International Economics: Understanding the Forces of Globalization for Managers is a 6-chapter book published in 2013 by the Business Expert Press and written by Dr. Paul Torelli, chief economist at Quantitative Social Science. The author explains that, because of the impact of globalization, new technology, and international trade, business managers need more than ever to understand basic economic concepts to make well-rounded decisions. To that end, this book outlines the conceptual foundation of economic globalization. Starting with the important milestones in the history of global trade development, the author explores how global trade has developed, and how globalization has fostered growth, consumption, and higher standards of living. He explains the core models of economic theory relevant to managers and how these concepts provide a framework for interpreting the global economy. He also shares insight on using the book in management courses and suggests complementary readings including case studies. In Chapter 1, A Brief History of Modern Economic Globalization (39 pages), the author explains the historical basis of modern economic thought. He shows how economic integration and international trade have continued to grow throughout history and recaps relevant historical milestones and their impact on the economy. He begins with the first outbreaks of the plague in the 1300s, which caused drastic global population decline, and follows the rise and fall of the world's economic powers through to the "hyper-globalization" of the 1980s.

International Economics: Understanding the Forces of Globalization for Managers is a 6-chapter book published in 2013 by the Business Expert Press and written by Dr. Paul Torelli, chief economist at Quantitative Social Science. The author explains that, because of the impact of globalization, new technology, and international trade, business managers need more than ever to understand basic economic concepts to make well-rounded decisions. To that end, this book outlines the conceptual foundation of economic globalization. Starting with the important milestones in the history of global trade development, the author explores how global trade has developed, and how globalization has fostered growth, consumption, and higher standards of living. He explains the core models of economic theory relevant to managers and how these concepts provide a framework for interpreting the global economy. He also shares insight on using the book in management courses and suggests complementary readings including case studies. In Chapter 2, Economic Growth, Convergence, and Trade (24 pages), the author considers the factors that lead to varying growth rates between countries. He explains how the Neo Classical Growth Model provides a framework for understanding long-term growth. He reviews the three components of the model, labor, capital, and technology, and the implication that varying the input of labor and capital can lead to an equilibrium state. He provides support for the model through the analysis of how globalization facilitated growth in Asia, Latin America, and Africa.

International Economics: Understanding the Forces of Globalization for Managers is a 6-chapter book published in 2013 by the Business Expert Press and written by Dr. Paul Torelli, chief economist at Quantitative Social Science. The author explains that, because of the impact of globalization, new technology, and international trade, business managers need more than ever to understand basic economic concepts to make well-rounded decisions. To that end, this book outlines the conceptual foundation of economic globalization. Starting with the important milestones in the history of global trade development, the author explores how global trade has developed, and how globalization has fostered growth, consumption, and higher standards of living. He explains the core models of economic theory relevant to managers and how these concepts provide a framework for interpreting the global economy. He also shares insight on using the book in management courses and suggests complementary readings including case studies. In Chapter 3, Theories of International Trade (29 pages), the author explains the fundamentals of global trade by looking at the evolution of key concepts. He reviews absolute and comparative advantage and how changes in the early twentieth century economy led to a greater emphasis on capital through the development of the factor proportions model. He explains the factor proportion model and related theorems that lend greater modern relevance and empirical support. He also discusses the impacts of trade policies and the inherent tradeoffs for globalization.

International Economics: Understanding the Forces of Globalization for Managers is a 6-chapter book published in 2013 by the Business Expert Press and written by Dr. Paul Torelli, chief economist at Quantitative Social Science. The author explains that, because of the impact of globalization, new technology, and international trade, business managers need more than ever to understand basic economic concepts to make well-rounded decisions. To that end, this book outlines the conceptual foundation of economic globalization. Starting with the important milestones in the history of global trade development, the author explores how global trade has developed, and how globalization has fostered growth, consumption, and higher standards of living. He explains the core models of economic theory relevant to managers and how these concepts provide a framework for interpreting the global economy. He also shares insight on using the book in management courses and suggests complementary readings including case studies. Chapter 4, Industrialization, Globalization, and Labor Markets (32 pages), considers the impact of a growing economy. The author looks at a country's transition from a service economy to a manufacturing economy through the framework of the Lewis Model of Development and also reviews criticisms of the model. He considers the factors of industrial policy, economic diversification, managerial capital, population growth, and wage levels. He looks specifically at the labor markets in America, Mexico, China, and India for empirical evidence on the impacts of globalization.

