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the Academy of International Business, an accolade achieved by only the
elite international business scholars. Dr. Hult was also selected in 2016 as
the Academy of Marketing Science/CUTCO-Vector Distinguished
Marketing Educator.
He regularly speaks at high profile events (e.g., European Commission,
Swedish Entrepreneurship Forum, United Nation's Conference on Trade
and Development, U.S. Department of Education, World Investment
Forum) and publishes influential op-ed articles (e.g., Time, Fortune,
Fortune, World Economic Forum, The Conversation). Tomas has
developed a large clientele of the world’s top corporations (e.g., ABB,
Albertsons, Avon, BG, Bechtel, Bosch, BP, Defense Logistics Agency,
Domino’s, FedEx, Ford, FreshDirect, General Motors, GroceryGateway,
HSBC, IBM, Michigan Economic Development Corporation, Masco,
NASA, Raytheon, Shell, Siemens, State Farm, Steelcase, Tech Data, and
Xerox).
In addition to co-authoring with Charles W. L. Hill the market-share
leading textbooks in international business (Global Business Today, now
in its 11th edition, and International Business, now in its 12th edition), Dr.
Hult has written several popular business trade books (e.g., Second Shift;
Global Supply Chain Management; Extending the Supply Chain; and Total
Global Strategy).
Tennis, golf, and traveling are his favorite recreational activities.

8
 Page vi

brief contents
PART ONE Introduction and Overview

Chapter One Globalization 2

PART TWO National Differences

Chapter Two National Differences in Political, Economic, and

Legal Systems 36

Chapter Three National Differences in Economic Development 58

Chapter Four Differences in Culture 86

Chapter Five Ethics, Corporate Social Responsibility, and

Sustainability 122

PART THREE The Global Trade and Investment Environment

Chapter Six International Trade Theory 150

Chapter Seven Government Policy and International Trade 184

Chapter Eight Foreign Direct Investment 212

Chapter Nine Regional Economic Integration 240

PART FOUR The Global Monetary System

Chapter Ten The Foreign Exchange Market 270

Chapter Eleven The International Monetary System 294

PART FIVE The Strategy of International Business

Chapter Twelve The Strategy of International Business 320

9
Chapter Thirteen Entering Developed and Emerging Markets
356

PART SIX International Business Functions

Chapter Fourteen Exporting, Importing, and Countertrade 382

Chapter Fifteen Global Production and Supply Chain

Management 408

Chapter Sixteen Global Marketing and Business Analytics 438

Chapter Seventeen Global Human Resource Management 474

GLOSSARY 503

NAME INDEX 511

SUBJECT INDEX 513

ACRONYMS 531

COUNTRIES AND THEIR CAPITALS 532

10
 Page vii

the proven choice

for international
business
Current. Application Rich, Relevant.
Accessible and Student Focused.
Global Business Today (GBT), the worldwide market leader among
international business products, has set a new standard for international
business teaching. We have focused on creating resources that

Are comprehensive, state of the art, and timely.

Are theoretically sound and practically relevant.
Focus on applications of international business concepts.
Tightly integrate the chapter topics throughout.
Are fully integrated with results-driven technology.
Take full and integrative advantage of globalEDGE.msu.edu—the
Google-ranked #1 web resource for “international business
resources.”
International Business (now in its 12th edition, 2019), also co-authored
by Charles W. L. Hill and G. Tomas M. Hult, is a more comprehensive
and case-oriented version that lends itself to the core course in
international business for those that want a deeper focus on the global
monetary system, structure of international business, international
accounting, and international finance.
GBT has always endeavored to be current, relevant, application rich,
accessible, and student-focused. Our goal has always been to cover macro
and micro issues equally and in a relevant, practical, accessible, and

11
student-focused approach. We believe that anything short of such a
breadth and depth of coverage is a serious deficiency. Many of the
students in these international business courses will soon be working in
global businesses, and they will be expected to understand the implications
of international business for their organization’s strategy, structure, and
functions in the context of the global marketplace. We are proud and
delighted to have put together this international business learning
experience for the leaders of tomorrow.
Over the years, and now through 11 editions, Dr. Charles Hill has
worked hard to adhere to these goals. Since the ninth edition, Charles’ co-
author, Dr. Tomas Hult, has followed the same approach. In deciding what
changes to make, we have been guided not only by our own reading,
teaching, and research but also by the invaluable feedback we received
from professors and students around the world, from reviewers, and from
the editorial staff at McGraw-Hill Education. Our thanks go out to all of
them.

