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
• 1500s and 1600s
• Late 1800s
• Early 1900s
• 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