The purpose of this chapter is to help the student of international business understand the main activities of the international business field and the basic conceptual framework that has been developed for carrying out these various activities. To assist the reader in knowing what and knowing how, the chapter provided a brief explanation of (1) the exchange of goods, services, and money, (2) the internationalization process and the various modes of entry into it, (3) global business strategy setting, and (4) the challenging tasks of the global manager.
Understanding the exceedingly complex field of international business requires an equally complex framework. This framework must blend the fundamentals of such diverse disciplines as sociology, the physical sciences, the political sciences, and economics, each of which has a plethora of highly specialized subdisciplines. Thus, a specialization in multinational management might be one of the greatest oxymorons. A person wishing to become a specialist in multinational management not only must claim expertise in the above disciplines—an expertise firmly grounded in international studies (see Table 2.4)—but also must possess an extraordinary talent for applying this knowledge to several different and at times conflicting situations. This person must indeed be a Renaissance person. 1 Such a manager must be able to set and achieve organizational goals and objectives in a world where Greek sailors dance to American music with Japanese women, drinking Scotch whisky or German beer in French or Romanian glasses and munching Georgian peanuts—a true global village. Although it is by no means easy, developing these skills is not beyond the capabilities of the average human being. This book aspires to provide a small contribution toward easing the difficult task of globalizing management thinking and action.
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American education fails to prepare our citizens to compete and participate in the world marketplace. We know neither the globe nor the cultures of the people who inhabit it. We cannot speak to potential customers, our friends, or our foes in a language they can understand. Our teachers have not been adequately prepared to discuss geography, cultures, languages, or world events. Throughout most of our history, we have been endowed with many resources and a domestic market large enough to handle what our productive economy has been able to turn out. In addition, most other nations were far behind in the development of technology and the translation of that technology into products the world wanted. As a result, we could sell whatever we wanted overseas, almost anywhere. We have been slow to notice the change. In some sectors, our economy can produce even more than Americans can consume. Other nations have caught up with us in the development of many forms of technology, and some have even surpassed our ability to turn that technology into products the world wants to buy. We are no longer isolated by the large oceans on either side of our nation. Our economic and political future depends on the ability to communicate with and understand people across national boundaries. Compounding the problem are two very simple realities: Three decades ago, a worker in Virginia competed with a worker in South Carolina or South Dakota. Now, the competition comes from South Korea as well. It is not possible for us to compete with the relatively lower wages paid to workers elsewhere in the world. What we can—and must—do is give our workers the finest of equipment and the best of educations. Three decades ago, there were sixteen Americans working for every one person on Social Security. By 1992, that ratio will be three to one. Those three working Americans must be well educated to be sufficiently productive. In a global economy, a well-educated individual, by definition, will need a firm grounding in international studies. |
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SOURCE: Cornerstone of Competition: The Report of the Southern Governors' Association Advisory Council on International Education (Washington, DC: Southern Governors' Association, November 1986). |
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