Chapter I

INTRODUCTION OF INTERNATIONAL BUSINESS AND

TRADE

© Mason Carpenter 2011, published by Flat World Knowledge

 Learning Objectives

1 2 3 4 5
Know the Identify who is Tell the forms of Understand Know ethics and
definition of interested in international globalization international
international international business trade debate business
business business

© Mason Carpenter 2011, published by Flat World Knowledge

The Definition of International Business
• International business: All cross-border exchanges of goods, services, or
resources between two or more nations.
• The entities involved in international business:
• Large multinational firms with thousands of employees doing business in many
countries around the world.

© Mason Carpenter 2011, published by Flat World Knowledge

Who is Interested in International Business?

Individuals or organizations will have an interest in international business if

it affects them in some way—positively or negatively
• Stakeholder: An individual or organization whose interests may be
affected as the result of what another individual or organization does.
• Stakeholder analysis: A technique used to identify and assess the
importance of key people, groups of people, or institutions that may
significantly influence the success of an activity, project, or business.

© Mason Carpenter 2011, published by Flat World Knowledge

 The Forms of International Business
• Importer: A person or organization that sells products and services that are sourced from other countries.
• Exporter: A person or organization that sells products and services in foreign countries that are sourced
from the home country.
• Foreign direct investment: The investment of foreign assets into domestic structures, equipment, and
organizations.
• Licensing: Licensing is one of other ways to expand the business internationally. Licensing is the
arrangement between a firm, called licensor, allows another one to use its intellectual property such as brand
name, copy right, patent, technology, trademark and so on for a specific period.
• Franchising: Franchising is closely related to licensing. Franchising is a parent company (franchiser) gives
right to another company (franchisee) to do business using the franchiser’s name and products in a
prescribed manner.

© Mason Carpenter 2011, published by Flat World Knowledge

 The Globalization Debate
• It is a stark difference of opinion on how the internationalization of businesses is
affecting countries’ cultural, consumer, and national identities—and whether these
changes are desirable.
• Supporters believe that increased trade and cross-border investment mean lower prices
for goods and services, greater economic growth, higher consumer income, and more
jobs.
• The globalization debate surrounds whether and how fast markets are actually merging
together.

© Mason Carpenter 2011, published by Flat World Knowledge

 Ethics and International Business
• Ethics: A branch of philosophy that seeks virtue and morality,
addressing questions about “right” and “wrong” behavior for people in
a variety of settings; the standards of behavior that tell how human
beings ought to act.
• Business ethics: The branch of business that examines various kinds
of activities and asks, “Is this business conduct ethically right or
wrong?”

© Mason Carpenter 2011, published by Flat World Knowledge

 Thank you 

© Mason Carpenter 2011, published by Flat World Knowledge