The Antecedents of International Business Theories
THE ANTECEDENTS OF THE THEORIES OF INTERNATIONAL BUSINESS
History and Background
International business is a broad term, collectively used to describe all commercial transactions (private, government and semi-government) that take place between two or more nations. International business is a newly coined term, but the concept is quite traditional. Actually, the term international business is derived from “international trade”.
In ancient days, producers of a country used to export their surplus production to neighboring countries and later with the further development of trade they started exporting goods to far off countries as well. This was the establishment of an era of “international trade”. With further developments, more competitors came into the international markets, as a result of which producers started marketing their goods at international levels; this was the time when “international trade” turned into “international marketing”.
With further advancements, producers started establishing their production facilities in foreign countries and the era of globalization arrived; this was the time when researchers coined the term “international business”. There are many thinkers who have worked in the field of international business and they have put forward various theories in order to justify the concept of international business. These theories collectively explain why business firms of one country should go to another country, although the industries of that country also produce the same goods and market them. So these theories explain the basis for international business.
Some of the most important theories of international business are given below:
1. Mercantilism :
Till c. 1500 most of the international business happening around the world was demand driven. Not all commodities demanded by people were produced locally. Hence, merchants travelled in search of these commodities to meet the demand. This was the essential driver for trade. The
History and Background
International business is a broad term, collectively used to describe all commercial transactions (private, government and semi-government) that take place between two or more nations. International business is a newly coined term, but the concept is quite traditional. Actually, the term international business is derived from “international trade”.
In ancient days, producers of a country used to export their surplus production to neighboring countries and later with the further development of trade they started exporting goods to far off countries as well. This was the establishment of an era of “international trade”. With further developments, more competitors came into the international markets, as a result of which producers started marketing their goods at international levels; this was the time when “international trade” turned into “international marketing”.
With further advancements, producers started establishing their production facilities in foreign countries and the era of globalization arrived; this was the time when researchers coined the term “international business”. There are many thinkers who have worked in the field of international business and they have put forward various theories in order to justify the concept of international business. These theories collectively explain why business firms of one country should go to another country, although the industries of that country also produce the same goods and market them. So these theories explain the basis for international business.
Some of the most important theories of international business are given below:
1. Mercantilism :
Till c. 1500 most of the international business happening around the world was demand driven. Not all commodities demanded by people were produced locally. Hence, merchants travelled in search of these commodities to meet the demand. This was the essential driver for trade. The
References: : 1. Ritzer, George “Theorizing the Globalization of Culture”, 2. Storper, Michael (1999), “Globalization and Knowledge Flows: An Industrial Geographer’s Perspective 3. http://www.edcon-edwards.com/VERNON.htm (accessed on 27-Oct-2013) 5. http://chetanchitre.wordpress.com/tag/life-cycle-theory/ (accessed on 27-Oct-2013) 6. http://www.edcon-edwards.com/VERNON.htm (accessed on 29-Oct-2013)