International Business

Part One
Background For International
Business

Chapter One
Globalization and International
Business
 Chapter Objectives
To define globalization and international business
and show how they affect each other
To understand why companies engage in
international business and why international
business growth has accelerated
To discuss the major criticisms of globalization
To become familiar with different ways in which a
company can accomplish its global objectives
To apply social science disciplines to understanding
the differences between international and domestic
business

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 Definition of Globalization

The broadening set of

interdependent relationships
among people from different
parts of a world that happens to
be divided into nations

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Definition of International Business

All commercial transactions

including sales, investments, and
transportationthat take place
between two or more countries

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 Factors in Increased Globalization

Increase in and expansion of technology

Liberalization of cross-border trade and resource
movements
Development of services that support international
business
Growing consumer pressures
Increased global competition
Changing political situations
Expanded cross-national cooperation
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 The Criticisms of Globalization
Threats to national sovereignty
Growth and environmental stress
Growing income inequality

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 Reasons That Firms Engage in
International Business
Expanding sales
Acquiring resources
Minimizing risk

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 Modes of Operation in International
Business
Merchandise exports and imports
Service exports and imports
Tourism and Transportation
Service Performance
Asset Use
Investments

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 Types of International Organizations

Collaborative arrangements
Strategic Alliance
Multinational Enterprise (MNE)

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 Views on future of international business and
globalization
Further globalization is inevitable.
International business will grow primarily
along regional rather than global lines.
Forces working against further globalization
and international business will slow down
both trends.

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Inc. publishing as Prentice Hall