You are on page 1of 13

ABOUT THIS BOOK The surge in cross-border connectivity involving people, organizations and countries opens up new

horizons every day. This naturally kindles fresh aspirations among professionals, managers, and entrepreneurs who regard the world as their oyster for seeking opportunities to participate in, and benefit from, international business. Some of you may already be doing so and may want to expand your business; others may be taking, or envisioning, first steps. International business can be thought of as a magnet that lures many but one which, by posing formidable challenges, also quickly rebuffs the unprepared. There is a rich body of experience to learn from, but, it is thinly documented. Concepts and practices constantly challenge each other in international business, making it difficult to bring relevant and significant insights to the attention of practising professionals in a timely manner. People learn mainly from their own experiences—often by burning their fingers, leading them to burn their bridges or their boats. Occasionally, there is also learning to be acquired from anecdotal tales of colleagues who are engaged in their own or others’ firms, but rarely is there any distilled analysis of the true encounters of a significant number of others, who took similar paths; of why they failed or how they—successfully made their way around. This book addresses that gap. It is not written to marshal data or arguments in support of or against contestable hypotheses of my academic collegiate community. There are numerous other forums and platforms to do that. Nor is this book meant for those who believe that international business is merely about networking and luck. This is not going to add to your ‘know-who’ network of business connections nor will it serve to demystify the future any better than would a crystal ball. People like you and me and millions of others, driven by our motivations and passions, mustering courage and support from powerbases, are actually shaping that future. This book will not serve the purpose of those who regard state actors as being almost omnipotent or who believe that lobbying for preferential incentives is the main route to international business. If you are in search of a bag of tricks to extend a domestic business abroad, if you are seeking a quick fix to treat irritants previously encountered in international business without diagnosing them, or if you are expecting to make winning deals with potential foreign partners by outsmarting them with magic wands—this book is not for you. Please put it back and continue your quest. I wish you luck. I would suggest muses, like Jonathan Swift’s Gulliver’s Travels; Lewis Carroll’s Alice in Wonderland; The Adventures of Marco Polo; the poetry of Milton and Blake, or Jaishankar Prasad’s stories, such as, Puraskar; the Finnish epic Kalevala where the quest for retrieving a magical money-making machine, the Sampo involves Kullervo’s adventures and Väinömöinen’s sagely wisdom or Kalidas’s ode to the Himalayas in Meghdoot—all of which I myself enjoy reading. However, if you want a book shorn of jargon, one which will help you consider and evaluate potential international business opportunities by connecting cross-border nodes of value (what we may call ‘value chains’) or designing and structuring ‘value grids’ and constellations (patterns), developing ways of engaging decisively and confidently in international business, and embracing the present with an eye on the future, I warmly welcome you. If you

could not have succeeded because they were ‘stuck in the . human trafficking. One of the well-kept secrets of international business is that several theories about it which are in wide circulation have never been empirically confirmed. But what enables. the organization of international value chains for bridging and linking resources and responses. and various stakeholding contracts supporting them occur on private entrepreneurial and managerial initiative. International business can take many forms. the various versions of comparative advantage theories (the Ricardian theory. if international business excites you. let me first outline the scope of the subject and its underbelly to provide you a sense of the chapters that follow. Quaint Porterian notions about positioning are contradicted by the success of retail chains. or if you are curious about concepts and cases and the ‘know-why’ and the ‘know-how’ which we pack into our international business courses at IIMA. weapons. and manufacturers. capital. based on what was identified as their comparative advantage. soldiers of fortune. ideas. there are also smuggling rackets. illicit drug deals and counterfeit products. In fact. services. in which players in illegal international activities and law enforcement authorities try to outsmart each other. illegal immigrants. Ghana invested in growing more of its large. Considerable cross-border procurement. and propels this phenomenon? To put it simply. In services. The illegitimate underworld is not something we focus on. sustains. SCOPE OF INTERNATIONAL BUSINESS As an introduction to this book. for instance. This includes some notable ones with