International business consists of transactions that are devised and carried

out across national borders to satisfy the objectives of individuals and

organizations. The direction and management of business activities among two or
more countries is known as international management. The process of direction
and management of the activates which have arisen from transferring the goods
and services measuring by money or as equivalent to money from one country to
another is known as international management. In other word, international
management means the import and export of goods and services, capital, human,
resources and other services from one country to another country

Importance of International Management

Management means the social activities which are maintained appropriately in
different countries business, industry culture, sports behavior etc. Management has
a great importance in coordinating and directing the business which is done among
two or more companies and in the case of multinational company when it conducts
its activities. The importance of international management is given below Development of national economies: For the success of international
management, one should coordinate the indigenous and international
elements. By coordinating the human and nonhuman assets, one can achieve
the objectives. By directing the international activities successfully, it is
possible to play an important role in the development of national economy.
Development of human resources: Management team should be skillful
and qualified to sustain in the international competitive market. So, training
should be given to all level of mangers. In this way, an organization can get
developed human resources.

 Large scale of production: The organizations which are directing by

international management, the production scale of these are generally large.
Because, these is no alternative of large scale of production to sustain in the
competitive market. And by large scale of production and by management an
organization can achieve it specific objectives.
Reduction of cost: By directing the international managerial activities
skillfully and effectively, it can be possible to reduce cost. By utilizing the
skill and experience of the mangers in every level of production and supply
an organization can reduce cost and can achieve objectives.
Utilizations of resources: For the proper utilization of indigenous and
international resources, strong and effective management is receded. No
country can be developed without proper utilization of resources.
Increase efficiency and effectiveness: International management works
very widely. So, its management must be more effective and efficient. So.
Different kinds of training programs are taken at different levels for
developing the human resources. By increasing the efficiency and
effectiveness, international management tries to achieve objectives.
Technological development: It is impossible to develop a national or
international organization without technological development. Because it is
the age of technology. One of the main aim of international management to
achieve organizational objectives by utilizing the modern technology in
every sphere of production and supply.

Development leadership: For achieving the organizational goal, managerial

activities have to do effectively and efficiently. It is not possible to complete
manorial activities efficiently without appropriate leadership. By
international monument, it is possible to develop worldwide leadership.

 Achievement of objectives: The main aim of management is to achieve the

forecasted objectives. For fulfilling these objectives, different kinds of
elements are coordinated. International management completes its all
activities successfully by effective management and leads to achieve
objectives.

Research and Development: For developing the international management,

there is no alternative of effective and efficient research. By researching
many new goods and technology can be innovated for the management.
Business Climate: The state of the business environment, the economy, and
the stock market.
Export: A good or service that is produced in one country and sold in
another country.
Foreign Direct Investment (FDI): Establishment of a subsidiary operation
or a joint venture in a foreign country, used when a company in one country
wishes to expand into another country.
Goods: Raw materials, semi-manufactured goods, or manufactured goods.
Import: A good or service brought into a country for sale.
International Business: Business activities needed to create, ship, and sell
goods and services internationally from producer to consumer; includes
international trade, importing and exporting goods and services, licensing
the use of assets in other countries, and foreign investment.
Organization for Economic Cooperation and Development (OECD): A
monitoring agency that offers governments a setting in which to discuss and
develop economic and social policy.

 Outsourcing: To obtain goods, parts, materials, or services from an outside

source.
Portfolio Investment: Purchase of shares and bonds for the income they
yield or the capital gains they may bring, and not for exercising of
ownership or control.
Private-sector Investment: The private sector's commitment of money or
capital to projects.
Products: A good or service.
Public-sector Investment: The public sector's commitment of money or
capital to projects in order to gain financial return.
Raw Materials: Materials in their natural state, such as cotton, coal, fish,
minerals, and wood.
Services: Activities that individuals, groups, organizations, or companies
perform to advise or assist other individuals, organizations, or companies.
Every company is trying to expand its business by entering foreign markets.
International business helps in the following ways: Helps as growth strategy: - Geographic expansion may be used as a
business strategy. Even though companies may expand their business at
home.
Helps in managing product life cycle: - Every product has to pass through
different stages of product life cycle-when the product reaches the last stages
of life cycle in present market, it may get proper response at other markets.
Technology advantages: - Some companies have outstanding technology
advantages through which they enjoy core competency. This technology
helps the company in capturing other markets.

 New business opportunities: - Business opportunities in overseas markets

help in expansion of many companies. They might have reached a saturation
point in domestic market.

Proper use of resources: -Sometimes industrial resources like labor,

minerals etc. are available in a country but are not productively utilized.

Availability of quality products: - When markets are open, better quality

goods will be available everywhere. Foreign companies will market latest
products at reasonable prices. Good product will be available in the markets.

Earning foreign exchange: - International business helps in earning

foreign exchange which may be used for strategic imports .India needs
foreign exchange to import crude oil, deface equipment, raw material and
machinery.

Helps in mutual growth: - Countries depend upon each other for meeting
their requirements. India depends on gulf countries for its crude oil supplies.
Investment in infrastructure: - International business necessitates proper
development of infrastructure. A company entering international business
must invest in roads.
International business by multinational so the complexities are also related
to their working. Some of these complexities are discussed as follow: Controlling the market: - Multinational try to control the market of the
host country. Whenever they enter a new country, the first strategy is to
eliminate the competitors either by taking over their business or forcing
them out of market by following price reduction policies.
Exhausting natural resources: - Multinational corporations set up their
production facilities in those countries where natural resources are available
in sufficient quantities.

 Importance to luxuries: - Multinational corporations enter those areas

where margin of profits is high.

Trade practices: - Since multinational corporations have their head office

in one country and the trade practices followed there are adhered to.
Economic development: - It is generally felt that the entry of businessmen
from outside may help in the economic development of that country. The
actual practice in many countries is different.
Shifting of investment: - International business is related to profitability of
its operations. If a business is getting sufficient profits in a particular country
then the investment remain there.

From the above discussion, it is clear that, for achieving the business goals
correctly, one should collect information and data about the market condition and
business environment and should analyzed and evaluate and take decisions on the
basis of these data and information before entering into a foreign market.