International bussiness the challenge of global competition 11e chapter 01

The Rapid Change of International BusinessMcGraw-Hill/Irwin International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc.. Learning Objectivesoperations in more than one

The Rapid Change of International Business

McGraw-Hill/Irwin

International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc All rights reserved.

chapter one

Learning Objectives

operations in more than one country

that are leading international firms to globalize

domestic business

International Business Terminology,

• Each formulates its own business strategy on perceived

market differences

International Business Terminology,

cont’d.

integrate operations worldwide in most of all functional areas

History of International Business

Greek merchants

internationally integrated trading system

• “all roads lead to China”

Globalization

• “as if the entire world (or major regions of it) were a single

entity; [such an organization] sells the same things in the same way everywhere”

information, labor, and capital

Table 1.1 Globalization Rankings: The KOF Index

of Globalization and the A.T Kearney/Foreign

Policy Globalization Index

Globalization Forces, cont’d.

Explosive Growth

and organizations in a foreign country

• level sufficient to obtain significant management control

(Table 1.2)

good/service to a destination outside a country or

region

Table 1.2 FDI Indicators and Multinational

Company Statistics (billions of dollars and

percentages)

Explosive Growth

matters relating to FDI and international

corporations

• 1995 – 45,000 parent companies with 280,000 foreign

affiliates ($7 trillion in sales)

• 2004 – 70,000 parent companies with 690,000 foreign

affiliates ($19 trillion in sales)

Table 1.3 Ranking of International Companies

and nations according to GNI (Atlas Method) or

Total Sales

Globalization Debate And You

– Extensive public protests about globalization and the

liberalization of international trade

– Waged by diametrically opposed groups with extremely

different views on consequences of globalization

– Dramatic reductions in worldwide poverty are contrasted with

anecdotal stories of people losing their livelihoods under the

growing power of multinationals

which management has no direct control

management can use to adapt to external forces

External Forces, cont’d.

Internal Environmental Forces

Why Is International Business

Different?

that surround and influence the firm’s life and

development

home country that surround and influence the firm

Why Is International Business

Different? cont’d.

environmental forces or between sets of foreign

environmental forces

International Business Model