We analyse the difficulties and opportunities of managing firm activities across national borders. Firms can enter foreign markets via six entry modes, where three are non-equity-based (exporting, licensing, franchising) and three are equity-based (greenfield investments, acquisitions, joint ventures). First, we discuss the advantages of and risks associated with each entry mode. We show how transaction costs theory, real options theory and institutional theory can help explain the optimal entry mode. Second, we include time and show how firms dynamically learn about markets to reduce their liability of foreignness. Third, we discuss the digital aspect, where we show that digital firms are different in various ways, but the arguments used to explain the entry mode still apply. Fourth, we discuss the challenge to balance pressure for global integration, cost effectiveness and standardisation with the pressure to make local adaptations. We evaluate four possible strategies, in particular for international HRM and marketing.

The final chapter draws out conclusions from a century of Indo-German relations. It shows the deep limits of treating nations and nationalism simplistically as barriers to international integration. The growing interconnectedness of the world did not challenge the ideas of nationalism but rather reinvigorated it. Nationalism is not the opposite of globalization but a part of it. To better integrate nations into our understanding of international business history and strategy, this chapter shows that we need to move beyond a transactional view of international business steeped in the assumption that nationalism introduces political risks and increases transaction costs, towards a relational view in which multinationals are understood as integral players in an evolving geopolitical landscape comprised of national communities. Such a view considers how multinationals navigate two sets of relationships that characterize nations: the relationships that define the nation as an imagined community with a collective past and an aspirational future and the relationships that define the nation in relation to other nations. These relationships allow us to consider the ways in which the economics of international business are inseparable from the politics and ideology of the global economy.

The pragmatic partnership among West European nations that has emerged since 1945 exemplifies how “win-win” strategies can bring powerfully beneficial results over time. Yet the EU model cannot be straightforwardly applied at the global level, for five reasons. First, the cultural and political differences among the world’s nations are much greater than they are within Europe. Second, the obscene divide between “haves” and “have-nots” is much starker and more intractable at the global level than it is within Europe. Third, rapid globalization has caused a political backlash in many nations, bringing to power leaders who seek a defensive retrenchment behind national walls. Fourth, global institutions of cultural integration, such as UNESCO, remain relatively weak. And fifth, racist prejudice and nativist xenophobia are on the rise in many nations. Nevertheless, the historical precedent set by the EU demonstrates that national sovereignty can be incrementally dismantled, yielding new forms of institutionalized cooperation among formerly separate and mutually hostile peoples.