Session 1
Introduction &
International Business
• Najmul A Sheikh
najmulsheikh303@Hotmail.com
• Engineering degree from BUET
• MBA from Waikato University, NZ.
• Graduate Certificate from KAPLAN.
I have Worked for:
• GE Finance
• Westpac Banking Corporation
• Investment Adviser
• Process Analyst
• Business Analyst
• National Australia Bank
• Financial Planning Manager
• Guest faculty at IBA, for MBA and BBA students. Topics were:
• Investment and Financial Management.
• Service Marketing through Process Improvement.
• I’m assigned to teach International Business
• Consider this as a Buffet lunch!!! All you can learn!
• Required Text:
International Business by Charles W Hill (10 th Edition),
McGraw Hill, USA
International Business by Michael Czinkota, Dryden USA
International Business by Vyuptakesh Sharan, Pearson,
India
• Please, no Mobile use, during lecture! Mobile, biggest
addiction in this century!
 Text: International Business by Charles W Hill
(10th Edition), McGraw Hill, USA

• Session 1, January 12 & 14; Chapter 1: Introduction & Overview, Globalization

• Session 2, January 19 & 21; Chapter 4: Differences in Culture ( Walmart Case in different countries)
• Session 3, January 26 & 28; Chapter 6: International Trade Theory & Quiz 1 (5 points).
• Session 4, February 2 & 4; Chapter 7 Political Economy of International Trade
• Session 5, February 9 & 11; Assignment, (10 points; 5 for Group Assignment & 5 for Individual Presentation).
• Session 6, February 16 & 18; Chapter 8: Foreign Direct Investment
• Session 7, February 23 & 25; Mid-term (20 points).
• Session 8, March 2 & 4; Chapter 10: The Foreign Exchange Market
• Session 9, March 9 & 11; Chapter 11: International Monetary System
• Session 10, March 16 & 18; Chapter 13: The Strategy of International Business & Quiz 2 (5 points).
• Session 11, March 23 & 25; Chapter 15: Entry Strategy and Strategic Alliance
• Session 12, March 30 & April 1; Assignment, (10 points; 5 for Group Assignment & 5 for Individual Presentation).
• Session 13, April 6 & April 8; Chapter 16: Exporting, Importing, and Counter Trade
• Session 14, April 15 & April 20; FINAL EXAM (40 points).
Evaluation & Grading Policy
Section Marks

