Academic journal article Journal of Business Administration

Economic Foundations of International Business

Academic journal article Journal of Business Administration

Economic Foundations of International Business

Article excerpt

1.0 INTRODUCTION

Over the past decade, international business has acquired a much higher profile in the teaching of business and management. This higher profile reflects the increased relative importance of international transactions and international competition in the business world and, in countries such as Canada, and the U.S., it also reflects recent patterns of immigration. Some business schools have announced plans to "internationalize" their curricula; and many business schools have expanded their international courses and programs, and have increased faculty positions and research commitments in the area.

This expansion of activity seems to call for a re-examination of the substance and methods of international business education. Such a re-examination seems particularly useful in view of the fact that, even in its traditional form, international business has been among the least well-defined and standardized of business and management teaching areas. This paper addresses one particular question that should be a part of such a re-examination: what role might economic foundations reasonably play in the teaching of international business?

In addressing the role of economics, there are some prior issues to be considered. One such issue, addressed by others at this conference, is whether international business and management is best taught in separate courses or as components in more general courses. (More realistically, the question concerns the appropriate mix between separate courses and integrated international modules.) Also, even if international business were taught in separate courses, one would still have to consider the division of labour between general international business courses and "functional" courses such as international finance, international marketing, etc. I do not propose to address these questions directly here. I will assume that the course material described here would be taught in the context of a general international business course taught in the third or fourth year of an undergraduate program or in the second year of an MBA program. However, most of what I write should also be relevant to other vehicles (i.e. other courses) in which international topics might be taught.

Section 2 of this paper considers what the objectives of an international business course should be and Section 3 briefly discusses the overall structure of international business courses and modules. Section 4 examines the role of economic institutions and theory in the global or "world-level" environment of business. Section 5 then discusses the role of economics in country-specific and region-specific business environments. The economic foundations of international business decision-making are discussed in Section 6. Section 7 contains an overview of major economic concepts and ideas in the international business field, and Section 8 reviews the economic content of current text books in international business. Teaching methods are briefly discussed in Section 9. Section 10 contains concluding remarks.

2.0 OVERALL OBJECTIVES OF COURSES IN INTERNATIONAL BUSINESS

Perhaps the first substantive issue to consider is what the objectives of an international business course or module should be. There is, first, a potentially important instrumental or "hands-on" aspect to such a course. More specifically, the course might contribute knowledge about international business that directly and tangibly enhances a student's ability to go out and start up a small import-export business, take a position in a major international firm, or do something else of an occupationally concrete nature in the international business area. A second possible objective would be to enhance the development of general skills, including writing skills, speaking skills, computer skills, etc. that have important and direct occupational value but that are not tied particularly to international business topics. Both instrumental knowledge of international business and the development of general skills have a strong applied or practical orientation, and might be referred to as "pragmatic" objectives. …

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