International Economics: Understanding the Forces of Globalization for Managers is a 6-chapter book published in 2013 by the Business Expert Press and written by Dr. Paul Torelli, chief economist at Quantitative Social Science. The author explains that, because of the impact of globalization, new technology, and international trade, business managers need more than ever to understand basic economic concepts to make well-rounded decisions. To that end, this book outlines the conceptual foundation of economic globalization. Starting with the important milestones in the history of global trade development, the author explores how global trade has developed, and how globalization has fostered growth, consumption, and higher standards of living. He explains the core models of economic theory relevant to managers and how these concepts provide a framework for interpreting the global economy. He also shares insight on using the book in management courses and suggests complementary readings including case studies. In Chapter 5, Politics, Globalization, and the State (28 pages), the author considers the relationship between government and growth. He explains the correlation between democracy and economic growth and provides empirical data. He also considers the influence of globalization on non-democratic nations. He explains different views on free trade, referencing the Stolper-Samuelson theorem, and the influence of political groups in an economy. He discusses the impact of trade and globalization on war.

International Economics: Understanding the Forces of Globalization for Managers is a 6-chapter book published in 2013 by the Business Expert Press and written by Dr. Paul Torelli, chief economist at Quantitative Social Science. The author explains that, because of the impact of globalization, new technology, and international trade, business managers need more than ever to understand basic economic concepts to make well-rounded decisions. To that end, this book outlines the conceptual foundation of economic globalization. Starting with the important milestones in the history of global trade development, the author explores how global trade has developed, and how globalization has fostered growth, consumption, and higher standards of living. He explains the core models of economic theory relevant to managers and how these concepts provide a framework for interpreting the global economy. He also shares insight on using the book in management courses and suggests complementary readings including case studies. Chapter 6, Poverty, Progress, and Critics of Globalization (32 pages), summarizes several arguments against globalization. The author reviews the research underlying these criticisms and highlights both positive and negative effects on the labor market, population growth, poverty levels, and public health. He discusses the example of Walmart to illustrate both benefits of arguments against globalization. He also looks at issues within labor unions, international financial integration, the unequal accumulation of financial power, and ultimate happiness.

Mergers, acquisitions and divestments, including the carve-outs of business units or parts of them, are standard strategies used by multi-divisional organizations to adjust their business portfolios. Carve-out projects are critically dependent on their management of IT. Systems, which have been integrated in order to deliver seamless and efficient IT operations, must now be pulled apart under demanding time and compliance constraints. In 2007, Delta IT Consulting (DIC), one of France's biggest IT-service provider, sold one of its three service provider divisions, IT Product Services. This division employed about 3500 employees in 20 countries and previously generated 0.7 billion of DIC's euro3.8 billion revenues. DIC itself is a division of Delta Corporation - a French high-tech company and leading player in a wide array of businesses, industries and countries around the world. This teaching case challenges the reader to analyze and manage the IT carve-out as a critical component within the divestment project. The case includes insights into strategic and organizational challenges of planning and managing an IT carve-out project.

By 2008, this rapid growth, compounded by limited installed glass manufacturing capacity at regional levels, had caused local supply shortages. Over the last several years, VASA's progressively deteriorating service had damaged its former reputation for excellent service. The case explores how to reverse a disappointing delivery service that led to angry customers complaining about unfulfilled orders, late deliveries, and accusations from transportation companies that held VASA responsible for these delays. Also these accusations resulted in deterioration in relationships with transportation companies that had done business with VASA for more than 25 years. VASA's CEO, evaluated the following options to recover its reputation: 1) take total control of distribution to customers by developing a VASA-owned delivery service; 2) reverse the situation with transportation companies by requiring them to develop delivery service management capabilities; or 3) replace these transportation companies, partially or totally, with more sophisticated logistic service providers.

The case is set in Hong Kong, with a third generation leader of a successful newspaper facing market challenges as the newspaper's niche role of providing Chinese news has been eroded by the age of the Internet. Part A of the case provides the context and the current challenges: high production costs, mixed results with a new magazine business, financial pressures due to lower print sales, a strong culture of success, and start-up online business. Four potential strategies are suggested as the CEO goes to the board for a decision. Part B1 and Part B2 contain different decisions from the board (one for making an acquisition and one for driving organic growth). This allows participants to work in small groups on different change agendas and plans.

Supplement to case SMU409. The case is set in Hong Kong, with a third generation leader of a successful newspaper facing market challenges as the newspaper's niche role of providing Chinese news has been eroded by the age of the Internet. Part A of the case provides the context and the current challenges: high production costs, mixed results with a new magazine business, financial pressures due to lower print sales, a strong culture of success, and start-up online business. Four potential strategies are suggested as the CEO goes to the board for a decision. Part B1 and Part B2 contain different decisions from the board (one for making an acquisition and one for driving organic growth). This allows participants to work in small groups on different change agendas and plans.

