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International Business




                    notes          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.
                                   Why then are these changes coming about, and what exactly are they? It is in practice, easier to
                                   identify the former than interpret the latter. The reason is that during the past few decades, the
                                   emergence of corporate empires in the world economy, based on the contemporary scientific and
                                   technological developments, has led to globalization of production. As a result of international
                                   production,  co-operation  among  global  productive  units,  the  large-scale  capital  exports,  “the
                                   export of production” or “production abroad” has come into prominence as against commodity
                                   export in world economy in recent years. Global corporations consider the whole of the world
                                   their production place, as well as their market and move factors of production to wherever they
                                   can optimally be combined. They avail fully of the revolution that has brought about instant
                                   worldwide communication, and near instant-transformation. Their ownership is transnational;
                                   their management is transnational. Their freely mobile management, technology and capital, the
                                   modern agent for stepped-up economic growth, transcend individual national boundaries. They
                                   are domestic in every place, foreign in none-a true corporate citizen of the world. The greater
                                   interdependence among nations has already reduced economic insularity of the peoples of the
                                   world, as well as their social and political insularity.
                                   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.


                                          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 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. Foreign business refers to domestic operations within a
                                   foreign country. Comparative business focuses on similarities and differences among countries
                                   and business systems for focuses on similarities and differences among countries and business
                                   operations and comparative business as fields of enquiry do not have as their major point of
                                   interest the special problems that arise when business activities cross national boundaries.

                                          Example: The vital question of potential conflicts between the nation-state and the
                                   multinational firm, which receives major attention is international business, is not like to be
                                   centered or even peripheral in foreign operations and comparative business.

                                   1.1 evolution of international Business

                                   The business across the borders of the countries had been carried on since times immemorial.
                                   But, the business had been limited to the international trade until the recent past. The post-World
                                   War  II  period  witnessed  an  unexpected  expansion  of  national  companies  into  international
                                   or  multinational  companies.  The  post  1990’s  period  has  given  greater  fillip  to  international
                                   business.



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