Activities carried out across national borders International Business

Operations outside its home or domestic market Foreign Business

Organization with multicountry affiliates Multi Domestic Company

Org that attempts to integrate operations worldwide Global Company

Either a global or multidomestic company International Company

All forces influencing the life and development of the firm Environment

Management has no control Uncontrollable forces

Variables that influence a firm’s ability to do business Economic

Characteristics and distribution of the human population Socioeconomic

Variables such as interest rate, inflation, taxation Financial

Foreign and domestic laws governing how firms must operate Legal

Elements of nature such as topography,climate Pysical

Elements of culture important to international managers Sociocultural

Compositions skills and attitude of labor Labor

Technical skills and equipment that affect how rss are converted Technological

Forces that management administers to adapt to changes Controllable forces

Factors of production and activities of the org Internal forces

All uncontrollable forces originating in the home country Domestic Environment

Uncontrollable forces originating outside of the home country Foreign Environment

Interaction between domestic and foreign env forces International Environment

Unconscious reference to ones own values when judging others Self-reference criterion

Carry out colonial activities in asia to open ocean trade routes 1602

Number of multinational activities existed late 1800

First American company to own foreign production facilities Singer Sewing Machine

Investment in a foreign country sufficient to obtain control Foreign Direct Investment

Transportation of any domestic good outside a country Exporting

Trans of any domestic good to into a country from a foreign country Importing

Tendency toward an international integration of good Economic Globalization

A common mgt goal to reduce unit costs Economies of Scale

Delay of payment by the importers Lack of foreign exchange

Changing method of going abroad from exporting to overseas Protect foregin markets

Means of maintaining stable sales when economy is in a slump Geographic Diversification

Vital part of economy. Strengthens relationship between countries Trade

Includes exports and imports International Trade

International companies do this to establish/expand operations Foreign Direct Investment

One party must lose in order for another to gain Zero-Sum Activity

Export that brings dollars to the country Positive

Imports that cause dollar outflow Negative

Nation produces larger amount of good for the same amt of input Absolute Advantage

Theory about an advantage in production of 2 goods Comparative Advantage

Locating activities in another nation Offshoring

Price of one currency stated in terms of another currency Exchange Rate

Lowering of a currency in terms of other currencies Currency Devaluation

Export large amt. of abundant and import scarce production Resource Endowment

Trade in manufactured goods will be greater between nations Overlapping Demand

Development of products with unique differences Product Differentiation

Theory that an export product eventually becomes an import Int. Product Lifecycle

Ave. cost/unit of output decreases as plant gets larger Economies of Scale

Reduction of unit cost due to improved efficiency from experience Experience Curve

Nation’s ability to design, produce while inc returns National Competitiveness

Diamond Model of National Advantage Michael Porter

Purchase of stocks and bonds to obtain return on fund invested Portfolio Investment

Purchase of sufficient stock to obtain management control Direct Investment

Value of total outstanding stock Book Value

Theory that FDI are made by oligopolistic industries Monopolistic Advantage Theory

Firm will transfer knowledge rather than sell it Internalization Theory

Dynamically create and exploit capabilities