Few people question the importance of a country's interaction with the rest of the world in fostering its economic, political, and social well-being. International business—a country's exchange of goods, money, services, and information—is a very important part of this interaction.
Because of the role the United States has played in world affairs during the last forty years, the average person's understanding of the importance of international business to U.S. prosperity is distorted. First, many assume that the amount of international business is quantitatively insignificant, as only a small percentage of the GNP is involved. Second, people assume that other nations depend on U.S. business more than Americans depend on others' business. This book subscribes to the proposition that the United States' dependence on the exchange of goods, money, services, and information with the rest of the world is neither small nor unimportant.
The misconception regarding the significance of international business for the United States stems from a lack of understanding of certain basic concepts and the supporting statistics. The ignorance of statistics is forgivable—few can claim that they fully understand the accounting procedures used by the U.S. Department of Commerce in keeping track of international transactions. The purpose of this chapter is to overcome the lack of understanding of the basic concepts by familiarizing the reader with the field of international business in general and international management in particular. After a brief description of the nature, magnitude, and importance of international business, the focus will shift to the main theme of this book, which is the role and function of private enterprise as the main carrier of a country's international transactions.
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