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International Business: a Theoretical Approach

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Submitted By Agata304
Words 9493
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EXPANDING ABROAD: MOTIVATIONS & MEANS
INTERNATIONAL BUSINESS: It consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations
The main characteristics of the international business are: - flow of ideas, services and capital across the world - new choices to consumers - acquisition of a wider variety of products is offered - the mobility of labor, capital and tech is facilitated - new challenging employment opportunities - reallocation of resources, shift of activities to a global level
International business has created a network of global links that bind countries, institutions, and individuals with trade, financial markets, technology, and living standards.

MULTINATIONAL ENTERPRISE (MNE): is a business –profit or non-profit – that operates in the global arena (across national borders), with no regard to the dimension of the firm
The main peculiarity of an MNE is the fact that manage actively and coordinately a set of operations located in different countries.
To be true MNE a company must: * have substantial, direct investment in foreign countries (not just the trading relationships of an import-export business) * and actively manage those operations as affecting their strategy and organization
The MNE is a recent phenomenon, mostly developed in the post-WW II years.

The United Nations has changed (1984) the definition of MNE as these companies have grown in size and importance: “the MNE is an enterprise comprising entities in 2 or more countries, regardless of the legal form and fields of activity of those entities, which operates under a system of decision making permitting coherent policies and common strategies through one or more decision-making centers and in which the

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