ABOUT THIS BOOK The surge in cross-border connectivity involving people, organizations and countries opens up new horizons

every day. This naturally kindles fresh aspirations among professionals, managers, and entrepreneurs who regard the world as their oyster for seeking opportunities to participate in, and benefit from, international business. Some of you may already be doing so and may want to expand your business; others may be taking, or envisioning, first steps. International business can be thought of as a magnet that lures many but one which, by posing formidable challenges, also quickly rebuffs the unprepared. There is a rich body of experience to learn from, but, it is thinly documented. Concepts and practices constantly challenge each other in international business, making it difficult to bring relevant and significant insights to the attention of practising professionals in a timely manner. People learn mainly from their own experiencesoften by burning their fingers, leading them to burn their bridges or their boats. Occasionally, there is also learning to be acquired from anecdotal tales of colleagues who are engaged in their own or others firms, but rarely is there any distilled analysis of the true encounters of a significant number of others, who took similar paths; of why they failed or how theysuccessfully made their way around. This book addresses that gap. It is not written to marshal data or arguments in support of or against contestable hypotheses of my academic collegiate community. There are numerous other forums and platforms to do that. Nor is this book meant for those who believe that international business is merely about networking and luck. This is not going to add to your know-who network of business connections nor will it serve to demystify the future any better than would a crystal ball. People like you and me and millions of others, driven by our motivations and passions, mustering courage and support from powerbases, are actually shaping that future. This book will not serve the purpose of those who regard state actors as being almost omnipotent or who believe that lobbying for preferential incentives is the main route to international business. If you are in search of a bag of tricks to extend a domestic business abroad, if you are seeking a quick fix to treat irritants previously encountered in international business without diagnosing them, or if you are expecting to make winning deals with potential foreign partners by outsmarting them with magic wandsthis book is not for you. Please put it back and continue your quest. I wish you luck. I would suggest muses, like Jonathan Swifts Gullivers Travels; Lewis Carrolls Alice in Wonderland; The Adventures of Marco Polo; the poetry of Milton and Blake, or Jaishankar Prasads stories, such as, Puraskar; the Finnish epic Kalevala where the quest for retrieving a magical money-making machine, the Sampo involves Kullervos adventures and Vinminens sagely wisdom or Kalidass ode to the Himalayas in Meghdootall of which I myself enjoy reading. However, if you want a book shorn of jargon, one which will help you consider and evaluate potential international business opportunities by connecting cross-border nodes of value (what we may call value chains) or designing and structuring value grids and constellations (patterns), developing ways of engaging decisively and confidently in international business, and embracing the present with an eye on the future, I warmly welcome you. If you

believe that chance favours the prepared mind; if international business excites you; if the cutting edge of practice within the scope of your own decision-making interests you; or if you are curious about concepts and cases and the know-why and the know-how which we pack into our international business courses at IIMA, read on. SCOPE OF INTERNATIONAL BUSINESS As an introduction to this book, let me first outline the scope of the subject and its underbelly to provide you a sense of the chapters that follow. International business is any business that spans beyond a countrys boundaries for creating value from the flow of products, services, capital, ideas, or people. International business can take many forms; its scope is not limited to government trade or official transactions between countries. Considerable cross-border procurement, the marketing of goods and services, the organization of international value chains for bridging and linking resources and responses, and various stakeholding contracts supporting them occur on private entrepreneurial and managerial initiative. But what enables, sustains, and propels this phenomenon? To put it simply, the world is characterized by a great diversity in the choice of lifestyles, a variety in natural resource endowments, differential competitive advantages, and plurality of pictures-in-the-mind over what is feasible to make, use, store, or exchange. On the darker side, there are also smuggling rackets, cheating on border levies, organized international crime syndicates, human trafficking, and contraband cross-border trade of goods, such as, weapons, illicit drug deals and counterfeit products. In services, there are mercenaries of various descriptions, soldiers of fortune, illegal immigrants; and numerous other organized forms of brokerage and contracting persist, in which players in illegal international activities and law