2. Chapter 4 International Environment for Business 1 Chapter 4 International Environment for Business ©2008 Thomson/South-Western

3. Chapter 4 International Environment for Business 2 Lesson 4.1 The Importance of International Business Goals Describe the nature, growth, and importance of international trade and investment. Explain the reasons for the growth of international business.

4. Chapter 4 International Environment for Business 3 Importance of International Business International business — business activities that occur between two or more countries Extent of international trade — most of world’s trade takes place among the developed countries of North America, Western Europe, and the Pacific Rim

5. Chapter 4 International Environment for Business 4 Canada China Mexico Japan Germany United Kingdom South Korea Taiwan France Malaysia Top 10 Countries with Which the United States Trades

6. Chapter 4 International Environment for Business 5 Growth in International Business World Trade Organization (WTO) European Union (EU) North American Free Trade Agreement (NAFTA) International Monetary Fund (IMF) World Bank

7. Chapter 4 International Environment for Business 6 Lesson 4.2 Forms of International Business Goals Distinguish between the different forms through which international business is conducted. Describe the policies, rules, and laws that governments use to affect international trade and investment.

8. Chapter 4 International Environment for Business 7 Forms of International Business Exporting Importing International licensing Joint ventures Wholly owned subsidiaries Strategic alliances Multinational firms

9. Chapter 4 International Environment for Business 8 Government Policies Policies – Tariffs – Dumping – Quotas – Nontariff barriers – Embargoes Currency values – Exchange rate

10. Chapter 4 International Environment for Business 9 Cultural Differences Culture — customs, beliefs, values, and patterns of behavior of the people of a country or group Low-context culture — people communicate directly and explicitly High-context culture — communication tends to occur through nonverbal signs and indirect suggestions

11. Chapter 4 International Environment for Business 10 Lesson 4.3 Theories of International Trade and Investment Goals Explain two theories of international trade. Discuss the concepts of balance of trade and balance of payments. Consider career opportunities in international business and understand the factors related to being sent abroad on assignment.

12. Chapter 4 International Environment for Business 11 Theories of International Trade Comparative advantage theory — to gain a trade advantage, a country should specialize in products or services that it can provide more efficiently than other countries can Product life cycle theory — product or service goes through four stages: introduction, growth, maturity, and decline

13. Chapter 4 International Environment for Business 12 Balance of Trade Balance of payments — accounting statement in which international transactions are recorded; consists of current account and capital account Current account — value of goods and services exported and imported, as well as other income and payments Capital account — investment funds coming into and going out of a country

14. Chapter 4 International Environment for Business 13 Career Opportunities in International Business Exporting and importing Teaching and translating Administering trade laws Managing foreign offices and operations Banking and insurance International trade organizations Government agencies