Solution Manual for Global Business, 5th Edition by Peng Mike, Verified Chapters 1 - 17, Complete Newest Version

Solution Manual for Global
Business
5th Edition
by Peng Mike. Complete Chapters 1 - 17
© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted
1
TABLE OF CONTENTS
1. Chapter 1: Introduction
2. Chapter 2: Formal Institutions: Politics, Laws, and Economics
3. Chapter 3: Informal Institutions: Cultures, Ethics, and Norms
4. Chapter 4: Resources and Capabilities
5. Chapter 5: International Trade
6. Chapter 6: Foreign Direct Investment
7. Chapter 7: Foreign Exchange
8. Chapter 8: Global and Regional Integration
9. Chapter 9: The Entrepreneurial Firm
10. Chapter 10: Foreign Market Entry
11. Chapter 11: Global Competitive Dynamics
12. Chapter 12: Alliances and Acquisitions
13. Chapter 13: Strategy, Structure, and Innovation in Multinationals
14. Chapter 14: Marketing and Supply Chain Management
15. Chapter 15: Human Resource Management
16. Chapter 16: Corporate Finance and Governance
Chapter 17: Corporate Social Responsibility
2 © 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted
to
Chapter 1
Table of Contents
Purpose and Perspective of the Chapter.......................................................................................................2
Cengage Supplements....................................................................................................................................2
Chapter Objectives........................................................................................................................................2
Complete List of Chapter Activities and Assessments.................................................................................3
What's New in This Chapter.........................................................................................................................3
Opening Case Discussion: Emerging Markets—Apple, America, and China.............................................3
Chapter Outline.............................................................................................................................................4
End-of-Chapter Guide...................................................................................................................................9
Review Questions......................................................................................................................................9
Critical Discussion Questions..................................................................................................................11
Global Action...........................................................................................................................................12
Closing Case: Emerging Markets—Are US Multinationals Good for America?...................................12
Appendix......................................................................................................................................................14
Generic Rubrics.......................................................................................................................................14
Standard Writing Rubric.........................................................................................................................14
Standard Discussion Rubric....................................................................................................................14
to
Purpose and Perspective of the Chapter
The purpose of this chapter is to explore the concepts of international and global business. First, we
discuss the importance of studying global business. Then, we develop the unified framework used in
each chapter, which focuses learning on one fundamental question and two core perspectives—an
institution-based view and a resource-based view. Next, we explore the concepts of globalization,
semiglobalization, and risk management. As a backdrop for the remainder of the text, the Global
Business and Globalization at a Crossroads section makes two points: First, a basic understanding of
the global economy is necessary. Second, it is important to critically examine your own personal
views and biases regarding globalization. Additionally, we outline three leading debates concerning
business and globalization/deglobalization. Finally, we explore the broad implications for savvy
managers and students for the future of global business in a less global world.
Cengage Supplements
The following product-level supplements provide additional information that may help you in
preparing your course. They are available in the Instructor Resource Center.
 Transition Guide (provides information about what’s new from edition to edition)
 Educator’s Guide (describes assets in the platform with a detailed breakdown of
activities by chapter with seat time)
 PowerPoint (provides text-based lectures and presentations)
 Test Bank (contains assessment questions and problems)
 Guide to Teaching Online (provides information about the key assets within the product
and how to implement/facilitate use of the assets in synchronous and asynchronous
teaching environments)
 Accelerated Course Syllabus (provides guidance on the recommended delivery of course
materials given a 5-week, 8-week, 12-week, and 16-week course)
 MindTap User Guide (provides information on how to navigate and use MindTap)
Chapter Objectives
The following objectives are addressed in this chapter:
1-1 Explain the concepts of international business and global business. 1-2
Give three reasons why it is important to study global business.
1-3 Articulate one fundamental question and two core perspectives in the study of global
business.
1-4 Describe the importance of globalization, semiglobalization, and risk management.
1-5 State the size of the global economy and its broad trends and understand your likely bias
in the globalization debate.
1-6 Participate in three leading debates concerning global business. 1-
7 Draw implications for action.

1-8 Understand the structure of the book and the discipline.
to
Complete List of Chapter Activities and Assessments
For additional guidance refer to the Teaching Online Guide.
Chapter PPT slide Activity/Assessment Duration

Objective
1-2 7 Opening Day Quiz in PPT and 5 min
Text (Table 1.2)
1-4 19 Discussion Activity 1 in PPT 10 min
1-6 26 Polling Activity in PPT 5 min
[return to top]
What's New in This Chapter

The following elements are improvements in this chapter from the previous edition:
 Opening Case: Apple, America, and China
 Closing Case: Are US Multinationals Good for America?
 In Focus 1.1: How Firms From Emerging Economies Overcome Liability Of Foreignness
 In Focus 1.3: The Dell Theory of Peace
 Debate 1: Globalization versus Deglobalization
 Debate 2: Strategic versus Nonstrategic Industries
 Debate 3: Just-in-Time versus Just-in-Case Management
 Table 1.3: Basics of Scenario Planning
 Table 1.6: Implications for Action
 Figure 1.3: Trade-offs Between Global Value Chain Resilience and Cost Per Unit
 New Implications for Action: The future of global business in a less global world
 New Topics: Black swan events, deglobalization, global value chain, organizational slack,
resilience, stakeholder, triple bottom line
[return to top]
Opening Case Discussion: Emerging Markets—Apple,

America, and China
This case can be used to help students understand how firms such as Apple are able compete around
the world while dealing with the various rules of the game. Ask students how a company can adapt
when the larger geopolitical relationship between their home and host country changes. What
determines their success and failure? How can they use globalization to their advantage? How
important was it for Apple to get involved in trade discussions and decisions by directly lobbying
US government officials?
[return to top]
to
Chapter Outline
In the outline below, each element includes references (in parentheses) to related content.
―CH.##‖ refers to the chapter objective; ―PPT Slide #‖ refers to the slide number in the
PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor
Resource Center); and, as applicable for each discipline, accreditation or certification standards
(―BL 1.3.3‖). Introduce the chapter and review learning objectives for Chapter 1. (PPT Slide 2).
I. INTERNATIONAL BUSINESS AND GLOBAL BUSINESS (LO 1-1, PPT Slides 3–4)
a. Key Concepts
 International business is typically defined as (1) a business (firm) that

engages in international (cross-border) economic activities and (2) the
action of doing business abroad.
 Global business is defined in this book as business around the globe and
includes both (1) international (cross-border) business activities covered by
traditional IB books and (2) domestic business activities.
 This book goes beyond competition in developed economies. It devotes

