International Business Lesson 1

INTERNATIONAL
BUSINESS

LECTURE 1

GLOBALIZATION.
INTRODUCTION TO INTERNATIONAL BUSINESS

Lecturer: PhD Mariana Ruda

FOREIGN TRADE AND CUSTOMS DEPARTMENT
LVIV POLYTECHNIC NATIONAL UNIVERSITY

WHAT IS
GLOBALIZATION?

https://www.youtube.com/watch?v=lMdhfBQUhtI
https://www.youtube.com/watch?v=JJ0nFD19eT8
https://www.youtube.com/watch?v=ovFjvcd6q1w

WHAT IS GLOBALIZATION?

GLOBALIZATION IS THE WORD USED TO DESCRIBE THE GROWING
INTERDEPENDENCE OF THE WORLD'S ECONOMIES, CULTURES, AND
POPULATIONS, BROUGHT ABOUT BY CROSS-BORDER TRADE IN
GOODS AND SERVICES, TECHNOLOGY, AND FLOWS OF INVESTMENT,
PEOPLE, AND INFORMATION.

GLOBALIZATION

Globalization of business is one of the main
trends in the development of the modern
world, which has a significant impact not
only on economic life but also political
(domestic and international), social and even
cultural and civilian consequences.

These consequences are increasingly
felt by almost all countries and among
them, of course, Ukraine, which is fully
conscious,

actively and

purposefully

moving

towards integration into the

INTERNATIONAL ECONOMY.

ABOUT GLOBALIZATION,
MAHATMA GANDHI ONCE SAID:

“I do not want my
house to be walled
in on all sides and
my windows to be
closed. Instead, I
want the cultures of
all lands to be
blown about my
house as freely as
possible. But I
refuse to be blown
off my feet by any.”

GLOBAL TRENDS
IN BUSINESS

As the economies of countries
around the world continue to
develop, foreign trade and an
interdependence of firms, markets,
and countries continues to growth
and expand. This development has
lead to intense competition among
different countries, industries, and
firms to claim their share within the
global markets. There are several
major trends influencing the growth
of international business, and how
the players in the international arena
interact.

#1 FORCED DYNAMISM

International business is a complex topic because
the environmentally is constantly changing.
Business continually push for new ways to expand
and grow, adopting new technologies in the
process.

The cultures and politics that shape countries and
the ways in which these countries act are
continually changing as well. These factors all
influence the ways in which global economies
develop and interact with each other.

#2 COOPERATION
AMONG COUNTRIES

Countries cooperate and conduct business with
each other through thousands of different
international organizations, treaties, and
consultations. This cooperation tends to encourage
globalization because restrictions on business
operations tend to become less restricted. Business
and countries are able to benefit from more
cooperation because they can grow their markets,
solve more complex problems, and deal with
concerns that lie outside of one's territory.

#3 LIBERALIZATION
OF CROSS-BORDER MOVEMENTS

In one way or another, every country
restricts the movement across its borders
of goods, services, and resources. These
restrictions tend to limit international
trade and business. However, countries
today impose much fewer restrictions on
cross- border movements than they did
in the past. This has allowed companies
to take advantage of opportunities, and
markets, around the world. When
countries are more open to cross-border
movements, consumers have better
access to a greater variety of goods and
services at a lower price. This also
creates more competition, forcing
producers to become more efficient
because they are competing with foreign
companies.

#4 TRANSFER OF TECHNOLOGY

Technology transfer refers to
the process by which
commercial technology is
disseminated to governments
and businesses around the
world. when two
organizations agree to a
technology transfer, all areas
of the economy and society
benefit, including research
and education, transportation,
employment, infrastructure,
and agriculture among others.

#5 GROWTH IN EMERGING
MARKETS

The growth of emerging
markets has benefited
international business in two
major ways. First, they have
increased the potential size of
markets, giving companies a
greater number of people to
sell their products or services
too. Second, as these markets
grow, they are developing an
entire new generation of
innovative companies that can
help address the world's most
pressing issues.

Where is the global economy heading in 2024?
This is what chief economists think
https://www.weforum.org/agenda/2023/09/global-economy-outlook-september-2023-chief-economists-outlook/

https://bharti-axagi.co.in/world-economy-ranking-2024/

THE MAIN ACTORS OF
GLOBALIZATION ARE
NOT THE COUNTRIES,

BUT TRANSNATIONAL
CORPORATIONS.

KEY TAKEAWAYS

1. Global expansion occurs when a business grows its
operations outside of its ‘base country’ of operations.
2. Benefits of global expansion include: talent acquisition,
cost reduction, business resilience, growth opportunities,
and tax and compliance benefits.
3. Potential disadvantages of global expansion include cost
of entity establishment, permanent establishment risk, not
understanding foreign consumer markets, and non-
compliance.
4. All successful examples of global expansion involve a
company carefully understanding its target country of
expansion.

What is global expansion?
https://joinhorizons.com/5-benefits-global-business-expansion/

TASK: ANSWER THE FOLLOWING QUESTIONS

1) "Why do I want to

study international business?“

2) "Globalization: is this an

opportunity or a threat for
international business?"