In Chapters 8 and 9, we reviewed several types of global expansion strategies a company can undertake when entering new markets. For this assignment, you will read a case study about Starbucks expansion into the Indian market (p. 413 in the textbook) and then respond to, and make decisions, based on the following questions:
- What inspired Starbucks to venture in to India? What were some of the companys early concerns and other obstacles?
- How would you describe Starbucks approach to entering India and how Starbucks was influenced by cultural differences to adapt its offerings for the Indian market?
- Why did Starbucks want to enter India through a joint venture? Specifically, what benefits did Starbucks and the Tara Group both gain by partnering with one another? What synergies were present? What conflicts occurred and how were they resolved?
- Now, assume the role of the Director of Starbucks Indian strategic planning team. You have been tasked to explore the benefits and challenges of expansion into foreign countries through joint-venture partnerships. Describe the opportunities, benefits, and concerns that Starbucks might face by doing so. Summarize the cultural environment, choose an entry strategy from the text, and describe how you would implement this entry strategy. Make sure you are very detailed in your explanation.
Importance note to follow:
1. Your well-written report should be 4-5 pages in length, not including the title and reference pages. To make it easier to read and therefore grade.
2. make sure you clearly delineate each section of your answer so it can be matched with the relevant question.
3. Use APA7 style guidelines, citation reference at least four references as appropriate.
4. Make sure no plagiarism for your written report.
Culture, Strategy, and Behavior
Fred Luthans | Jonathan P. Doh
Culture, Strategy, and Behavior
Jonathan P. Doh
University of NebraskaLincoln
INTERNATIONAL MANAGEMENT: CULTURE, STRATEGY, AND BEHAVIOR, TENTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2018 by McGraw-
Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2015,
2012, and 2009. No part of this publication may be reproduced or distributed in any form or by any means,
or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education,
including, but not limited to, in any network or other electronic storage or transmission, or broadcast for
Some ancillaries, including electronic and print components, may not be available to customers outside the
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 LMN 21 20 19 18 17 16
Chief Product Officer, SVP Products & Markets: G. Scott Virkler
Vice President, General Manager, Products & Markets: Michael Ryan
Vice President, Content Design & Delivery: Betsy Whalen
Managing Director: Susan Gouijnstook
Director, Product Development: Meghan Campbell
Director, Management/OB: Michael Ablassmeir
Director of Digital Content: Kristy Dekat
Product Developer: Laura Hurst Spell
Marketing Manager: Debbie Clare
Marketing Coordinator: Brittany Bernholdt
Digital Product Analyst: Sankha Basu
Director, Program Management: Linda Avenarius
Program Manager: Mark Christianson
Content Project Managers: Danielle Clement/Karen Jozefowicz
Buyer: Jennifer Pickel
Design: Jessica Serd
Content Licensing Specialists: Shannon Manderscheid/Lori Hancock
Cover Image: © Glow Images/Rodrigo A Torress
Compositor: SPi Global
Printer: LSC Communications
All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.
Library of Congress Cataloging-in-Publication Data
Names: Luthans, Fred, author. | Doh, Jonathan P., author.
Title: International management : culture, strategy, and behavior / Fred
Luthans, University of Nebraska-Lincoln, Jonathan P. Doh, Villanova
Description: Tenth Edition. | Dubuque: McGraw-Hill Education,  |
Revised edition of the authors International management, 
Identifiers: LCCN 2016055609| ISBN 9781259705076 (alk. paper) | ISBN
1259705072 (alk. paper)
Subjects: LCSH: International business enterprisesManagement. |
International business enterprisesManagementCase studies.
Classification: LCC HD62.4 .H63 2018 | DDC 658/.049dc23 LC record
available at https://lccn.loc.gov/2016055609
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website
does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education
does not guarantee the accuracy of the information presented at these sites.
Dedicated in Memory of
A Passionate Advocate for Global Business Education and Experience.
