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INTERNATIONAL BUSINESS

Reference Books : International Business By

Subba Rao

Francis Cherunilam

Dr Chandran

Sundaram and Black

Daniels & Radebough

Charles Hill & Jain

Roebuck & Simon

Anti Dumping etc 10. ISO and world quality standards etc 9. HR policies etc 11. Globalisation. International Trade Institutions. Trade Barriers. Millineum goals. IBRD. Adv & Disadv 2.Ethical business. Intellectual property rights. IMF. purchase power parity. cultural and social issues. International finance & Foreign Direct Investments. Transnational economy. ADR etc 8. Environmental challenges 4. MFN status. WTO and Policies 7. Market entry strategies and Country selection processes 6. G 20 issues. International issues. GDR. International trade theories 3.Case studies .Logistics. Generalised topics etc 12. CSR. Definition of IB. Domestic vs Int’I business. Information technology.International Business International Business 1. 5. Regional groups.

Singapore. Brazil.International Business Independence. USA) • The Product Life Cycle Theory (Raymond Vernon’s Theory) • Factor Proportions Theory (ex India. US. Dependence and Interdependence International Trade Policy • Laissez-faire approach (Free trade) Vs Interventionist approach Theories • Mercantilism (ex Colonial rule) • Absolute advantage and Comparative advantage (ex India – tea. China. Dubai) . Hong kong.wheat) • Theory of Country size (ex India.

1 gms = Us $ 35 .International Business World Monetary and Exchange rate System • Gold Specie Standard • Gold Bullion standard • Gold Exchange Standard Bretton Woods System 1944 1 Troy Ounce of Gold = 31.

International Business : Prof Bharat Nadkarni Components of Balance of Payments Item A)Current Account I Merchandise II Non Monetary Gold Movement III Invisibles (B) Capital Account I Private II Banking III Official (Govt) (C ) IMF (D) SDR Allocation (E) Errors & Omissions (F ) Reserves and Monetary Gold Credit Debit Net .

Source raw materials wherever they are cheapest. 5. 4. Manufacture anywhere in the world where it is most cost effective.International Business Scope : “World is turning into a Global village”. 2. And you will have achieved the stature of a true Global Organization . To manage all the above points. 6. Try and Forge international strategic alliances. Hire the best talent from all over the world. “SMOOTH” 1. Organize and Raise finances globally. Obtain and Sell in those global markets where the returns are highest. 3.

International Business International Business International business can be defined as activities that buys and sells goods and services across two or more national boundaries. where the managers have to learn the factors unique to . There are institutional arrangements who provide some managerial direction of economic activity taking place abroad. International business is related with those enterprises which have operating units outside their own country. It includes any type of business activity that crosses national borders. even if the management is located in a one country. Conducting international business is really not like playing a whole new ball game but it is like playing in a different ball park.

The guiding principles of a firm engaged in international business activities should incorporate a global perspective.International Business the playing field. . Incorporating an international outlook into the firm’s basic statement will help focus the attention of management on the opportunities outside the domestic economy.

. To facilitate mobility of factors of production. services and capital across the world. 3. 4.International Business Objectives of International Business 1. To integrate economies. To facilitate transfer of ideas. To offer new markets. 2.

High cost of transportation . Competition (pull & push effects) 4.International Business Difference between Domestic and International business 1. concessions and incentives) 2. Expansion of production capacities 3. Wide market 5. Higher rate of profits (Absolute advantages. taxes. Technology 7. Political stability 6.

• Intense competition at global level • Exchange rate developments – shift from –ve to +ve growth • Global capital flows to LDCs • Differences in Price and Cost • Restructuring the economy to integrate with global economy • Increased importance of CSR • The growing importance on enhancing standard of living in LDCs . markets and countries.International Business Growing importance of International Business • Current trends are towards the increasing globalisation and interdependence of firms.

International Business • • Liberal trade policies and procedures Revolution in communication and transportation .

