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• Module overview
• 1. Introduction to international business
  • 1.1 Part A: Globalisation
  • 1.2 Globalisation and related concepts
    • 1.2.1 Globalisation of markets
    • 1.2.2 Globalisation of production
    • 1.2.3 Drivers of globalisation
    • 1.2.4 Globalisation of business structures
    • 1.2.5 The pros and cons of globalisation
    • 1.2.6 Managing a global enterprise
  • 1.3 Summary: Part A
  • 1.4 Part B: National differences in political economy
    • 1.4.1 Political systems
    • 1.4.2 Economic systems
    • 1.4.3 Legal systems
    • 1.4.4 Determinants of economic development
    • 1.4.5 Global change
  • 1.5 Summary: Part B

• 2. Understanding culture

  • 2.1 Culture defined
  • 2.2 The importance of history in understanding culture
  • 2.3 Cultural dimensions of business
    • 2.3.1 social structure
    • 2.3.2 language
    • 2.3.3 time
    • 2.3.4 religion, ethics and superstition
    • 2.3.5 wealth and material possessions
    • 2.3.6 decision making
    • 2.3.7 bribery
  • 2.4 Interpersonal relations
  • 2.5 Selection and training of expatriate managers
  • 2.6 Barriers to performance in the new culture
  • 2.7 A framework for cultural analysis
    • 2.7.1 Hofstede's value survey model (VSM)
  • 2.8 Summary

• 3. Economic and political aspects of international trade theory

  • 3.1 Part A: International trade theories
  • 3.2 An introduction to trade theories
  • 3.3 Early theories
    • 3.3.1 Theory of absolute advantage
    • 3.3.2 Theory of comparative advantage
    • 3.3.3 Weaknesses of early theories
    • 3.3.4 More recent theories
    • 3.3.5 Criticism of the Heckscher-Ohlin theory and the Leontief paradox
  • 3.4 Modern theories
    • 3.4.1 New trade theory
    • 3.4.2 Theory of competitive advantage: The Porter diamond
  • 3.5 Summary: Part A
  • 3.6 Part B: Political aspects of world trade
  • 3.7 The development of world trading patterns
  • 3.8 Protectionism
  • 3.9 Instruments of trade policy
  • 3.10 The case for government intervention (political)
  • 3.11 The case for government intervention (economic)
  • 3.12 Strategic trade policy
  • 3.13 Development of the world trading system
  • 3.14 Summary: Part B

• 4. Foreign direct investment in the global economy

  • 4.1 Part A: Theories of foreign direct investment
  • 4.2 Extent and significance of FDI
  • 4.3 Horizontal FDI
  • 4.4 Theories of horizontal FDI
    • 4.4.1 Market imperfection theory
    • 4.4.2 Impediments to exporting
    • 4.4.3 Impediments to the sale of know-how
    • 4.4.4 Knickerbocker's theory of oligopolistic competition
    • 4.4.5 Vernon 's product life-cycle theory
    • 4.4.6 Location-specific advantages
  • 4.5 Vertical FDI
    • 4.5.1 Market imperfection theory
    • 4.5.2 Investment in specialised assets
  • 4.6 Summary: Part A
  • 4.7 Part B: Political and economic aspects of FDI
  • 4.8 The politics of FDI
    • 4.8.1 The radical view
    • 4.8.2 The free market view
    • 4.8.3 Pragmatic nationalism
  • 4.9 Benefits of FDI to the host country
    • 4.9.1 Resource-transfer effects
    • 4.9.2 Capital
    • 4.9.3 Technology
    • 4.9.4 Management
    • 4.9.5 Employment effects
    • 4.9.6 Benefits to consumers
    • 4.9.7 Balance-of-payments (BOP) effects
  • 4.10 Costs of FDI to the host country
    • 4.10.1 Adverse effects on domestic firms
    • 4.10.2 Adverse effects on BOP
    • 4.10.3 Surrender of national sovereignty
  • 4.11 Benefits of FDI to the home country
  • 4.12 BOP benefits
  • 4.13 Employment benefits
    • 4.13.1 Reverse resource-transfer effect
    • 4.13.2 Costs of FDI to the home country
    • 4.13.3 BOP effects
    • 4.13.4 Employment effects
  • 4.14 Encouraging and discouraging FDI
  • 4.15 Multicultural agreement on investment (MAI)
  • 4.16 Summary: Part B

