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INTERNATIONAL BUSINESS

International business can be described as the business carried on across the national borders between two or more nations. The concept of international business stems from the business processes intersected by the national borders. Since the international business processes are not confined to the geopolitical boundaries in the conventional sense, the term `national border' is to be used in a wider perspective. A more flexible concept of the national border is the contact line between people and the multinational enterprises (MNEs) possessing a distinctive character attributable to their different social, cultural and economic environments. A three-pronged approach may be adopted for understanding the concepts relating to international business. The first prong deals with the transmission of resources from one country to another in the form of shipment of goods, transfer of funds, and movement of people. The second prong is concerned with the relationship of the MNE with the host societies. The third prong involves the elements of conflict arising from the national sentiments and nationalistic attitudes guiding both the parent and the host countries.

The importance of International Business Management in Indian scenario is very high. It is one of the fast developing countries in the world, every developed country like to do business with it, because of its liberalized, globalised and free economy policies. Therefore, many MNCs and Joint Ventures are venturing into the country and even the indigenous companies are going ahead for globalizing themselves. So the need of the hour is a skilled person in international trade, where the company will not be in a position to recruit unskilled one and give them training by spending huge amount after losing precious time.

Concept: Terms describe all commercial transactions (private governmental, sales investments, logistics& transportation) that take place between 2or more nations. Also, is exchange of capital, goods services across international borders or territories' is major source of revenue for any nation that's affect its economic power and gross domestic product (GDP).

SPECIAL DIFFICULTIES IN INTERNATIONAL BUSINESS ENVIRONMENT What make international business strategy different from the domestic are the differences in the marketing environment. The important special problems in international marketing are given below: 1. POLITICAL AND LEGAL DIFFERENCES The political and legal environment of foreign markets is different from that of the domestic. The complexity generally increases as the number of countries in which a company does business increases. It should also be noted that the political and legal environment is not the same in all provinces of many home markets. For example, the political and legal environment is not exactly the same in all the states of India. 2. CULTURAL DIFFERENCES The cultural differences, is one of the most difficult problems in international marketing. Many domestic markets, however, are also not free from cultural diversity. 3. ECONOMIC DIFFERENCES The economic environment may vary from country to country. 4. DIFFERENCES IN THE CURRENCY UNIT The currency unit varies from nation to nation. This may sometimes cause problems of currency convertibility, besides the problems of exchange rate fluctuations. The monetary system and regulations may also vary. 5. DIFFERENCES IN THE LANGUAGE An international marketer often encounters problems arising out of the differences in the language. Even when the same language is used in different countries, the same words of terms may have different meanings. The language problem, however, is not something peculiar to the international marketing. For example: the multiplicity of languages in India. 6. DIFFERENCES IN THE MARKETING INFRASTRUCTURE

The availability and nature of the marketing facilities available in different countries may vary widely. For example, an advertising medium very effective in one market may not be available or may be underdeveloped in another market. 7. TRADE RESTRICTIONS A trade restriction, particularly import controls, is a very important problem, which an international marketer faces. 8. HIGH COSTS OF DISTANCE When the markets are far removed by distance, the transport cost becomes high and the time required for affecting the delivery tends to become longer. Distance tends to increase certain other costs also. 9. DIFFERENCES IN TRADE PRACTICES Trade practices and customs may differ between two countries.

IMPORATNCE 1. Helps as growth strategy: - Geographic expansion may be used as a business strategy. Even though companies may expand their business at home. 2. Helps in managing product life cycle: - every product has to pass through different stages of product life cycle-when the product reaches the last stages of life cycle in present market; it may get proper response at other markets. 3. Technology advantages: - some companies have outstanding technology advantages through which they enjoy core competency. This technology helps the company in capturing other markets. 4. New business opportunities: - business opportunities in overseas markets help in expansion of many companies. They might have reached a saturation point in domestic market.

5. Proper use of resources: -Sometimes industrial resources like labor, minerals etc. are available in a country but are not productively utilized. 6. Availability of quality products: - when markets are open, better quality goods will be available everywhere. Foreign companies will market latest products at reasonable prices. Good product will be available in the markets. 7. Earning foreign exchange: - international business helps in earning foreign exchange which may be used for strategic imports .India needs foreign exchange to import crude oil, deface equipment, raw material and machinery. 8. Helps in mutual growth: - countries depend upon each other for meeting their requirements. India depends on gulf countries for its crude oil supplies. 9. Investment in infrastructure: - international business necessitates proper development of infrastructure. A company entering international business must invest in roads.

