GLOBALIZATION IN INTERNATIONAL BUSINESS WHY ARE GLOBALIZATION

GLOBALIZATION IN INTERNATIONAL BUSINESS.

WHY ARE GLOBALIZATION AND INTERNATIONAL BUSINESS IMPORTANT? Globalization refers to the ongoing social, economic, and political process that deepens the relationships and broadens the interdependencies amongst nations. International business involves all commercial transactions—private and governmental— between parties of two or more countries.

THE FORCES BEHIND GLOBALIZATION Increase in and Expansion of Technology Liberalization of Cross-Border Trade and Resource Movements Development of Services That Support International Business Growing Consumer Pressures Increased Global Competition Changing Political Situations Expanded Cross-National Cooperation

WHY COMPANIES ENGAGE IN INTERNATIONAL BUSINESS? To Expand Sales Acquire Resources Minimize Risk

MODES OF INTERNATIONAL BUSINESS Merchandise Exports and Imports Service Exports and Imports 1. Tourism and Transportation. 2. Performance of Services. 3. Use of Assets. Investments 1. Direct Investment. 2. Portfolio Investment. International Companies and Terms to Describe Them

WHY INTERNATIONAL BUSINESS DIFFERS FROM DOMESTIC BUSINESS ? Physical and Societal Factors 1. Political Policies. 2. Legal Policies. 3. Behavioral Factors. 4. Economic Forces. 5. Geographical Influences. The Competitive Environment

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WHY INTERNATIONAL BUSINESS DIFFERS FROM DOMESTIC BUSINESS ? The Competitive Environment