C hanges in the global business environment continue unabated and at an accelerated pace. Many surprising and difficult-to-predict developments have rocked global
peace and economic security. Terrorism, mass migration, the United Kingdoms exit from
the European Union, and the rise of anti-immigration political movements in Europe, the
United States, and elsewhere have called into question assumptions about the direction
of the global political economy. In addition, rapid advances in social media have not only
accelerated globalization but also provided a means for those who seek political and
economic changes to organize and influence their leaders for more responsible gover-
nance, or, in some cases, advance a more narrow ideological agenda (see opening articles
in Chapters 1 and 2). In addition, concerns about climate change and other environmen-
tal issues have prompted companies, in conjunction with governments and nongovern-
mental organizations, to consider alternate approaches to business and governance (see
Chapter 3 opening article).
Some of these developments have challenged longstanding beliefs about the power
and benefits of globalization and economic integration, but they also underscore the
interconnected nature of global economies. Although many countries and regions around
the world are closely linked, important differences in institutional and cultural environ-
ments persist, and some of these differences have become even more pronounced in
recent years. The challenges for international management reflect this dynamism and the
increasing unpredictability of global economic and political events. Continued growth of
the emerging markets is reshaping the global balance of economic power, even though
differences exist between and among regions and countries. Although many emerging
markets continued to experience growth during a period when developed countries
economies stagnated or declined, others, like Russia and Brazil, have faced major set-
backs. Further, some developed economies, such as Greece, Italy, Spain, and Portugal,
continue to face formidable challenges that stem from the European debt crisis that began
in 2009. Low or negative interest rates reflect a new normal of slower-than-average
growth among many global economies.
The global political and security environment remains unpredictable and volatile,
with ongoing conflicts in the Middle East and Africa and continuing tensions in Iran,
North Korea, Iraq, and Afghanistan and elsewhere. Another crisis stemming from con-
flict in Syria and elsewhere has resulted in mass migrationand broad dislocations
across North Africa and Southern, even Northern, Europe (see Chapters 1 and 2 for
further discussion). On the economic front, the global trade and integration agenda seems
stalled, largely due to domestic political pressures in Europe and North America. Although
the Trans-Pacific Partnership (TPP), a proposed free-trade agreement including 12 coun-
tries in the Americas and Asia, was concluded, its ratification in the United States is
uncertain. Similarly, the fate of the Transatlantic Trade and Investment Partnership, which
was still under negotiation at the time of this writing, is also unclear.
As noted above, the advent of social networking has transformed the way citizens
interact; how businesses market, promote, and distribute their products globally; and how
civil society expresses its concerns that governments provide greater freedoms and
accountability. Concurrently, companies, individuals, and even students can now engage
in broad mass collaboration through digital, online technology for the development of
new and innovative systems, products, and ideas. Both social networking and mass col-
laboration bring new power and influence to individuals across borders and transform
the nature of their relationships with global organizations. Although globalization and
technology continue to link nations, businesses, and individuals, these linkages also high-
light the importance of understanding different cultures, national systems, and corporate
management practices around the world. The world is now interconnected geographically,
but also electronically and psychologically; as such, nearly all businesses have been
touched in some way by globalization. Yet, as cultural, political, and economic differ-
ences persist, astute international managers must be in a position to adapt and adjust to
the vagaries of different contexts and environments.
In this new tenth edition of International Management, we have retained the
strong and effective foundations gained from research and practice over the past
decades while incorporating the important latest research and contemporary insights
that have changed the context and environment for international management. Several
trends have emerged that pose both challenges and opportunities for international
First, more nationalistically oriented governments and/or political movements
have emerged in many regions of the world, challenging previous assumptions about
the benefits and inevitability of globalization and integration. Second, while emerging
markets continue to rise in importance, somesuch as China and Indiahave fared
much better economically than otherssuch as Brazil and Russia. Third, aging popu-
lations and concerns about migration have challenged many developed country govern-
ments as they wrestle with these dual pressures. Fourth, social media and other forms
of electronic connectivity continue to facilitate international business of all sorts; how-
ever, these connection go only so far, with many barriers and limitations imposed by
Although we have extensive new, evidence-based material in this edition, we
continue to strive to make the book even more user-friendly and applicable to prac-
tice. We continue to take a balanced approach in the tenth edition of International
Management: Culture, Strategy, and Behavior. Whereas other texts stress culture,
strategy, or behavior, our emphasis on all three critical dimensionsand the interac-
tions among themhas been a primary reason why the previous editions have been
the market-leading international management text. Specifically, this edition has the
following chapter distribution: environment (three chapters), culture (four chapters),
strategy (four chapters), and organizational behavior/human resource management
(three chapters). Because the context of international management changes rapidly,
all the chapters have been updated and improved. New real-world examples and
research results are integrated throughout the book, accentuating the experiential
relevance of the straightforward content. As always, we emphasize a balance of
research and application.
