HISTORY OF INTERNATIONAL

BUSINESS
International Business, Lecture 1b
 WHY INTERNATIONAL BUSINESS
DEVELOPED

◎ There are several factors that developed

international business:
◎ Development of Roads and discovery of Sea routes
◎ Development of Transportation System
◎ Development of medium of exchange (Money and
coins)
◎ Development of different kinds of products (silk,
cloths)
◎ Technology
 THE ANCIENT TRADE
◎ 7000 BC, prehistoric
Egyptians had
imported goats and sheep
from Southwest Asia
◎ 6000 to 4000 BC:: The ancient
peoples of
the Sahara imported
domesticated animals
from Asia
◎ 4000 BC ancient
Egyptians were
importing pottery
THE ANCIENT TRADE SHIP
 THE ANCIENT TRADE (CONTD.)

◎ Business internationally started many years ago.

◎ Story of Joseph (Prophet Yusuf) proves about trade of crop,
cloths and slaves
◎ During Pharaoh there were trades across their boarder for
crops and cloths.
◎ Long before Christ, Phoenician and Greek merchants sold
goods abroad.
◎ Expansion of agricultural and industrial production in China
resulted in foreign trade.
◎ China remains dominant in trade until 1800.
◎ It was replaced by Britain in about 1840.
 CHINESE TRADE

◎ In early years, by the time of Confucius, Chinese people

traded salt, iron, fish, cattle, and silk. To facilitate trade,
the First Emperor instituted a uniform weights and
measure system and standardized the road width so carts
could bring trade goods from one region to the next. 
ARABIAN CARAVANS
 TRADE AND SOCIETY:
FEUDALISM
◎ In England -- Lords, the owners of
land were the most rich. They
controlled society.
◎ They were less interested in trade
◎ Only means to be rich was to
conquer
◎ They encouraged Literature and
Poetry.
RIG VEDA AND JUDAISM

During the time of Rig Veda there were

references of trade especially with China.
Jews:
◉ Wealth was the reward for a hard worker
◉ But the pursuit of wealth was bad
◉ Opposed to commerce (including trade)
and usury
◎ Aristotle was suspicious of trade
◎ He felt that commerce and usury (high
interest rate) were not good
NEW TESTAMENT AND ISLAM

◎ New Testament
◎ The love of money is the root of all evil.
(Timothy 6:10),
◉ ISLAM
◉ Business (Commerce and Trade)
permitted but Interest prohibited
 EMPERORS AND KINGS
◎ The Ottoman Empire of 1300s was very strong,
who did not allow others to use their trade
routes. This spawned a search for sea routes to
Asia, including expeditions that discovered the
Americas.
◎ In 1600, Great Britain's British East India Company
followed by companies of Portugal, the
Netherlands, France etc. began to establish
foreign branches throughout Asia.
 OTTOMAN EMPIRE AND
COLUMBUS
12

THE MIDDLE AGES

 13 VASCO DA GAMA
◎ Vasco da Gama, born in Portugal
explores the African coast and
reaches India in 1498
◎ The results are: expanded trade and
broader view of humanity

THE MIDDLE AGES

 FEUDALISM AND BUSINESS
CLASS

◎ Production of Land gradually went

down,
◎ A new class – called business class
grew up. They became rich and
richer and challenged the Lords.
◎ They developed trade, funded
discovery of sea routes
◎ They encouraged science and
technology.
STEAM ENGINE – A MOVE AWAY
FROM FEUDALISM

◎ The most important invention was steam

engine ,
◎ Thomas Newcomen (1663-1729) invented it.
◎ He established an industry making threads
and cloth.
◎ But his steam engine had lot of weaknesses.
◎ A STORY ---------
◎ He was James Watt (1736-1819)
TRANSPORTATION OF GOODS
 RAILWAY STEAM ENGINE

The people of Great Britain used Horse

driven Carts to carry goods from remote
parts of the country for business. It was
expensive and time taking.
 RAIL ENGINE

When railway engine was invented by

George Stephenson, carrying goods for
exports became very cheap
 INDUSTRIAL REVOLUTION

◎ Because of Invention of Steam Engine an

◎ INDUSTRIAL REVOLUTION occurred in
England.
◎ There were one after one inventions in
that country.
◎ SO, there were new businesses and new
rich persons.
◎ International Trade and Business
flourished
 BIRTH OF CAPITALISM

◎ Industrial Revolution created a new

Society called

CAPITALISM
Poor became poorer.
Politics changed. Lords failed.
 MERCANTILISM: 17TH AND 18TH
CENTURIES
◎ British Idea – world can be conquered by

◎ Guns
◎ And/Or
◎ Trade
 FDI AND MNES
◎ First Foreign Direct Investment by Britain to America
was Colt Fire Arms and Ford* (vulcanized rubber)
◎ In America a number of multinational companies
existed in the late 1800s.
◎ The first multinational enterprise was possibly Singer
Sewing Machine. In 1868 it opened a branch in
Scotland and by 1880 it became a global organization.
◎ First MNE in Bangladesh is possibly James Finlay Tea
company
 IMPACT OF INTERNATIONAL
TRADE

◎ International Trade brought goods. Ideas Technology

also came.
◎ Trade impacted on Politics, the arts, agriculture,
industry, and other sectors of human life.
◎ Public health was also affected. Different diseases
were caused by trade. Rats came with the caravans
and ships. During the mid-1300s through the 1500s,
the plague killed one-quarter of China's people and
one-third of the population of Europe.
◎ Even today we have the same problem.