extensive space to competitive battles waged in emerging economies and the
base of the global economic pyramid.
b. Key Terms
 International business (IB): (1) A business (firm) that engages in

international (cross-border) economic activities and/or (2) the action of
doing business abroad
 Multinational enterprise (MNE): A firm that engages in foreign direct

investment (FDI)
 Foreign direct investment (FDI): Investment in, controlling, and
managing value-added activities in other countries
 Global business: Business around the globe
II. WHY STUDY GLOBAL BUSINESS? (LO 1-2, PPT Slides 5–9)
a. Key Concepts
 Why study global business?
(1) Enhance your employability and advance your career in the global
economy
(2) Better preparation for possible expatriate assignments abroad
(3) Stronger competence in interacting with foreign suppliers,
partners, and competitors, and in working for foreign-owned
employers in your own country
b. Key Terms
to
 Group of 20 (G-20): The group of 19 major countries plus the European
Union whose leaders meet on a biannual basis to solve global economic
problems
 Global mindset: Ability to ―connect the dots‖ globally
 Expatriate manager (expat): A manager who works abroad
 International premium: A significant pay raise when working overseas
c. Opening Day Quiz: 5 minutes total. (PPT Slide 7, Text p. 6)

Have students take the Opening Day Quiz in Table 1.2. Can they answer all the
questions correctly? If not, they will benefit from studying global business.
III. A UNIFIED FRAMEWORK (LO 1-3, PPT Slides 10–12)
a. Key Concepts
 Our most fundamental question is: What determines the success and failure
of firms around the globe? The two core perspectives are (1) the institution-
based view and (2) the resource-based view. We develop a unified
framework by organizing materials in every chapter according to the two
perspectives guided by the fundamental question.
b. Key Terms
 Triple bottom line: Economic, social, and environmental performance
 Stakeholder: Any group or individual who can affect or is affected by the

achievement of a firm’s objectives
 Liability of foreignness: The inherent disadvantage that foreign firms
experience in host countries because of their nonnative status
IV. GLOBALIZATION AND SEMIGLOBALIZATION (LO 1-4, PPT Slides 13–19)
a. Key Concepts
 Advocates of globalization count its contributions to include greater

economic growth, higher standards of living, improved technology, and
more extensive cultural exchange.
 Critics argue that globalization destroys jobs in rich countries, exploits

workers in poor countries, grants MNEs too much power, degrades the
environment, and promotes inequality.
 This section (1) outlines three views on globalization, (2) reviews the swing
of the pendulum, (3) highlights the importance of risk management, and (4)
discusses the important idea of semiglobalization.
b. Key Terms
 Globalization: The close integration of countries and peoples of the

world
to
 Emerging economies: A term that has gradually replaced the term
―developing countries‖ since the 1990s
 Emerging markets: A term that is often used interchangeably with
―emerging economies‖
 Base of the pyramid (BoP): Economies where people make less than
$2,000 per capita per year
 BRIC: Brazil, Russia, India, and China
 BRICS: Brazil, Russia, India, China, and South Africa
 Reverse innovation (or frugal innovation): An innovation that is adopted

first in emerging economies and is then diffused around the world
 Risk management: The identification and assessment of risks and the

preparation to minimize the impact of high-risk, unfortunate events
 Black swan event: An unpredictable event that is beyond what is
normally expected and that has severe consequences
 Scenario planning: A technique to prepare and plan for multiple
scenarios (either high risk or low risk)
 Semiglobalization: A perspective that suggests that barriers to market
integration at borders are high, but not high enough to insulate countries
from each other completely
c. Discussion Activity 1: 10 minutes total. (PPT Slide 19)

Pose the question to the class.
 After comparing the three views of globalization, which seems the most
sensible to you and why?
(1) The important thing is not so much the answer as the extent to
which the student demonstrates thought in providing the answer to
―why.‖
(2) The three major views are:
(a) A new force sweeping through the world in recent times
(b) A long-run historical evolution since the dawn of human

history
(c) A pendulum that swings from one extreme to another from

time to time
V. GLOBAL BUSINESS AND GLOBALIZATION AT A CROSSROADS (LO

1-5, PPT Slides 20–24)
a. Key Concepts
to
 A basic understanding of the global economy is necessary. It is important to
critically examine your own personal views and biases regarding
globalization.
b. Key Terms
 Gross domestic product (GDP): The sum of value added by resident firms,
households, and governments operating in an economy
 Purchasing power parity (PPP): A conversion that determines the
equivalent amount of goods and services that different currencies can
purchase
 Gross national product (GNP): GDP plus income from nonresident

sources abroad
 Gross national income (GNI): GDP plus income from nonresident
sources abroad; GNI is a term used by the World Bank and other
international organizations to supersede the term GNP
 Nongovernmental organizations (NGO): An organization that is not

affiliated with any government
VI. DEBATES AND EXTENSIONS (LO 1-6, PPT Slides 25–29)
a. Key Concepts
 Debate 1: Globalization versus Deglobalization
 Debate 2: Strategic versus Nonstrategic Industries
 Debate 3: Just-in-Time versus Just-in-Case Management
b. Key Terms
 Deglobalization: The process of weakening economic interdependence

among countries
 Global value chain (GVC): A chain of geographically dispersed and
coordinated activities involved in the production of a good or service and its
supply and distribution activities
 Organizational slack: A cushion of resources that allow an organization to

adapt successfully to pressures
 Resilience: Capacity to recover quickly from difficulties
c. Polling Activity: 5 minutes total. (PPT Slide 26)

Ask students whether or not they agree with the statement on the slide.
 Overall, globalization is good for the US economy.
(1) The purpose of this question is not so much to resolve whether

globalization is good for any given country’s economy as it is to
help students clarify their position in their own mind and then
to
examine whether it can be justified. Answers may vary depending on
the national and cultural background of the student.
d. Discussion Activity 2: 10 minutes total. (PPT Slide 29)

 Given the size of the global economy and the size of some of the large firms,
do you think it is possible to carve out a niche that you can exploit as a small
business person? Or do you feel that the most practical way to participate in
the global economy is to do so as an employee or manager in a global firm?
(1) Students do not have to look far to find that small business people
have indeed been successful by carving out a niche—an excellent
strategy for entrepreneurs.
(2) Also, many people today are finding opportunities in the US and
overseas with multinational corporations that need their
capabilities.
VII. IMPLICATIONS FOR ACTION: THE FUTURE OF GLOBAL BUSINESS IN A LESS