Ethnocentric (Home country orientation) 2. Geocentric (World orientation) . Regiocentric (Regional orientation) 4. Polycentric (Host country orientation) 3.International Business International Business Corporate Approaches E P R G Model 1.

Promotional and Regulatory measures .International Business Home Country Economic Environment 1. Domestic Markets & Size 2. Economic Policies 3.

Development of Banking Facilities 5. Gross Domestic Product 3. Ex Johannesburg.International Business Host Country Economic Environment 1. Sao Paolo . Purchasing Power and Standard of Living 6. Industrialisation 4. Economic diversity (urbanisation – Rural dev. Size of the Markets 2. Income levels 8. Foreign Exchange Situation 7.

Strategic Locations 4.International Business Global Economic Environment 1. International organisations 2. Trading Blocs 3. Global Political Environments and Issues .

1967. Mexico LAFTA (9) : Latin American Free Trade Area Argentina. Philippines.. Peru. Uruguay. Chile. Mexico. Sri Lanka. Maldives (SAPTA – SAARC preferential trading agreement) NAFTA (3) : North American Free Trade Agreement USA. Singapore and Thailand. Brazil. Canada. Paraguay. Bangladesh. Nepal. Malaysia. viz. Columbia. . Ecuador ASEAN (5) : The Association of South East Asian Nations was formed by the Bangkok Declaration.International Business SAARC (7): + Afghanistan (Total 8) South Asian Association for Regional Cooperation India. Bhutan. Pakistan. Indonesia. by five countries.

Belgium. Luxembourg.1. Britain. Germany. Sweden did’nt join. Greece. Sweden. 2004 the total membership of EU increased to 25. Euro : Common currency of the EU was launched by 11 members on 1. Britain.1999.1. Poland. Estonia. EU Additions With effect from May 1. Finland. Hungary. Lithuania. Denmark. Latvia. Denmark. Cyprus and Malta. Two more members. . Bulgaria and Romania. Slovakia. Following ten countries were inducted. Greece joined in 1. Portugal. Netherlands. Czech Republic. taking the tally to 27 countries.2001 Maastricht Treaty of 1991 set the stage for the monetory union. were inducted in 2007.International Business EU (15) : European Union Austria. Slovenia. France. Ireland. Italy. Spain.

With the dissolution of the CMEA in 1991 following political changes. – AFTA – with more members like Cambodia. Argentina. Paraguay and Uruguay. the erstwhile Soviet Union and East European countries sought to foster economic development via the integration scheme of Council for Mutual EconomicAssistance (CMEA or COMECON). Laos. ASEAN – China free trade zone is under process.International Business MERCOSUR : Mercado Comun del Sur – Brazil. Myanmar and Vietnam also joining the group. . In the post World War II period. the regional trade of the eastern bloc also collapsed.

Thank you .

Structure ( I P O) Production Marketing Finance HR R&D IT Business Development . Internal Environment Org.International Business International Business Environment 1.

International.International Business International Business Environment 2. Political. External Micro Environment All Stakeholders and Competitors b. External Macro Environment STEPIN (Social. Economical. Technical. and Natural) . External Environment a.

•51 per cent in drugs/pharma industry for bulk drugs. roads.03.2010) • 20 percent (40'per cent for NRIs} in the banking sector. and • 50 per cent in mining ~ except for gold. be subject to sectoral caps: (as on 31. •24 per cent in small-scale industries. •40 per cent (100 per cent for NRIs) in domestic air taxi operations/airlines. •100 per cent in power. ports. •51 per cent in non-banking financial companies. •100 per cent in petroleum. tourism and venture capital funds. diamonds and precious stones . silver. however.Foreign direct investment approvals will. •49 per cent in telecommunications.

The Millennium Development Goals … as defined by UN Eradicate extreme poverty and hunger Achieve universal primary education Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS. malaria and other diseases Ensure environmental sustainability Develop a global partnership for development Stop Child Labour .