Good morning everyone. Today we’re going to talk about international influences on business activity. This topic is all about how globalisation and international trade affect the way businesses operate today. In the past, most businesses focused only on local customers. But now, thanks to technology, transport, and global trade, even a small business can sell its products to customers around the world.
Let’s start with why international trading links are so important. When businesses trade internationally, they can reach larger markets, buy materials at lower cost, and spread their risks across different countries. For example, a car manufacturer in the UK might import car parts from Germany, assemble the cars in Britain, and then sell them to customers in Asia or North America. This allows the business to grow, create jobs, and become more efficient. For consumers, international trade means more choice and sometimes lower prices because of competition. Think about how you can buy clothes made in Bangladesh, electronics from South Korea, and snacks from the United States—all thanks to international trade.
Now, let’s talk about trade agreements. These are deals between countries that make trade easier by reducing tariffs, which are taxes on imports, and removing restrictions. Trade agreements open doors for businesses to enter new markets and sell their products abroad more easily. For example, the African Continental Free Trade Area helps African businesses trade with each other by cutting tariffs and encouraging investment across borders. But there is a flip side. With easier trade, foreign competitors can also enter local markets. That means domestic firms have to become more efficient to survive and compete.
Another huge influence on international business is technology. Technology has completely changed how trade happens. Think about how easy it is now for a business to sell products online. Platforms like Amazon or Alibaba allow even small companies to reach global customers. Cloud computing makes it easier for international teams to work together. And new technologies like artificial intelligence and blockchain make supply chains faster, more transparent, and more reliable. For example, a company can now track its goods from factory to delivery in real time, no matter where they are in the world. But businesses also need to invest in cybersecurity and digital systems to keep up with these changes.
Next, let’s look at multinational corporations, or MNCs. These are large companies that operate in more than one country, like Nestlé, Apple, or Toyota. When they invest in another country, they can bring many benefits. They create jobs, share new technologies, and pay taxes that support the local economy. They often help develop infrastructure too, like roads, electricity, or internet networks. For example, when Nestlé opens a production facility in a developing country, it can boost local employment and contribute to regional development.
However, MNCs also have disadvantages. Some of their profits may be sent back to their home country instead of being reinvested locally. In some cases, they may use too many natural resources or harm the environment. Smaller local businesses may also struggle to compete with large global firms that have more money and better technology. In addition, there are concerns about labour conditions. For example, some fast-fashion brands have faced criticism for using cheap labour in countries with weak worker protections. So, while MNCs can help economies grow, they must also act responsibly.
Finally, let’s discuss how governments and multinationals work together. Governments often try to attract foreign companies because they bring investment and jobs. To do this, they may offer incentives like tax breaks or cheap land. But at the same time, governments must make sure these companies follow environmental, labour, and competition laws. Sometimes, governments even partner with MNCs in joint projects, especially in industries like energy or infrastructure. For instance, the Indian government has worked with major technology companies to build digital networks and smart cities.
To wrap up today’s lesson, international influences shape almost every aspect of modern business. Global trade and technology have made the world more connected than ever before. This gives businesses access to new opportunities, new markets, and new customers. But it also means more competition and greater responsibility to act ethically.
