International Management: Culture, Strategy, and Behavior 11th Edition by Fred Luthans Solution man

U. S. MNCs have holdings throughout the world.
At the same time, foreign MNCs are finding the United States to be a lucrative market for expansion.
Canada is the United States’ largest trading partner, a position it has held for many years.
The United States also has considerable foreign direct investment in Canada, more than in any other country except the United Kingdom.
By the early 1990s Mexico had recovered from its economic problems of the previous decade and had become the strongest economy in Latin America.
In 1994, Mexico became part of NAFTA, and it appeared to be on the verge of becoming the major economic power in Latin America.
Because of NAFTA/USMCA, Mexican businesses are finding themselves able to take advantage of the U.S. market by producing goods that were previously purchased from Asia.
Maquiladora is a factory, mostly located in Mexican border towns, that imports materials and equipment on a duty- and tariff-free basis for assembly or manufacturing and re-export.
The EU
The ultimate objective of the EU is to eliminate all trade barriers among member countries (like between the states in the U.S.).
This economic community eventually will have common custom duties as well as unified industrial and commercial policies regarding countries outside the union.
The challenge for the future of the EU is to absorb its eastern neighbors, the former communist-bloc countries.
The EU has faced major challenges.
Several European governments, including Greece, Portugal, Spain, and Ireland, have had dangerously large deficits that resulted from both structural conditions and shorter-term economic pressures.
Maintaining a unified EU in the coming decades may be challenging.
The U.K. is scheduled to leave the EU on October 31, 2019.
Japan
During the 1970s and 1980s, Japan’s economic success had been without precedent.
There has been a steady decline in Japan’s overseas investments since the 1990s due to a slowing Japanese economy, poor management decisions, and competition from emerging economies, such as China.
Some of the early success of the Japanese economy can be attributed to the Ministry of International Trade and Industry (MITI) – a Japanese government agency that identifies and ranks national commercial pursuits and guides the distribution of national resources to meet these goals.
Teaching Tip: To learn more about MITI, go to http://www.meti.go.jp/english/.
Another major reason for Japanese success may be the use of keiretsus – large, vertically integrated corporations whose holdings supply much of the assistance needed in providing goods and services to end users.
Japan remains a formidable international competitor and is well poised in all three major economic regions: the Pacific Rim, North America, and Europe.
Emerging and Developing Economies
While there is no precise definition, developing economies typically face relatively low GDP per capita and a workforce either unskilled or semiskilled – there also may be considerable government intervention in economic affairs.
Emerging markets can be viewed as developing economies that exhibit sustained economic reform and growth.
See International Management in Action: Recognizing Cultural Differences summarized at the end of the outline.
Central and Eastern Europe
Russia’s economy continues to emerge as poverty declines and the middle class expands.
Pervasive challenges (persistent crime, corruption, and lack of public security) make many investors feel the risk is still too high – but the large market is such a draw that many MNCs feel they must get involved.
Teaching Tip: Current information about Russia can be obtained on a daily basis via a news site available at http://russia-insider.com/en/ria_novosti_-_russian_news_agency.
In Hungary, state-owned hotels were privatized, and Western firms have been entering into joint ventures with local companies and MNCs are also making direct investments.
Poland had a head start as they established the first noncommunist government in 1989, followed by radical economic reforms.
Although Russia, the Czech Republic, Hungary, and Poland receive the most media coverage and are among the largest of the former communist countries, others also are struggling to right their economic ships.
The key is to maintain the social order, establish the rule of law, rebuild the collapsed infrastructure, and get factories and other value-added, job-producing firms up and running.
Foreign investment must be forthcoming for these countries to join the global economy.

 
China
After years of steady, strong growth, China’s GDP has been slowing considerably.
In 2018, GDP expanded at only 6.6 percent, the slowest in 28 years.
China also remains a major risk for investors.