Resource Considerations

Resource Considerations

Understanding International Business

  • International business is any business activity that crosses national borders.
  • Two main segments of International Business - Trade and Investment.
  • Growth of International Business is driven by Liberalization, Technological Advancement and Globalization.

Mode of Entry

  • Various modes to enter International Business: Exporting, Licensing, Franchising, Joint Ventures, and Foreign Direct Investment (FDI).

Political Economic Legal Systems

  • Different countries have different Political, Economic and Legal structures which affect international business.
  • Political factors include government type, political stability or instability, trade restrictions.
  • Economic factors include economic indicators like inflation, unemployment, exchange rates.
  • Legal factors include laws on business procedures, safety standards, labour and employment law.

International Trade Theories

  • It is important to understand theories like Mercantilism, Absolute Advantage, Comparative Advantage, Product Life Cycle and National Competitive Advantage to make effective international business decisions.

Dealing with Foreign Exchange Market

  • The value of currency changes constantly which impacts the profitability of international business.
  • Foreign Exchange Rate is the rate at which one currency can be exchanged with another.
  • Firms can use numerous strategies to mitigate risks associated with foreign exchange market.

Globalization and Its Impact on International Business

  • Globalization is the growing interconnectedness and interdependence of different countries.
  • Positive impacts of Globalization include access to new markets, access to resources and reduced cost of doing business.
  • Negative impacts include increased competition, risk of economic contagion and threats to national sovereignty.

Ethical Issues in International Business

  • Cross-cultural differences can lead to different perspectives on ethics.
  • It’s important to consider ethical aspects such as human rights, environmental sustainability and corruption.
  • The OECD Guidelines for Multinational Enterprises and the UN Global Compact are two popular international ethical standards.

The Role of International Organisations

  • International organisations like World Trade Organisation (WTO), International Monetary Fund (IMF) and World Bank support globalization and international business through their functions and policies.
  • WTO focuses on promoting free trade, while IMF and World Bank provide financial assistance to countries.

The Role of Information Technology in International Business

  • IT plays a critical role in today’s global business environment. It facilitates communication, data management, supply chain management and also helps in decision making and strategic planning.

These points encompass a broad overview of the subject, and it’s essential to dig deeper into each topic to gain a comprehensive understanding.