Getting what we wish for: The realities of business education for a global economy

Business schools around the world have embraced globalization and, as a result, attempted to attract international students to their programs. Teaching diverse student groups has many advantages, but is not without its challenges, including cultural differences in educational expectations and student self-efficacy. The goal of this article is to suggest that we can create plans and activities capable of helping Asian students adapt more quickly to the expectations of Western education. We herein describe Rotterdam Business School's experiences in working with a diverse—mainly Asian—population of students, focusing on strategies that may assist them in adapting to the expectations of the global business school classroom.     

Is the multinational firm in danger?: The threat of nationalism

A ground swell of nationalism in foreign countries may mean the end of the multinational firm; steps to accommodate to public sentiment in the host country offer only temporary relief, and the proposed. “supranational” corporation would still be considered an outsider. A new form of international business activity must evolve. One possibility is a management contract, whereby the Western firm supplies management skills and technical knowledge without the equity participation and direct control that have been the essence of traditional foreign investment. This device would remove the principal objection of host countries to direct investment from abroad—foreign ownership of local industry—and the foreign firm would benefit from some revenue—better than eviction.     

Towards a Strategic Model of Global Franchise Expansion

This paper develops the first global index of international franchise expansion that ranks countries according to their attractiveness to US-based franchise firms. A quantitative model combining insights from academic research and business practice generates a ranking of 143 potential expansion target countries according to their risk/opportunity profiles. The rankings suggest that countries with large markets and strong political and legal systems (large European countries, and Canada, Japan, and Australia) are the most attractive for US-based franchisors, while the small, unstable African countries are the least attractive. China (and the other BRIC countries—Brazil, Russia, India) though attractive from a market opportunity perspective, is nevertheless not highly ranked due to their significant risks and large cultural and geographic distances. This study reaffirms the importance of a strategic approach to international franchising decisions, underscores the importance of properly assessing the relative importance of key determinants in internationalization decisions, highlights the importance of a comprehensive and systematic assessment of the various risks in international franchising decisions, shows the usefulness of quantitative modeling in international franchising, and advocates the development of effective risk management methods in order to cope with rapid changes in the global marketplace.     

Issue linkage and issue tie-in in multilateral negotiations

We describe a model of international, multidimensional policy coordination where countries can enter into selective and separate agreements with different partners along different policy dimensions. The model is used to examine the implications of negotiation tie-in — the requirement that agreements must span multiple dimensions of interaction — for the viability of multilateral cooperation when countries are linked by international trade flows and transboundary pollution. We show that, while in some cases negotiation tie-in has either no effect or can make multilateral cooperation more viable, in others a formal tie-in constraint can make an otherwise viable joint multilateral agreement unstable.     

Old problems remain, new ones crop up: Political risk in the 21 century

Despite the fact that most developing countries now generally welcome multinational companies, political risk still represents a huge concern for international business. In fact, multinational companies today probably face a much broader array of risks than during the nationalization wave of the 1960s and 1970s. To substantiate this claim, a theoretical framework is presented herein which outlines the key causal relationships in the political risk landscape. It is explained why a discernible attitude change in the developing and emerging world does not necessarily equal a reduced overall level of political risk. To illustrate the framework and the complexity of the political risk phenomenon, a number of recent case examples are presented from the international bauxite and aluminium industry—an industry whose wide-ranging value chain, international focus, global significance, and natural exposure to risks make it very suitable for analysis. The conceptual discussion and the empirical examples presented in this article suggest that political risk is now surely a highly complex, multidimensional phenomenon. This trait poses major challenges for the global business community, particularly in terms of accurately assessing these risks.     

On the international transmission of technology shocks

Using vector autoregressions on U.S. time series and an aggregate of industrialized countries, we find that technology shocks appreciate the terms of trade and lower the trade balance; they induce an ‘S’-shaped cross-correlation function for both variables (the S-curve). In calibrating a prototypical international business cycle model under complete and incomplete financial markets, we find two distinct sets of parameter values. While both model specifications deliver the S-curve, the underlying transmission mechanism of technology shocks is fundamentally different. Most importantly, only in the incomplete markets economy the terms of trade appreciate and thus amplify the relative wealth effects of technology shocks—as suggested by the evidence.     

The cross-Atlantic tussle over financial data and privacy rights

Banking is an international business; both information and capital flow relatively unimpeded across international borders. Banking institutions’ information stores have increased dramatically with the spread of computers, and these institutions protect data inside their firewalls from outside eyes, and from disaster, through establishing multiple secure data repositories. However, access to banks’ databases is increasingly sought by governments and governance institutions, and restrictions are tightening on moving data across borders. Probably the most prominent example of both trends involves European Union–domiciled cross-border banking business. A key legal reason for resulting issues hinges on differing views of privacy rights: the European Union enshrines privacy as a human right, while the United States empowers rights of free speech over privacy. These differing approaches to privacy rights have caused a cross-Atlantic conflict for global banks. Caught between competing, conflicting regulations, banks’ capacity to move information and to comply with governments’ demands for it have become restricted. This restriction is happening as governments seek increased access to banks’ information for purposes of financial information statecraft—the notion that countries can influence other governments’ policies and actions through data.     

