This document discusses chapter 2 of an international entrepreneurship course. It covers topics like globalization, how it affects entrepreneurial environment, reasons for growing global entrepreneurs and entrepreneurship, advantages and disadvantages, and strategic considerations for going global. Key points include how globalization facilitates technology entrepreneurship, creates new market opportunities, and allows companies to find lower production costs. International political, economic, socio-cultural, and technological environments shape entrepreneurial success abroad.

1. Skyline University Kano Nigeria
INTERNATIONAL ENTREPRENEURSHIP
Course Code: ENT4311
Fall 2022
Class Venue: C14
chapter 2:
Topic: Globalization and International Entrepreneurial Environment
Dr. Saidu Nasiru Sulaiman
Senior Lecturer: Entrepreneurship and Innovation
School of Art, Management and Social Sciences

2. Chapter 2: Globalization and International
Entrepreneurial Environment
-What is Globalization?
-How Globalization Affects International Entrepreneurial Environment
-Reason Behind the Growing of Global Entrepreneurs
-Reason Behind the Growing of Global Entrepreneurship
-Advantages and Disadvantages of Globalization and International
Entrepreneurship
-International Entrepreneurial Environment
-Strategic Effects of Going Global
- Strategic Issues and Important Considerations

3. What is Globalization?
Globalisation is the worldwide trend of economic
integration across borders allowing businesses to
expand beyond their domestic boundaries.
Globalisation is the international trend of the
economies of the world becoming borderless and inter-
linked. Companies are no longer limited by their
domestic boundaries and may conduct any business
activity anywhere in the world.
Globalisation means companies are likely to compete
anywhere in the world (e.g. produce and sell anywhere,
source raw materials anywhere, conduct Research and
Development anywhere etc.)
Globalization of business is the change in a business
from a company associated with a single country to one
that operates in multiple countries.

4. How Globalization Affects International Entrepreneurial
Environment
Globalization affects entrepreneurship in various important ways:
First, globalization facilitates technology entrepreneurship
by fostering the rise of innovation ecosystems through out
the world. Internet crosses national boundaries with a click of a
mouse allowing even the smallest business to go global.
Globalization may also create a demand for new, more
diversified products through cross-cultural exposures and
for higher end goods and services through increased prosperity.
This change in demand may help form new market niches and
create new entrepreneurial opportunities.
Globalization makes trade barriers to be falling and world trade
among countries which increased the flow of goods, services,
capital, people, and ideas across international boundaries.

5. How Globalization Affects International Entrepreneurial
Environment
Globalization allows companies to find lower-cost ways to
produce their products. It also increases global competition,
which drives prices down and creates a larger variety of choices for
consumers. Lowered costs help people in both developing and
already-developed countries live better on less money.
Globalization makes money to flow more freely across national
borders as companies seek the best rates for financing anywhere in
the world and investors look for best returns anywhere in the world.
Companies can no longer afford to assume that their success in
their home market equates to long term profitability or survival.

6. How Globalization Affects International Entrepreneurial
Environment
Globalization leads to the increased interconnectedness of
national economies; it creates more wealth in developing,
countries. Entrepreneurship development is the process of
enhancing the skills and knowledge of entrepreneurs through
different training and classroom programs.
Globalization changes the way nations, businesses and
people interact. Specifically, it changes the nature of economic
activity among nations, expanding trade, opening global supply
chains and providing access to natural resources and labor
markets.

7. Reason Behind the Growing of Global Entrepreneurs:
The research study found that the principal factors
influencing the early internationalization of
international start-ups are:
the international vision of the founders,
their desire to become international market leaders,
the identification of specific international
opportunities, and
the possession of international contacts and
acquaintances

8. Reason Behind the Growing of Global Entrepreneurship
A combination of developments in technology, financing and
corporate culture is behind the rising power and leverage of small
companies to go global.
Seeking of foreign investment by countries: This is because foreign
investment boost economic growth by introducing innovative
technologies, products, and services.
Increasing local competition from entrepreneurs challenges existing
firms to become more competitive.
International entrepreneurial activity raises the productivity of firms
and economies.
Often entrepreneurial companies play a significant role in economic
development not just on national level, but within the global economy.
Moreover, one of the most important aspects of entrepreneurship
is that it creates opportunities for employment; therefore it affects
local societies in a most positive way.

