The term business has been variously conceptualized as the act of buying and selling of goods; an economic activity; any exchange transaction that produces profit; an organization that makes profit and so on. This parochial conception of business has been borne out of the fact that earlier scholars seemed not to regard artisans/professionals as businessmen. However, Industrial Revolution orchestrated by the House system of production changed such parochial perception of business. Industrial Revolution introduced the benefits of mass production to the people lowering prices and increasing the supplies of goods to all. These benefits made trade beyond borders attractive. It also made the demise of mercantilism inevitable.
International business, therefore, came into existence consequent upon the benefits of industrial Revolution. Till date, some people regard international business as ''big business''. To such people, international business is dominated by giant corporations whose economic power is so great that it may even compromise the political autonomy of nation-states. Others equate international business to international trade, thinking only in terms of exports and imports. Some of them are staffers of firms that sell products to overseas markets, like Nigerian Breweries PLC, International Equitable, Unilever Plc, etc; others work for firms that are bottling foreign made products right in their home markets. To these categories of people, international business could either be an opportunity or a threat.
Czinkota et al (1996:4) have defined international business as consisting of transactions that are devised and carried out across national borders to satisfy the objectives of individuals and organizations. These transactions take on various forms, which are often interrelated. Primary types of international business are international trade and direct foreign investment. International trade occurs when a firm exports and/or imports goods and services to and/or from consumers/producers in another country. International investment occurs when a firm finances and employs resources in business activities outside its home country.
The essence of every economic activity is to create satisfaction for human wants. The fact that the transaction is carried across national borders shows the difference between domestic and international business. The transaction across national borders is usually subjected to new cultures, policies/laws, society and so on. Though, the basic principles of business still apply, their application, complexity and intensity vary considerably.
When management understands these issues and problems and incorporates them into her decisions, she then plans effectively beyond domestic demands.