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Latin American companies have not fared well in international competition in recent years, compared with North American, European, and Japanese firms. A greater concern is that competitors from India, Eastern Europe, and China are gaining more rapid entrance into the ‘grandes ligas’ of global business. This introductory chapter compares Latin American companies with their rivals from elsewhere in terms of size, global reach, innovation, and other issues, identifying the weaknesses that exist in the Latin American context. It argues that Latin American firms do have a number of international competitive strengths, many based on the institutional structure of the region's economies, which must be further developed to produce a broad level of competitiveness. The remainder of the chapter briefly summarizes the findings of each of the empirical studies that make up the book, focusing on individual countries, specific companies, industry sectors, and sources of competitiveness.

The literature on the history of multinational enterprises (MNEs) is reviewed in sections. These cover general works, case studies, industry studies, diplomatic history and the history of public policy, early history, emerging ideas, and business history journals.

A strategy analysis framework is used to examine the key strategic issues facing multinational enterprises (MNEs). The strategic analysis process is first reviewed, and then issues of international strategy are identified. These issues are then examined using the strategy analysis process. The aim is to identify the most salient issues of international strategy and to set an agenda for debate and further research.

The first part of this chapter discusses China's growing role in international business and the inward and outward investment problems attending this. China's institutional context is then addressed, highlighting the deep involvement of government agencies with business life as being associated with many of the difficulties experienced by inward and outward investment. The implications of this government intervention are discussed next, first by examining the nature of complexity in China's business environment and the strategies available to foreign investing firms for coping with this, and second, by exploring the relevance of China's differentiated business system for modes of engagement between Chinese and international firms.

Focuses on challenges faced by businesses in the transition context, drawing on research beyond the main business journals. First, the microeconomic aspects of economic transition are summarized, taking the development of new institutions as starting points as they set the stage for developments in the enterprise sphere. Next, multinational enterprises entering the region are discussed, considering their motives, and their strategies for dealing with the specific context. Lastly, some managerial challenges are addressed that arise for multinational enterprises operating in the region.

This chapter discusses the lead up to the ‘Big Bang’ and its effects––the Big Bang refers to the abolition of fixed commissions and the single capacity on 27 October 1986, both of which had been at the centre of London Stock Exchange thinking for most of the twentieth century, and certainly since 1945. This move followed the abolition of exchange controls in 1979, and the associated far‐reaching changes on the securities market. The path from one to the other is traced, including the loss of the Stock Exchange's monopoly position within the securities market in January 1986. The new ways and roles that the Stock Exchange was forced to adopt during the early 1980s are described, including its merger with ISRO (International Securities Regulatory Organisation), its failure to merge with LIFFE (London International Financials Futures Exchange), expansion of securities traded on SEAQ (Stock Exchange Automated Quotations) international, and its opening of membership to global players. The last section of the chapter discusses further changes to the Stock Exchange that occurred to reflect the completely changed nature of its membership, including alterations in the degree of control and supervision exercised, and the ending of the Compensation Fund.

The literature on capital flows in the world economy is reviewed, along with that on the utilization of capital controls and the broader issues of international business risks associated with debt and equity capital flows for both firms and financial institutions, active internationally. The chapter concludes with a brief discussion of some of the research topics facing the field of international business in these areas.

An examination is made of international business activity in Latin America. It starts by tracing the historical context, and then analyses four issues that are central to international business in Latin America at the beginning of the twenty‐first century. These are the government/business relationship; the impact of subregional integration schemes on competition in the region; FDI in the region and policies to avoid financial crises; and the entry and operation of foreign multinational enterprises (MNEs), and the reaction of local firms to these. Lastly, the relationship of the informal economy to international business in the region is investigated.

The first section of this chapter outlines the growing threats to the London Stock Exchange through the 1970s, including the ability of its members to block new proposals by the Council of the Stock Exchange, the investigation by the Monopolies Commission into the various restrictive practices of the Stock Exchange, relations with and attitude of the government, the formation of the Council of the Securities Industry (CSI), which was to take over responsibility for the Stock Exchange and other components of the securities market. The second section of the chapter discusses the limited responses of the Stock Exchange to these threats. The next two sections discuss technology and competition (from computerized trading systems), and change among the members (mergers, which resulted in a disproportionately large number of large firms as members, and a loss in numbers of jobbers). The last section looks at market opportunities––domestic corporate securities, government debt securities, loss of the foreign securities, traded options, the collapse of the securities market in 1974, and the by‐now limited role of the money market.

This chapter look at the decline of the London Stock Exchange during the 1950s. The first part discusses the ways that the Stock Exchange raised money to enable it to survive in the early 1950s, relations between it and the government (which were conducted informally through confidential exchanges between the Governor of the Bank of England and the Chairman of the Stock Exchange), the restoration of option dealing, and the use of the Stock Exchange by the government to police activities regarding securities. The second part discusses the policing of the members of the Stock Exchange, and the third discusses the growing competition from the provincial stock exchanges, closer integration with the London‐based North American brokerage houses, and the Stock Exchange's lack of concern with international business. The last section looks at money and capital (securities) markets in the face of the decline of the Stock Exchange over the 1950s.

