Week 1 International Business Notes

Topics: Communism, Economic system, Capitalism, Political philosophy, Communist state, Government / Pages: 3 (693 words) / Published: Sep 10th, 2013
MGF 2351 – Week 1
Introduction & The International Business Environment (Differences in Political Economy)
Unit objectives * Classify the key features and issues in the global environment in which international business takes place; * Explain the impact that the environment has on the internationalisation process of a business organisation; and * Demonstrate an understanding of the role of entry mode choice and other strategic issues in order to succeed in international business * Formal Lecture Content 

• What is an “International Business”?
– Any firm that engages in international trade or 
investment 

– International business differs from domestic business for a variety of reasons: > National culture

> Political, economic, and legal systems
> Labour and environmental standards
> Foreign exchange 

• Is that all? No!

• It is also about:

– The study of trade theory and the environment 
faced by firms as they look to internationalise – It also looks at the strategies and entry modes pursued by firms as they seek to internationalise • Note: 

– At Monash, IB is different to International Management - MGF3681

Topic 1: The International Business Environment * What is a political economy?
– The political economy of a nation refers to how the political, economic, and legal systems of a country are interdependent
> They interact and influence each other
> They affect the level of economic well- being in the nation

Political systems
The system of government in a nation
• Assessed according to:
– The degree to which the country emphasises collectivism as opposed to individualism
– The degree to which the country is democratic or totalitarian
• Collectivism stresses the primacy of collective goals over individual goals
– Can be traced to the Greek philosopher, Plato (427-347 BC): The Republic

• Today, collectivism is equated with socialists (Karl Marx 1818-1883)
– Advocate state ownership of

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