The Rapid Change of International Business

1. The Rapid Change of International Business Chapter 1

2. Terms to Know • International Business • Foreign Business • Multidomestic company • Global company • Transnational company? • International company

3. History of International Trade • BC • 1500’s and 1600’s • Late 1800’s • Early 1900’s • Present Day

4. What is Globalization? • “The international integration of goods, technology, labor, and capital.”

5. Forces for Globalization • Political • Trading agreements • Decreasing barriers • Privatization • Technological • Information • Markets • Market • “Pull” companies over with you • Cost • Competitive • Increasing • Counter maneuver

6. 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

7. 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

8. International Environment • Environment • Three environments • Domestic • Foreign • International • Two classifications • Uncontrollable • Controllable

9. Uncontrollable Factors • Competitive • Distributive • Economic • Socioeconomic • Financial • Legal • Physical • Political • Sociocultural • Labor • Technological

10. Controllable Factors • Factors of Production • Capital • Raw materials • People • Activities of the Organization • Personnel • Finance • Production • Marketing

11. Three Environments • Domestic • Most familiar • Affect overseas operations • Foreign • Different face values • Changes difficult to assess • Forces interrelated • International • More complex • Self-reference criteria