This course on the context of international business provides an overview of the environments in which international business has existed in the past and how it operates in the present. First, the theory and history of international trade and the place of business in global trade are summarized. Next, the parallel topic of globalization and its impact on international business is reviewed. Then, the varied political, economic, and ethical environments in which international business must operate are discussed. Finally, current international trade agreements and national trade laws and regulations are presented. Without understanding the context of international business, international managers and leaders will indeed find success difficult.
In this first module, we take a quick survey of the long history of global trade and then review reasons why international trade has grown so rapidly in recent decades. Next, we review the historical evolution of trade theory and review contemporary trade theories. We argue that International Business is the implementation of International, discuss the motives for engaging in international business, and present the methods that businesses employ to operate globally. Along the way we look at a huge ongoing effort to recreate an ancient trading route; we delve into history to investigate a failed theory of trade that has repercussions to this day; and will explore why one of the world’s largest companies has often failed with its global expansion efforts. So, fasten your seatbelts – we’re taking off!
A hallmark of recent decades has been the very rapid growth of international trade. This week we will define globalization, survey some of its successes, and will review its challenges and criticisms. We will conclude with a case study of an emerging technology that may well greatly accelerate the rapid pace of globalization!
International Political, Legal, and Economic Environments
This module examines the varied environments in which international businesses must operate and succeed. We first examine the underpinning of international political and legal systems. Next, we examine the underpinning of international political and legal systems. International managers must understand how these systems work and their implications for conducting international business. Finally, we tackle the challenging topics of international business ethics, corporate social responsibility (CSR), and corruption. These topics are challenging because there are no bright guidelines for defining right from wrong, good from bad, or honest from corrupt in international business. Nonetheless, international managers must frequently make difficult ethical and moral decisions, even without clear guide lines. It is imperative that managers understand these topics and their implications for conducting international operations. If managers do not understand the fundamental rules of a country in which they operate, they won’t be successful there!
International Trade Law
With this module we examine the many ways that nations build barriers to impede trade to protect their domestic industries and jobs. Then, ironically, we study the many foreign trade agreements and organizations that nations create to reduce and sometimes eliminate those same barriers. We then summarize various national trade laws, such as import and export restrictions imposed by individual countries. Next, we examine Free Trade Zones that countries establish to reduce trade barriers and promote cross-border transactions. Finally, we will focus on national intellectual property laws such as patents, copyrights, and trademarks which has become critically important as much international trade now includes an abundance of high-tech and entertainment products with valuable embedded IP.