International Business e trade of goods, services, technology, capital and/or knowledge across national borders and at a global or transnational scale. e To conduct business overseas, multinational companies need to bridge separate national markets into one global marketplace. Example: Amazon, Coca-Cola, etc e These companies have independent operations in each country, and each country has its own set of offices, er ployees, etc e Even the products and marketing campaigns are customized as per local needsInternational Management @ management of business operations in an organisation @ serving markets and operating in more than one country Simple we can say that : e@ Managing an International business : a Company that engage in international cross border economic activities location & Utilisation of Human, Finance & Physical e@ Involves : Procurement, resources of the firm and across national boundaries e@ known as MNE or MNCDomestic, Transnational, or Multinational Business Domestic Business e@ Companies that operate mostly or solely within one country are domestic firms. e@ The products and services are typically tailored to the local environment, which may lead customers to trust or prefer domestic companies over foreign businesses. Multinational Business e@ Companies operate in more than one country and have a centralized management system @ Owns a home country and its subsidiaries Example: IBM, Pepsico, Nestle Transnational Business @ transnational compa’ s have many companies around the world but do not have ce ized management systemDomestic, Transnational, or Multinational Business Domestic Business @ Companies that operate mostly or solely within one country are domestic firms. e@ The products and services are typically tailored to the local environment, which may lead customers to trust or prefer domestic companies over foreign businesses. Multinational Business @ Companies operate in more than one country and have a centralized management system @ Owns a home country and its subsidiaries Example: IBM, Pepsico, Nestle Transnational Business @ transnational companies have many companies around the world but do not have centralized management system Example : McDonald's, Unilever, AppleInternational Business Environment An international business environment is the surrounding in which international companies run their businesses. Macro (External) Environment e@ The economic environment, (Economic system, economic resources, the level of income, the distribution of income and assets) e social and cultural environment, (customs, traditions, tastes and preferences) © political, legal and regulatory environment, (Taxes, Subsidy, other business related laws) e natural environment, (natural resource, weather and climatic conditions, port facilities etc.) e technological environment,+ Globali Importance of C Type of globalisation * Polutical * Social * EconomicalStages of Globaliz Stage 1: Domestic Stage Stage 2: International Stage Stage 3 : Multinational Stage Stage 4 : Global Stage : Features of GlobalisationForeign Market Entry Strategy Export PiggyBacking: | xp Merger & Acquisition : D: erge c C 1 Franchising » A r r L Y x.McD. I Licensing e s e Joint Venture: rershir c a k Turnkey Projects ) f k Greenfield projects : | I, P, fer tLPG Model (brought under Economic Reform in 1990's by PM P'V Narsimha Rao and FM Mai han Singh) LPG stands for : Liberalisation, Privatization and Globalisation To develop India’s Economy LPG Model was followed It was aimed at making the Indian economy as fastes growing economy and globally competitive Liberalisation means to free the economy from direct.or physical controls| imposed by the government. (Industrial Licensing system, price control on goods, import license, foreign exchange controls etc. was liberalised) i.e reduction in restrictions. Privatisation means allowing the private sector to setup more and more idustries that were previously reserved for public sector. (Joint Venture Leasing, Franchising) Globalisation means allowing interaction, integration among the people companies and government of different nations by international trade and investment and aided by information technologyMNC (Multinational Companies/Corporation) * MNCs are the companies that have their head office in one country and regional branches all over the world Their function is to provide access of different Products to different countries. * Simply, a company with production and distribution fac country lities in more than one ¢ Example : Microsoft Corporation India (American), Nestle (Switzerland), etc nwceee $B Se = EEcoc accenture ora~cwes INMOSS Googie aMesntar HSRC <> Detottte ea = . ww Moneswen E<—aa- careearr tA a>. | ee £ —_ MNC (Multinational Companies/Corporation) Merits * Employment Gener ¢ Flow of Foreign Capital * Proper use of resource * Technical Developmer + End of Local Monopoly + Improvement in standard of liv Demerits ¢ Danger for domestic resov * Repatriatic * Danger to indey * ExploitatiorFDI Foreign Direct Investment An investment made by company or entity based in company or entity based in another country FDI policy of the Government of India prescribes the for industrial sector Broadly the industrial sector are categorised as e Re 49% in | ance, Banking, R&D, Courier etc.) * Unre icted ( 106 FDI jowed Mining, IT servic Airline os ed (Ator Er y, Tobacco related indus’ agriculture FDI can be done through two ways — * Automatic Route (No ap; from go nent is required) & ¢ Government Route (Approval from Government is Required) one country into zn Cap in specifiec8:14 fal al Hea 1S) SlidePlayer nv @ 8 BD : x The Emergence Of Global Institutions Institutions created over the past half century include: + The General Agreement on Tariffs and Trade (GATT) + The World Trade Organization (WTO) + The International Monetary Fund (IMF) * The World Bank + The United Nations (UN) @ Chapter 1 Globalization. - Visit > ppt video online download Images may be subject to copyright. Learn More «<< Share Emergence OF Global instiusions ecenerornamonang meses nas ‘Twomapttedin rte Genet havent on te Secuty = a Q © Dianl: Chirte * Discover Search Q Save The Emergence of Global Institutions 361 Tid atin) 0 IF clidndtaune a CollectionsInternational Institution e Rules and organisations that govern and constrain the behaviour of member countries. help to set the international agenda mediate political bargaining, provide a place for political initiatives and acting as catalysts for the coalition- formation. They facilitate cooperation and coordination among member nations. ajor International Institutions WTO : World Trade Organisation IMF ; International Monetary Fund UNCTAD : UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT IBRD : The | ational Bank for Reconstruction and DevelopmentwTo @ was established in January 1, 1995 e@ It is the successor organisation to the General Agreement on Trade and Tariff (GATT) It facilitates international trade through the removal of tariff and non-tariff barriers. Headquarter at Geneva, Switzerland 164 member Countries India has been a WTO member since | January 1995 and a member of GATT since 8 July 1948.Objective of WTO The main objectives are The WTO's objective is to help trade flow smoothly, freely and predictably achieving progressive liberalization of trade in services, as mandated in the GATS ensuring flexibilities for developing countries, with special priority to be given to least-developed countries respecting the needs of small and medium-sized service suppliers, particularly in developing countries, with a commitment to respect “the existing structure and 2 —_ ee WORLD TRADI ORGANIZATION principles of the GATS”Function of WTO yy @ administering trade — acting as a forum for trade negotiations —, settling trade disputes WORLD TRADE ORGANIZATION X 32 reviewing national trade policies building the trade capacity of developing economie: cooperating with other international organizationsheadquartered in Washington, D.C consisting of 190 countries Established in 1944 working to foster global metary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each otherFunction of IMF The IMF's fundamental mission is to ensure the stability of the international monetary system. It does so in three ways e Economic Surveillance : keeping track of the global economy and the economies of member countries; @ Lending : lending to countries with balance of payments difficulties; and @ Capacity Building : giving practical help to members. gna TI,IBRD @ established in 1944 and @ headquartered in Washington, D.C., United States @ isa global development cooperative @ owned by 189 member countries it supports the World Bank Group's mission by providi loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries, as well as by coordinating responses to regional and global challenges.UNCTAD @) 95 countries UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT headquarters are located in Geneva, Switzerland, and have offices in New York and Addis Ababa The main goals of UNCTAD are to expand the capabilities of developing countries in the sphere of trade, investment and development, to assist them in overcoming the difficulties arisen as a result of globalization and to integrate on an equal footing into the world economy8:39 al tl Mea ur @ 33 Gs} ® Commerce Mates : x Nature of International Business ¢ International Restrictions ¢ Benefits to Participating Countries « Large Scale Operations ¢ Integration of Economies ¢ Dominated by Developed Countries « Market Segmentation ov Nature International Business: Nature, Characteristics... commercemates.com Visit > Images may be subject to copyright. Learn More «<~ Share Save Characteristics of Inbrestonl International business * Q Al Discover Search Collections8:40 fil wl Hea Nature of International Business The trade of goods, services, technology, capital and/or knowledge across national borders and at a global scale. ‘These businesses serve local demands and demands of different countries. ‘These operations are large in terms of production, marketing and sales of products. There are different cultures, tradition, climate, and habits etc. ~ Heterogeneity of 18 * Discover ag @ 8 Gs Buying Behaviors ditfer in countries due to socio-economic conditions. Integrating different economies into 1B operations. 