1. © Mason Carpenter 2011, published by Flat World Knowledge
International Business: Opportunities and Challenges in a Flattening World, 1e By Mason Carpenter and Sanjyot P. Dunung
© Mason Carpenter 2011, published by Flat World Knowledge

2. © Mason Carpenter 2011, published by Flat World Knowledge
This work is licensed under the Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unported License. To view a copy of this license, visit send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA
© Mason Carpenter 2011, published by Flat World Knowledge

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Chapter 1 Introduction
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4. © Mason Carpenter 2011, published by Flat World Knowledge
Learning Objectives
Know the definition of international business
Comprehend how strategic management is related to international business
Understand how entrepreneurship is related to international business
Know who has an interest in international business
Understand what a stakeholder is and why stakeholder analysis might be important in the study of international business
© Mason Carpenter 2011, published by Flat World Knowledge

5. © Mason Carpenter 2011, published by Flat World Knowledge
Learning Objectives
Recognize that an organization’s stakeholders include more than its suppliers and customers
Know the possible forms that international businesses can take
Understand the differences between exporting, importing, and foreign direct investment
See how governments and nongovernmental organizations can be international businesses
Understand the flattening world perspective in the globalization debate
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Learning Objectives
Understand the multidomestic perspective in the globalization debate
Know the dimensions of the CAGE analytical framework
Learn about the field of ethics
Gain a general understanding of business ethics
See why business ethics might be more challenging in international settings
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7. The Definition of International Business
Globalization: The shift toward a more interdependent and integrated global economy
In terms of markets:
Trade barriers are falling and buyer preferences are changing
In terms of production:
Where a company can source goods and services easily from other countries
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8. The Definition of International Business
International business: All cross-border exchanges of goods, services, or resources between two or more nations
These exchanges can go beyond the exchange of money for physical goods to include international transfers of other resources, such as people, intellectual property, and contractual assets or liabilities
The entities involved in international business:
Large multinational firms with thousands of employees doing business in many countries around the world
A small one-person company acting as an importer or exporter
© Mason Carpenter 2011, published by Flat World Knowledge

9. Strategic Management and Entrepreneurship
Strategic management: The body of knowledge that answers questions about the development and implementation of good strategies; mainly concerned with the determinants of firm performance
Strategy: The central, integrated, and externally oriented concept of how an organization will achieve its performance objectives
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10. Strategic Management and Entrepreneurship
Basic tool of strategy – SWOT assessment
SWOT (strengths, weaknesses, opportunities, threats): A strategic management tool that helps an organization:
Take stock of its internal characteristics—strengths and weaknesses
Assess its external environmental conditions—opportunities and threats—that favor or threaten the organization’s strategy
© Mason Carpenter 2011, published by Flat World Knowledge

11. Strategic Management and Entrepreneurship
Entrepreneurship: The recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures
Entrepreneur: A person who engages in entrepreneurship
Intrapreneurship: A form of entrepreneurship that takes place in a business that is already in existence
Intrapreneur: A person within an established business who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation
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12. Who is Interested in International Business?
Individuals or organizations will have an interest in international business if it affects them in some way—positively or negatively
Stakeholder: An individual or organization whose interests may be affected as the result of what another individual or organization does
Stakeholder analysis: A technique used to identify and assess the importance of key people, groups of people, or institutions that may significantly influence the success of an activity, project, or business
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13. The Forms of International Business
Business: A person or organization engaged in commerce with the aim of achieving a profit
Importer: A person or organization that sells products and services that are sourced from other countries
Exporter: A person or organization that sells products and services in foreign countries that are sourced from the home country
Foreign direct investment: The investment of foreign assets into domestic structures, equipment, and organizations
Location advantages: Advantages due to choice of foreign markets and can include better access to raw materials, less costly labor, key suppliers, key customers, energy, and natural resources
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14. Table 1.1 - Sample Three-Part Mission Statement
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15. The Forms of International Business
Government: The body of people that sets and administers public policy and exercises executive, political, and sovereign power through customs, institutions, and laws within a state, country, or other political unit
Nongovernmental organizations (NGOs): Any nonprofit, voluntary citizens’ group that is organized on a local, national, or international level
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16. The Globalization Debate
It is a stark difference of opinion on how the internationalization of businesses is affecting countries’ cultural, consumer, and national identities—and whether these changes are desirable
The shift toward a more interdependent and integrated global economy is fueled largely by
Declining trade and investment barriers
New technologies, such as the Internet
The globalization debate surrounds whether and how fast markets are actually merging together
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We Live in a Flat World
Flat-world view: A metaphor for viewing the world as a level playing field in terms of commerce, where all competitors have an equal opportunity
Multidomestic view: A metaphor for viewing the world’s markets as being more different than similar, such that the playing field differs in respective markets
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We Live in a Flat World
According to Thomas Friedman:
Globalization Columbus’s discovery of the New World and ran from 1492 to about 1800
Globalization From about 1800 to 2000, was disrupted by the Great Depression and both World Wars and was largely shaped by the emerging power of huge, multinational corporations
Globalization Major software advances have allowed an unprecedented number of people worldwide to work together with unlimited potential
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How the World Got Flat
Friedman identifies ten major events that helped reshape the modern world and make it flat:
11/9/89: When the walls came down and the windows went up
8/9/95: When Netscape went public
Work-flow software: Let’s do lunch; Have your application talk to my application
Open-sourcing: Self-organizing, collaborative communities
Outsourcing: Y2K
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How the World Got Flat
Offshoring: Running with gazelles, eating with lions
Supply-chaining: Eating sushi in Arkansas
Insourcing: What the guys in funny brown shorts are really doing
In-forming: Google, Yahoo!, MSN Web Search
The Steroids: Digital, mobile, personal, and virtual
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How the World Got Flat
The ten factors had powerful roles in making the world smaller, but each worked in isolation until the convergence of three more powerful forces
New software and increased public familiarity with the Internet
The incorporation of that knowledge into business and personal communication
The market influx of billions of people from Asia and the former Soviet Union who want to become more prosperous—fast
© Mason Carpenter 2011, published by Flat World Knowledge

22. We Live in a Multidomestic World, Not a Flat One!
International business professor Pankaj Ghemawat characterizes the world as as “semiglobalized” and “multidomestic”
CAGE framework: The analytical framework used to understand country and regional differences along the distance dimensions of culture, administration, geography, and economics
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23. Ethics and International Business
Ethics: A branch of philosophy that seeks virtue and morality, addressing questions about “right” and “wrong” behavior for people in a variety of settings; the standards of behavior that tell how human beings ought to act
Business ethics: The branch of business that examines various kinds of activities and asks, “Is this business conduct ethically right or wrong?”
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What Ethics is Not
Two of the biggest challenges to identifying ethical standards
What the standards should be based on?
How we apply those standards in specific situations?
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