MGF 2351 – Week 1
Introduction & The International Business Environment (Differences in Political Economy) Unit objectives
Classify the key features and issues in the global environment in which international business takes place; *
Explain the impact that the environment has on the internationalisation process of a business organisation; and *
Demonstrate an understanding of the role of entry mode choice and other strategic issues in order to succeed in international business *
Formal Lecture Content
• What is an “International Business”?
Any firm that engages in international trade or
– International business differs from domestic business for a variety of reasons:
> National culture
> Political, economic, and legal systems
> Labour and environmental standards
> Foreign exchange
• Is that all? No!
• It is also about:
– The study of trade theory and the environment
faced by firms as they look to internationalise
– It also looks at the strategies and entry modes pursued by firms as they seek to internationalise
– At Monash, IB is different to International Management - MGF3681
Topic 1: The International Business Environment
* What is a political economy?
– The political economy of a nation refers to how the political, economic, and legal systems of a country are interdependent > They interact and influence each other
> They affect the level of economic well- being in the nation
The system of government in a nation
• Assessed according to:
– The degree to which the country emphasises collectivism as opposed to individualism – The degree to which the country is democratic or totalitarian • Collectivism stresses the primacy of collective goals over individual goals – Can be traced to the Greek philosopher, Plato (427-347 BC): The Republic
• Today, collectivism is equated with socialists (Karl Marx 1818-1883) – Advocate state ownership of the basic...
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