The Global Emerging Market

Transcription

1 The Global Emerging Market Strategic Management and Economics Vladimir Kvint 13 Routledge j j j ^ Taylor & Francis Croup NEW YORK AND LONDON

2 Brief Contents Extended Table of Contents ix List of Illustrations xiv About the Author xx Acknowledgments xxii Keynote Definitions - xxv List of Abbreviations xxvii Introduction: A Path to Strategy xxix 1 A Strategic Evaluation of the Global Marketplace 1 2 The Global Emerging Market 75 3 Ten Modern Global Political, Economic, and Technological Trends Strategic Country Classification of the Global Marketplace The Emerging Global Business Order Global Economic Strategy Strategic Management Systems Investment Strategy for the Global Emerging Market 346 Notes. 412 Bibliography for Reading on Strategy and Economics of the Global Emerging Market 440 Specialized Periodicals on the Global Emerging Market and Business Strategy 443 Index 445

3 Extended Table of Contents Lists of Illustrations xiv About the Author, xx Acknowledgments xxii Keynote Definitions xxv List of Abbreviations xxvii Introduction: A Path to Strategy xxix 1 A Strategic Evaluation of the Global Marketplace 1 Keynote Definition 1 Genesis of the Global Marketplace 1 The World Economy and the Global Marketplace 5 Defining the Global Marketplace 6 Economic Integration in the Global Marketplace 8 Strategic Evaluation of the World Economy and the Global Marketplace 10 Strategic Evaluations of the Basic Economic Factors of the World Economy 18 Study Questions 73 2 The Global Emerging Market 75 Keynote Definitions 75 Preconditions for the Birth of the Global Emerging Market 76 Historical Precedents of the Creation of Emerging Economies 76 Economic and Philosophical Inevitability of the Failure of Dictatorships and Command Economies 76 The Global Emerging Market 78 Major Characteristics of an Emerging-market Country 82 Classification of Emerging-market Countries 84 The Genesis of the Global Emerging Market 88 Growing Input of the Global Emerging Market in the World Economy 88 The Business Perspective 89 Emerging-market Countries' Regional Integration into the Global Marketplace 93 The Current Role of the Global Emerging Market in the World 100 Technological Achievements in the Global Emerging Market 104 National Agendas and Benefits to Society of Emerging-market Countries 104 Role of the Middle Class in Economic Maturation of Emerging-market Countries 108

4 x Extended Table of Contents The Future of the Global Emerging Market in the Global Marketplace 109 Study Questions Ten Modern Global Political, Economic, and Technological Trends 111 Globalization and Democratization as Objective Trends 111 System of the Ten Global Trends 113 The Roots of the Global Trend of Political Disintegration 114 Regionalization as a Global Trend 118 The Trend of Regional Economic Integration 121 The Trend of Privatization 124 Mass Privatization 127 Cash Privatization 127 The Role of Initial Public Offerings in Privatization 130 The Trend of Internationalization 131 Strategic Reasons to Do Business Internationally 131 Deficit of Investment as a Consequence of Internationalization 139 The Economic Impact of the Global Trend of Terrorism and Extremism 139 The Roots of Terrorism and Extremism 139 Defining Terrorism 142 Responses to Terrorism and Extremism 143 The Impact of Terrorism on the Global Marketplace 144 Terrorism and the Global Emerging Market 148 Technological Trends 149 Study Questions Strategic Country Classification of the Global Marketplace 160 The Strategic Necessity for Country Classification Systems 160 The Flawed Country Classifictions of Major Multilateral Institutions 161 The World Bank Group Approach 162 The International Monetary Fund Approach 165 The World Trade Organization Approach 171 The United Nations Approach 171 Observations of Multilateral Institutions' Country Classification Systems 175 Alternatives to the Classifications Systems of Multilateral Institutions 175 The Strategic Approach to Country Classification 177 Indexation of Countries by Industrial Structure 178 Indexation of National Economies' Technological Maturity 183 Evaluation of National Environmental Protection 184 A Synthesized Rating of National Technological, Economic, and Social Advancement 185 The Strategic Comprehensive Country Classification System 188 Observations of the Superpower Category 193 Observations of the Technologically Advanced Economies Category 194 Observations of the Wealthy Nations Category 195 Observations of the Emerging-market Countries Category 196 Observations of the Economies in Bloom Category 196