enforcement authorities try to outsmart each other. The illegitimate underworld is not something we focus on, but we must not lose sight of it. Gold smuggling and havala trade by the so-called bhailog allegedly financed the growth of Bollywood for a long time until the government eventually acknowledged filmmaking as an industry eligible for financing and credit from the banking system and industrial finance institutions in 2002. One of the well-kept secrets of international business is that several theories about it which are in wide circulation have never been empirically confirmed. In fact, many theories have actually been refuted but they continue to be peddled and circulated. This includes some notable ones with intuitive appeal; for instance, the various versions of comparative advantage theories (the Ricardian theory, the HeckscherOhlin model) which justify specialization in trade have contributed to the impoverishment of many African nations. Ghana invested in growing more of its large, delicious juicy pineapples, based on what was identified as their comparative advantage, for exporting to Europe. The efforts were in vain because Southern European producers lobbied in the European Union for a maximal size for pineapples that could be imported into the European Community. Quaint Porterian notions about positioning are contradicted by the success of retail chains, like Sainsbury (Cronshaw 1994), and manufacturers, like Toyota who, according to Porter, could not have succeeded because they were stuck in the

middle and did not choose between his holy cows of cost-based and differentiation-based advantages. Concepts of industry analysis lose relevance when industry boundaries change or get blurred. Diamonds and double diamonds of competitive advantage passed on to strategy students as gospel truth may have actually widened the gap between scholarship and practice. The Hofstedian constructs of national culture for explaining intercultural and multicultural encounters and how they affect international business lie in tatters (McSweeney 2002). In contrast, timeless gems of concepts, like Selznicks distinctive competence (repackaged by C.K. Prahalad as core competence) and Jaquess time-span of discretion (emphasized by Vikram Sarabhai as the time-interval needed for systemic responses), have remained relevant for decades. Novels, like James Clavells popular Noble House and Taipan (you would recognize Jardines in it!), have immortalized in fiction some of the ugly realities where sound management concepts are applied in a twisted manner for questionable purposes. The nature and dynamics of international business transform rapidly when the motives and powerbases of participants as entrepreneurs, managers, officials, investors, consumers, arbiters, do not remain constant or stable. These actors themselves frequently disappear and reappear in new costumes. Just as it is impossible to step twice into the same water in a river, it is rather difficult to conduct research in international business with primary data in real time to judge contemporary beliefs through testable hypotheses. The sharpest insights available in international business arise from cases drawn from actionresearch where the thin line separating consultancy from research pales. When more is written than is actually known, it becomes difficult to separate wild conjectures from working hypotheses, and working hypotheses from possible alternate hypotheses. In international business, the results of actions and interventions are quickly known. That is what drew me to international business in the first place. But, be carefulSumantra Ghoshal cautioned us in one of his last articles that bad management theories can drive out good management practices (Ghoshal 2005). The growing body of knowledge in this field is, by its very nature, interdisciplinary and multidisciplinary. Several internationally renowned management journals, like the Journal of International Business Studies and International Business Review, regularly publish results from research in international business. There are also hundreds of new cases researched and written annually that are periodically discussed in numerous academic and business conferences worldwide and also brought to the classrooms for learners in management institutions. Managers can become more productive if they give attention to the nuanced aspects of the business that is being considered, which questions to ask, how to evaluate risks, and when and where to make international footprints. When designing new value chains, it is necessary to understand the complexity of international business in order to develop capabilities in enterprises. Managers and entrepreneurs need to understand potential value constellations in productservice linkages so as to cope with political risks and country risks; to reinforce management processes; to design control systems; and to sustain and renew organization

