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Private Governmental Sales Investments Logistics Transportation Regions Countries Nations Transactions Profit Governments Political

International business involves commercial transactions that cross national borders, including trade, investments, and transportation of goods, services, and resources between two or more countries. Over the past two decades, globalization has increased dramatically as markets have become truly global and financial transactions unrelated to trade have grown rapidly. This pervasive growth in interconnected global markets means that countries' economies are now significantly impacted by external forces from other nations.

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Aswini K Krishnamurthi
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80 views

Private Governmental Sales Investments Logistics Transportation Regions Countries Nations Transactions Profit Governments Political

International business involves commercial transactions that cross national borders, including trade, investments, and transportation of goods, services, and resources between two or more countries. Over the past two decades, globalization has increased dramatically as markets have become truly global and financial transactions unrelated to trade have grown rapidly. This pervasive growth in interconnected global markets means that countries' economies are now significantly impacted by external forces from other nations.

Uploaded by

Aswini K Krishnamurthi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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INTRODUCTION:

International business is a term used to collectively describe all commercial transactions


(privateand governmental, sales, investments, logistics,and transportation) that take place between two or
more regions, countries and nations beyond their political boundery. Usually, private companies
undertake such transactions for profit; governments undertake them for profit and for politicalreasons.[1] It
refers to all those business activities which involves cross border transactions of goods, services,
resources between two or more nations. Transaction of economic resources include capital, skills, people
etc. for international production of physical goods and services such as finance, banking, insurance,
construction etc.[2]

One of the most dramatic and significant world trends in the past two decades
has been the rapid, sustained growth of international business. Markets have
become truly global for most goods, many services, and especially for financial
instruments of all types. World product trade has expanded by more than 6
percent a year since 1950, which is more than 50 percent faster than growth of
output the most dramatic increase in globalization, has occurred in financial
markets. In the global forex markets, billions of dollars are transacted each day,
of which more than 90 percent represent financial transactions unrelated to trade
or investment. Much of this activity takes place in the so-called Euromarkets,
markets outside the country whose currency is used.
This pervasive growth in market interpenetration makes it increasingly difficult
for any country to avoid substantial external impacts on its economy. In
particular massive capital flows can push exchange rates away from levels that
accurately reflect competitive relationships among nations if national economic
policies or performances diverse in short run. The rapid dissemination rate of new technologies
speeds the pace at which countries must adjust to external
events. Smaller, more open countries, long ago gave up illusion of domestic
policy autonomy. But even the largest and most apparently self-contained
economies, including the US, are now significantly affected by the global
economy. Global integration in trade, investment, and factor flows, technology,
and communication has been tying economies together.
DEFINITION OF INTERNATIONAL BUSINESS:

• International business deals with:-


“ the transactions that take
place between the citizens and corporate of different country”
• Process of marketing goods and services in the international
market
• Exploring marketing opportunities in the overseas market

International business includes any type of business activity that crosses national
borders. Though a number of definitions in the business literature can be found
but no simple or universally accepted definition exists for the term international business. At one
end of the definitional spectrum, international business is
defined as organization that buys and/or sells goods and services across two or
more national boundaries, even if management is located in a single country. At
the other end of the spectrum, international business is equated only with those
big enterprises, which have operating units outside their own country. In the
middle are institutional arrangements that provide for some managerial direction
of economic activity taking place abroad but stop short of controlling ownership
of the business carrying on the activity, for example joint ventures with locally
owned business or with foreign governments.
In its traditional form of international trade and finance as well as its newest
form of multinational business operations, international business has become
massive in scale and has come to exercise a major influence over political,
economic and social from many types of comparative business studies and from
a knowledge of many aspects of foreign business operations. In fact, sometimes
the foreign operations and the comparative business are used as synonymous for
international business.
SCOPE OF INTERNATIONAL BUSINESS ACTIVITIES
The study of international business focus on the particular problems and
opportunities that emerge because a firm is operating in more than one country.
In a very real sense, international business involves the broadest and most generalized study of
the field of business, adapted to a fairly unique across the
border environment. Many of the parameters and environmental variables that
are very important in international business (such as foreign legal systems,
foreign exchange markets, cultural differences, and different rates of inflation)
are either largely irrelevant to domestic business or are so reduced in range and
complexity as to be of greatly diminished significance. Thus, it might be said
that domestic business is a special limited case of international business.
The distinguishing feature of international business is that international firms
operate in environments that are highly uncertain and where the rules of the
game are often ambiguous, contradictory, and subject to rapid change, as
compared to the domestic environment.

The guiding principles of a firm engaged in (or commencing) international


business activities should incorporate a global perspective. A firm’s guiding
principles can be defined in terms of three board categories products
offered/market served, capabilities, and results. However, their perspective of
the international business is critical to understand the full meaning of
international business. That is, the firm’s senior management should explicitly
define the firm’s guiding principles in terms of an international mandate rather
than allow the firm’s guiding principles in terms as an incidental adjunct to its
domestic activities. Incorporating an international outlook into the firm’s basic
statement of purpose will help focus the attention of managers on the opportunities outside the
domestic economy.

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