1-3Chapter Objectives▪Discuss themeaning of internationalbusiness▪Explain the importance ofunderstanding international business▪Identify and describe thebasic formsof international business activities▪Discuss thecauses of globalization
1-4What is International Business?Business transactions between parties from more than one country▪Examples▪–buying materials in one country andshipping to another for furtherprocessing or assembly- shipping finished products from onecountry to another for retail sale-building a plant in a foreign countryto capitalize on lower labor costs- borrowing money from a bank in onecountry to finance operations inanother.
Who are the parties involved?▪May includei.Private individuals,ii.Individual companiesiii.Grps of companiesiv.Government agencies1-5
1-6How Does International BusinessDiffer from Domestic Business?Domestic Businessinvolves transactions occurringwithin the boundariesof a single countryInternational Business -transactionscross nationalboundariesOther Reasons:i.Currency Differences(to convert USD, RM etc.)ii.Legal systems Differ.(to comply to local law)iii.Cultural Differences(to adapt to local culture)iv.Availability of Resources Differ.