GLOBAL WORLD (LO 1-7, PPT Slides 30–31)
a. Key Concepts
 For savvy managers and students, the future of global business in a less
global world suggests at least three broad implications (Table 1.6):
(1) From a resource-based view, instead of only focusing on
delinking, shrinking, withdrawals, and divestitures (which, of
course, are important), develop resources and capabilities to
identify and leverage opportunities for further globalization.
(2) From an institution-based view, enhance geopolitical savvy and be

aware that globalization is a force for peace and prosperity.
(3) From a career standpoint, even a less global world presents

tremendous opportunities, especially for professionals with skills in
geopolitics, tariffs and trade compliance, supply chain reorganization,
and management of stakeholders and climate change challenges.
b. Key Terms
 None
VIII. STRUCTURE OF THE BOOK AND THE DISCIPLINE (LO 1-8)
a. Key Concepts
 This book has four parts:
(1) Part I is foundations. After this chapter, Chapters 2, 3, and 4

address the two leading perspectives—namely, institution-based
and resource-based views.
to
(2) Part II covers tools, focusing on trade (Chapter 5), FDI (Chapter 6),
foreign exchange (Chapter 7), and global and regional integration
(Chapter 8).
(3) Part III sheds light on strategy. We start with the

internationalization of small, entrepreneurial firms (Chapter 9),
followed by ways to enter foreign markets (Chapter 10), to manage
competitive dynamics (Chapter 11), to make alliances and
acquisitions work (Chapter 12), and to strategize, structure, and
innovate (Chapter 13).
(4) Part IV builds excellence in different functional areas: marketing

and supply chain (Chapter 14), HRM (Chapter 15), finance and
corporate governance (Chapter 16), and CSR (Chapter 17).
 In every chapter, a significant portion is devoted to the numerous debates,

which provoke more critical thinking. In addition, ethics is emphasized
throughout the book. Ethical Dilemma features can be found in every
chapter. Numerous review questions, critical discussion questions, and
global action exercises are stamped ―ON ETHICS.‖
b. Key Terms
 None
[return to top]
End-of-Chapter Guide
Review Questions
You can assign these questions several ways: in a discussion forum in your LMS; as whole-class
discussions in person; or as a partner or group activity in class.
1. What is the traditional definition of IB? How is global business defined in this book?
 International business (IB) is defined as (1) a business firm that engages in
international (cross-border) economic activities and/or (2) the action of doing
business abroad.
 Global business is defined in this book as business around the globe. The activities
include both (1) international (cross-border) business activities covered by
traditional IB books and (2) domestic business activities.
2. ON CULTURE: Not all people in your country support globalization, and some feel that
globalization is an economic threat. However, to what extent could it be they may also feel
that it is a threat to their culture?
 Students’ answers may vary depending on their national and cultural
background.
 The purpose of this question is not so much to resolve whether globalization is or is
not a threat to any given country as it is to help students clarify their position in their
own mind and then examine whether it can be justified.
to
3. Discuss the importance of emerging economies in the global economy. Use current
news.
 Emerging economies already command a significant part of global GDP. However,
the improving economies of some countries are not keeping pace with their
expanding populations. Current news examples will vary.
4. What is your interest in studying global business? How do you think it may help you
succeed in the future?
 Students’ responses will vary, but they should mention that it will help to prepare
them to work in a global business, perhaps even as an expat.
5. What is the most fundamental question in global business?
 The most fundamental question in global business is this: What determines the
success and failure of firms around the globe?
6. How would you describe an institution-based view of global business?
 Institutions are the ―rules of the game.‖ Doing business around the globe
requires intimate knowledge about the formal and informal rules governing
competition in various countries.
7. How would you describe a resource-based view of global business?
 The resource-based view focuses on a firm’s internal resources and capabilities.
8. After comparing the three views of globalization, which seems the most sensible to you
and why?
 The three views are as follows:
o A new force sweeping through the world in recent times
o A long-run historical evolution since the dawn of human history
o A pendulum that swings from one extreme to another from time to time
 Students’ opinions on which view is the most sensible will vary. The important
thing is not so much the answer as the extent to which the student demonstrates
thought in providing the answer to ―why.‖
9. What are semiglobalization and deglobalization? What factors contribute to them?
 Semiglobalization is a perspective that suggests that barriers to market integration
at borders are high, but not high enough to insulate countries from each other
completely. Deglobalization refers to total isolation on a nation-state basis. Trade,
FDI, and barriers to market integration are all factors.
10. How can risk management deal with black swan events?
 Black swan events occur when an unpredictable event that is beyond what is
normally expected results in severe consequences. Through risk management,
potential risks can be identified and assessed, leading to preparation that might
minimize the impact of these high-risk, unfortunate events.
11. You may view yourself as objective and neutral regarding globalization, but do you sense
any bias that you may have, one way or the other? What bias most likely exists on the
part of other students taking this course?
 Students’ responses will vary. The important thing is not so much the answer as the
extent to which the student demonstrates thought in providing the answer.
Opponents of globalization might mention anything from job loss in their home
to
country to taking advantage of workers in developing economies. Proponents of
globalization will probably frame their answers in terms of benefits, such as
increased trade worldwide and job opportunities for workers in developing
economies.
12. Given the size of the global economy and the size of some of the large firms, do you think
it is possible to carve out a niche that you can exploit as a small business person? Or do you
feel that the most practical way to participate in the global economy is to do so as an
employee or manager in a global firm?
 Students’ answers will vary, but they do not have to look far to find that small
business people have indeed been successful by carving out a niche—an excellent
strategy for entrepreneurs. Also, many people today are finding opportunities in
the US and overseas with multinational corporations that need their capabilities.
[return to top]
Critical Discussion Questions

