressures for Global Integration 318 Distinct Strategies Emerging from the Integration-Responsiveness Framework 319 Organizational Structure 322 Centralized or Decentralized Structure? 322 Alternative Organizational Arrangements for International Operations 323 Export Department or International Division 324 Decentralized Structure (Geographic Area Division) 325 Centralized Structure (Product or Functional Division) 326 Global Matrix Structure 327 Building the Global Firm 328 Visionary Leadership 329 Organizational Culture 331 Global Trend: Global Corporate Social Responsibility Rises to the Top of the MNE Agenda 332 Organizational Processes 333 Common Organizational Processes Designed to Achieve Coordination 333 Putting Organizational Change in Motion 334 Closing Case: Carlos Ghosn and Renault-Nissan: Leading for Global Success 336 Chapter Essentials: Key Terms 338 Summary 339 Test Your Comprehension 340 Apply Your Understanding 340 Global Edge Internet Exercises 342 MSB The Critical Role of Negotiations in International Business 343 Global Market Opportunity Assessment 344 Estimating Market Demand in Emerging Markets and Developing Countries 344 Global Market Opportunity Assessment: An Overview 346 Task One: Analyze Organizational Readiness to Internationalize 347 Task Two: Assess the Suitability of the Firm¿s Products and Services for Foreign Markets 351 Factors Contributing to Product Suitability for International Markets 351 Key Issues for Managers to Resolve in Determining Product Potential 352 Task Three: Screen Countries to Identify Target Markets 353 Targeting Regions or Gateway Countries 354 Screening Methodology for Potential Country Markets 354 Global Trend: Global Macro Trends That Affect International Business 355 Screening Countries for Direct Investment and Global Sourcing 360 Task Four: Assess Industry Market Potential 362 Practical Methods for Managers to Assess Industry Market Potential 364 Data Sources for Estimating industry Market Potential 365 Task Five: Select Foreign Business Partners 365 Recent Grad in IB: Javier Estrada 366 Criteria for Selecting a Partner 367 Searching for Prospective Partners 367 Task Six: Estimate Company Sales Potential 368 Determinants of Company Sales Potential 368 Practical Approaches to Estimating Company Sales Potential 370 In Conclusion 371 Closing Case: Advanced Biomedical Devices: Assessing Readiness to Export 372 Chapter Essentials: Key Terms 375 Summary 375 Test Your Comprehension 376 Apply Your Understanding 376 Global Edge Internet Exercises 378 MSB Global Market Opportunity Assessment for Cancer Insurance 379 rt 4 Entering and Operating in International Markets 380 Exporting and Countertrade 380 Exporter¿s Dogged Pursuit of International Customers 380 An Overview of Foreign Market Entry Strategies 382 The Internationalization of the Firm 383 Diverse Motives for Pursuing Internationalization 383 Characteristics of Firm Internationalization 384 Exporting as a Foreign Market Entry Strategy 385 Exporting: A Popular Entry Strategy 387 Service Industry Exports 388 Advantages of Exporting 389 Disadvantages of Exporting 390 Global Trend: The Emergence of SME Exporters 390 A Systematic Approach to Exporting 391 Importing 394 Managing Export-Import Transactions 394 Documentation 395 Shipping and Incoterms 396 Methods of Payment in Exporting and Importing 396 Cash in Advance 397 Letter of Credit 398 Open Account 399 Consignment Sales 399 Cost and Sources of Export-Import Financing 400 Commercial Banks 400 Factoring, Forfaiting, and Confirming 400 Distribution Channel Intermediaries 401 Buyers and Suppliers 401 Intracorporate Financing 401 Government Assistance Programs 401 Multilateral Development Banks (MDBs) 402 Identifying and Working with Foreign Intermediaries 402 Working with Foreign Intermediaries 402 When Intermediary Relations Go Bad 404 Countertrade 405 The Magnitude and Drivers of Countertrade 406 Types of Countertrade 407 Risks of Countertrade 407 Why Countertrade? 408 Closing Case: Barrett Farm Foods 409 Chapter Essentials: Key Terms 411 Summary 411 Test Your Comprehension 412 Apply Your Understanding 413 Global Edge Internet Exercises 414 MSB Identifying An Attractive Export Market Foreign Direct Investment and Collaborative Ventures 416 Deutsche Post¿s Global Buying Spree 417 Trends in Foreign Direct Investment and Collaborative Ventures 418 Low, Moderate, and High-Control Foreign Market Entry Strategies 418 Motives for Foreign Direct Investment (FDI) and Collaborative Ventures 420 Market-Seeking Motives 420 Resource or Asset-Seeking Motives 420 Efficiency-Seeking Motives 421 Foreign Direct Investment 422 Key Features of FDI 423 Who Is Active in Direct Investment? 