1. Attendance plus Participation in the Class 10 (5+5)

2. 2 Quizzes 2X5

3. 2 Assignments or Case Study 2X10

4. Mid-Term Examination 20

5. Final Examinations on 8th & 10th December 40

Total 100
 BUS 510: Introduction & Overview
of
International Business
Over the past three decades a fundamental shift has
been occurring in the world economy. We have been
moving away from a world in which national
economies were relatively self-contained entities,
isolated from each other by barriers to cross-border
trade and investment: by distance, time zones,
languages; and by national differences in government
regulation, culture and business systems.
 Globalization
• The process by which this transformation toward a more integrated and
interdependent world economy is occurring is commonly referred to as
Globalization.
• Globalization has several facets including the globalization of market and
globalization of the production.
• Globalization of Markets refers to the merging of historically distinct and separate
national markets into one huge global marketplace. Ecuador’s Rose Industry is an
example. Flower industry in Bangladesh are similar!
• Globalization of Production refers to sourcing of goods and services from location
around the globe to take advantage of national differences in the cost and quality
of factors of production ( such as labor, energy, land and capital). Garments
industry is a perfect example!
 Drivers of Globalization
• Two macro factors underlie the trend toward greater
globalization.
• The first is the Declining Trade and Investment Barriers to
the free flow of goods, services, and capital that has
occurred since the end of World War II.
• The second factor is Technological Change, particularly the
dramatic developments in technological change, particularly
the dramatic developments in recent decades in
communication, information processing, and transportation
technologies.
 Declining Trade and Investment Barriers
• International Trade occurs when a firm exports goods or services to
consumers in another country. Such as our Garments Industry. Many of
the barriers to international trade took the form of high tariffs on
imports of manufactured goods. The typical aim of such tariffs was to
protect domestic industries from foreign completion. Such as, Tariff on
(Float) Glass and Ceramic import in Bangladesh.
• Foreign Direct investment (FDI) occurs when a firm invests resources in
business activities outside its home country. In addition to reducing
trade barriers, many countries have also been progressively removing
restrictions to foreign direct investment. Such as Investment by
Samsung in Bangladesh and many factories in EPZ.
 The Role Of Technological Change
• Microprocessors and Telecommunications: Which enabled the explosive growth of
high-power, low-cost computing, vastly increasing the amount of information that
can be processed by individual and firms. Online data-processing and call centers are
typical examples. 3D printing is just the latest addition to this technological change.
• The Internet makes much easier for buyers and sellers to find each other, wherever
they may be located and whatever their size. It allows businesses, both small and
large, to expand their global presence at a lower cost than ever before. Online shops
from Amazon, Alibaba to Daraz and so on.
• Transportation Technology, such as Containerization has revolutionized the
transportation business, significantly lowering the costs of shipping goods over long
distance. Such as; fish from UK transported to China for processing and packing; and
finally back to UK super market shelves!
 The Emergence of Global Institution
As market globalize and an increasing proportion of business activity
transcends national borders, institutions are needed to help manage,
regulate, and police the global marketplace and to promote the
establishment of multinational treaties to govern the global business
system. A number of important global institutions have been created
to help perform these functions, including the General Agreement in
Tariffs and Trade (GATT) and its successor, the World Trade
Organization (WTO), the International Monetary Fund (IMF) and its
sister institution, the World Bank.
The Nature of International Business….
• No organization is insulated from the effects of foreign markets and
competition. Indeed, more and more firms are reshaping themselves for
international competition and discovering new ways to exploit markets in
every corner of the world. Our Garments are exporting to India and China.
• Interesting example of Indian Ceramic Company!
• We can identify four general levels of international activity that
differentiate organizations.
1. Domestic business acquires essentially all of its resources and sells all of
its products or services within a single country. Most small businesses are
small in nature.
The Nature of International Business
2. An International business is one that is based primarily in a single
country, but acquires some meaningful share of its resources or
revenues from other countries, such as garments or plastic
companies.
3. A Multinational business has a world-wide marketplace from which
it buys raw materials, borrows money, where it manufacture and
sells its products. Apple, Samsung.
4. A Global business is one that transcends national boundaries and
its not committed to a single home country. Such as Unocal,
considers itself as a “Global Energy Company”.
Part 2: Environmental Challenges of
International Business Management….
Three environmental challenges of International Management are;
a. The Economic Environment.
There are three aspects of The Economic Environment; such as:
1. Economic System such a Market Economy.
2. Natural Resources: Availability of natural resources in different
countries like; Oil, Iron, educated manpower.
3. Infrastructure: A country’s infrastructure consists of its Education,
Power plants, Railroads, shipping ports, communications etc.
Environmental Challenges of International
Business Management….
b. The Political/Legal Environment consists of;
1. Government Stability.
2. Incentives for international trade; Tax Holiday, duty-free entry of
raw materials etc.
3. Controls of International Trade, any embargo!
4. Economic Communities; NAFTA, EU etc.
Environmental Challenges of International
Business Management
c. The Cultural Environment:
1. Values, Symbols, Beliefs and Language. Some garments’ African
adventure failed.
2. Individual Behaviors Across Culture. DADA Dhaka faced in Jamaica.
 Modes of International Business
• When an organization makes the decision to increase its level of international
activity, there are several alternative strategies that can be adopted.
1. Importing and Exporting: Doing Export/Import.
2. Licensing: A company may prefer to arrange for a foreign company to
manufacture or market its products under a licensing agreement. Singer, KFC.
3. Strategic Alliances: In a strategic alliance, two or more firms jointly cooperate
for mutual gain. A joint venture is a special type of strategic alliance in which
the partners actually share ownership of a new company.
4. Direct Investment: Another level of commitment to internationalization is
direct investment. Samsung is doing FDI in Bangladesh.
 The Globalization Debate…
• GLOBALIZATION, JOBS AND INCOME: Trade War started by Trump.
• GLOBALIZATION, LABOR POLICIES AND THE ENVIRONMENT: Demand
for Trade Union and establishing ACCORD/ALLIANCE.
• GLOBALIZATION AND NATIONAL SOVEREIGNTY: Selling or investing in
communication, infrastructure and other technological sectors.
Singtel had problem to buy Telstra in Australia due to National
Security!
• GLOBALIZATION AND THE WORLDS POOR: Less tariff to import tomato
from Africa to Europe, however much more tariff to import value
added products such as Katchup!
The Globalization Debate
• Trade War started by Trump and it’s probable effect on Bangladesh.
• Case of (Float) Glass Industry: Indo-China trade war and Chinese glass
industry’s response!
• Glass Industry in Bangladesh: Import vs local manufactured glass by
Nasir, PHP, Usmania.
• Who is benefiting!
Managing in the Global Marketplace…….
• We all learn that, an International Business is any firm that engage in
international trade or, investment. A firm does not have to become a
multinational enterprise, investing directly in operations in other
countries, to engage in an international business. All a firm has to do
is export or import products from other countries.
• The Task of managing an international business differs from that of
managing a purely domestic business in many ways.
• Countries differ in their cultures, political systems, economic systems,
legal systems and levels of economic development.
Managing in the Global Marketplace…….
• Marketing a product in Brazil may require a different approach from
marketing the products in Germany. Ex: Walmart failed in Germany!
• Managing a U. S workers might require different skills from managing
German workers; maintaining close relations with a particular level of
government may be very important in Mexico or Bangladesh and irrelevant
in UK or Germany!
• Conducting business transactions across national borders require
understanding the rules governing the international trading and investment
system.
• Managers in an international business must not only be sensitive to these
differences but also adopt the policies and strategies for coping with them.
Managing in the Global Marketplace……..
• The managers of an international business must decide where in the
world to site production activities to minimize cost, delivery time and
maximize value added. Ex: bitter experience of DADA Dhaka in
Jamaica!
• They must decide whether it is ethical to adhere to the lower labor
and environmental standards found in many developed nations. Rana
Plaza disaster and blaming the mirror. Implementation of Accord and
Alliance.
• The managers in an international business also must decide which
foreign markets to enter and which to avoid.
 Managing in the Global Marketplace……
• Must choose appropriate mode for entering in a particular foreign
country!
1. Is it best to export product to the foreign country?
2. Should the firm allow a local company to produce it’s product in that
country? Samsung is now at this stage.
3. Should the firm enter into a joint venture with a local firm to produce
its product in that country?
4. Should the firm set up a wholly owned subsidiary to serve the market in
that country?
Entry mode is critical because it has major implications for the long-term.
 Managing in the Global Marketplace
• Last but not least, cross- border transactions also require that money be
converted from the firm’s home currency into a foreign currency and vice-
versa. Because currency exchange rate vary in response to changing
economic conditions, managers in an international business must develop
policies for dealing with exchange rate movements.
• Managers also need to be aware of the uncertain, unstable or
unpredictable government policies of a foreign country. Say for example
of current US government policies towards China, Iran etc.
• Nike decided that, they won’t supply jerseys to Iranian football team
during World Cup because of hostile US government policies towards
Iran!