European and international business Essay Example | Topics and Well Written Essays - 2000 words

European and international business - Essay Example Globalization has accelerated in recent years, a development that have significant implications for the regulation and governance of international business, trade and investment. International business implies no fundamental shift in the underlying principles of trading or business functions but simply more cross – border transactions .In simpler terms it includes all commercial transactions – private and governmental – between two or more countries. Private companies undertake such transactions for profit; governments may or may not do the same in their transactions International Business comprises a large and growing portion of the world’s total business. The world have seen a tremendous increase in the global transactions and foreign trade in the recent years. The main reason behind this is that now more and more countries are getting engaged in trading with each other in order to increase their profit or sales or protecting them from being eroded by co mpetition. The main objectives which are influencing the companies to engage in international business are expansion of sales, acquiring resources, minimizing competitive risk and diversification of sources of sales and supplies (Johnson & Turner, 2003). Besides these there are few other factors like economic factors, cultural factors, technological factors, and social factors which have influenced to a greater extent.Reasons for recent international business growth:-It’s hard to determine just how much international business has occurred at different times in history. ... -> Development of supporting services -> Increase in global competition Expansion of technology: In recent years, the pace of technological advances has accelerated to greater heights and the knowledge of products and services is available more quickly and widely due to communication and transportation technology. By increasing the demand for new products and services, technology has tremendous impact on international business. As the demand increases, so do the number of international business transactions. The recent technological improvement led to the production of high quality products at lower cost. As a result, the domestic countries have entered foreign countries to find market for their products. Liberalization of cross - border movements: Every country restricts the movement across its borders of goods and services and the resources, such as workers and capital to produce both .These restrictions hinder the international trade and thus the government today has imposed fewer restrictions on cross - border movements in order to facilitate trade. With the enactment of the World Trade Organizations (WTO) in 1995, the restrictions imposed on international trade are diminishing. There are many reasons as for why the government has reduced the restrictions. Few among them are: their domestic products will become more efficient as a result of foreign competition, their citizens expressing the desire for better access to a larger variety of goods and services to lower prices and so on (Rugman & Brewer, Nov 2001). Development of supporting services: Companies and governments have developed services which earn international business. For example, banks have developed efficient means for companies to receive