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INTRODUCTION TO INTERNTIONAL BUSINESS
International business is a term used to collectively describe all commercial
transactions (privateandgovernmental,sales,investments,logistics,andtransportation)
that take place between two or moreregions,countriesandnationsbeyond their
political boundary. Usually, private companies undertake
suchtransactionsforprofit;governmentsundertake them for profit and
forpoliticalreasons. It refers to all those business activities which involve cross border
transactions of goods, services, resources between two or more nations. Transaction of
economic resources include capital, skills, people etc. for international production of
physical goods and services such as finance, banking, insurance, construction etc..
Amultinational enterprise(MNE) is a company that has a worldwide approach to
markets and production or one with operations in more than a country. An MNE is often
called multinational corporation (MNC) or transnational company (TNC). Well known
MNCs includefast foodcompanies such asMcDonald'sandYum Brands, vehicle
manufacturers such asGeneral Motors,Ford Motor CompanyandToyota, consumer
electronics companies likeSamsung,LGandSony, and energy companies such
asExxonMobil,ShellandBP. Most of the largest corporations operate in multiple
national markets.
Areas of study within this topic include differences inlegal systems,political
systems,economic policy,language,accounting standards,labor standards,living
standards,environmental standards,local culture,corporate culture,foreign exchange
market,tariffs,importandexportregulations,trade agreements,climate,educationand
many more topics. Each of these factors requires significant changes in how individual
business units operate from one country to the next.
The conduct of international operations depends on companies' objectives and the
means with which they carry them out. The operations affect and are affected by the
physical and societal factors and thecompetitiveenvironment.
http://en.wikipedia.org/wiki/Privately-held_companyhttp://en.wikipedia.org/wiki/Privately-held_companyhttp://en.wikipedia.org/wiki/Privately-held_companyhttp://en.wikipedia.org/wiki/Governmentalhttp://en.wikipedia.org/wiki/Governmentalhttp://en.wikipedia.org/wiki/Governmentalhttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Investmentshttp://en.wikipedia.org/wiki/Investmentshttp://en.wikipedia.org/wiki/Investmentshttp://en.wikipedia.org/wiki/Logisticshttp://en.wikipedia.org/wiki/Logisticshttp://en.wikipedia.org/wiki/Logisticshttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Regionshttp://en.wikipedia.org/wiki/Regionshttp://en.wikipedia.org/wiki/Regionshttp://en.wikipedia.org/wiki/Countrieshttp://en.wikipedia.org/wiki/Countrieshttp://en.wikipedia.org/wiki/Countrieshttp://en.wikipedia.org/wiki/Nationshttp://en.wikipedia.org/wiki/Nationshttp://en.wikipedia.org/wiki/Nationshttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Profit_(accounting)http://en.wikipedia.org/wiki/Profit_(accounting)http://en.wikipedia.org/wiki/Profit_(accounting)http://en.wikipedia.org/wiki/Governmentshttp://en.wikipedia.org/wiki/Governmentshttp://en.wikipedia.org/wiki/Governmentshttp://en.wikipedia.org/wiki/Politicalhttp://en.wikipedia.org/wiki/Politicalhttp://en.wikipedia.org/wiki/Politicalhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Fast_foodhttp://en.wikipedia.org/wiki/Fast_foodhttp://en.wikipedia.org/wiki/Fast_foodhttp://en.wikipedia.org/wiki/McDonald%27shttp://en.wikipedia.org/wiki/McDonald%27shttp://en.wikipedia.org/wiki/McDonald%27shttp://en.wikipedia.org/wiki/Yum_Brandshttp://en.wikipedia.org/wiki/Yum_Brandshttp://en.wikipedia.org/wiki/Yum_Brandshttp://en.wikipedia.org/wiki/General_Motors_Corporationhttp://en.wikipedia.org/wiki/General_Motors_Corporationhttp://en.wikipedia.org/wiki/General_Motors_Corporationhttp://en.wikipedia.org/wiki/Ford_Motor_Companyhttp://en.wikipedia.org/wiki/Ford_Motor_Companyhttp://en.wikipedia.org/wiki/Ford_Motor_Companyhttp://en.wikipedia.org/wiki/Toyotahttp://en.wikipedia.org/wiki/Toyotahttp://en.wikipedia.org/wiki/Toyotahttp://en.wikipedia.org/wiki/Samsunghttp://en.wikipedia.org/wiki/Samsunghttp://en.wikipedia.org/wiki/Samsunghttp://en.wikipedia.org/wiki/LGhttp://en.wikipedia.org/wiki/LGhttp://en.wikipedia.org/wiki/LGhttp://en.wikipedia.org/wiki/Sonyhttp://en.wikipedia.org/wiki/Sonyhttp://en.wikipedia.org/wiki/Sonyhttp://en.wikipedia.org/wiki/ExxonMobilhttp://en.wikipedia.org/wiki/ExxonMobilhttp://en.wikipedia.org/wiki/ExxonMobilhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/Legal_systemshttp://en.wikipedia.org/wiki/Legal_systemshttp://en.wikipedia.org/wiki/Legal_systemshttp://en.wikipedia.org/wiki/Political_systemshttp://en.wikipedia.org/wiki/Political_systemshttp://en.wikipedia.org/wiki/Political_systemshttp://en.wikipedia.org/wiki/Political_systemshttp://en.wikipedia.org/wiki/Economic_policyhttp://en.wikipedia.org/wiki/Economic_policyhttp://en.wikipedia.org/wiki/Economic_policyhttp://en.wikipedia.org/wiki/Language_barrierhttp://en.wikipedia.org/wiki/Language_barrierhttp://en.wikipedia.org/wiki/Language_barrierhttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Labor_standardshttp://en.wikipedia.org/wiki/Labor_standardshttp://en.wikipedia.org/wiki/Labor_standardshttp://en.wikipedia.org/wiki/Living_standardshttp://en.wikipedia.org/wiki/Living_standardshttp://en.wikipedia.org/wiki/Living_standardshttp://en.wikipedia.org/wiki/Living_standardshttp://en.wikipedia.org/wiki/Environmental_standardhttp://en.wikipedia.org/wiki/Environmental_standardhttp://en.wikipedia.org/wiki/Environmental_standardhttp://en.wikipedia.org/wiki/Culturehttp://en.wikipedia.org/wiki/Culturehttp://en.wikipedia.org/wiki/Culturehttp://en.wikipedia.org/wiki/Corporate_culturehttp://en.wikipedia.org/wiki/Corporate_culturehttp://en.wikipedia.org/wiki/Corporate_culturehttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Importhttp://en.wikipedia.org/wiki/Importhttp://en.wikipedia.org/wiki/Importhttp://en.wikipedia.org/wiki/Exporthttp://en.wikipedia.org/wiki/Exporthttp://en.wikipedia.org/wiki/Exporthttp://en.wikipedia.org/wiki/Trade_agreementshttp://en.wikipedia.org/wiki/Trade_agreementshttp://en.wikipedia.org/wiki/Trade_agreementshttp://en.wikipedia.org/wiki/Climatehttp://en.wikipedia.org/wiki/Climatehttp://en.wikipedia.org/wiki/Climatehttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Competitivehttp://en.wikipedia.org/wiki/Competitivehttp://en.wikipedia.org/wiki/Social_environmenthttp://en.wikipedia.org/wiki/Social_environmenthttp://en.wikipedia.org/wiki/Social_environmenthttp://en.wikipedia.org/wiki/Social_environmenthttp://en.wikipedia.org/wiki/Competitivehttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Climatehttp://en.wikipedia.org/wiki/Trade_agreementshttp://en.wikipedia.org/wiki/Exporthttp://en.wikipedia.org/wiki/Importhttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Corporate_culturehttp://en.wikipedia.org/wiki/Culturehttp://en.wikipedia.org/wiki/Environmental_standardhttp://en.wikipedia.org/wiki/Living_standardshttp://en.wikipedia.org/wiki/Living_standardshttp://en.wikipedia.org/wiki/Labor_standardshttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Language_barrierhttp://en.wikipedia.org/wiki/Economic_policyhttp://en.wikipedia.org/wiki/Political_systemshttp://en.wikipedia.org/wiki/Political_systemshttp://en.wikipedia.org/wiki/Legal_systemshttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/ExxonMobilhttp://en.wikipedia.org/wiki/Sonyhttp://en.wikipedia.org/wiki/LGhttp://en.wikipedia.org/wiki/Samsunghttp://en.wikipedia.org/wiki/Toyotahttp://en.wikipedia.org/wiki/Ford_Motor_Companyhttp://en.wikipedia.org/wiki/General_Motors_Corporationhttp://en.wikipedia.org/wiki/Yum_Brandshttp://en.wikipedia.org/wiki/McDonald%27shttp://en.wikipedia.org/wiki/Fast_foodhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Politicalhttp://en.wikipedia.org/wiki/Governmentshttp://en.wikipedia.org/wiki/Profit_(accounting)http://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Nationshttp://en.wikipedia.org/wiki/Countrieshttp://en.wikipedia.org/wiki/Regionshttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Logisticshttp://en.wikipedia.org/wiki/Investmentshttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Governmentalhttp://en.wikipedia.org/wiki/Privately-held_company 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Operations
Objectives:salesexpansion,resourceacquisition,riskminimization
Means
Modes:importingandexporting,tourismandtransportation,licensingandfranchising,turnkeyoperations,managementcontracts,directinvestmentandportfolio
investments.
Functions:marketing,globalmanufacturingandsupplychainmanagement,accounting,finance,human resources
Overlaying alternatives: choice of countries, organization andcontrol mechanisms
Physical and societal factors
Politicalpoliciesandlegal practices
Culturalfactors
Economic forces Geographicalinfluences
Competitive factors
Major advantage inprice,marketing,innovation, or other factors.
Number and comparative capabilities ofcompetitors
Competitivedifferences bycountry
Local taxes
There has been growth inglobalizationin recent decades due to the following eightfactors:
Technologyis expanding, especially intransportationandcommunications.