1B faces competition domestically ‘and intemationally, There is stiff competition. Itis based on geographic ‘segmentation of consumers. Goods are produced according to the demand of consumers (different market segments) ‘Science and technology has played an important role in the IB operations ‘Developed countries have more access to resources like technology, capital etc. Q Al Search CollectionsGlobal Marketing “marketing on a worldwide scale” Process of planning, producing, distributing and promoting globally Considering whole world as a single market place Same marketing mix throughout the world Coca Cola / Sony/ BMW / IBM / Google etc.Global Marketing e A global firm operates in more than one country and e captures R&D, production, — logistical, marketing, and financial advantages of other countries e Global firms plan, operate, and coordinate their activities on a worldwide basis.Global Marketing Political Environment Legal Environment Social and Cultural Environment Technological Environment Economic Environment Competitive EnvironmentGlobal P’s of Marketing e Global Product Strategies © PRODUCT STANDARDIZATION = products cross borders without adaptationGlobal P’s of Marketing PRODUCT ADAPTATION STRATEGIES Warren Keegan has distinguished five product and communications adaptation strategies Straight extension introduces the product in the foreign market without any change. Product adaptation alters the product to meet local conditions or preferences. Product invention creates something new. It can take two forms: * Backward invention reintroduces earlier product forms well adapted to a foreign country’s needs. ¢ Forward invention creates a new product to meet a need in another country. Less-developed countries need low-cost, high-protein foods.Global P’s of Marketing Global Communication Strategies Changing marketing communications for each local market is a process called communication adaptation. If it adapts both the product and the communications, the company engages in dual adaptationGlobal P’s of Marketing Global Pricing Strategies PRICE ESCALATION Companies have three choices for setting prices in different countries: e Set a uniform price everywhere. e@ Set a market-based price in each country. e Seta cost-based price in each country.Process of Global Marketing Domestic Marketing Export marketing International Marketing Multinational Marketing Global Marketingiv @ 8 GD ) Shaalaa.com : x ‘conomic Factors ee eee Discuss the economic Visit > determinants of econonii... Images may be subject to copyright. Learn More < Share Save Q SpringerLink @ Facebook The Economy of Bangl.... Enotes World - The Ba... =. * Q Al Discover Search Collectionsa id @ 8 > 2% chat.openai.com/ + Global Market Management GZ ChatGPT 3.5 v 4 Managing in the global marketplace involves understanding diverse cultures, adapting to varied business practices, navigating international regulations, and leveraging technology for effective communication and coordination. It requires a strategic approach to market entry, risk management, and building strong cross-cultural teams. Continuous market analysis and flexibility are crucial to stay competitive in the dynamic global business landscape. Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.id @ 8 > OQ) 23 chat.openaiicom/ + = Intl Biz: Evolving Dynam GZ ChatGPT 3.5 v G © chataPt The nature of international business has been evolving over the years due to various factors. Some key aspects include: 1. Globalization: The increased interconnectedness of economies has led to a more globalized business environment. Companies now operate across borders, facing both opportunities and challenges in different markets. 2. Technology: Advancements in technology h \ facilitated cammunicatian streamlined cunnly Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.a ChatGPT 3.5 v id @ 8 > 2% chat.openai.com/ + Intl Biz: Evolving Dynam GZ G DUSINESS SLaLegies. . Trade Agreements: Bilateral and multilateral trade agreements have shaped international business by reducing barriers and facilitating smoother cross-border transactions. Organizations often need to adapt their strategies based on the changing landscape of these agreements. . Political and Economic Instability: Shifts in political landscapes and economic uncertainties in various regions impact international business decisions. Companies must navigate geopoliticali | and economic fluctuations to maintain stability and Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.a ChatGPT 3.5 v id @ 8 > 2% chat.openai.com/ + Intl Biz: Evolving Dynam GZ G growth. . Sustainability and CSR: There's a growing emphasis on corporate social responsibility (CSR) and sustainability in international business. Consumers and stakeholders increasingly demand ethical practices, environmental responsibility, and social impact from companies operating globally. . Cultural Diversity: Understanding and respecting diverse cultures is crucial in international business. Companies need to tailor their products, marketing strategies, and management approaches i ¥ Jit the cultural nuances of different reaions Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.9:01 Sil stl Hea ur @ 3 a> OQ) 23 chat.openaiicom/ + = Intl Biz: Evolving Dynam GZ G ChatGPT 3.5 v @pprvauiics ww suit ue Curural nuances of different regions. ‘7. Supply Chain Resilience: Recent events, such as the COVID-19 pandemic, highlighted the importance of resilient and adaptable supply chains in international business. Companies are reevaluating and restructuring their supply chains to mitigate risks and disruptions. 