Our purpose in this chapter is to introduce students to a way of thinking about institutions (institutional
theory) and then to many of the international organizations with which businesses must interact or whose
influence businesses feel, and from which businesses can gain substantially, especially in the areas of
information and financing.
Suggestions and Comments
Students should have had civics or government courses in high school, political science courses as college
freshmen or sophomores or business law courses, all of which deal with government control of business.
This parallel may be used to bridge to the international institutions.
One way to build interest in this area is to go to the career development opportunities these institutions
offer our students. They are the source of rich careers, and all of the international organizations have
employment links of their websites.
Students and many business people, actually, think of institutions such as the UN or the WTO as
tangential to their practice of international business (IB), although perhaps important to IB in a more
general way. This is a mistake, and throughout the chapter, you might emphasize ways in which
international institutions can be helpful to the business managers who know how to use them. Companies
can get financing, beneficial information and sometimes contracts from the various organizations or from
The growth of developing countries, especially the BRICs (Brazil, Russia, India, China) is affecting most
international organizations. Many of our students, when they take jobs with business or government, will
confront the problems and opportunities posed by dealing with developing countries or by the influence
of the developing countries on international institutions.
Student Involvement Exercises
All the organizations described issue several publications. You may wish to have students read some of
the publications on-line in order to sample their contents and quality.
All of these institutions have substantial websites. You might assign individual students or groups specific
organizations to research, including their history, purposes, activities, successes and short-comings.
Despite much opposition from protectionists, organized labor and environmentalists, the North American
Free Trade Agreement (NAFTA) came into effect in 1994. Since then, trade between Mexico and the U.
S. has grown as exports from both countries increased substantially. The feared exodus of jobs from the
U.S. to low-wage Mexico did not occur. Congress approved NAFTA at the request of President Clinton
under the so-called fast-track authority that Congress had granted him and the recent presidents preceding
him. Fast- track permits the president to negotiate trade agreements with other countries and submit them
for congressional approval or disapproval by an up or down vote with no amendments permitted. Other
countries are reluctant to negotiate agreements with the U.S. if the agreements are subject to
congressional amendments. Fast track expired in July, 2007. To date, it has not been renewed.
Since many of the institutions discussed in this chapter have governments as their membership, it is
important to understand how and when these institutions speak for their members’ governments and the
impact their power has. Recent meetings of some international institutions have made the news not