Global Environment

International agencies (World Bank, IMF, WTO, EEC, etc.) International conventions, treaties and agreements, economic and business conditions in other countries, etc. Certain developments is such as a hike in the crude oil price have global impact. Developments in information and communication technologies facilitate rapid spread of culture across countries. Economic conditions abroad affect Indian firms. For example, exports increase when markets expand abroad. International political factors can also affect business. For example, improvements in relations between India and Pakistan has led to higher trade between the two countries. WTO regulations have far reaching impact on business in India. Import and investment liberalization by WTO has led to greater competition in India.

The main determinants of international environment are as follows:

1. The state of the world economy and distribution of world output.
2. International economic cooperation.
3. International market structure and competition.
4. Barriers to international trade and investment.
5. National economic policies of different countries.
6. Role of multilateral economic institutions.
7. International economic laws, treaties, agreements, codes and practices.
8. Political system and conditions in different countries.
9. Cultural factors in different countries.
10. Growth and transfer of technology.

Growth and spread of multinationals.