International Business

Part One
Background For International
Business
Chapter One
Globalization and International
Business
1-2
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Chapter Objectives
To define globalization and international
business and show how they affect each other
To understand why companies engage in
international business and why international
business growth has accelerated
To discuss the major criticisms of globalization
To become familiar with different ways in which
a company can accomplish its global objectives
To apply social science disciplines to
understanding the differences between
international and domestic business
1-3
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Definition of Globalization
The broadening set of
interdependent relationships
among people from different
parts of a world that happens
to be divided into nations
1-4
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Definition of International Business
All commercial transactions
including sales, investments,
and transportationthat take
place between two or more
countries
1-5
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Factors in Increased Globalization
Increase in and expansion of technology
Liberalization of cross-border trade and resource
movements
Development of services that support
international business
Growing consumer pressures
Increased global competition
Changing political situations
Expanded cross-national cooperation
1-6
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
The Criticisms of Globalization
Threats to national sovereignty
Growth and environmental stress
Growing income inequality
1-7
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Reasons That Firms Engage in
International Business
Expanding sales
Acquiring resources
Minimizing risk
1-8
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Modes of Operation in
International Business
Merchandise exports and imports
Service exports and imports
Tourism and Transportation
Service Performance
Asset Use
Investments
1-9
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Types of International Organizations
Collaborative arrangements
Strategic Alliance
Multinational Enterprise (MNE)
1-10
Copyright 2009 Pearson Education, Inc. publishing as Prentice Hall
Views on future of international
business and globalization
Further globalization is inevitable.
International business will grow primarily
along regional rather than global lines.
Forces working against further
globalization and international business
will slow down both trends.