1. A classmate says: ―Global business is relevant for top executives, such as CEOs, in large
companies. I am just a lowly student who will struggle to gain an entry-level job, probably
in a small domestic company. Why should I care about it?‖ How do you convince your
classmate that global business is something to care about?
 Even if you do not aspire to compete for the top job at a large company and instead
work at a small firm or are self-employed, you may find yourself dealing with
foreign-owned suppliers and buyers, competing with foreign-invested firms in your
home market, or perhaps even selling and investing overseas. Alternatively, you
may find yourself working for a foreign-owned firm, your domestic employer
acquired by a foreign player, or your unit ordered to shut down for global
consolidation. Understanding how global business decisions are made may facilitate
your own career in such firms.
2. ON ETHICS: What are some of the darker sides (in other words, costs) associated with
globalization? How can business leaders make sure that the benefits of their various actions
outweigh their costs?
 Students’ responses will vary. There should be a variety of answers, including
some that are not practical. This is a question in which the answer is not as
important as the thought process and the ability to clearly articulate.
3. ON ETHICS: Why did a majority of British voters vote in favor of Brexit in 2016? Are
Britain as a country and the average British citizens better off during the post-Brexit era?
(Hint: See Chapter 8)
 British citizens were frustrated by slow growth, high unemployment, an influx of
immigrants, and the endless need to bail out troubled EU countries such as Greece.
However, as explained in Chapter 8, the decision has had significant consequences.
Automakers cut jobs and closed factories. Banks lost their
―passporting rights,‖ and finance job and assets moved out of Britain. An
to
agricultural labor shortage led to crops being left to rot in fields. UK exporters
to
and importers saw an increase in orders, but these proved to be temporary. On the
other hand, a post-Brexit Britain was able to nimbly navigate the COVID-19
pandemic and that has been considered a crucial win for Brexit.
[return to top]
Global Action
1. Not all industries and not all firms have suffered equally during COVID-19. Find two
industries: one that suffered tremendously and one that suffered less. Then find two
firms within each of the two industries: one that suffered tremendously and one that
improved performance (a total of four firms). Investigate what are behind their
performance differences.
student’s thought process and the ability to clearly articulate their response.
2. ON ETHICS: Pick one firm among the numerous ones mentioned in the chapter (starting
with Apple in the Opening Case and ending with Toyota in the Closing Case). Recommend
how it can contribute to some of the 17 Sustainable Development Goals (SDGs) advocated by
the United Nations.
[return to top]
Closing Case: Emerging Markets—Are US Multinationals Good for

America?
This case can be used to help students understand the advantages and disadvantages of US
multinationals and the delicate balancing act that these firms must perform. Most debates on
multinational enterprises (MNEs) around the world focus on their impact on host countries that
receive foreign direct investment (FDI). However, recent debates highlight the role of homegrown
MNEs in the US economy itself.
1. Who are stakeholders of US MNEs? Have US MNEs done a good job to take care of
them?
 With headquarters in the United States, participation in the US stock exchanges,
and majority shareholders remaining American, US MNE stakeholders are still
predominantly Americans. Shareholders enjoy these firms’ global success, and
executives enjoy bigger power, more pay, and higher-profile global celebrity status.
 However, much of the expansion of these MNEs has been overseas, and the
companies have not been taking very good care of their US-based stakeholders. This
has been evidenced by the low taxes they contribute—with profits remaining
overseas—and their abandonment of corporate social responsibility. President Trump
went so far as to accuse such MNEs of unleashing ―carnage‖ on ordinary Americans.
to
 That said, abandoning the benefits of low-cost labor and employing high-cost
American labor would jack up the price of goods and services. And if US MNEs
shifted foreign jobs back home at US wage levels, profits would drop significantly,
and dividends would plummet. Hence, debates on how to strike the balance
continue to rage on.
2. ON ETHICS: As CEO of a major US MNE, you are in a private meeting seeing the
president of the United States, who asks you: ―When can you start moving jobs back?‖
What are you going to say?
student’s thought process and the ability to clearly articulate their response. Students
should address the unintended consequences such a move would have on the price of
goods and services as well as profits and shareholder dividends.
3. ON ETHICS: Switch the country to Australia, Britain, Canada, China, France, Germany,
India, Japan, or any country where you are studying. Are MNEs from that country good for
that country?
[return to top]
to
Appendix
Generic Rubrics
Providing students with rubrics helps them understand expectations and components of
assignments. Rubrics help students become more aware of their learning process and progress, and
they improve students’ work through timely and detailed feedback.
Customize these rubric templates as you wish. The writing rubric indicates 40 points, and the
discussion rubric indicates 30 points.
Standard Writing Rubric

Criteria Meets Requirements Needs Improvement Incomplete
Content The assignment clearly The assignment partially The assignment does not
and comprehensively addresses some or all address the questions in
addresses all questions in questions in the the assignment.
the assignment. assignment. 0 points
15 points 8 points
Organization and Clarity The assignment presents The assignment presents The assignment does not
ideas in a clear manner ideas in a mostly clear present ideas in a clear
and with strong manner and with a mostly manner and with strong
organizational structure. strong organizational organizational structure.
The assignment includes structure. The assignment The assignment includes
an appropriate includes an appropriate an introduction, content,
introduction, content, and introduction, content, and and conclusion, but
conclusion. Coverage of conclusion. Coverage of coverage of facts,
facts, arguments, and facts, arguments, and arguments, and
conclusions are logically conclusions are mostly conclusions are not
related and consistent. logically related and logically related and
10 points consistent. consistent.
Research The assignment is based The assignment is based The assignment is not
upon appropriate and upon adequate academic based upon appropriate
adequate academic literature but does not and adequate academic
literature, including peer include peer reviewed literature and does not
reviewed journals and journals and other include peer reviewed
other scholarly work. scholarly work. journals and other
5 points 3 points scholarly work.
0 points
Research The assignment follows The assignment follows The assignment does not
the required citation some of the required follow the required
guidelines. citation guidelines. citation guidelines.
5 points 3 points 0 points
Grammar and Spelling The assignment has two The assignment has three The assignment is
or fewer grammatical and to five grammatical and incomplete or
spelling errors. spelling errors. unintelligible.
5 points 3 points 0 points
[return to top]
Standard Discussion Rubric

