Reasons for the Recent Growth of International Business Activity

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Review Questions
2.- Why is it important for you to study international business? * Almost any large organization you work for will have international operations or be affected by the global economy. * You start your own business, you may find yourself using foreign-made materials or equipment, competing with foreign, and perhaps even selling in foreign markets. * Keep pace with your future competitors.

5.- What is portfolio investment?
* Foreign portfolio investments (FPI) are purchases of foreign financial assets (stocks, bonds, and certificates of deposit) for a purpose other than control. An example of portfolio investment is the purchase of 1,000 shares of Sony’s common stock by a Danish pension fund.

6.- What are the basic reasons for the recent growth of international business activity? * There are two broad reasons: strategic imperatives, which motivate globalization, and environmental changes, which facilitate it.

Questions for Discussion
5.- What are some of the differences in skills that may exist between managers in a domestic firm and those in an international firm?
Domestic firm;
* Local workers.
* Legal system.
* Local supply.
International firm;
* Languages.
* Currency
* Cultures and new markets.
Review Questions
2.- How do differences in income levels and income distribution among countries affect international business?
The most important piece of information needed by international business people about a country is its income level because it provides clues to the purchasing power of residents. One important source of income statistics is the World Bank, which divides the world’s countries into high-income, middle-income, low-income categories.

4.- What is keiretsu?
* Japanese industry is controlled by large families of interrelated companies, that is typically centered on a major Japanese bank. The bank takes primary responsibility...
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