Unit1.

An overview of international business

A business has to be involving, it has to be fun,

and it has to exercise your creative instincts.
Richard Branson - British Virgin Group Founder

Vocabulary
significant - значний; важливий; істотний
- important or noticeable
international business - міжнародний бізнес
- the activity of trading goods and services
between countries
globalization - глобалізація
- the process by which a company, etc.,
expands to operate internationally
global - глобальний, світовий; у світовому
масштабі
- covering, influencing, or relating to the
whole world

interdependent - залежний один від одного,

взаємозалежний
- relating to two or more people or things
dependent on each other
output - обсяг виробництва,виробництво
an amount of something produced by a
person, machine, factory, country, etc
forex market - ринок іноземної валюти
The foreign exchange market (forex, FX, or
currency market) is a form of exchange for
the global decentralized trading of
international currencies. Financial centers
around the world function as anchors of
trading between a wide range of different
types of buyers and sellers around the clock,
with the exception of weekends. The foreign
exchange market determines the relative
values of different currencies
boundary - кордон
- a real or imagined line that marks the edge
or limit of something
arrangement угода, домовленість
 an agreement between two people or groups
about how something happens or will happen
transaction операція, угода
- the process of doing business
market - ринок
- an economic system in which prices,
salaries, employment, etc. are decided by
how much people want and will pay for goods
and services
foreign business - іноземний бізнес
- the system in which banks and other similar
organizations buy and sell money from each
other
- інвестування, вкладання капіталу
an investment - the act of putting money, effort, time, etc.
into something to make a profit or get an
advantage, or the money, effort, time, etc.
used to do this
liberalization - лібералізація
- the act of making laws, systems or opinions
less severe
to export - вивозити, експортувати
- to send goods to another country for sale

to import - увозити, довозити, імпортувати

- to bring a product into a country from
another country, especially in order to sell it
a trade - торгівля
- the buying and selling of goods between
people, companies, or countries
currency - валюта, гроші
- the system of money that is used in a
particular country at a particular time
Abbreviations
GATT - abbreviation for General Agreement on Tariffs and Trade:
an international agreement among more than 100 countries to end
rules that limit trade between them
NAFTA - abbreviation for North American Free Trade Agreement:
an agreement made in 1994 between the US, Canada, and Mexico that
allows them to trade with each other without import taxes, etc.
MERCOSUR - a trade agreement between Argentina, Brazil,
Paraguay, Uruguay, and Venezuela that makes it easier for member
countries to trade with each other
 WTO – abbreviation for World Trade Organization: an official
organization that deals with agreements for buying and selling goods
and services between countries:

Text1

International Business
("International Business." Encyclopedia of Management.
2009. Encyclopedia.com. 25 Feb. 2013
<http://www.encyclopedia.com>.)

One of the most dramatic and significant world trends in the past
two decades has been the rapid, sustained growth of international
business. It is the age of globalization. More and more firms are
engaged in international business. Globalization is a process by which
the world economy is becoming a single interdependent system.
Markets have become truly global for most goods, many services, and
especially for financial instruments of all types. World product trade has
expanded by more than 6 percent a year since 1950, which is more
than 50 percent faster than growth of output the most dramatic
increase in globalization, has occurred in financial markets. In the global
forex markets, billions of dollars are transacted each day, of which
more than 90 percent represent financial transactions unrelated to
trade or investment. International business is defined as business
transactions that take place across national borders. This broad
definition includes the very small firm that exports (or imports) a
small quantity to only one country, as well as the very large global firm
with integrated operations and strategic alliances around the world.
International business grew over the last half of the twentieth
century and the early twenty-first century partly because of
liberalization of both trade and investment, and partly because doing
business internationally had become easier. In terms of liberalization,
the General Agreement on Tariffs and Trade (GATT) negotiation rounds
resulted in trade liberalization, and this was continued with the
formation of the World Trade Organization (WTO) in 1995, which is
responsible for the regulation of trade on the global level. Other
regional trade agreements include the North Atlantic Free Trade
Agreement (NAFTA) between The United States, Canada and Mexico
and the MERCOSUR between South American Countries. At the same
time, most governments liberalized worldwide capital movements,
particularly with the advent of electronic funds transfers. In addition,
the introduction of a new European monetary unit, the euro, into
circulation in January 2002 has impacted international business
economically. The euro is the currency of the European Union, and it
has replaced the national currency of many European countries. As of
early 2005, the United States dollar continues to struggle against the
euro and the impacts are being felt across industries worldwide.

