Framework for analyzing the international business environment. • Summary form of multinational business operations, international business has become. COMPONENTS OF INTERNATIONAL BUSINESS ENVIRONMENT; CONCLUSION The international environment is going through a historic transformation. Request PDF on ResearchGate | International Business Environment | International Business Environment Unit 1: Globalization and International Business Unit.
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R. JAYARAJ, M.A., Ph.D.,. Analyzing the international business environment and identifying key factors for international business operations. Int. J. Business Environment, Vol. 7, No. 2, The international business environment: a proposed analytical framework Abdulghany Mohamed Carleton. International Business Environment: An Analysis of Intercultural Communication and Etiquette Ephraim A. Okoro, Howard University Mellvin C. Washington.
Many scholars stated that international business is equated only with those big enterprises, which have operating units outside their own country. Other theorists defined that international business environment is the commercial activities crossed national borders. It includes the global movement of good, capital, services, employees and technology; importing and exporting; cross-border transactions in intellectual property such as patents, trademarks, know-how, copyright materials through licensing franchising and management contracts.
Group of researchers stated that international business environment is the deal done by individual or organisation at global level in order to accomplish the objective through export, import and foreign direct investment. International business, whether in its conventional form of international trade and finance and contemporary types of multinational business operations, it is operated at huge scale and has great impact on political, economic and social field.
It is observed that many foreign operations and the comparative business are used as equal for international business. Overseas business denotes to domestic operations within an overseas nation.
Comparative business focuses on similarities and differences among countries and business systems for focuses on similarities and differences among countries. The fundamental objective of international business to gain profit. When firms do not get profit in domestic market, they look for foreign market for lucrative business. Scope of International Business International business has wide scope as it focuses on the particular issue and opportunities that appear in business environment as organization operates at global scale.
International business is the generalized field of business, adapted to quite exceptional features in global environment. The characteristic feature of international business is that international organizations operate in uncertain business atmosphere and subject to rapid change as compared to the domestic environment. Numerous factors and environmental variables that are important in international business such as foreign legal systems, foreign exchange markets, cultural differences, and different rates of inflation are either largely irrelevant to domestic business or are so reduced in range and complexity as to be of greatly diminished significance.
Domestic business is a limited case of international business. The characteristic feature of international business is that international firms operate in environments that are highly uncertain and where the rules of the game are often ambiguous, contradictory, and subject to rapid change, as compared to the domestic environment.
Problems or Major Issues in International Business Many investigators have found that when firms operated at international scale, they face numerous challenges and issues. International businesses have to conform to the local rules and regulation in which they operate.
International Economic Environment in Marketing: Definition & Factors
Organizations when expand their business in other countries, they have foreign languages and difficulty to gather information about foreign countries. They have to deal in foreign currency. The exchange rate may be varied. When working in other countries, their culture and social value must be taken in account.
The risk factor is high in overseas business operations that include political, commercial, and financial.
Communication and control of international business is complicated. It is very difficult to understand the demand of the international market. One of the major issue international businesses is trade restrictions.
A trade restriction, particularly import controls, is a very important problem, which an international dealer faces. It is observed that Trade practices and customs may differ between two countries.
Some of the issues in international business environment include social, ethical, environmental and legal issues. Benefits of International Business Though firms have to undergo numerous problems when expanding their business in other countries, but the international business brings countries together.
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 the U.
International Economic Environment Defined
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. Tax structures.
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. Inflation rates. 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.Morrison, J.
Arun Kumar Anala.
International Business Environment
Comparative business focuses on similarities and differences among countries and business systems for focuses on similarities and differences among countries.
Elem ent s of Cult ure. Second, what are the causes of its uniformities and variations?