424 Service Multinationals 424 Leading Destinations for FDI 425 Factors to Consider in Selecting FDI Locations 425 Types of Foreign Direct Investment 426 Greenfield Investment versus Mergers and Acquisitions 426 The Nature of Ownership in FDI 427 Vertical versus Horizontal FDI 427 International Collaborative Ventures 428 Equity Joint Ventures 428 Project-Based, Nonequity Ventures 429 Global Trend: Consolidation in Global Industries 430 Differences between Equity versus Project-Based, Nonequity Ventures 431 Consortium 431 Cross-Licensing Agreements 433 Managing Collaborative Ventures 432 Understand Potential Risks in Collaboration 433 Pursue a Systematic Process for Partnering 433 Ensure Success with Collaborative Ventures 433 Success Factors in Collaborative Ventures 434 The Experience of Retailers in Foreign Markets 434 Challenges of International Retailing 435 International Retailing Success Factors 436 Foreign Direct Investment, Collaborative Ventures, and Ethical Behavior 437 Closing Case: AUTOLATINA: A Failed International Partnership 444 Chapter Essentials: Key Terms 446 Summary 446 Test Your Comprehension 447 Apply Your Understanding 447 Global Edge Internet Exercises 448 MSBSelecting a Site for a Manufacturing Plant 449 Licensing, Franchising, and Other Contractual Strategies 450 Harry Potter: The Magic of Licensing 450 The Nature of Contractual Entry Strategies in International Business 452 Unique Aspects of Contractual Relationships 453 Types of Intellectual Property 453 Licensing 454 Trademark and Copyright Licensing 455 Know-How Licensing 456 Who Are the Top Licensing Firms? 457 Advantages and Disadvantages of Licensing 457 Advantages of Licensing 457 Disadvantages of Licensing 459 Franchising 460 Who Are the Top Franchisors? 462 Advantages and Disadvantages of Franchising 463 The Franchisor Perspective 463 The Franchisee Perspective 464 Other Contractual Entry Strategies 464 Turnkey Contracting 465 Build-Operate-Transfer Arrangements (BOT) 466 Management Contracts 466 Leasing 466 The Special Case of Internationalization by Professional Service Firms 467 Recent Grad in IB: Jennifer Knippen 468 Global Trend: Internationalization of Management Consulting Firms 469 Management of Licensing and Franchising 469 Careful Selection of Qualified Partners 470 Managerial Guidelines for Protecting Intellectual Property 470 Closing Case: Subway and the Challenges of Franchising in China 475 Chapter Essentials: Key Terms 477 Summary 477 Test Your Comprehension 478 Apply Your Understanding 479 Global Edge Internet Exercises 480 Summary 477 MSB Choosing the Best Entry Strategy 481 Global Sourcing 482 Global Sourcing of Pharmaceutical Drug Trials 482 Trends Toward Outsourcing, Global Sourcing, and Offshoring 484 Decision 1: Outsource or Not? 486 Decision 2: Where in the World Should Value-Adding Activities Be Located? 487 Global Sourcing from Subsidiaries versus Independent Suppliers 487 Contract Manufacturing: Global Sourcing from Independent Suppliers 488 Offshoring 489 Limits to Global Sourcing 490 Strategic Implications of Outsourcing and Global Sourcing 490 Evolution of Global Sourcing 491 Phases in the Evolution: From Global Sourcing of Inputs to Offshoring Value-Adding Activities 491 Magnitude of Global Sourcing 492 Diversity of Countries That Initiate and Receive Outsourced Work 492 Global Trend: China: Rivaling India in the Global Sourcing Game 493 Benefits and Challenges of Global Sourcing for the Firm 494 Cost Efficiency 495 Achievement of Strategic Goals 495 Implementing Global Sourcing through Supply-Chain Management 497 Logistics and Transportation 500 Transportation Modes 500 Risks in Global Sourcing 501 Strategies for Minimizing Risk in Global Sourcing 502 Implications of Global Sourcing for Public Policy and Corporate Citizenship 504 Potential Harm to Economies from Global Sourcing 504 Ethical and Social Implications of Global Sourcing 506 Potential Benefits to National Economy 506 Public Policy toward Global Sourcing 507 Closing Case: Good Hopes for Global Outsourcing 508 Chapter Essentials: Key Terms 510 Summary 510 Test Your Comprehension 511 