International Business When business activities are performed on an international level, these can be termed as international business. Basic functions, processes and techniques of international business are essentially the same as those involved in domestic business. What is different is the environment within which these functions are performed and processes are carried out. International Business environments are unfamiliar and different from the domestic environment These variations may need adaptation for business success.
The Multinational Corporation The International Environment International managers face intense and constant challenges that require training and understanding of the foreign environment. Managing a business in a foreign country requires managers to deal with a large variety of cultural and environmental differences.
As a result, international managers must continually monitor the political, legal, sociocultural, economic, and technological environments. The political environment The political environment can foster or hinder economic developments and direct investments.
As examples, the political and economic philosophies of a nation's leader may change overnight. The stability of a nation's government, which frequently rests on the support of the people, can be very volatile. Various citizen groups with vested interests can undermine investment operations and opportunities.
And local governments may view foreign firms suspiciously. Political considerations are International business environment in poor countries written down and often change rapidly. For example, to protest Iraq's invasion of Kuwait inmany world governments levied economic sanctions against the import of Iraqi oil.
Political considerations affect international business daily as governments enact tariffs taxesquotas annual limitsembargoes blockagesand other types of restriction in response to political events.
Businesses engaged in international trade must consider the relative instability of countries such as Iraq, South Africa, and Honduras.
Political unrest in countries such as Peru, Haiti, Somalia, and the countries of the former Soviet Union may create hostile or even dangerous environments for foreign businesses.
In Russia, for example, foreign managers often need to hire bodyguards; sixteen foreign businesspeople were murdered there in Civil war, as in Chechnya and Bosnia, may disrupt business activities and place lives in danger.
And a sudden change in power can result in a regime that is hostile to foreign investment; some businesses may be forced out of a country altogether. Whether they like it or not, companies are often involved directly or indirectly in international politics.
The legal enviroment The American federal government has put forth a number of laws that regulate the activities of U. However, once outside U. Many legal rights that Americans take for granted do not exist in other countries; a U. In addition, some countries have copyright and patent laws that are less strict than those in the U.
China, for example, has recently been threatened with severe trade sanctions because of a history of allowing American goods to be copied or counterfeited there.
As a result, businesses engaging in international trade may need to take extra steps to protect their products because local laws may be insufficient to protect them.
The economic environment Managers must monitor currency, infrastructure, inflation, interest rates, wages, and taxation.
In assessing the economic environment in foreign countries, a business must pay particular attention to the following four areas: Average income levels of the population. If the average income for the population is very low, no matter how desperately this population needs a product or service, there simply is not a market for it.
In some countries, foreign firms pay much higher tax rates than domestic competitors. These tax differences may be very obvious or subtle, as in hidden registration fees.
In some countries, however, inflation rates of 30, 40, or even percent per year are not uncommon. Inflation results in a general rise in the level of prices, and impacts business in many ways. As the cost of petroleum products increased, a corresponding increase took place in the cost of goods and services.
As a result, interest rates increased dramatically, causing both businesses and consumers to reduce their borrowing.Introduction to International Business Environment - authorSTREAM Presentation.
Introduction to International Business Environment - authorSTREAM Presentation Companies find it difficult to co-ordinate and control their business in countries with poor communication systems.
Financial Environment. What are the poorest countries in the world? The rankings below were published in Wikipedia from International Monetary Fund's gross domestic product per capita (GDP per capita) report and reflecting the countries with the lowest purchasing power parity (PPP).
International Business Definitions 1) IB field is concerned with the issues facing international favorable investment environment.
During , 69 countries made changes to FDI regulations, or 98% were more favorable to investment. Globalization and the World’s Poor uCritics argue that globalization has not helped poor.
Dec 04, · The Netherlands also helps to bring low- and middle-income countries more into line with international trade law.
Reliable official bodies and other organisations in developing countries. Reliable official bodies and other organisations that work both quickly . International Business Ch. 3. STUDY. PLAY. The purchasing power parity for different countries is adjusted (up or down) depending upon whether the cost of living is lower or higher than in the United States.
Although countries such as China and India are currently relatively poor, their economies are already large in absolute terms and.
|20 Poorest Countries In The World | TheRichest||If you have seen the movie Blood Diamond you should know that it is based on Sierra Leone. Togo is among the world's largest producers of phosphate.|
|Introduction to International Business Environment |authorSTREAM||The government therefore encourages these countries to develop their private sectors.|
Dec 04, · Doing business in developing countries. Increasing access to markets for entrepreneurs from developing countries.
Poor knowledge of markets and strict requirements for market access form constraints for entrepreneurs from developing countries. This also applies to the quality standards for products that may be sold on the European market.