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.
Economic environment The host of most important economic factors which affect business are: Nature of economy Low income economies High income economies Middle income economies Developing and developed economies Some special factors are Least developed countries Most backward and disadvantaged Newly industrializing economies Very high growth rate over a long period of time Transition economies transition from centralized to market economy.
Some of the poor countries like India are among the largest economies in the world. Several developing countries are very vibrant and growing fast. Structure of the economy: Economy has three broad sectors namely , Primary mostly agricultural Secondary industrial Tertiary service sector Economic policies: Industrial policy Trade policy Foreign exchange policy Foreign investment and technology policy Fiscal policy Monetary policy.
The cost of ignoring the socio-cultural environment in business could be very high.
Elements of culture: Knowledge and beliefs Ideals Preferences Some of the complexities involved in multicultural business: Eg , TV, literature, film, advertising, marketing etc play very important roles in cultural transmission. At high educational levels transmission and diffusion are easy in a well organized communication system.
It s a blunder to introduce a product to a market which is not ready to adopt to it. Eg, Nationality: American Stereotype: Brash, materialistic, A society plagued by crime and violence, a cowboy culture where indivuduals are obsessed with time and deadlines.
Religion Religious factors, often very sensitive, need to be paid attention by business. Attitude towards work and wealth, working timings and holidays demand and consumption patterns etc. Language Language and communication are very sensitive in the business environment. For example: A multinational blundered in the middle east when its detergent advertisement picture soiled cloths on the left, the box of detergent in the middle and clean clothes in the right.
Culture and Organizational Behaviour The cultural impact on international business is reflected by several basic beliefs and behaviours. One of the important reasons for the failure of number of companies in foreign markets is their failure to understand the cultural environment of those markets, that is, consumer preferences, habits and beliefs, and suitably formulate their business strategies.
Etiquette Economic environment is one of the important determinant of product and pricing strategies. Types of Handshake Firm Gentle shaking hands is unfamiliar and uncomfortable for some Soft Light and quick not offered to superiors ; repeated on arrival and departure Moderate grasp; repeated frequently Moderate grasp; repeated frequently Brisk and firm; repeated on arrival and departure.
Demographic Environment Business market, demand is people in the sense that the demand depends on the people and their characteristics income levels, tastes and preferences, beliefs, attitudes and sentiments, host of other demographic factors.
Demographic trends across the world are an important determinant of global business. Important demographic bases of market segmentation includes: Population size The size of population is one of the important determinant of demand for many products.
Countries with small population are generally not attractive for business. However, small firms may find promising niches in these markets. Developing nations like India, enjoy a demographic dividend, that is, a higher proportion of people in the working age. The changes in the age distribution have a lot of implications for business.
Several pharmaceutical companies, for example, are paying a lot of attention to the potential requirements of the aged population. Political environment includes the characteristics and policies of the political parties, nature of constitution, government system are among the factors of utmost importance in market selection and business strategy formulation.
The political environment includes: As against the past suspicion against foreign capital and technology, a large number of developing countries, are trying to woo foreign capital and technology. However, there is a lot of difference in restrictions and regulations of business, scope of foreign business, trade policies, procedures, incentive system and so on.
Hostilities between some countries affect business in developing countries also. For example, Arab countries did not do business with Israel. These countries insisted that countries who wanted to do business with them must produce Israel Boycott certificate. Each region has a particular regulatory environment in which the major world players compete for market share. There are wide variations between countries in the policies and regulations regarding the conduct of business.
For example, certain trade practices or strategies allowed in some countries may be regarded as unfair by the laws of some other countries. Categories of laws An international business firm will confront home s, foreign and international laws. International laws, treaties and conventions etc.
Laws of foreign countries.
International Business Environment
Laws of home country India related to international business. Settlement of disputes Disputes are common in international business. There are two avenues for the settlement of disputes Judicial dispute settlement dispute will be solved by judicial court.
It often takes long time, very expensive and strains the relations of the parties involved. Extra-judicial dispute settlement if parties agree on conciliation, they want an amicable settlement of their dispute with active assistance of a third person, the conciliator, and hope an amicable settlement can be achieved.
Regulation related to products Product Standards Many countries may have its own products standards or specifications. For example, ISO accreditation is necessary for certain products for selling in markets such as European Union.
It is mandatory to make certain disclosure about the product such as ingredients, shelf life, possible adverse effects etc. Product liability If a person suffers any damage because of a product, he has to prove that the producer was at fault in respect of the defect in the product causing the damage. Packing and labelling regulations Many countries have their own regulations regarding packing and labelling. At the core of social system is the natural environment and the available technology.
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International Business Environment
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International Business Environment
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The International Environment
The social sphere is understood to be constituted — in and over time and in specific spaces — of humanly established institutions Boddewyn, ; Mudambi and Navarra, ; Peng et al. In short, as discussed below, the nature and consequences of the IBE have practical and intellectual implications. Luca Pennazzi. Thus, space and time are in this framework not taken for granted, nor are they treated as the same for everything and everyone, but rather they are regarded as ever-present, multifaceted and crucial features of the IBE — conceptually, substantively and empirically.