Session 1 International Business

Overview of International Business (IB)

  • Falling Trade/FDI Barriers

  • Globalization (related to Chapter 1)

  • International Monetary System (Chapter 10)

  • International Trade (Chapter 5)

  • Cross-Cultural Management (Chapter 2)

  • Market Economics (Chapters 4, 9, 15)

  • Politics & Law (Chapter 3)

  • Emerging Trends and Technological Innovation

DEFINITIONS & CONCEPTS

General Definition of International Business

  • Definition 1: The study of transactions that occur across national borders for the purpose of satisfying needs of individuals and organizations (e.g., water for survival, coffee for pleasure).

  • Definition 2: “Business activities that involve the transfer of resources, goods, services, knowledge, skills or information across national boundaries.”

  • Note: The term ‘international’ is noted as superfluous due to the pervasive nature of globalization in modern business contexts.

Areas of International Business

  • Key Areas:

    • Global Trade and Economics

    • International Market Entry Strategies

    • Cross-Cultural Management and Leadership

    • Global Business Strategy

    • International Finance and Accounting

    • Political and Legal Environment

    • Emerging Trends in International Business

Definition of International Trade

  • International trade refers to transactions between entities physically located in different places, crucial for globalization and economic development.

  • Importance: It influences industries, businesses, and global relations, being a core aspect of the global economy.

Key Aspects of International Trade

  • Aspects include:

    • Exports and Imports

    • Trade Theories

    • Trade Barriers

    • Trade Agreements and Organizations

    • Balance of Trade

    • Exchange Rates and Trade

    • Global Supply Chains

    • Protectionism vs. Free Trade

Export Definition

  • Exports are goods and services produced in one country and sent to another for economic gain.

  • Importance of Exports: They contribute to economic growth by generating revenue, creating jobs, and enhancing global business relationships.

Import Definition

  • Imports refer to goods and services brought into one country from another for trade or consumption.

  • Importance of Imports: They allow access to products that are unavailable domestically and can benefit from cost advantages in global markets.

Group Work Activity: Import Export Puzzle

  • Objective: Classify products as exports or imports and explain their role in international business.

  • Steps:

    1. Form groups of 3-5 students.

    2. Classify provided products as exports or imports.

    3. Choose one product and discuss its relation to international business and trade

GLOBALIZATION

Definition of Globalization

  • Globalization refers to the shift towards a more integrated and interdependent world economy.

  • Alternative Definition: “The widening set of interdependent relationships among people from different nations.”

  • Controversy: Globalization can be viewed positively or negatively, depending on its perceived impact on society, economy, and politics.

Economic Globalization

  • Describes the growing interdependence of economic actors across countries and regions.

Consequences of Globalization

  • Increased interdependence of locations, cross-border migration, blending of cultures, standardization, competition for resources, and cooperation in supranational institutions.

Drivers of Globalization

  1. Declining Trade and Investment Barriers

  2. Technological Change

  • Significant developments in communication, internet, and transportation technology.

Key Players

  • Key Institutions: Multinational Corporations (MNEs), medium-sized multinationals (mini-multinationals).

Impact of Globalization

  • Influence on careers, jobs, income, labor policies, environment, and national sovereignty.

Necessary Global Institutions

  • Purpose: To manage, regulate, and police the global market.

  • Major Institutions:

    • GATT: General Agreement on Tariffs and Trade

    • WTO: World Trade Organization

    • IMF: International Monetary Fund

    • World Bank

    • United Nations

    • Group of Twenty (G20)

DISCUSSION & SUMMARY

Individual Reflection

  • Write about one significant topic learned and its impact on your understanding of International Business.

Group Discussion

  • Discuss key terms learned in this session in small groups.

REFERENCES:

  • Literature:

    • Collinson, S., Narula, R., & Rugman, A. (2020). International Business. (8th ed.) Pearson

    • Hill, C.W.L. (2023). International Business. (14th ed.) McGraw Hill

    • Steers, R.M., Osland, J.S., & Szkudlarek, B. (2024). Management Across Cultures. (5th ed.) Cambridge University Press.