Criteria Meets Requirements Needs Improvement Incomplete
Participation Submits or participates in Does not participate or Does not participate in
discussion by the posted submit discussion by the discussion.
deadlines. Follows all posted deadlines. Does not 0 points
instructions for initial post follow instructions for
and responses. initial post and responses.
to
5 points 3 points
Contribution Quality Comments stay on task. Comments may not stay Does not participate in
Comments add value to on task. Comments may discussion.
discussion topic. not add value to 0 points
Comments motivate other discussion topic.
students to respond. Comments may not
20 points motivate other students to
respond.
10 points
Etiquette Maintains appropriate Does not always maintain Does not participate in
language. Offers criticism appropriate language. discussion.
in a constructive manner. Offers criticism in an 0 points
Provides both positive and offensive manner.
negative feedback. Provides only negative
5 points feedback.
3 points
[return to top]
to
Instructor Manual
Peng, Global Business, 5e; ©2023; 9780357716403; Chapter 2: Formal Institutions: Politics,
Laws, and Economics
Table of Contents
Purpose and Perspective of the Chapter....................................................................................................17
Cengage Supplements..................................................................................................................................17
Chapter Objectives......................................................................................................................................17
Complete List of Chapter Activities and Assessments...............................................................................18
What's New in This Chapter......................................................................................................................18
Opening Case Discussion: Australia versus Facebook...............................................................................18
Chapter Outline...........................................................................................................................................18
End-of-Chapter Guide.................................................................................................................................24
Review Questions....................................................................................................................................24
Critical Discussion Questions..................................................................................................................26
Global Action...........................................................................................................................................27
Closing Case: Emerging Markets—Democracy, Development, and COVID.......................................27
Appendix......................................................................................................................................................29
Generic Rubrics.......................................................................................................................................29
Standard Writing Rubric.........................................................................................................................29
Standard Discussion Rubric....................................................................................................................29
to
Purpose and Perspective of the Chapter
The purpose of this chapter is to explore the concept of institutions, popularly known as the
―rules of the game.‖ As economic players, firms play by these rules. However, institutions are not
static. They may change, resulting in institutional transitions—‖fundamental and comprehensive
changes introduced to the formal and informal rules of the game that affect firms as players.‖ Firms
must respond to these changes.
Overall, the success and failure of a firm around the globe are, to a large extent, determined by its
ability to understand and take advantage of the different rules of the game. In other words, how
firms play the game and win (or lose), at least in part, depends on how the rules are made, enforced,
and changed. This calls for firms to constantly monitor, decode, and adapt to the changing rules of
the game in order to survive and prosper. As a result, such an institution- based view has emerged as
a leading perspective on global business. This chapter first introduces this view. Then, it focuses on
formal institutions (such as politics, laws, and economics). Informal institutions (such as cultures,
ethics, and norms) will be discussed in Chapter 3.
Cengage Supplements
The following product-level supplements provide additional information that may help you in
preparing your course. They are available in the Instructor Resource Center.
 Transition Guide (provides information about what’s new from edition to edition)
 Educator’s Guide (describes assets in the platform with a detailed breakdown of
activities by chapter with seat time)
 PowerPoint (provides text-based lectures and presentations)
 Test Bank (contains assessment questions and problems)
 Guide to Teaching Online (provides information about the key assets within the product
and how to implement/facilitate use of the assets in synchronous and asynchronous
teaching environments)
 Accelerated Course Syllabus (provides guidance on the recommended delivery of course
materials given a 5-week, 8-week, 12-week, and 16-week course)
 MindTap User Guide (provides information on how to navigate and use MindTap)
Chapter Objectives
The following objectives are addressed in this chapter:
2-1 Explain the concept of institutions and their key role in reducing uncertainty.
2-2 Articulate the two core propositions underpinning an institution-based view of global
business.
2-3 Identify the differences among democracy, totalitarianism, and authoritarianism. 2-4
Outline the differences among civil law, common law, and theocratic law.
2-5 Describe the importance of property rights and intellectual property rights.
2-6 Differentiate the characteristics among market economy, command economy, and
mixed economy.
to
2-7 Participate in two leading debates concerning politics, laws, and economics. 2-8
Draw implications for action.
Complete List of Chapter Activities and Assessments

For additional guidance refer to the Teaching Online Guide.
Chapter PPT slide Activity/Assessment Duration

Objective
2-1—2-3 30 Polling Activity in PPT 5 min
[return to top]
What's New in This Chapter

The following elements are improvements in this chapter from the previous edition:
 Opening Case: Australia versus Facebook
 Closing Case: Democracy, Development, and COVID
 In Focus 3.1: One Rock Formation, Two Countries
 In Focus 3.2: New Political Risk
 In Focus 3.3: Freedom of Speech versus Censorship on Social Media
 New Implications for Action: Be geopolitically savvy
 New Topics: Authoritarianism, geopolitics, hybrid organization, illiberal democracy,
institutional work, nonmarket (political) strategy, state capitalism
[return to top]
Opening Case Discussion: Australia versus Facebook

Why did Facebook take the unprecedented action to ―unfriend‖ Australia? Why was the Australian
government motivated to pass the new law? How should firms respond when laws, regulations, and
rules change? How do politics, laws, and economics influence high-stakes cases such as this?
Answers to these questions boil down to institutions, popularly known as the
―rules of the game.‖ As economic players, firms play by these rules. However, institutions are not
static. They may change, resulting in institutional transitions—‖fundamental and comprehensive
changes introduced to the formal and informal rules of the game that affect firms as players.‖ Firms
must respond to these changes. Overall, the success and failure of a firm around the globe are, to a
large extent, determined by its ability to understand and take advantage of the different rules of the
game.
[return to top]
Chapter Outline
In the outline below, each element includes references (in parentheses) to related content.
―CH.##‖ refers to the chapter objective; ―PPT Slide #‖ refers to the slide number in the
PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor
to
Resource Center); and, as applicable for each discipline, accreditation or certification standards
(―BL 1.3.3‖). Introduce the chapter and review learning objectives for Chapter 2. (PPT Slide 2).
IX. UNDERSTANDING INSTITUTIONS (LO 2-1, PPT Slides 3–6)
a. Key Concepts
 Institutions are commonly defined as ―the rules of the game.‖ Institutions
have formal and informal components, each with different supportive pillars.
b. Key Terms
 Institutional transition: Fundamental and comprehensive changes
introduced to the formal and informal rules of the game that affect firms as
players
 Institution-based view: A leading perspective in global business that

suggests that the success and failure of firms are enabled and constrained
by institutions
 Institution: Formal and informal rules of the game

