It may be mentioned here that mostly people think of international business as international trade. But this is not true. No doubt international trade, comprising exports and imports of goods, has historically been an important component of international business. But of late, the scope of international business has substantially expanded. Companies have started increasingly making investments into foreign countries and undertaking production of goods and services in foreign countries to come closer to foreign customers and serve them more effectively at lower costs. The fundamental reason behind international business is that the countries cannot produce equally well or cheaply all that they need. This is because of the unequal distribution of natural resources among them or differences in their productivity levels.

Due to these differences, it is not uncommon to find one particular country being in a better position to produce better quality products and/ or at lower costs than what other nations can do. In other words, we can say that some countries are in an advantageous position in producing select goods and services which other countries cannot produce that effectively and efficiently, and vice versa. As a result, each country finds it advantageous to produce those select goods and services that it can produce more effectively and efficiently at home, and procuring the rest through trade with other countries which the other countries can produce at lower costs. The international business as it exists today is to a great extent the result of geographical specialization as pointed out above.

Fundamentally, it is for the same reason that domestic trade between two states or regions within a country takes place. Most states or regions within a country tend to specialize in the production of goods and services for which they are best suited. Most developing countries which are labor abundant, for instance, specialize in producing and exporting garments. Since they lack capital and technology, they import textile machinery from the developed nations which the latter are in a position to produce more efficiently. To conclude, we can say that international business is a much broader term and is comprised of both the trade and production of goods and services across frontiers.

As of today, the World Bank is a group of five international organisations responsible for providing finance to different countries. As mentioned earlier, the World Bank is entrusted with the task of economic growth and widening of the scope of international trade. During its initial years of inception, it placed more emphasis on developing infrastructure facilities like energy, transportation and others. No doubt all this has benefited the under-developed nations too, but the results were not found to be very satisfactory due to poor administrative structure, lack of institutional framework and non-availability of skilled labour in these countries. Realising these problems, the World Bank later decided to divert resources to bring about industrial and agricultural development in these countries.

Assistance is extended to different countries for raising cash crops so that their incomes rise and they may export the same for earning foreign exchange. The bank has also been providing resources for education, sanitation, health care and small scale enterprises. Today, the services provided by the World Bank have increased manifold. The World Bank is no longer confined to simply providing financial assistance for infrastructure development, agriculture, industry, health and sanitation. It is rather significantly involved in areas like removal of rural poverty through raising productivity, increasing income of the rural poor, providing technical support, and initiating research and cooperative ventures. The group and its affiliates headquartered in Washington DC catering to various financial needs are listed below on World Bank and its affiliates. World Bank and its Affiliates

Institution
International Bank for Reconstruction and Development (IBRD)     1945
International Financial Corporation (IFC)                                          1956
International Development Association (IDA)                                   1960
Multilateral Investment Guarantee Agency (MIGA)                          1988
International Centre for Settlement of Investment Disputes (ICSID) 1966