structures. It is necessary to acquire knowledge and skills for developing insights into how enterprises create and develop particular patterns of trading or investment, and why they exhibit preferences for certain entry modes. The manner in which firms resolve issues of coordination and control, and enhance awareness and sensitivity for recognizing and mitigating conflicts in international business negotiations can make all the difference between stalled growth and profiting from new opportunities. Managers can close the gap between identifying and populating arenas of strategic opportunity through new growth platforms (Laurie, Doz and Sheer 2006). Smith (2010) has drawn attention to the fact that our understanding of international relations requires fresh thinking. Transformations in international economic relations have outpaced reforms which are crucial in the architecture of international institutions. NEW HORIZONS IN INTERNATIONAL BUSINESS The frontiers of the world business environment underwent a silent revolution between 1989 and 1995 when a lot of residual political agenda accumulating since World War II was sorted out. The Cold War ended with the fall of the Berlin Wall; the USSR and its COMECON (Council for Mutual Economic Assistance) trade disintegrated; the European Union Treaty saw the light of day; and the first World Trade Organization (WTO) was chartered. This opened economies and connected the world by creating gateways for new possibilities, discovering new interfaces, and crafting new institutions aided by the entry of fresh technologies, such as, mobile telephony and the World Wide Web. In the 1990s, courses in International Business quickly became an indispensable part of management curricula in leading business schools all over the world. Initially, the content and pedagogy of these courses varied widely, and notions of what knowledge would be most useful were hotly contested. Small open economies, like Belgium and Finland, where the internationalization imperative was high, were among the first to introduce compulsory international business courses as part of the curricula in their business schools. It was an honour for me to be associated with both these initiatives in the formative stages of international business curricular design and delivery of courses. These courses were developed along with practising managers, policymakers, and scholars; these processes have been documented in the book, What Knowledge is of Most Worth? (Mathur 2000). In 2006, IIM Ahmedabad introduced International Business as a compulsory course for the first time when the new Full-Time Residential Executive MBA programme (the PGPX programme) was launched. I have been responsible for designing it, updating it, and teaching it since its inception. Elective coursesInternational Business and Strategies and the Futurewere introduced in the flagship MBA programme (called PGP) in the same year, and I remain responsible for both these courses, as well. Even before International Business was established as a stand-alone course, international aspects did come up in various functional courses. However, there is a huge difference between adding the epithet International to a session in Finance or Marketing or Human Resource Management

(HRM) and taking a holistic view of international business as a discipline with its own rigorous interdisciplinary trajectory and multidisciplinary integration that has evolved over two decades. In firms, too, international business activities were previously restricted to those with roles in technical procurement, foreign exchange hedging in treasury functions, or export marketing. As more and more strategies devised by managers pertain to significant engagements with, and attention to, activities abroad, a wider set of executives is responsible for organizing international business and has to be prepared for new ways of doing business with enhanced skills. CONTENTS OF THIS BOOK The structure of this book eschews artificial distinctions between the macrolevel phenomena of the business environment and its microeconomic expression in business firms. The chapters have been organized in a way so that the micro and macro elements speak to each other throughout. The macro strand leads you to the national, bilateral, plurilateral and multilateral initiatives and emerging concepts concerned with governance, competitiveness, and international economic relations. The micro strand focuses on how business seek, create and sustain firm specific advantages to respond to the business environment by concentrating on strategic, tactical, and operational issues that concern systems, structures, and processes. As an international business professional, you need bifocal vision to understand the world economic and business environment as it evolves at the macrolevel, while simultaneously managing your own business for which you are directly responsible. Bifocal vision is necessary but not sufficient. The cement that binds a firm is essentially behavioural and can come apart overnight. Therefore, it is useful to regard a business firm as an artificial juridical person that comes alive from the confluence of a bunch of treaties involving founders, partners, shareholders, creditors, employees, customers, local communities, regional and national governments as stakeholding constituents (Aoki 1990). Only by paying heed to signals and noises can one discern whether the stakeholding contracts that make up the nexus of treaties are stressed or whether the wheels of the business juggernaut are beginning to creak and groan. Strategy is simply a grand actionable design collectively shareable and containable as a picturein-the-mind of any group. An aspirational dream conceived in an individuals mind even if that individual be a leader is only an idea, not a strategy. Mintzberg (1994) reminded us that no one has ever seen or touched or smelt a strategy. People often confuse plans with strategy. However, it is strategy (by discovery or design as a picture in the mind reinforced or modified by managerial actions everyday) that keeps a firm sustainable for its stakeholders. Any dissatisfied stakeholder may become a spoke-holder, and invisible or unattended spoke-holders can be annoying sources of turbulence. The advantages of international business are derived on the basis of geographical separation of value-creating parts in a business chain where the partitioning of task is itself an intended part of the grand design. The danger of not recognizing stakeholders and their interests gets magnified in international business because

