3: Business in a Global Environment

Learning Objectives

By the end of the chapter, you should be able to:

  1. Explain why nations and companies participate in international trade and how they measure that trade.
  2. Describe the concepts of absolute and comparative advantage.
  3. Define importing and exporting.
  4. Explain how companies enter the international market through licensing agreements or franchises.
  5. Describe how companies reduce costs through contract manufacturing and outsourcing.
  6. Explain how cultural, economic, legal, and political differences between countries create challenges to successful business dealings.
  7. Discuss the various initiatives designed to reduce international trade barriers and promote free trade.

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