intuitive appeal. use. On the darker side. but we must not lose sight of it. and plurality of ‘pictures-in-the-mind’ over what is feasible to make. a variety in natural resource endowments. according to Porter. if the cutting edge of practice within the scope of your own decision-making interests you.believe that chance favours the prepared mind. or people. such as. like Toyota who. store. the world is characterized by a great diversity in the choice of lifestyles. for exporting to Europe. and numerous other organized forms of brokerage and contracting persist. cheating on border levies. and contraband cross-border trade of goods. read on. like Sainsbury (Cronshaw 1994). the Heckscher–Ohlin model) which justify specialization in trade have contributed to the impoverishment of many African nations. there are mercenaries of various descriptions. the marketing of goods and services. delicious juicy pineapples. its scope is not limited to government trade or official transactions between countries. International business is any business that spans beyond a country’s boundaries for creating value from the flow of products. differential competitive advantages. Gold smuggling and havala trade by the so-called bhailog allegedly financed the growth of Bollywood for a long time until the government eventually acknowledged filmmaking as an industry eligible for financing and credit from the banking system and industrial finance institutions in 2002. organized international crime syndicates. many theories have actually been refuted but they continue to be peddled and circulated. The efforts were in vain because Southern European producers lobbied in the European Union for a maximal size for pineapples that could be imported into the European Community. or exchange.

These actors themselves frequently disappear and reappear in new costumes. regularly publish results from research in international business. Prahalad as ‘core competence’) and Jaques’s ‘time-span of discretion’ (emphasized by Vikram Sarabhai as the time-interval needed for systemic responses). have immortalized in fiction some of the ugly realities where sound management concepts are applied in a twisted manner for questionable purposes. it becomes difficult to separate wild conjectures from working hypotheses. by its very nature. Just as it is impossible to step twice into the same water in a river. When more is written than is actually known. The growing body of knowledge in this field is. That is what drew me to international business in the first place.K. In international business. the results of actions and interventions are quickly known. When designing new value chains. have remained relevant for decades. and working hypotheses from possible alternate hypotheses. be careful—Sumantra Ghoshal cautioned us in one of his last articles that ‘bad management theories can drive out good management practices’ (Ghoshal 2005). and when and where to make international footprints. do not remain constant or stable. consumers.middle’ and did not choose between his holy cows of ‘cost-based’ and ‘differentiation-based’ advantages. Novels. arbiters. it is rather difficult to conduct research in international business with primary data in real time to judge contemporary beliefs through testable hypotheses. managers. Managers and entrepreneurs need to understand potential value constellations in product–service linkages so as to cope with political risks and country risks. to reinforce management processes. like Selznick’s ‘distinctive competence’ (repackaged by C. Managers can become more productive if they give attention to the nuanced aspects of the business that is being considered. The sharpest insights available in international business arise from cases drawn from action–research where the thin line separating consultancy from research pales. and to sustain and renew organization . how to evaluate risks. Diamonds and double diamonds of competitive advantage passed on to strategy students as gospel truth may have actually widened the gap between scholarship and practice. like James Clavell’s popular Noble House and Taipan (you would recognize Jardines in it!). like the Journal of International Business Studies and International Business Review. interdisciplinary and multidisciplinary. timeless gems of concepts. to design control systems. it is necessary to understand the complexity of international business in order to develop capabilities in enterprises. Several internationally renowned management journals. But. Concepts of industry analysis lose relevance when industry boundaries change or get blurred. The nature and dynamics of international business transform rapidly when the motives and powerbases of participants as entrepreneurs. investors. The Hofstedian constructs of national culture for explaining intercultural and multicultural encounters and how they affect international business lie in tatters (McSweeney 2002). In contrast. There are also hundreds of new cases researched and written annually that are periodically discussed in numerous academic and business conferences worldwide and also brought to the classrooms for learners in management institutions. officials. which questions to ask.

