Page 100 - Business Principles and Management

Chapter 4 • International Environment of Business

long-term loans to less-developed countries to develop basic industries and facil-
ities, such as roads and electric power plants.
Another factor that has helped international business is the tremendous
advances in communication and transportation. Telephone, fax, and the Inter-
net have made it cheaper and quicker to obtain information from around the
world and conduct business round the clock. The Internet and television broad-
casts enable firms to advertise their products worldwide and create a global
consumer culture. Faster and cheaper transportation has meant that firms can
easily ship goods long distances. For example, thanks to air transport, tulips
grown in the Netherlands are shipped daily to florists in New York City.
Since the early 1990s, the world has seen a move toward free-enterprise
practices. Many governments have reduced their control over the economy. Sev-
eral types of businesses that were strictly regulated by the government, such as
telecommunications and airlines, have been opened up to competition. In many
foreign countries, business enterprises owned by the government have been sold
to private owners—both domestic and foreign. All these changes have opened
up new investment and trading opportunities for foreign firms.

CHECKPOINT
Explain why there has been growth in international business.

4.1 Assessment

UNDERSTAND MANAGEMENT CONCEPTS
Circle the best answer for each of the following questions.
1. International business has become more dominant in the
United States since
a. 1900
b. World War I
c. World War II
d. 2000
2. NAFTA includes
a. the United States and the EU
b. the United States and Canada
c. the United States and Mexico
d. the United States, Canada, and Mexico

THINK CRITICALLY
Answer the following questions as completely as possible.
3. List the countries where most international trade occurs.
4. Give four reasons why a firm may go into
international business.

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