International Business, 6th Edition

chapter 1
An Overview of International Business

Griffin & Pustay

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What Is International Business?

Business transactions between parties from more than one country Parties may include:
Private individuals Individual companies Groups of companies Governmental agencies
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How Does International Business Differ from Domestic? Currency conversion Legal systems Culture Availability of resources

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International Business Activities

Exporting and Importing International Investments Licensing, Franchising, and Management Contracts

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Figure 1.1 Exports as a % of GDP

90 80 70

82.9 75

Percentage of GDP

60 50 40 30 20 10 0 44.1

39.7

35.7 31.8 28.8 27.1 21.4 17.8 14.5 10.8

M ex ni ic te o d Ki ng do m Fr an ce

eth er lan ds Th ail an d G er m an y

Ca na da

Ja pa n

Ch

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ni te d

Br az i

St ate s

In di a

in a

Figure 1.2 World Exports as a % of World GDP

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Figure 1.3 Foreign Direct Investment Relative to World GDP

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The Era of Globalization

Globalization: the inexorable integration
of markets, nation-states, and technologiesin a way that is enabling individuals, corporations and nationstates to reach around the world farther, faster, deeper, and cheaper than ever before
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Contemporary Causes of Globalization Strategic Imperatives To leverage core competencies To acquire resources and supplies To seek new markets To better compete with rivals

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Environmental Change and Globalization

Changes in Political Environments

Technological Changes

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Why Study International Business?

Large organizations Foreign-owned subsidiaries Small businesses Competitors Business techniques and tools Cultural literacy
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