For the new tenth edition we have incorporated important new content in the areas
of the emergence and role of social media as a means of transacting business and mobi-
lizing social movements, the global pressures around migration, the role of the sharing
economy as represented by companies such as Uber, and other important global themes.
We have incorporated the latest research and practical insights on pressure for MNCs to
adopt more sustainable practices, and the strategies many companies are using to dif-
ferentiate their products through such green management practices. We have updated
discussion of a range of contemporary topics, including continued exploration of the role
of the comprehensive GLOBE study on cross-cultural leadership.
A continuing and relevant end-of-chapter feature in this edition is the Internet
Exercise. The purpose of each exercise is to encourage students to use the Internet
to find information from the websites of prominent MNCs to answer relevant ques-
tions about the chapter topic. An end-of-book feature is a series of Skill-Building and
Experiential Exercises for aspiring international managers. These in-class exercises
represent the various parts of the text (culture, strategy, and behavior) and provide
We have extended from the ninth edition of International Management the chap-
ter-opening discussions called The World of International Management (WIM),
based on very recent, relevant news stories to grab readers interest and attention. Many
of these opening articles are new to this edition and all have been updated. These
timely opening discussions transition the reader into the chapter topic. At the end of
each chapter, there is a pedagogical feature that revisits the chapters subject matter:
The World of International ManagementRevisited. Here we pose several discussion
questions based on the topic of the opening feature in light of the students entire
reading of the chapter. Answering these questions requires readers to reconsider and
to draw from the chapter material. Suggested answers to these WIMRevisited
discussion questions appear in the completely updated Instructors Manual, where we
also provide some multiple-choice and true-false questions that draw directly from the
chapters World of International Management topic matter for instructors who want to
include this material in their tests.
The use and application of cases are further enhanced in this edition. All cases
have been updated and several new ones have been added. The short within-chapter
country case illustrationsIn the International Spotlightcan be read and dis-
cussed in class. These have all been revised and three have been addedCuba, Greece,
and Nigeria. In addition, we have added an additional exercise, You Be the Interna-
tional Management Consultant, that presents a challenge or dilemma facing a com-
pany in the subject country of the Spotlight. Students are invited to respond to a
question related to this challenge. The revised or newly added Integrative Cases
positioned at the end of each main part of the text were created exclusively for this
edition and provide opportunities for reading and analysis outside of class. Review
questions provided for each case are intended to facilitate lively and productive writ-
ten analysis or in-class discussion. Our Brief Integrative Cases typically explore a
specific situation or challenge facing an individual or team. Our longer and more
detailed In-Depth Integrative Cases provide a broader discussion of the challenges
facing a company. These two formats allow maximum flexibility so that instructors
can use the cases in a tailored and customized fashion. Accompanying many of the
in-depth cases are short exercises that can be used in class to reinforce both the sub-
stantive topic and students skills in negotiation, presentation, and analysis. The cases
have been extensively updated and several are new to this edition. Cases concerning
the controversies over drug pricing, TOMS shoes, Russell Athletics/Fruit of the Loom,
Euro Disneyland and Disney Asia, Google in China, IKEA, HSBC, Nike, Walmart,
Tata, Danone, Chiquita, Coca-Cola, and others are unique to this book and specific
to this edition. Of course, instructors also have access to Create (www.mcgraw-hill-
create.com), McGraw-Hills extensive content database, which includes thousands of
cases from major sources such as Harvard Business School, Ivey, Darden, and NACRA
Along with the new or updated International Management in Action boxed appli-
cation examples within each chapter and other pedagogical features at the end of each
chapter (i.e., Key Terms, Review and Discussion Questions, The World of Interna-
tional ManagementRevisited, and Internet Exercise), the end-of-part brief and in-
depth cases and the end-of-book skill-building exercises and simulations in the Connect
resources complete the package.