NEW HORIZONS IN INTERNATIONAL BUSINESS The frontiers of the world business environment underwent a silent revolution between 1989 and 1995 when a lot of residual political agenda accumulating since World War II was sorted out. Initially. such as. were among the first to introduce compulsory international business courses as part of the curricula in their business schools. and crafting new institutions aided by the entry of fresh technologies. these processes have been documented in the book. It is necessary to acquire knowledge and skills for developing insights into how enterprises create and develop particular patterns of trading or investment. and teaching it since its inception. and why they exhibit preferences for certain entry modes. Doz and Sheer 2006). and the first World Trade Organization (WTO) was chartered. and notions of what knowledge would be most useful were hotly contested. This opened economies and connected the world by creating gateways for new possibilities. the USSR and its COMECON (Council for Mutual Economic Assistance) trade disintegrated. IIM Ahmedabad introduced International Business as a compulsory course for the first time when the new Full-Time Residential Executive MBA programme (the PGPX programme) was launched. Managers can close the gap between identifying and populating arenas of strategic opportunity through new growth platforms (Laurie. Small open economies. like Belgium and Finland. In 2006. and scholars. and I remain responsible for both these courses. However. policymakers. mobile telephony and the World Wide Web. The manner in which firms resolve issues of coordination and control. discovering new interfaces.structures. I have been responsible for designing it. international aspects did come up in various functional courses. the content and pedagogy of these courses varied widely. and enhance awareness and sensitivity for recognizing and mitigating conflicts in international business negotiations can make all the difference between stalled growth and profiting from new opportunities. as well. Even before International Business was established as a stand-alone course. What Knowledge is of Most Worth? (Mathur 2000). courses in International Business quickly became an indispensable part of management curricula in leading business schools all over the world. The Cold War ended with the fall of the Berlin Wall. These courses were developed along with practising managers. there is a huge difference between adding the epithet ‘International’ to a session in Finance or Marketing or Human Resource Management . Smith (2010) has drawn attention to the fact that our understanding of international relations requires fresh thinking. the European Union Treaty saw the light of day. updating it. Transformations in international economic relations have outpaced reforms which are crucial in the architecture of international institutions. Elective courses—International Business and Strategies and the Future—were introduced in the flagship MBA programme (called PGP) in the same year. In the 1990s. It was an honour for me to be associated with both these initiatives in the formative stages of international business curricular design and delivery of courses. where the internationalization imperative was high.

customers. bilateral. competitiveness. you need bifocal vision to understand the world economic and business environment as it evolves at the macrolevel. The chapters have been organized in a way so that the micro and macro elements speak to each other throughout. and processes. plurilateral and multilateral initiatives and emerging concepts concerned with governance. a wider set of executives is responsible for organizing international business and has to be prepared for new ways of doing business with enhanced skills. Mintzberg (1994) reminded us that no one has ever seen or touched or smelt a strategy. The micro strand focuses on how business seek. or export marketing. create and sustain firm specific advantages to respond to the business environment by concentrating on strategic. In firms. People often confuse plans with strategy. and operational issues that concern systems. activities abroad. Bifocal vision is necessary but not sufficient. An aspirational dream conceived in an individual’s mind even if that individual be a leader is only an idea. CONTENTS OF THIS BOOK The structure of this book eschews artificial distinctions between the macrolevel phenomena of the business environment and its microeconomic expression in business firms. creditors. not a strategy. structures. while simultaneously managing your own business for which you are directly responsible. partners. shareholders. The advantages of international business are derived on the basis of geographical separation of value-creating parts in a business chain where the partitioning of task is itself an intended part of the grand design. Only by paying heed to signals and noises can one discern whether the stakeholding contracts that make up the nexus of treaties are stressed or whether the wheels of the business juggernaut are beginning to creak and groan. regional and national governments as stakeholding constituents (Aoki 1990). As more and more strategies devised by managers pertain to significant engagements with. The macro strand leads you to the national. international business activities were previously restricted to those with roles in technical procurement. it is strategy (by discovery or design as a ‘picture in the mind’ reinforced or modified by managerial actions everyday) that keeps a firm sustainable for its stakeholders. local communities. However. Therefore. and attention to. Strategy is simply a grand actionable design collectively shareable and containable as a ‘picturein-the-mind’ of any group. it is useful to regard a business firm as an artificial juridical person that comes alive from the confluence of a bunch of treaties involving founders.(HRM) and taking a holistic view of international business as a discipline with its own rigorous interdisciplinary trajectory and multidisciplinary integration that has evolved over two decades. The cement that binds a firm is essentially behavioural and can come apart overnight. too. and invisible or unattended spoke-holders can be annoying sources of turbulence. tactical. foreign exchange hedging in treasury functions. As an international business professional. and international economic relations. employees. The danger of not recognizing stakeholders and their interests gets magnified in international business because . Any dissatisfied stakeholder may become a ‘spoke-holder’.

