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)
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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
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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