Importance of Understanding International Businesses

International Business
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PART I
International business occurs through trading across a nation’s border and this phenomenon is more pronounced with the advent of globalization. There is increased interdependence between and among different countries owing to economic and political ties. It is important to learn about international business because the external environment affects businesses and imposes different risks to local economies (Cherunilam, 2010). In other words, through international business corporations seek to reduce risk in their operations through diversification. Additionally, having knowledge on the external environment allows the management to make strategic decisions that affect long term growth and sustainability of the business operations. Because of interdependence among countries the local market is affected by global forces, and there is convergence between globalization and corporate governance (Khanna, 2004).
International business extends to international financing and there is a need to raise awareness on the role of international business on the global economy. Countries need to establish trade relations this reduces barriers to trade and facilitates business growth. Hence, it is important to understand the role of international business in easing growth prospects in a country. With increased barriers to trade, the cost of trading is likely to be higher, and the United Arab Emirates, would find it harder to obtain goods that she does not produce. Understanding international business helps business leaders to utilize their competitiveness to gain a bigger market share in the international market, and this helps to determine the strategies chosen to ensure sustainability (Pagell & Halperin, 2000). Essentially, international business would allow local companies to improve on their goods and services production, and managers who understand the impact of international business in opening up markets can t...