I came across quite a few questions lately on the subject of defining “International Business”. Here are some of the questions and my thoughts on how to find the best answers for your business.
UPDATE: After reading this article many international business students ask me to spell out international business theories for them. This is not what this article is about.
My blog tries to raise awareness of cultural differences and how this impacts international business professionals in the field. It is based solely on my own personal experience and it’s about developing the personal skills you need to be successful in the field.
One of the very first cultural differences international professionals encounter is the cultural differences in what international business represents to people from different countries.
What Is International Business?
Dealing with so many different cultures and with extensive field experience, I tend to apply the simplest of definitions:
International business =
Business transactions crossing national borders at any stage of the transaction.
But then very often other questions crop up.
When I Export Products Do I Have An International Business?
There are distinctions to be made between:
- A company that sells their domestic products to different countries through export/import agents, and
- A company that knows how to adapt its marketing, sales, products and business strategies to sell to clients in different countries
A company with in-house international expertise across all business activities has an international business without a doubt.
Some people would say that a company, where a third party international sales agent takes care of all aspects of the international sale, is not an international business.
There are of course companies at varying stages between these two scenarios. And companies often progress through these different stages as they develop their international business.
There is no real “yes” or “no” answer here. It depends what definition you give to “international business”. But you do need to know your definition of “international business” and no matter which one you use you should also convey this definition to others when speaking about it.
What Is International Business Versus Global Business?
To answer this question it really depends which hat I decide to put on.
If we are going to discuss the theory of international business, there are some fine differences. But this is not a university and my response is based on my many years of field experience in international business.
Here is my current reality: In conversations across cultures the terms “international business” and “global business” refer to the same thing.
The question of different meanings for these terms has its place in classrooms and also for in-depth strategy sessions.
Today, if you are in the field, academic definitions of “international business” are not easy to translate into the cross-cultural reality of business. The boundaries of definitions become fuzzy and inadequate.
Remember, both “international business” and “global business” mean that you have to adapt your business to the outside world. Herein lies the true meaning of international business for me.
- You need to learn how to adapt your business to your markets in different cultures
Successful international businesses or global businesses seem to become free of their own national boundaries. They simply become very competent at navigating through the whole world market.
The Differentiating Factor: An International Mindset
When determining whether a business is international or not, and when comparing how one business could be “more international” than another, perhaps the best thing is to look at the company’s mindset:
- How real are your international client relationships? Do you connect with your international clients?
- Is your “international business” only about your company? Or do you make an effort to understand your international client?
- What do you do to adapt your business to your international markets?
International business has more to do with a mindset and the answer to these questions will give you a company’s real international business value.
What do you think? Please share your thoughts and comments below.
Photos from Shutterstock.
Filed under: international business development
If you've read this far, you should sign up to receive updates
Sign up for the International Stories newsletter, and prepare yourself to manage international business