Question

Discuss and debate the role of global businesses in your home and foreign countries. Is the sole purpose of a business to provide a return for their stockholders (“the business of business is business”) or do businesses have a broader social, environmental, and financial purpose (“doing well by doing good”)?

Answer 1

All human beings wherever they mat be require different types of goods and services to satisfy their needs. Business is a major economic activity in all modern societies concerned as it is with production and sale of goods and services require by people.

The purpose behind most business most business activities is to earn money by meeting people's demand for goods and services. Business is central to our lives. Although our lives are influenced by many other institutions in modern society such as schools, colleges, hospitals, political parties and religious organizations, business has the major influence on our daily lives.

It may be mentioned here that most people think of international business as international trade. But this is not true. No doubt, international trade , comprising export and import of goods, has historically been an important component of international business. International or global business is a much broader term and is comprised of both the trade and production of goods and services across frontiers.

The fundamental reason behind international or global business is that the countries cannot produce equally well or cheaply all that they need. This is because of unequal distribution of natural resources among them of differences in their productive style. Due to these differences, it is not uncommon to find one particular country being in a better position to produce better quality products and or at lower costs than what other nations can do. Some countries are in advanced position in producing select goods and services which other countries cannot produce that effectively and efficiently, As a result, each country finds it advantageous to produce these select goods and services that it can produce more effectively and efficiently at home , and producing the rest through trade with other countries which the other countries can produce at lower costs.

What is true for the nation is more or less true for the firms. Firms too engage in international business to import what is available at lower prices in other countries, and export goods to the countries where they can fetch better prices for their products. Besides price considerations, there are several other benefits which nations and firms to engage in international business...

Notwithstanding greater complexities and risks , global business is important to both nations and business firms,growing realization of these benefits overtime has in fact been a contributory factor to the expansion of trade and investment among nations, resulting to the phenomenon of globalization.

As nations are concerned, global business helps a country to earn foreign exchange, helps to use resources more efficiently, helps to improve growth prospectus and employment potentials and thereby increasing standard of living.