International Business Chapter 1 Quiz

International Business: Opportunities and Challenges in a Flattening World

• The book is titled "International Business: Opportunities and Challenges in a Flattening World, 1e"
• Authored by Mason Carpenter and Sanjyot P. Dunung
• Published by Flat World Knowledge in 2011.
• The book is licensed under Creative Commons Attribution-Noncommercial-ShareAlike 3.0.

Learning Objectives (Chapter 1)

• Define international business.
• Understand the relationship between strategic management and international business.
• Understand the relationship between entrepreneurship and international business.
• Identify stakeholders in international business.
• Define stakeholder analysis.
• Recognize that stakeholders include more than suppliers and customers.
• Understand different forms of international business (e.g., exporting, importing, foreign direct investment).
• Understand how governments and NGOs can be international businesses.
• Understand the flattening world perspective in the globalization debate.
• Understand the multidomestic perspective in the globalization debate.
• Understand the CAGE analytical framework.
• Understand the field of business ethics.
• Explain why business ethics are challenging in international settings.

Globalization

• Globalization is the shift toward a more interdependent and integrated global economy.
• In terms of markets, trade barriers are falling, and buyer preferences are changing.
• In terms of production, companies can easily source goods and services from other countries.

International Business Definition

• International business includes all cross-border exchanges of goods, services, or resources between two or more nations.
• Such exchanges can include international transfers of resources like people, intellectual property, contractual assets, or liabilities.
• International business entities range from large multinational firms with global operations to small, individual businesses involved in exporting or importing.

Strategic Management and Entrepreneurship

• Strategic management involves the knowledge of developing and implementing effective strategies, primarily focusing on achieving a firm's performance objectives in a central, integrated, and externally-oriented manner.
• SWOT (Strengths, Weaknesses, Opportunities, and Threats) assessment is a strategic management tool to analyze internal characteristics (strengths and weaknesses) and external environmental conditions (opportunities and threats) for an organization.
• Entrepreneurship is the act of recognizing opportunities, addressing needs, and using resources to implement innovative ideas for new business ventures.
• Intrapreneurship is a form of entrepreneurship occurring within existing businesses, where individuals are responsible for turning ideas into profitable products via assertive risk-taking and innovation.

Who is Interested in International Business?

• Individuals or organizations are interested in international business if it impacts them positively or negatively.
• Stakeholders are individuals or organizations with interests potentially affected by actions of another individual or organization.
• Stakeholder analysis identifies and assesses the significance of key people, groups, and institutions influencing an activity's, project's, or business's success.

Forms of International Business

• Business in global commerce aims to make a profit.
• Importers purchase and sell goods from foreign countries.
• Exporters sell goods or services to foreign countries.
• Foreign direct investment is investing in foreign assets like structures, equipment, and organizations within a country.
• Location advantages in foreign markets can include access to raw materials, lower labor costs, better suppliers, and key customers.

Ethics and International Business

• Ethics seeks to explore virtue and morality by defining right and wrong conduct.
• Business ethics examines the morality of business activities, determining if business conduct is ethically sound.
• Core challenges of ethical standards include their basis and practical application.

The Flattening World

• The "flat-world view" describes a world where the global playing field is level.

• The "multidomestic view" highlights the distinct characteristics of each market.

• Globalization, according to Thomas Friedman, is categorized into three phases:

  • Globalization 1.0 (1492-1800), marked by exploration and colonization.
  • Globalization 2.0 (1800-2000), characterized by major corporations and globalizing operations
  • Globalization 3.0 (Present), marked by major software advancements and allowing individuals worldwide to cooperate.

• Friedman has identified key events shaping globalization's evolution

CAGE Framework

• The CAGE framework is a tool to understand country and regional differences.
• It assesses the distances between countries through cultural, administrative, geographic, and economic dimensions.

How the world got flat

• Friedman identifies ten major events that shaped the 'flat' world.
• These include the fall of the Berlin Wall, the rise of the internet, the development of workflow software, and the rise of outsourcing.