Introduction to

IBT
MEC 35 INTERNATIONAL BUSINESS AND
TRADE
 COURSE DESCRIPTION

This introductory course focuses on the core concepts and techniques for entering the
international marketplace. Emphasis is on the effect of sociocultural, demographic,
economic, technological, and political-legal factors in the foreign trade environment. As
an introductory survey course, we will cover a variety of topics to illustrate the unique
nature of international business including the patterns of world trade, currency exchange
and international finance, globalization of the firm, international marketing, and
operating procedures of the multinational enterprise. The course demonstrates how
international business variables affect the trade process. It aims to highlight the realities
of international business, some of the its advantages and concerns that come when
business is conducted on the international stage.
MEC 35 INTERNATIONAL BUSINESS AND
TRADE
 COURSE OBJECTIVE

The course aims to provide the students with knowledge on concepts of Globalization
and International Trade; Students will apply a working knowledge of the principles of
International trade to analysis and problem solving in actual situation. Students will be
able to learn about international business laws and importance of them. Finally they will
be familiar with important factors that have impact on globalization and international
trade.
MEC 35 INTERNATIONAL BUSINESS AND
TRADE
 COURSE OUTCOMES

By the end of the course, the students will be able to:

1. A. Background of International Business and Trade: (1) Definition of different
terminologies used in international business and trade including its differences; (2)
Globalization; (3) Philippines’ position in International Business and Trade.
2. B. Theories of International Trade and Investment: (1) Advantages of Specialization;
(2) Concept of Comparative Advantage
3. C. International Monetary System: (1) The Role of the International Monetary Fund;
(2) Exchange Rates, its calculation and the foreign exchange market; (3) The Regional
Currency (Euro) and Its impact.
MEC 35 INTERNATIONAL BUSINESS AND
TRADE
 COURSE OUTCOMES

By the end of the course, the students will be able to:

4. D. Economic Integration: (1) Levels of Economic Integration; (2) The ASEAN; (3) WTO;
(4) APEC; (5) NAFTA, etc.
5. E. Trade and Investment Policies: (1) Role of Foreign Trade in International Trade and
Investment; (2) Foreign Trade and Investment Policies of the Philippines and its
impact to the Philippine economy.
6. F. Politics and Laws: (1) Regulating International Business Behavior; (2) Foreign
Corrupt Practices; (3) Role of International Law and Organizations in the Conduct of
International Business.
7. G. Cultural Challenges: (1) Impact of Culture in International Business, (2) Elements of
Culture and how it shaped the international business.
MEC 35 INTERNATIONAL BUSINESS AND
TRADE
 COURSE OUTCOMES

By the end of the course, the students will be able to:

8. H. International Expansion of Business: (1) Entry strategies; (2) indirect importing and
exporting; (3) licensing and other international practices.
9. I. Global Supply Chain: (1) International Logistics, (2) Free Trade Zones; Import and
Export Documentation and Processes; (3) Cost Control mechanism in international
business; (4) addressing border challenges.
10. J. International Marketing: (1) targeting a foreign market; (2) pricing strategy for
import and export products; (3) analyzing and estimating the market potential.
11. L. International Human Resources: (1) objectives of human resource management in
international organizations (2) Transformations of HR Functions from domestic
company to a global company; (3) advantages and disadvantages of training
employees in different countries.
 Class Activities
Readings
Discussion Forums
Class Reporting –
https://www.economist.com/ and
https://www.ft.com/
Case Analysis
Quizzes
Learning Log
 GRADING SYSTEM
Midterm Quizzes (17.50%)
MT-Case Analysis (7%)
MT Exam - (10.50%)
Finals Quizzes (17.50%)
Finals – Case Analysis (7%)
CP (Reporting, Discussion Forum and
Recitations) –(10.50%)
Final Exam (30%)
This Photo by Unknown Author is licensed under CC BY-SA
CHAPTER 1

AN OVERVIEW OF INTERNATIONAL
BUSINESS
 Chapter Objectives

Discuss the meaning of

international business
Explain the importance of
understanding international
business
Identify and describe the basic
forms of international business
activities
Discuss the causes of globalization
Comprehend the growing role of
emerging markets in the global
economy
THE OLYMPIC
 The Business of the Olympics

Intense reflection of international

business
Government of games by IOC
Competition for hosting
Revenue sources for the Olympics
 Broadcast rights

 Corporate sponsorships
 What Is International Business?
Business transactions between parties from
more than one country

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

 Why Study IBT?
 most organizations are either international or
compete with international companies,
 modes of operations may differ from those used
domestically,
 it helps managers to decide where to find resources
and to sell,
 the best way of conducting business may differ by
country,
 an understanding helps you make better career
decisions,
 an understanding
helps you decide what governmental policies to
support.
 Who Are The Parties Involved?

 Private individuals
 Individual companies

 Groups of companies

 Governmental agencies
How Does International Business
Differ from Domestic?
Currency conversion
Legal systems
Culture
Availability of resources
 Activity:
What are the currencies of Brunei, Thailand,
England and France?
Can you identify some cultural differences
between Malaysians and Arabs?
Can you think of various aspects to consider
when doing business in Muslim countries?
 Why Study International Business?
Large organizations
Job assignment
Small businesses
Competitors
Business techniques and tools
Cultural literacy
 International Business Activities

Exporting and Importing

(E&I)
International
Investments (2I’s)
Licensing, Franchising,
and Management
Contracts (LFMC)
 Exporting and Importing

Exporting: selling of products made in one’s

own country for use or resale in other
countries
Importing: buying of products made in other
countries for use or resale in one’s own
country

WHO IS THE BIGGEST TRADE PARTNER FOR

MALAYSIA?
WHAT DO WE NORMALLY IMPORT AND
EXPORT?
 Visible and Invisible Trade
Trade in Goods
 Merchandise exports and imports
 Visible trade
Trade in Services
 Service exports and imports
 Invisible trade
 International Investments
Capital supplied by residents of one country
to residents of another
Two categories:
 Foreign direct investments
 Portfolio investments
 Other Forms of
International Business Activity

Management
contracts

Licensing Franchising
 International Licensing
Contractual arrangement
 Allow its intellectual property to be used by providing
license to secondary party
 Secondary party will provide royalty in return.
 Management Contract
One countries agreed to operate facilities or
provide other management services to a firm
in another country for an agreed-upon fee.
 International Franchising
A specialized form of international licensing.
However, primary party allow secondary
party to operate exactly as the parent
company run their business.
 Contemporary Causes of
Globalization
Strategic Imperatives
To leverage core competencies
To acquire resources and supplies
To seek new markets
To better compete with rivals
 Globalization
Globalization is the widening and deepening of
interdependent relationships among people from
different nations.
The term sometimes refers to the elimination of
barriers to international movements of goods,
services, capital, technology, and people that
influence the integration of world economies.
 HOW DOES IB FIT IN?
The Relation to Globalization

The global connections between supplies and

markets result from the activities of international
business (IB), which are all commercial
transactions (including sales, investments, and
transportation) that take place among countries.
Private companies undertake such transactions for
profit; governments may undertake them either for
profit or for other reasons.
 FACTORS IN INCREASED
GLOBALIZATION
Rise in and application of technology
Liberalization of cross-border trade and resource
movements
Development of services that support IB
Growth of consumer pressures
Increase in global competition
Changes in political situations and government
policies
Expansion of cross-national cooperation
Environmental Change and
Globalization

Changes in
Technological
Political
Changes
Environments

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall