The World Of International Business

1. The World Of International Business Chapter 1 International Business

2. The Nature of International Business • Understanding International Business • Overview of International Business • Business and International Business • Business: Any activity that seeks profit by providing goods or services to others • International Business: Any activity involving business operations across national borders • Domestic and International Companies • Domestic Company • A company that conducts business in only one country • International Company • Company that conducts business across national borders • The number of companies continue to grow, this trend is called globalization. • Home and Host Countries • Home country – where the selling company is headquartered • Host country – where the product is being sold (outside the home) 1-1

3. The Nature of International Business • The History of Global Business • The 1600’s to 1800’s • British/Dutch East India Co. – Tea, spices, fabric • Colonial America trade with Britain and Europe • Singer • The 1900’s to Present • 1920 – 37 U.S. companies operated in 2 or more countries • U.S. buys and sells products and services all over the world • The Global Business Environment • Cultural and Social Factors • Influenced by countries education system, economic philosophy and religious beliefs • Political and Legal Factors • Wars and international conflicts • Elections • Economic Factors • Economic growth or decline, interest rates • Natural Disasters

4. The Nature of International Business • International Business Management • Businesses must adapt/adjust their management processes when they work in other parts of the world • Leadership styles and employee motivation are different from country to country • Marketing and International Trade • Product • Price • Place • Promotion • Accounting and Finance • Must understand the financial issues of international trade • Currency exchange is very important

5. The Nature of International Business • Human Resource Management and Careers • How people are recruited, hired and trained • Trade Relations • Global Dependence – Concept that all countries depend on each other for trade. • Individual Consumers • One person buys a product that is from another country • People who travel to a foreign country buy many goods and services • Companies • Import and export goods • Buy parts for their products • State and Provinces • Trading partners or relationships are developed between states and countries through regional connections • Countries and Trade Relations • Trade agreements- NAFTA • A Global Effect

6. Questions • 1. What is international business? • Give 3 Examples • 2. When did global trade first begin? • 3. What are three factors that influence trade relations? • Provide examples for each factor • 4. Explain the concept of geographic proximity and how it might affect trade in North America.

7. The Scope of International Business • The Impact of International Business • Local Level • Consumers expect local businesses to keep up with local, national and international trends • Local merchants must adapt to the rapidly changing world • State and Provincial Level • Many state governments have commerce departments • Actively seek ways to sell products within the state to countries around the world • National Level • Balance of trade (Imports vs. Exports) • Affects developing countries, need to import more products. • International Level • Make sure that international trade is fair 1-2

8. The Scope of International Business • Ethics and Social Responsibility • Ethics: • Set of moral principles by which people conduct themselves personally, socially, and professionally • Business Ethics: • Set of ideas about how a company should conduct business in relation to legal, social and environmental issues • Social Responsibility • The duty to do what is best for society. Businesses do the following to promote social responsibility • Eliminate negative attitudes • Perform positive activities • Code of Ethics – • A statement that explains what a company or group believes is proper and improper conduct

9. The Scope of International Business • Stakeholder • The various individuals or groups of people who have direct interest, involvement, or investment in something • Ethical Issues • Profits vs. pollution, unfair wages, • Factors Affecting Ethical Decisions • Culture and History • Religion may play a factor • Historical precedent or past acceptance • Unions • Government Regulations • Child labor laws, low wages

10. The Scope of International Business • Local and Global Impacts • Business has expanded with the internet, new technologies and improved transportation

11. Questions • 1. How does international business affect ordinary people? • 2. What are ethics and social responsibility? • 3. What are stakeholders?

12. Corporate Ethics • With a partner, you will be assigned a Corporate Level Ethical Issue • Define and discuss the issue • Determine at least 3 ways the issue can be perceived • Answer: Can this view be considered ethical? • Put into a PowerPoint Presentation to present to the class