International Business

МИНИСТЕРСТВО ТРАНСПОРТА  

РОССИЙСКОЙ ФЕДЕРАЦИИ 

 

ФЕДЕРАЛЬНОЕ ГОСУДАРСТВЕННОЕ БЮДЖЕТНОЕ 

ОБРАЗОВАТЕЛЬНОЕ УЧРЕЖДЕНИЕ ВЫСШЕГО 

ОБРАЗОВАНИЯ 

«РОССИЙСКИЙ УНИВЕРСИТЕТ ТРАНСПОРТА 

(МИИТ)»  

 

 

Институт экономики и финансов 

 

Кафедра «Лингвистика» 

 
 
 
 

И.В. Юдина 

 
 

International Business    

 

Хрестоматия 

 

 
 
 
 
 
 
 
 
 

МОСКВА - 2018 

МИНИСТЕРСТВО ТРАНСПОРТА  

РОССИЙСКОЙ ФЕДЕРАЦИИ 

 

ФЕДЕРАЛЬНОЕ ГОСУДАРСТВЕННОЕ БЮДЖЕТНОЕ 

ОБРАЗОВАТЕЛЬНОЕ УЧРЕЖДЕНИЕ ВЫСШЕГО 

ОБРАЗОВАНИЯ 

«РОССИЙСКИЙ УНИВЕРСИТЕТ ТРАНСПОРТА 

(МИИТ)» 

 

 

Институт экономики и финансов 

 

Кафедра «Лингвистика» 

 
 
 
 

И.В. Юдина 

  
 

International Business  

 

Хрестоматия  

для студентов-бакалавров  

направлений «Экономика», «Торговое дело» 

 
 
 
 
 
 
 
 
 
 

 

МОСКВА - 2018 

УДК 42 
Ю 16 
 
         Юдина И.В. International Business: Хрестоматия. Для 
студентов-бакалавров 
направлений 
«Экономика», 

«Торговое дело». – М.: РУТ (МИИТ), 2018. - 32 с.  
 
 
          Настоящая 
хрестоматия 
предназначена 
для 

студентов-бакалавров 
направлений 
«Экономика», 

«Торговое дело».  
          Цель 
хрестоматии 
– 
научить 
студентов 

самостоятельно читать литературу на английском языке по 
специальности по широкому спектру вопросов и извлекать 
из прочитанного полезную информацию.  
 
 
 
 
 
 

 

©РУТ (МИИТ), 2018 

 
 
 
 
 
 
 
 
 

International business 

 
International business refers to the trade of 

goods, services, technology, capital and/or know 
ledge across national borders and at a global level. 

It involves cross-border transactions of goods and 

services 
between 
two 
or 
more 
countries. 

Transactions of economic resources include capital, 
skills, 
and 
people 
for 
the 
purpose 
of 
the 

international production of physical goods and 
services such as finance, banking, insurance, and 
construction. International business is also known as 
globalization. 

To conduct business overseas, multinational 

companies need to bridge separate national markets 
into one global marketplace. There are two macro-
scale factors that underline the trend of greater 
globalization. The first consists of eliminating 
barriers to make cross-border trade easier (e.g. free 
flow of goods and services, and capital, referred to 
as "free trade"). The second is technological change, 
particularly 
developments 
in 
communication, 

information 
processing, 
and 
transportation 

technologies. 
 

Forms of international business 

 

There are two forms of international business: 

export-import and foreign investment. 

1. 
Export is the sale of products that are 

produced in one country for further processing or 
resale in other countries. 

Import is the purchase of products that are 

produced in the countries of the world, for the 

purpose of further processing or sale in the territory 
of the state. 

Export-import operations include trade in goods 

(raw materials, clothing, etc.) and trade in services 
(financial, transport). 

2. 
Foreign investment is the transfer of capital 

to the subjects of one country, for further use by the 
subjects of other countries of the world. These 
investments can be both direct foreign investments 
and portfolio investments. 

Direct investments are invested in capital to 

further control the investment objects, assets. 
companies located in other countries. 
 
Types of operations: 

 Merchandise exports: goods exported—not 

including services. 

 Merchandise imports: The physical good or 

product that is imported into the respective 
country. Countries import products or goods 
that their country lacks in. An example of this 
is that Colombia must import cars since there 
is no Colombian car company. 

 Service exports: As of 2018, the fastest 

growing export sector. The majority of the 
companies create a product that requires 
installation, 
repairs, 
and 
troubleshooting. 

Service exports is simply a resident of one 
country 
providing 
a 
service 
to 
another 

country. A cloud software platform used by 
people 
or 
companies 
outside 
the 
home 

country. 

 "Tourism 
and 
transportation, 
service 

performance, asset use" 

 Exports and Imports of products, goods or 

services 
are 
usually 
a 
country's 
most 

important international economic transactions. 

 
Features of modern international business 

1) Accessibility arid universality. International 

business 
despite 
the 
legislative 
regulation 
of 

countries 
is 
increasingly 
becoming 
a 
real 

opportunity for many businesses in almost every 
country, changing its strategy and tactics to reach 
new levels of development and potential fields of 
business activity. 

