We analyse the appropriate means for engaging in international trade and expansion given the nature of and circumstances facing the organisation and with consideration for the impact on the common good, society, and the environment. How organisations evaluate, plan, and undertake international engagement and expansion are considered. We examine why businesses engage in international trade and business and consider the role that economics, politics, and culture play in the decision to operate internationally. This unit is designed to introduce students to the issues involved in undertaking business in the global marketplace.
Political uncertainty can affect transaction exposure ©2004 Prentice Hallīenefits No capital outlay Potential for capital gain if home currency rises in value Costs Potential for capital loss if home currency falls in value Go Naked ©2004 Prentice Hallīenefits Elimination of transaction exposure Flexibility in size and timing of contract Costs Fees to banks Lost opportunity for capital gain if home currency rises in value Buy Forward Currency ©2004 Prentice Hallīenefits Elimination of transaction exposure Ease and relative inexpensiveness of futures contracts Costs Small brokerage free Inflexibility in size and timing of contract Lost opportunity for capital gain if home currency rises in value Buy Currency Future ©2004 Prentice Hallīenefits Elimination of transaction exposure Potential for capital gain if home currency rises in value Costs Premium paid up front for option because of its “heads I win tail I don’t lose” nature Inflexibility in size and timing of option Buy Currency Option ©2004 Prentice Hallīenefits Elimination of transaction exposure Costs Effort or expense of arranging offsetting transaction Lost opportunity for capital gain if home currency rises in value Acquire Offsetting Asset ©2004 Prentice Hall
The Itaipu Dam the Parana River between Brazil an Paraguay ©2004 Prentice Hall Table 18.1 Payment Methods for International Trade ©2004 Prentice Hall Map 18.1 Countertrade by Marc Rich ©2004 Prentice Hall