Global Management

Business is buying and selling of the goods or services. Global business is the buying and selling of goods and services by people from different countries. Global business presents its own set of challenges for managers. How can you be sure that the way you run your business in one country is the right way to run that business in another?

Multinational corporations (MNCs) are corporations that own businesses in two or more countries. Another way to appreciate the impact of global business is by considering direct foreign investment. Direct foreign investment occurs when a company builds a new business or buys an existing business in a foreign country.

Of course, companies from many other countries also own businesses in the United States. But direct foreign investment in the United States is only half the picture. U.S. companies also have made large direct foreign investments in countries throughout the world. Historically, governments have actively used trade barriers to make it much more expensive or difficult (or sometimes impossible) for consumers to buy or consume imported goods. Protectionism is a government’s use of trade barriers to shield domestic companies and their workers from foreign competition.

When companies produce products in their home countries and sell those products to customers in foreign countries, they are exporting. Exporting as a form of global business offers many advantages. It makes the company less dependent on sales in its home market and provides a greater degree of control over research, design, and production decisions.