TOPIC 1 WHAT IS INTERNATIONAL BUSINESS?

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5. The Malaysian government used the „Infant Industry‰ argument to

support the national car manufacturer, Proton.
A. True
B. False

6. Why do firms need to venture abroad to acquire resources?

7. How does the maintaining of national security justify government

intervention in trade flows?

 This opening topic introduced and explained the basic and current concepts
underlying the activity of international business.

 First, we learned about the increasing role and importance of international

business in line with its tremendous growth in recent years and the reasons for
its growth.

 Next, we learned that globalisation can be viewed as comprising two aspects

of production and of marketing.

 The activities conducted in international markets are categorised as the export

and import of goods and services and investments. The other activities which
we briefly learned are licensing, franchising and management contracts, all of
which will be dealt with in greater detail in later topics.

 In order to have a better understanding of international competition, we

learned about external factors that interact within which the international firm
operates.

 We also learned about the reasons that drive firms to engage in businesses
abroad which are mainly to expand their sales, to acquire needed resources
and/or to minimise the risk of competition.

 Finally, we learned about the practice of trade protectionism by country

governments to restrict the free flow of trade into or out of their countries
based on seven major reasons.

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