economic. and it taught me about the bewildering variety of institutional rules and norms in different parts of the world. social. That taught me a great deal. Rather. This book avoids taking a step-by-step approach to conceiving a business or pretending that ready-made solutions preexist to every problem that may arise. we have the advantage of your own experience. and to consider. especially when there are pieces missing from your . During the eight years that I was managing director of an international business firm in Europe. I can assure you I needed all the knowledge and skills from the world of managerial practice and scholarship I had acquired and still some because there were always experiences to learn from. I must confess I have been in executive roles in multinational firms and founded a business I owned and managed in Europe for eight years. The fundamental question before undertaking business is to ask whether the business is designed to serve all its stakeholding constituents and whether it would continue to do so in a sustainable manner. cultural. an attempt is made to draw your attention to a plurality of perspectives for various problems about which you yourself may like to think and consider. There can be multiple viewpoints for every decision. Instead. I would not go so far as to believe that they have succeeded only because they were not burdened by such education. it avoids suggesting ‘five steps to make your brand achieve salience in New York!’ Have you not wondered why self-styled gurus churning inspirational public lectures and writing books detailing step-by-step approaches do not have the courage to take those steps themselves? Having mentioned that.of spans and distances (physical. There is much that you may wish to know about international business. Surveys have shown that an overwhelmingly large proportion of successful international business entrepreneurs haven’t been to business schools or university (this category includes more than two-thirds of the people listed in the Forbes List of the 400 richest people in the world). by exposing you to the totality of it—illuminating warts and all—it will not let you take or support a decision where all pertinent aspects haven’t been considered. and time. We are not going to take that route here. While it would be fair to state that people have succeeded in international business despite their lack of formal education in it. This book will not cover up or pretend to simplify the complexity of international business. especially about how fragile assumptions of demand can be. and this written text to which you can refer. On our side. political. as you take this walk with me through the subject matter. The book refrains from advocating quick fixes and handing out mindless homilies. It avoids suggesting how an ‘x’ number of mechanical steps could make you a prosperous exporter to Timbuktu or a successful joint-venture partner in Outer Mongolia. how quickly prices can change. for you to reflect. along with project work and an exam at the end. we cover the subject in the flagship PGP programme over one academic term of twenty-six contact sessions (each of seventy-five minutes) with reading and library work to be done after every contact session. the complexity of decision-making. institutional and psychic). There are successful people out there who have made fortunes in this field long before the subject was added to business school curricula. At IIMA. The value of this book lies in preparing you to think through. your wish to learn.

