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Pusan National University
Global Business English
International Trade and
Business Correspondence
by Prof. Yang-kee LEE
[ Volume ONE ]
Table of Contents
[ Volume ONE ]
Chapter I
Fundamentals of Global Business English
Unit 01 Introduction to Global Business English
Unit 02
How to Write Business Correspondence
Understanding Global Business Transactions
Chapter II
Unit 03 Requisites for Global Business Transactions and their Phases
Unit 04 Information Phase
Unit 05 Agreement Phase
Unit 06 Implementation Phase
Unit 07 Follow-Up Phase
Unit 08 Documentations
[ Volume TWO ]
Chapter III
Forms of Business Contracts and Int’l Business Law
Unit 08 Forms of Business Contracts
Unit 09 E-commerce
Unit 10 International Business Law
Chapter IV Global Business English in Practice
Unit 11 Careers and Opportunities in Global Business
Unit 12 Overseas Market Research and Presentations
Unit 13 English for International Meetings and Negotiations
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Chapter I Fundamentals of Global Business English
Unit 01 Introduction to
Global Business English
Global Business English refers to English used for the conduct of
global business and international trade or global business transactions.
1-1. Concept of Global Business
Global business or international trade is the exchange of goods and services among
individuals and businesses in multiple countries. It also means a specific entity, such as
a multinational corporation or international business company that engages in business
among multiple countries.
Business refers to any human activity undertaken on a regular basis with the
earn profit or monetary gain through production, distribution, sale or purchase
and services. Business may also be defined as “an activity involving regular
or purchase of goods and services for sale, transfer and exchange with an
earning profit.”
object to
of goods
object of
1-2. Characteristics of Business
The characteristics of business are composed of the following six components such as
(i) deals in goods and services, (ii) sale or exchange of goods and services, (iii)
regular exchange of goods and services, (iv) requirement for investment, (v) aims at
earning profit, and (vi) involvement into risk and uncertainty of income. The detailed
descriptions for each component are as follows:
(i) Deals
milk, tea,
be in the
in goods and services: People in business are engaged in production and
of goods and services. The goods may be consumer goods like bread, butter,
etc. or capital goods like plant, machinery, equipment, etc. The services may
form of transportation, banking, insurance, warehousing, advertising and so on.
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(ii) Sale or exchange of goods and services: If a person produces or buys a product for
self-consumption or for gifting it to another, he/she is not engaged in business. But
when he/she produces or buys goods to sell it to somebody, he/she is engaged in
business. Thus, in business the goods and services produced or purchased must be
exchanged for money or for goods (under barter system) between the buyers and
sellers. Without sale or exchange of goods the activities cannot be treated as business.
(iii) Regular exchange of goods and services: The production or buying and selling
activities must be carried out on a regular basis. In general, an isolated transaction is
not treated as business. For instance, if Mr Smith sold his old car to Mr Patrick, it is
not considered as business, unless he continues to carry buying and selling of cars on
a regular basis.
(iv) Requirement for investment: Every business activity requires some amount of
investment in terms of land, labour or capital. These resources are utilised to produce a
variety of goods and services for distribution and consumption.
(v) Aims at earning profit: Business activities are performed with the primary objective of
earning income by way of profit. Without profit it is not possible to survive for a long
period. Earning of profit is also required to grow and expand the business.
(vi) Involvement into risk and uncertainty of income: We know that every business aims of
earning profit. A businessman who invests the various resources expects a fair amount
of return. But, in spite of his/her best efforts, the reward he/she gets is always
uncertain. Sometimes he/she enjoys profit and also times may come when he/she
suffers heavy loss. This happens because the future is unpredictable and businessperson
has practically no control over certain factors that affect his/her earnings.
1-3. Types of Global Business
There are many different types of global business or international trade between the
multi-national parties involved in the common practices and the channels for the flow of
goods or services. They include the specific types of import and export transaction or
other ways of transaction depending upon the categorisation of items and the degree of
involving parties. For instance, visible trade refers to exchange of physically tangible
goods between countries, involving the export, import, and re-export of goods at various
stage of production. It is distinguished from invisible trade, which involves the export and
import of physically intangible items such as services.
Another example is direct trade or bilateral trade that refers to a system of trading
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between two parties from different countries attempting to balance its trade with that of
the other. It is different from indirect trade, which requires the involvement of the third
party, and it includes intermediate trade, merchandising trade, transit trade (passing
trade), and Switch trade, etc. There is also counter trade and it means exchanging
goods or services which are paid for, in whole or part, with other goods or services,
rather than with money. This includes barter trade, compensation trade, triangular trade,
and counter purchase.
In general, a firm can sell a physical product abroad in
production facility abroad via foreign direct investment
intermediate types of global business that can allow
international returns on its unique advantages. These are
terms of export or can locate a
(FDI). There is an array of
a firm to acquire global or
as follows:
(i) Exporting: It is a type of global business selling a physical product and receiving
sales price in return unless it is done in the way of counter trade. It only entails
foreign marketing and documentation from domestic operations without significant changes.
Little investment, typically no investment abroad, is required. However, it is susceptible to
trade barriers and exchange rate fluctuation. It also has logistical difficulties and is less
suitable for service products.