The main thrust and content are considered of two influential strands of the international business (IB) literature. The first examines the development of scholarly thought on the determinants of ownership, sectoral pattern, and the geographical scope of multinational enterprise (MNE) activity. The second examines the main changes in the external—technological, economic, and political—environment that have helped to fashion these explanations. These strands are reviewed in two separate sections of the chapter, each of which considers three main time periods: the 1960s to the mid‐1970s, the mid‐1970s to the late 1980s, and the late 1980s to the turn of the twentieth century.

This chapter addresses the continuing decline and failure of the London Stock Exchange to adjust to change during the 1960s, when the government rather than the market continued to be the major influence over the way it developed. The first section of the chapter discusses relations with the government. The next discusses relations with the members––where the desire was to create a level playing field for both members and non‐members, and now became an equal desire to ensure that all members had both the training and the capital to enable them to play an active role in the market, whilst not posing a threat to others; however, the members themselves were hostile to the admission of both women and foreigners, both of whom were keen to become members. The third section of the chapter discusses continuing competition with provincial and foreign stock exchanges, and the failure of the London Stock Exchange to capture or retain foreign business. The last section looks at money and capital (securities) markets in the 1960s.

This chapter examines the state of American and European economies during the outbreak of World War I until the Genoa Conference was convened in 1922. It first considers the military–political origins of the war before analyzing the role the international business community played at the time of the war's outbreak. Hereafter the chapter focuses on the American perspectives, as it studies the ambiguities of American neutrality, the state of the American economy and its eventual entry into the war, and the beginnings of a strain on the Anglo-American relationship at the Paris Peace Conference. The chapter then returns the focus to the international stage as postwar reconstruction begins, highlighting the attempts at European recovery and the role of American businesses in these endeavors.

Arguing that international business is essentially and incontrovertibly political, this essay describes the range of state policies that can shape and constrain the behaviour of firms. Specifically, it examines the five most important domestic policies that affect firms: trade policy (including export controls, protectionism, and strategic trade policy), foreign direct investment (FDI), capital controls, regulation, and competition policy. The first section describes how policies tend to emerge in each of these areas, what objectives they are often directed towards, and how they affect the course of international business. The second section then moves to the politics behind the policies—i.e. to an examination of how the policies that affect international business are created and by whom. A concluding section examines the emerging role of transnational groups (international institutions such as GATT and WTO, and non‐governmental organizations) in shaping and defining a country's national policies.

Changing models of multinational enterprise (MNE) organization over the last three decades of the twentieth century are surveyed and their theoretical underpinnings examined. The potential of these theories for understanding the future evolution of organizations in international business is assessed. An appendix gives details of the basic models of formal MNE structure identified in the 1960s and 1970s, which are still relevant.

There has been an enormous increase in the formation of international strategic alliances and in the research efforts devoted to understanding alliances over the last few decades. The chapter begins with a brief overview of alliance forms and then moves on to consider alliance formation and governance structures, alliance performance, control issues, bargaining power, the role of trust, evolutionary processes, and alliance networks. Within each section, key research areas and questions are identified and the major supporting research and associated findings are discussed.

A selective, critical survey is provided of the academic literature on the financial management policy of multinational enterprises (MNEs). The focus of much of the current research is the two major themes of financial management policy in relation to the increasing volatility of real and financial asset prices in the international financial environment of MNEs; and international market segmentation. The main parts of the chapter discuss the enhanced importance of recent increases in asset price volatility, the classification and management of risk exposure, the management of financial risk by MNEs, and issues relating to the effective implementation of a risk management system within the governance structure of an MNE.

Research in international business has contributed its own methodological designs that serve as templates for subsequent efforts. This chapter first briefly documents three contributions: Raymond Vernon's Harvard multinational enterprise database, foreign direct investment studies, and the choice of foreign entry mode. Next, two current areas of research are addressed that might benefit from agreement on design and method: organizational ecology and demography; and comparative management and national systems. In focusing on these contributions, various other major contributions to international business research are neglected, especially that of business history, which has indisputably created successful research programmes with defined methodologies; this topic is treated in the first chapter (by Wilkins) in this volume.

Culture has a pervasive impact on the management of human resources, especially in terms of the efficient transaction, organization, and strategic planning of international business. This chapter first defines the central notion of culture, including discussion of its dimensions and measurement. Next, the influences of culture on interpersonal behaviours and negotiation styles are discussed. Third, human resources policies are outlined that take into account cultural differences in employee groups. The final section focuses on the impact of culture on the strategic thinking of managers.