9. Advantages and Disadvantages of Globalization and
International Entrepreneurship
Advantages
As a result of globalization, we all
enjoy many advantages. these are-
1. Transfer of Technology
2. Better Services
3. Standardization of Living
4. Development of Infrastructure
5. Foreign Exchange Reserves
6. Economic Growth
7. Affordable Products
8. Contribution to World GDP
Growth Rate
9. Extensions of Market
Disadvantages
The globalization impacts us in
multidimensional way. So it has
some disadvantages also. These are-
1. Growing Inequality
2. Increasing of the Unemployment
rate
3. Trade Imbalance
4. Environmental Loots

10. International Entrepreneurial Environment
An international entrepreneurial environment
refers to the atmosphere in which international
companies run their businesses.
International entrepreneurial environment is
the foreign countries where international
entrepreneurs operate.
The international entrepreneurial environment
serves as an avenue for international
entrepreneurs to earn foreign income outside
their country of existence.
In short, international entrepreneurial
environment can be refers to as foreign or global
operations.

11. International Entrepreneurial Environment
Entrepreneurs all over the world seek ways of introducing their
products to international markets; unfortunately, the international
entrepreneurial environment poses a lot of opportunities and threats
to foreign entrants.
The cultural, political, economic and technological environments act as
determinant factors in entrepreneurial success in global markets. As
such, international entrepreneurial environment comprises the
followings:
• International Political/legal Environment
• International Economic Environment
• International Technological Environment
• International Socio-Cultural Environment

12. International Entrepreneurial Environment
•International Technological Environment :
International entrepreneurial environment has
many positive aspects in spite of various issues,
such as it contributes new technology,
infrastructure development, managerial skills,
creating jobs, providing better services, and
bringing in investment capital from other
countries by exporting products.
•International entrepreneurs have to deal with the
technological advances that are changing the
nature of their products and services and requiring
them to operate imaginatively and effectively in
the foreign markets.

13. International Entrepreneurial Environment
•International Political and Legal Environment : International entrepreneurial
environment is multidimensional including the political risks, exchange risks, legal &
taxation issues.
•Therefore, International political environment comprises the political risk, political
institutions, government policies, tax, legal system etc.
•Political risk is threat from social, legal political or economic factors in a foreign
country may affect the operation and profitability of an organization's global
operation.
•Tax rate also play significant role in attracting or otherwise of foreign entrepreneurs.
•Some countries limit foreign ownership in particular industries. The imposition
of quotas, tariffs, local content requirements can also be issues to international
entrepreneurs.
•Legal system represents unique system of regulations, rules and law of a country.
Different countries have different legal system (i.e. common law, civil law, sharia law
etc.)
• There are a number of laws that regulate the conduct of businesses that cover such
matters as standards of products, packaging, promotion, protecting consumer
interests and local industries, protecting the environment, due to globalisation
regulations have become stronger in many countries.
•Government policies such as the industrial policy, fiscal policy, and tariff policy;
these changes often have profound impacts on businesses especially entrepreneurs;
however, some policies create opportunities as well as threats.

14. International Entrepreneurial Environment
•International Socio-Cultural Environment : this involves
pervasive national socio-cultural factors such as norms, values,
roles that guide people in a particular way in a particular society.
It tells you what behaviors appropriate, what is not.
•International entrepreneurship deals not only with cross
borders, they also deals with cross cultures. Culture profoundly
influences how people think, communicate, and behave. It also
affects the kinds of transactions they make and the way they
negotiate them.
•Culture can manifest itself in various ways. This is why
understanding of national culture is necessary for any
international entrepreneur.
•Through understanding culture, international entrepreneurs can
manage diversity in their organisations.
•Understanding culture can be a source of competitive advantage,
because can create something to fit the cultural values.
•The socio-cultural fabric is an important environmental factor
that must be analyzed while formulating international business
strategies.

15. International Entrepreneurial Environment
•International Economic Environment : this involves
economic system that guide the system of production
(capitalist, socialist or mixed economy).
•Economic system has implication for international
entrepreneurship. A policy of a free international trade
environment strengthens the economies of all countries.
•The competition from imports and exports leads to lower
prices, better quality of products, wider selections and
improved standards of living.
•Factors like economic policies, economic condition (i.e.
purchasing power, income, consumption and savings),
economic resources (i.e. capital, raw materials,
infrastructures),.
•Economic factors like inflation, deflation, unemployment,
exchange rate fluctuations, interest fluctuations, can affect
the operations of international entrepreneurs

16. International Entrepreneurial Environment
• International entrepreneurs/managers must understand
how these environments are changing and the impact of
those changes on the business.
• This is because these environmental factors are
unpredictable, uncontrollable and in most times form the
basis for decision for local entrepreneurs to break into
new markets.
• Therefore, it is mandatory for the people at the
entrepreneurial/managerial level to work on the factors
that comprise of International Entrepreneurial
Environment.

