Globalisation

Question 1

What is International Business

Answer 1

Business transactions between parties from one or more country

Question 2

What makes international business different

Answer 2

Boundaries
Currencies
Culture
Legal Systems
Availability of resources
Skills and knowledge

Question 3

International business activities

Answer 3

Exporting and importing
International Investments
Licensing
International Franchising 
International Management Contract

Question 4

FDI

Answer 4

A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.

Question 5

FPI

Answer 5

Foreign portfolio investments (FPI) are purchases of foreign financial assets (stocks, bonds, etc.) for a purpose other than control, such as increasing the rate of return on a portfolio of assets.

Question 6

Motives for globalisation

Answer 6

Opportunity for growth + diversification
Higher profits
Sourcing advantages - closer to suppliers
Lower cost production
Economies of scale
Compete with foreign competitors

Question 7

Globalisation drivers

Answer 7

Declining trade barriers
Technological innovation
Transportation advancements
Convergence of culture
Economic changes across the globe

Question 8

World Institutions

Answer 8

The World Trade Organization (WTO)
The International Monetary Fund (IMF)
The World Bank
The United Nations (UN)

Question 9

Ethical obligations for MNCs

Answer 9

CSR

Avoid ethical issues such as exploitation