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The Rapid Change of International Business. Chapter 1. Terms to Know. International Business Foreign Business Multidomestic company Global company Transnational company? International company. History of International Trade. BC 1500’s and 1600’s Late 1800’s Early 1900’s Present Day.

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Terms to Know

  • International Business

  • Foreign Business

  • Multidomestic company

  • Global company

  • Transnational company?

  • International company


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History of International Trade

  • BC

  • 1500’s and 1600’s

  • Late 1800’s

  • Early 1900’s

  • Present Day


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What is Globalization?

  • “The international integration of goods, technology, labor, and capital.”


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Forces for Globalization

  • Political

    • Trading agreements

    • Decreasing barriers

    • Privatization

  • Technological

    • Information

    • Markets

  • Market

    • “Pull” companies over with you

  • Cost

  • Competitive

    • Increasing

    • Counter maneuver


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Explosive Growth

  • Foreign Direct Investment

    • US= 10%

    • Total assets in 2002: $26.5 trill. (grew 8.3%)

    • 53.1 million jobs

  • Exporting

  • Importing

  • International Companies

    • 63,800 companies in 2002, 866,000 affiliates

    • 25% of global output, 2/3 of trade


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The Debate over Globalization

  • For:

    • Raises standard of living

    • Creates jobs

  • Against:

    • Uneven results across nations

    • Deleterious effects in labor and labor standards

    • Decline in environment and health standards


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International Environment

  • Environment

    • Three environments

      • Domestic

      • Foreign

      • International

    • Two classifications

      • Uncontrollable

      • Controllable


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Uncontrollable Factors

  • Competitive

  • Distributive

  • Economic

  • Socioeconomic

  • Financial

  • Legal

  • Physical

  • Political

  • Sociocultural

  • Labor

  • Technological


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Controllable Factors

  • Factors of Production

    • Capital

    • Raw materials

    • People

  • Activities of the Organization

    • Personnel

    • Finance

    • Production

    • Marketing


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Three Environments

  • Domestic

    • Most familiar

    • Affect overseas operations

  • Foreign

    • Different face values

    • Changes difficult to assess

    • Forces interrelated

  • International

    • More complex

    • Self-reference criteria


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