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The Future of Global
Business
The Future of Global
Business
A Reader

Michael R. Czinkota
McDonough School of Business,
Georgetown University and the
University of Birmingham, U.K.
Masaaki Kotabe
Institute of Global Management, Temple
University, Philadelphia, P.A.
Ilkka A. Ronkainen
McDonough School of Business,
Georgetown University, Washington, D.C.
First published 2011
by Routledge
711 Third Avenue, New York, NY 10017
Simultaneously published in the UK
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Routledge is an imprint of the Taylor & Francis Group, an informa business

This edition published in the Taylor & Francis e-Library, 2011.

To purchase your own copy of this or any of Taylor & Francis or Routledge’s
collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.

© 2011 Taylor & Francis

The right of the editors to be identified as the authors of the editorial
material, and of the authors for their individual chapters, has been
asserted by them in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced

or utilised in any form or by any electronic, mechanical, or other means,
now known or hereafter invented, including photocopying and recording,
or in any information storage or retrieval system, without permission in
writing from the publishers.
Trademark Notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
Library of Congress Cataloging in Publication Data
The future of global business: a reader / [edited by] Michael R Czinkota,
Ilkka A Ronkainen, Masaaki Kotabe.
p. cm.
1. Export marketing. 2. International business enterprises. 3. International
trade. I. Czinkota, Michael R. II. Ronkainen, Ilkka A. III. Kotabe, Masaaki.
HF1416.F88 2011
338.8'8—dc22
2010022288

ISBN 0-203-87813-2 Master e-book ISBN

ISBN13: 978-0-415-80093-8 (hbk)

ISBN13: 978-0-203-87813-2 (ebk)
To Ilona and Margaret.
MRC

To my children in pursuit of their dreams.

MK

To Sirkka and Alpo Ronkainen.

IAR
Table of Contents

About the Editors xiv

1. Role of Research in International Marketing 1

1.1 Czinkota, Michael R. and Ilkka A. Ronkainen, “An
International Marketing Manifesto,” Journal of International
Marketing 11,1, 2003, 13–27. 3

1.2 Czinkota, Michael R. and A. Coskun Samli, “The

Remarkable Performance of International Marketing in
the Second Half of the 20th Century,” European Business
Review, 19, 4, 2007, 316–331. 21

1.3 Czinkota, Michael R., “Freedom and International Marketing:

Janis Joplin’s Candidacy as Patron of the Field,” Thunderbird
International Business Review, January–February 2005, 1–13. 44

1.4 Czinkota, Michael R., “Academic Freedom for All in Higher

Education: The Role of the General Agreement on Trade in
Services,” Journal of World Business, 41, 2, 2006, 149–160. 58

1.5 Czinkota, Michael R., “International Information Cross-

Fertilization in Marketing: An Empirical Assessment,”
European Journal of Marketing, 34, 15, 2000, 1305–1314.
Winner, Article of the Year Award. 83
viii Contents

1.6 Czinkota, Michael R. and Ilkka A. Ronkainen, “Trends and

Indications in International Business: Topics for Future
Research,” Management International Review, April 2009. 96

1.7 Kotabe, Masaaki and Crystal X. Jiang, “Contemporary

Research Trends in International Marketing: The 2000s,”
in Alan Rugman, ed., Oxford Handbook of International
Business, 2nd ed., Oxford: Oxford University Press, 2008,
447–501. 119

2. Competition from Emerging Markets 193

2.1 Malik, Omar R. and Masaaki Kotabe, “Dynamic Capabilities,
Government Policies, and Performance in Firms from
Emerging Economies: Evidence from India and Pakistan,”
Journal of Management Studies, 2009. 195

2.2 Gao, Gerald Y., Janet Y. Murray, Masaaki Kotabe, and

Jiangyong Lu, “A ‘Strategy Tripod’ Perspective on Export
Behaviors: Evidence from Domestic and Foreign Firms
Based in an Emerging Economy,” Journal of International
Business Studies, 39, 2009. 239

2.3 Aulakh, Preet S., Masaaki Kotabe, and Hildy Teegen,

“Export Strategies and Performance of Firms from
Emerging Economies: Evidence from Brazil, Chile, and
Mexico,” Academy of Management Journal, 43 (3), 2000,
342–361. 279

2.4 Aulakh, Preet S. and Masaaki Kotabe, “Institutional

Changes and Organizational Transformation in Developing
Economies,” Journal of International Management, 14
(September), 2008, 209–216. 322

3. Marketing Mix 341

3.1 Dimofte, Claudiu V., Johny K. Johansson, and Ilkka A.
Ronkainen, “Cognitive and Affective Reactions of U.S.
Consumers to Global Brands,” Journal of International
Marketing, 16, 4, December 2008. 343
 Contents ix

