International Business

I. Read and learn the following words and word combinations. Translate the examples:

acquire v – набувати, отримувати, придбати; to acquire knowledge – набу­вати знання; to acquire resources – отримувати ресурси

acquisition n – 1) отримування, набування; 2) поглинання (фірм); 3) збір даних; syn. to get, to receive, to obtain

e.g. A domestic business acquires all its resources and sells all its products within a single country.

revenue n – 1) прибуток, надходження; 2) pl. прибуткові статті; losses and revenues – витрати і надходження; syn. earnings, profits, income; national/public revenues – державний прибуток/надходження; personal revenue – особистий прибуток

e.g. The company revenue has been steadily increasing in recent years.

global adj– 1) світовий, всесвітній; 2) спільний, загальний; global economic order – світовий економічний порядок; on the global scale – у світовому масштабі

globalize v – глобалізувати

globalization n – глобалізація

e.g. In today’s globalized economy multinational companies play a leading role.

diverse adj – 1) відмінний, несхожий; 2) різний, різноманітний

diversify v – 1) урізноманітнювати, диверсифікувати; 2) (AE) вкладати гроші в різні підприємства

diversification n – 1) розходження; 2) різноманітність, багатоманіт­ність; 3) розширення асортименту; 4) диверсифікація

e.g. Diversification of activity is the strategy of big companies, aiming tо penetrate diverse markets.

option n – 1) вибір, право вибору або заміни; 2) предмет вибору; варі­ант; 3) опціон, угода з премією

e.g. In a big supermarket a customer may choose among several options.

venture n – 1) ризиковане підприємство; 2) спекуляція; 3) комерційне підприємство; joint venture – спільне підприємство; to form/to set up/to establish a joint venture – організувати спільне підприємство

e.g. Establishing a joint venture is one of the ways to expand internationally.

subsidiary n – дочірня компанія, філія; syn. affiliate, branch

e.g. Multinational corporations run subsidiaries in different parts of the world.

legislation n – законодавство; current legislation – діюче законодавство; domestic/local legislation – місцеве законодавство; national/international legislation – національне/міжнародне законодав­ство; syn. jurisdiction, administration

e.g. Local legislation secures foreign business investments.

environment n – навколишнє середовище, оточення; business environment – ділове середовище; natural environment – природне середо­вище; environmental – те, що стосується навколишнього середо­вища; environmental protection – захист навколишнього середо­вища

e.g. Having lived for 10 years in this region, he has better understanding of the local environment.

II. Read and translate the text:

International Business

Business can take many different forms and can be conducted at different levels. Based on the level of business activity business may be defined as either home or domestic, international, and multinational. If business acquires all its resources and sells all its products within a single country it is considered a domestic business. Although international business is also based in a single country it acquires a meaningful share of its resources and revenues from other countries. A multinational business operates on the world-wide scale regardless of national boundaries.

More and more domestic businesses decide to enter international markets and become international, while international companies expand and become multinational (transnational). This phenomenon is called globalization – the evolution of economy that comprises interrelated markets. The decision to adopt a global or nationally focused strategy depends upon both markets and technological con­siderations.

There are three primary motivations for firms to engage in international business: 1) to expand sales; 2) to acquire resources; 3) to diversify sources of sales and supplies. When a business decides to expand internationally , i.e. adopts a global strategy, it may choose among several options, including importing or exporting merchandise (visibles), service exports and imports (invisibles), foreign investment in the form of either direct or portfolio investments, setting up joint ventures or subsidiaries.

Many countries now have foreign trade offices that help importers and exporters, interested in doing business within their borders. Although many mechanisms exist for promoting the growth of international business, there are also many barriers to doing business abroad. The major factors causing changes in world trade and investment patterns are economic conditions, technology and political relations.

The economic factor that influences the decision to engage in business beyond national borders includes the level of economic development in various countries, the presence of adequate infrastructure, a country’s balance of payments and monetary exchange rates. The political element is associated with the degree of political risk concerning a particular country, trade barriers erected by govern­ments, legislation encouraging foreign business investments. The technological factor includes various methods of technological transfer.

A considerable amount of international business is conducted by multinational corporations though midsize and even small companies may also engage, especially when they offer a unique product and/or good value. Regardless of the size of the company that is expanding internationally, its top-level managers have to subscribe to one of three basic orientations or philosophies concerning the methods of operating: ethnocentric, polycentric and geocentric. A company that assumes an ethnocentric philosophy implements abroad practices that work in its home-country. On the contrary, a polycentric orientation is based on the belief that the nationals in the host-country have a better understanding of the local environment and thus should run the operation of the subsidiary. As a result subsidiaries in various countries operate almost independently under the direction of local staff and are tied to the parent company mainly through the financial control. A geocentric (world) orientation views major questions such as “Where in the world shall we raise money, build our plant, conduct research and development, develop and launch new ideas to serve our present and future customers?” from a global perspective at both the headquarters and subsidiaries. The geocentric approach is the most difficult to achieve as it requires that the managers acquire both local and global knowledge.

III. Answer the following questions:

1. How do we discriminate between domestic, international and multinational business?

2. What is the usual way of business expansion?

3. What are the primary motivations for firms to become international?

4. Through what mechanism can business become international?

5. What factors cause changes in world trade and investment pattern?

6. What is the essence of economic/political/technological factor?

7. In what cases do midsize and small companies engage in international business?

8. What are the philosophies concerning the international business running?

9. How is an ethnocentric approach implemented?

10. What is the essence of a polycentric approach?

11. How do the companies apply a geocentric approach?

12. What is the meaning of the word “environment” in the context?

IV. Give Ukrainian equivalents of the following:

within a single country; to operate on the world-wide scale; interrelated markets; sources of sales and supplies; merchandise; foreign trade offices; beyond national borders; monetary exchange rate; legislation encouraging smth; midsize company; to subscribe to a certain philosophy; to operate almost independently; to raise money.

V. Give English equivalents of the following:

рівень бізнесової діяльності; значна частка; незважаючи на …; при­ймати глобально спрямовану стратегію; прямі або портфельні інвести­ції; сприяти зростанню міжнародного бізнесу; система світо­вої торгівлі та інвестицій; відповідна інфраструктура; ступінь політич­ного ризику; менеджери вищої ланки; батьківщина; країна, що приймає; започаткувати; вперше застосувати нову ідею.

VI. Match the definition on the right with the word on the left. Learn the definition:

revenue	becoming larger, enlargement
merchandise	undertaking in which there is a risk
venture	income, especially the total annual income of the state
expansion	group of assistants working together under a manager or head
staff	goods bought and sold

VII. The text contains words that also exist in your native language, the so-called international terms, e.g. infrastructure – інфраструк­тура, product – продукт. Write out from the text all the words of such kind (mind their pronunciation and stress) and group them into two categories: 1) general terms, e.g. base; 2) specific terms, e.g. business.

8. Based on the contents of the text explain the meaning of ethno-, poly, geo- in the words ethnocentric, polycentric, and geocentric.

9. Fill in the gaps with the words from the list below: