Analysis Into Challenges Facing International Business
Analysis Into Challenges Facing International Business
Analysis Into Challenges Facing International Business
Excerpt
CONTENTS TABLE
1.1 Introduction
1.2 Challenges facing international business
1.2.1 Globalization
1.2.2 Strategic Choices for International Business
1.2.3 Culture and the Costs of Doing Business
1.2.4 The Impact of Political Risk
1.2.5 International Trade Theory
1.2.6 National and International Accounting
1.2.7 Difference in Office Hours
1.2.8 Software and Hardware Support
1.2.9 Difference in Regulations
1.2.10 Language Barrier
1.2.11 Different Standards
1.2.12 Innovation
1.2.13 Supply Chains
1.2.14 Information Overload
1.2.15 Infrastructure within the Foreign Country
1.2.16 Corruption Amongst Foreign Officials
1.2.17 Pricing
1.2.18 Tariffs and Quotas
1.2.19 Company is Not Flexible
2.0 Conclusions
REFERNCE
INTERNATIONAL BUSINESS
1.1 Introduction
One of the keys to business success is the ability to trade internationally and
participants on regularly try draw ways of how to tackle the challenge of
remaining competitive while growing the business by going global.
1.2.1 Globalization
It may also refer to the closer integration of the countries and peoples of the
world …brought about by the enormous reduction of costs of transportation and
communication, and the breaking down of artificial barriers to the flows of
goods, services, capital, knowledge, and people across borders (Stiglitz 2002).
When MNEs grow in size, they could reach a level where ‘global
standardization strategy’ may be a strategic choice. The global strategy was
promoted by Levitt (1983), who considered that globalization naturally results
in uniformity of consumer taste. In this framework, a company could achieve
significant economies of scale by producing the same standard product at a
global level.
Different countries have different cultural values and standards. Culture is the
collective programming of the mind which distinguishes the members of one
human group from another. Hofstede (1984) identified the main dimensions of
culture that affect work practices in different countries: Power distance,
uncertainty avoidance, individualism vs. collectivism, masculinity vs.
femininity, long vs. short-term orientation.
Uncertainty avoiding countries tend to have solid legal frameworks and strict
rules of doing business (Pagell & Halperin 2001). In such countries, thorough
auditing tends to be carried out to ascertain compliance with rules (Hill 2005).
These countries tend to have uniform accounting procedures and low disclosure
levels (Gray 1988). Coming from a different cultural perspective, an
international business may find it costly to adapt to the national standards and
rules of the country it wishes to do business in. Paradoxically, uncertainty
avoidance can also translate into unethical practices as persons seek to secure a
more certain result through corruption (Husted 1999). In terms of entry modes
into the country, businesses may find that uncertainty avoidant countries favor
solid frameworks such as established subsidiaries or local ownership, which are
more costly and risky.
Masculinity vs. femininity also tends to influence business costs. For instance,
high masculine cultures have been associated with unethical practices (Vitell et
al 1993). Feminine cultures could result in higher secrecy and conservatism in
accounting and finance (Salter & Niswander 1995).
Religion has an important impact on doing business. For instance, Hill (2005)
noted that Islamic culture encourages private enterprise and the right to private
property. This implies that doing business in Islamic culture may have reduced
political risks, whose prevention can become costly.
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