1. Chapter 4 International Environment for Business
©2008 Thomson/South-Western

2. Lesson 4.1 The Importance of International Business
Goals
Describe the nature, growth, and importance of international trade and investment.
Explain the reasons for the growth of international business.
Chapter 4 International Environment for Business

3. Importance of International Business
International business — business activities that occur between two or more countries
Extent of international trade — most of world’s trade takes place among the developed countries of North America, Western Europe, and the Pacific Rim
Chapter 4 International Environment for Business

4. Top 10 Countries with Which the United States Trades
Canada
China
Mexico
Japan
Germany
United Kingdom
South Korea
Taiwan
France
Malaysia
Chapter 4 International Environment for Business

5. Growth in International Business
World Trade Organization (WTO)
European Union (EU)
North American Free Trade Agreement (NAFTA)
International Monetary Fund (IMF)
World Bank
Chapter 4 International Environment for Business

6. Lesson 4.2 Forms of International Business
Goals
Distinguish between the different forms through which international business is conducted.
Describe the policies, rules, and laws that governments use to affect international trade and investment.
Chapter 4 International Environment for Business

7. Forms of International Business
Exporting
Importing
International licensing
Joint ventures
Wholly owned subsidiaries
Strategic alliances
Multinational firms
Chapter 4 International Environment for Business

8. Chapter 4 International Environment for Business
Government Policies
Policies
Tariffs
Dumping
Quotas
Nontariff barriers
Embargoes
Currency values
Exchange rate
Chapter 4 International Environment for Business

9. Chapter 4 International Environment for Business
Cultural Differences
Culture — customs, beliefs, values, and patterns of behavior of the people of a country or group
Low-context culture — people communicate directly and explicitly
High-context culture — communication tends to occur through nonverbal signs and indirect suggestions
Chapter 4 International Environment for Business

10. Lesson 4.3 Theories of International Trade and Investment
Goals
Explain two theories of international trade.
Discuss the concepts of balance of trade and balance of payments.
Consider career opportunities in international business and understand the factors related to being sent abroad on assignment.
Chapter 4 International Environment for Business

11. Theories of International Trade
Comparative advantage theory — to gain a trade advantage, a country should specialize in products or services that it can provide more efficiently than other countries can
Product life cycle theory — product or service goes through four stages: introduction, growth, maturity, and decline
Chapter 4 International Environment for Business

12. Chapter 4 International Environment for Business
Balance of Trade
Balance of payments — accounting statement in which international transactions are recorded; consists of current account and capital account
Current account — value of goods and services exported and imported, as well as other income and payments
Capital account — investment funds coming into and going out of a country
Chapter 4 International Environment for Business

13. Career Opportunities in International Business
Exporting and importing
Teaching and translating
Administering trade laws
Managing foreign offices and operations
Banking and insurance
International trade organizations
Government agencies
Chapter 4 International Environment for Business