17. Other Strategic Issues
• Moving your business to an International location can sound like a
desirable prospect at first glance. There might be better opportunities,
better living conditions, or perhaps the city may be more aligned with
your political and social convictions.
• Going global is the company’s effort to expand its business reach
throughout the world. It not only talks about the customer base but also
the production facilities, decision making, management, and revenue.
• Therefore, there are other strategic issues:
-Tax consideration
-Overhead costs
-Hidden costs
-Growth possibilities
-Impact on customers
-Logistics

18. Stages of Going Global
The level of business participation in the global economy usually goes through stages:
• Domestic: The entrepreneur’s operations are limited to the domestic market where
local or national markets are the main target of the company. Likewise, raw materials
and labor usually rely on local supplies, though not always.
• International: The entrepreneur started to enter the international market by
exporting its products to various countries.
• Multinational: the entrepreneur operates production facilities abroad by building
factories in various countries. The company has a centralized structure, with the head
office in the country of origin. The head office makes decisions about what products
are produced and developed. They create special offers for markets in each country.
• Global: Global companies invest and are present in numerous countries. They
market a consistent product image and the same brand for various countries,
emphasizing volume, cost management, and efficiency. The head office is responsible
for global strategy.
• Transnational: Transnational business is far more complex. Companies invest in
foreign operations and delegate decision making, R&D, and marketing for each
foreign subsidiary. They have an efficient and integrated global strategy while
maintaining responsiveness to local and regional markets.

19. Strategic Effects of Going Global
Two Major Issues:
1. Physical Proximity To Customers
2. Psychological Proximity To Customers

20. Physical Proximity To Customers
This involves physical closeness
•Proximity paradox: Sometimes a foreign
market that is geographically close may
inhibit the perceived psychological closeness
of a market
Eg. Canada and USA

21. Psychological Proximity To Customers
This involves psychological closeness
1. perception vs. reality
•Perception of closeness/distance may be perceived rather than
real, e.g. Canadian and Australian entrepreneurs focus too much
on the similarities their countries have with the USA rather
than the vast differences
2. Closer psychological proximity makes it easier for an
entrepreneur to enter a market
3. All entrepreneurs are basically alike regardless of country

22. Strategic Decision Process of Going Global
1. Stage 1: First Movements
•Highly centralized decision-making process
2. Stage 2: Successful Business
•Decentralize decision-making
3. Stage 3: Longer term success
•Centralize some decision-making process

23. 7 Strategic Keys to Going Global
Global entrepreneurs need to be ready to address a number of
challenges to make a success of it. Below are some specific challenges of
going global.
1. Learn the legal systems where you intend to open up
2. Alter your pricing model as you learn
3. Empower regional leaders
4. Be prepared to just be international, not multinational
5. Accept local business customs, don't fight them
6. Profit is sanity, revenue is vanity
7. Make sure you enjoy the journey

24. Entry Strategies into International Entrepreneurial Market
• International market entry strategies provide businesses with a roadmap to
enter into foreign markets. Because there are many methods companies can
use to sell their goods globally, they will choose the best approach based on
their goals and target market.
• Understanding market entry strategies and their differences can help you
decide which strategy offers the most benefits to your company, in a given
country at a given time.

25. Entry Strategies into International Entrepreneurial Market
• Exporting – Indirect & Direct Exporting
• Non equity arrangements – Licensing, mgmt. contracts, turnkey
projects
• Direct foreign Investment
• Minority interest
• Majority Interest
• Joint ventures
• Mergers and acquisition
Horizontal merger, vertical merger, product extension merger, market extension
merger, Diversified activity merger.

26. Strategic Issues and Important Considerations
There are two types of strategic issues; external and internal.
External strategic issues arise due to factors beyond your control.
Internal strategic issues are ones which your organization faces because
of internal factors.
Entrepreneurial partnering is good strategy of entering into
international market.
Trade barriers
Complicated distribution system
GATT (General Agreement on Tariff and Trade)
FTA (Free Trade Agreement)
NAFTA(US, Canada, Mexico trade agreement)