Firstly, International Business is the performance of trade and investment activities that have been done by firms across national borders when it takes place between two or more countries. It is also known as cross-border business. Individual firms, governments and international agencies are involved in the international business transactions. The assets that exchange by firms and nations mostly are physical and intellectual assets which including products, services, capital, technology, know-how and labor. Moreover, international business gives us the opportunity to access the products and services from all around the world and it could profoundly affects the quality of life and the economic of the country (Cavusgil et al. 2008).

DEFINITION OF GLOBALIZATION

The definition of globalization is the deepening relationship and broadening interdependence among people from different parts of the world, and especially among different countries (Daniels et al. 2007). The categories that involves in globalization are technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure.

Besides that, there are two types of integration which is negative integration and positive integration. Negative integration could refer to barriers between countries being removed such as tariffs and quotas while positive integration could refer to standardizing international economic laws and polices (The non-hub story 2010).

MULTINATIONAL COMPANY (MNC)

Multinational Company (MNC) also known as Multinational Corporation is the most important type of the focal firm. It is a direct resource with the various business activities that which is through the subsidiaries and the affiliates that which located in the multiple countries. MNC has its own worldwide of the network and it has corporate with the numerous of the suppliers and the independent business partners of the abroad. MNC is among of the leading participants and many small and medium-sized enterprises participate as well.

Multinational company can be categories into 3 elements which is horizontally integrated multinational corporations, vertically integrated multinational corporations and diversified multinational corporations.

Horizontally integrated multinational corporations

Corporations that manage production establishments in different countries that produces similar products.

Vertically integrated multinational corporations

Manage production establishment in certain countries to produce products as input to its production establishment in other countries.

Diversified multinational corporations

Production Establishment is either horizontally or vertically integrated.

HISTORY OF HONDA

Honda is the world’s largest motorcycle manufacturer since 1959 and the world’s largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. It is established by Soichiro Honda in 1948. Due to the World War II, Soichiro Honda developed and produced small 2-cycle motorbike engines. It is because during that time Japan was facing gasoline storage and they needed inexpensive transportation that need less gasoline (The non-hub story 2010).

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Now, the ranking of Honda in automobile manufacturer around the world is number sixth. The first Japanese automobile manufacturer that releases a dedicated luxury brand is Honda. Besides that, Honda is also producing lawn and garden equipment, tillers, robotics, marine engines, personal watercraft and power generators. The headquarters of Honda is located at Minato, Tokyo, Japan (Wikipedia 2010).