WORLDLANGUAGESIT CANADA

¡THE EXPERIENCE MAKES THE DIFFERENCE !

WORLDLANGUAGESIT CANADA ©
 BUSINESS ENGLISH FOR
SPECIFIC PURPOSES
INTERNATIONAL BUSINESS,
Mtro. Jorge Rodriguez

WORLDLANGUAGESIT CANADA INC.

2
 The International
Business Imperative

Mtro. Jorge Rodriguez

WORLDLANGUAGESIT CANADA INC.

3
 Learning Objectives
To understand the history and impact of
international business.
To learn the definition of international
business.
To recognize the growth of global linkages
today.
To understand the U.S. position in world trade
and the impact international business has on
the United States.
To appreciate the opportunities and challenges
offered by international business.

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International Business Questions
How will an idea, good, or service fit
into the international market?
Should trade or investment be used
to enter a foreign market?
Should supplies be obtained
domestically or abroad?
What product or services
adjustments are necessary to be
responsive to local conditions?
What are the threats from global
competitors, and how can these
threats be counterattaked?
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Need for International Business
More and more firms around the
world are going global, including:
Manufacturing firms
Service companies (i.e. banks, insurance,
consulting firms)
Art, film, and music companies

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Need for International Business
International business:
causes the flow of ideas, services, and capital across the world
offers consumers new choices
Allows the acquisition of a wider variety range of products and
services.
facilitates the mobility of labor, capital, and technology
provides challenging employment opportunities
reallocates resources, makes preferential choices, and shifts
activities to a global level

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 The Definition of
International Business.

Mtro. Jorge Rodriguez

WORLDLANGUAGESIT CANADA INC.

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What is International Business?
International business consists of transactions
which are devised and carried out, across
national borders, in order to satisfy the needs
of individuals, companies, and organizations.

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Types of International Business
Export-import trade
Foreign direct
investment

Licensing

Franchising

Management contracts

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The History and Impact of
International Business.

Mtro. Jorge Rodriguez

WORLDLANGUAGESIT CANADA INC.

11
 International Business and the
Roman Empire
Pax Romana, or Roman Peace ensured that
merchants were able to travel safely and rapidly.
Common coinage simplified business transactions.
Rome developed a systematic law, central market
locations, and an effective communication system;
all of which enabled international business to
flourish in the Roman Empire.
The growth of the Roman Empire occurred mainly
through the linkages of business

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International Business and the
Roman Empire (cont.)
The decline of the Roman Empire can be
attributed in part to:
infighting and increasing decadence
the Pax Romana being no longer enforced
the decline of use and acceptance of the common
coinage
declining levels of communication
As a result, former Roman allies
cooperated with invaders.
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United States: A Global Leader
The United States has developed a
world leadership position due to:
its use of market-based transactions in the
Western world
a broad flow of ideas, goods, and services
across national borders
an encouragement of international
communication and transportation
Pax Americana, an American sponsored and
enforced peace

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 The Smoot-Hawley Act
In 1930’s, the U.S. passed the Smoot-
Hawley Act, which raised import duties to
reduce the volume of goods coming into the
U.S.

The act was passed in the hope that it would

restore domestic employment.

The result was a worldwide depression and

the collapse of the world financial system.

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The Expansion of International
Trade

Mtro. Jorge Rodriguez

WORLDLANGUAGESIT CANADA INC.

16
Expansion of International Trade
In the past 30 years, the volume of
international trade has expanded from
$200 billion to over $7.5 trillion.

The sales of foreign affiliates of

multinational corporations are now
twice as high as global exports.

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 Global Links Today
International business has created a network of
global links that bind countries, institutions, and
individuals with trade, financial markets,
technology, and living standards.
For example, a reduction in coffee production in
Brazil would affect individuals and economies
worldwide.

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 Recent Changes in
International Business
Total world trade declined dramatically after
2000, but is again on the rise.
The rate of globalization is accelerating.
Regionalization is taking place, resulting in
trading blocs.
The participation of countries in world trade is
shifting.

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 The Composition of Trade
Between the 1960’s and the 1990’s the
importance of manufactured goods increased
while the role of primary commodities (i.e.
rubber or mining) had decreased.
More recently, there has been a shift of
manufacturing to countries with emerging
economies.
There has been an increase in the area of
services trade in recent years.

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 The Current U.S. International
Trade Position
Exports and Imports of Goods and Services per Capita
for Selected Countries

Country Exports per Capita Imports per Capita

Australia $4,296 $4,525
Brazil 379 428
China 222 199
Japan 4,165 3,622
Kenya 91 125
United Kingdom 4,767 5,500
United States 3,472 4,962
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The Impact of International
Business on the United States
U.S. international business outflows are
important on the macroeconomic level in
terms of balancing the trade account.

On the microeconomic level, participation

in international business can help firms
achieve economies of scale that cannot be
achieved in domestic markets.

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 Average Plant Salary and Wages
(per worker, dollars per hour)
30

25

20
$ per hour

15

10

0
All Plants Small Plants Large Plants

Non-Exporters Exporters
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 Globalization
Because of globalization, for the first
time in history, the availability of
international products and services can
be accessed by individuals in many
countries, from diverse economic
backgrounds.

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The Structure of this Lesson
Part One introduces the importance of international
business and its global linkages.
Part Two presents the environment of international
business, addressing culture, policies, politics, and
law.
Part Three provides coverage of the theory of
international trade and investment and presents
balance of payments issues.
Part Four discusses markets, financial systems,
economic integration, and emerging market
concerns.

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The Structure of this Lesson
(cont.)
Part Five presents the strategic considerations
surrounding international business.
Part Six targets the operational issues surrounding
international business, using an implementing-
oriented perspective.
Part Seven concludes the lesson with a focus on the
future of the field and the reader’s career.

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 BUSINESS ENGLISH FOR
SPECIFIC PURPOSES
INTERNATIONAL BUSINESS,
Mtro. Jorge Rodriguez

WORLDLANGUAGESIT CANADA INC.

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