International Management

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International Management
Culture, Strategy, and Behavior
Eighth Edition

Fred Luthans University of Nebraska–Lincoln Jonathan P. Doh Villanova University

INTERNATIONAL MANAGEMENT: CULTURE, STRATEGY, AND BEHAVIOR, EIGHTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on recycled, acid-free paper containing 10% postconsumer waste. 1 2 3 4 5 6 7 8 9 0 QDB/QDB 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-811257-7 MHID 0-07-811257-5 Vice President & Editor-in-Chief: Brent Gordon Vice President, EDP/Central Publishing Services: Kimberly Meriwether-David Editorial Director: Paul Ducham Managing Developmental Editor: Laura Hurst Spell Developmental Editor: Jane Beck Associate Marketing Manager: Jaime Halteman Project Manager: Erin Melloy Buyer: Kara Kudronowicz Design Coordinator: Margarite Reynolds Cover Designer: Studio Montage, St. Louis, Missouri Cover Images: Top to bottom, © Mark Downey/Getty Images; Jacobs Stock Photography/Getty Images; © Goodshoot/PunchStock Media Project Manager: Balaji Sundararaman Compositor: Aptara®, Inc. Typeface: 10/12 Times Roman Printer: Quad/Graphics All credits appearing on page or at the end of the book are considered to be an extension of the copyright page. Library of Congress Cataloging-in-Publication Data Luthans, Fred. International management : culture, strategy, and behavior / Fred Luthans, Jonathan P. Doh.—8th ed. p. cm. Rev. ed. of: International management / Richard M. Hodgetts, Fred Luthans, Jonathan Doh. 6th ed. 2006. Includes bibliographical references and index. ISBN-13: 978-0-07-811257-7 ISBN-10: 0-07-811257-5 1. International business enterprises—Management. 2. International business enterprises—Management—Case studies. I. Doh, Jonathan P. II. Hodgetts, Richard M. International management. III. Title. HD62.4.H63 2012 658'.049—dc22 2011002070

www.mhhe.com

Dedicated in Memory of

Richard M. Hodgetts A Pioneer in International Management Education

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Preface
C
hanges in the global business environment continue unabated. The global financial crisis and economic recession have challenged some assumptions about globalization and economic integration, but they have also underscored the interconnected nature of global economies. Most countries and regions around the world are inextricably linked, yet profound differences in institutional and cultural environments persist. The challenges for international management reflect this dynamism and the increasing unpredictability of global economic and political events. Continued growth of the emerging markets is reshaping the global balance of economic power. Many emerging markets continued to experience growth during a period in which developed countries saw their economies stagnate or decline. The global political environment remains volatile and uncertain, with ongoing conflicts in the Middle East and Africa and continuing tensions in Iran, North Korea, Iraq, and Afghanistan, especially as the U.S. role in these latter two countries evolves. On the economic front, failure to conclude important trade agreements, including the so-called “Development” Round of multilateral trade negotiations under the World Trade Organization, and the lagging support for some bilateral trade...
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