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International BusinessPart One

Background For International Business

Chapter One

Globalization and International

Business

Dr. Mayur Shah

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Chapter Objectives

To define globalization and international

business and show how they affect each other

To understand why companies engage in

international business and why internationalbusiness growth has accelerated

To discuss the major criticisms of globalization

To become familiar with different ways in whicha company can accomplish its global objectives

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Definition of Globalization

The integration of world economies

through the reduction of barriers to the

movement of trade, capital, technology

and people

The broadening set of interdependent

relationships among people from differentparts of a world that happens to be

divided into nations

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Definition of International Business

All commercial transactions

including sales, investments,and transportationthat take

place between two or more

countries

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International Business:

Operations and Influences

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Factors behind

Increased Globalization

1. Increase in and expansion of technology

2. Liberalization of cross-border trade and resource

movements

3. Development of services that support internationalbusiness

4. Growing consumer pressures

5. Increased global competition

6. Changing political situations7. Expanded cross-national cooperation

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The Criticisms of Globalization

Threats to national sovereignty

Growth and environmental stress

Growing income inequality

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Reasons That Firms Engage in

International Business

Expanding sales

Acquiring resources

Minimizing risk

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Modes of International

Operations

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Modes of Operation in

International Business

Merchandise exports and imports

Service exports and imports

Tourism and Transportation

Service Performance

Asset Use

Investments (FDI and FII)

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Types of International Organizations

Collaborative arrangements

Strategic Alliance

Multinational Enterprise (MNE)

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Physical and Social Factors

Affecting International Business

Operations

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Competitive Factors Affecting

International Business

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Views on future of international

business and globalization

Further globalization is inevitable.

International business will grow primarily

along regional rather than global lines.

Forces working against further

globalization and international business

will slow down both trends.