Comprehensive and Up-to-Date

To be relevant and comprehensive, an international business package must

Explain how and why the world’s cultures, countries, and regions
differ.
Cover economics and politics of international trade and investment.
Tackle international issues related to ethics, corporate social
responsibility, and sustainability.
Explain the functions and form of the global monetary system.
Examine the strategies and structures of international businesses.
Assess the special roles of the various functions of an international
business.

Relevance and comprehensiveness also require coverage of the major

theories. It has always been a goal to incorporate the insights gleaned from
recent academic scholarship into the book. Consistent with this Page viii
goal, insights from the following research, as a sample of
theoretical streams used in the book, have been incorporated:

New trade theory and strategic trade policy.

The work of Nobel Prize–winning economist Amartya Sen on

12
 economic development.
Samuel Huntington’s influential thesis on the “clash of civilizations.”
Growth theory of economic development championed by Paul Romer
and Gene Grossman.
Empirical work by Jeffrey Sachs and others on the relationship
between international trade and economic growth.
Michael Porter’s theory of the competitive advantage of nations.
Robert Reich’s work on national competitive advantage.
The work of Nobel Prize–winner Douglass North and others on
national institutional structures and the protection of property rights.
The market imperfections approach to foreign direct investment that
has grown out of Ronald Coase and Oliver Williamson’s work on
transaction cost economics.
Bartlett and Ghoshal’s research on the transnational corporation.
The writings of C. K. Prahalad and Gary Hamel on core
competencies, global competition, and global strategic alliances.
Insights for international business strategy that can be derived from
the resource-based view of the firm and complementary theories.
Paul Samuelson’s critique of free trade theory.
Conceptual and empirical work on global supply chain management
—logistics, purchasing (sourcing), operations, and marketing
channels.

In addition to including leading-edge theory, in light of the fast-changing

nature of the international business environment, we have made every
effort to ensure that this product is as up-to-date as possible. A significant
amount has happened in the world since we began revisions of this book.
By 2016, almost $4 trillion per day were flowing across national borders.
The size of such flows fueled concern about the ability of short-term
speculative shifts in global capital markets to destabilize the world
economy.
The world continued to become more global. As you can see in Chapter
1 on Globalization, trade across country borders has almost exponentially
escalated in the last few years. Several Asian economies, most notably
China and India, continued to grow their economies at a rapid rate. New
multinationals continued to emerge from developing nations in addition to
the world’s established industrial powers.
Increasingly, the globalization of the world economy affected a wide
range of firms of all sizes, from the very large to the very small. We take

13
great pride in covering international business for small- and medium-sized
enterprises (SMEs), as well as larger multinational corporations. We also
take great pride in covering firms from all around the world. Some sixty
SMEs and multinational corporations from all six core continents are
covered in the chapters’ opening cases, closing cases, and/or Management
Focus boxes.
And unfortunately, global terrorism and the attendant geopolitical risks
keep emerging in various places globally, many new and inconceivable
just a decade ago. These represent a threat to global economic integration
and activity. Plus, with the United Kingdom opting to leave the European
Union (Brexit), which has implications past 2019, the election of President
Donald Trump in the United States (who espouses views on international
trade that break with the long established consensus), and several elections
around the world, the globe—in many ways—has paid more attention to
nationalistic issues over trade. These topics and many more are integrated
into this text for maximum learning opportunities.