• 5. Regional economic integration

  • 5.1 Regional economic integration
    • 5.1.1 Levels of economic integration
  • 5.2 Political and economic effects of integration
    • 5.2.1 Assumption
    • 5.2.2 Explanation
  • 5.3 Regional economic integration in Europe
  • 5.4 Regional economic integration in the Americas
    • 5.4.1 North American Free Trade Agreement (NAFTA)
    • 5.4.2 Summit of all the Americas
    • 5.4.3 Andean Pact
    • 5.4.4 Association of Caribbean States (ACS)
    • 5.4.5 MERCOSUR
  • 5.5 Regional economic integration in Asia Pacific
    • 5.5.1 Australia-US FTA (AUSFTA)
    • 5.5.2 Closer Economic Relations (CER)
    • 5.5.3 Association of South-East Asian Nations (ASEAN)
    • 5.5.4 Asia-Pacific Economic Cooperation Group (APEC)
    • 5.5.5 India
    • 5.5.6 West Pacific Economic Zone (WPEZ)
  • 5.6 Regional economic integration in Africa
  • 5.7 Opportunities and threats posed by regional economic integration
    • 5.7.1 Europe
    • 5.7.2 North America
    • 5.7.3 Asia
  • 5.8 Summary
• 6. The international monetary system
  • 6.1 Part A: The foreign exchange market
  • 6.2 The nature and functions of the foreign exchange market
    • 6.2.1 Terms used in the foreign exchange market
    • 6.2.2 Theories of exchange rate determination
    • 6.2.3 Exchange rate forecasting
    • 6.2.4 Restrictions on currency convertibility
    • 6.2.5 Summary: Part A
  • 6.3 Part B: The international monetary system
    • 6.3.1 The gold standard
    • 6.3.2 The Bretton Woods agreement
    • 6.3.3 Exchange rate systems
    • 6.3.4 European monetary union (EMU)
    • 6.3.5 Recent changes in the international monetary system
    • 6.3.6 Summary: Part B
  • 6.4 Part C: The global capital market
  • 6.5 Structure and functions of the global capital market
    • 6.5.1 Euromarkets
    • 6.5.2 The global bond market
    • 6.5.3 The global equity market
    • 6.5.4 Risk and the cost of capital
    • 6.5.5 Summary: Part C
  • 6.6 Integrative summary: Parts A, B and C
• 7. International business strategy
  • 7.1 Strategy: definition and purpose
  • 7.2 Advantages of going international
  • 7.3 Strategic options
    • 7.3.1 Generic strategies
    • 7.3.2 International strategy
    • 7.3.3 Multidomestic strategy
    • 7.3.4 Global strategy
    • 7.3.5 Transnational strategy
  • 7.4 Summary
• 8. Organisational structure in international business
  • 8.1 Organisation design
    • 8.1.1 Centralisation and decentralisation
    • 8.1.2 The example of Bata Ltd
  • 8.2 Organisation design options
    • 8.2.1 Matrix structure
  • 8.3 International structure options
  • 8.4 Coordinating and integrating mechanisms
    • 8.4.1 Control systems
    • 8.4.2 Examples
  • 8.5 Summary
• 9. Exporting and other modes of entry
  • 9.1 Part A: Entry modes and strategic alliances
  • 9.2 International involvement options
    • 9.2.1 Six entry modes
  • 9.3 Strategic alliances
  • 9.4 Summary: Part A
  • 9.5 Part B: Exporting, importing and countertrade
  • 9.6 Identifying export opportunities
  • 9.7 Trade documentation
  • 9.8 Export assistance agencies
  • 9.9 Countertrade
    • 9.9.1 Barter
    • 9.9.2 Counter purchase or parallel barter
    • 9.9.3 Offset trading
    • 9.9.4 Switch trading
    • 9.9.5 Buyback or compensation trading
  • 9.10 Summary