International Management is generally recognized to be the first mainstream
text of its kind. Strategy casebooks and specialized books in organizational behavior,
human resources, and, of course, international business, finance, marketing, and eco-
nomics preceded it, but there were no international management texts before this
one, and it remains the market leader. We have had sustainability because of the
effort and care put into the revisions. We hope you agree that this tenth edition
continues the tradition and remains the world-class text for the study of interna-
McGraw-Hill Connect®: connect.mheducation.com
Continually evolving, McGraw-Hill Connect® has been redesigned to provide the only
true adaptive learning experience delivered within a simple and easy-to-navigate environ-
ment, placing students at the very center.
· Performance AnalyticsNow available for both instructors and students,
easy-to-decipher data illuminate course performance. Students always know
how theyre doing in class, while instructors can view student and section
performance at a glance.
· Personalized LearningSqueezing the most out of study time, the adaptive
engine within Connect creates a highly personalized learning path for each
student by identifying areas of weakness and providing learning resources to
assist in the moment of need.
This seamless integration of reading, practice, and assessment ensures that the focus is
on the most important content for that individual.
Instructor Library The Connect Management Instructor Library is your repository
for additional resources to improve student engagement in and out of class. You can
select and use any asset that enhances your lecture.
To help instructors teach international management, this text is accompanied by a
revised and expanded Instructors Resource Manual, Test Bank, and PowerPoint slides,
all of which are in the Connect Library.
We would like to acknowledge those who have helped to make this book a reality. We
will never forget the legacy of international management education in general and for this
text in particular provided by our departed colleague Richard M. Hodgetts. Special thanks
also go to our growing number of colleagues throughout the world who have given us
many ideas and inspired us to think internationally. Closer to home, Jonathan Doh would
like to thank the Villanova School of Business and its leadership, especially Provost Pat
Maggitti, Interim Dean Daniel Wright, Dean Joyce Russell, Interim Vice Dean Wen Mao,
and Herb Rammrath, who generously endowed the Chair in International Business
Jonathan now holds. Also, for this new tenth edition we would like to thank Ben Littell,
who did comprehensive research, graphical design, and writing to update chapter material
and cases. Specifically, Ben researched and drafted chapter opening World of International
Management features, developed a number of original graphics, and provided extensive
research assistance for other revisions to the book. Allison Meade researched and drafted
the Chapter 4 World of International Management feature on Culture Clashes in Cross-
Border Mergers and Acquisitions. Fred Luthans would like to give special recognition
to two international management scholars: Henry H. Albers, former Chair of the Manage-
ment Department at the University of Nebraska and former Dean at the University of
Petroleum and Minerals, Saudi Arabia, to whom previous editions of this book were
dedicated; and Sang M. Lee, former Chair of the Management Department at Nebraska,
founding and current president of the Pan Pacific Business Association, and close col-
league on many ventures around the world over the past 30 years.