3.2 Czinkota, Michael R. and Masaaki Kotabe, “Entering the

Japanese Market: A Reassessment of Foreign Firms’ Entry
and Distribution Strategies,” Industrial Marketing
Management, 29, November 2000, 483–491. 372

3.3 Swan, K. Scott, Masaaki Kotabe, and Brent B. Allred,

“Exploring Robust Design Capabilities, Their Role in
Creating Global Products, and Their Relationship to Firm
Performance,” Journal of Product Innovation Management,
22, 2, March 2005, 144–164. 388
3.4 Clark, Terry, Masaaki Kotabe, and Dan Rajaratnam,
“Exchange Rate Pass-Through and International Pricing
Strategy: A Conceptual Framework and Research
Propositions,” Journal of International Business Studies, 30,
Second Quarter, 1999, 249–268. 432

3.5 Gençtürk, Esra F. and Masaaki Kotabe, “The Effect of Export

Assistance Program Usage on Export Performance:
A Contingency Explanation,” Journal of International
Marketing, 9, 2, 2001, 51–72. 459

4. Global Sourcing and Supply Chain Management 487

4.1 Czinkota, Michael R., “An Analysis of the Global Position
of U.S. Manufacturing,” Thunderbird International Business
Review, October 2003: 505–519. 489

4.2 Kotabe, Masaaki, Michael J. Mol, and Sonia Ketkar, “An

Evolutionary Stage Model of Outsourcing and Competence
Destruction: A Triad Comparison of the Consumer
Electronics Industry,” Management International Review,
48, 1, 2008, 65–93. 504

4.3 Kotabe, Masaaki, Michael J. Mol, and Janet Y. Murray,

“Outsourcing, Performance, and the Role of E-Commerce:
A Dynamic Perspective,” Industrial Marketing Management,
37, 1, 2008, 37–45. 546

4.4 Murray, Janet Y., Masaaki Kotabe, and Joe Nan Zhou,
“Strategic Alliance-Based Sourcing and Market Performance:
x Contents

Evidence from Foreign Firms Operating in China,” Journal

of International Business Studies, 36, 2, March 2005,
187–208. 568

5. Emerging Issues 615

5.1 Czinkota, Michael R., Gary A. Knight, Peter W. Liesch,
and John Steen, “Positioning Terrorism in Management and
Marketing: Research Propositions” Journal of International
Management, 11, 2005, 581–604. 617

5.2 Czinkota, Michael R., David A. Grossman, Rajshekhar

G. Javalgi, and Nicholas Nugent, “Foreign Market Entry
Mode of Service Firms: The Case of U.S. MBA Programs,”
Journal of World Business, forthcoming. 655
5.3 Czinkota, Michael R., “How Government Can Help
Increase U.S. Export Performance: Testimony Before the
House Committee on Small Business.” 688
5.4 Kotabe, Masaaki and Crystal X. Jiang, “Three Dimensional:
The Markets of Japan, Korea, and China are Far from
Homogeneous,” Marketing Management, 15, 2, 2006,
39–43. 697
5.5 Kotabe, Masaaki, Srini S. Srinivasan, and Preet S. Aulakh,
“Multinationality and Firm Performance: The Moderating
Role of R&D and Marketing Capabilities,” Journal of
International Business Studies, 33, 1, 2002, 79–97. 709

Index 734
 The Future of Global Business: A Reader
Edited by Michael R. Czinkota and Ilkka A. Ronkainen

Global Business: Positioning Ventures Ahead

Michael R. Czinkota and Ilkka A. Ronkainen
This list matches the chapters in
Global Business: Positioning Ventures Ahead
with the readings found in
this book.

Chapter 1: The Global Imperative

1.1 Czinkota, Michael R. and Ilkka K. Ronkainen, “An International
Marketing Manifesto”

1.2 Czinkota, Michael R. and J. Samli “The Remarkable Performance

of International Marketing in the Second Half of the
20th Century”

Chapter 2: Establishing the Context

2.1 Malik, Omar R. and Masaaki Kotabe, “Dynamic Capabilities,
Government Policies, and Performance in Firms from Emerging
Economies: Evidence from India and Pakistan”

2.3 Aulakh, Preet S., Masaaki Kotabe, and Hildy Teegen, “Export
Strategies and Performance of Firms from Emerging Economies:
Evidence from Brazil, Chile, and Mexico”

2.4 Aulakh, Preet S. and Masaaki Kotabe, “Institutional Changes and

Organizational Transformation in Developing Economies”

