Our great grandfathers ate food which was grown by them, wore clothes which were stitched by them. Slowly as the population of a country began to increase, there was also an advancement of technology leading to improved production and distribution methods. Slowly people began to depend on others for goods and services. Slowly some people started to specialize in one activity for example, producing food grains, stitching clothes, making food, etc… this lead to increased dependence.
People then started to buy and sell goods and services amongst themselves in the same country. Slowly with advent of modern technology and distribution system these transaction started to be conducted beyond the borders of one country.
Now you wear shirt made in Thailand, shoes made in US, use music system made in Japan, own a television set made in China. Most of you have the experience of browsing Internet and visiting different web sites, knowing the products and services offered by various companies across the globe. Some of you might have the experience of even ordering and buying the products through Internet. This process gives you the opportunity of transacting in the international business arena without visiting or knowing the various countries and companies across the globe. You get all these even without visiting or knowing the country of the company where they are produced.
We all are now a part of global economy. Political boundaries of nations, states or regions are no longer the fetters for business in the global economic paradigm. Production and consumption are globally spread for most products.
International Business is all commercial transactions – private or government – between two or more countries. International Business allows you to purchase popular items made in other countries, without global business our life probably would have been different. Private organizations may undertake these activities for profits whereas governments may or may not for profits.
International Business means carrying business activities beyond national boundaries. These activities include transactions of economic resources such as:
- International production
Study of international business has become very important because:
- It comprises a large and growing portion of the world’s total business
- It provides a source of raw materials and parts for foreign products
- It allows new markets for investments
- It helps improve political relations
- All companies are affected by global events and business
Thus, international business is the process of focusing on the resources of the globe and objectives of the organizations on global business opportunities and threats.