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Wednesday, October 24, 2012

Understanding the International Business

Separate cases begin and end each chapter in order to provide real-world examples of the concepts contained within the chapters. Good use is made of graphs, tables and other illustrations. Each of the seven major parts of the book has an overview at its beginning, as do each of the individual chapters. Each chapter ends with a summary of key points, and includes a list of notes which the reader may use for additional research.

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Part One is the only one-chapter section in the book; it provides an overview and background to the study of international business. Daniels and Radebaugh suggest that some individuals are interested in international business because they are part of an organization which operates on a worldwide basis. Others are interested in the subject as citizens who are concerned with the regulations of such businesses in order to obtain their own objectives.

According to the authors, as technology has advanced (including transportation and communications), geographic frontiers have been penetrated and global business is the result. Consequently, a number of disciplines, such as geography, history, political science, law, economics and anthropology are now necessary to understand the full scope of international business.

The authors also cite four international organizations which seek to enhance the economic standing of their members: Multifibre Arrangement (MFA); Organization of Petroleum Exporting Countries (OPEC); United Nations (UN); and the Organization for Economic Cooperation and Development (OECD). The first two base membership on belonging to a given industry (textile and oil, respectively).

Chapter 15, "Some More Forms of Foreign Involvement," explores motives behind choosing to become involved in global business activities and the multiple forms of international operations which often must exist simultaneously.

Chapter 5 takes on the broad issue of governmental influence on trade. This topic is important because although economists have long recognized the potential resource benefit of free trade, no country in the world allows the unregulated flow of goods and services.

Managers must be aware that having contracted foreign companies to work on the multinationals behalf does not remove the responsibility of the manager for overseeing the successful implementation of resources and quality standards. The form that this supervision takes may vary from country to country, company to company, and division to division, depending on the host country, the product and the company culture.

The authors suggest that centrally planned economies are generally unable to mass produce items which could be marketed in the West in the quantities necessary to achieve exchange for imports. Command economies, faced with out of balance trade situations, may terminate imports or export products at below cost.

 

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