and . Institutions and organizations can draw on alternative means of allocating resources and save on transactional costs. procurement. information technology. For this reason. institutional and cultural. Chapter 3 alerts readers to the numerous alternative possibilities that exist. In most of the chapters. it is important to be able to make assumptions and take decisions on the basis of patterns which you can recognize quickly. nothing depreciates in value as fast as information. for example. and governments to international business. technological. I have shared several brief examples (including some notable ones put in boxes) to bring you factual information and narratives to illustrate the nature of the issues discussed. and directions that international business is taking. the mode of presentation is to regard international business as a multidisciplinary enterprise and knowledge arena. The structure and the nature of international businesses depend upon the purposes which a business serves for all the involved parties—internal or external. or human response management) can yield all the critical insights required to exercise business judgement. This is the classic Coasian reason (Coase 1960) that explains why it makes sense to do business through a firm that can reliably hold. you will seldom possess all the relevant data you desire at the time of making a decision. Therefore. MODE OF PRESENTATION In this book. environmental. and its emerging trends. Here. notions. conceptions. In real life. technology. No one facet (such as. and risks. artefacts and understanding are important for organizing new value constellations. Chapter 1 introduces you to the motivations that attract individuals. The changes required in boundaries of task. territory. Opportunities for business in the world environment are discussed in Chapter 2 to highlight the nature of boundary-crossings to be negotiated for various kinds of opportunities. are best not taken within functional isolation. Also. Notice. organizations. bereft of jargon and technicalities that may detract the reader. relationships. There is discussion on how the scope of international business has changed in the recent past. manufacturing. This book will have served its purpose if it helps guide you to recognize patterns confidently and with alacrity. supply-chain management. and take better decisions for committing resources to action. command and direct resources. A multinational firm further eliminates the need to limit cross-border transactions to markets because it can transfer resources from one part to another at notional transfer prices. Even functional decisions in a complex endeavour. like international business. attention is drawn to the design of organizations as open systems that contain management processes conducive to sustainable international engagement. and that no choice is free of constraints. I have adopted what I hope is an easy-to-read style. Organizations with linkages abroad need to be designed for sustainability on several dimensions—economic.own puzzles. that human trafficking may be illegal but ‘body-shopping’ in the IT industry is not. social. keeping in mind that every choice is associated with some resource commitments. responsibilities. The genesis of international business and its forms are contextually and historically traced to demystify some of the patterns. marketing. that every resource at some stage becomes a constraint. time. finance.

Also. ‘On Being Stuck in the Middle or Good Food Costs Less at Sainsbury’s’. Chapter 4 is devoted exclusively to the design of potential cross-border value chains from an internal market perspective. however.. predictability in taxation rates. British Journal of Management. while distinguishing cultural diversity from institutional diversity the latter being covered in Chapter 6. This is followed by a discussion on sources of business intelligence in Chapter 8.that the capacity to transfer human resources in labour markets internal to the firm can circumvent external labour market constraints. We would all benefit from the creating and sharing of more knowledge. 3 (Oct. We take note of the logic that sustains value chains and value constellations distinguishing how different ways of structuring product–services linkages enabled by technology introduce new techno-commercial and socio-technical forms. Cronshaw. freedom for capital flows. It highlights important aspects of how capabilities co-evolve in collaborations. M. . property. Coase. pp. and attitudes in multicultural and intercultural environs and the dilemmas it creates are dealt with in Chapter 5. 19–32. I would be delighted to know what you think of this book and I look forward to your suggestions for additions to or amendments in any aspect of the book. impact international business. ‘The Firm as a nexus of Treaties’. fiscal deficits. I will be happy to include your reflections and experiences on the book’s website and in the next edition of the book. vol. inflation rate. and money supply. if you have experiences you would care to share with me and other readers. 1–44. M. Subtle distinctions between the unjust. please write to me at anmathur@iimahd. such as. 1960).H. 5. This has been done to separate statutory. Political risk pertains to the hazard of governance breakdown or regime transition or policy change entailing risks for income. Chapter 7 introduces two significant types of additional risks—political risk and country risk— that. (1990). and customary elements. beliefs. to learning or closing opportunities to continue your journey with international business. pp. and and the illegal have profound implications on the design of cross-border value chains and for clarity on what aspects are contractible and contracted. whereas statutory regulations provide institutional edifices on foundations that are distinguishable by justice frames. the unlawful. contractual. R. (1994). Journal of Law and Economics. A section titled ‘After the End’ concludes the book without closure. and a discussion of missing markets and new directions in international business in Chapter 9. vol. stability of currency exchange rate. Sage. The diversity of norms. values.ernet. (1960). REFERENCES Aoki. besides investment risk and market risks (which exist for all businesses—domestic or international). Thousand Oaks. Customary elements belong to cultural traditions. whereas country risk relates to the fluctuations in economic dimensions. balance of payments. ‘The Problem of Social Cost’.