 Institutional framework: Formal and informal institutions that govern
individual and firm behavior
 Formal institution: Institution represented by laws, regulations, and rules
 Regulatory pillar: The coercive power of governments
 Informal institution: Institution represented by cultures, ethics, and

norms
 Normative pillar: The mechanism through which norms influence
individual and firm behavior
 Norms: Values, beliefs, and actions of relevant players that influence the focal
individuals and firms
 Cognitive pillar: The internalized (or taken-for-granted) values and
beliefs that guide individual and firm behavior
X. WHAT DO INSTITUTIONS DO? (LO 2-1, PPT Slides 7–8)
a. Key Concepts
 The key function of institutions is to reduce uncertainty.
b. Key Terms
 Transaction cost: The cost associated with economic transactions or, more
broadly, the cost of doing business
 Opportunism: The act of self-interest seeking with guile
to
 Transition economy: Label for a subset of emerging economies,
particularly those moving from central planning to market competition
(such as China, Poland, Russia, and Vietnam)
XI. AN INSTITUTION-BASED VIEW OF GLOBAL BUSINESS (LO 2-2, PPT Slides 9–12)
a. Key Concepts
 Proposition 1: Managers and firms rationally pursue their interests and
make choices within the formal and informal institutional constraints in a
given institutional framework.
 Proposition 2: While formal and informal institutions combine to govern

firm behavior, in situations where formal constraints are unclear or fail,
informal constraints will play a larger role in reducing uncertainty and
providing constancy to managers and firms.
b. Key Terms
 Bounded rationality: The necessity of making rational decisions in the
absence of complete information
 Nonmarket (political) strategy: A strategy that centers on leveraging political
and social relationships
 Institutional work: Purposive action aimed at creating, maintaining, and
disrupting institutions
XII. POLITICAL SYSTEMS (LO 2-3, PPT Slides 13–15)

a. Key Concepts
 Democracy is a political system in which citizens elect representatives to
govern the country.
 Totalitarianism is a political system in which one person or party
exercises absolute political control over the population.
 Authoritarianism is a political system in which political plurality is
undermined and concentrated government power is imposed.
 While the degree of hostility toward business varies among different types of
totalitarianism and authoritarianism (some are more probusiness than
others), totalitarianism and authoritarianism in general are not as good for
business as democracy.
 As the forces of deglobalization march around the world, firms must be

prepared to deal with geopolitical risk.
b. Key Terms
 Political system: The rules of the game on how a country is governed
politically
to
 Democracy: A political system in which citizens elect representatives to
govern the country on their behalf
 Totalitarianism (dictatorship): A political system in which one person or
party exercises absolute political control over the population
 Authoritarianism: A political system in which political plurality is
undermined and concentrated government power is imposed
 Political risk: Risk associated with political changes that may negatively
impact domestic and foreign firms
 Geopolitics: International political relations
XIII. LEGAL SYSTEMS (LO 2-4 and 2-5, PPT Slides 16–20)
a. Key Concepts
 Laws in different countries are transplanted from three legal traditions.
 Civil law uses comprehensive statutes and codes as a primary means to
form legal judgments.
 Common law is shaped by precedents and traditions from previous
judicial decisions.
 Theocratic law is a legal system based on religious teachings.
b. Key Terms
 Legal system: The rules of the game on how a country’s laws are
enacted and enforced
 Civil law: A legal tradition that uses comprehensive statutes and codes as a
primary means to form legal judgments
 Common law: A legal tradition that is shaped by precedents and
traditions from previous judicial decisions
 Theocratic law: A legal system based on religious teachings
 Property right: The legal right to use an economic property (resource) and
to derive income and benefits from it
 Intellectual property (IP): Intangible property that is the result of
intellectual activity
 Intellectual property rights (IPR): Right associated with the
ownership of intellectual property
 Patent: Exclusive legal right of inventors of new products or processes to
derive income from such inventions
 Copyright: Exclusive legal right of authors and publishers to disseminate
their work
to
 Trademark: Exclusive legal right of firms to use specific names, brands, and
designs to differentiate their products from others
 Piracy: Unauthorized use of intellectual property
c. Discussion Activity: 10 minutes total. (PPT Slide 20)
 Would you rather do business in a country that uses civil law or common
law? Why?
(1) Students’ opinions may vary depending on the extent to which one
prefers flexibility versus certainty. Some may prefer the type of law
used in the country in which they live.
XIV. ECONOMIC SYSTEMS (LO 2-6, PPT Slides 21–23)
a. Key Concepts
 An economic system refers to the rules of the game on how a country is
governed economically.
 A pure market economy is characterized by laissez faire and total control by
market forces.
 A pure command economy is defined by government ownership and
control of all means of production.
 Most countries operate mixed economies with a different emphasis on
market versus command forces.
b. Key Terms
 Economic system: Rules of the game on how a country is governed
economically
 Market economy: An economy that is characterized by the ―invisible
hand‖ of market forces
 Command economy: An economy that is characterized by government
ownership and control of factors of production
 Mixed economy: An economy that has elements of both a market
economy and a command economy
c. Discussion Activity: 10 minutes total. (PPT Slide 23)
 Many view the United States as a mixed economy. In your opinion, is the
mix changing? If so, how? Is it shifting more to a command economy or a
market economy?
(1) The US economy is constantly changing but the direction may depend
on the political and economic tilt of those answering the question.
Those who want more government involvement may not feel that a
specific increase in government is sufficient and may take a much
different view of the direction of the economy than
to
those who feel that the country is moving toward a command
economy.
XV. DEBATES AND EXTENSIONS (LO 2-7, PPT Slides 24–27)

a. Key Concepts
 Two leading debates are (1) drivers of economic development and (2)
private ownership versus state ownership.
b. Key Terms
 State-owned enterprise (SOE): A firm owned and controlled by the state
(government)
 Moral hazard: Recklessness when people and organizations (including
firms and governments) do not have to face the full consequences of their
actions
 State capitalism: A capitalist, market-based system with substantial state

ownership
 Hybrid organization: An organization that incorporates elements from
different institutional logics
XVI. MANAGEMENT SAVVY (LO 2-8, PPT Slides 28–30)

a. Key Concepts
 Managers must be geopolitically savvy and realize that the institutional
framework governing the age of deglobalization is not the same as that
governing the age of globalization. Managers considering working abroad
should have a thorough understanding of the formal institutions before
entering a country. In situations where formal constraints are unclear,
managers can reduce uncertainty by relying on informal constraints, such as
relationship norms.
b. Key Terms
 None
c. Polling Activity: 5 minutes total. (PPT Slide 30)
 Do ―rules of the game‖ promote or prevent opportunism?
(1) Students will probably argue that much depends on the rules in
question.
(2) One important source of transaction costs is opportunism, defined as