of spans and distances (physical, cultural, economic, political, social, institutional and psychic). The fundamental question before undertaking business is to ask whether the business is designed to serve all its stakeholding constituents and whether it would continue to do so in a sustainable manner. There can be multiple viewpoints for every decision. There is much that you may wish to know about international business. This book avoids taking a step-by-step approach to conceiving a business or pretending that ready-made solutions preexist to every problem that may arise. Instead, an attempt is made to draw your attention to a plurality of perspectives for various problems about which you yourself may like to think and consider. The book refrains from advocating quick fixes and handing out mindless homilies. It avoids suggesting how an x number of mechanical steps could make you a prosperous exporter to Timbuktu or a successful joint-venture partner in Outer Mongolia; it avoids suggesting five steps to make your brand achieve salience in New York! Have you not wondered why self-styled gurus churning inspirational public lectures and writing books detailing step-by-step approaches do not have the courage to take those steps themselves? Having mentioned that, I must confess I have been in executive roles in multinational firms and founded a business I owned and managed in Europe for eight years. That taught me a great deal, especially about how fragile assumptions of demand can be, how quickly prices can change; and it taught me about the bewildering variety of institutional rules and norms in different parts of the world. Surveys have shown that an overwhelmingly large proportion of successful international business entrepreneurs havent been to business schools or university (this category includes more than two-thirds of the people listed in the Forbes List of the 400 richest people in the world). There are successful people out there who have made fortunes in this field long before the subject was added to business school curricula. While it would be fair to state that people have succeeded in international business despite their lack of formal education in it, I would not go so far as to believe that they have succeeded only because they were not burdened by such education. During the eight years that I was managing director of an international business firm in Europe, I can assure you I needed all the knowledge and skills from the world of managerial practice and scholarship I had acquired and still some because there were always experiences to learn from. This book will not cover up or pretend to simplify the complexity of international business. Rather, by exposing you to the totality of itilluminating warts and allit will not let you take or support a decision where all pertinent aspects havent been considered. At IIMA, we cover the subject in the flagship PGP programme over one academic term of twenty-six contact sessions (each of seventy-five minutes) with reading and library work to be done after every contact session, along with project work and an exam at the end. We are not going to take that route here. On our side, we have the advantage of your own experience, and time, for you to reflect, your wish to learn, and this written text to which you can refer, as you take this walk with me through the subject matter. The value of this book lies in preparing you to think through, and to consider, the complexity of decision-making, especially when there are pieces missing from your

own puzzles. In real life, you will seldom possess all the relevant data you desire at the time of making a decision. Also, nothing depreciates in value as fast as information. Therefore, it is important to be able to make assumptions and take decisions on the basis of patterns which you can recognize quickly. This book will have served its purpose if it helps guide you to recognize patterns confidently and with alacrity, and take better decisions for committing resources to action. MODE OF PRESENTATION In this book, the mode of presentation is to regard international business as a multidisciplinary enterprise and knowledge arena. No one facet (such as, finance, marketing, technology, manufacturing, procurement, supply-chain management, information technology, or human response management) can yield all the critical insights required to exercise business judgement. Even functional decisions in a complex endeavour, like international business, are best not taken within functional isolation. I have adopted what I hope is an easy-to-read style, bereft of jargon and technicalities that may detract the