Welcome to class of International Business by Dr. Satyendra Singh University of Winnipeg Canada.
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Transcript of Welcome to class of International Business by Dr. Satyendra Singh University of Winnipeg Canada.
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Welcome to class ofInternational Business
byDr. Satyendra Singh
University of WinnipegCanada
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Objectives:
• History of International Business• The Debate• Definitions• Globalization• The International Business Model• Characteristics of International Business
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History of International Business
• Early Traders– Well before the time of Christ and Greek merchants – China stimulated the emergence of an internationally integrated trading
system• “all roads lead to China”
• 17th Century Mercantilism/Colonialism– British East India Company– Dutch East India Company– France, Portugal, Spain– …
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Globalization Debate
• World Trade Organization– Extensive public protests about globalization and the liberalization of international
trade
• Debate– For:
• poverty , living standards– Against:
• Income inequality • Labor standard • Environmental health conditions
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Opposition to Globalization!
• Albania• Algeria• Burundi• Congo• Madagascar• Myanmar• Syria• Ukraine•
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Definitions
• International/foreign/multidomestic Firm– An organization with multicountry affiliates
• Each formulates its own business strategy on perceived market differences
• Global Firm– an organization that attempts to standardize and integrate operations
worldwide in most of all functional areas– Ratio of foreign to total employment– Ratio of foreign to total assets– 20 countries
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Globalization
• Globalization – Coined by Theodore Levitt
• “as if the entire world (or major regions of it) were a single entity; [such an organization] sells the same things in the same way everywhere”
• Economic Globalization– International integration of goods, technology, information,
labor, and capital– Process of making this integration happen
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International Business Model
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Characteristics of International Business…
• Domestic Environment All the uncontrollable forces in the home country that surround and
influence the firm’s life and development Shortage of foreign currency FDI in home country
Foreign Environment All the uncontrollable forces originating outside the home country
that surround and influence the firm different values (Conflict: bypass country A to serve B) difficult to assess (Clause: quality of welfare/life) Interrelated (Technology vs. mass labor)
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Characteristics of International Busines
• International Environment Interaction between domestic and foreign environmental
forces Intl. Organizations (WTO, NAFTA…) affect businesses Decisions are linked to other subsidiaries (strike)
Decision making more complex Prefer time off vs. more money Cultural differences Self-reference criterion: decisions based on your own cultural values