Q 1. Discuss the objectives and motives of International Business.
Ans.
International business includes any types of business activities whether goods or services that crosses national boundaries. A number of definitions of International business can be found but no single universally accepted definition exists for the term international business. We shall discuss some of the definitions to understand the meaning of international business.
Some people define international business as an organization that buys and/or sells goods and services across two or more countries. Some others consider it as big enterprises which have operating units outside their home country. Still others consider it as joint ventures with locally owned business or with foreign governments.
International business has become massive in scale and has come to exercise a major influence over political economics and social forces because of many types of comparative business studies and knowledge of many aspects of foreign business operations. In fact, sometimes the foreign operations and comparatives business refers to domestic operation within a foreign country. Comparatives business, on the other hand, focuses on similarities and differences among country and business systems.
Businesses undertake international operations because of a number of benefits that arise from international business. Motives of international business are as follows:
i) International business helps a firm in spreading the commercial risk across several countries. When demand of a product in one country is depressed, the production may be exported to other countries, cold weather, for instances may depress soft drink consumption in one country but all countries do not have winter at the same time. In fact, some countries are relatively warm throughout the year. Such markets provide outlets for production of soft drinks even in winter.
ii) International business helps a firm in increasing their overall sales and profit. Many Firm in USA have done well because of their international sale.
iii) Many firm resort to international business with a motive to survive. Some firms may not have large market in home country. There may be intense competition in the home country. Under such a situation, the firm would look towards foreign markets.
iv) International business operation explores management to new ideas and different approaches to solving problems. This in turn will help individual executives to develop their general management skills and personal effectiveness. They become innovative and adopt broader horizons. All these factors can give a firm a competitive edge in the home country.
v) Many firms conduct international business to harness the economics of scope. Economics of scope provide benefits like unit cost reductions resulting from undertaking range of activities using common services and inputs useful for each activity.
Ans.
INTERNATIONAL BUSINESS
International business includes any types of business activities whether goods or services that crosses national boundaries. A number of definitions of International business can be found but no single universally accepted definition exists for the term international business. We shall discuss some of the definitions to understand the meaning of international business.
Some people define international business as an organization that buys and/or sells goods and services across two or more countries. Some others consider it as big enterprises which have operating units outside their home country. Still others consider it as joint ventures with locally owned business or with foreign governments.
International business has become massive in scale and has come to exercise a major influence over political economics and social forces because of many types of comparative business studies and knowledge of many aspects of foreign business operations. In fact, sometimes the foreign operations and comparatives business refers to domestic operation within a foreign country. Comparatives business, on the other hand, focuses on similarities and differences among country and business systems.
MOTIVES OF INTERNATIONAL BUSINESS
Businesses undertake international operations because of a number of benefits that arise from international business. Motives of international business are as follows:
i) International business helps a firm in spreading the commercial risk across several countries. When demand of a product in one country is depressed, the production may be exported to other countries, cold weather, for instances may depress soft drink consumption in one country but all countries do not have winter at the same time. In fact, some countries are relatively warm throughout the year. Such markets provide outlets for production of soft drinks even in winter.
ii) International business helps a firm in increasing their overall sales and profit. Many Firm in USA have done well because of their international sale.
iii) Many firm resort to international business with a motive to survive. Some firms may not have large market in home country. There may be intense competition in the home country. Under such a situation, the firm would look towards foreign markets.
iv) International business operation explores management to new ideas and different approaches to solving problems. This in turn will help individual executives to develop their general management skills and personal effectiveness. They become innovative and adopt broader horizons. All these factors can give a firm a competitive edge in the home country.
v) Many firms conduct international business to harness the economics of scope. Economics of scope provide benefits like unit cost reductions resulting from undertaking range of activities using common services and inputs useful for each activity.
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