In addition, we would like to acknowledge the help that we received from the many
reviewers from around the globe, whose feedback guided us in preparing the tenth edition
of the text. These include
Joseph S. Anderson, Northern Arizona
Chi Anyansi-Archibong, North Carolina
A&T State University
Koren Borges, University of North
Lauryn De George, University of Central
Jae Jung, University of Missouri at Kansas
Manjula S. Salimath, University of North
Thomas M. Abbott, Post University
Yohannan T. Abraham, Southwest Missouri State
Janet S. Adams, Kennesaw State University
Irfan Ahmed, Sam Houston State University
Chi Anyansi-Archibong, North Carolina A&T State
Kibok Baik, James Madison University
R. B. Barton, Murray State University
Lawrence A. Beer, Arizona State University
Koren Borges, University of North Florida
Tope A. Bello, East Carolina University
Mauritz Blonder, Hofstra University
Gunther S. Boroschek, University of MassachusettsBoston
Charles M. Byles, Virginia Commonwealth University
Constance Campbell, Georgia Southern University
Scott Kenneth Campbell, Georgia College & State
M. Suzanne Clinton, University of Central Oklahoma
Helen Deresky, SUNY Plattsburgh
Dr. Dharma deSilva, Center for International Business
David Elloy, Gonzaga University
Val Finnigan, Leeds Metropolitan University
David M. Flynn, Hofstra University
Jan Flynn, Georgia College and State University
Joseph Richard Goldman, University of Minnesota
James Gran, Buena Vista University
Robert T. Green, University of Texas at Austin
Annette Gunter, University of Central Oklahoma
Jerry Haar, Florida International UniversityMiami
Jean M. Hanebury, Salisbury State University
Richard C. Hoffman, Salisbury State University
Johan Hough, University of South Africa
Julie Huang, Rio Hondo College
Mohd Nazari Ismail, University of Malaya
Steve Jenner, California State UniversityDominguez Hills
James P. Johnson, Rollins College
Marjorie Jones, Nova Southeastern University
Jae C. Jung, University of MissouriKansas City
Ann Langlois, Palm Beach Atlantic University
Robert Kuhne, Hofstra University
Christine Lentz, Rider University
Ben Lever III, College of Charleston
Robert C. Maddox, University of Tennessee
Curtis Matherne III, East Tennessee State University
Douglas M. McCabe, Georgetown University
Jeanne M. McNett, Assumption College
Lauryn Migenes, University of Central Florida
Alan N. Miller, University of Nevada, Las Vegas
Ray Montagno, Ball State University
Rebecca J. Morris, University of NebraskaOmaha
Ernst W. Neuland, University of Pretoria
William Newburry, Rutgers Business School
Yongsun Paik, Loyola Marymount University
Valerie S. Perotti, Rochester Institute of Technology
Richard B. Peterson, University of Washington
Suzanne J. Peterson, University of NebraskaLincoln
Joseph A. Petrick, Wright State University
Juan F. Ramirez, Nova Southeastern University
Richard David Ramsey, Southeastern Louisiana University
Owen Sevier, University of Central Oklahoma
Mansour Sharif-Zadeh, California State Polytechnic
Emeric Solymossy, Western Illinois University.
Jane H. Standford, Texas A&M UniversityKingsville
Dale V. Steinmann, San Francisco State University
Randall Stross, San Jose State University
George Sutija, Florida International University
Deanna Teel, Houston Community College
David Turnipseed, University of South AlabamaMobile
Katheryn H. Ward, Chicago State University
Li Weixing, University of NebraskaLincoln
Aimee Wheaton, Regis College
Marion M. White, James Madison University
Timothy Wilkinson, University of Akron
George Yacus, Old Dominion University
Corinne Young, University of Tampa
Zhe Zhang, University of Central FloridaOrlando
Anatoly Zhuplev, Loyola Marymount University
Our thanks, too, to the reviewers of previous editions of the text:
Finally, thanks to the team at McGraw-Hill who worked on this book: Susan Gouijnstook,
Managing Director; Anke Weekes, Executive Brand Manager; Laura Hurst Spell, Senior
Product Developer; Erin Guendelsberger, Development Editor; Michael Gedatus, Market-
ing Manager; and Danielle Clement, Content Project Manager. Last but by no means
least, we greatly appreciate the love and support provided by our families.
Fred Luthans and Jonathan P. Doh
New and Enhanced Themes
· Thoroughly revised and updated chapters to reflect the most
critical issues for international managers.
· Greater attention to demographic trends and human mobility,
underscoring the importance of aging work forces, migration,
culture, and global talent management.
· Focus on global sustainability and sustainable management
practices and their impact on international management.
· New or revised opening World of International Management
(WIM) features written by the authors on current international
management challenges; these mini-cases were prepared
expressly for this edition and are not available elsewhere.
· Discussions of the rise of global terrorism, the migrant crisis,
the growing role of social media in international transactions,
and many other contemporary topics presented in the opening
chapter and throughout the book.
· New and updated discussions of major issues in global ethics,
sustainability, and insights from project GLOBE and other
· Greater emphasis on major emerging regions, economic challenges
in major countries such as Brazil and Russia, and specific case
illustrations on how companies are managing these challenges.