3.5 Gençtürk, Esra F. and Masaaki Kotabe, “The Effect of Export

Assistance Program Usage on Export Performance: A Contingency
Explanation”

Chapter 3: Doing Your Homework on Global Markets

1.5 Czinkota, Michael R., “International Information Cross-Fertilization
in Marketing: An Empirical Assessment”
1.7 Kotabe, Masaaki and Crystal Jiang, “Contemporary Research
Trends in International Marketing: The 2000s”

5.3 Czinkota, Michael R., “How Government Can Help Increase U.S.
Export Performance; Testimony Before the House Committee on
Small Business”

Chapter 4: Getting There with Customers and Suppliers

3.2 Czinkota, Michael R. and Masaaki Kotabe, “Entering the Japanese
Market: A Reassessment of Foreign Firms’ Entry and Distribution
Strategies”

3.3 Swan, K. Scott, Masaaki Kotabe, and Brent Allred, “Exploring

Robust Design Capabilities, Their Role in Creating Global
Products, and Their Relationship to Firm Performance”

4.3 Kotabe, Masaaki, Michael J. Mol, and Janet Y. Murray,

“Outsourcing, Performance, and the Role of E-Commerce:
A Dynamic Perspective”

Chapter 5: Creating a Global Presence

2.2 Gao, Gerald Y., Janet Y. Murray, Masaaki Kotabe, and Jiangyong
Lu, “A ‘Strategy Tripod’ Perspective on Export Behaviors:
Evidence from Domestic and Foreign Firms Based in an
Emerging Economy”
4.1 Czinkota, Michael R., “An Analysis of the Global Position of U.S.
Manufacturing”

4.4 Murray, Janet Y., Masaaki Kotabe, Joe Nan Zhou, “Strategic
Alliance-Based Sourcing and Market Performance: Evidence from
Foreign Firms Operating in China”

5.2 Czinkota, Michael R., David A. Grossman, Rajshekhar (Raj) G.

Javalgi, Nicholas Nugent, “Foreign Market Entry Mode of Service
Firms: The Case of U.S. MBA Programs”

Chapter 6: Making Communication Happen

1.3 Czinkota, Michael R., “Freedom and International Marketing:
Janis Joplin’s Candidacy as Patron of the Field”
Chapter 7: Negotiating Cultural Chasms
5.1 Czinkota, Michael R., Gary A. Knight, Peter W. Liesch, and John
Steen, “Positioning Terrorism in Management and Marketing:
Research Propositions”

Chapter 8: Positioning the Product and Brand

1.4 Czinkota, Michael R., “Academic Freedom For All in Higher
Education: The Role of the General Agreement on Trade in
Services”
3.1 Dimofte, Claudiu V., Johny K. Johansson, and Ilkka A. Ronkainen,
“Cognitive and Affective Reactions of U.S. Consumers to Global
Brands”

5.4 Kotabe, Masaaki and Crystal X. Jiang, “Three Dimensional: The

Markets of Japan, Korea, and China are Far from Homogeneous”

5.5 Kotabe, Masaaki, Srini S. Srinivasan, and Preet S. Aulakh,

“Multinationality and Firm Performance: The Moderating Role of
R&D and Marketing Capabilities”

Chapter 9: Making Money

3.4 Clark, Terry, Masaaki Kotabe, and Dan Rajaratnam, “Exchange
Rate Pass-Through and International Pricing Strategy: A
Conceptual Framework and Research Propositions”
4.2 Kotabe, Masaaki, Michael J. Mol, and Sonia Ketkar, “An
Evolutionary Stage Model of Outsourcing and Competence
Destruction: A Triad Comparison of the Consumer Electronics
Industry”

Chapter 10: Discovering and Using Trends in International Business

1.6 Czinkota, Michael R. and Ilkka A. Ronkainen, “Trends and
Indications in International Business: Topics for Future Research”
About the Editors

Michael R. Czinkota
Michael R. Czinkota presents international business and marketing issues
at the Graduate School and the Robert Emmett McDonough School of
Business at Georgetown University and the Birmingham Business School
in the United Kingdom. He has held professorial appointments at
universities in Asia, Australia, Europe, and the Americas.
Dr. Czinkota served in the U.S. government as Deputy Assistant
Secretary of Commerce. He also served as head of the U.S. Delegation
to the OECD Industry Committee in Pars and as senior advisor for
Export Controls.
His background includes ten years of private-sector business
experience as a partner in a fur trading firm and in an advertising agency.
His research has been supported by the U.S. government, the National
Science Foundation, the Organization of American States, and the
American Management Association. He was listed as one of the three
most published contributors to international business research in the
world by the Journal of International Business Studies and has written a
number of books.
Dr. Czinkota was born and raised in Germany and educated in
Austria, Scotland, Spain, and the United States. He studied law and
business administration at the University of Erlangen-Nürnberg and
was awarded a two-year Fulbright Scholarship. He holds an MBA in
international business and a Ph.D. in logistics from the Ohio State
University.
 About the Editors xv

