1) Most companies are international or compete w/ international companies.

2) Modes of operation may differ from those used domestically.

3) The best ways to conduct business may differ by country.

4) An understanding allows better career decision.

5) Understanding which government policy to support.

Globalization

&

International Business

Globalization-refers to the growing set of interdependent relationships among people from different parts of a world that happens to be divided into nations.

Intenational Business-all commercial transacations between two or more countries.

1) Increasing expansion in technology.

2) Development of services that support Int'l Business.

3) Growing consumer pressure.

4) Increasing global competition.

5) Liberization of cross-border trade and resource movement.

6) Expanding cross-national cooperation.

7) Changing political situations.

Why do Companies Engage in Int'l Business?

(3 Operating Objectives)

1) Increase Sales

2) Acquire Resources

3) Minimize Risk

1) Threatens national sovereignty.

2) Growing environmental stress.

3) Increases in income inequality and personal stress.

Foreign Direct Investment (FDI)

&

Portfolio Investment

Foreign Direct Investment-an investment in a controlling interest of a foreign company.

Portfolio Investment-an investment in a noncontrolling interest in a foreign company.

1) Imports and Exports

2) Merchandise and Service

3) Foreign Direct and Portfolio Investments

4) Collaborative Arrangements