Lecture 1 - An Introduction to International Business.docx...

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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.

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