Governmentsare removing international business restrictions.
Institutionsprovide services to ease the conduct of international business.
Consumersknow about and wantforeigngoodsandservices.
Competitionhas become more global.
Politicalrelationships have improved among some majoreconomicpowers.
Countriescooperate more on transnational issues.
Cross-national cooperation and agreements.
Studying international business is important because:
Most companies are eitherinternationalor compete with international companies.
Modes ofoperationmay differ from those used domestically.
The best way of conducting business may differ bycountry.
An understanding helps you make bettercareerdecisions.
An understanding helps you decide whatgovernmentalpoliciesto support.
Managers in international business must understand social science disciplines and howthey affect all functional business fields.
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/Good_(economics)http://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Competitionhttp://en.wikipedia.org/wiki/Competitionhttp://en.wikipedia.org/wiki/Politicalhttp://en.wikipedia.org/wiki/Politicalhttp://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/Countrieshttp://en.wikipedia.org/wiki/Countrieshttp://en.wikipedia.org/wiki/Cross-national_cooperation_and_agreementshttp://en.wikipedia.org/wiki/Cross-national_cooperation_and_agreementshttp://en.wikipedia.org/wiki/Internationalhttp://en.wikipedia.org/wiki/Internationalhttp://en.wikipedia.org/wiki/Internationalhttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Countryhttp://en.wikipedia.org/wiki/Countryhttp://en.wikipedia.org/wiki/Countryhttp://en.wikipedia.org/wiki/Careerhttp://en.wikipedia.org/wiki/Careerhttp://en.wikipedia.org/wiki/Careerhttp://en.wikipedia.org/wiki/Governmentalhttp://en.wikipedia.org/wiki/Governmentalhttp://en.wikipedia.org/wiki/Policieshttp://en.wikipedia.org/wiki/Policieshttp://en.wikipedia.org/wiki/Policieshttp://en.wikipedia.org/wiki/Policieshttp://en.wikipedia.org/wiki/Governmentalhttp://en.wikipedia.org/wiki/Careerhttp://en.wikipedia.org/wiki/Countryhttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Internationalhttp://en.wikipedia.org/wiki/Cross-national_cooperation_and_agreementshttp://en.wikipedia.org/wiki/Countrieshttp://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/Politicalhttp://en.wikipedia.org/wiki/Competitionhttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Foreign_tradehttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Institutionshttp://en.wikipedia.org/wiki/Governmentshttp://en.wikipedia.org/wiki/Communicationshttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Technologyhttp://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/Countryhttp://en.wikipedia.org/wiki/Competitivehttp://en.wikipedia.org/wiki/Competitorshttp://en.wikipedia.org/wiki/Innovationhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Geographicalhttp://en.wikipedia.org/wiki/Economic_forceshttp://en.wikipedia.org/wiki/Culturalhttp://en.wikipedia.org/wiki/Legal_practiceshttp://en.wikipedia.org/wiki/Policieshttp://en.wikipedia.org/wiki/Control_mechanismshttp://en.wikipedia.org/wiki/Human_resourceshttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Supply_chain_managementhttp://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/w/index.php?title=Portfolio_investments&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Portfolio_investments&action=edit&redlink=1http://en.wikipedia.org/wiki/Direct_investmenthttp://en.wikipedia.org/wiki/Contractshttp://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Turnkeyhttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Licensinghttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Tourismhttp://en.wikipedia.org/wiki/Exportinghttp://en.wikipedia.org/wiki/Importinghttp://en.wikipedia.org/wiki/Riskhttp://en.wikipedia.org/wiki/Resourcehttp://en.wikipedia.org/wiki/Sales 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Tom Travis, the managing partner of Sandler, Travis & Rosenberg, PA. andinternational trade and customs consultant, uses the Six Tenets when giving advice onhow to globalize one's business. The Six Tenets are as follows:
1. Take advantage of trade agreements: think outside the border
Familiarize yourself with preference programs and trade agreements.
Read the fine print.
Participate in the process.
Seize opportunities when they arise.
2. Protect your brand at all costs
You and your brand are inseparable.
You must be vigilant in protecting your intellectual property both at home and
abroad.
You must be vigilant in enforcing your IP rights. Protect your worldwide reputation by strict adherence to labor and human
rights standards.
3. Maintain high ethical standards
Strong ethics translate into good business.
Forge ethical strategic partnerships.
Understand corporate accountability laws.
Become involved with the international business self-regulation movement.
Develop compliance protocols for import and export operations.
Memorialize your company's code of ethics and compliance practices in
writing.
Appoint a leader.
4. Stay secure in an insec
new security measures.
Secure your data.
Keep your personnel secure.
5. Expect the Unexpected
The unexpected will happen.
Do your research now.
Address your particular circumstances.
6. All global business is personal
Go to the source.
Keep communications open.
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7. Keep the home office operatioure world
Security requires transparency throughout the supply chain.
Participate in trade-government partnerships.
Make the most of nal.
Fly the flag at your overseas locations.
Relate to offshore associates on a personal level.
Be available to overseas clients and customers 24/7.
