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The Rapid Change of International Business
Chapter 1
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Terms to Know International Business Foreign Business
Multidomestic company Global company Transnational company? International company
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History of International Trade
BC 1500’s and 1600’s Late 1800’s Early 1900’s Present Day
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What is Globalization? “The international integration of goods, technology, labor, and capital.”
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Forces for Globalization
Political Trading agreements Decreasing barriers Privatization Technological Information Markets Market “Pull” companies over with you Cost Competitive Increasing Counter maneuver Source:
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Explosive Growth Foreign Direct Investment Exporting Importing
US= 10% Total assets: $26.5 trill. (grew 8.3%) 53.1 million jobs Exporting Importing International Companies 64,000 companies, 866,000 affiliates 25% of global output, 2/3 of trade
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The Debate over Globalization
For: Raises standard of living Creates jobs Against: Uneven results across nations Deleterious effects in labor and labor standards Decline in environment and health standards
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International Environment
Three environments Domestic Foreign International Two classifications Uncontrollable Controllable
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Uncontrollable Factors
Competitive Distributive Economic Socioeconomic Financial Legal Physical Political Sociocultural Labor Technological
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Controllable Factors Factors of Production
Capital Raw materials People Activities of the Organization Personnel Finance Production Marketing
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Three Environments Domestic Foreign International Most familiar
Affect overseas operations Foreign Different face values Changes difficult to assess Forces interrelated International More complex Self-reference criteria
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