The International Business Imperative: Neha Sharma Faculty Member DIT, Dehradun

The International
Business imperative
Neha Sharma
Faculty Member
DIT, Dehradun
Learning Objectives
To understand the history and impact of
international business.
To learn the definition of international
business.
To recognize the growth of global linkages
today.
To understand the U.S. position in world trade
and the impact international business has on
the United States.
To appreciate the opportunities and challenges
offered by international business.
International Business 2
Need for International Business
More and more firms around the
world are going global, including:
Manufacturing firms
Service companies (i.e. banks, insurance,
consulting firms)
Art, film, and music companies
Need for International Business
International business:
causes the flow of ideas, services and
capital across the world
offers consumers new choices
permits the acquisition of a wider variety
of products
facilitates the mobility of labor,
capital, and technology
provides challenging employment
opportunities
reallocates resources, makes preferential
choices, and shifts activities to a global
level
What is International Business?
International business consists of

transactions that are devised and
carried out across national borders
to satisfy the objectives of
individuals, companies and
organizations.
Types of International Business
Exporting
Internet
Contractual
Agreements
Foreign direct
investment
Others
International Business Questions
How will an idea, good, or service fit
into the international market?
Should trade or investment be used
to enter a foreign market?
Should supplies be obtained
domestically or abroad?
What product adjustments are
necessary to be responsive to local
conditions?
What are the threats from global
competitors, and how can these
threats be counteracted?
International Business and the
Roman Empire
Pax Romana, or Roman Peace ensured that
merchants were able to travel safely and
rapidly.
Common coinage simplified business
transactions.
Rome developed a systematic law, central
market locations, and an effective
communication system; all of which enabled
international business to flourish in the Roman
Empire.
The growth of the Roman Empire occurred
mainly through the linkages of business
International Business and the
Roman Empire (cont.)
The decline of the Roman Empire can be
attributed in part to:
infighting and increasing decadence
the Pax Romana being no longer enforced
the decline of use and acceptance of the common
coinage
declining levels of communication
As a result, former Roman allies
cooperated with invaders.
United States: A Global Leader
The United States has developed a
world leadership position due to:
its use of market-based transactions in the
Western world
a broad flow of ideas, goods, and services
across national borders
an encouragement of international
communication and transportation
Pax Americana, an American sponsored and
enforced peace
The Smoot-Hawley Act
The the 1930’s, the U.S. passed the Smoot-
Hawley Act, which raised import duties to
reduce the volume of goods coming into the
U.S.
The act was passed in the hope that it would

restore domestic employment.
The result was a worldwide depression and

the collapse of the world financial system.
Expansion of International Trade
In the past 30 years, the volume of
international trade has expanded from
$200 billion to over $7.5 trillion.
The sales of foreign affiliates of

multinational corporations are now
twice as high as global exports.
Global Links Today
International business has created a network
of global links that bind countries,
institutions, and individuals with trade,
financial markets, technology, and living
standards.
For example, a reduction in coffee production in
Brazil would affect individuals and economies
worldwide.
Recent Changes in
International Business
Total world trade declined dramatically
after 2000, but is again on the rise.
The rate of globalization is accelerating.
Regionalization is taking place, resulting

in trading blocs.
The participation of countries in world

trade is shifting.
The Composition of Trade
Between the 1960’s and the 1990’s the
importance of manufactured goods
increased while the role of primary
commodities (i.e. rubber or mining) had
decreased.
More recently, there has been a shift of
manufacturing to countries with
emerging economies.
There has been an increase in the area
of services trade in recent years.
The Current U.S. International
Trade Position
Exports and Imports of Goods and Services per Capita
for Selected Countries
Country Exports per Capita Imports per Capita

Australia $4,296 $4,525
Brazil 379 428
China 222 199
Japan 4,165 3,622
Kenya 91 125
United Kingdom 4,767 5,500
United States 3,472 4,962
The Impact of International
Business on the United States
U.S. international business outflows are
important on the macroeconomic level in
terms of balancing the trade account.
On the microeconomic level, participation

in international business can help firms
achieve economies of scale that cannot be
achieved in domestic markets.
Globalization
Because of globalization, for the first
time in history, the availability of
international products and services can
be accessed by individuals in many
countries, from diverse economic
backgrounds.
Thank You
For any clarifications, feel free to mail at
[email protected]

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The International

International business consists of

The act was passed in the hope that it would

The result was a worldwide depression and

The sales of foreign affiliates of

The rate of globalization is accelerating.

Regionalization is taking place, resulting

The participation of countries in world

Country Exports per Capita Imports per Capita

On the microeconomic level, participation

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