#87 International vs Global
Approximately 2500 years ago, Confucius supposedly said, “When words loose their meaning, people loose their freedom”. What stuck from my early training as a sinologist tells me that this quote has often been misinterpreted and misused. A less common interpretation is that it is important that people who are engaged in discourse must first agree on the terminology before they can have a meaningful exchange of ideas. This is why one of the first things I discuss with students in my International Business course is the sometimes confusing terminology in the field – international, multinational, transnational, global. Depending on the management silo we find ourselves in – strategy, marketing, human resources, etc. – we may use these words differently. Now, I’m not going to go into this discussion here today, but I wanted to share a different, but related observation. Recently I discovered the Google Ngram Viewer (http://books.google.com/ngrams) that provided me with a more historical perspective on the discussion over international business terminology. Ngram mines digital content that Google has stored in GoogleBooks for user-defined key words. Looking for the occurrence of the key words ‘international business’ and ‘global business’ between 1978 and 2008, we can see an interesting development: while the use of “international business” is relatively stable over time (with maybe even a slight decline from 2000 on), we can see dramatic increases in the use of “global business” at least for the 20 years following the mid 1980s.
Looking for an explanation, I turned to the world trade data as provided by the World Trade Organization. I expected to see a dramatic increase in world trade about the same time the use of the term “global business” took off, maybe with some time lag of 3 to 5 years. However, it looks like the most dramatic increases in world (“global”) trade happened only in the late 1990s and not in the 1980s.
I haven’t yet had a chance to look into FDI data (particularly because clean, comparable global FDI data is hard to come by), so therefore, I don’t have a better explanation yet than to just ascribe the heightened popularity of “global business” to a certain trend among authors and publishers. Which remains yet to be proven, of course. Contributions welcome!
November 24, 2012 @ 5:17 pm
The comparison of international business to global business fascinates me. At times it seems that these are very interchangeable words that talk about the same thing; however, after reading the post and looking into the context of the two meanings, they discuss very different concepts. While both global and international can mean the same thing to an associate working in international business, when researching the matter, international and global have different meanings. International business refers to doing business by means of importing and exporting. Where as Global business refers to companies that have a global investment and are present in a variety of countries. They not only display the same image and message of the company/ brand in multiple offices, they are internally set up to have a corporate headquarters that is responsible for delivering the overall global strategy. (Andrew Hines, Difference between a global, transnational, international and multinational company)
In conversation international and global are very interchangeable, however, it is becoming more of a distinction in business. On an expansion of the above idea that international works in multiple countries. Inter-nation-al business has the clear message of having distinctions between nations and business units see this at the forefront of doing business overseas. From a global perspective there is not distinction between nations. It is expressed to show more of a dynamic and linked view of the economic factors that tie businesses together. After the 1980’s there was a large shift in the language of international to global. With new generations changing and economies growing, the word global downplayed the borders and other barriers businesses faced when going overseas into new markets. While the same policies and language barriers were still present with global business as international business, it was a matter of attitude and context that we were now doing business. Without seeing a dividing line on nations, businesses were able to grow stronger business partnerships. While this is not a proven reason to why the word shift occurred, from the distinction of the two definitions from MRops Blog, it seems that this is a very valid insight as to how the shift is continuing to grow. (http://mrops.com/the-difference-between-international-and-global/)
March 27, 2016 @ 10:18 am
I fully agree with the statement that agreeing in terminology is key when discussing topics where there might be the slightest chance that there is no common understanding of specific terms or “vocabulary”.
Probably I did something wrong when trying to reproduce the graph around 4 years later, or data really changed that dramatically. There is no intersection anymore and international business still is the term used more often.
When looking at the terms international and global related to stages of corporate readiness, international would only be the first step going global, followed by multinational and regional. Personally I would link the words as following:
– International: any connection to one or several countries different from one’s home country
– Global: connections to several countries split over the whole globe
Like I mentioned before I am not sure whether the data displayed for my research (international business, global business) is correct. Therefore I searched for globalization which has a shape similar to global business in the original thread. For me this might be one possible reason for the increase of the term “global business” as the term “globalization” might have been coming up around the 90s as well.
I am looking forward to further comments.
Kind regards,
Michael