Unit 1: International Business & Globalization Definition of Business

Unit 1: International Business & Globalization

Definition of Business

The term Business has three definitions:

- Business is a legal organization that produces goods or provides services to consumers in order to get profit.

- Business is a commercial activity aimed to earn profit.

- Business is an occupation, work or trade in which a person is engaged.

International Business represents commercial transactions that take place between two or more nations.

Globalization

Globalization represents an establishment of a combined and interdependent world economy. Globalization is divided into (1) globalization of markets & (2) globalization of production.

Globalization of markets is mergence of separate national markets into one global marketplace despite of differences in culture, religion, geography, taxes, laws and politics.

Stimuli for market globalization:

- Higher demand for goods & services;

- Universal products & services, i.e. computers;

- Common tastes & preferences, i.e. Coca-Cola; MacDonalds;

- Lower trade barriers;

- Global Institutions, i.e. World Bank, WTO, WHO.