The Rapid Change of
International Business
Chapter 1
Terms to Know
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International Business
Foreign Business
Multidomestic company
Global company
Transnational company?
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International company
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History of International Trade
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BC
1500’s and 1600’s
Late 1800’s
Early 1900’s
Present Day
What is Globalization?
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“The international integration of goods,
technology, labor, and capital.”
Forces for Globalization
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Political
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Technological
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Information
Markets
Market
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Trading agreements
Decreasing barriers
Privatization
“Pull” companies over with you
Cost
Competitive
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Increasing
Counter maneuver
Explosive Growth
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Foreign Direct Investment
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US= 10%
Total assets in 2002: $26.5 trill. (grew 8.3%)
53.1 million jobs
Exporting
Importing
International Companies
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63,800 companies in 2002, 866,000 affiliates
25% of global output, 2/3 of trade
The Debate over Globalization
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For:
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Raises standard of living
Creates jobs
Against:
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Uneven results across nations
Deleterious effects in labor and labor
standards
Decline in environment and health standards
International Environment
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Environment
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Three environments
Domestic
 Foreign
 International
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Two classifications
Uncontrollable
 Controllable
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Uncontrollable Factors
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Competitive
Distributive
Economic
Socioeconomic
Financial
Legal
Physical
Political
Sociocultural
Labor
Technological
Controllable Factors
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Factors of Production
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Capital
Raw materials
People
Activities of the Organization
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Personnel
Finance
Production
Marketing
Three Environments
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Domestic
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Foreign
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Most familiar
Affect overseas operations
Different face values
Changes difficult to assess
Forces interrelated
International
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More complex
Self-reference criteria