The document presents a framework for analyzing the international business environment, highlighting the complexity and interdependency of eight key levels including international framework, globalization, national objectives, and foreign trade activities. It outlines the roles of various organizations, impacts of globalization, and necessary considerations for companies of differing sizes and strategies. The conclusion emphasizes the framework's utility in understanding international trade's effects on national economies, including job creation and increased purchasing power.

1. Framework For Analysing
International Business Environment
Amit Gwaskoti
Pranav Kishor Choudhary
MBA 1st Year

2. Introduction
• Framework demonstrates
the complexity and
independency of different
levels in international
business management.
• There are 8 Levels and each
level has different goals and
directions

3. Levels of Framework
• Level 1: International framework
• Level 2: Globalisation
• Level 3: National objectives
• Level 4: Location
• Level 5: Company
• Level 6: Foreign trade activities
• Level 7: Foreign trade financing
• Level 8: International business

4. Level 1: International framework
• At this level, there are two kinds of organisations with the objective to
develop the world trade activities and to improve the world market
sales.
a) International financial institutions
• The World Bank, International Monetary Fund, National Reserve Banks,
European Central Bank, and other National Financial Institutions
b) Organisational institutions
• WTO, EU, NAFTA, MERCOSUR, ASEAN, etc. (TTIP)

5. Level 2: Globalisation
a) CHANGE OF ECONOMIC POLICY
b) LIBERALISATION OF INTERNATIONAL TRADE AND CAPITAL
c) INTERNATIONAL STANDARDS AND NORMS

6. 2.1 - CHANGE OF ECONOMIC POLICY
• Deregulation of employment markets
• Privatisation of nationalised companies
• Reduction of taxes for earnings and property incomes
• Simplification of the international capital flows
• Improvement of the chance to success for companies to create an
attractive climate for investments

7. 2.2 - LIBERALISATION OF
INTERNATIONAL TRADE AND CAPITAL
• Simplification of trade in
goods and services as well as
the transfer of capital
• General Agreement on Trade
and Tariffs (GATT) of 1948
was basis for the worldwide
free movement of goods

8. 2.3 - INTERNATIONAL STANDARDS AND NORMS
• Businesses have to comply with
international norms.
• Products are need to made to
meet international standards.
• Compatibility of the products
becomes universal.
(Car industry, configuration of
copy machines, and printers)

9. Globalisation process has different impacts
depending on the size and strategy of a company
Size of company Strategy Problems Task of government
Multinational companies Internationalisation
Shifting the jobs to abroad
(low-cost countries)
Support of passive foreign
direct investment
Middle-sized companies Regionalisation
Lack of competitiveness to
compared with
multinationals
Tax relief and support of
active foreign direct
investment
Small-sized companies Specialisation Lack of cheap capital
Improvement of domestic
capital market and cheap
loan

10. Level 3: National objectives
• Political stability
• Infrastructure
• Trade Policy

11. 3.1 - Political stability

12. 3.2 - Infrastructure
• Material infrastructure
• roads, harbours, railways, airports,
bridges, etc.
• Institutional infrastructure
• banks, insurance companies, and
financial markets
• Personnel infrastructure
• quality and quantity of
professional educated people

13. 3.3 - Trade policy
• Trade policy depends on elected
government.
• It could be progressive or
digressive.
• The government may (or may
not) support the companies.
• The national frameworks for
companies in international
business may differ from country
to country

14. Level 4:
Location

15. Level 5: Company
1. Company organisation and its production structure
• Size, product, management, finance, research and development
2. Decision-making process (international management)
• Professional competence (technical education and experience)
• Social competence
• Cross-cultural competence

16. Level 6: Foreign trade activities
1. Basic types of international trade
1. Exports (direct/indirect)
2. Imports (direct/indirect)
3. Transit trade (through third country)
2. Special types of international trade
1. Across the border processing
2. Licensing, franchising
3. Foreign direct investment (FDI) and joint ventures

17. Level 6: Foreign trade activities
• These choices will Increase competitiveness by
• Reducing production costs abroad (cost and location advantage),
• Accessing core resources (safeguard supplies of raw materials),
• Making easier market entry in case of trade barriers,
• Lowering taxation on earnings in the host country,
• Reducing exchange risk (risk avoidance).

18. Level 7: Foreign trade financing

19. Level 8: International business
• Reduction of unemployment rate.
• Increasing purchasing power.
• Welfare in the countries

20. Conclusion
• This theoretical framework of international
business environment helps in
understanding different factors of
International trade.
• International trade brings the economy of
a country to higher levels of equilibrium.
• It reduces and unemployment and
increases purchasing power.

21. Sources
Schapour Zafarpour (October 14th 2015). A Theoretical Framework
(Modelling) for International Business Management, Perspectives on
Business and Management, Vito Bobek, IntechOpen, DOI:
10.5772/60903.
Vienna University for Economic and Business, Austria
Available from: https://www.intechopen.com/books/perspectives-
on-business-and-management/a-theoretical-framework-modelling-
for-international-business-management