WHAT’S NEW IN THE 11TH EDITION

The success of the first ten editions of Global Business Today (and its
longer, more in-depth textbook option and companion, International
Business, now in the 12th edition) was based in part on the incorporation of
leading-edge research into the text, the use of the up-to-date examples and
statistics to illustrate global trends and enterprise strategy, and the
discussion of current events within the context of the appropriate theory.
Building on these strengths, our goals for the 11th edition have focused on
the following:
1. Incorporate new insights from scholarly research.
2. Make sure the content covers all appropriate issues. Page ix
3. Make sure the text is up-to-date with current events,
statistics, and examples.
4. Add new and insightful opening and closing cases in most chapters.
5. Incorporate value-added globalEDGETM features in every chapter.
6. Connect every chapter to a focus on managerial implications.

As part of the overall revision process, changes have been made to every
chapter in the book. All statistics have been updated to incorporate the

14
most recently available data. As before, we provide the only textbook in
International Business that ensures that all material is up-to-date on
virtually a daily basis. The copyright for the book is 2020, but you are
likely using the text somewhere between the years 2019 to 2022. We keep
the textbook updated to each semester you use the text in your course! We
do this by integrating Connect and globalEDGETM features in every
chapter.
Specifically, combining McGraw Hill’s Connect platform with the
Google number-one-ranked globaledge.msu.edu site (for “international
business resources”), we can add up-to-date materials and exercises to
each chapter to add value to the material and provide relevant data and
information. This keeps chapter material constantly and dynamically
updated for teachers who want to infuse Connect and globalEDGETM
material into the chapter topics, and it keeps students abreast of current
developments in international business.
In addition to updating all statistics, figures, and maps to incorporate
most recently published data, a chapter-by-chapter selection of changes for
the 10th edition include the following:

CHAPTER 1: GLOBALIZATION
New opening case: GM and Its Chevrolet Supercar, The Corvette
ZR1
New materials on international trade, trade agreements, world
production, and world population
Explanations of differences in cross-border trade and in-country
production; the value of trade agreements; and population
implications related to resource constraints
Revised Management Focus: Boeing’s Global Production System
Revised Management Focus: Wanda Group
New closing case: Globalization of BMW, Rolls-Royce, and the
MINI

CHAPTER 2: NATIONAL DIFFERENCES

IN POLITICAL, ECONOMIC, AND
LEGAL SYSTEMS

15
 New opening case: Transformation in Saudi Arabia
New Country Focus: Putin’s Russia
Updated data on corruption
Updated Country Focus: Corruption in Brazil
New closing case: The Decline of Zimbabwe

CHAPTER 3: NATIONAL DIFFERENCES

IN ECONOMIC DEVELOPMENT
New opening case: Brazil’s Struggling Economy
Updated statistics and discussion in section Differences in Economic
Development
Updated Country Focus: Property Rights in China
Updated statistics and discussion in section States in Transition
New closing case: Economic Development in Bangladesh

CHAPTER 4: DIFFERENCES IN
CULTURE
New opening case: China, Hong Kong, Macau, and Taiwan
Deeper treatment of culture, values, and norms
Revised the foundation that most religions are now pro-business
Updated the Hofstede culture framework with new research
New Country Focus: Determining Your Social Class by Birth
New Country Focus: Turkey, Its Religion, and Politics
New Management Focus: China and Its Guanxi
New closing case: The Swatch Group and Cultural Uniqueness
Page x
CHAPTER 5: ETHICS, CORPORATE
SOCIAL RESPONSIBILITY, AND
SUSTAINABILITY
New opening case: Sustainability Initiatives at Natura, the Bodyshop,
and Aesop
Deeper focus on corporate social responsibility and sustainability at
the country, company, and customer levels
New Management Focus: “Emissionsgate” at Volkswagen