self-interest seeking with guile. Examples include misleading,
cheating, and confusing other parties in transactions that will
increase transaction costs. Attempting to reduce such transaction
costs, institutional frameworks increase certainty by spelling out the
rules of the game so that disputes can be mitigated with relative ease,
to
such as through formal arbitration and courts.
to
[return to top]
End-of-Chapter Guide
Review Questions
13. How can the ―rules of the game‖ reduce uncertainty and combat opportunism?
 The very word ―rules‖ suggests the answer to that question. When there is
nothing involving formal or informal rules to serve as a guideline, there is
obviously going to be uncertainty.
 When it comes to combatting opportunism, students will probably argue that much
depends on the rules. One important source of transaction costs is opportunism,
defined as self-interest seeking with guile. Examples include misleading, cheating,
and confusing other parties in transactions that will increase transaction costs.
Attempting to reduce such transaction costs, institutional frameworks increase
certainty by spelling out the rules of the game so that disputes can be mitigated
with relative ease, such as through formal arbitration and courts.
14. Do you agree that managers and firms rationally pursue their interests? Why or why
not?
 It probably could be argued that they pursue their interests but their idea of what
constitutes their interest may not be in agreement with what others would regard as
their interest. A firm or person may wish to be respected and admired by society—
that may be what the firm or individual feels is in one’s best interest. However, that
might involve not taking advantage of an opportunity for increased profits or a raise
in compensation.
15. ON CULTURE: What are examples of formal institutional constraints that affect global
business firms?
 Students should be able to list a variety of constraints such as the negative
reactions of various stakeholders to actions that may be legal but viewed as
unacceptable.
16. ON ETHICS: If your firm is from a totalitarian country, what are the pros and cons of
expanding into a democratic country?
 This is a question in which the answer is not as important as the student’s
reasoning.
17. ON ETHICS: If your firm is from a democratic country, what are the pros and cons of
expanding into a totalitarian country?
 This is a question in which the answer is not as important as the student’s
reasoning.
to
18. Would you rather do business in a country that uses civil law or common law? Why?
 Students’ opinions may vary depending on the extent to which one prefers
flexibility versus certainty. Some may prefer the type of law used in the country in
which they live.
19. What are some of the issues to consider before doing business in a theocracy?
 Cultural sensitivity would be especially important in such a country.
Familiarization with beliefs and the application of those beliefs to all aspects of
business would be essential.
20. What is the relationship between property rights and economic development?
 According to de Soto, there is a significant relationship between the two: The legal
protection of property rights allows economic growth. For example, when property
rights are in place, an entrepreneur can use his or her title to a piece of land as
collateral for a small business loan.
21. Why is it important to protect IPR?

 IP is normally intangible and can thus be easily duplicated. The incentive to
invent or create music, for example, could be reduced if innovators had no
assurance of reaping rewards from their efforts.
22. ON ETHICS: Under what circumstances would it be easier to do business in a command

economy than a market economy?
 In a market economy, one may need to convince many buyers but in a command
economy in which the government is the buyer, the persuasion needs to be directed
toward only those in control of the government. Also, buyers in a market economy
may be fickle and change their mind over time but in a command economy, there is
stability unless those in the government change what they want.
23. Many view the United States as a mixed economy. In your opinion, is the mix changing? If
so, how?
 The US economy is constantly changing but the direction may depend on the
political and economic tilt of those answering the question. Those who want more
government involvement may not feel that a specific increase in government is
sufficient and may take a much different view of the direction of the economy than
those who feel that the country is moving toward a command economy.
24. In your opinion, which is the most important driver of economic development—culture,
geography, or institutions? Why?
 This is a question in which the answer is not as important as the reasoning and the
ability to defend that reasoning.
25. Do you feel you would have the greatest likelihood of professional success under private
ownership or state ownership? Why?
 The answer to this question may depend on the specific individual’s career plans
(perhaps it involves some type of government activity, for example) and the person’s
social, political, and economic tilt.
to
26. Why has it recently become important for international managers to become
geopolitically savvy?
 Given that most managers grew up in the age of globalization, they have little
appreciation of geopolitics. A new generation of managers are advised to be
geopolitically savvy. They need to realize that the institutional framework
governing the age of deglobalization is not the same as that governing the age of
globalization.
27. Why is it important to understand formal institutions before entering a country? Explain by
using an example.
 This is true for both firms and individuals who wish to avoid being fined or
imprisoned. Students should be able to use their own country to create examples
that could get a person or firm into trouble if there was no awareness of formal
institutional requirements.
28. ON CULTURE: Why is understanding of human relations within a culture sometimes

more important than legal expertise?
 In some societies there will be no need for legal expertise (for example, to
prepare a contract) until the relationship has been established so that one is
trusted.
[return to top]
Critical Discussion Questions

4. How do you explain your country’s economic success (or failure)?

 Encourage students to answer this question by focusing on concepts brought forth in
this chapter (political, legal, and economic systems) and avoid using the question to
expound favor or opposition to a politician or ideology. However, this is a question
in which the answer is not as important as their thought process and the ability to
clearly articulate it.
5. What is your view on the debate between private ownership and state ownership?
 The response will likely be the result of ideology, but this is a question in which the
answer is not as important as the students’ thought processes and ability to clearly
articulate their views.
6. ON ETHICS: As a manager, you discover that your firm’s products are counterfeited by
small family firms that employ child labor in rural Bangladesh. You are aware of the
corporate plan to phase out the products soon. You also realize that once you report such
IPR violations to the authorities, these firms will be shut down, employees will be out of
work, and families and children will be starving. How do you proceed?
 This is also a question in which the answer is not as important as the students’
thought process and their ability to clearly articulate their views. However,
because you plan to phase out the product, you may choose to ignore the
counterfeiting. Even though child labor is involved, because child starvation is
to
worse, you might offer advice to the family firms as to how to be more successful.
to
7. ON ETHICS: Your multinational, which is headquartered in a democratic country, is the
largest foreign investor and enjoys 10% of its global profits from (1) Sudan, where
government forces are reportedly cracking down on rebels and killing civilians; or (2)
Myanmar, where the military has crushed a democratically elected government in a coup and
killed some protesters. As country manager in one of these countries, you understand that
your firm is pressured by activists to exit these countries. The government actions, which you
personally find distasteful, are not directly related to your operations. How would you
proceed?
 Although this is also a question in which the answer is not as important as the
student’s thought process and their ability to clearly articulate their views, there are
some things that should be considered even by students who really do not care about
social/humanitarian issues and are only concerned about the bottom line. In a global
economy with instant global communication of news, the policies of a given country
might not affect a firm’s operations in that country but it might affect the firm’s sales
and problems with legislative initiatives in other countries.
[return to top]
Global Action
3. Evaluating political risk is an important element of country risk analysis. You are an
executive assistant for the CEO of a company in China. She is interested in doing business
with or in the United States. However, she is concerned about (1) the US-China geopolitical
rivalry, (2) the numerous mass shootings reported by the US media, and (3) the anti-Asian
hate crime in the United States. She has asked you to conduct a political risk analysis of the
United States and come up with a go/no-go recommendation. Can you prepare a report for
her?
students’ thought process and the ability to clearly articulate their response.
 The globalEDGE Reference Desk may be a useful resource for students.
4. For your employer, a diversified multinational organization (such as GE, Samsung,