reader. In most of the chapters, I have shared several brief examples (including some notable ones put in boxes) to bring you factual information and narratives to illustrate the nature of the issues discussed. Chapter 1 introduces you to the motivations that attract individuals, organizations, and governments to international business. The genesis of international business and its forms are contextually and historically traced to demystify some of the patterns, conceptions, notions, and directions that international business is taking. There is discussion on how the scope of international business has changed in the recent past, and its emerging trends. Opportunities for business in the world environment are discussed in Chapter 2 to highlight the nature of boundary-crossings to be negotiated for various kinds of opportunities. The changes required in boundaries of task, territory, time, relationships, artefacts and understanding are important for organizing new value constellations. Here, attention is drawn to the design of organizations as open systems that contain management processes conducive to sustainable international engagement. Organizations with linkages abroad need to be designed for sustainability on several dimensionseconomic, technological, environmental, social, institutional and cultural. The structure and the nature of international businesses depend upon the purposes which a business serves for all the involved partiesinternal or external. For this reason, Chapter 3 alerts readers to the numerous alternative possibilities that exist, keeping in mind that every choice is associated with some resource commitments; that every resource at some stage becomes a constraint; and that no choice is free of constraints, responsibilities, and risks. Institutions and organizations can draw on alternative means of allocating resources and save on transactional costs. This is the classic Coasian reason (Coase 1960) that explains why it makes sense to do business through a firm that can reliably hold, command and direct resources. A multinational firm further eliminates the need to limit cross-border transactions to markets because it can transfer resources from one part to another at notional transfer prices. Notice, for example, that human trafficking may be illegal but body-shopping in the IT industry is not, and

that the capacity to transfer human resources in labour markets internal to the firm can circumvent external labour market constraints. Chapter 4 is devoted exclusively to the design of potential cross-border value chains from an internal market perspective. It highlights important aspects of how capabilities co-evolve in collaborations. We take note of the logic that sustains value chains and value constellations distinguishing how different ways of structuring productservices linkages enabled by technology introduce new techno-commercial and socio-technical forms. The diversity of norms, values, beliefs, and attitudes in multicultural and intercultural environs and the dilemmas it creates are dealt with in Chapter 5, while distinguishing cultural diversity from institutional diversity the latter being covered in Chapter 6. This has been done to separate statutory, contractual, and customary elements. Customary elements belong to cultural traditions, whereas statutory regulations provide institutional edifices on foundations that are distinguishable by justice frames. Subtle distinctions between the unjust, the unlawful, and the illegal have profound implications on the design of cross-border value chains and for clarity on what aspects are contractible and contracted. Chapter 7 introduces two significant types of additional riskspolitical risk and country risk that, besides investment risk and market risks (which exist for all businessesdomestic or international), impact international business. Political risk pertains to the hazard of governance breakdown or regime transition or policy change entailing risks for income, property, and lives, whereas country risk relates to the fluctuations in economic dimensions, such as, freedom for capital flows, stability of currency exchange rate, balance of payments, predictability in taxation rates, fiscal deficits, inflation rate, and money supply. This is followed by a discussion on sources of business intelligence in Chapter 8, and a discussion of missing markets and new directions in international business in Chapter 9. A section titled After the End concludes the book without closure, however, to learning or closing opportunities to continue your journey with international business. I would be delighted to know what you think of this book and I look forward to your suggestions for additions to or amendments in any aspect of the book. Also, if you have experiences you would care to share with me and other readers, please write to me at anmathur@iimahd.ernet.in. I will be happy to include your reflections and experiences on the books website and in the next edition of the book. We would all benefit from the creating and sharing of more knowledge. REFERENCES Aoki, M. (1990), The Firm as a nexus of Treaties, Sage, Thousand Oaks. Coase, R.H. (1960), The Problem of Social Cost, Journal of Law and Economics, vol. 3 (Oct., 1960), pp. 144. Cronshaw, M. (1994), On Being Stuck in the Middle or Good Food Costs Less at Sainsburys, British Journal of Management, vol. 5, pp. 1932.

