International Business Effects on Daily Lives - Essay Example

? Topic: International business and its effects to our daily lives Lecturer presentation International business entails the exchange of goods and services between individual persons, governments and businesses in two or more different countries (Daniel, 2007). Therefore, the movement of goods and services across the international borders is one of the most defining characteristics of the trade. International trade has been in existence for long periods across the continents and some of the most prominent trade routes included the great Trans -Saharan trade between African countries and Asian countries. The great Silk Road was another prominent trade route, which facilitated trade between different countries across Asia and Europe. The present global trade has evolved from ancient practices, where merchants engaged in trade to get profit, while the governments engaged in the trade for the same reasons in addition to expansion of their political influences. Due to the movement of people and services across different countries, international trade affects cultural, social, economic, and political aspects of the countries and the people engaged in the trade (Vadime, 2000). This paper examines international business in context with historical development and its influence on our daily lives. The objective of the earliest trade just like the current international commerce was to satisfy diverse human needs and wants. Because of diverse distribution of resources in different geographical regions, scarcity and availability of goods and services initiated the early trade. People from one region exchanged their commodities at their disposal with goods and services from other regions. In this regard, goods and services were exchanged directly without use of currency in transactions called barter trade. One of the earliest challenges that plagued early trade was geographical distances between the source and market of the commodities and services. This resulted to the development of transportation networks, linking all the trading regions involved. Allen, et al (2000) noted that the earliest forms of transport during the early trade were human porters and the use of domesticated animals such as camels and donkeys. According to Francis (2007), domesticated animals enabled early traders to travel long distances and this form of transport made early Arabian traders very successful in the trade. Francis (2007) noted that as early as in the second millennium, Arabs organized trade caravans across the Arabian Peninsula and the Far East. This resulted to the formation of the early trade routes where valuable goods such as silk, precious metals and spices were traded across the regions. Early caravans across long distances were not profitable for trading in cheaper commodities. However, people could travel across shorter distance to exchange cheaper but essential commodities such as food, animals, ornaments and textiles with one another (Francis, 2007). The earliest trade routes were on the land and could not take place across regions isolated by large water bodies (Allen, et al 2000). In addition to geographical limitations of the land routes, many caravans were attacked as they travelled across hostile regions resulting to heavy loss of lives and trade. To ensure the safety of trade routes, Curtis, et al (1999) noted that most traders formed partnerships with people along the routes and in other cases, established empires resorted to military intervention and expanding their territorial boundaries across the region of trade interests. However, the discovery of water transport in the third millennium solved some of the challenges of land routes, such as insecurity and limitations of the quantity of cargo carried. According to Curtis, et al (1999), maritime trade developed after realization that monsoon winds could be manipulated to propel sea vessels across large geographical regions isolated by water bodies. According to Daniel (2007), the waterways enhanced international trade further by opening up inaccessible regions to trade. In addition, linking marine with land routes increased the volume and the scope of international trade in the early periods. Examples of linked marine and land network include the Incense trade route between Saudi Arabia and the Mediterranean Sea (Daniel, 2007). According to Curtis et al (1999), Incense route channeled goods from India, Saudi and countries from East Asia. The main goods traded along the route were aromatic plants such as myrrh, which were valuable commodities among the rulers of the surrounding empires. The desire to control the profitable trade route caused many battles and when the Roman Empire took over, the Arabic intermediaries were isolated and this created conflict between the two. Eventually, Roman vessels changed their usual route because of pirate attacks launched by the Arabs in the Gulf of Aden (Francis, 2007). Another prominent trade route linking land and waterways was the Inca route in South America that joined merchants from Andes and Peru (Allen, et al 2000). However, the major trade routes were on land and they included the Silk Road, Via Maris, the Grand trunk road and the Trans Saharan route. The most active maritime routes were along the Mediterranean Sea and they included the Spice route that linked Indians, Greeks and Romans (Curtis, et al 1999). By the 17th century, other trade routes had connected all continents and the level of international trade increased further. The efficiency in transportation of goods