Best selling author Thomas L. Friedman is famous for saying that "the world is flat" because we have become so closely connected via the Internet and efficient air travel with all the nations on earth. Even small businesses function on a global level with customers, employees, vendors, manufacturers, and raw materials coming from other nations.
Identification
Each international business works in at least two countries and so must become comfortable with cross-cultural communications that vary, like the laws, with each country. To learn what restrictions apply, American companies that want to do business in another country can consult with the United States Department of State. Information about importing and exporting internationally is also available from the Government.
Considerations
International business success relies on a well-designed strategic business plan. In addition to learning about the cultural and financial context of all the countries in which the business will operate, the plan needs to do careful market research. Due diligence should also consider resolve potential disputes in advance. It is also useful to know where to find advocates in each targeted culture. The United States Commercial Service Market Research Library is a great resource for international businesses to use because it links to each country's commercial guides.
Function
International trade is perhaps the most common international business. Food, raw materials, manufactured goods and artifacts are all traded across international borders from where they are produced to where they will be sold. To do this well, a company needs to respect all the treaties and agreements pertaining to both the countries involved, the commodities and the means of transportation. Import and export duties and documentation vary with the country of origin and the destinations.
Features
Global outsourcing has become a way for American businesses to take advantage of electronic and digital communications to save money on wages. Developing nations where cost of living is dramatically lower than that in the United States frequently have large numbers of highly educated English speakers who can man telephone help desks for very low wages. This benefits the company as it contributes to improving the standard of living in developing countries.
Types
Wal-Mart and McDonald's are two American companies that have grown to become large multi-national corporations. Toyota is an example of a Japanese company that is a multi-national corporation. This company employs American laborers to build Japanese cars in the United States for sale in America. Whenever a company holds assets in one country and does business in another country, it is involved in international business.