5 Observations of the Emerging-market Democracies Category 197 Observations of the Oligarchic Emerging Markets Category 198 Observations of the Emerging-market Dictatorships Category 200 Observations of the Pre-emerging Markets Category 201 Observations of the Developing Countries Category 202 Observations of the Underdeveloped Countries Category 203 Evaluation of International Business Infrastructure 205 Classification Glossary 209 Study Questions 209 Extended Table of Contents xi 5 The Emerging Global Business Order 211 Keynote Definitions 211 Genesis of the Global Order 211 Bretton Woods Institutions of the Global Order 215 Dynamics of the Global Order 218 The Global Business Order in the Dynamics of the Global Order 219 The Evolution of the Global Order 224 The Revolution of the Global Order 225 Objective and Subjective Factors Influencing the Global Business Order 229 The Factor of Global Trends 230 The Global Optimum 231 Triggering Events of the Formation of the Emerging Global Business Order 235 The Changing Roles of Multilateral Institutions in the Global Marketplace 239 New Authorities of the Global Business Order 244 G8 and its Likely Enlargement 245 The Bretton Woods Committee 246 World Economic Forum 247 The Council on Foreign Relations 249 The Trilateral Commission 250 The Institutionalization of the Global Business Order 251 Major Characteristics of the Emerging Global Business Order 252 Study Questions Global Economic Strategy 258 Keynote Definitions 258 The Strategic Mindset 258 Two Approaches of Strategic Thinking 260 Stages of the Strategic Thought Process 262 Characteristics of the Strategic Mindset 262 The Three Axes of Strategic Thought 264 The Professional Strategist 265 The Strategist's 15 Rules 266 Rule 1: Strategists Can Never Rely on Common Sense Alone 267 Rule 2: The Majority is Very Often Strategically Wrong 267 Rule 3: Strategically, the Present is Already the Past 268

6 xii Extended Table of Contents Rule 4: The Strategist Must Learn from History 269 Rule 5: Nothing Lasts Forever 270 Rule 6: Inertia is the Strategist's Greatest Adversary 271 Rule 7: Strategists Should Not Fall into Predictable Patterns 272 Rule 8: A Successful Strategy Cannot be Dishonest 272 Rule 9: Strategists Must Make Systems Out of Chaos 273 Rule 10: An Asymmetric Strategic Response Is More Efficient than a Symmetric One 274 Rule 11: The Strategist Must Always be an Optimist 275 Rule 12: Always Overestimate the Competitor 276 Rule 13: Innovation Can Provide Huge Strategic Advantages 276 Rule 14: The Strategist Should Optimize Limited Resources, Using Time as the Determining Factor 277 Rule 15: Strategists Must Figure Out What their Clients Need, not What their Clients Want 277 System of Strategy 279 Hierarchy of Strategy 279 Correlation between Strategy, Tactic, and Policy 279 Development of Strategy 280 Stages of Strategy Development 280 Selection of Strategic Scenario, Tactic, and Policy 290 Strategic Factors and Limitations for Businesses Entering Emerging Markets 290 Strategy of Subordinate Units 295 Strategy Implementation 296 Time-sensitive Resource Analysis 296 Corporate Entry Strategy 301 Tactic 303 Cultural and Religious Environment of Strategy Development and Implementation 304 Culture as a Strategic Risk Factor 306 Exit Strategy 307 Study Questions Strategic Management Systems 311 Concept of a Strategic Management System 311 Major Elements of a Strategic Management System 312 Strategic Leadership 312 Organizational Structure 316 Executives, Managers, and Staff 318 Strategic Decision-making Process 321 Managerial Tools, Aids, and Strategic Information Technology 325 Functions of Strategic Management Systems 327 Strategic Planning and the Strategic Plan 327 Strategic Motivation 328 Strategic Monitoring and Control: Evaluating Strategy and Strategists 330

7 Extended Table of Contents xiii International Joint Ventures as a Strategic Organizational Vehicle of Globalization 332 Economic Genesis of the International Joint Venture 333 The Letter of Intent or Memorandum of Understanding for International Joint Venture Establishment 336~- InternationalJoint Ventures' Market-entry Strategy 338 Key Factors to Consider When Making an International Joint Venture 338 Management Systems of International Joint Ventures 340 Study Questions Investment Strategy for the Global Emerging Market 346 Keynote Definitions 346 Reasons for Cross-Border Investment 346 Economic Nature of Foreign Direct Investment 346 Rationale of Investment in the Global Emerging Market 349 Gauging Foreign Investment Risk in Emerging Markets 354 Systematic Risk in the Global Emerging Market 355 Unsystematic Risk of Investment 380 International Business Infrastructure in Emerging-market Countries 383 Technological Risk of Foreign Direct Investment 398 Foreign Direct Investment from the Global Emerging Market to Developed Countries 404 Study Questions 410 Notes 412 Bibliography for Reading on Strategy and Economics of the Global Emerging Market 440 Specialized Periodicals on the Global Emerging Market and Business Strategy 443 Index 445 s