Ghoshal, Sumantra (2005), Bad Management Theories are Destroying Good Management Practices, The Academy of Management Learning and Education, 4(1) 7581. Laurie, Donald L., Yves L. Doz, and Claude P. Sheer (2006), Creating New Growth Platforms. Harvard Business Review, May 2006. Mathur, Ajeet N. (2000), What Knowledge is of Most Worth? Tampere: Tampere University Press. A1:48. McSweeney, Brendan (2002), Dimensions do not exist. Human Relations 55(1), January 2002. Mintzberg, H. (1994), The Fall and Rise of Strategic Planning, Harvard Business Review, January-February, pp. 10714. Smith, Steve (2010), Six Wishes for a More Relevant Discipline of International Relations, chap. 44. The Oxford Handbook of International Relations. (eds) Christian Reus-Smit and Duncan Snidal. Oxford and New York: Oxford University Press. Chapter 1 IT PAYS TO BE IN INTERNATIONAL BUSINESS To And Hold see a infinity a world heaven in the in in palm a a of grain wild your of sand, flower, hand,

And eternity in an hour. W ILLIAM B LAKE WHY DO INTERNATIONAL BUSINESS? There is something inviting as well as frightening about crossing boundaries. Back in 1977, I asked an IIM batchmate what had made him take up an international banking position in Hong Kong which, then, seemed quite far away. Pat came the an swer,Where else would you get a British lifestyle, an American salary, and a Chinese wife?Since he had recently married a lovely Chinese girl, I didnt have the heart to suggest Singapore! Today, people are jumping continents for much less. Countries, organizations, and people are aware of possibilities arising out of increased contact. In what must appear as a long long time ago, children used to have penfriends in foreign countrieswriting letters to each other and collecting postage stamps. I know of at least one international business that blossomed out of penfriendship in the 1970s when my classmate Kaushik Sen and his childhood penfriend, Susanne Schwenkmeir, entered into a partnership, armed with nothing more than an ABC travel guide and a telex machine. They established the

TravellersClub GmbH in Munich, Germany, and later extended their business horizons to San Francisco, the US, as World Travellers Club Inc. The availability of multimedia and telematics has now provided inexpensive means to make and develop such contacts easier. Nowadays, a volume of contents as large as the Encyclopaedia Britannica can be electronically transmitted from anywhere to anywhere on the planet in less than a second. There has been a convergence on a number of dimensions, such as, consumption preferences and professional standards. An unprecedented expansion in the range of consumables goods as well as serviceshas altered the economic geography of the planet, because many kinds of resources from different parts of the world can be linked to produce more effectively and efficiently. Both locals and expatriates are generally paid significantly more by international firms than by firms which deal only in domestic business. Try dividing some such salary package by the waking hours devoted to the work done. You would wonder how anyone could contribute so much value in an hour to deserve such compensation and how a company could afford to pay it. But there are certain reasons for this. A part of these higher salaries is skill retention premium due to the scarcity in the market of professional talent with international business acumen. There exist higher standards and more demanding requirements in profile specifications; and also higher profitability and growth rates that enable such astronomical salaries to be disbursed. Surely, you would want to know what to do in order to earn such a salary in your own organization? Or, how to generate higher earnings from international trade or from investment as an entrepreneur? Businesses may be born and may die, but brands which have made their mark internationally achieve a kind of enviable immortality and, therefore, some lasting commercial value. You would have heard of Parker pens, Singer sewing machines, Dunlop tyres, Rolls-Royce cars, His Masters Voice (HMV) music records, and Spencers. None of the companies that originally created these brands exists anymore but these brands, with their own value, are still in the market and have found new owners! How many in India would remember Polsen butter, Vimto beverage, Afghan Snow cream, Three Coins hair-cutting saloons, Super Star cigaretttes, Diwana Tej magazine, Patriot and Sunday Observer newspapers, Binaca and Signal toothpastes, Dalda vanaspati, Torino Orange bottled softdrink, NELCO transistors, Kelvinator refrigerators, Weston television sets, and Standard Herald cars? Would anyone have heard of them abroad? These were popular national brands that withered, leaving little behind. Money may make the world go around but there should be more than an economic reason for you to cross boundaries and live abroad for international business which can, actually, be grasped wherever you are. Foreign artefacts of consumption are part of life and the world around us; and it is difficult to come across a product or a service that reaches you untouched by cross-border value chains even if you are a diehard swadeshi (a consumer who prefers local produce). Box 1.1: BeingSwadeshi

