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MGT 361 International BusinessChapter 1:An Overview of International Business
By end of the chapter, students should be able to:Understand the meaning of International BusinessWhy study International Business?IdentifyanddescribethebasicformsofInternational Business activitiesIdentify the reasons why firms doing InternationalBusinessThe chapter objectives:
IB consists of business transactions betweenparties from more than one countryThe business transactions includes:Buying materialsin one country and shipping themto another for processing or assembly (like Applecompany)Shipping finished productsfrom one country toanother for retail sale (like high-end cars such asFerrari)Building a plantin a foreign country (Samsung)Borrowing money from banks in one country tofinance operation in anotherWhat is InternationalBusiness?
IndividualInvestors and businessmenCompaniesPrivate or publicCompany ClustersAlliance, subsidiaries, associatesGovernment BodiesCentral BankInternational InstitutionWorld Bank, International Monetary FundParticipants
TransactionsIB transactions cross national boundariesLegal SystemForcing one or more countries to adjust the practices to comply with locallawCultureFor IB, each party needs to adjust its behaviors to meet the expectation ofothersCurrencyIn IB, at least 1 party has to convert its currencies into another or bothparties using third country’s currenciesAvailability of ResourcesFor IB, natural resources are differ by countryOperation NatureIB is riskier and more complexDomesticvsInternational Business (IB)vs
Career OpportunitiesTo be prepared for a career in any facet of business worldStart own BusinessDoing business with partners from other countriesJob AssignmentWork for a firm that is owned by corporation headquarters inanother countryTo keep pace with future competitorsTo ensure that you have global skills and knowledge to aidyour careerTo keep track of latest business instrumentsIB and companies keep improving their technologies,methods, processes and skills in conducting the business, sodo weCultural literacyUnderstand and appreciate the similarities and differences ofvarious cultural backgroundsWhy study InternationalBusiness?
International BusinessActivitiesImportingInternationalInvestmentLicensingFranchisingManagement ContractsExportingFDIPI
•Exporting and Importing•Export: selling of products made in one’s home country for use/resale inother countries•Import: buying of products made in other countries for sale/resale in one’scountry•International Investment