Globalization Globalization is the "process enabling financial and investment markets to operate internationally, largely as a result of deregulation and improved communications" - to "make worldwide in scope or application" All effects of globalization are positive only: there are no negative effects. The so-called negative effects are the consequences of loss of employment in inefficient, uncompetitive industries, loss of monopoly power of local industries/ businessmen and traders to exploit consumers by charging them prices that are higher than the imported goods and by supplying low quality products as compared to internationally available quality. The most positive effects of globalization are elimination of local monopolies, elimination of inefficiency, and access to opportunities available all over the globe for every citizen of different countries and awareness of citizens that they are not destined to be oppressed by the local political parties and rulers. Five main economic flows that characterize globalization are: 1. Goods and services, e.g. exports plus imports as a proportion of national income or per capita of population 2. Labor/people, e.g. net migration rates; inward or outward migration flows, weighted by population 3. Capital, e.g. inward or outward direct investment as a proportion of national income or per head of population 4. Technology, e.g. international research & development flows; proportion of populations (and

rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband) The main positive impact of globalization are: 1. Industrial trans nationalization - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies 2. Financial - emergence of worldwide financial markets and better access to external financing for corporate, national and sub national borrowers 3. Economic - realization of a global common market, based on the freedom of exchange of goods and capital. 4. Political - political globalization is the creation of a world government which regulates the relationships among nations and guarantees the rights arising from social and economic globalization. 5. Informational - increase in information flows between geographically remote locations 6. Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities such as Globalism - which embodies cultural diffusion, the desire to consume and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture" 7. Ecological- the advent of global environmental challenges that can not be solved without international cooperation, such as climate change, cross-boundary water and air pollution, overfishing of the ocean, and the spread of invasive species. 8. Social - the achievement of free circulation by people of all nations 9. Transportation - fewer and fewer European cars on European roads each year (the same can also be said about American cars on American roads) and the death of distance through the incorporation of technology to decrease travel time. greater international cultural exchange Spreading of multiculturalism, and better individual access to cultural diversity, greater international travel and tourism Effect of globalization on Indian industry has been very positive, though some industrial firms with the baggage of high cost, inefficient plants and processes inherited from the past because of closed economy's government dictated industrial policies and priorities had to face serious problems in the beginning. But soon most of the industries have become more and more efficient; customer focused and improved their international competitiveness in term of costs, prices, product quality and variety. Industrial growth has been very high and strong during the past decade because of globalization. Exports have increased tremendously. Indian industries are also expanding abroad.

Foreign companies have substantially increased their investments in Indian industries. Wages of industrial labour has increased substantially as they have become very productive. However, the communists will not agree to this view because with industrial workers becoming richer following increasing demand for and the wages of industrial labour. India has done very little reforms in agriculture to enable private and individual economic initiative that would help harness the benefits of globalization. Despite this govt. created hurdles to globalization, Indian agriculture has benefited substantially from whatever little globalization that has been allowed in Indian agriculture. The farmers that got the exposure to global links of markets, technology and investment, benefited in terms of improving their yields, getting better prices and secured off take. Indian agricultural exports have grown where Indian farmers in selected pockets are competitive: these include spices made from agricultural produce, flowers, mangoes, other fruitsrice, vegetables, pickels, papads, tobacco, etc. The e-choupals network created by an Indian company and the spread of mobile telephones have provided on line market price and climatic information on on-line realtime basis and helped them to get the best prices and sell to the most attractive buyers and brought them freedom from the clutches of the middlemen and traders. The most positive effect that globalization would have given to most Indian farmers with very small landholdings is to sell the land to fellow larger farmers or industrialists at a price that would be far more in value than his lifetime earnings from the land he currently owns and a better life as a non-farm worker after that. But the governments in India will not allow him to get released from the bondage of being a poor farmer with a small piece of land playing on the sentiments to oppose globalization of Indian farming and keep as many people to remain .as poor farmers as possible. India has done very little reforms in agriculture to enable private and individual economic initiative that would help harness the benefits of globalization. Because of the resistance from the traders and the politicians, more and more farmers are not getting the benefits of globalization: vested interests are stopping the entry of more professional and honest buyers of agricultural produce of high quality for supply to urban areas through network of malls. There have not been any negative effect of globalization on Indian farming. But faulty and restrictive policies of Indian politicians have made it difficult for farmers to consolidate their holdings for larger scale commercial farming, access to large, high paying buyers with retail chains, support of well-organized transparent mandis not ruled

by traders. As a result in many areas farmers have committed suicides because of crop failures and high indebtedness. Using the old British Indian laws of land acquisition, the state govts. are forcing farmers to sell their lands for industries at prices they consider justified rather than asking industrialists and companies to bid for agricultural land which will increase the market prices of land,. India does not need all the land under agriculture now for agricultural use: much less area would suffice to feed the nation and export if agricultural productivity can be raise substantially through private investment in agriculture by companies that need agricultural produce for their business growth and India's economic growth..Globally India has tremendous opportunities of exporting farm produce and allied agro-products. Even the landless farmers have tremendous opportunities of getting higher income by working under contract farming methods through agreements with large industrial companies The only negative effect of globalization of Indian farming is that the cropping pattern may change and higher scales of production and higher productivity will displace agricultural labour. But these are going to be offset by much higher earnings per acre of land and much greater and more remunerative employment opportunities as construction worker, farm produce storage, transport, food processing and in the chain of retail dirtbution malls in rural Ares for both industrial consumer goods, consumer durables, agricultural implements as well as farm produce including products of poultry, dairy, etc.