• 10. International marketing and materials management

  • 10.1 Part A: Optimising the manufacturing location
  • 10.2 Industry requirements
    • 10.2.1 machinery manufacture
    • 10.2.2 electronic products
    • 10.2.3 shipbuilding
    • 10.2.4 textiles
    • 10.2.5 food processing
    • 10.2.6 country facto
  • 10.3 Technological factors
    • 10.3.1 value creation and/or added value
    • 10.3.2 fixed costs
    • 10.3.3 minimum efficient scale
    • 10.3.4 flexible manufacturing system (also called lean production)
  • 10.4 Product factors
  • 10.5 Concentration (centralisation) versus decentralisation
  • 10.6 Make-or-buy decisions
  • 10.7 Materials management
  • 10.8 Production and materials technology
  • 10.9 Summary: Part A
  • 10.10 Part B: International marketing and R&D
  • 10.11 The marketing mix
  • 10.12 The globalisation of markets
  • 10.13 Standardisation
  • 10.14 Market segmentation
    • 10.14.1 segmenting the world
    • 10.14.2 segmenting foreign markets
    • 10.14.3 international market segmentation
  • 10.15 Product attributes
    • 10.15.1 industrial products
    • 10.15.2 consumer products
  • 10.16 Distribution strategy
  • 10.17 Promotion strategy
    • 10.17.1 cultural barriers
    • 10.17.2 source effects
    • 10.17.3 noise levels
    • 10.17.4 push/pull strategies
    • 10.17.5 customer sophistication
    • 10.17.6 channel length
    • 10.17.7 media availability
    • 10.17.8 global advertising
  • 10.18 Pricing strategy
    • 10.18.1 regulatory influences on prices
  • 10.19 Research and development (R&D)
  • 10.20 Summary: Part B

• 11. International human resource management

  • 11.1 The strategic role of international HRM
  • 11.2 Managing international employees
    • 11.2.1 staffing
    • 11.2.2 expatriate managers
  • 11.3 Training and management development
  • 11.4 Performance appraisal
  • 11.5 Compensation
  • 11.6 International labour relations
    • 11.6.1 the concerns of unions
    • 11.6.2 the strategy of unions
    • 11.6.3 approaches to labour relations
  • 11.7 Summary
• 12. Accounting and financial management in international business
  • 12.1 Part A: Accounting in international business
  • 12.2 Country differences in accounting standards
  • 12.3 National and international standards
  • 12.4 Consolidation and currency translation
  • 12.5 Accounting aspects of control systems
  • 12.6 Changes in exchange rates
  • 12.7 Transfer pricing
  • 12.8 Summary: Part A
  • 12.9 Part B: Financial management in international business
  • 12.10 Financial management in MNEs
  • 12.11 Investment decisions
  • 12.12 Financing decisions
  • 12.13 Financial structure
  • 12.14 The objectives of global money management
  • 12.15 Moving money across borders
    • 12.15.1 unbundling
    • 12.15.2 dividend remittance
    • 12.15.3 royalty payments
    • 12.15.4 transfer prices
    • 12.15.5 fronting loan
  • 12.16 Techniques for global money management
    • 12.16.1 multilateral netting
  • 12.17 Managing foreign exchange risk
  • 12.18 Transaction exposure
  • 12.19 Developing policies for managing foreign exchange exposure
  • 12.20 Summary: Part B
  • 12.21 Integrative summary: Parts A and B

2.7 A framework for cultural analysis

Previous sections in this topic have presented a virtual list of dos and don'ts for international businesses and their managers. It would clearly be useful if we could consolidate these details in a model which would enable us to plan our entry to another culture. Fortunately, such models exist and in this section we will look at one - the Hofstede model.

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