Cases in the Environment of Business – International Perspectives
Volume 18, Number 4 Article by Tillai Rajan A December, 2006
Cases in the Environment of Business – International Perspectives : By David W Conklin, 2006, Sage Publications, pp 605, Price: $59.95. :
Businesses are no longer bound by national boundaries. Whether one talks about the booming software and BPO industries, the outsourced manufacturing to China, or entry into new markets in Asia by Fortune 500 companies, businesses are constantly looking beyond national boundaries. Advancements in telecommunication and information technologies, market maturity in developing countries in Asia and Latin America, and innovations in business practices have made the vision of the global marketplace a reality. Under these circumstances, it is imperative that business managers take advantage of the forces of globalisation rather than being threatened by them. The business environment largely includes the industry structure, macroeconomic forces, political forces, societal forces and technological forces. Understanding the international context in each of the above dimensions, therefore, assumes importance.
This book is a part of the Ivey Casebook Series that draw from the Ivey Business School’s case collection, one of the world’s largest collections of decision-oriented, field-based business cases. Through this series, the editors have provided access to a wide range of contemporary case studies in a single volume.
The book contains 35 case studies, 2 subject notes, and 1 simulated discussion. These have been divided into six categories with each category forming a separate chapter. Following the short introductory chapter to the text that suggests the set of forces that play a predominant role in the decisions of each case, the five chapters focus on the following themes: industry structure, macroeconomic forces, political forces, societal forces, and technological forces. The sixth chapter provides integrative cases that build on the frameworks and perspectives developed in the earlier chapters. The case studies in the integrative chapter largely focus on the emerging economies – General Motors in China, Intel’s site selection decision in Latin America, and Acer Group’s China Manufacturing decision. Each chapter begins with a short introduction that provides an outline of the topic, points to relevant additional reading for those interested, and sets the context of the cases in the respective chapters.
The highlight of the book is its diversity and breadth. The cases are chosen from a variety of industries such as airlines, theme parks, retail, telecom, oil and gas, utilities, automobiles and manufacturing, located in various countries including Korea, Hungary, Singapore, the US, Argentina, China, Brazil, etc. The focus of managerial decision making is also varied. Global expansion strategy, new business entry, global branding, business ethics, and privatisation are some of the issues that have been presented in the cases.
Chapter 1 focuses on the industry structure and the microeconomic forces that influence managerial decisions and business profitability. Several conceptual frameworks, such as Porter’s ‘five forces model’ and ‘diamond framework’, the value chain analysis and the creative web concept, exist to analyse the industry structure. Industry structures differ between countries. For example, while the retail industry is a competitive industry, it is not open to FDI in India. This restricts the options for global retailers like Wal-Mart to operate in India. This chapter presents cases that capture the essence of local conditions as well as the challenges involved in developing a global strategy. Of the seven cases, three are focused on understanding the local conditions (Samsung in Korea, PharmaPlus in Hungary, and Singapore Airlines in South East Asia) while the remaining deal with the global strategies of Swatch, Whirlpool Corporation, Wal-Mart and Stella Artois. Chapter 2 highlights through four cases the importance of understanding and managing macroeconomic risks. Macroeconomic forces such as inflation, exchange rates, unemployment, business cycles, and the impact of monetary and fiscal policies are beyond the control of individual businesses and affect the industry as a whole. However, businesses must be prepared to deal with their adverse effects whenever they occur. For example, the Indian software industry would have to recognise and develop strategies to mitigate the possible appreciation of the rupee.
Even in the open market era of today, governments play an important role in the business environment by setting the rules of the game in terms of industry policy and regulation. Chapter 3 stresses the importance of a relationship with the government through eight case studies on companies such as the Mekong Corporation, Citigroup, Dell, Enron, and Bombardier versus Embraer. The recent merger of two pharmaceutical giants, Sanofi-Synthelabo and Aventis, also provides a good example of how governments play an important role in business. Among the above, the Lucent and Enron cases are set in India, and the Citigroup case is set in China, providing the reader an opportunity to evaluate the liberalisation reforms in these two large countries. Chapter 4 has six cases on business responses to societal forces. Businesses have evolved from responding to just the shareholders’ interests to those of a broader set of stakeholders. The corporate social responsibility statements issued by large corporations corroborate this. The recent proliferation of civil society organisations has also increased the focus on the social responsibility of businesses. However, how different countries view areas such as ethics, values, cultural behaviours, environmental regulations and labour standards varies significantly.
With technology playing a ubiquitous part in managerial decision making today, with implications for organisation structure, relationships and competitiveness, it becomes important to understand investment decisions in the context of technological changes. Advances in telecom, information and computing technology has led to the mainstream emergence of e-business. Chapter 5 has five cases that deal on the above issues in the context of technological change. While the individual case studies in the book are interesting, some of them seem to be force fitted to the theme under which they have been included. For example, Chapter 6, which contains only three cases, could have been included in earlier chapters. The two subject notes on currency risk management and global warming in the Kyoto protocol also do not resonate well with the rest of the content.
Businesses operate in a complex environment, which is characterised by a network of different factors. By presenting the case studies on the five key dimensions that affect businesses, this book attempts to help readers sharpen their managerial decision making abilities around these dimensions. There have been several compilations of case studies on strategic management. The key differentiating features of this book are the holistic perspective that it provides on the business environment and the different country contexts that it presents. While not many of these case studies seem suitable for using it in a 75-90 minute graduate business class to highlight managerial decision making, they would form good supplementary reading to course material, providing the international perspective on the business environment.
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