1.
Presented by
R.Sumathi
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2.
The International Business
Imperative
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3.
 To understand the history and impact of
international business.
 To learn the definition of international business.
 To recognize the growth of global linkages
today.
 To understand the U.S. position in world trade
and the impact international business has on
the United States.
 To appreciate the opportunities and challenges
offered by international business.
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4.
 More and more firms around the world are
going global, including:
◦ Manufacturing firms
◦ Service companies (i.e. banks, insurance,
consulting firms)
◦ Art, film, and music companies
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5.
 International business:
◦ causes the flow of ideas, services, and
capital across the world
◦ offers consumers new choices
◦ permits the acquisition of a wider
variety of products
◦ facilitates the mobility of labor,
capital, and technology
◦ provides challenging employment
opportunities
◦ reallocates resources, makes
preferential choices, and shifts
activities to a global level
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6.
International business consists of
transactions that are devised and carried out
across national borders to satisfy the
objectives of individuals, companies, and
organizations.
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7.
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Export-import trade
Foreign direct
investment
Licensing
Franchising
Management contracts

8.
 How will an idea, good, or service fit
into the international market?
 Should trade or investment be used to
enter a foreign market?
 Should supplies be obtained
domestically or abroad?
 What product adjustments are
necessary to be responsive to local
conditions?
 What are the threats from global
competitors, and how can these
threats be counteracted?
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9.
 Pax Romana, or Roman Peace ensured that
merchants were able to travel safely and
rapidly.
 Common coinage simplified business
transactions.
 Rome developed a systematic law, central
market locations, and an effective
communication system; all of which enabled
international business to flourish in the
Roman Empire.
 The growth of the Roman Empire occurred
mainly through the linkages of business
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10.
 The decline of the Roman Empire can be
attributed in part to:
◦ infighting and increasing decadence
◦ the Pax Romana being no longer enforced
◦ the decline of use and acceptance of the
common coinage
◦ declining levels of communication
 As a result, former Roman allies
cooperated with invaders.
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11.
 The United States has developed a world
leadership position due to:
◦ its use of market-based transactions in the
Western world
◦ a broad flow of ideas, goods, and services
across national borders
◦ an encouragement of international
communication and transportation
◦ Pax Americana, an American sponsored
and enforced peace
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12.
 The the 1930’s, the U.S. passed the
Smoot-Hawley Act, which raised import
duties to reduce the volume of goods
coming into the U.S.
 The act was passed in the hope that it
would restore domestic employment.
 The result was a worldwide depression
and the collapse of the world financial
system.
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13.
 In the past 30 years, the volume of
international trade has expanded from
$200 billion to over $7.5 trillion.
 The sales of foreign affiliates of
multinational corporations are now twice
as high as global exports.
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14.
 International business has created a
network of global links that bind
countries, institutions, and individuals
with trade, financial markets, technology,
and living standards.
◦ For example, a reduction in coffee production
in Brazil would affect individuals and
economies worldwide.
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15.
 Total world trade declined dramatically
after 2000, but is again on the rise.
 The rate of globalization is accelerating.
 Regionalization is taking place, resulting
in trading blocs.
 The participation of countries in world
trade is shifting.
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16.
 Between the 1960’s and the 1990’s the
importance of manufactured goods
increased while the role of primary
commodities (i.e. rubber or mining) had
decreased.
 More recently, there has been a shift of
manufacturing to countries with
emerging economies.
 There has been an increase in the area of
services trade in recent years.
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17.
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Exports and Imports of Goods and Services per Capita
for Selected Countries
Country Exports per Capita Imports per Capita
Australia
Brazil
China
Japan
Kenya
United Kingdom
United States
$4,296
379
222
4,165
91
4,767
3,472
$4,525
428
199
3,622
125
5,500
4,962

18.
 U.S. international business outflows are
important on the macroeconomic level in
terms of balancing the trade account.
 On the microeconomic level,
participation in international business
can help firms achieve economies of
scale that cannot be achieved in domestic
markets.
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19.
19
0
5
10
15
20
25
30
All Plants Small Plants Large Plants
$
per
hour
Non-Exporters Exporters

20.
 Because of globalization, for the first time
in history, the availability of international
products and services can be accessed by
individuals in many countries, from diverse
economic backgrounds.
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21.
 Part One introduces the importance of
international business and its global linkages.
 Part Two presents the environment of
international business, addressing culture,
policies, politics, and law.
 Part Three provides coverage of the theory of
international trade and investment and presents
balance of payments issues.
 Part Four discusses markets, financial systems,
economic integration, and emerging market
concerns.
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22.
 Part Five presents the strategy considerations
surrounding international business.
 Part Six targets the operational issues
surrounding international business, using an
implementation-riented perspective.
 Part Seven concludes the book with a focus on
the future of the field and the reader’s career.
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