Comprehensive Study Notes: Global Business, International Trade, and Multinational Strategy

International Business

All commercial transactions—including trade, investment, and services—that take place between two or more countries.

Multinational Enterprises (MNEs)

Entities that own or control production or service facilities in more than one country and operate across international borders.

Market-Seeking

A motivation for internationalization aimed at accessing larger consumer bases beyond domestic markets to expand sales.

Resource-Seeking

The strategy of securing lower-cost production inputs and acquiring proprietary technology unavailable domestically.

Risk Diversification

A strategy to offset market volatility by spreading sales across multiple country cycles and counterbalancing local demand downturns.

Environmental Disparities

Differences across country-level operating environments that necessitate customized strategic approaches.

Sovereign Intervention

Limits imposed by government policies in cross-border trade, including tariffs, subsidies, and capital movements.

Globalisation

The shift towards a more integrated and interdependent world economy, representing an evolving process.

Globalisation of Markets

The merging of segregated national markets into a single global marketplace.

Globalisation of Production

Dispersing components of the value chain across global sites to capitalize on national comparative advantages.

Trade

Physical merchandise and commercial services exchanged internationally.

Capital

Encompasses Foreign Direct Investment (FDI) and cross-border portfolio equity.

Information Flow

Digital globalisation involving cross-border internet traffic and collaborative knowledge transfers.

Foreign Trade Zones (FTZs)

Designated geographical areas where products can be imported and manufactured with minimal customs duties.

World Trade Organization (WTO)

An international institution that governs multilateral trade rules and polices compliance with trade treaties.

Foreign Direct Investment (FDI)

Investment made directly in foreign business operations, typically defined by acquiring at least 10% equity.

Free Trade Area (FTA)

An agreement where internal tariffs are removed among member nations, but each retains its own external tariffs.

Strategy and Organisation in the International Firm

Actions managers take to achieve organizational goals and maximize enterprise value.

Cultural Intelligence (CQ)

An individual's capability to function effectively in culturally diverse settings.

Hofstede's Cultural Dimensions

Framework that measures national culture across various dimensions, such as power distance and individualism.

Ethics in International Business

Accepted principles of right and wrong governing conduct in international commerce.

Triple Bottom Line

Framework assessing three pillars of performance: Profit, People, and Planet in corporate social responsibility.

Supply Chain Reconfiguration

Structural shifts in managing supply chains to enhance operational resilience and efficiency.

Political Risk

The probability that political events or decisions will negatively affect an international investor's profitability.