GLOBAL BUSINESS ENVIRONMENT Lo 1: analyse the key

Factors that drive globalisation First driver is the commoditization of the Information and Communication Technology (ICT) infrastructure, computers, software, and Internet. According to Friedman, “These technologies are able to weave the world together even tighter.”
This deep global integration sets the stage for the second driver, the development of world trading systems and standards–leading to free trade, removal of barriers to trade, democratization of capital and investment barriers, and knowledge transfer.
These two are now fueling the third driver, economic expansion of emerging markets and new business venturing. Entrepreneurial Capitalism is expanding around the world.<br>

International economic integration International economic integration is a topic upon which both academics and policy-makers are focusing a great deal of attention. This has perhaps been most marked in western Europe, given the establishing of the internal market and the prospects for an economic and monetary union. In parallel with the movement toward widening and deeping of western European economic integration, we find an increased integration of eastern Europe to world trade and finance as well as regional integration in North America and in East Asia.<br>

International economic integration ‘International economic integration’ is one aspect of “international economics” which has been growing in importance in the past three decades or so. The term itself has a rather short history; indeed, Machlup (1977) was unable to find a single instance of its use prior to 1942. Since then the term has been used at various times to refer to practically any area of international economic relations. By 1950, however, the term had been given a specific definition by economists specialising in international trade to denote a state of affairs or a process which involves the amalgamation of separate economies into larger regions, and it is in this more limited sense that the term is used today.<br>

International economic integration More specifically, international economic integration is concerned with the discriminatory removal of all trade impediments between the participating nations and with the establishment of certain elements of cooperation and coordination between them. The latter depends entirely on the actual form that integration takes. Different forms of international integration can be envisaged and some have actually been implemented:<br>

International economic integration More specifically, international economic integration is concerned with the discriminatory removal of all trade impediments between the participating nations and with the establishment of certain elements of cooperation and coordination between them. The latter depends entirely on the actual form that integration takes. Different forms of international integration can be envisaged and some have actually been implemented.<br>

International economic integration Free trade area: is the least restrictive and loosest form of economic integration among nations. In a free trade area all barriers to trade among members countries are removed. Each member country maintains its own trade barriers vis-à-vis con-member countries.
Customs union: is one step further in the economic integration process. As in the free trade area, goods and services are freely traded among members. In addition, however, the customs union establishes a common trade policy with respect to non-members. Typically this takes the form of a common external tariff, whereby imports from non-member are subject to the same tariff when sold to any member country.<br>

International economic integration Common market. The common market has the same features as a customs union, but, in addition, factors of production (labour, capital and technology) are mobile among members. Restrictions on immigration and cross-border investment are abolished.
Economic union: it is the last step in an economic integration process. In addition to free movement of goods, services and production factors, it also requires integration of economic policies, both monetary and fiscal. Under an economic union members harmonize monetary policies, taxation and government spending. In addition, a common currency is used by members and this could involve a system of fixed exchange rates.<br>

Foreign direct investment Foreign direct investment (FDI) is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. The Organization of Economic Cooperation and Development (OECD) defines control as owning 10% or more of the business. Businesses that make foreign direct investments are often called multinational corporations (MNCs) or multinational enterprises (MNEs). An MNE may make a direct investment by creating a new foreign enterprise, which is called a greenfield investment, or by the acquisition of a foreign firm, either called an acquisition or brownfield investment.<br>

Foreign direct investment Foreign direct investments are commonly categorized as being horizontal, vertical or conglomerate. A horizontal direct investment refers to the investor establishing the same type of business operation in a foreign country as it operates in its home country, for example, a cell phone provider based in the United States opening up stores in China. A vertical investment is one in which different but related business activities from the investor's main business are established or acquired in a foreign country, such as when a manufacturing company acquires an interest in a foreign company that supplies parts or raw materials required for the manufacturing company to make its products.<br>

Foreign direct investment A conglomerate type of foreign direct investment is one where a company or individual makes a foreign investment in a business that is unrelated to its existing business in its home country. Since this type of investment involves entering an industry the investor has no previous experience in, it often takes the form of a joint venture with a foreign company already operating in the industry.<br>

International business International business comprises all commercial transactions that take place between two or more regions, countries and nations beyond their political boundaries. Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc. A multinational enterprise is a company that has a worldwide approach to markets and production or one with operations in more than a country.<br>

International business An MNE is often called multinational corporation or transnational company. Well known MNCs include fast food companies such as McDonald's and Pizza Hut , vehicle manufacturers such as General Motors, Ford Motor Company and Toyota, consumer electronics companies like Samsung, LG and Sony, and energy companies such as ExxonMobil, Shell and BP. Most of the largest corporations operate in multiple national markets.<br>

International business International business All cross-border exchanges of goods, services, or resources between two or more nations. These exchanges can go beyond the exchange of money for physical goods to include international transfers of other resources, such as people, intellectual property, and contractual assets or liabilities. encompasses a full range of cross-border exchanges of goods, services, or resources between two or more nations. These exchanges can go beyond the exchange of money for physical goods to include international transfers of other resources, such as people, intellectual property (e.g., patents, copyrights, brand trademarks, and data), and contractual assets or liabilities (e.g., the right to use some foreign asset, provide some future service to foreign customers, or execute a complex financial instrument).<br>

International business The entities involved in international business range from large multinational firms with thousands of employees doing business in many countries around the world to a small one-person company acting as an importer or exporter. This broader definition of international business also encompasses for-profit border-crossing transactions as well as transactions motivated by nonfinancial gains (e.g., triple bottom line, corporate social responsibility, and political favour) that affect a business’s future.<br>

International trade International trade allows firms to compete in the global market and to employ competitive pricing for their products and services. As more products become available to the market, consumers meet their needs and satisfy their wants, thus increasing customer satisfaction.
Moreover, the exchange of goods and services on a global level has a significant impact on a national economy as exports grow, thus increasing the balance of international payments and significantly contributing to a country’s gross domestic product (GDP).<br>

REFERENCES El-Agraa A.M. (1989) International Economic Integration. In: International Trade. Palgrave Macmillan, London
Price, R. (2018). What is driving globalization?. [online] Global Entrepreneurship Institute. Available at: https://news.gcase.org/2011/06/29/what-is-driving-globalization/ [Accessed 25 Sep. 2018].
Dictionary of International Trade. (2018). What is Economic integration? Definition and meaning. [online] Available at: https://www.globalnegotiator.com/international-trade/dictionary/economic-integration/ [Accessed 25 Sep. 2018].<br>

REFERENCES Staff, I. (2018). Foreign Direct Investment - FDI. [online] Investopedia. Available at: https://www.investopedia.com/terms/f/fdi.asp [Accessed 25 Sep. 2018].
Study.com. (2018). What Is Foreign Direct Investment? - Definition, Advantages & Disadvantages - Video & Lesson Transcript | Study.com. [online] Available at: https://study.com/academy/lesson/what-is-foreign-direct-investment-definition-advantages-disadvantages.html [Accessed 25 Sep. 2018].<br>

REFERENCES What does International Business mean?. [online] Available at: https://www.definitions.net/definition/International%20Business [Accessed 25 Sep. 2018].
Scholar.flatworldknowledge.com. (2018). Flat World Knowledge. [online] Available at: http://scholar.flatworldknowledge.com/books/3158/fwk-168388-ch01_s01 [Accessed 25 Sep. 2018].
My Accounting Course. (2018). What is International Trade? - Definition | Meaning | Example. [online] Available at: https://www.myaccountingcourse.com/accounting-dictionary/international-trade [Accessed 25 Sep. 2018].<br>