INTERNATIONAL BUSINESS : INTRODUCTION

“We have nowhere to go except everywhere” is the typical saying of multinational companies.

The basic tasks and functions of international business are almost the same as domestic business. But there is greater difficulty in performing the functions effectively and integrating them to serve organizational objectives.

International business may be understood as those business transactions that involve crossing of national boundaries. It I the process of focusing on resources of the globe and objectives of the organisations on global business opportunities and threats, in order to produce buy, sell or exchange of goods/services worldwide.

ASSESSING CORPORATE GLOBALITY

Internationalisation of capital

Internationalisation of Corporate mindset

Internationalisation InternationalisationOf Supply Chain of market presence

EVOLUTION OF INTERNATIONAL BUSINESS The first phase of globalisation began around 1870 and ended with the World War-I driven by the industrial revolution in the UK, Germany and USA.The prolonged recession before the World war II in the

West led to the international consensus after the World war II that a different approach towards international trade was required.

23 countries conducted negotiations in 1947 in order to prevent the protectionist policies and to revive the economies from recession which aim at establishment of International Trade Organization.

GATT (General Agreement on Trade and Tariffs) provided series of rounds of negotiations by which tariffs are reduced.By January 1,1995 GATT was replaced by the WTO. The efforts of IMF, World Bank and WTO to lliberalise their economies led to the globalisation.

The term international business has emerged from the term ‘International Marketing’ which in turn emerged from ‘International trade’.

International trade to International Marketing- It is the shift from exporting/importing to international marketing.International marketing to International Business- Shift from international marketing to international business.

DRIVERS OF GLOBALISATION1.Regional Integration2. Declining Trade Barriers3. Declining Investment barriers4. Growth in Foreign Direct Investment5. Strides in Technology6. Growth of Multinational Companies

INTERNATIONAL BUSINESS MODEL

Stages Influence Goals•Domestic Social and Cultural Market Share•International Technological High Profits•Multinational Economic Risk Avoidance•Global Political Resources Acquisition•Transnational Expand Business Capacities

Advantages

Domestic Business International Business Low prices Variety of Goods High Living Standards Economic growth& Competitive Advantage

Approaches InfluencesEthnocentric Export, Direct Investment ProblemsPolycentric Licensing, Franchising, Political risksRegiocentric Turnkey Projects, Joint Foreign DebtGeocentric Ventures, Mergers & Exchange Instability Acquisitons High cost