Special difficulties in international business

What make international business strategy different from the
domestic are the differences in the marketing environment.The
important special problems in international marketing are given below:
1. political and legal differences
The political and legal environment of foreign markets is different
from that of the domestic.The complexity generally increases as the
number of countries in which a company does business increases.It
should also be noted that the political and legal environment is not the
same in all provinces of many home markets.For example, the political
and legal environment is not exactly the same in all the states of India.
2. Cultural differences
The cultural differences, is one of the most difficult problems in
international marketing.Many domestic markets, however, are also not
free from cultural diversity.
3.Economic differences
The economic environment may vary from country to country.
4. Difference in currency unit
The currency unit varies from nation to nation.This may sometimes
cause problems of currency convertibility, besides the problems of
exchange rate fluctuations.The monetary system and regulations may
also vary.
5. Differences in language
An international marketer often encounters problems arising out
of the differences in the language.Even when the same language is
used in different countries, the same words of terms may have
different meanings.The language problem, however, is not something
peculiar to the international marketing.For example:the multiplicity of
languages in India.
6. Differences in marketing structure
The availability and nature of the marketing facilities available in
different countries may vary widely.For example, an advertising
medium very effective in one market may not be available or may be
underdeveloped in another market.
7. Trade restrictions
A trade restriction, particularly import controls, is a very important
problem,
which an international marketer faces.
8. High cost of distance
 When the markets are far removed by distance, the transport cost
becomes high and the time required for affecting the delivery tends to
become longer. Distance tends to increase certain other costs also.
9. Difference in trade structure
Trade practices and customs may differ between two countries.

Activity 1. Answer the questions

 How many firms are engaged in international business?
More and more firms are engaged in international business.
 How can you define the term “international business”?
International business is defined as business transactions that take
place across national borders.
 Why did International business grow over the last half of the
twentieth century and the early twenty-first century?
International business grew over the last half of the twentieth
century and the early twenty-first century partly because of
liberalization of both trade and investment, and partly
because doing business internationally had become easier.
 What is liberalization in international business?
Trade liberalization is the removal or reduction of restrictions or barriers
on the free exchange of goods between nations.
 What has impacted international business economically in
January 2002?
In addition, the introduction of a new European monetary
unit, the euro, into circulation in January 2002 has impacted
international business economically.
 Are there any special difficulties in international business ?
1. political and legal differences
2. Cultural differences
3.Economic differences
4. Difference in currency unit
5. Differences in language
6. Differences in marketing structure
. Trade restrictions
8. High cost of distance
9. Difference in trade structure

Activity 2. Complete the sentences

1. Globalization is a process by which the world economy is
becoming a single interdependent system.
2. International business is defined as business
transactions that take place across national borders.
 3. More and more firms are engaged in international
business.
4. International business grew over the last half of the
twentieth century and the early twenty-first century partly
because of liberalization of both trade and investment, and
partly because doing business internationally had become
easier.
5. The economic environment may vary from country to
country.
6. The euro is the currency of the European Union, and it
has replaced the national currency of many European countries.
7. One of the most dramatic and significant world trends
in the past two decades has been the rapid, sustained growth of
international business.

Activity 3 Join the abbreviation with it’s definition

GATT abbreviation for General Agreement North American Free

on Tariffs and Trade: an international Trade Agreement: an
agreement among more than 100 agreement made in
countries to end rules that limit 1994 between the US,
trade between them Canada, and Mexico
that allows them to
trade with each other
without import taxes,
etc.
a trade agreement between
MERCOSUR Argentina, Brazil, Paraguay, General Agreement on
Uruguay, and Venezuela that makes Tariffs and Trade: an
it easier for member countries to international
trade with each other agreement among
more than 100
countries to end rules
that limit trade
abbreviation for North American between them
NAFTA Free Trade Agreement: an World Trade
agreement made in 1994 between Organization: an
 the US, Canada, and Mexico that official organization
allows them to trade with each other that deals with
without import taxes, etc. agreements for buying
and selling goods and
services between
countries:
abbreviation for World Trade
WTO Organization: an official organization a trade agreement
that deals with agreements for between Argentina,
buying and selling goods and Brazil, Paraguay,
services between countries: Uruguay, and
Venezuela that makes
it easier for member
countries to trade with
each other

