The Global Emerging Market: Strategic Management and Economics Book

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

The Future of the Global Emerging Market in the Global Marketplace 109

Study Questions 110

3 Ten Modern Global Political, Economic, and Technological Trends111

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 157

4 Strategic Country Classification of the Global Marketplace 160

The Strategic Necessity for Country Classification Systems 160

The Flawed Country Classifications 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

Observations of the Emerging-market Democracies Category 197

Observations of the Oligarchic Emerging Markets Category 198

Observations of the Emerging-market Dictorships 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

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 256

6 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

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 309

7 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

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

International Joint 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 344

8 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