Masaaki Kotabe
Masaaki Kotabe holds the Washburn Chair Professorship in International
Business and Marketing, and is Director of Research at the Institute of
Global Management Studies at the Fox School of Business at Temple
University. Prior to joining Temple University in 1998, he was
Ambassador Edward Clark Centennial Endowed Fellow and Professor of
Marketing and International Business at the University of Texas at
Austin. Dr. Kotabe also served as the Vice President of the Academy of
International Business in the 1997–1998 term. He received his Ph.D. in
Marketing and International Business at Michigan State University.
Dr. Kotabe teaches international marketing, global sourcing strategy
(R&D, manufacturing, and marketing interfaces), and Asian business
practices at the undergraduate and MBA levels and theories of
international business at the Ph.D. level. He has lectured widely at
various business schools around the world, including Austria, Germany,
Finland, Norway, Sweden, Brazil, Colombia, Mexico, China, Japan,
Korea, Indonesia, and Turkey. For his research, he has worked closely
with leading companies such as AT&T, Kohler, NEC, Nissan, Philips,
Sony, and Ito-Yokado (parent of 7-Eleven stores), and served as advisor
to the United Nations’ and World Trade Organization’s Executive Forum
on National Export Strategies.
Dr. Kotabe has written many scholarly publications. He serves as the
Editor of the Journal of International Management, and also has served
on the editorial boards of the Journal of Marketing, the Journal of
International Business Studies, the Journal of International Marketing,
the Journal of World Business, the Journal of the Academy of Marketing
Science, Advances in International Management, the Journal of Business
Research, and the Thunderbird International Business Review, among
others. He also serves as an Advisor to the Institute of Industrial Policy
Studies (IPS) National Competitiveness Report

Ilkka A. Ronkainen
Ilkka A. Ronkainen is a member of the faculty of marketing and
international business at the School of Business at Georgetown
University. He has received the undergraduate teaching and research
awards twice, and in 2001 and 2008, the International Executive MBA
program at Georgetown recognized him as the Outstanding Professor of
xvi About the Editors

the Year. He is the founder and director of the MSB’s summer Hong
Kong program. He has been a member of the Georgetown University
Faculty Senate since 1992.
Dr. Ronkainen serves as docent of international marketing at the
Helsinki School of Economics. He was visiting professor at HSE during
the 1988–1997 and 1991–1992 academic years and continues to teach
in its Executive MBA, International MBA, and International BBA
programs. He is co-author of two key college texts, International
Marketing, 9th edition (Cengage) and International Business, 8th
edition, Wiley.
Dr. Ronkainen holds a Ph.D. and a Master’s degree from the
University of South Carolina as well as an M.S. (Economics) degree from
the Helsinki School of Economics.
Section 1 1
2
3
4
5
Role of Research in 6
7
International Marketing 8
9
10
1
2
3
4
5
6
7
8
9
20
1
2
3
4
5
6
7
8
9
30
1
2
3
4
5
6
7x
Chapter 1.1 1
2
3
4
5
An International 6
7
Marketing Manifesto 8
9
Michael R. Czinkota and Ilkka 10
A. Ronkainen 1
2
3
4
5
INTERNATIONAL MARKETING WORKS 6
7
Today might be called the triumph of international marketing. There 8
seems finally to be proof that planned economies are less efficient than 9
market economies. Governments all over the world are encouraging 20
market-based activities. The abolishment of state monopolies, the priva- 1
tization of state-owned companies, the opening of national economies 2
toward the world market, and the ongoing introduction and enforcement 3
of rules and laws to ensure competitive market conditions are being 4
witnessed. 5
As a change agent, international marketing has brought important 6
benefits to nation-states, firms and their employees, and customers. 7
During the past 30 years, the value of global trade has risen from $200 8
billion to more than $7.6 trillion (World Trade Organization 2002). The 9
growth rate of marketing between countries has consistently exceeded 30
average domestic growth rates (International Monetary Fund 2000). The 1
fastest globalizing nations have enjoyed rates of economic growth up to 2
50% higher than those that have integrated into the world economy 3
more slowly (Global Business Policy Council 2000). Linked to this 4
growth, these same countries have also achieved relatively greater gains 5
of political freedom, greater increases in life expectancy, higher literacy 6
rates, and better overall standards of living. 7x
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