The Role and Value of Global Business Research: Perspective of a Business School Dean

The scope of this article is two-fold. First, it looks at business research in general, in various countries, as a task that the dean wants to have faculty members pursue, to attain goals such as accreditation and ranking with organizations such as the AACSB, Equis, the Financial Times, and US News & World Report. And second, it looks at international business research as part of what business schools produce and what a dean can encourage. As more academics realize the importance of international competition, and also of dealing with people from other cultures and countries, IB research is becoming more acceptable in mainstream publications as well as in specialized international business ones. Key questions discussed here include encouraging, measuring, promoting, and financing international business research.     

Information costs and home bias: an analysis of US holdings of foreign equities

We test extant hypotheses of the home bias in equity holdings using high quality cross-border holdings data and quantitative measures of barriers to international investment. The effects of direct barriers to international investment, when statistically significant, are not economically meaningful. More important are information asymmetries that owe to the poor quality and low credibility of financial information in many countries. While a direct measure of information costs is not available, some foreign firms have reduced these costs by publicly listing their securities in the United States, where investor protection regulations elicit standardized, credible financial information. A proxy for the reduction in information asymmetries—the portion of a country’s market that has a public US listing—is a major determinant of a country’s weight in US investors’ portfolios. Foreign countries whose firms do not alleviate information costs by opting into the US regulatory environment are more severely underweighted in US equity portfolios.     

A new look at ethics in international business

In many countries there are stated rules that gift-giving and solicitation in business practice are unethical and prohibited. However, except for the American FCPA, all the rules and guidelines seem to govern only domestic business practices and there are no clear-cut rules for international business practices in this respect. This study investigates gift-giving and solicitation in international business practice, using the data collected from 111 New Zealand international business firms. The research findings show variable conduct and contradictory attitudes. These findings suggest that, with the variety of ethical standards and levels of morality which exist in different cultures, neither Deontology nor Utilitarianism could be the answer to the dilemma of ethics and pragmatism that faces today's international business managers. Instead, “Culturalism,” as developed in this study, should be the guiding principle to international business ethics.     

Business Cultural Intelligence Quotient: A Five‐Country Study

Cultural intelligence (CI) has often been linked to performance at the individual, team, and firm levels as a key factor in international business success. Using a new measure of CI, the business cultural intelligence quotient (BCIQ), our study provides empirical evidence on several key antecedents of CI using data on business professionals across five diverse countries (Austria, Colombia, Greece, Spain, and the United States). The findings suggest that the most important factors leading to cultural intelligence, in order of importance, are the number of countries that business practitioners have lived in for more than six months, their level of education, and the number of languages spoken. We find that cultural intelligence varies across countries, suggesting that some countries have a higher propensity for cross‐cultural business interactions. By teasing out the common antecedents of BCIQ among professionals, our findings may help with screening and training professionals for international assignments. Future research may examine the environmental (country‐specific) factors associated with a higher propensity for cultural intelligence (such as immigration, cultural diversity, languages spoken, and international trade) to explain the effect of country of origin on cultural intelligence in the professional community. © 2016 Wiley Periodicals, Inc.     

Transforming business education to produce global managers

In recent years, globalization of businesses has occurred faster than the internationalization of business schools—in terms of faculty, students, and curriculum. Indeed, there is now a disconnect between global economic realities and the ability of business schools to produce global managers. This article discusses mission-based strategies for international business education and proposes opportunities that increase global awareness, global understanding, and global competence through student and faculty engagement and development. These changes will advance business schools’ mission of producing global managers.     

Reevaluating the role of trade agreements: Does investment globalization make the WTO obsolete?

International ownership alters the role of multilateral trade institutions by redefining pecuniary externalities among countries. Regardless of the underlying cause - whether foreign direct investment, international portfolio diversification, cross-country mergers, or multinational firms — international ownership can mitigate incentives that lead large countries to set inefficiently high tariffs. At the same time, however, foreign ownership introduces the potential for expropriation by investment-host countries, which can extract rent from foreign owners by manipulating local prices. The basic principle of reciprocity continues to serve as an important guide to efficiency, though its application must account for the pattern of international ownership in addition to traditional measures of market access.     

Why CIBERs matter to the competitiveness of U.S. businesses in the 21 century

Centers for International Business Education and Research (CIBERs)—located at 33 institutions of higher education across the U.S. and administered by the U.S. Department of Education under Title VI of the Higher Education Act—serve as regional and national resource centers for the business community, and as conduits for major initiatives to support and strengthen the international components of curricula in K-12 schools and institutions of higher education. This article argues that CIBERs are well-positioned to not only address current needs, but also drive innovative thinking and leading-edge activities toward longer-term challenges. Herein, exemplary activities from CIBERs serve as examples to support this claim, and Indiana University's CIBER strategic trajectory for the 2010-2014 grant cycle is explored within the context of the current global situation.     

