MGMT1101 Lecture Notes - Lecture 1: Protectionism
19 May 2018
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Department
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MGMT1101 – Global Business Environment
Chapter 1 – International Business
International Business: consists of all commercial transactions that take place between two or more
countries.
- Refers to business activities that straddle two or more countries.
- MNE (Multinational Enterprise) is any business that has productive activities in two or more
countries.
Types of IB transactions:
- Trade of values between two parties:
• Companies and shares/ stocks
• Investors
• Investment banks, analysts, etc.
- By private or public enterprises
• Exchanging (combinations of):
• Goods
• Services
• Technology
• Capital
• Ideas and intellectual property
Significance of Borders and Boundaries
- State boundaries: Political and legal system boundaries; nation-state system
- Cultural boundaries: nation-state is a oder ietio ad yth
- Economic boundaries: most economic transactions take place within borders
- Boudaries of id ad haits: orders are oth psyhologial, soial ad physial
Businesses, both small and large, are shifting towards becoming international due to the integrated
global economy.
- Free Trade Agreement
- Managers need to understand the context within which they operate -> evaluate
opportunities and risks to make decisions and to take actions
- Context + Action = Performance
Why international business?
- Potential benefits of the global market
- Distance and cost of doing business
- Operating in an unfamiliar environment (western vs non-western, democracy vs
authoritarian) **underestimated the complexity of countries with high authority
- Political, social, cultural, legal and economic differences
- Protectionism of governments
- Different currencies used in transactions
- Lak of orld goeret : o fial aritrator to set rules, resoles disputes, efore
agreements. ***
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
International business: consists of all commercial transactions that take place between two or more countries. Refers to business activities that straddle two or more countries. Mne (multinational enterprise) is any business that has productive activities in two or more countries. Trade of values between two parties: companies and shares/ stocks. By private or public enterprises: exchanging (combinations of), goods, services, technology, capital. State boundaries: political and legal system boundaries; nation-state system. Cultural boundaries: nation-state is a (cid:373)oder(cid:374) i(cid:374)(cid:448)e(cid:374)tio(cid:374) a(cid:374)d (cid:862)(cid:373)yth(cid:863) Bou(cid:374)daries of (cid:858)(cid:373)i(cid:374)d a(cid:374)d ha(cid:271)its(cid:859): (cid:271)orders are (cid:271)oth psy(cid:272)hologi(cid:272)al, so(cid:272)ial a(cid:374)d physi(cid:272)al. Economic boundaries: most economic transactions take place within borders. Businesses, both small and large, are shifting towards becoming international due to the integrated global economy. Managers need to understand the context within which they operate -> evaluate opportunities and risks to make decisions and to take actions. Operating in an unfamiliar environment (western vs non-western, democracy vs authoritarian) **underestimated the complexity of countries with high authority.
