Created By:

De Castro, Anne Gwyneth C.

Evangelista, Jesseca Joy B.
Gallaza, May Ann O.

INTERNATIONAL
BUSINESS
CHAPTER 1
INTERNATIONAL BUSINESS

a cross border

transaction between

individuals, businesses,

or government entities.

GLOBALIZATION
the shift toward a more creates greater
interdependent and integrated opportunities for
global economy international business

International trade and Globalization

Relationship

Ease of transportation across international borders

facilitated by globalization makes it easier to trade

internationally

International communication is much easier now because of the

improvement in technology and the influence of globalization

Globalization has brought people and businesses much

closer, therefore, the impact on international business is
huge as well as remarkable.

Sources: Carpenter,M.A(2012)Challenges and Opportunities in International Business

Esther Ejim Last Modified Date: October 30. (2022, October 30). What is the relationship between International Trade and globalization? Smart Capital Mind.
Retrieved November 24, 2022, from https://www.smartcapitalmind.com/what-is-the-relationship-between-international-trade-and-globalization.htm
 INTERNATIONAL BUSINESS

EXCHANGES TRADE BUSINESS

ALL CROSS-BORDER EXCHANGES OF

GOODS, SERVICES, OR RESOURCES
BETWEEN TWO OR MORE NATIONS

These exchanges can go beyond the

exchange of money for physical goods to

include international transfers of other

resources, such as people, intellectual

property, and contractual assets or liabilities.

INTERNATIONAL
BUSINESS
encompasses a full range of
cross-border exchanges of goods,
services, or resources between two
or more nations.

These exchanges can go beyond

the exchange of money for
physical goods to include
international transfers of other
resources, such as people,
intellectual property (e.g., patents,
copyrights, brand trademarks, and INTERESTED IN
data), and contractual assets or
liabilities (e.g., the right to use
INTERNATIONAL BUSINESS
some foreign asset, provide some
future service to foreign
customers, or execute a complex
financial instrument).

Stakeholders Include: an individual or

employees, managers, organization whose

businesses, governments, interests may be

and nongovernmental affected as the

organizations. result of what

another individual

or organization

does.

Source: Carpenter,M.A(2012)Challenges and Opportunities in International Business

 FORMS OF INTERNATIONAL BUSINESS
BUSINESS

BUSINESS
PROFIT

Typically gauged in
financial and economic BE A PERSON OR ORGANIZATION ENGAGED IN

COMMERCE WITH THE AIM OF ACHIEVING A

terms. PROFIT.

Note: The international part of a firm’s business can vary from importing to exporting to having significant
operations outside its home country.

sells products and services

IMPORTER that are sourced from other
countries

sells products and services

EXPORTER in foreign countries that are

sourced from its home

country.

Advantages due to choice of foreign

markets and can include better

access to raw materials, less costly

labor, key suppliers, key customers,

energy, and natural resources.

FOREIGN DIRECT INVESTMENT

FDI happens when a firm is investing

assets directly into a foreign country’s
buildings, equipment, or organizations.

INTERNATIONAL FORMS OF GOVERNMENT

GOVERNMENT
the body of people that sets and
administers public policy and exercises

executive, political, and sovereign power

through customs, institutions, and laws

within a state, country, or other political

unit.

NON-GOVERNMENTAL
ORGANIZATIONS
Any nonprofit, voluntary citizens’ group

that is organized on a local, national, or

international level.

Source: Carpenter,M.A(2012)Challenges and Opportunities in International Business

 THE GLOBALIZATION DEBATE

HOW THE WORLD

GOT FLAT

1 11/9/89 2 8/9/95
When the walls came
When Netscape

down and the windows

went public
went up

WORK-FLOW

10 THE STEROIDS 3 SOFTWARE

Digital, mobile,
Let’s do lunch. Have

personal, and
TEN FACTORS
your application talk to

my application
virtual
HAD POWERFUL
OPEN-

9 INFORMING ROLES IN MAKING

4 SOURCING
Google, Yahoo!,
THE WORLD
Self-organizing,

MSN Web Search SMALLER collaborative

communities

8 INSOURCING 5 OUTSOURCING

What the guys in funny

Y2K
brown shorts are really

doing

7 SUPPLY-CHAINING 6 OFFSHORING

Eating sushi in
Running with

Arkansas gazelles, eating

with lions

CAGE FRAMEWORK
CULTURE GEOGRAPHY

Cultural differences
Generally, as distance goes

between two countries

up, trade goes down, since

distance usually increases

reduce their economic

the cost of transportation.

exchange. Culture

Geographic differences also

refers to a people’s
include time zones, access

norms, common beliefs,

to ocean ports, shared

and practices borders, topography, and

climate

ADMINISTRATION ECONOMICS

Bilateral trade flows show

Economic distance refers to

that administratively similar

differences in demographic

countries trade much more

and socioeconomic

with each other.

conditions. The most

Administrative distance obvious economic difference

refers to historical
between countries is size (as

governmental ties. compared by gross domestic

product, or GDP).

Source: Carpenter,M.A(2012)Challenges and Opportunities in International Business

 Good Ethics are
Good Business

1
ATTRIBUTES OF ETHICAL BUSINESS

ACCOUNTABILITY
Having accountability means that

the organization sets its ethical

expectations up front. The

company’s values are clear to

each individual working for it.

Everyone is expected to stay true

to these values and is held

accountable for their actions.

2 FAIRNESS
CULTURES

Fairness is the perception of the

greater majority that the policies

in place inside the organization

are reasonable and impartial.

Employees should see justice in

the daily practices of the company

as well. They must view

themselves and the work

receiving fair treatment in all

aspects from pay to promotions.

MOTIVE-BASED 3
TRUST
Pertains to the way that employees assess
the character of the people that they work
with inside the company. Each must be
able to have a certain level of confidence
in the other for them to be able to succeed
in their tasks as these usually require
teamwork.

Source: https://online.norwich.edu/academic-programs/resources/good-ethics-are-good-business