International Business

International Business is the exchange of goods and services among

individuals and businesses in multiple countries. It can also be considered as
a specific entity, such as a multinational corporation or international
business company that engages in business among multiple countries. All
commercial transactions ie. Private and governmental, sales, investments,
logistics and transportation –that takes place between two or more regions,
countries and nations beyond their political boundaries. Private companies
undertake such transactions for profit. Governments undertake them for
profit and political reasons:

 All business activities which involve cross border transactions of goods,

services, resources between two or more nations
 Transaction of economic resources include capital, skills, people etc. for
international production of physical goods and services such as finance,
banking, insurance, construction etc

Globalization
 A process by which the people of the world are unified into a single
society and functioning together
 Combination of economic, technological, socio cultural and political
forces
 Integration of national economies into the international economy
through trade, foreign direct investment, capital flows, migration, and
spread of technology
 Internationalism-recognizes that different peoples, cultures, languages,
nations, borders, economies, and ecosystems exist

Some Products of Globalization

Samsung, Dell, Hp, HSBC Bank, DHL, Mac Donalds, Uniliver, Apple, Toyota,
Nestle are some products of globalization.

Government Intervention
Governments intervene in markets to address inefficiency. In an optimally
efficient market, resources are perfectly allocated to those that need them in
the amounts they need. In efficient markets that is not the case; some may
have too much of a resource while others do not have enough. Inefficiency
can take many different forms. The government tries to combat these
inequities through regulation, taxation, and subsidies. Most governments
have any combination of four different objectives when they intervene in the
market.

Maximizing Social Welfare

In an unregulated inefficient market, cartels and other types of organizations

can wield monopolistic power, raising entry costs and limiting the
development of infrastructure. Without regulation, businesses can produce
negative externalities without consequence. This all leads to diminished
resources, stifled innovation, and minimized trade and its corresponding
benefits. Government intervention through regulation can directly address
these issues.

Another example of intervention to promote social welfare involves public

goods. Certain depletable goods, like public parks, aren't owned by an
individual. This means that no price is assigned to the use of that good and
everyone can use it. As a result, it is very easy for these assets to be
depleted. Governments intervene to ensure those resources are not
depleted.

Macro-Economic Factors

Governments also intervene to minimize the damage caused by naturally

occurring economic events. Recessions and inflation are part of the natural
business cycle but can have a devastating effect on citizens. In these cases,
governments intervene through subsidies and manipulation of the money
supply to minimize the harsh impact of economic forces on its constituents.

Socio-Economic Factors

Governments may also intervene in markets to promote general economic

fairness. Government often tries, through taxation and welfare programs, to
reallocate financial resources from the wealthy to those that are most in
need. Other examples of market intervention for socio-economic reasons
include employment laws to protect certain segments of the population and
the regulation of the manufacture of certain products to ensure the health
and well-being of consumers.

Governments can sometimes intervene in markets to promote other goals,

such as national unity and advancement. Most people agree that
governments should provide a military for the protection of its citizens, and
this can be seen as a type of intervention. Growing a large and impressive
military not only increases a country's security, but may also be a source of
pride. Intervening in a way that promotes national unity and pride can be an
extremely valuable goal for government officials.