people are jumping continents for much less. Brendan (2002). Human Relations 55(1). Pat came the an swer. (1994). January-February. ‘The Fall and Rise of Strategic Planning’. May 2006. Smith. H. Yves L. What Knowledge is of Most Worth? Tampere: Tampere University Press. They established the . McSweeney. Susanne Schwenkmeir. The Oxford Handbook of International Relations. and people are aware of possibilities arising out of increased contact. organizations. armed with nothing more than an ABC travel guide and a telex machine.Ghoshal. W ILLIAM B LAKE WHY DO INTERNATIONAL BUSINESS? There is something inviting as well as frightening about crossing boundaries. The Academy of Management Learning and Education. I asked an IIM batchmate what had made him take up an international banking position in Hong Kong which. Donald L. Sumantra (2005). A1:48. Harvard Business Review. Laurie. seemed quite far away. Back in 1977. In what must appear as a long long time ago. Steve (2010). and a Chinese wife?’Since he had recently married a lovely Chinese girl. 4(1) 75–81. entered into a partnership. ‘Creating New Growth Platforms’.. children used to have penfriends in foreign countries—writing letters to each other and collecting postage stamps. Harvard Business Review. I didn’t have the heart to suggest Singapore! Today.‘Where else would you get a British lifestyle. ‘Bad Management Theories are Destroying Good Management Practices’. I know of at least one international business that blossomed out of penfriendship in the 1970s when my classmate Kaushik Sen and his childhood penfriend. 107–14. hand. Sheer (2006). Mintzberg. January 2002. pp. (2000). Countries. flower. ‘Six Wishes for a More Relevant Discipline of International Relations. (eds) Christian Reus-Smit and Duncan Snidal. Oxford and New York: Oxford University Press. Ajeet N. Chapter 1 IT PAYS TO BE IN INTERNATIONAL BUSINESS To And Hold see a infinity a world heaven in the in in palm a a of grain wild your of sand. Doz. an American salary. and Claude P. 44. then. Mathur.’ chap. And eternity in an hour. ‘Dimensions do not exist’.

Binaca and Signal toothpastes. Afghan Snow cream. But there are certain reasons for this. Diwana Tej magazine. Torino Orange bottled softdrink. a volume of contents as large as the Encyclopaedia Britannica can be electronically transmitted from anywhere to anywhere on the planet in less than a second. Nowadays. Weston television sets. Germany. Try dividing some such salary package by the waking hours devoted to the work done. leaving little behind. None of the companies that originally created these brands exists anymore but these brands. with their own value. Money may make the world go around but there should be more than an economic reason for you to cross boundaries and live abroad for international business which can. the US. therefore. Box 1. Foreign artefacts of consumption are part of life and the world around us. Patriot and Sunday Observer newspapers. consumption preferences and professional standards. some lasting commercial value. Vimto beverage. Surely. You would wonder how anyone could contribute so much value in an hour to deserve such compensation and how a company could afford to pay it. The availability of multimedia and telematics has now provided inexpensive means to make and develop such contacts easier. and later extended their business horizons to San Francisco. and Standard Herald cars? Would anyone have heard of them abroad? These were popular national brands that withered. and Spencer’s. You would have heard of Parker pens. Dalda vanaspati. but brands which have made their mark internationally achieve a kind of enviable immortality and. actually. Super Star cigaretttes. are still in the market and have found new owners! How many in India would remember Polsen butter. how to generate higher earnings from international trade or from investment as an entrepreneur? Businesses may be born and may die. There has been a convergence on a number of dimensions. Kelvinator refrigerators. Singer sewing machines. be grasped wherever you are. Both locals and expatriates are generally paid significantly more by international firms than by firms which deal only in domestic business. Rolls-Royce cars. because many kinds of resources from different parts of the world can be linked to produce more effectively and efficiently.1: Being‘Swadeshi’ . you would want to know what to do in order to earn such a salary in your own organization? Or. and it is difficult to come across a product or a service that reaches you untouched by cross-border value chains even if you are a diehard swadeshi (a consumer who prefers local produce). His Master’s Voice (HMV) music records. as World Travellers Club Inc. There exist higher standards and more demanding requirements in profile specifications.Travellers’Club GmbH in Munich. A part of these higher salaries is skill retention premium due to the scarcity in the market of professional talent with international business acumen. Dunlop tyres. Three Coins hair-cutting saloons. and also higher profitability and growth rates that enable such astronomical salaries to be disbursed. NELCO transistors. such as. An unprecedented expansion in the range of consumables— goods as well as services—has altered the economic geography of the planet.

