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Blunders in International Business

This book is dedicated to those whose blunders made the book possible

Blunders in International Business
Fourth Edition David A. Ricks
University of Missouri, St Louis

© 1974, 1993, 1999, 2006 by David A. Ricks BLACKWELL PUBLISHING 350 Main Street, Malden, MA 02148-5020, USA 9600 Garsington Road, Oxford OX4 2DQ, UK 550 Swanston Street, Carlton,Victoria 3053, Australia The right of David A. Ricks to be identified as the Author of this Work has been asserted in accordance with the UK Copyright, Designs, and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except aspermitted by the UK Copyright, Designs, and Patents Act 1988, without the prior permission of the publisher. First edition published 1974 as International Business Blunders by Grid, Inc. Second edition published 1993 by Blackwell Publishing Ltd Third edition published 1999 Fourth edition published 2006 by Blackwell Publishing Ltd 1 2006 Library of Congress Cataloging-in-Publication Data is availablefor this book. ISBN-13: 978-1-4051-3492-7 (paperback) ISBN-10: 1-4051-3492-5 (paperback) A catalogue record for this title is available from the British Library. Set in 11.5/13.5pt Garamond by Graphicraft Limited, Hong Kong Printed and bound in the United Kingdom by TJ International Padstow, Cornwall The publisher’s policy is to use permanent paper from mills that operate a sustainable forestrypolicy, and which has been manufactured from pulp processed using acid-free and elementary chlorine-free practices. Furthermore, the publisher ensures that the text paper and cover board used have met acceptable environmental accreditation standards. For further information on Blackwell Publishing, visit our website: www.blackwellpublishing.com

Contents
Preface 1 Introduction The Role of CultureThe Role of Communication Structure vii 2 3 9 13 17 17 19 28 32 33 36 36 46 47 49 51 74 78 80 80 91

2 Production Location/Layout Product Package Color Summary 3 Names Product Names Company Names Summary 4 Marketing Promotions Pricing Summary 5 Translation Carelessness Multiple Meanings

vi

CONTENTS

Idioms Summary 6 Management Cultural Differences Poor Personnel Choices Labor RelationsSummary 7 Strategic Management Entry Mode Supply Problems Complex Problems Additional Mistakes Summary 8 Other Areas of International Business Legal Finance Market Research Summary Lessons Learned Adaptation Nationalism Promotion Translation Market Research Conclusion

96 99 101 104 108 111 113 115 115 121 125 129 135 137 137 144 146 155 157 157 158 159 160 166 167 170 173 177 181

9

NotesIndex of Companies Index of Places Index of Products

Preface
We often hear of business success stories. It seems that everyone is willing to relate past successes. However, unless these tales are absolutely incredible, we tend to forget them and consequently learn little of value. Mistakes, on the other hand, are seldom admitted, are easily remembered, and can be used to illustrate valuablelessons. In fact, I began this collection of international business blunders when I discovered how effectively they could be used in the classroom. One day, after discussing what many of my students thought was a minor point related to international business, I cited a few blunders made by firms that had overlooked the concepts under discussion. The students thoroughly enjoyed the blunders—so muchso that not only did they remember the concepts but they also wanted to learn more about international business. As I encountered more reported blunders, I incorporated them into my classroom lectures with similar results and began to realize that I had stumbled on to a useful and enjoyable teaching tool. At this point, I decided to search seriously for blunders committed by multinational...
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