The World Of International Business Chapter 1 International Business

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

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

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

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

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.

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

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

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

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

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

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