Introduction and Concepts of the Modern International Business13/03/2020
Different nations all over the world are experiencing an essential change in the way they deliver and market various items, products and services. The national economies that were accomplishing the objective of self-sustainability are currently developing route towards International Business. The factor for this crucial change is the development of correspondence, innovation, communication, infrastructure and so on.
Introduction to Modern International Business
Business activities done across national borders is Modern International Business. The International business is the purchasing and selling of the goods, commodities and services outside its national borders. Such trade modes might be owned by the state or privately owned organization.
In which, the organization explores trade opportunities outside its domestic national borders to extend their own particular business activities, for example, manufacturing, mining, construction, agriculture, banking, insurance, health, education, transportation, communication and so on.
Nations that were away from each other, because of their geological separations and financial and social contrasts are now connecting with each other. World Trade Organization established by the administration of various nations is one of the major contributory factors to the expanded connections and the business relationship among the countries.
The national economies are dynamically getting borderless and fused into the world economy as it is clear that the world has today come to be known as a ‘global village’. Numerous more organization are making passage into a worldwide business which presents them with opportunities for development and tremendous benefits.
India was trading with different nations for quite a while, yet it has quickened its progress of incorporating with the world economy and expanding its foreign trade and investment.
With the globalization of the world economy, there has been a concomitant rise in the number of companies that operate globally. Though international business as a concept has been around since the time of the East India Company and continued into the early decades of the 20th century, there was a lull in the international expansion of companies because of the Two World Wars. After that, there was a hesitant move towards internationalizing the operations of multinational companies.
What really provided a fillip to the global expansion of companies was the Chicago School of Economic Thought propelled by the legendary economist, Milton Friedman, which championed neoliberal globalization. This ideology, which started in the early 1970s gradually, became a major force to reckon with in the 1980s and became the norm in the 1990s. The result of all this was the frenzied expansion of global companies across the world.
Thus, Modern international businesses grew in scope and size to the point where at the moment; the global economy is dominated by multinationals from all countries in the world. What was primarily a phenomenon of western corporations has now expanded to include companies from the East (from countries like India and China). This module examines the phenomenon of international businesses from different aspects like the characteristics of international business, their effect on the local, target economies, and the ways and means with which they would have to operate and succeed in the global competition for ideas and profits.
Above all, Modern international businesses have to ensure that they blend the global outlook and the local adaptation resulting in a “Global” phenomenon wherein they would have to think global and act local. Further, international businesses need to ensure that they do not fall afoul of local laws and at the same time repatriate profits back to their home countries. Apart from this, the questions of employability and employment conditions that dictate the operations of global businesses have to be taken into consideration as well.
Considering the fact that many third world countries are liberalizing and opening up their economies, there can be no better time than now for international businesses. This is balanced by the countervailing force of the ongoing economic crisis that has dealt a severe blow to the global economy. The third force that determines international businesses are that not only is the third world countries eager to welcome foreign investment, they seek to emulate the international businesses and become like them. Hence, these aspects would be discussed in detail in the subsequent articles.
Finally, Modern international businesses have to ensure that they have a set of operating procedures and norms that are sensitive to the local culture and customs and at the same time, they stick to their brand that has been developed for global markets. This is the challenge that we discussed earlier as “Glocal” orientation.
In conclusion, Modern international businesses are facing the best of times and the worst of times at the same time and hence, the savvy and astute among them would succeed in this “Shift Age”.
Benefits of Modern International Business
International Business is important to both Nation and Business organizations. It offers them various benefits.
Benefits to Nation
- It encourages a nation to obtain foreign exchange that can be utilized to import merchandise from the global market.
- It prompts specialization of a country in the production of merchandise which it creates in the best and affordable way.
- Also, it helps a country in enhancing its development prospects and furthermore make opportunity for employment.
- International business makes it comfortable for individuals to utilise commodities and services produced in other nations which help in improving their standard of life.
Benefits to Firms
- It helps in improving profits of the organizations by selling products in the nations where costs are high.
- It helps the organization in utilizing their surplus resources and increasing profitability of their activities.
- Also, it helps firms in enhancing their development prospects.
- International business also goes as one of the methods for accomplishing development in the firms confronting extreme market conditions in the local market.
- And it enhances business vision as it makes firms more aggressive, and diversified.