(ii) Licensing: It deals with technical information, assistance, and/or using rights. In
return, it collects licensing fee and commitment to use the information or rights. It is
advantageous for increasing return on investment in technology, creativity, or customer
relations. It also requires little additional capital or time investment. However, the
downside is that the agreement generally prohibits the originating firm from exploiting the
assets in particular foreign markets. It is also difficult to manage quality control.
(iii) Franchising: This type of business transacts trademark, on-going service, some
inputs and shared marketing expenses. In return, it is given payment for trademark,
payment for inputs used, and share of operating revenue or profits. There are three
main advantages. Firstly, it is important way of gaining foreign returns on certain kinds
of customer service and trade name asset. Secondly, it allows some control over the
conditions of sale in the foreign market. Finally, it only entails limited financial
commitment. However, quality control is weak.
(iv) Management Contracts: It involves with people for a certain period of time. In return
for this, it receives salary, benefits and indirect costs, as well as share of operating
revenues or profits. This type has both pros and cons. Contractor puts up no capital
and bears no risk. It also is useful in foreign contexts that prohibits or too risky for FDI.
Though, contractee has a good chance to become a competitor, at least in the local
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(v) Turn-key Operation: It offers design, construction and equipping of a production
facility to the trading partner. In return, it takes all costs plus fees, assumption of
ownership and risk at end of project. As contractor bears no risk in this type of
business, it is useful in foreign context that prohibits or are too risky for FDI. However,
contractee might have a good chance to become a competitor, at least in the local
(vi) Contract Arrangements: It involves dealings of expertise, financing, materials, or
finished goods. It receives inputs available in the foreign country in return. It helps avoid
currency controls and foreign exchange risk. On the other hand, it may be difficult to
negotiate a fair arrangement.
(vii) Foreign Direct Investment (FDI): This type of business provides capital, management,
technology, and perhaps key material inputs. As a reward, it collects repatriated profit,
licensing fees and transfer payments for inputs. It is profitable, relatively easy to handle
quality control and has possibility of tax avoidance through transfer pricing. However, it is
not easy to acquire capital and operating commitment.
1-4. Global Business English
Global Business English (or Business English) is basically defined as English used for
the conduct of global business and international trade or global business transactions. It
is generally taught to non-native English speakers who desire to do business with
English speakers around the world. Thus, it is purely a functional category of Business
English aimed at preparing learners for effective communication in a global context. On
the other hand, it can also be learned by native English speakers who are more familiar
with casual use of the language and are not sure of their footing when it comes to
formal, multi-national office environment conversation, and global business contracts or
According to The New Oxford Dictionary of English, business means a person’s regular
occupation, profession, or trade for a commercial house or firm. It also indicates the
practice of making one’s living by engaging in commerce (buying and selling). English,
originally the language of England, is now widely spoken in many varieties throughout
the world. Global Business English, therefore, is the Business English used in mercantile
transactions worldwide.
1-5. Scope of Global Business English
The focus in Business English is on the language and skills required for regular
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business communication: the vocabulary of trade, business contracts and transactions,
presentations, negotiations, meetings, daily conversation, networking, correspondence and
report writing, etc. The strict rules of grammar are sometimes ignored or sidestepped for
these purposes. G.B. Hotchkiss & Kilduff, in one of their books, said “Business English
include all written messages in English that are used in transactions”.
Though, Business English varies depending upon different aspects to different people.
For some, it focuses on vocabulary and topics regarding trade, business contracts,
finance and international relations. For others, it means the communication skills used in
the workplace, and focuses on the language and skills necessary for typical business
communication such as presentations, negotiations, meetings, socialising, correspondence,
report writing, and so on.
The scope of Global Business English dealt with in this book is as follows:
Business Writings and Correspondence (Unit 02);
Business Transactions and their Phases (Unit 03-07);
Business Contracts and International Business Law (Unit 08-10);
Business Expressions for Market Research, Presentations, Meetings
Negotiations (Unit 11-13).
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Key Expressions & Technical Terms
barter system
구상무역 또는 물물교환
business transaction/commerce/trade
business contract
business correspondence
business meeting
상품 또는 원자재
협상 또는 거래
exchange of goods and services
물품 및 서비스 교환
금융 또는 재정
Global Business English/Business English
International Business Law
국제비지니스법 또는 국제상거래법
market research
프레젠테이션 또는 발표
profit/monetary gain
수익/금전적 이윤
보상 또는 보상금
양도 또는 이전
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Check-up Questions 01
Q1. Translate the sentence below into Korean.
Global Business English refers to English used for the conduct of global business and
international trade or global business transactions.
Q2. Write the following sentence in English.
비즈니스는 물품 및 서비스에 대한 생산, 유통, 매매 또는 매입을 통한 수익 창출 또
는 금전적 이윤의 추구를 목적으로 정기적으로 행해지는 모든 인간의 활동을 칭한다.
[Useful expressions]
refer to ~
~을 칭하다
on a regular basis
~을 행하다
with object to <Verb>
~하는 것을 목적으로
Q3. Which one is NOT considered a characteristic of business?
① Regular deals in goods and services
② Temporary exchange of goods and services
③ Requirement for investment
④ Aims at earning profit
Q4. What is NOT in the scope of Global Business English in this book?
① Business writings and correspondence
② Business transactions and their phases
③ Business consultation and domestic business law
④ Business expressions for market research, presentations, meetings, etc.
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