8. Regulatory Changes: The regulatory environment for international business is subject to change. Companies must stay informed about and compliant with evolving J ulations in various jurisdictions, impacting areas like Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.a ChatGPT 3.5 v 10. id @ 8 > 2% chat.openai.com/ + Intl Biz: Evolving Dynam GZ G protection. . Market Saturation and Emerging Markets: Traditional markets may become saturated, leading companies to explore opportunities in emerging markets. Understanding the unique challenges and dynamics of these markets is essential for success. Digital Transformation: The digital transformation wave has affected international business operations, from online transactions to digital marketing. Adopting and leveraging digital techne’ vies is crucial for staying compeultive in the global Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.7:23 tal sl Heo ui @ OQ) 23 chat.openaiicom/ + = States in transition. G G ChatGPT 3.5 v busiiiess i Uetall © ChataPt States in transition in international business typically refer to countries undergoing significant economic, political, or social changes that impact their business environment. This transition can result from factors such as economic liberalization, political reforms, or shifts in governance. 1. Economic Liberalization: Countries may transition by opening up their markets, red. v g trade barriers, and encouraaina foreian investment. This Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.Cultural Difference "Cross Cultural Manac Variations in cultural traits between cultures, like: e different music, e different language, e different religion, e different food, cloth, and so forth.Education, religion, belief structure, past experience, Cultural DifferenceCultural Difference How do people react to cultural differences? Adopting/Following other Culture (Completely Changed) Don't Adopt or Follow other culture (Rigid) Follow own culture along with adopting/accepting other cultureCultural Difference Tips to Respond Cultural Difference e Keep an Open Mind © People keeps doing many different thing according their culture, don't judge them e Be Flexible (Keep Learning Attitude) o Adopt the differences if required e Be Tolerant to differences © You like this, I like that e Regards Other PositivelyCultural Change Cultural change refers to the change in customs, traditions, beliefs, lifestyle, behaviour ete: e denote the way society is changed. e The society takes on. new cultural traits, behavior patterns, and social norms, and creates new social-structures as a result.Cultural Change eer tne M.N. Srinivas defines westernisation as “the changes brought about in Indian society and culture as a result of over 150 years of British rule, the term subsuming changes occurring at different levels...technology, institutions, ideology and values. How do Change Occurs? e occurs from contact with another society (for example, job transfer) e Discovery, invention and diffusion of innovations (automobiles or a smart phone in every pocket)Cultural Change The Four Main Ways to Cultural Change e Change in Behaviour o Changed the normed behaviour like : Night shift in organisation, Greeting style etc. e Change in Symbol o the things we see around us and that affect us, like reception area, working environment etc. e Change in Leadership e Change Stories (the examples or reference)Cultural Change Cultural change is the process in which an organization encourages employees to adopt behaviors and mindsets that are consistent with the organization's values and goals. Merger and Acquisition New Leadership Training Technological change New Workforce new business models,6.Create —ay 1. Create a new stories sense of Lala) urgency symbols 5. Change 2. Change the reward leaders and system other key players 4.Train 3.Role wa”ChatGPT 3.5 v hy @ Gay 2% chat.openai.com/ + : Social Structure Overview G G Social structure © ChataPt Social structure refers to the patterned relationships and institutions that form the foundation of a society. It encompasses various elements such as family, education, economy, and government, shaping the way individuals interact and organize themselves within a community. Social structures often reflect cultural norms, values, and power dynamics, influencing ro | statuses, and hierarchies within a society. Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.1 @ Gay OQ 2% google.com/sean + @ ? ‘Gy SlideShare 3 x Social Structure © Social structure is a framework consisting of social institutions (political, educational & religion), social practices (roles & statuses) and social groups(primary and secondary). © It establishes a society and applies limits on behavior. © It refers as the way in which a society is organized, Itis a collection of people and relations in a = geographical area. Social structure | PPT Visit > Images may be subject to copyright. Learn More «<~ Share Save Social structure, definition and meaning. + when men elate themseivesto eachother + They establish a structure, form + very society has patter of organization composed of structures + association of men with each other Johnson + Structure: stable intr rlationshiss among the parts. @ SlideShare @ SlideShare9:09 Sill wll Hea gy @ 33 G2} (26 chat.openaicom/ + = Religion Discussion GZ G ChatGPT 3.5 v © ChataPt Religion is a complex and diverse set of beliefs, practices, and values that often involve a higher power or divine being. People turn to religion for guidance, meaning, and a sense of purpose in life. There are various religions worldwide, each with its unique teachings and traditions. If you have specific questions or topics you'd like to discuss about religion, feel free to let me know! Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.9:11 Tal al Heo ogy @ 33 Ga (26 chat.openaicom/ + Language: Communica GZ G ChatGPT 3.5 v Vhat is language. © chatePt Language is a system of communication that uses symbols, such as words and gestures, to convey meaning. It enables individuals to express thoughts, share information, and interact with one another. Languages can vary widely across cultures and regions, but they all serve as a fundamental tool for human communication. v Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.ChatGPT 3.5 v uy @ 33 D> 25 chat.openai.com/ + Language: Communica GZ G © ChataPt Education is a process of acquiring knowledge, skills, values, and attitudes. It typically involves formal instruction in institutions like schools or universities, as well as informal learning through experiences. Education plays a crucial role in personal development and societal progress by equipping individuals with the tools they need to contribute to their communities and navigate the world. Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.Cross Cultural Management Country or Group of Countries have different culture and subculture e Every Culture and subculture have different belief, attitude, food, cloth, language, norms. Etc. In the era of globalisation, e Companies performing their business in one Country (culture) are expanding their business to other countries (Culture)Cross Cultural Management Companies conducting business in different nation (culture) have to deal with e Different type of consumers having different taste and preferences, likes and dislikes etc. e Different employee from different culture having different languages, working pattern, behaviour etc. i.e, single organisation having global business have to deal with multiple cultureCross Cultural Management ‘Cross-cultural management” @ compares organizational behaviour across countries and cultures, e and seeks to understand and improve the interaction of co-workers, managers, executives, clients, suppliers, and alliance partners from countries and cultures around the world’ e Increase effectiveness in global business managementCross Cultural Management e Simply, it is the management of cross culture, © different business people of different nations and culture e Many studies have shown that not understanding cultural differences can lead to business failures.Cross Cultural Management Two common problems in cross cultural business interactions— ethnocentrism and the self-reference criterion. e Ethnocentrism is the belief that the people, customs, and traditions of your own race or nationality are better than those of others. e Self-reference criterion is judging another person’s culture by the yardstick of your own culture.Understanding Culture Culture represents the way of Life The food we eat The language we speak Cloth we use Place where we worship Festival we celebrate art and handicrafts are all part of culture.Understanding Culture A patterned way of thinking, feeling, and reacting that exists within a e particular group, @ organization, e profession, e subgroup ofa society, e nation, or e a group of nations.Understanding Culture The tangible or visible aspects of culture include food, dress, music, dance, architecture, and other art forms.Understanding Culture The intangible aspects include beliefs, attitudes, (like or dislikes) role, norms, and (rule) Values (principles or standards of behaviour)Understanding Culture Geert Hofstede, has defined culture as ‘the collective programming of the mind—the software of groups in society’. Features/Characteristics e Culture is learned not innate Culture is shared Culture is dynamic (changes with time) Culture is man made Culture is integrated (Many factors)Understanding Culture Importance Provide a pattern way to live life Provide a sense of connectivity and continuity with the past Important factor in developing human behaviour Influence market demand Essential framework for social interaction Artistics Creativity : Dance, Music, Handicrafts etcogy @ 3 Gea OQ schatopenaicom/ + = Language: Communication System GZ G ChatGPT 3.5 v — Culture and competitive advantage © ChataPt Culture can provide a competitive advantage in various ways. A positive and well-defined organizational culture can enhance employee engagement, productivity, and innovation. When employees share common values and goals, it often leads to better collaboration and a more cohesive work environment. Additionally, a strong organizational culture can contribute to attracting anc J iining top talent. Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.10:56” tea ogy @ 83 (aD OQ schatopenaicom/ + = Language: Communication System GZ ChatGPT 3.5 v 4 On a broader scale, a country's cultural attributes can also influence its competitive advantage. For instance, a rich cultural heritage can bea significant attraction for tourism, positively impacting the economy. Moreover, a culture that values education, innovation, and entrepreneurship can contribute to a nation's competitiveness in the global market. In summary, culture, whether at the organizationa’ v national level, can bea critical factor in gaining a competitive Message ChatGPT... ChatGPT can make mistakes. Consider checking important information.