Introduction to International Business

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Welcome to class of
International Business
by
Dr. Satyendra Singh
University of Winnipeg
Canada
Objectives:
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History of International Business
The Debate
Definitions
Globalization
The International Business Model
Characteristics of International Business
History of International Business
• Early Traders
– Well before the time of Christ and Greek
merchants
– China stimulated the emergence of an
internationally integrated trading system
• “all roads lead to China”
• 17th Century Mercantilism/Colonialism
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British East India Company
Dutch East India Company
France, Portugal, Spain
…
Globalization Debate
• World Trade Organization
– Extensive public protests about globalization and
the liberalization of international trade
• Debate
– For:
• poverty , living standards
– Against:
• Income inequality 
• Labor standard 
• Environmental health conditions 
Opposition to Globalization!
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Albania
Algeria
Burundi
Congo
Madagascar
Myanmar
Syria
Ukraine
Definitions
• International/foreign/multidomestic Firm
– An organization with multicountry affiliates
• Each formulates its own business strategy on perceived
market differences
• Global Firm
– an organization that attempts to standardize and
integrate operations worldwide in most of all
functional areas
– Ratio of foreign to total employment
– Ratio of foreign to total assets
– 20 countries
Globalization
• Globalization
– Coined by Theodore Levitt
• “as if the entire world (or major regions of it) were a
single entity; [such an organization] sells the same things
in the same way everywhere”
• Economic Globalization
– International integration of goods, technology,
information, labor, and capital
– Process of making this integration happen
International Business Model
Characteristics of International
Business…
• Domestic Environment
 All the uncontrollable forces in the home country
that surround and influence the firm’s life and
development
 Shortage of foreign currency
 FDI in home country
 Foreign Environment
 All the uncontrollable forces originating outside the
home country that surround and influence the firm
 different values (Conflict: bypass country A to serve B)
 difficult to assess (Clause: quality of welfare/life)
 Interrelated (Technology vs. mass labor)
Characteristics of International Busines
• International Environment
 Interaction between
environmental forces
domestic
and
foreign
 Intl. Organizations (WTO, NAFTA…) affect businesses
 Decisions are linked to other subsidiaries (strike)
 Decision making more complex
 Prefer time off vs. more money
 Cultural differences
 Self-reference criterion: decisions based on your own
cultural values
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