International Business Part One Background For International Business
International Business Part One Background For International Business Chapter One Globalization and International Business Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Chapter Objectives • To define globalization and international business and show 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 2 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Definition of Globalization The broadening set of interdependent relationships among people from different parts of a world that happens to be divided into nations 3 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Definition of International Business All commercial transactions— including sales, investments, and transportation—that take place between two or more countries 4 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
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 5 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
The Criticisms of Globalization • Threats to national sovereignty • Growth and environmental stress • Growing income inequality 6 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Reasons That Firms Engage in International Business • Expanding sales • Acquiring resources • Minimizing risk 7 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Modes of Operation in International Business • • • Merchandise exports and imports Service exports and imports Tourism and Transportation Service Performance Asset Use Investments 8 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Types of International Organizations • Collaborative arrangements • Strategic Alliance • Multinational Enterprise (MNE) 9 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
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. 10 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
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