Introduction
As the world appears to be getting smaller as a result of the increasing efficiency of global communication and transnational firms coming up, changes are bound to continue taking place in the world of business. There is also increased chances that any other business can grow to operate outside parent nation. The new technologies have enabled communication that reduced time and distances differences so that people can work together from different places. International business therefore opens opportunities for people who even never thought of opening businesses abroad. This is because clients may require your goods from another nation especially when an advertising method that covers larger areas like the internet is used to promote the business.
Change and Success
International venture is a very fruitful changes if done properly and with the expertise it deserves. Globalization process has seen economies develop new business means that encourage strong monetary deals. Due to the diversity that comes along with interactions from different ethnicities, there is high changes of finding exceptional talent and skills. Intercultural; communication is now being encouraged in the attempt to eliminate barriers to business. The civil society is calling for fight against discriminations of any type ranging from racial, gender, ethnicity and regional. In this was, events and undertakings that can increases interaction and sharing of culture are encouraged. Multinationals have also discovered that in order for them to success in host nation, they have to employ the local people who understand the business environment in their countries.
Doing business internationally is at the same time increasing the way nations will achieve interdependence and strengthening of their individual national economies. This way, business are experiencing changes in their normal way of trade and adopting various nations they enter. International business has a chance to meet and research different markets that will ensure that they succeed. In most cases, going international means success for the firm. More migrations and internationalized education systems also offer growing opportunity. Many business have also undergone diversification in terms of manpower, technology, area of operation and ways of doing business in general.
Populations continue to embrace diversity in terms of culture and as a consequence, there tend to be a very productive workforce with great amount of talent and skills. This is what is termed intercultural competence which is able to capitalize on the indefinite opportunities and benefits that can be drawn thereafter.
Considerations
- Culture
- Customs and Traditions – Learn and appreciate Diversity without any form of Favouritism;
- Language – communication can reflect cultural preference and discourages other. Using English is best since it has become a de facto language for international Business;
- Politics
- Government policies – Business should be compliant with Host nation’s policies;
- Trade Regulations, such as tariffs – Adhere to the business regulations to avoid trouble with authorities. This also shows good corporate responsibility.
Culture
Customs and Traditions
Diversity describes the differences among individuals in terms of race, religion, ethnicity, gender and nationality, however in the business context; this describes the differences in the individual characteristics of the employees. Differences include therefore skill, talent, attitude and ability. The customs and beliefs that different people hold usually have an effect on the way they work. Appreciating different customs and traditions at workplace is very important. This is because in essence no culture is superior than the other and all people are equally. Respecting people’s beliefs will translate into cooperation at work, it will reduce cases of discrimination and this means that people will work as a team. Respecting the customs of people from other regions when undertaking international venture will enable one to make friends and the business will not face problems when it comes to issues like political will, penetrating the market and so on.
Diversity and inclusion when implemented correctly has a lot of benefits which include increased employee retention. This is because employees are unlikely to quit when they are appreciated regardless of the culture, belief or race: when employees are treated the same regardless of their differences, cases of them being harassed or harassing others are decreased: organizations achieve greater adaptability because diverse workforce can offer a larger range of solutions to the organization’s problems. Individual, talents, capabilities and experiences are all contributed to flexible adaptation to changing markets: diverse range of skills, capabilities and experience offer broad ranger of services to clients: diversity also offers a pool of suggestions and ideas; these are able to meet client’s needs efficiently. Finally diversity and inclusion offers more efficient execution of duties as workers are inspired to perform at highest capabilities.
Language
English has grown to be a de facto language for business over time. It’s therefore encouraged to at least communicate in English when doing official international business deal. Language can be a serious barrier to functionality. However when venturing in areas that people do not understand English, its advised to employ educated local who can translate the language or make an attempt to learn the official language in that region. Communication as an identified huddle, particularly language as a barrier is very common. Workers from different backgrounds speaking languages other than English can be a problem for communication between managers and workers. Intimidation or insults are common especially when discipline is not very strictly enforced. Religion is also a big problem and a major reason for clashing, some religions do not embrace certain practices which to others are essential (Cuddy et al 2009). Furthermore some religions do not work on certain workdays and these could conflict company’s policies and principles.
The problem of communication does not usually limit itself to the people involved in cultural differences but also affects overall output. In workplaces, there is always a question of good behaviour and work etiquette and appropriate way to communicate since communication is increasingly becoming very critical bearing in mind the advent of information technology. The cultural norms about the appropriate behaviour are not clearly stated at workplaces neither have they evolved enough to be traditional recognized. This is the basic concern for fostering effective dialogue at workplaces. Language barrier that result form high levels of workplace diversity is the major cause of poor communication.
Politics
Government Policies
In the past, business people and some economist used to think that multinational were not affected by host government policies. This is because they were perceived to be very big and powerful that even some nations. Its now a proven fact that these polices do in fact have a direct effect on the business. For instance, when the government imposes high tax rates in certain sectors than the expected profit margin, the sector will reduce so much and businesses will lose. On the other hand if taxes are waived, more people will tend to invest.
Trade regulations
Trade regulations are very important in regulating the way business is carried out. This is also very crucial when it comes to decision making. Instance, a manager has to find out whether shipping may be restricted or prohibited by a certain government. Some governments only allow purchase of raw material. The barriers in some cases are not good for business. However, developing nations complain that the free trade is unfair deal since it exploit them more. The Us for instance bans importation of steel from abroad.
Social Responsibility and Ethical Behaviours
- Guidelines, rules, and regulations across borders – its important to honour trade treaties, customs, and trade controls set agreed upon by the countries in question.
- Implications on business and operational strategy – there have been cases of malfeasance which have prompted need to address Ethical and social responsibility at international level. Core issues of concern are affirmative action, environment, and employee issues.
Guideline, Rules and Regulations
There are several principles that are set in different countries to regulate the way business is carried out in those regions. As such, the international companies will to do business in such a country should find out and make sure it can comply with those regulations. Some of these include ; importing tariffs, trade agreements, banned or restricted imports, and labeling and documentation among others.
Implications on Business
Many rules and illogical regulations are very bad for business. They slow down the process of production and hence profitability. However business has to be regulated in order to ensure that the environment is protected and that they do not deal in products that threaten human existence. At the international level, multinationals usually support structural changes that will lead to more liberal trade and support good conduct in business. Increased tariffs can be devastating.
Managing an International Business
- Developing strategies to handle change and culture;
- Review of the choices of ownership;
- Taxation and Currency;
- Human Resources:
- Motivation;
- How to build an international workforce;
- How to manage cross-cultural groups and diversity;
- Measuring productivity and dispensing rewards.
Mangers of international businesses have a very big task as they struggle to ensure that there is liberal trade and fare competition . They is need to constantly create strategies to deal with problems of diversity in culture and possible problems at work and so on. Issues like discrimination, intimidations and other conflicts can be very common when cultural diversity is not managed properly. Management should struggle to build teams that embrace cultural differences.
Ownership styles for international businesses can cause serious problems and need to be studied well before investors venture into business. Taxation and currency policies are usually very different in various nations. Its imperative to make extensive research and fins out how taxation is done especially on imports, exports, local raw materials and labor force. When taxation is so high in s certain industry, the profits are likely to be very low hence uneconomical.
Human resource Management has to be tactful with employee motivation tactic. They can introduce incentives like prices for good work and awards for exceptional performance etc. creating a competent workforce at international level is very hard if the employees do work as a team. However a working culture and a quality performance tradition can be established where employees can get trainings often, work in groups to get used to each other and attend team building activities to boost the morale of working together.