Shell. He may then have a breakfast of eggs. free. He may then use a mobile phone. where his Acer Notebook. making us more fully developed persons with greater skills and knowledge in organizational roles. counting his blessings that he lives and works in his hometown and pride himself on being 100 percent Swadeshi Indian. like Dalmianagar. if he indulges in formal wear. Some cities. He may then settle down to a day’s work. creativity. become obsolete. or become impossible to make due to non-availability of inputs. On arriving at his office building. respect. originally developed as a radiophone by Ericsson in Sweden and whose cellphone prototype was first widely used in war-time Germany but which may now be of Korean. let us follow R. He may then step out to board a bus. . and tenacity in human endeavour more than other places. the International Labour Organization (ILO). and hash potatoes. made in Taiwan. designed in Italy. and Sahaganj. which uses an engine adapted from Japan or Germany and a chassis made in India. and the United Nations Development Programme (UNDP) to solve complex problems stems from the diversity of their talent pool. Lodhna. aesthetic. You are more likely to meet with professionals from different countries in those places and organizations which tolerate. He then changes into office wear where his garments are probably made of fibres first used for this purpose in Sumeria but probably now made in some sweatshop in Bangladesh and. laid by the descendants of a fowl which was Vietnamese in origin. There are numerous ghost towns. There are parts of Birmingham in the UK. he may enter a lift made by Kone of Finland and go to his desk. Detroit in the US and the Ruhr and Saar regions. World Bank. The ability of IBM. This is also true of transnational firms which are multidomestic in nature if their business is nothing more than the horizontal national extension of a tried and tested model across several countries. awaits him. Laxman’s‘common man’(‘aam aadmi’) as he goes about his day. originally grown in Colombia. Japanese. services. He wakes up from a bed where the mattress is filled with cotton—first grown in the Nile Valley in Egypt or Ethiopia—and settles down to drink a cup of chai—originally cultivated in China—and settles down with the morning daily newspaper produced ever since Caxton’s printing press was commercialized in England. GE. which were once thriving industrial hubs. or encourage diversity and multinationalism. They are more likely to receive early warning signals if insulation from competition—self-imposed or regulatory—has not lulled them into a false sense of complacency. native to Spain. Microsoft. or technologies on which they are riding may lose relevance. It pays to be in international business in many ways! Businesses which are satisfied with thriving on local demand do not always realize that there is no guarantee that their business proposition sustains. or Finnish make. followed by a cup of coffee. Swedish. and emotional repertoire. like Kolkata and New York.Inspired by the recent public interest over the controversial use of cartoons in books. The diversity in interactions is not only a rich source of cultural and social stimulation but it also adds to the intellectual. have a distinct character where the intermingling and crossfertilization of ethnicities over a long period of time has induced sensitivity.K. where he might get whiffs of French perfume from co-passengers like Mario Miranda’s Miss Fonseca. or that the products. may put on an appendage derived from the cravat of Croatia. Batanagar. kinesthetic.