Activity4 Say True or False according to the text

1. Globalization is a process by which the world economy is

becoming a single interdependent system._____ True
2. The global currency markets, billions of dollars are transacted
each day_______False
3. International business is defined as business transactions that
take place across national borders________true
4. Markets have become truly global for most goods, many
services, and especially for financial instruments of all
types.________true
5. International business grew over the last half of the nineteenth
century and the early twentieth century partly because of
liberalization of both trade and investment._________false
6. World product investment has expanded by more than 10
percent a year since 1930.________false
Activity5 Word search puzzle
ARRANGEMENT, BUSINESS, CURRENCY, EXPORT, GLOBAL, IMPORT,
INTERNATIONAL
MARKET, SIGNIFICANT, TRADE, TRANSACTION

M N R Q J F L S L M N T K G U
E M K Y A E F Y X W P R C C U
Y T R A D E Y I P T J A K R C
P M N T P V C G N O T N N M E
U Y M K Q I Y V A X U S O T D
I N T E R N A T I O N A L S C
Q X L S M T A S G X T C X D X
C A R R A N G E M E N T F H K
S I G N I F I C A N T I K D L
J Q P W U S J X I M P O R T G
A O A U W B C U R R E N C Y C
C M Q E X P O R T D V Y V I C
H S I F G L O B A L L Q A H C
Y M P K V V L N V M A R K E T
A T A P N S I B U S I N E S S

Activity 6 Choose the best word to fit the gap.

1 It’s important to understand how other cultures behave so you don’t
cause .
A offence B problem C disaster D behavior

2 In some countries it is quite to use the correct title when talking to

business colleagues.
A offensive B likely C formal D tricky

3 Having good may help you to make deals more easily.

A entertaining B manners C demonstrations D handshaking

4 Ian has to be very organised as his work involves meeting tight .

A problems B responsibilities C challenges D deadlines

5 Lesley doesn’t like having to wait for other people to work for her.
A generate B solve C resolve D tackle
6 Paul enjoys working at Small World because he finds the stimulating.
A installation B environment C application D opportunity

7 If someone looks me straight in the eye without I tend to think they

are honest.
A yawning B sighing C blinking D sniffing

8 Your body usually gives other people information about how you
really feel.
A appearance B impression C language D relationship
9 Bob and Tony are business and have arranged to meet at the sales
conference.
A delegates B customers C associates D officers

10 I’ve given the latest sales to Mr Allen but he hasn’t had a chance to
look at them yet.
A systems B figures C worksheets D facts

Activity 7. Fill in the gaps with the correct nationality.

1 He lives in Holland so he must be Dutch.
2 She comes from the USA so I think she’s_ American .
3 They speak French so they could be French or Canadian
(France/Canada).
4 He’s Swede _a but he can’t speak any Swedish.
5 I became a citizen Hungarian when I married a woman from Hungary.
Twenty first century is the age of globalization.

More and more firms are engaged in international business.

Globalization is the integration of national economies through trade,

investment, capital flow, labor migration, and technology.

Markets have become global for goods, services, and financial

instruments.

International business is defined as business transactions that take

place across national borders.

Trade liberalization is the removal or reduction of restrictions or barriers

on the free exchange of goods between nations.

The WTO responsible for the regulation of trade on the global level.

Other regional trade agreements the NAFTA, the GATT and the
MERCOSUR.

the euro has impacted international business economically.

Special difficulties in international business include:

1. political and legal differences

2. Cultural differences
3.Economic differences
4. Difference in currency unit
5. Differences in language
6. Differences in marketing structure
7. Trade restrictions
8. High cost of distance
9. Difference in trade structure