16
 New closing case: Woolworths’s Corporate Responsibility Strategy

CHAPTER 6: INTERNATIONAL TRADE

THEORY
New opening case: “Trade Wars Are Good and Easy to Win”
Discussion of President Donald Trump’s approach to international
trade
Updated Country Focus: Is China Manipulating Its Currency in
Pursuit of a Neo-Mercantilist Policy?
New closing case: The Trans Pacific Partnership (TPP) Is Dead; Long
Live the CPTPP!
Updated Appendix: International Trade and the Balance of Payments
with new data and revised discussion

CHAPTER 7: GOVERNMENT POLICY

AND INTERNATIONAL TRADE
New opening case: U.S. and South Korea Strike a Revised Trade
Deal
New section: The World Trading System Under Threat, which
discusses the potential ramifications of Brexit and the trade policies
of the Trump administration
New Closing Case: Boeing and Airbus Are in a Dogfight over Illegal
Subsidies

CHAPTER 8: FOREIGN DIRECT

INVESTMENT
New opening case: Geely Goes Global
Updated statistics and discussion in the section Foreign Direct
Investment in the World Economy
New Management Focus: Burberry Shifts Its Entry Strategy in Japan
New closing case: FDI in the Indian Retail Sector

CHAPTER 9: REGIONAL ECONOMIC

17
INTEGRATIONS
New opening case: NAFTA 2.0?
Extended discussion of Brexit and its ramifications
New section The Future of NAFTA, which discusses the
renegotiation of NAFTA by the Trump administration
New closing case: Free Trade in Africa: TFTA and CFTA

CHAPTER 10: THE FOREIGN

EXCHANGE MARKET
New opening case: The Fluctuating Value of the Yuan Gives Chinese
Business a Lesson in Foreign Exchange Risk
New closing case: The Mexican Peso, the Japanese Yen, and
Pokemon Go

CHAPTER 11: THE INTERNATIONAL

MONETARY SYSTEM
New opening case: Can Dollarization Save Venezuela?
Updated statistics discussion of floating exchange rates through to
early 2018
New Country Focus: China’s Exchange Rate Regime
New Closing Case: Egypt and the IMF

CHAPTER 12: THE STRATEGY OF

INTERNATIONAL BUSINESS
New opening case: Red Bull, a Leader in International Strategy
Deeper discussion of the rise of regionalism
Integration of global strategy thoughts
New Management Focus: IKEA’s Global Strategy
New Management Focus: Unilever’s Global Organization
New closing case: Sony Corporation: An International Innovator?
Page xi
CHAPTER 13: ENTERING
18
DEVELOPED AND EMERGING
MARKETS
New opening case: IKEA Entering India, Finally!
New scope of the chapter to include entering developed and emerging
markets, as well as aspects of less developed markets
New closing case: Cutco Corporation—Sharpening Your Market
Entry

CHAPTER 14: EXPORTING,

IMPORTING, AND COUNTERTRADE
New opening case: Spotify and SoundCloud
New material on company readiness to export and import material
New and revised material on globalEDGETM Diagnostic Tools, with
a focus on Company Readiness to Export (CORE)
New Management Focus: Embraer and Brazilian Importing
New Management Focus: Exporting Desserts by a Hispanic
Entrepreneur
New Management Focus: Two Men and a Truck
New closing case: Tata Motors and Exporting

CHAPTER 15: GLOBAL PRODUCTION

AND SUPPLY CHAIN MANAGEMENT
New opening case: Procter & Gamble Remakes Its Global Supply
Chains
Revised and new material on global logistics, global purchasing, and
global operations
Revised sections Strategic Roles for Production Facilities, Make-or-
Buy Decisions, and Global Supply Chain Functions
New material in the sections Role of Information Technology,
Coordination in Global Supply Chains, and Interorganizational
Relationships
New Management Focus: IKEA Production in China
New Management Focus: Amazon’s Global Supply Chains
New closing case: Alibaba and Global Supply Chains

