[Solution] Part 2, Step I: Organizational Environment
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Author: Sarah Bennett
International Business
Globalization is an important trend that is impacting most businesses.
Levels of Internationalism
US companies increasingly operate in industries with numerous competitors based in other countries. US firms compete with these other companies for resources and customers abroad and at home.
Managers find it helpful to describe organizations in terms of four levels of international presence, distinguished by the proportion of resources and customers a business has in different countries.
Levels of International Business Activity
- A domestic business operates entirely within a single country. Examples include family-owned businesses and farms.
- An international business is based mostly in one country but does business in others, either by buying resources or by selling goods/services.
- A multinational business (multinational corporation, or MNC) acquires resources from all over the world and sells its products globally as well.
- A global business operates so internationally that it no longer considers itself as having a home country. While there are no global businesses today, some multinational businesses are evolving toward a truly global stance.
Managing Globalization
Organizations can take different approaches to managing their international operations:
- Regionalism - Managing operations as a collection of independent businesses in different parts of the world
- Globalization - Operating as a single integrated system across all regions
Select the words that best complete the following sentences.
A company that operates in only one country is a .
View Explanation
A firm that operates entirely within one country is a domestic business.
A globalization focus means that managers operate an international organization as a .
View Explanation
Managers pursuing a globalization focus seek to run the organization as an integrated whole.