new cultural exposures. adds dimensions to our constructs. which has added attractions associated with adventure and challenge. . It is noteworthy that increased possibilities of contact do not diminish certain amounts of anxiety and hostility evoked in our encounters with foreign-ness and foreigners. The sailor claimed to have come across Indians who had tails like monkeys. you should also consider that many such countries have prospered by successfully implementing policies to export heavily and to enjoy trade surpluses with economies that were several times larger. Illustrations of Indians with tails soon found their way into Swedish encyclopaedias. The vast amount of legends and myths that intelligent professionals accumulate about other countries and peoples is no longer surprising. While this is true for those of us who have experienced‘foreigners’in their home countries. Nikolas Köpman. expanded choices in lifestyle. one may add! Several navies of the world now recruit women. you will discover the total exposure that you. THE WORLD NOT EXPERIENCED Travel is said to broaden the mind because it brings new experiences. because that is easily fulfilled through international business. Unfortunately. Carl Linnaeus. have to the world.‘Join the Navy and See the World’. more delegated authority. narrated folklore can become received wisdom! The famous eighteenth-century Swedish taxonomist. Finland ends up. With just over five million people. If you think that countries which sustain open economies are more volatile in their balance of trade. Domestic businesses may unknowingly carry risks greater than the cumulative risk of trying to do business with unfamiliar customers or partners. and the bonus of subsidized tourism thrown in for good measure. beyond the land of their birth. it is open to women on a scale that the world’s navies still cannot provide. with a positive balance of trade with India which has over a billion people and is thirty times its economic size. relied on the account of a visit to the Andaman Islands by a Danish sailor. From such experiences (theirs and ours). it would give you a rough measure of how much of the world you have really sampled and what remains to be experienced. The famous Freud–Einstein correspondence brought out lucidly that the instincts of humankind to aggress and destroy have their origins in the separation experienced between ourselves and others on a psychological plane. but they can no longer attract recruits by posing as exclusive providers of world travel.straddling France and Germany where you would similarly come across relics of industrial estates in the process of being converted to other uses. Have you travelled extensively? If you divide the total area (or population) of all the countries you have visited by the world area (or population). higher salaries. only for the men of that period. Have you thought about the missed and missing opportunities in places that you’ve not visited? The early-twentieth-century recruitment slogan. and changes our perspectives. reflected a popular enticement for commoners to experience more of the planet. Moreover. higher status. as a group. If you do this exercise with your group of colleagues. their experience of us as foreigners could not have failed to leave some impressions either. every year. too.

and Venice proliferated in merchants.GENESIS OF INTERNATIONAL BUSINESS International business is not a new phenomenon. . and Mesopotamian and Syrian groups. The first set of international business entities were Phoenician merchants. who conducted trade from Turkestan to the Mediterranean and up to the Azores Islands in the Atlantic through the Strait of Gibraltar. and the tales of Marco Polo who travelled from Venice to China. and the Baltics. or. It existed when men dared to lead camel caravans on long journeys through the Sindh Desert. transport stuff on yaks over the Sinkiang Plateau. The Merchant of Venice. weathering storms in sailing ships. Germany. Kublai Khan (which is said to have provoked laughter in the Royal Court because the Chinese were much more technologically advanced!) are some examples. and the trading firms in the Italian centres of Genoa. Greece. ride Arabian steeds across the Gobi Desert. immortalized in literature by Shakespeare. Rome. In the olden days. The Roman Empire prospered due to international business and weakened when cross-border flows could no longer be safely conducted. Florence. Egypt. were happy trudging with tradable goods. Phoenician traders of the Eastern Mediterranean region brokered trade between the‘oriental’territories of India and China to their east and the lands that consisted of Arabia. carrying cuckoo clocks as a symbol of European technical advancement to offer to the Grand Mongol. and Turkey. Naples. There were private bank-like institutions in the Eastern Mediterranean area in the fourteenth century. Milan. International merchant trade for cost and price arbitrages has existed for as long as anyone can remember. Roman and Greek traders.