Inspired by the recent public interest over the controversial use of cartoons in books, let us follow R.K. Laxmanscommon man(aam aadmi) as he goes about his day. He wakes up from a bed where the mattress is filled with cottonfirst grown in the Nile Valley in Egypt or Ethiopiaand settles down to drink a cup of chaioriginally cultivated in Chinaand settles down with the morning daily newspaper produced ever since Caxtons printing press was commercialized in England. He may then have a breakfast of eggs, laid by the descendants of a fowl which was Vietnamese in origin, and hash potatoes, native to Spain, followed by a cup of coffee, originally grown in Colombia. He then changes into office wear where his garments are probably made of fibres first used for this purpose in Sumeria but probably now made in some sweatshop in Bangladesh and, if he indulges in formal wear, may put on an appendage derived from the cravat of Croatia. He may then step out to board a bus, designed in Italy, which uses an engine adapted from Japan or Germany and a chassis made in India, where he might get whiffs of French perfume from co-passengers like Mario Mirandas Miss Fonseca, free. On arriving at his office building, he may enter a lift made by Kone of Finland and go to his desk, where his Acer Notebook, made in Taiwan, awaits him. He may then use a mobile phone, originally developed as a radiophone by Ericsson in Sweden and whose cellphone prototype was first widely used in war-time Germany but which may now be of Korean, Japanese, Swedish, or Finnish make. He may then settle down to a days work, counting his blessings that he lives and works in his hometown and pride himself on being 100 percent Swadeshi Indian. You are more likely to meet with professionals from different countries in those places and organizations which tolerate, respect, or encourage diversity and multinationalism. Some cities, like Kolkata and New York, have a distinct character where the intermingling and crossfertilization of ethnicities over a long period of time has induced sensitivity, creativity, and tenacity in human endeavour more than other places. The ability of IBM, Shell, GE, Microsoft, World Bank, the International Labour Organization (ILO), and the United Nations Development Programme (UNDP) to solve complex problems stems from the diversity of their talent pool. The diversity in interactions is not only a rich source of cultural and social stimulation but it also adds to the intellectual, aesthetic, kinesthetic, and emotional repertoire, making us more fully developed persons with greater skills and knowledge in organizational roles. It pays to be in international business in many ways! Businesses which are satisfied with thriving on local demand do not always realize that there is no guarantee that their business proposition sustains, or that the products, services, or technologies on which they are riding may lose relevance, become obsolete, or become impossible to make due to non-availability of inputs. They are more likely to receive early warning signals if insulation from competitionself-imposed or regulatoryhas not lulled them into a false sense of complacency. This is also true of transnational firms which are multidomestic in nature if their business is nothing more than the horizontal national extension of a tried and tested model across several countries. There are numerous ghost towns, like Dalmianagar, Lodhna, Batanagar, and Sahaganj, which were once thriving industrial hubs. There are parts of Birmingham in the UK, Detroit in the US and the Ruhr and Saar regions,

