BUSINESS

Globalization
 Deepening relationship and broadening
interdependence among people
 Availability of international products and services
 Criticisms
 Positive Consequences
 Global cooperation - Uniform standards - Use of resources -
Technological developments - Solve environmental problems

Global Links
• Created a network
• Bind countries, institutions, and individuals with trade
• International business
Globalization – Cont.
 Negative Consequences
 Using more nonrenewable natural resources
 Threats to national sovereignty
 Growing income inequality and personal stress
 Economic growth and environmental stress
 Environmental pollution
 Factory and vehicle emissions
 Deforestation
International Business -
Introduction
 Performance of trade and investment activities by
firms across national borders
 Consists of all commercial transactions - including
sales, investments, and transportation
 Take place between two or more countries
Needs / Benefits
 Flow of ideas, services, and capital across the world
 Offers consumers new choices
 Wider variety of products
 Acquire resources
 Mobility of labour, capital, and technology
 Challenging employment opportunities
 Reallocates resources, makes preferential choices, and shifts
activities to a global level
 Expand sales
 Minimize risk
 Diversify among international markets
Growth / Opportunity
 Rapid increase in and expansion of technology
 Transportation is quicker while costs are lower
 Communication enables control from afar
 Liberal government policies on trade and resources
 Development of institutions that support
international trade
 Consumer pressures
 Increased global competition
Risks / Influences
o Physical/Societal factors
 Cross-cultural risk o Political policies and legal
 situation or event practices
 Country risk o Cultural factors
 operations and profitability
o Ethical practices
o Economic factors
 Currency risk o Geographical influences
 Fluctuations & exchange rates o Competitive environment
 Commercial risk o Asset valuation
o Foreign taxation
 potential loss or failure
o Operational problems
o Weak partner


Impact / Requires
 Macroeconomic level - in terms of balancing the
trade account
 Microeconomic level - participation in international
business can help firms achieve economies
 Social science understanding
 Political science appreciation
 Legal awareness
Modes / Types
 Importing and exporting
 Tourism and transportation
 Licensing and franchising
 Management contracts
 Foreign direct investment
1. Private & Government
2. Sales
3. Investments
4. Logistics
5. Transportation
Levels/Terms
 Multinational Enterprise (MNE): global approach to
markets and production
 Multinational Corporation (MNC)
 Transnational Company (TNC)
 Globally integrated company: integrated operations
located in different countries
 Multi-domestic company: multinational companies
that allow local responsiveness