Acivity 8 Choose the correct idiomatic word or expression in (a),

(b), (c) or (d), for each of these sentences.
1. When a project goes wrong or fails, we can say that it:
(a) puts its foot in it (b) goes belly up (c) sticks its oar in (d)
gets its knickers in a twist
2. We sometimes say that people who compete for success in business
or in a career are working
for the:
(a) horse race (b) dog race (c) rat race (d) camel race
3. The practice of transferring a difficult, incompetent or non-essential
employee from one department
to another is known informally as a:
(a) weasel waltz (b) turkey trot (c) cat calypso (d) rabbit rumba
4. We might refer to a bad employer with a reputation for losing
talented staff as:
(a) a people churner (b) a people mixer (c) a people stirrer (d) a
people beater
5. The sudden moment that you realise you have made a terrible
mistake is known as:
(a) an ohnosecond (b) a gordonbennettminute (c) a
whoopsadaisyinstant (d) a hellsbellsmoment
6. If you do a lot of different types of work in an office for very low pay,
you could be referred to (unkindly) as:
(a) a pig in a poke (b) the cat's whiskers (c) a a gift horse (d) a
dogsbody
7. When an employee telephones to say that s/he is not coming to work
because s/he is ill, but in fact
is only pretending to be ill, we say that s/he is throwing:
(a) the book at someone (b) a wobbly (c) a punch (d) a sickie
8. If an employee gets very angry at work because of something bad or
unpleasant that happens, we can say that they are experiencing:
(a) office anger (b) work rage (c) shopfloor strops (d) workplace
wobblies
9. If an employee is deliberately or accidentally excluded from decision-
making processes, they might complain that they are being left:
(a) out of their mind (b) out of the blue (c) out of their head (d)
out of the loop
10. Work that offers the same money for less effort than another similar
job is often known as:
(a) a cushy number (b) a doddle (c) a pushover (d) child's play
11. When somebody is dismissed from their job, we can say that they
have:
(a) got the shoe (b) got the sandal (c) got the boot (d) got the
slipper
12. If you criticize somebody in writing, we can say that you them.
(a) pencil-smack (b) pencil-thrash (c) pencil-punch (d) pencil-
whip
13. A general or broad view of a problem as a whole (which does not go
into details) is known as:
(a) a bird's-eye view (b) a helicopter view (c) a mountaintop
view (d) a balloon view
14. The lazy practice of working only when a supervisor is present and
able to see you is called:
(a) lip service (b) hand service (c) nose service (d) eye service
15. If your job is unpleasant, you might say that you have:
(a) a nose job (b) a job lot (c) a jobsworth (d) a mushroom job
16. If you consider your job to be silly, trivial and unimportant, you
might describe it as:
(a) a Tom and Jerry job (b) a Mickey Mouse job (c) a Homer
Simpson job (d) a Donald Duck job
17. A lazy employee who only pretends to work is said to be:
(a) swinging the lead (b) swinging a cat (c) swinging the
balance (d) swinging both ways
18. A new product (especially a new car) that has some major defects is
known

Activity 9Complete dialogues 1 - 16 with the most appropriate

word or expression from the box. There are six words or
expressions that you do not need.

basket case bean counter busymeet cash cow dead wood

dumbsizing ear candy empty suit glad-hand goldbricker
graveyard shift happy camper idea hamster kiss up to
mover and shaker seagull manager shape up or ship out stress puppy
toxic employee trim the fat wiggle room wombat
1. A. Tim seems to enjoy being under a lot of pressure, but this doesn't
stop him from complaining all
the time.
B. I know, but he's not the only ____ _____ in this company.
2. A. I've told Tom that unless he improves his performance at work,
he'll be fired.
B. Good. It's about time somebody told him to ____ _____.
3. A. Tom always dresses well and follows procedure, but he doesn't
actually contribute much to the
company.
B. I agree. He's a typical ____ _____.
7. A. The company brought in a so-called expert to deal with a big
project, but he just made a lot of
fuss, achieved absolutely nothing and then left.
B. Well, he wasn't the first ____ _____ we've had, and I'm sure he won't
be the last.
5. A. We need to get rid of some of our older and less productive staff.
B. I agree. The ____ _____ has to go as soon as possible.
6. A. Ms Rigden met a lot of people at the conference, didn't she?
B. She certainly did. I think I saw her ____ _____ almost everyone there.
4. A. The only way to get promoted in this job is to flatter and be very
attentive to the senior
managers.
B. That's terrible! You shouldn't have to ____ _____ people to get ahead
in your job.
8. A. My boss always tells me how well I'm doing, but he never offers
me a pay rise.
B. Well, I suppose a bit of ____ _____ is better than nothing.
9. A. I can't believe we sat in that meeting and listened to the boss talk
for over three hours.
B. Me neither. What a complete ____ _____!
10. A. We need to reduce the size of the company but we need to make
sure it doesn't become
unprofitable or inefficient.
B. That's true. ____ _____ is something we need to avoid at all costs.
11. A. Do you enjoy your work here?
B. Oh, absolutely. I'm a regular ____ _____.
12. A. We're expected to sign the contract by tomorrow.
B. That's no good. We only received it yesterday. We need a bit of ____
_____.
13. A. Have you seen Alan today?
B. He's in a ____ _____ all morning. He should be free at lunchtime.
14. A. Is the company doing well?
B. No, not at all. As far as I'm concerned, it's a complete ____ _____!
15. A. Business is dropping off and we could end up in financial trouble.
B. I know. Perhaps it's time to ____ _____.
16. A. Do you think there will be a lot of demand for our latest range of
T-shirts?
B. Oh absolutely. It's a ____ _____. Everyone will want one