The significant of international Business in the 21st century

According to Peng and meyer International Business refers to businesses (firm’s ) that engages in international cross-border economic activities and or the action of doing business abroad.Companies decide to go global and enter international market for various reasons e.g. Multinational enterprises, (MNE),this are firms that engages in foreign direct investments and operates in multiple countries. Some reasons why Firms choose do business internationally is to diversify the market and customer base, access cheaper labour, affordable resources, e.g raw materials, increasing sales/profits. International business can also be affected by certain factors such as inflation, impact on national income, government policies, subsidies for exporters, impact on exchange rates , technologies, and even restrictions on imports.
IMPORTANCE OF MULTINATIONAL ENTERPRISES (MNE’s) 1. Mmultinational enterprises are important source of foreign direct investment (FDI). Besides, it is through multinational enterprises that modern high technology is transferred to the developing countries. In addition to this basic issue, a big firm may decide to set up and operate business units in other countries to benefit from advantages of location and low labour costs, for example, it has been found that giant American and European firms set up production units to explore and refine oil in Middle East Countries because oil is found there. Similarly, to take advantages of lower labour costs, and not strict environmental standards. 2. A MNE investing in an area may result in a significant injection into the local economy. This may provide jobs directly or through the growth of local ancillary businesses such as banks and insurance. It might initiate a multiplier process generating more income as newly employed workers spend their wages on consumption. 3. MNEs may provide training and education for employees thus creating a higher skilled labour force. These skills may be transferred to other areas of the host country. Often management and entrepreneurial skills learned from MNEs are an important source of human capital. 4. MNEs will contribute tax revenue to the government and other revenues if they purchase existing national assets as in the case in Botswana through the privatization process. 5. Increased quality and efficiency: Exposure to foreign competition will encourage increased efficiency. Doing business in the international market allows firms to improve the quality of their product in order to gain a competitive advantage 6. MNEs are important as they can also engage in Corporate social responsibility (CSR).
Peng and Meyer explains CSR as the consideration of, and response to issues beyond the narrow economic, technical and legal requirements of the firm to accomplish social benefits along with the traditional economic gains which the firm seeks.
The consensus amongst Varied Authors is that CSR should entail:......
-Ethical Business Behaviour
-Compliance with legal requirements
-Respect for the stakeholders (human capital, communities, Investors, customers and suppliers)
-The CSR should look beyond making Profits, for example Tom's Shoes, a company with CSR at its core, donates one pair of shoes to a child in need for every pair a customer purchases

- Reference http://www.businessnewsdaily.com/4679-corporate-social-responsibility.html#sthash.mFEFriKI.dpuf

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In order to increase their profitability many giant firms find it necessary to go in for horizontal and vertical integration. For this purpose they find it profitable to set up their production or distribution units outside their home country