1 An Overview of International Business (2021).docx -...

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INTERNATIONAL BUSINESSAN OVERVIEW OF INTERNATIONAL BUSINESSLEARNING OUTCOMESDiscuss the meaning of international business.Explain the importance of understanding international business.Identify and describe the basic forms of international business activities.Discuss the cause of globalization.Understand the growing role of emerging markets in the global economy.INTRODUCTIONInternational business and the global economy play a very dominant role in the world today.International business forces firms to compete in both domestic and foreign markets. Changesin communication, transportation and information technology facilitate the domestic firms’foreign expansion and aid foreign companies’ invasion of the domestic market.Internationalbusiness was further accelerated with the growth of e-commerce, the reduction of internationaltrade barriers by trade organization such as World Trade Organization (WTO), EU and theemergence of growing importance of emerging markets of China and India.International business affects the world economy and hence the daily life as to products, pricesand finances. It is important to understand how these concepts affect managers as they makedecision and develop strategies. Understand the fundamentals mechanics and ingredients ofglobal economy and how they affect people, business and industries. Know the evolution of theglobal economy and complex commercial and political relationship between Asia, Europe, NorthAmerica and the rest of the world.INTERNATIONAL BUSINESSInternational business consists of business transactions between parties from more than onecountry. Examples include buying materials in one country and shipping them to anothercountry for processing or assembly, shipping finished products from one country to another fora retail sale, building a plant in foreign country to capitalize on lower production costs, orborrowing money in one country to finance operations in another country. The parties involvedcan be private individuals, individual companies, groups of companies or government agencies.Domestic business in contrary involves transaction occurring within the boundaries of a singlecountry.1
Main differences between international and domestic businessThe countries involved may used different currencies, forcing at least one party toconvert its currency into another. Hence, the involvement of foreign exchange.The legal systems of the countries may differ, forcing one or more parties to adjust theirpractices to comply with local laws. This may result in incompatibility in the system andpractices.The cultures of the countries may differ, forcing each party to adjust its behavior to meetthe expectation of the other.

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Term
Spring
Professor
N/A
Tags
International Trade, Globalization, World Trade Organization

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