This document provides an overview of international business. It defines international business as transactions between parties from more than one country, which can include private individuals, companies, government agencies. International business differs from domestic business in areas like currency conversion, legal systems, culture, and resource availability. The main activities of international business are exporting, importing, international investments, and licensing. It also discusses the trend of globalization and how it has increased international trade and foreign direct investment worldwide.

1. 1-1
chapter 1
An Overview
of
International
Business
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
International
Business,
6th
Edition
Griffin & Pustay

2. 1-2
What Is International
Business?
• Business transactions between
parties from more than one country
• Parties may include:
– Private individuals
– Individual companies
– Groups of companies
– Governmental agencies
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

3. 1-3
How Does International Business
Differ from Domestic?
• Currency conversion
• Legal systems
• Culture
• Availability of resources
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

4. 1-4
International
Business Activities
• Exporting and Importing
• International Investments
• Licensing, Franchising, and
Management Contracts
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

5. 1-5
Figure 1.1 Exports as a % of GDP
82.9
39.7
31.8
28.8
21.4
17.8
10.8
14.5
27.1
35.7
75
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Percentage
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GDP
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

6. 1-6
Figure 1.2 World Exports
as a % of World GDP
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

7. 1-7
Figure 1.3 Foreign Direct
Investment Relative to World GDP
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

8. 1-8
The Era of Globalization
Globalization: the inexorable integration
of markets, nation-states, and
technologies…in a way that is enabling
individuals, corporations and nation-
states to reach around the world farther,
faster, deeper, and cheaper than ever
before
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

9. 1-9
Contemporary Causes of
Globalization
Strategic Imperatives
• To leverage core competencies
• To acquire resources and supplies
• To seek new markets
• To better compete with rivals
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

10. 1-10
Environmental Change and
Globalization
Changes in
Political
Environments
Technological
Changes
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

11. 1-11
Why Study International
Business?
• Large organizations
• Foreign-owned subsidiaries
• Small businesses
• Competitors
• Business techniques and tools
• Cultural literacy
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall