Lecture 1 - An Introduction to International BusinessWhat is International Business?●Narrow view:○International business may relate purely to “business”, as in business firms operatingacross national borders.○In such a case the entities involved in international business range from:■Large multinational firms with thousands of employees doing business in manycountries around the world.■To a small one-person company acting as an importer or exporter.●International business is not a new phenomenon; however, the volume of international businesshas increased dramatically over the last decade.●Today, an increasing number of companies buy and sell goods in the international marketplace.●Many of the largest US-based MNCs have close to (or more than) two thirds of their total salesoutside the US.○Intel = 80 percent.○Mondelez = 76 percent.○Coca-Cola = 70 percent.○ExxonMobil = 65.4 percent.○Apple 63.2 percent.○GE = 62.1 percent.●Other large American MNCs that generated more than 50 percent of their sales overseas (2017).○Procter and Gamble = 58 percent.○Chevron = 57 percent.○Oracle = 53 percent.○Alphabet = 52.7 percent.○IBM = 52 percent.○Pfizer = 50.5 percent.●Broad View:○International business may relate purely to “business”, as in business firms operatingacross national borders.■Government to Government (Trades and transactions between nations).■Government to foreign companies/organizations.■People to People/Government to People/People to Organizations.●World exports of merchandise trade have increased by 20 per cent in value terms between 2008-18. Exports of manufactured goods grew at an average annual rate of 2.3 per cent.●World exports of commercial services have increased by 46 per cent in value terms between2008-2018 and services exports grew by an average annual rate of 3.9 per cent.●Actors 1:○A business can be a person or organization engaged in commerce with the aim ofachieving a profit. Business profit is typically gauged in financial and economic terms.■The international part of a firm’s business can vary considerable, from importingto exporting to having significant operations outside its home country (FDI)
●Actors 2:○Most national governments, for instance, maintain embassies and consultants in foreigncountries.○National governments also do business/transactions with firms owned by foreigngovernments (such as buying of defense equipment)○National governments also participate in international treaties related to such issues suchas trade, the environment, NGOs and Charity, etc.●Actors 3:○National non-governmental organizations (NGOs) include many nonprofit, voluntarycitizens’ groups that are organized on a local, national, or international level.○International NGOs (Rotary club, Red Cross, etc.)●Actors 4:○Supra-organizations such as the United Nations (UN) or the World Trade Organization(WTO) are practically separate governments themselves, with certain powers over allmember countries.