Global Business Analysis : Understanding the Role of Systemic Risk in International Business

One of the core functions of any successful business is the ability to manage and adapt to risk. In a global environment characterised by complexity, it is vital to be able to understand where risk lies and how it impacts upon business. This textbook presents a series of meta-level trends, including as geo-political risks, climate change, and technology, and explores how they are forming and reshaping the risk environment of business. Using a mix of micro and macro level analysis, students will be able to understand how seemingly random, global events, pose challenges for firms. Representing a bold sea-change in the study of international business, this book emphasises the practical elements that students will need to understand in order to succeed in the real world. Readers will not only learn how to understand and read risks in international markets, but they will also benefit from a tooklit to help them assess these processes. Ultimately, this textbook will furnish students with a full appreciation of the importance of risk in international systems. Preface Contents Abbreviations List of Figures List of Tables List of Case Studies List of Boxes 1 The Nature of Global Risk Introduction The Nature of Risk The Systemic Nature of Risk Case Study 1.1: The Strange Case of Kim Jong Un’s Weight Loss The Global System The Structure of the Global System The Operation of the Global System Complexity Concentration Case Study 1.2: Globalization and Superspreading—The Case of COVID-19 Global Trends and Global Risk The Nature of Global Risk Box 1.1: Twenty-First-Century Events That Impact Upon Global Flows Security Crisis 2001 Global Financial Crisis of 2007–2009 The COVID-19 Pandemic of 2019–2022 The Russia–Ukraine Conflict—2022–Present Systemic Resilience in the Face of Global Complexity Systemic Sustainability Conclusion Discussion Questions Activities Summary Key Readings 2 The Global Business Model: Business and Embedded Global Risk Introduction The Nature of the Business Model Value Networks Case Study 2.1: Apple’s Global Value Network for the iPhone Business Model Risk Business Model Resilience Business Model Adaptation Globality and the Business Model Box 2.1: The Legacy of Global Complexity: The Universal International Business Internationalization and Business Risk Types of Global Business Models Box 2.2: Global Value Networks (GVNs): The Global Interconnection of Business Models MNCs and Macro-level Risk Political Economic Social Case Study 2.2: Chinese SME Internationalization Conclusions Key Points Discussion Questions Activities Summary Key Readings 3 The State and the Global System Introduction The State in International Business Box 3.1: State Types State Strategy Case Study 3.1: Why Afghanistan Matters State Success and Failure What About Alternative Cycles of Growth and Risk Reduction? Box 3.2: The Return of the State State Failure PESOE Framework for State-Based Risk Assessment: Mapping State-Based Risk Political Economic Social Operational Ecological Mapping State-Based Risk: The PESOE Pentagon Case Study 3.2: Mapping State-Based Risk: The Case of Japan Conclusions Key Points Discussion Questions Activities Summary Key Readings 4 Geoeconomic Risk Introduction The Global Economic Sub-system The Nature of Economic Globalization Drivers of Globalization Driver 1: The Triumph of Economic Neo-Liberalism Driver 2: Spread of International Governance and Regulation Driver 3: Finance and Capital Spread Driver 4: Technology Driver 5: Social and Cultural Convergence Global Economic Interconnectedness Trade Interconnectivity Capital Interconnectivity People Interconnectivity Data Interconnectivity The Form and Nature of Geoeconomic Risk Box 4.1: From Connectivity to Hyperconnectivity within Global Economic Systems Major Sources of Geoeconomic Risk Dominant State Performance Generalized Macro-economic Instability Box 4.2: The Great Moderation Global Decoupling Commodity Markets Box 4.3: The Strategic Challenges of China and US Decoupling Economic Nationalism Case Study 4.1: The ‘Excessive