Line,line, everywhere a line: Cultural considerations for waiting-line managers

Given the trend of increasing business globalization, management teams of multinational companies have taken steps to better understand consumers, local business partners, and local governments. Local queueing preferences present managers with additional challenges and opportunities in international markets. The world may be ‘flat,’ but it is foolish to believe that all cultures perceive lines and waiting through the same lens. As discussed herein, perceptions regarding waiting and management of queues vary greatly; therefore, managers should adopt different policies and procedures when managing waiting lines across natural and cultural borders. Considering queue management in a global context offers benefits. Thinking globally—and acting locally—can prioritize and clarify important decisions any waiting-line manager has to make.     

Mergers & acquisitions research: A bibliometric study of top strategy and international business journals, 1980–2010

Mergers and acquisitions (M&As) are important modes through which firms carry out their domestic and international strategies and have been noted as the CEOs favorite strategy. As a significant field of study, M&A-research has accumulated substantial knowledge. This bibliometric study examines the extant strategy and international business literature on M&As. Methodologically, we examined a sample of 334 articles published in sixteen leading management/business journals, during a 31 year period — from 1980 to 2010. The results provide a global perspective of the field, identifying the works that have had the greater impact, the intellectual interconnections among authors and works, the main research traditions, or themes, delved upon on M&A-related research. Structural and longitudinal analyses reveal the changes in the intellectual structure of the field over time. A discussion on the accumulated knowledge and future research avenues concludes this paper.     

A Cross Cultural Analysis of the Geographical Knowledge of U.S., Irish,Israeli, Mexican,and South Korean Business School Students

ABSTRACT

Geographical knowledge about foreign countries is considered to be a significant factor related to the successful marketing of goods and services in international markets-a not insignificant conclusion by experts given the sizable trade deficits run up by the United States in 2000 ($365 billion), 2001 ($346 billion), and 2002 ($435 billion).

Unfortunately, previous research has concluded that U.S. business school students-tomorrow's executives who will make decisions that will impact their firms' international operations-have inadequate levels of international geographical knowledge.

This article compares the geographical knowledge of U.S. business school students to that of business school students in four countries: Ireland, Israel, Mexico, and South Korea. The sub-par performance exhibited by the U.S. students and the impact of six independent variables on global geographical knowledge are used to develop a number of pedagogical conclusions designed to enhance the international geographical knowledge of U.S. business school students and students in foreign business schools and overcome the antipathy toward this subject matter that apparently exists within business schools and their various external constituencies.     

Taking international business education programs and pedagogy to new heights: Fundamental questions for educators and students

As the dynamic global business environment continues to force organizations to be agile and adaptive, international business (IB) education pedagogy is transforming. Building on previous literature describing gaps in IB pedagogy, as well as unaddressed stakeholder needs, we first use our institution—the United States Air Force Academy—as an example of IB program development. In examining our program's evolution, we develop five questions that may provide insight regarding more generalizable IB pedagogy trends. To assess this possible generalizability, we explore questions related to the development of our program using self-reported, publically-available websites of the top full-time MBA programs throughout the United States. Our questions focus on the role of foreign languages, study abroad opportunities, integrative courses, capstone/thesis projects, and faculty development. Our exploration indicates that these five questions are important not only for educators developing future programs, but also for students examining potential IB programs. Additionally, our research examines a sixth question focused on the development of competitive positioning and program differentiation in IB programs. We hope to motivate future inquiry into IB pedagogy, which could inform more effective means of improving IB education.     

International-Domestic Student Differences in Learning: Use of Classroom Response Systems in China Versus in Canada

ABSTRACT

This study compares the impact of audience response systems (clickers) on the learning experience and classroom behavior of Chinese and Canadian students. Based on differences in student learning styles, which are rooted in the differences in national cultures, we predict that clicker technology will result in a more positive learning experience, and have more impact on classroom behavior in Chinese students than in Canadian students. Our survey results show that, consistent with the findings of prior studies, both groups of students report a positive experience and improved classroom behavior with the use of clickers. Chinese students report a more positive learning experience, but no difference in classroom behavior changes than Canadian students. This study extends the research on clickers by considering the impact of cultural background and shows classroom technology such as clickers can potentially help mitigate the cultural barriers in international business education.     

Business resilience: Lessons from government responses to the global COVID-19 crisis

This study explores the survival of firms across countries, and what factors contribute to their ability to withstand large-scale exogenous shocks, focusing on the COVID-19 pandemic. Using corporate default risk as a measure of non-resilience, our empirical results from 97 countries reveal that stringent COVID-19 containment measures created a significant resilience test for businesses worldwide. Further tests suggest that cash holdings, knowledge assets, international sales, and access to foreign capital markets are crucial for global businesses to pull through exogenous shocks. Country-level institutional qualities also play an essential role in shaping business resilience during a crisis. Our study is the first to comprehensively analyze the drivers of business resilience across diverse countries using the COVID-19 outbreak as a major global crisis, providing a nuanced understanding of this topic in international business.