Thoroughly Revised and Updated Chapter Content
· New or revised opening WIM discussions on topics including
the global influences of social media using the case of Snap-
chat; the role of social networking in political change in the
Middle East; sustainability as a global competitive advantage
using examples of Patagonia, Tesla, and Nestlé; and cultural
challenges in global mergers and acquisitions. Others address
the competitive dynamics between Apple and Xiaomi and
Amazon and Alibaba, the emergence of Haier as the largest
global appliance company, Netflixs challenges in China and
Russia, and many others. These features were written expressly
for this edition and are not available elsewhere.
· Updated and strengthened emphasis on ethics, social
responsibility, and sustainability.
· Extensive coverage of Project GLOBE, its relationship to other
cultural frameworks, and its application to international man-
agement practice (Chapters 4, 13).
· Revised or new In the International Spotlight inserts that
profile the key economic and political issues relevant to
managers in specific countries.
· Greater coverage of the challenges and opportunities for inter-
national strategy targeted to the developing base of the
pyramid economies (Chapter 8 and Tata cases).
edition of International
Strategy, and Behavior
is still setting the
Jonathan Doh and
Fred Luthans have
taken care to retain
from research and
practice over the past
decades. At the same
time, they have fully
new and emerging
have changed what
are currently facing
and likely to face in
the coming years.
Thoroughly Updated and/or New Cases,
Inserts, and Exercises
· Completely new In the International Spotlight country profiles at
the end of every chapter including the addition of profiles on Cuba,
Greece, and Nigeria.
· You Be the International Management Consultant exercises pre-
senting an actual companys challenge in that country and inviting
students to recommend a course of action.
· New International Management in Action features, including
discussions on timely topics such as the rise of Bitcoin, the
Volkswagen emissions scandal, and the political risks facing Uber,
to name a few.
· Thoroughly updated cases (not available elsewhere): TOMS shoes,
Russell Athletics/Fruit of the Loom, Euro Disneyland and Disney
Asia, Google in China, IKEA, HSBC, Nike, Walmart, Tata, Danone,
Chiquita, Coca-Cola, and others are unique to this book and specific
to this edition.
· Brand new end-of-part cases developed exclusively for this edition
(not available elsewhere): TOMS Puts Its Right Foot Forward; The
Ethics of Global Drug Pricing.
· Brand new World of International Management chapter opening
discussions, including topics such as Netflixs expansion to emerg-
ing markets, the merger of ABInBev and SABMiller, the battle
brewing between Apples iPhone and Chinese cell phone startups,
the impact of Russian sanctions on international businesses, and the
growth of Chinese brand Haier, to name a few.
· New and revised graphics throughout.
· Timely updates throughout, based on the latest research, including
an extended discussion of the GLOBE project, the continued impact
of global terrorism on international business, and the push towards a
sustainable future, to name a few.
Totally Revised Instructor and Student Support
The following instructor and student support materials can be found in
Connect® at connect.mheducation.com for the Tenth Edition.
· The Instructors Manual offers a summary of Learning Objectives
and a teaching outline with lecture notes and teaching tips, as
well as suggested answers to questions found throughout and at
the conclusion of each chapter. Suggested answers are also pro-
vided for all the cases found in the book.
· The test bank is offered in both Word and EZ Test formats and
offers over 1,000 test items consisting of true/false, multiple choice,
and essay. Answers are provided for all test bank questions.
Continues to set the standard. . .
· PowerPoint Presentations consisting of 30 slides per chapter give instructors
talking points, feature exhibits from the text, and are summarized with a
review and discussion slide.
· LearnSmart®: The Tenth Edition of International Management is avail-
able with LearnSmart, the most widely used adaptive learning resource,
which is proven to improve grades. To improve your understanding of
this subject and improve your grades, go to McGraw-Hill Connect® at
connect.mheducation.com and find out more about LearnSmart. By
helping students focus on the most important information they need to
learn, LearnSmart personalizes the learning experience so they can study
as efficiently as possible.
· SmartBook®: An extension of LearnSmart, SmartBook is an adaptive eBook
that helps students focus their study time more eff