MADM730 An Overview of International Business.docx -...

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Chapter 1International Business: A Managerial PerspectiveAn Overview of International BusinessLearning Objectives1.1Discuss the meaning of international business.1.2Explain the importance of understanding international business.1.3Identify and describe the basic forms of international business activities.1.4Discuss the causes of globalization.What Is International Business?International business consists of business transactions between parties from more than one countryInternational Business versus Domestic BusinessBoundariesCurrenciesLegal SystemsCulturesAvailability of ResourcesInternational business can differ from domestic business for a number of reasons, including the following:Domestic business involves transactions occurring within the boundariesof a single country, whereas internationalbusiness transactions cross national boundaries.The countries involved may use different currencies, forcing at least one party to convert its currencyinto another.The legal systemsof the countries may differ, forcing one or more parties to adjust practices to comply with local law.The culturesof the countries may differ, forcing each party to adjust its behavior to meet the expectations of country.The availability of resourcesdiffers by country. One country may be rich in natural resources but poor in skilled labor,whereas another may enjoy a productive, well-trained workforce but lack natural resources.Why Study International Business?Provides the knowledge and skills that are essential for your career in the twenty-first centuryHelps you make better career assessmentsKeep pace with future competitorsStay abreast of the latest business techniques and toolsObtain cultural literacyInternational Business ActivitiesExporting & ImportingInternational InvestmentsInternational LicensingInternational FranchisingInternational Management ContractInternational Business Activities: Exporting and Importing (1 of 2)Exporting: selling of products made in one’s own country for use or resale in other countries.Importing: buying of products made in other countries for use or resale in one’s own country.Exporting and importing activities often are divided into two groups:Trade in goods:tangible products tangible products such as clothing, computers, and raw materials. Official U.S.government publications call this type of trademerchandise exports and imports; the British call itvisible trade.Trade in services:intangible products such as banking, travel, and accounting activities. In the United States, thistype of trade is calledservice exports and imports; in the United Kingdom, it is calledinvisible trade.Exporting and Importing (2 of 2)Exports of Goods and Services as a Percentage of GDP for Some Key Countries (2017)
Trade is important to countries. As Figure 1.1 shows, exporting account for more than two-thirds of the gross domestic

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Term
Spring
Professor
Sanjay
Tags
International Trade, Globalization, World Trade Organization

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