International
business awareness
International business
Chapter 1
Learning objectives:
- Explain the concept
of IB
- Identify one
fundamental
question and two
core perspectives
that provide a frame
- Give opinions about
globalization
- Summarize some basic trends in the global economy
- Draw implications for action by integrating global and local knowledge
International business
International business is about businesses engaging in international economic
activities and/or the activity of doing business abroad.
The most important actors are Multinational enterprises (MNE): a firm that
engages in foreign direct investment (FDI) by directly investing in, controlling and
managing value-added activities in other countries.
Emerging economies are economies that only recently established institutional
frameworks that facilitate international trade and investment, typically with low- or
middle-level income and above average growth.
BRIC: Brazil, Russia, India and China
Gross domestic product (GDP): the sum of value added by resident firms,
households and governments operating in an economy.
Gross national product (GNP): gross domestic product plus income from
nonresident sources abroad.
Gross national income (GNI): GDP plus income from nonresident sources abroad.
GNI is used by the world bank and other international organizations to supersede the
term GNP.
Purchasing power parity (PPP): a conversion that determines the equivalent
amount of goods and services different currencies can purchase. Used to capture
differences in cost of living in different countries.
A unified framework
Fundamental question: what determines the success and failure of firms around the
globe? To answer this, we use two core perspectives: institution-based view
(environment)- to have knowledge about the formal and informal rules in the country
where you are doing business. Businesses have to play by the rules and are
commonly known as institutions. Some formal rules such as the requirements to
treat domestic and foreign firms as equals, would enhance the potential odds for
business awareness
International business
Chapter 1
Learning objectives:
- Explain the concept
of IB
- Identify one
fundamental
question and two
core perspectives
that provide a frame
- Give opinions about
globalization
- Summarize some basic trends in the global economy
- Draw implications for action by integrating global and local knowledge
International business
International business is about businesses engaging in international economic
activities and/or the activity of doing business abroad.
The most important actors are Multinational enterprises (MNE): a firm that
engages in foreign direct investment (FDI) by directly investing in, controlling and
managing value-added activities in other countries.
Emerging economies are economies that only recently established institutional
frameworks that facilitate international trade and investment, typically with low- or
middle-level income and above average growth.
BRIC: Brazil, Russia, India and China
Gross domestic product (GDP): the sum of value added by resident firms,
households and governments operating in an economy.
Gross national product (GNP): gross domestic product plus income from
nonresident sources abroad.
Gross national income (GNI): GDP plus income from nonresident sources abroad.
GNI is used by the world bank and other international organizations to supersede the
term GNP.
Purchasing power parity (PPP): a conversion that determines the equivalent
amount of goods and services different currencies can purchase. Used to capture
differences in cost of living in different countries.
A unified framework
Fundamental question: what determines the success and failure of firms around the
globe? To answer this, we use two core perspectives: institution-based view
(environment)- to have knowledge about the formal and informal rules in the country
where you are doing business. Businesses have to play by the rules and are
commonly known as institutions. Some formal rules such as the requirements to
treat domestic and foreign firms as equals, would enhance the potential odds for
