This chapter addresses two main questions: (1) What activities are involved in the field of international business? (2) How are these activities organized and executed? This combination of "know what" and "know how" is essential for understanding the field of international business.
Answering the first question involves study of the variety of activities typically performed by business organizations engaged in international business and of the nature of such organizations. Answering the second question requires study of the process used by an organization considering involvement in international business and how this involvement actually materializes (that is, entry strategies).
Finally, because organizations are made up of people who carry out the various decision-making activities involved in international business, the chapter delineates the basic tasks in setting global business strategy and the subsequent decisions and plans that must be made and carried out in implementing international operations.
LEARNING OBJECTIVES
After studying the material in this chapter, the student should be familiar with the following concepts:
- International business
- Exchange of goods
- Exchange of services and information
- Exchange of money
- Portfolio (stock) investment
- Direct foreign investment (USDFI)
- Direct foreign investment in the United States (DFIUS)
- The business enterprise
- The business enterprise as an open system
- The internationalization process
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