What is International Business and why do I have to study it?
As students of BBI you all must be aware of the world’s largest bank, while writing this article it was the Industrial and Commercial Bank of China with $3.062 trillion in assets. So today I give you a placement, post your BBI graduation with this bank’s branch in Mumbai city. This is an international bank based in China but has a branch in Mumbai and like Mumbai it has branches across different leading cities and states across the globe, so a bank which has multiple business avenues across the globe is termed as an International bank and its business will be called as international business.
Similarly if you take up British sports car manufacturer Aston Martin, the automobile made super famous by the British (drool worthy) secret agent 007 – James Bond, then they too are based in Britain but supply cars across the globe, in fact they even have a lot of manufacturing, selling and marketing units across the globe and hence can be termed as an international business.
So an International Company basically is one who conducts business across the globe and International Business is the process of conducting business that is not restricted or defined by geographical boundaries.
Coming back to your placement with the Industrial and commercial bank of China once placed in a company that has offices across the globe there might be chances and opportunities that you get to visit and work with different people from different corners of the world. You might attend a meeting in Beijing followed by a conference in New York and later in that week go in for a training seminar at Zurich to help you sharpen up your skills.
While you go about all of this your knowledge if only restricted to an Indian banking mindset will make you feel like a misfit and you will struggle to grasp with the opportunities of learning at these places because you have no idea of how the world operates and hence it is a must to know and understand the basics of international business.
What is the Syllabus for this Subject?
- International Business
- Introduction Foreign Direct Investment
- Legal Aspects of International Business
- Economic Integration
- International Strategy
- International Marketing
- Transnational Corporations
- International Human Resource Management
- Export Finance And Risk Management
- International Business Environment In India
- Balance Of Payments
Important concepts explained in a simple manner:
As I mentioned above International business is all about conducting business with the world, let me go ahead and help you understand in brief what the other aspects of your syllabus will talk about.
Foreign Direct Investment is when a foreign company decides to invest in another country and expand their operations in that country. An excellent example of the same can be popular fast food chain ‘Mc Donalds’ who have an outlet probably in every country in the world. A FDI helps by fuelling the economy with foreign funds and creates employment and infrastructure while on the other hand it takes away business from local operators and reduces opportunities for natives of a particular country.
Legal aspects of International Business will teach you ‘what’s’ and the ‘how’s’ of the different laws and regulations applicable while dealing with other countries. It also lets you know about international bodies governing trade activities and what are the rules and procedures set up by them that you need to follow.
Economic Integration is the integration of economies of the world by reducing trade barriers and trade blocks so as to ensure free and fair trade for all countries across the world. It helps businesses across the world to expand and grow and it helps nations to fuel the economy and develop in the process.
International Strategy is all about strategizing and creating plans and policies for your business by keeping in mind an international approach and a global mindset. Not all countries have the same laws, rules, regulations, customs, traditions, culture and though process. It is the knowledge of all of this taken into consideration and then strategized for the growth and development of a company in an international environment.
International Marketing like international strategy talks about marketing your products on a global level and ensuring that you segment, target and position the right product in the right place and at the right time to boost your sales.
Transnational Corporations are multinational corporations that we have been studying about since our school days. These are the corporations that have offices and branches across the globe and function on an international level.
International Human Resource Management talks about how human resource managers have to consider the diverse human personnel from different parts of the globe and hence plan and strategize their overall approach towards the policies that govern the organization accordingly.
Export Finance And Risk Management: While export financing is all about the financial aspects dealing with international business, Risk management talks about the various risks that are taken by a business on a regular basis and how they are managed to avert any crisis that may come up on the organization in case the risk had a negative outcome.
While dealing with creditors or debtors in a single nation, it is a single set of laws that are applicable and hence make it very easy to deal with your financing prospects, but in the case of financial dealings with multiple nations and multiple laws, rules and regulations it is a must to understand export finance.
Risks that an organization encounters can be legal crisis, accidents, uncertainty in financial markets, threats from project failures, credit risk, natural disasters or any attempt of contempt by competitors.
International Business Environment in India: The international business environment in India is dynamic and provides a good scope for countries wishing to do business in India. The newly appointed government’s focused objectives like Make in India and related benefits provided to companies and organizations wishing to enter the country are a huge green signal towards the welcome the country offers to its international counterparts and hence it is an interesting topic to study about.
Balance Of Payments: The balance of payments or BOP is a term we are acquainted with on a regular basis. The BOP of a country is the record of all economic transactions between the residents of a country and the rest of the world in a particular period. These transactions are made by individuals, firms and government bodies. Thus the balance of payments includes all external visible and non-visible transactions of a country during a given period, usually a year. It represents a summation of country’s current demand and supply of the claims on foreign currencies and of foreign claims on its currency.
Best Method to Study This Subject:
The simplest and most effective method to study this subject will be to attend lectures and make running notes in class. Follow it up with a reading of your notes once you are home and you can easily write excellent answers in your exams, based on the conceptual knowledge you will have gained in the process.
All the Best, do well! 🙂
BY AMI PANDYA