and services enhanced interaction of people from different regions and cultures. According to Allen, et al (2000), the Trans Saharan trade linking West African countries with the Arabian Peninsula resulted to the spread of Arabic culture in West African states, such as Islamic religion and Arabic language. The great Silk Road enhanced the early spread of Chinese culture across Asia and western countries. Vadime (2000) noted that the Silk Road was the most influential trade link between Asian countries and the Western Europe. It enhanced the transfer of knowledge, technology, culture and international understanding along the route. Other significant contribution of the Silk Road was enhanced silk trade and other textiles from China in the region. Due to the many people engaged in the trade, diverse cultures were introduced along the route. For instance, Buddhism a religion widely practiced in Eastern Asia began spreading across the international borders becoming a very influential religion in the world (Vadime, 2000). From these formative years, international business grew immensely after the discovery of better and more efficient modes of transport and communication. In United States, wagon trains became popular mode of transport and extensive network was built in the between 18th and 19th centuries to enhance movement of goods and people across the American Hinterland. In the middle of 19th century, industrialization gained momentum and mass production resulted to an increase in produced commercial goods. Large-scale construction of railway lines and use of more efficient trains improved movement of goods, traders and services across the international borders (Francis, 2007). In United States, Curtis, et al (1999) noted that railway networks assisted in uniting the various states that make the country. Railway networks were constructed to link various European countries including the Trans -Siberian railway that extended from Russia to China. Developed countries built railway networks in their colonies in Africa, Asia and South America. These networks helped in the opening of more trading frontiers and trade across international borders. Examples included the Kenya Uganda Railway constructed by Britain in its East African colonies. The railway line linked Kenya and Uganda and later it was extended to Tanzania. In the mid 20th century, automobiles were produced in mass and extensive construction of road networks linked more countries. This opened more countries to international trade and the introduction of air transport later in the 20th century enabled quicker movement of goods and services over long distances (Daniel, 2007). Besides air, railroad and water transport, construction of pipelines across borders enhanced movement of goods such as petroleum products. In addition, modern ports were constructed and water has become very popular mode of transport in countries linked with large water bodies. Communication across international borders has improved greatly after the discovery of information technology. Before information technology became real, communication at both local and international level was difficult mainly because of limited penetration of communication lines and high costs (Winters, 1991). However, introduction of electronic mail has enhanced quick communication to any part of the world at affordable costs. Besides improvement of communication and transport, international trade has enhanced global understanding between different countries across the world. According to Curtis et al (1999), formation of commercial agreements and blocks between trading partners has brought the international community together. Examples of trading blocks include World Trade Organization (WTO), European Union, OPEC, among other trading agreements. The World Trade Organization is one of the largest trading bodies globally and it incorporates both developed and least developed economies. According to Daniel (2007), WTO was formed to enhance trade among member countries by reducing trading barriers, such as prohibitive tariffs between trading partners. This has stimulated trade and easy movement of goods, services, and people across international borders. In this respect, every aspect of our lives has been influenced profoundly by international business. The clothes we wear originate from different countries that have formed trading partnerships with our countries. In addition, international trade enhanced the availability of numerous goods in all countries. Unlike in the past when slow and inefficient methods of transport and communication isolated people, the current international trade has brought people from diverse cultures and countries closer, through liberalization. In the past, geographical distances were huge hindrance to global integration but effective communication and transport networks have shattered geographical, political and economic barriers. This has promoted international understanding and cooperation across the globe. References Allen, R., et al.(2000).The world economy in history: The social science of long Term Change. London: Routlegde. Curtis, P. et al. (1999). International trade in the world History. London: Cambridge University Press. Daniel, R. (2007). International business environment and operations. Chicago: Prentice Hall. Francis, D. (2007). The history of early international trade: Cambridge: Cambridge University press. Vadime, E.(2000).The silk roads. Highways of culture and commerce. Edinburgh: Berghan Books. Winters, A. (1991). International economics. 4th Ed. New York: Routledge Read More