Siemens, or Tata Group), evaluate the political and economic risk of three industry sectors
within its current portfolio. Prepare a report, and identify which industry and region
would provide the highest likelihood of good profits to your firm in the next five years?
 The globalEDGE Reference Desk may be a useful resource for students.
[return to top]
Closing Case: Emerging Markets—Democracy, Development, and

COVID
This case explores an overview of the spread of democracy since the 1960s—and its subsequent stall
—as a backdrop to a discussion of how various democratic and authoritarian
to
countries fared during the COVID-19 pandemic. As countries race ahead to tame COVID and to
recharge their economies, it is very clear that the global debate about the relationship among
democracy, development, and pandemics will not stop any time soon.
4. Why does democracy have such broad appeal around the world? Why does it suffer
from severe setbacks lately?
 Democracies—on average—are richer, less corrupt, and experience more peace.
However, it is often easier to remove an old regime than it is to build a new one.
Democracy can also be seen as trending toward an example of mob rule in some
cases.
5. ON ETHICS: If you could choose to become a citizen of any country, which country
would you choose in preparation for the next pandemic, which, according to some
experts, will be bigger and more devastating than COVID-19?
students’ thought process and the ability to clearly articulate their response. World
Bank research reports that democracy, on average, is associated with lower
pandemic mortality rate, but the global debate about the relationship among
democracy, development, and pandemics will not stop any time soon.
6. ON ETHICS: The military governments in Egypt, Myanmar, and Thailand have invited
your firm to do business there. As a CEO who struggles to find post-COVID growth
opportunities, you appreciate the lucrative offers. But you are also concerned that your
firm may be labeled a ―devil’s advocate‖ or ―accomplice‖ by democracy activists around
the world. How would you proceed?
[return to top]
to
IF YOU WANT THIS TEST BANK OR SOLUTION MANUAL
EMAIL ME kevinkariuki227@gmail.com TO RECEIVE ALL
CHAPTERS IN PDF FORMAT
IF YOU WANT THIS TEST BANK OR SOLUTION MANUAL

EMAIL ME kevinkariuki227@gmail.com TO RECEIVE ALL
CHAPTERS IN PDF FORMAT
to

Solution Manual for Global Business, 5th Edition by Peng Mike, Verified Chapters 1 - 17, Complete Newest Version

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Solution Manual for Global Business, 5th Edition by Peng Mike, Verified Chapters 1 - 17, Complete Newest Version

Uploaded by

Copyright:

Available Formats

Solution Manual for Global

2. Chapter 2: Formal Institutions: Politics, Laws, and Economics

3. Chapter 3: Informal Institutions: Cultures, Ethics, and Norms

4. Chapter 4: Resources and Capabilities

5. Chapter 5: International Trade

6. Chapter 6: Foreign Direct Investment

7. Chapter 7: Foreign Exchange

8. Chapter 8: Global and Regional Integration

9. Chapter 9: The Entrepreneurial Firm

10. Chapter 10: Foreign Market Entry

11. Chapter 11: Global Competitive Dynamics

12. Chapter 12: Alliances and Acquisitions

13. Chapter 13: Strategy, Structure, and Innovation in Multinationals

14. Chapter 14: Marketing and Supply Chain Management

15. Chapter 15: Human Resource Management

16. Chapter 16: Corporate Finance and Governance

Chapter 17: Corporate Social Responsibility

Give three reasons why it is important to study global business.

1-4 Describe the importance of globalization, semiglobalization, and risk management.

1-6 Participate in three leading debates concerning global business. 1-

7 Draw implications for action.

Chapter PPT slide Activity/Assessment Duration

What's New in This Chapter

Opening Case Discussion: Emerging Markets—Apple,

 International business is typically defined as (1) a business (firm) that

 This book goes beyond competition in developed economies. It devotes

 International business (IB): (1) A business (firm) that engages in

 Multinational enterprise (MNE): A firm that engages in foreign direct

 Why study global business?

 Global mindset: Ability to ―connect the dots‖ globally

 Expatriate manager (expat): A manager who works abroad

 International premium: A significant pay raise when working overseas

c. Opening Day Quiz: 5 minutes total. (PPT Slide 7, Text p. 6)

III. A UNIFIED FRAMEWORK (LO 1-3, PPT Slides 10–12)

 Triple bottom line: Economic, social, and environmental performance

 Stakeholder: Any group or individual who can affect or is affected by the

 Advocates of globalization count its contributions to include greater

 Critics argue that globalization destroys jobs in rich countries, exploits

 Globalization: The close integration of countries and peoples of the

 BRIC: Brazil, Russia, India, and China

 BRICS: Brazil, Russia, India, China, and South Africa

 Reverse innovation (or frugal innovation): An innovation that is adopted

 Risk management: The identification and assessment of risks and the

c. Discussion Activity 1: 10 minutes total. (PPT Slide 19)

(2) The three major views are:

(a) A new force sweeping through the world in recent times

(b) A long-run historical evolution since the dawn of human

(c) A pendulum that swings from one extreme to another from

V. GLOBAL BUSINESS AND GLOBALIZATION AT A CROSSROADS (LO

 Gross national product (GNP): GDP plus income from nonresident

 Nongovernmental organizations (NGO): An organization that is not

 Debate 1: Globalization versus Deglobalization

 Debate 2: Strategic versus Nonstrategic Industries

 Debate 3: Just-in-Time versus Just-in-Case Management

 Deglobalization: The process of weakening economic interdependence

 Organizational slack: A cushion of resources that allow an organization to

c. Polling Activity: 5 minutes total. (PPT Slide 26)

 Overall, globalization is good for the US economy.

(1) The purpose of this question is not so much to resolve whether

d. Discussion Activity 2: 10 minutes total. (PPT Slide 29)

VII. IMPLICATIONS FOR ACTION: THE FUTURE OF GLOBAL BUSINESS IN A LESS

(2) From an institution-based view, enhance geopolitical savvy and be

(3) From a career standpoint, even a less global world presents

VIII. STRUCTURE OF THE BOOK AND THE DISCIPLINE (LO 1-8)