Overview of International Business andOverview of International Business andGlobalizationGlobalizationJashim Uddin,PhDAssociate Professor, East West University, Bangladesh
International Business (IB)defined as all about commercialtransactions-privateandgovernmental-betweentwoormorecountries. These transactions include sales, investments, andtransportation that take place between two or more countries.Globalizationis a process of interaction and integration amongthe people, companies, and governments of different nations, aprocess driven by international trade and investment and aided byinformationtechnology.Thisprocesshaseffectsontheenvironment, on culture, on political systems, on economicdevelopment and prosperity, and on human physical well-being insocieties around the world.Globalization refers to the widening set of interdependentrelationship among people from different parts of a world thathappens to be divided into nations. Theterm sometimes refers tothe elimination of barriers to international movement of goods,services, capital, technology, and people that influence theintegration of the world economies.
Why Companies Engage in IBTo expand sales:A country’s market size alwayshave a limit and reduction of AFC (average fixedcost) require increased production volumeTo acquire resources:Natural resources andlocations, products, services, components,technologies, information from another country cannot be usable without IBTo minimize risk:Taking the advantage ofbusiness cycle situations-recessions to expansions-indifferent countries. Diversify suppliers acrosscountries. Counter competitor’s advantage.
Forces behind globalizationExpansion of technology in transportation andcommunication networksLiberalization of cross-border trade