2) Stepwise development. The passage of the 

stages of the firm from simple foreign trade to 
multi-national corporations and is to join the 
international business. At each stage, it is necessary 
to overcome the difficulties faced by the firm. To 
begin with, it will be the quality of the goods and 
the cost of its production, allowing the rational sale 
of goods abroad, further developing will appear 
problems of efficient use of capital and labor, etc. 

3) The 
globalization 
of 
Technology. 

International business now has the following 
characteristics: 

 
The possibility of implementation, sitting 

in the office 

 
Real-time transactions 

 
Communications help to reach the business 

markets of products, capital, labor, etc. 

4) 
Financial content. It is around financial 

content that all interests, decisions and strategies of 
international business operations revolve. 

5) the Interaction of national and international. 

The strategy of the company should be aimed at the 
use of national characteristics everywhere. This is 
manifested in the differentiation of national and 
cultural factors leading to conflicts. 

6) 
Knowledge 
and 
competence. 
It 
is 
the 

development of management that guarantees the 
success of the company, because the staff must know 
the basics of international business and use this 
knowledge in practice. 
 
Answer the following questions: 
 
1) What does international business involve? 
 
2) What do multinational companies need to conduct 
business overseas? 
 
3) Describe two forms of international business. 
 
4) What types of operations do you know? 
 
5) Speak about features of modern international 
business. 
 

International business 

 

International 
business 
includes 
all 
business 

transactions that involve two or more countries. 
Such business relationships may be private or 
governmental. In the case of private firms the 

transactions are for profit. Government-sponsored 
activities in international business may or may not 
have a profit orientation. 
There are three major motivations for private firms 
to pursue international business. These are to expand 
sales, to acquire resources, and to diversify sources 
of sales and supplies. 

Sales expansion. Sales are limited by the number 

of people interested in a firm's products and services 
and by customers' capacity to make purchases. Since 
the number of people and the degree of their 
purchasing power is higher for the 
world as a whole than for a single country firms may 
increase their sales potentials by defining markets in 
international terms. 

Ordinarily higher sales mean higher profits. If, 

for example, each sales unit has the same mark-up, 
more volume translates to more profits. Lucas film, 
for example, receives a percentage of the sales made 
by companies marketing Star Wars merchandise; 
thus Lucas film's revenues increase with each 
additional toy that Parker Kenner sells in the United 
Kingdom. In fact, profits per unit of sales may 
increase 
as 
sales 
increase. 
Star 
Wars 
cost 

approximately $10 million to produce; as more 
people see the film, the average production cost per 
viewer decreases. 

International sales are thus a major motive for 

firms' expansion into international business. A 
United Nations study indicated that among the 
largest industrial firms in the world, about 40 
percent of their sales come from outside their home 
markets. 

Resource 
acquisition. 
Manufacturers 
and 

distributors seek out products and services as well as 
components and finished goods produced in foreign 
countries. Sometimes this is to reduce their costs: 
for example, Lucas film used studios in the United 
Kingdom in the filming of Star Wars and Kenner 
manufactures its Laser Pistol in Hong Kong. The 
potential effects on profits are obvious. The profit 
margin 
may be increased, or cost savings may be passed on 
to consumers, thereby permitting more people to buy 
the products. 

Diversification. Companies usually prefer to 

avoid wild swings in their sales and profits; so they 
seek out foreign markets and procurement as a 
means to this end. Lucas film has been able to 
smooth its yearlong sales somewhat because the 
summer vacation period (the main season for 
children's film attendance) varies between the 
northern and southern hemispheres. It has also been 
able to make large television contracts during 
different years for different countries. Many other 
firms take advantage of the fact that the timing of 
business cycles differs among countries. Thus while 
sales decrease in one country that is experiencing a 
recession, 
they 
increase 
in 
another 
that 
is 

undergoing recovery. Finally by depending on 
supplies of the same product or component from 
different countries, a company may be able to avoid 
the full impact of price swings or shortages in any 
one country that might be brought about, for 
example, by a strike. 
 
 

Answer the following questions: 
 
1) What are three major motivations for private 
firms? 
 
2) What does sales expansion include? 
 
3) What do higher sales mean? 
 
4) How you explain resource acquisition? 
 
5) Give an example of diversification. 
 

The Definition and Essence  

of International business 

 
   International business historically and logically 
arises as a result of the development and deepening 
of the international division of labor and the 
formation of the world market. 
   International business can be defined as the 
business interaction of firms of different forms of 
ownership 
or 
their 
units 
located 
in 
different 

countries, the main purpose of which is to profit 
from the benefits and advantages of business 
international operations alone. 
   "International business is a business activity 
involving the use of capital in various forms and the 
benefits of increased business activity, carried out 
for profit and extends to the international economic 
sphere." 
   International 
business 
includes 
any 
business 

transactions carried out by two or more countries. 
Such business relationships may arise at the level of