Apply Your Understanding 511 Global Edge Internet Exercises 512 MSBA Smarter Approach to Global Sourcing 513 rt5 Building the Global Firm: Functional Area Excellence 514 Marketing in the Global Firm 514 Zara¿s Unique Model for International Marketing Success 514 Global Marketing Strategy 516 Targeting Customer Segments and Positioning 516 Standardization and Adaptation of the International Marketing Program 518 Standardization 519 Adaptation 521 Standardization and Adaptation: A Balancing Act 522 Global Branding and Product Development 523 Global Branding 523 Global Product Development 525 International Pricing 526 Factors Affecting International Pricing 526 Global Trend: Designing Global Products with Global Teams 527 A Framework for Setting International Prices 529 Managing International Price Escalation 530 Managing Pricing under Varying Currency Conditions 531 Transfer Pricing 531 Gray Market Activity (Parallel Imports) 533 International Marketing Communications 535 International Advertising 535 International Promotional Activities 537 Global Account Management 537 International Distribution 538 Ethical Dimensions of International Marketing 538 Closing Case: MTV India 540 Chapter Essentials: Key Terms 542 Summary 542 Test Your Comprehension 543 Apply Your Understanding 543 Global Edge Internet Exercises 544 MSB Developing a Distribution Channel in Japan 545 Human Resource Management in the Global Firm 546 International Human Resources: Management at Johnson & Johnson 546 The Strategic Role of Human Resources in International Business 548 Three Employee Categories 549 Differences between Domestic and International HRM 549 Key Tasks in International Human Resource Management 551 International Staffing Policy 551 Searching for Talent 553 Expatriate Failure and Culture Shock 555 Preparation and Training of Personnel 556 Preparing Employees for Repatriation 557 Cultivating Global Mindsets 557 Charting Global Careers for Employees 558 International Performance Appraisal 558 Compensation of Personnel 559 International Labor Relations 561 Distinctive Features of Labor around the World 563 The Cost and Quality of Labor 563 Workforce Reduction 564 Trends in International Labor 565 Firm Strategy in International Labor Relations 566 Diversity in the International Workforce 566 Women in International Business 566 Global Trend:Global Corporate Citizenship in International Human Resource Management 567 Success Strategies for Women Managers in International Business 570 Closing Case: Sony¿s Evolving Human Resource Challenges 571 Chapter Essentials: Key Terms 573 Summary 573 Test Your Comprehension 575 Apply Your Understanding 575 Global Edge Internet Exercises 576 Summary 573 MSB Evaluating International Locations for Quality of Life 577 Financial Management and Accounting in the Global Firm 578 How a Small Firm Rides Foreign-Exchange Waves 578 Primary Tasks in International Financial Management 580 Task One: Decide on the Capital Structure 582 Task Two: Raise Funds for the Firm 582 Financial Centers 583 Sources of Funds for International Operations 584 Global Trend: Emerging Markets as International Investment Destinations Debt Financing 587 Intracorporate Financing 588 Task Three: Working Capital and Cash Flow Management 588 Methods for Transferring Funds within the MNE 589 Multilateral Netting 590 Task Four: Capital Budgeting 591 Net Present Value Analysis of Capital Investment Projects 591 Task Five: Currency Risk Management 592 Three Types of Currency Exposure 593 Foreign Exchange Trading 594 Types of Currency Traders 595 Exchange Rate Forecasting 596 Management of Exposure to Currency Risk through Hedging 597 Best Practice in Minimizing Currency Exposure 599 Task Six: Accommodate the Diversity of International Accounting and Tax Practices 599 Transparency in Financial Reporting 600 Trends toward Harmonization 600 Recent Grad in IB: Maria Keeley 601 Consolidating the Financial Statements of Subsidiaries 603 International Taxation 604 Closing Case: International Financial Operations at Tektronix 607 Chapter Essentials: Key Terms 609 Summary 609 Test Your Comprehension 611 Apply Your Understanding 611 Global Edge Internet Exercises 612 MSB Understanding Currencies: Big Macs and Dell Computers 613 notes xxx sary xxx to Credits me Index ject Index
Library of Congress Subject Headings for this publication:
International business enterprises -- Management.