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  • Print publication year: 2004
  • Online publication date: June 2012

3 - International Dimensions of Business and Commerce

Summary

business firms increasingly operate in a global environment, obtaining goods and services from companies worldwide, participating in a global virtual corporation, and working as part of international strategic alliances. One key dimension of increasing globalization has been the dismantling of barriers to trade and investment. From the 1950s to 1993, for example, world trade grew at an average compound rate of 10% annually. Investment also has grown rapidly in recent decades, stimulated by the removal of restrictions and by international rules that provide assurances to investors against discriminatory or arbitrary treatment.

A second international dimension is the enormous growth in recent years of multinational enterprises. Such firms operate across national boundaries, frequently in multiple countries. Therefore, in today's global marketplace, it may be difficult to decide, for example, what constitutes an American company. Is Chrysler an American company or a foreign company? Is a U.S.-based multinational company that derives more than one-half its revenues and profits from operations outside U.S. borders an American company? Just because a company is incorporated in Delaware does not make it an “American” company. Such a company may be principally doing business outside U.S. borders and for the benefit of foreign nations. All these changes complicate the problems of economic espionage.

Effects of the New Technology and Threats to Business Interests

Global markets are increasingly affected by issues of trade secret protection.