Nature of International Business
Countries across the world are endowed
with natural resources of various kinds.
But no single country uniquely possesses all natural resources required
for its people. Due to varying climatic
conditions prevailing across the world certain resources are abundantly
available in some countries, while these resources may not exist or may not be
available to the required extent in other parts of the countries. This
situation paves way for international business. In other words countries with
surplus resources have to exchange them with other countries for its deficit
resources. For example, Gulf countries are super rich in petroleum resources
but they do not have any other essential resources needed for human existence.
Hence they have to exchange the surplus petroleum resources to buy other
essential resources from other countries where they are available abundantly.
Similarly some advanced countries
produce goods and services of good quality at affordable prices using
sophisticated techniques. The developing
countries and least developed countries cannot afford to produce those goods with their
limited technical knowhow. In such a
case international business enables these countries to buy those goods from
advanced countries. This makes it necessary for international business
In
short uneven distribution
of natural resources across the
world and specialisation attained
by certain countries in the production of certain products push those countries
to exchange goods and services with one another. This exchange a warrants
International trade or International business.
Today we live in a world where the
obstacles to the exchange of the goods and technology have been substantially
reduced. Due to advancement of technology the national economies are
increasingly becoming borderless and getting progressively integrated into the world
economy. The contemporary world is called as ‘global village’. Business in
today’s context is not restricted to the mere boundaries of the country but
also expands to boundaries of the
several other countries. Due to tremendous development in the information and
communication technology (ICT ) and rapid advancement in transportational
system more and more firms engage in international business which presents them
with numerous opportunities for their faster economic growth and increased
gains.
India has been trading with other
countries fairly for a long period of time. It has played a vital role in
international business from the ancient period. But it has of late considerably
speeded up the process of integrating with the world economy and phenomenally
increased its foreign trade and investments.
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