19
CHAPTER 16: GLOBAL MARKETING
AND BUSINESS ANALYTICS
New opening case: Fake News and Alternative Facts
Revised section Globalization of Markets and Brands
New section on Business Analytics; reordered with International
Marketing Research to provide a better flow of the chapter material
Revised section International Marketing Research
Inclusion of more social media topics throughout
Revised positioning of the Product Development and R&D section
New Management Focus: Global Branding, Marvel Studios, and Walt
Disney Company
New Management Focus: Burberry’s Social Media Marketing
New closing case: ACSI and Satisfying Global Customers

CHAPTER 17: GLOBAL HUMAN

RESOURCE MANAGEMENT
New opening case: Global Mobility at Shell
New section: Building a Diverse Global Workforce, which looks at
the benefits, challenges, and policies for building a diverse global
workforce in a multinational enterprise
New Closing Case: Sodexo: Building a Diverse Global Workforce

Beyond Uncritical Presentation and

Shallow Explanation
Many issues in international business are complex and thus necessitate
considerations of pros and cons. To demonstrate this to students, we have
adopted a critical approach that presents the arguments for and against
economic theories, government policies, business strategies, organizational
structures, and so on.
Related to this, we have attempted to explain the complexities of the
many theories and phenomena unique to international business so the
student might fully comprehend the statements of a theory or the reasons a

20
phenomenon is the way it is. We believe that these theories and Page xii
phenomena are explained in more depth in this work than they
are in the competition, which seem to use the rationale that a shallow
explanation is little better than no explanation. In international business, a
little knowledge is indeed a dangerous thing.

Practical and Rich Applications

We have always believed that it is important to show students how the
material covered in the text is relevant to the actual practice of
international business. This is explicit in the later chapters of the book,
which focus on the practice of international business, but it is not always
obvious in the first half of the book, which considers macro topics.
Accordingly, at the end of each chapter in Parts Two, Three, and Four—
where the focus is on the environment of international business, as
opposed to particular firms—there is a section titled Focus on Managerial
Implications. In this section, the managerial implications of the material
discussed in the chapter are clearly explained. Additionally, most chapters
have at least one Management Focus box. The purpose of these boxes is
to illustrate the relevance of chapter material for the practice of
international business.
A Did You Know? feature in each chapter challenges students to view
the world around them through the lens of international business (e.g., Did
you know that sugar prices in the United States are much higher than sugar
prices in the rest of the world?). The authors recorded short videos
explaining the phenomenon.
In addition, each chapter begins with an opening case that sets the stage
for the chapter and ends with a closing case that illustrates the relevance of
chapter material for the practice of international business.
To help students go a step further in expanding their application-level
understanding of international business, each chapter incorporates two
globalEDGETM research tasks designed and written by Tomas Hult. The
exercises dovetail with the content just covered.

Integrated Progression of Topics

21
A weakness of many texts is that they lack a tight, integrated flow of
topics from chapter to chapter. This book explains to students in Chapter 1
how the book’s topics are related to each other. Integration has been
achieved by organizing the material so that each chapter builds on the
material of the previous ones in a logical fashion.

PART ONE
Chapter 1 provides an overview of the key issues to be addressed and
explains the plan of the book. Globalization of markets and globalization
of production is the core focus.

PART TWO
Chapters 2 through 4 focus on country differences in political economy
and culture, and Chapter 5 on ethics, corporate social responsibility, and
sustainability issues in international business. Most international business
textbooks place this material at a later point, but we believe it is vital to
discuss national differences first. After all, many of the central issues in
international trade and investment, the global monetary system,
international business strategy and structure, and international business
functions arise out of national differences in political economy and culture.

PART THREE
Chapters 6 through 9 investigate the political economy of global trade and
investment. The purpose of this part is to describe and explain the trade
and investment environment in which international business occurs.

PART FOUR
Chapters 10 and 11 describe and explain the global monetary system,
laying out in detail the monetary framework in which international
business transactions are conducted.

PART FIVE
In Chapters 12 and 13, attention shifts from the environment to the firm. In

22
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