Globalization’ of Rare Earths Asset Bubbles Supply Side Shock Singular Events Case Study 4.2: The Economic Shock of COVID Conclusions Summary Further Reading 5 Geopolitical Risk Introduction What is Political Risk? Political Interconnectivity Political Globalization Box 5.1: Global Governance Architecture: The Main Global Co-Ordinating Institutions Geopolitical Risk What is Geopolitics? The Nature of Geopolitical Risk Case Study 5.1: Geopolitical Risk in Global Business: Russian Divestment and the Russia–Ukraine Conflict Major Sources of Geopolitical Risk Erosion of Hegemony Rogue States Nationalism International Terrorism Inter-state Conflict Global Governance Failure Case Study 5.2: TSMC and Geopolitics Conclusions Key Points Discussion Questions Activities Summary Further Reading 6 Ecological Risk Introduction The Anthropocene Climate Risk What is Climate Change? Physical Climate Risks Adaptation Climate Risks Box 6.1: Climate Change and Small Island Developing States (SIDS) Four Climate Risk Scenarios Scenario 1: Low Physical/Low Adaptation Risk Scenario 2: High Physical/Low Adaptation Risk Scenario 3: Low Physical/High Adaptation Risk Scenario 4: High Physical/High Adaptation Risk Case Study 6.1: BP and the Energy Transition: Moving Beyond Petroleum Water–Energy–Food Nexus Water Security Energy Security The Nature of Energy Security The Energy Transition and Security The Risk Context of the Energy Transition Investment Risk Geopolitical Risk Geo-Social/Economic Risk Food Security Food Security Risks Geopolitical Risk Climate Risk Economic Risk Social Risk Technological Risk Case Study 6.2: Water Risk on the Nile and Ethiopia’s Grand Ethiopian Renaissance Dam (GERD) Conclusion Key Points Discussion Questions Activities Summary References 7 Global Social Risk Introduction The Nature of Social Risk Case Study 7.1: Social Media and Social Risk Globalizing Social Risk Meta-Level Social Risks Macro-Level Social Risk Meso-Level Social Risk Micro-Level Social Risk Social Risk Within the Global System Demographic Change and Social Risk Ageing Case Study 7.2: Japan’s ‘Super Ageing’ Society Inequality and Social Risk Global Health and Wellbeing Global Public Health Global Wellbeing Global Health Security Case Study 7.3: Global Obesity and Social Risk Box 7.1: Agricultural Pandemics Conclusions Key Points Discussion Questions Activities Summary Further Readings 8 Technological Risk Introduction The Global Technological System Technological Change and the Global System The Nature of Technological Risk Economic Social Political Ecological Technological Technological Risk in the Fourth Industrial Revolution Technological Risk as Digital Risk Automation/Robotization Artificial Intelligence Cyber Risk Fragmentation of the Global Technological System Internet of Things (IOT) Ethical IOT Risk Security IOT Risk Privacy IOT Risk Technical IOT Risk The Digital Divide The Emergence of Widespread Anti-Science Sentiment Box 8.1: The Dark Web Case Study 8.1: India Moves up the Tech Value Chain Case Study 8.2: Google and China Conclusions Key Points Discussion Questions Activities Summary Further Reading 9 Infrastructural Risk Introduction The Nature of Infrastructure The Global Infrastructure System Critical Infrastructure Infrastructure Risk Infrastructure Risk Within Global Systems Transport Global Bottlenecks Hub Bottlenecks Link Bottlenecks The Global Commons Case Study 9.1: The Ever Given’s Disruption of the Suez Canal Energy Expropriation Risk Within Energy Case Study 9.2: The Nord Stream Pipelines International Risk in Electricity Grids Information Infrastructure Infrastructural Splintering Case Study 9.3: China’s Malacca Dilemma Conclusion Key Points Discussion Questions Activities Summary Further Readings 10 Conclusions: Analysing Global Business In a Complex Environment Introduction Understanding Risk in Global Business The Rise of the Polycrisis The Resilience of Global Systems Geoeconomic Geopolitical Social Ecological Technological Infrastructural The Importance of Sustainable Global Systems Conclusion Key Points Discussion Questions Group Activities Summary Further Reading Index