InbanaUonal business is all commercial transactions u2014u2014 private and govemmental u2014u2014between two or more countries. Private companies undertake such transactions forprofit; governments may or may not do the same in their transactions.

Why should we study international business? A simple answer is that international business comprises a large and growing portion of the world's total business. Today,global events and competition affect almost all companies u2014u2014 large or small u2014u2014 because most sell output to and secure supplies from foreign countries. Many companies also compete against products and services that come from abroad.

A more complex answer is that a company operating internationally will engage in modes of business, such as exporting and importing, that differ from those it is accustomed to domestically. To operate effectively, managers must understand thesedifferent modes, which we'll discuss shortly.