straddling France and Germany where you would similarly come across relics of industrial estates in the process of being converted to other uses. Domestic businesses may unknowingly carry risks greater than the cumulative risk of trying to do business with unfamiliar customers or partners. If you think that countries which sustain open economies are more volatile in their balance of trade, you should also consider that many such countries have prospered by successfully implementing policies to export heavily and to enjoy trade surpluses with economies that were several times larger. With just over five million people, Finland ends up, every year, with a positive balance of trade with India which has over a billion people and is thirty times its economic size. THE WORLD NOT EXPERIENCED Travel is said to broaden the mind because it brings new experiences, adds dimensions to our constructs, and changes our perspectives. While this is true for those of us who have experiencedforeignersin their home countries, their experience of us as foreigners could not have failed to leave some impressions either. From such experiences (theirs and ours), narrated folklore can become received wisdom! The famous eighteenth-century Swedish taxonomist, Carl Linnaeus, relied on the account of a visit to the Andaman Islands by a Danish sailor, Nikolas Kpman. The sailor claimed to have come across Indians who had tails like monkeys. Illustrations of Indians with tails soon found their way into Swedish encyclopaedias. The vast amount of legends and myths that intelligent professionals accumulate about other countries and peoples is no longer surprising. It is noteworthy that increased possibilities of contact do not diminish certain amounts of anxiety and hostility evoked in our encounters with foreign-ness and foreigners. The famous FreudEinstein correspondence brought out lucidly that the instincts of humankind to aggress and destroy have their origins in the separation experienced between ourselves and others on a psychological plane. Have you travelled extensively? If you divide the total area (or population) of all the countries you have visited by the world area (or population), it would give you a rough measure of how much of the world you have really sampled and what remains to be experienced. If you do this exercise with your group of colleagues, you will discover the total exposure that you, as a group, have to the world. Have you thought about the missed and missing opportunities in places that youve not visited? The early-twentieth-century recruitment slogan,Join the Navy and See the World, reflected a popular enticement for commoners to experience more of the planet, beyond the land of their birth. Unfortunately, only for the men of that period, one may add! Several navies of the world now recruit women, too, but they can no longer attract recruits by posing as exclusive providers of world travel, because that is easily fulfilled through international business, which has added attractions associated with adventure and challenge; higher salaries; more delegated authority; higher status; new cultural exposures; expanded choices in lifestyle; and the bonus of subsidized tourism thrown in for good measure. Moreover, it is open to women on a scale that the worlds navies still cannot provide.

GENESIS OF INTERNATIONAL BUSINESS International business is not a new phenomenon. It existed when men dared to lead camel caravans on long journeys through the Sindh Desert, transport stuff on yaks over the Sinkiang Plateau, ride Arabian steeds across the Gobi Desert; or, were happy trudging with tradable goods, weathering storms in sailing ships. International merchant trade for cost and price arbitrages has existed for as long as anyone can remember. The Roman Empire prospered due to international business and weakened when cross-border flows could no longer be safely conducted. The first set of international business entities were Phoenician merchants, Roman and Greek traders, and Mesopotamian and Syrian groups, who conducted trade from Turkestan to the Mediterranean and up to the Azores Islands in the Atlantic through the Strait of Gibraltar, Germany, and the Baltics. In the olden days, Phoenician traders of the Eastern Mediterranean region brokered trade between theorientalterritories of India and China to their east and the lands that consisted of Arabia, Egypt, Greece, Rome, and Turkey. There were private bank-like institutions in the Eastern Mediterranean area in the fourteenth century, and the trading firms in the Italian centres of Genoa, Florence, Naples, Milan, and Venice proliferated in merchants. The Merchant of Venice, immortalized in literature by Shakespeare, and the tales of Marco Polo who travelled from Venice to China, carrying cuckoo clocks as a symbol of European technical advancement to offer to the Grand Mongol, Kublai Khan (which is said to have provoked laughter in the Royal Court because the Chinese were much more technologically advanced!) are some examples.