Introduction

This book takes some initial steps into the twenty-first-century discussion of relations between national governments and multinational firms. This is the issue that defines international business (IB), since business that crosses national boundaries must necessarily deal with at least two national governments. As a result of the necessary interactions, there may be conflict or congruence between two governments' policies or between governments and multinational firms. Differences in policies or interests can often require mediation of some sort, resulting in the establishment of new rules on the relations of companies with home and host governments. Even if policies are mutually supportive between home and host governments, disagreements may arise over the distribution of benefits from company activities such as foreign direct investment (FDI), and thus produce conflicts that must be resolved. Much of the recent literature on international business-government relations has emphasized the more cooperative, accommodative relationship that has arisen between governments that want to pursue economic growth and development, and companies that want access to markets or to production inputs. This is quite a shift from the situation during the 1960s through the 1980s, when many governments were reluctant to permit entry of foreign firms or imposed major constraints on their operations. Even so, this new more welcoming attitude is not the only feature of the relationship that matters today. For example, the issue of environmental protection is one increasingly important element in present and future relations that has potential for very serious conflict between companies and governments.