Supplement to case SMU409. The case is set in Hong Kong, with a third generation leader of a successful newspaper facing market challenges as the newspaper's niche role of providing Chinese news has been eroded by the age of the Internet. Part A of the case provides the context and the current challenges: high production costs, mixed results with a new magazine business, financial pressures due to lower print sales, a strong culture of success, and start-up online business. Four potential strategies are suggested as the CEO goes to the board for a decision. Part B1 and Part B2 contain different decisions from the board (one for making an acquisition and one for driving organic growth). This allows participants to work in small groups on different change agendas and plans.

Rakuten is Japan's version of Amazon, but it offers a very different shopping experience. The goal of its founder in 1997 was to allow small and midsize merchants to set up shop on the internet very easily and to provide the kind of hospitality and customer service that even chain restaurants offer in Japan. Mikitani didn't want an internet superstore; he wanted something more like a bazaar, where shop owners would curate the merchandise and interact with customers. He believes that people need communication and connection: "A human being can listen to understand your needs, and can tell you the stories behind the products you're considering," he writes. Rakuten hosts more than 40,000 merchants in Japan. To control the risk of quality or service problems, the company has a tight screening process for people who want to open a store on the site. It monitors transactions, maintains a customer feedback program (shops that consistently receive poor ratings are ejected), and offers refunds for goods that don't arrive. Today it is the world's third-largest e-commerce marketplace, with global sales in 2012 of $15 billion.

CEOs often complain that the financial markets simply don't understand their companies' strategy. The author's recent findings show that they may well have a point. Many good strategies are complex and thus hard to understand. A proper analysis of Monsanto, for example, requires expertise in pharmaceuticals, agricultural chemicals, and agricultural biotechnology--but on Wall Street those three industries are analyzed separately. Back in 1999 one analyst wrote, "Monsanto will probably have to change its structure to be more properly analyzed and valued." Zenger was intrigued by the possibility that complex or unique strategies are systematically ignored by analysts or undervalued by capital markets. He and two colleagues undertook to investigate the question, by examining all 7,630 companies that were publicly traded in U.S. capital markets from 1985 through 2007. They devised a way to measure uniqueness and complexity and counted the number of analysts covering each company. Their analysis determined that although many factors--such as company size and trade volume--influence analysts' decisions about what companies to cover, the greater effort required for a complex or unusual strategy discourages coverage. And although their uniqueness measure is actually associated with higher market value, this premium is, on average, lower than it would be if the company got more coverage. CEOs who face the uniqueness challenge have two options: They can make strategic information more accessible--by issuing tracking stocks, marketing directly to investment banks, or paying for independent equity research--or they can find sympathetic investors who believe in the company, which may mean taking it private.

Most businesses rely on traditional capital-budgeting tools when making strategic decisions such as investing in an innovative technology or entering a new market. These tools assume that decision makers have access to remarkably complete and reliable information--yet most strategic decisions must be made under conditions of great uncertainty. Why are these traditional tools used so often even though their limitations are widely acknowledged? The problem is not a lack of alternatives. Managers have at their disposal a wide variety of tools--including decision analysis, scenario planning, and information aggregation tools--that can help them make smart decisions under high degrees of uncertainty. But the sheer variety can be overwhelming. This article provides a model for matching the decision-making tool to the decision being made, on the basis of three factors: how well you understand the variables that will determine success, how well you can predict the range of possible outcomes, and how centralized the relevant information is. The authors bring their framework to life using decisions that executives at McDonald's might need to make--from the very clear-cut (choosing a site for a new store in the United States) to the highly uncertain (changing the business in response to the obesity epidemic).

As one of the world's preeminent advisers to CEOs, Ram Charan has spent the past 35 years on the road, helping hundreds of executives deal with their toughest challenges. In this edited interview, he shares what he's learned about decision making over the decades. Getting to the right answer is a lot harder today than it was 10 years ago, Charan points out. Leaders have to contend with more variables and constituencies than ever before. They must be able to cut through all that complexity and to make subjective judgments about highly ambiguous, and constantly changing, factors. The best executives know which decisions to focus on (and which to delegate), when to make a decision, and what the risk of not making a decision is. When opportunities arise and vanish quickly, timing is critical. In this environment, good decisions involve a lot more than analytics. They demand perceptual acuity, or the ability to see change coming; qualitative judgment, which allows leaders to formulate and select the right options; and credibility, which helps them gain acceptance for decisions. All three traits can be developed over time by practicing the right habits, such as listening to diverse and contradictory views, thinking through second- and third-order consequences, and socializing decisions by demonstrating transparency and explaining their performance payoff.

