Ibe International Business Questions

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Topic 1: International Business

1. Why companies engage in international business?
There are three major operating objectives that underline the reasons for companies to engage in international business:
-expanding sales: pursuing international sales usually increases the potential market and potential profits
-acquiring resources: foreign sources may give companies lower costs, new or better products, additional operating knowledge
-minimizing risk: international operations may reduce operating risk by smoothing sales and profits, preventing competitors from gaining advantages.

2. Identify three of the drivers of globalisation. Justify your selection supporting your argument with the use of examples.

3. Which factors facilitated globalisation?
-increase in and expansion of technology
-liberalization of cross-border trade and resource movements
-development of services that support international business
-growing consumer pressures
-increased global competition
-changing political situations
-expanded cross-national cooperation

4. What are the threats to globalisation? Is globalisation likely to lessen?
-Fear of globalisation (protectionism; yet MNEs, WTO)
-Macroeconomic instability (US imbalances, dollar crises, asset price crashes)
-Resource insufficiency
-Geopolitical tensions (China, India)
-Globalisation of “bads” (terrorism, drugs, fear of movement of people, climate change)
Despite of the fact that globalisation may lead to some circumstances such as lost of countries sovereignty, the threat to environment and etc., globalisation is likely to increase rather than decrease, because of the development of innovations, because of the improvement of people’s ideology.

5. Will FDI increase or decrease in the current decade? Why?
FDI tends to increase in the current decade. According to the recent data the amount of FDI in different countries is considerable. Firms throughout the world are interested in FDI

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