GB Review – Chapters 1 - 4

Ch. 1
Vocabulary: International business, global business, MNE, FDI, emerging economies (markets), reverse innovation,
GDP, GNI, PPP, expatriate manager

focus on emerging economies, BRIC, Triad, Global Economic Pyramid

one fundamental question and two core perspectives in the study of global business. Unified framework for Global
Business

First core perspectives: institution based view (formal vs. informal institutions). What are the formal institutions?
Informal institutions?) and Second core perspective: Resource based view (include liability of foreignness)

identify three ways of understanding what globalization is: new force vs. historical evolution vs pendulum view

Semiglobalization

Ch. 2
- Explain the concept of institutions and their key role in reducing uncertainty
- Dimensions of institutions: Formal vs Informal; Regulatory, normative, and cognitive pillars
- Norms and values
- Be able to apply knowledge of formal and informal institutions to example scenarios

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- What is Transparency International?
- Transaction costs, opportunism, transition economies

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- two core propositions underpinning an institution-based view of global business
- political systems: basic differences between democracy and totalitarianism, plus the four versions of

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totalitarianism; political risk
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- legal systems: differences in civil law, common law, and theocratic law systems
ou urc
- importance of property rights and intellectual property (IP) rights, plus the three types of IP; piracy

- economic differences: market economy, command economy, and mixed economy

- State-owned enterprise (SOE), moral hazard
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- private ownership vs. state ownership

aC s
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Ch. 3
- Vocabulary: cross cultural literacy, informal institution, ethnocentrism, lingua franca
- define what culture is and articulate its four main manifestations:
o language
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o religion
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o social structure, social stratification, and social mobility

o education
- how cultures systematically differ from each other. Three ways to understand differences:
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o context (high vs. low)

o clusters – Samuel Huntington
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o dimensions - Hofstede’s five dimensions; situations where a specific dimension applies; critiques of Hofstede’s
research
- the importance of ethics, codes of conduct, and ways to combat corruption (FCPA, Transparency Int’l)
- managing ethics overseas: ethical relativism, ethical imperialism;
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- strategic responses when firms deal with ethical challenges

- Three middle of the road approaches
- Leading debates concerning cultures, ethics, and norms
o Western Values vs. Eastern Values
o Cultural Convergence vs. Divergence – “crossvergence”

o Opportunism and Individualism / Opportunism and Collectivism – In-group vs. Out-group

Ch. 4: Leveraging Resources and Capabilities

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 GB Review – Chapters 1 - 4
Resource-based view
Understanding resources and capabilities; tangible & intangible resources and capabilities
vocabulary: value chain, benchmarking, commoditization
Configuring business activity and location (domestic or foreign)
o Captive sourcing/FDI
o Offshoring
o Onshoring
o Outsourcing
VRIO Framework: valuable, rare, inimitable (causal ambiguity), exploited by the organization
Burberry case: In Focus 4.2
Offshoring versus not offshoring (Evolution / progress of offshoring)
o OEM
o ODM
o OBM

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