Though a few superbright people may have the almost magical ability to consistently make good decisions, the rest of us just get by--or so conventional wisdom holds. But new research contradicts that thinking. A recent study by MIT's Sandy Pentland and his colleagues shows that anyone can become a good decision maker. The key is to constantly conduct "social exploration," or seek out a wide range of new people and ideas. In 2011, Pentland's team gathered data on 1.6 million users of eToro, an investment site that lets day traders see and copy one another's moves. Information on the site is extremely transparent, so the researchers were able to plot the return each trader achieved against the amount of social exploration he or she did. The traders who had the right level of diversity of ideas and people in their networks experienced a return on investment that was 30% higher than the return of the isolated traders. They equally outperformed the traders who were too interconnected to one group and got trapped in an "echo chamber," where similar ideas kept recirculating. What's more, by offering incentives and nudges, the researchers were able to help more traders attain the model idea flow. The results? The profitability of all traders on eToro doubled. Although these findings involve only stock investments, the researchers believe that many kinds of organizations can apply them to improve their internal decision making.

The past decade has seen a wealth of research on decision making, yet business executives seem impervious to its lessons. The problem is not that they lack the desire to make better decisions. It's that the bulk of the research does not apply to the kind of decision that's most challenging for them. Decisions vary along two dimensions. The first considers whether the decision maker can influence the terms and the outcome. The second addresses whether the aim is to do well or to do better than others. Before making any decision, the most important thing is to understand what kind it is. Decision research has produced good advice for routine choices and judgments, such as personal investment decisions, where people are choosing among the products before them, have no ability to change them, and are not competing with anyone. For these decisions, research has shown, it's important to avoid common biases. But strategic decisions, such as entering a new market or acquiring another company, are completely different. Executives can actively influence outcomes. Furthermore, success means doing better than rivals. For these decisions, executives need more than an ability to avoid common biases. They require a talent for clear-eyed analysis and the ability to take bold action.

For decades, the basic idea that governed economic thinking was that markets work: The right price will always find a buyer and a seller, and millions of buyers and sellers are far better than a few government officials at determining the right price. But then came the Great Recession, when the global financial system seemed on the verge of collapse--as did prevailing notions about how the economic and financial world is supposed to function. The author has followed academic economics and finance as a journalist since the mid-1990s. To him, three shifts in thinking stand out: (1) Macroeconomists are realizing that it was a mistake to pay so little attention to finance. (2) Financial economists are beginning to wrestle with some of the broader consequences of what they've learned over the years about market misbehavior. (3) Economists' extremely influential grip on a key component of the economic world--the corporation--may be loosening. In the early 1930s, he concludes, policy errors by governments and central banks turned a financial crisis into a global economic disaster. In 2008 the financial shock was at least as big, but the reaction was smarter and the economic fallout less severe.

Sales leaders have long fixated on process discipline, monitoring reps' conformance to "optimal" behaviors and their performance of specified activities. Recently, however, this sales machine has stalled. The approaches that once led to predictable progress in a sale do not work with today's customers, who are empowered with more information than ever before. The new environment favors creative and adaptable sellers who challenge customers with disruptive insights into their business--and offer unexpected solutions. Such "insight selling" gives reps latitude to discover what the customer has already concluded about its needs and the available solutions, determine who the decision makers are, look for signals that the customer is receptive to a new insight about its business, and then figure out how best to proceed. A study of 2,500 B2B sales professionals found that most organizations, despite faltering sales performance, still have a climate that emphasizes compliance rather than judgment. To create a judgment-oriented sales climate, managers must serve as connectors within and beyond their teams, providing a continual flow of information that supports reps as they exercise their judgment on individual deals. These managers must also focus on the long term, monitoring customers' behaviors and directing reps' creativity and critical thinking to the most promising opportunities. And they need to hire professionals--not necessarily those with sales backgrounds--who can thrive in the new climate.

At 57, Christine Lagarde has held top jobs in government, in the private sector, and now at a big global institution, the International Monetary Fund, where she became managing director in 2011. It was a doubly challenging time to take the helm: Lagarde's predecessor, Dominique Strauss-Kahn, was embroiled in scandal, and the global economy remained in dire straits. In this interview with HBR's editor in chief, Lagarde talks about what it takes to be an effective leader, the differences between "masculine" and "feminine" leadership styles and what women bring to the table in times of crisis, ideas for strengthening the IMF, and opportunities for the Fund and the world's governments to create a more vibrant global economy.