Preface to the Fourth Edition – Fundamentals of International Business

Preface to the Fourth Edition

This is the fourth edition of the textbook on international business, developed according to the syllabus requirements of Delhi University. The book is an introduction to the dynamic field of international business and aims to give students a comprehensive coverage of all aspects of the subject by linking concepts, theories, and frameworks with real-life cases and examples. The book also incorporates latest developments like BREXIT and the fluctuations in the BOLIVAR to introduce complex topics in regional economic integration and international finance. It uses the story of the Wimbledon tennis ball to introduce students to the complexities of globalization and international business, and brings out the interconnected nature of culture through the case of McDonalds in Japan and the hurdles of marketing in global markets through a case study of selling cookies in China. It highlights emerging issues such as the robotic revolution in manufacturing, the appearance of mega regional agreements and the impact of climate change and global terrorism on international business.

The book reaches out to its young Internet savvy audience through a variety of pedagogical features which include online videos and exercises. It also encourages students to experience international business in action outside the confines of their classroom and to explore the intricacies of cross-cultural management through the use of case analysis and simulation.

FEATURES OF THE BOOK

The book follows a clearly formulated methodological structure to introduce the subject to the students. It follows a comprehensive, logical, graded approach based on the concept, environment, structure and strategy of International Business. It looks at the widest possible gamut of issues in the area to give student an idea of the broad spectrum of issues that subject covers. It incorporates leading-edge research, alongside up-to-date examples and current statistics tracking global developments in this field. It also has the broadest possible geographical coverage as it explores emerging business practices in Africa, TNCs from Latin America and the emergence of new geographies such as Vietnam, Indonesia and Turkey. To provide a well-rounded perspective in a topic, it emphasizes the associated conceptual debates along with the facts. In addition, it incorporates several pedagogical features designed to arouse the interest of students and engage them in the subject.

  1. Learning Objectives

    Learning objectives serve as a guideline for the learning parameters for the student.

    LEARNING OBJECTIVES

    The basic objective of this chapter is to introduce the fundamental concepts of globalization and international business. After reading this chapter, you should be able to:

    • Understand the fundamental concepts and features of globalization
    • Comprehend the evolution and growth of international business
    • Distinguish between domestic and international business
    • Analyse the different modes of entry into international business
  2. Opening Vignettes

    Opening vignettes introduce the basic concepts in the chapter through real-life situations to stimulate readers’ interest and curiosity in the chapter.

    JOURNEY OF THE WIMBLEDON TENNIS BALL

    Wimbledon is the oldest tennis tournament in the world. It is one of the four Grand Slam tournaments and the only one still played on a grass court. The tournament is synonymous with all things British—the royalty, strawberries and cream and the legendary summer.

    At the heart of the tournament is the little green ball manufactured by British MNE Slazenger, which travels more than 50,000 miles before it lands at centre court. The ball has to conform to certain specifications to find a place at Wimbledon. It has to be two-and-a-half inches (6.35 cm) in diametre, have a weight of two ounces (56.7 g), needs a water repellant barrier for protection against the rain, should be able to bounce between 53 – 58 inches after being dropped onto concrete from a height of 100 inches, is packed in a pressurized tin and stored at a temperature of 68 degree Fahrenheit.

    The Slazenger balls travel over 50,000 miles between 11 countries and across four continents in their quest for perfection. Their complex supply chain has materials shipped from all over the world for manufacturing to Bataan in Philippines. Clay is shipped from South Carolina in the US, silica from Greece, magnesium carbonate from Japan, zinc oxide from Thailand, sulphur from South Korea and rubber from Malaysia. Wool is then shipped from New Zealand all the way to Stroud in Gloucestershire (UK), where it is weaved into felt and then flown back to Bataan. The final production needs petroleum naphthalene from Zibo in

  3. Bird’s-eye View Box

    Bird’s-eye view is a new feature in all chapters which provides a synoptic view of the chapter contents at strategic points to facilitate both the teacher and the student.

    Bird’s-eye View

    There are various modes of entry into international business involving varying degrees of foreign market involvement and associated risk. Traditionally firms have followed a step-by-step approach to enter foreign markets, beginning with exports and gradually moving into contractual forms of entry followed by investment. In recent years, many emerging market firms have skipped some stages of entry and used a higher entry mode to access foreign markets.

  4. Marginalia Box

    Marginalia capture key definitions and concepts presented for easy reference.

     

    Investment-related entry modes involve ownership of property, assets, projects, and businesses invested in a host country. Foreign investment takes two forms—foreign direct investment (FDI) and foreign portfolio investment (FPI).

  5. Summary

    Summary captures the main points of each chapter for a quick recapitulation.

    CHAPTER SUMMARY
    • Culture is learned, shared behaviour, acquired through education or experience, and passed on from one generation to another.
    • It becomes the basis of individual and group behaviour as it undergoes constant change in the process of being adapted to new environments.
  6. Key Terms

    Key terms list the important terms from each chapter.

    KEY TERMS
    • International business
    • Globalization
    • Transnational corporation
    • Modes of entry
    • Foreign direct investment
    • Foreign portfolio investment
    • Export
    • Import
  7. Discussion Questions

    Discussion questions are based on information given in the chapters to test the understanding and application of key concepts. They include questions on application of key concepts to real life situations.

    DISCUSSION QUESTIONS
    1. What is globalization?
    2. What are the main elements of globalization?
    3. What is international business?
  8. Tables

    Tables use current data from leading international publications such as The World Investment Report and The World Trade Report to substantiate growth in international business.

     

    Table 4.1 World Output with Trade

THE TEACHING AND LEARNING PACKAGE

The book includes several resources to facilitate the teaching and learning process. These are available on the companion site of the book: www.pearsoned.co.in/sumativarma. Constant updates and new developments in the dynamic field of International Business are available on the author’s Facebook page: https://www.facebook.com/IB.SumatiVarma.

HIGHLIGHTS OF THE FOURTH EDITION
  1. The book has been revised and updated as per curriculum guidelines issued by the UGC under the CBCS system for all undergraduate courses of study on a pan India level.
  2. Two new chapters on International Financial Environment and Exchange Rate Determination have been added.
  3. There is major content revision in chapters 1, 4, 5, 6, 7, 8, 9, 13.
  4. Scope of chapter 16 has been expanded.
  5. This revised edition has nine new opening vignettes.
  6. Data on trade FDI, TNCs have been updated till 2018 based on global reports.
  7. Content has been updated in the opening vignette for chapter 11.
  8. The book has updated model question papers.
  9. There are additional discussion questions.
  10. The latest university examination questions have been added.

Sumati Varma