INTERNATIONAL BUSINESS Meaning and
Definition
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International business refers to the economic activities conducted between two or more countries involving the exchange of goods, services, and resources across national borders. It involves various business transactions such as trade, investment, and outsourcing, and requires the coordination and integration of economic activities on a global scale.
In international business, companies operate in multiple countries, expanding their activities beyond their domestic market to capitalize on global opportunities. This expansion broadens their customer base, allows for access to resources and labor markets, and enhances profitability through economies of scale. International business encompasses both the commercial and non-commercial activities conducted by private and public sector entities, including multinational corporations, governments, and non-governmental organizations.
Key components of international business include imports and exports of goods and services, international investment (such as foreign direct investment or portfolio investment), international production (in the form of overseas subsidiaries or joint ventures), and international trade agreements and regulations. Multinational corporations play a crucial role in international business as they have the ability to operate in multiple countries and leverage their global presence to expand their market share and influence.
Successful international business operations require an understanding of cultural, political, legal, and economic differences among countries. Companies engaged in international business need to adapt their strategies, products, and marketing approaches to suit the diverse characteristics of global markets. Additionally, they must navigate complex international legal frameworks, trade policies, tariff barriers, and currency exchange rates to ensure sustainable business growth and profitability in various countries.
Etymology of INTERNATIONAL BUSINESS
The term "international business" combines two words:
1. International: The word "international" comes from the Latin word "internationale" which means "between or among nations". It is derived from the Latin word "inter" meaning "between" and "natio" meaning "nation". The term was first recorded in English in the early 18th century.
2. Business: The word "business" can be traced back to the Middle English word "bisignis" derived from the Old English word "bisignes" which means "care, anxiety, occupation, or business". It can also be linked to the Old English word "bisignan", meaning "to care for, attend to, or be occupied with". The word has various roots in Old Norse, Old High German, and Old French. Over time, it evolved to refer to commercial or trade-related activities.
