IBUS 311 1st Edition Lecture 2 Outline of Last Lecture I. Overview of Syllabusa. Class attendance and participation b. Examsc. Group project Outline of Current Lecture I. What is International Business?II. How Does International Business Differ from Domestic?III. Does the Company Change its Business Model When Operating Across Borders?IV. Why do Firms Participate in International Business?V. Who Participates in International Business?VI. How Do Firms Internationalize?Current Lecture- There are 196 sovereign nation-states in the world today. (These act as borders and barriers)- When looking at different countries they vary in, densities, income, education, political freedom, and institutional/governance quality.- A business needs to decide the ease of doing business with another country-I. What is International Business?- International Business: Performance of trade and investment activities by firms across national borders- Globalization (of markets): Ongoing economic integration and growing interdependence of countries worldwide - Global Governance: Management of relations among the sovereign countriesII. How Does International Business Differ from Domestic?- Cross borders: Enter different business environments and use distinctive business methodsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- The global environment is complex and multi-faced (Opportunities/Threats)Political Economic Global Cultural Company Legal Infrastructure - Countries are further divided into Regional Economic Blocs- 4 Major Risks: 1. Cross-Cultural: Negotiation Patterns, Decision-Making Styles, Ethnical Practices2. Political Risk: Example: Government Intervention3. Currency Risk: Currency Expose, Asset Valuation, Foreign Trade, Inflation Currency Risks are more manageable than other risks4. Commercial Pattern: Weak partnerIII. Does the Company Change its Business Model When Operating Across Borders?- A company needs to decide whether to replicate of adapt their business. Example: McDonalds is designed to be more comfy and focuses more on their McCafe line for European countriesIV. Why do Firms Participate in International Business?- Seeking Efficiency - Seeking Growth- Seeking Resources - Also seeking knowledgeV. Who Participates in International Business?- Multinational Enterprise- Small-Medium sized Enterprise- Born Global Firm- Non-governmental OrganizationsVI. How Do Firms Internationalize?- International trade- Exporting- Importing of Global Sourcing- International Investments- International Portfolio Investments- Flows: Trade in Product, Trade in Service, Knowledge and Direct