INTERNATIONA

L BUSINESS
MANAGEMENT
BY : PRATEEK KUMAR BANSAL

INTRODUCTION
International

business is all commercial transactionsprivate

and governmental between two or more countries. Private
companies undertake such transactions for profits; governments
may or may not do the same in their transactions. These
transactions include sales, investments and transportation.

Study

of international business has become important because

(i) it comprises a large and growing portion of the world's total
business, (ii) All companies are affected by global events and
competition, whether large or small, since most sell output to
and secure raw materials and supplies from foreign countries.
Many companies also compete against products and services
that come from outside India.

INTRODUCTION
The

company's external environment conditions such as

physical, societal and competitive affect the way
business functions such as marketing, manufacturing and
supply chain management are carried out. When a
company operates internationally, foreign conditions are
added to domestic ones making the external
environment more diverse and complex.

Shows the relationship between the company's external environmentphysical,

societal and competitiveand its influences on firms operations. The conduct of
international operations depends on companies* objectives and the means with
which they carry them out.

Importance of International
Business

Most

companies are eitherinternationalor compete with

international companies.

Modes
The
An

ofoperationmay differ from those used domestically.

best way of conducting business may differ bycountry.

understanding helps you make bettercareerdecisions.

An

understanding helps you decide whatgovernmental

policiesto support.

Managers

in international business must understand social

science disciplines and how they affect all functional
business fields.

Why Companies Engage in International

Business
To

expand sales: Companies' sales are dependent on (a) the consumers'

interest in their products or service and (b) the consumers' willingness and
ability to buy them. The number of people and the extent of their
purchasing powers are higher for the world as a whole than for a single
country. Hence companies increase the potential market for their sales by
pursuing global markets. Thus, higher sales means higher profits because
of economies of scale. So increased sales are a major motive for a
company's expansion into international business.

To

acquire resources: Manufacturers and distributors also look for foreign

capital, technologies and information that they can use at home, to reduce
their costs. Sometimes, a company operates abroad to acquire something
not readily available in the home country so as to improve its product
quality and differentiate itself from competitors, potentially increasing
market share and profits.

Why Companies Engage in International

Business

To minimize risk: Companies seek out foreign markets to

minimize swings in sales and profits arising out of business cycle
recessions and expansionswhich occur differently in different
countries. For example, sales decrease or grow more slowly in a
country that is in recession and increase or grow more rapidly in
one that is expanding rapidly in one that is expanding
economically. Many companies enter into international business for
defensive reasons e.g. to counter advantages competitors might
gain in foreign markets that in turn, can hurt them in the domestic
market.

Factors that influenced the growth in

globalization of international business

There has been growth inglobalizationin recent decades due to (at

least) the following eight factors:

Technologyis expanding, especially intransportationand

communications.

Governmentsare removing international business restrictions.

Institutionsprovide services to ease the conduct of international

business.

Consumerswant to know aboutforeigngoodsandservices.

Competitionhas become more global.

Politicalrelationships have improved among some majoreconomic

powers.

Countriescooperate more on transnational issues.

Cross-national cooperation and agreements .

Factors that influenced the growth in

globalization of international business

There has been growth inglobalizationin recent decades due to (at

least) the following eight factors:

Technologyis expanding, especially intransportationand

communications.

Governmentsare removing international business restrictions.

Institutionsprovide services to ease the conduct of international

business.

Consumerswant to know aboutforeigngoodsandservices.

Competitionhas become more global.

Politicalrelationships have improved among some majoreconomic

powers.

Countriescooperate more on transnational issues.

Cross-national cooperation and agreements .