Uncontrollable Forces
Organizations should focus on their uncontrollable forces to stay fit within the market spectrum. Businesses are structured to serve a purpose through coordinated plans and goals to be profitable. International companies are organizations that have widened their business ventures to cover most parts of the world. To operate within the uncontrollable forces, it must structure its internal and external activities to meet their demands and opportunities (Mittal, 2018). Three main uncontrollable forces that affect international businesses are sociocultural forces, economic forces, natural disasters, and human-related problems.
Sociocultural Forces
Any business venture has a workforce that affects its operations. An organization is formed when people from all walks of life come together to attain business goals and missions. Society contains people who are defined by their cultural beliefs and understanding. The impact of sociocultural forces becomes stronger when it is an international company (Njenga, 2017). The organizational operations are affected when the sociocultural impacts are the determinants of the company’s decision-making analogy. Multinational companies can be affected by customer preferences, culture, religion, language, level of education, politics, and attitudes of the society surrounding them. Therefore, an international company must understand foreign cultures before starting operations in a new environment.
When a company engages in the pork business, it should do thorough research about the area. For instance, opening a pork business in Muslim countries will not be profitable because their religious belief is that pork should not be consumed. When most of the targeted customers are not consumers of pork, the idea is null and void. Equally, when the target audience is teenagers and youths, the organization should use social media to get them (Gerner, 2019). Using other channels for advertisements can make the international company miss the right audience and register low sales.
Economic Forces
Globalization paved the way for international businesses to make profits beyond boundaries. Digitalization manifolds and taps valuable sources and attracts the desired customers to make an international business flourish. However, international companies face legal liabilities, unequal distribution of wealth, technological factors, government policies, and employment levels (Drori et al., 2020). Some countries have legal frameworks that differ in terms of wage rates and discrimination. The economic data of some countries poses a threat to the continuity of some international organizations. Income inequality globally makes it harder for a company such as Tesla to move into developing nations. It is effective to send some of their electric automobile to specified customers rather than setting up a plant that can assemble their product in that environment.
The UK and the US have differences in terms of registering a company. When an international company moves to such vicinities, they find long legal formalities that make them unprofitable. For instance, when a company finds the art of double taxation and other legalities that will manifest in their profit, it means that they must rethink whether it is healthy to invest in such a country (Shen et al., 2017). A country like Canada has set up minimum wages for its population, making it hard for international organizations to outsource their services in such a country to seek cheap labor. Equally, some countries, such as China, are technologically developed, making it hard for companies seeking their services to look outside their nations to expand their territory.
Natural Disasters and Human-Related Problems
There are artificial disasters and CO2 emission standards that give rise to extreme temperatures. The man-made disasters include food and water crises, ecosystem collapse and biodiversity loss, and large-scale involuntary migration. In 2017 there was a high impact of extreme weather, hurricanes, and a rise in carbon dioxide emissions. When people migrate, they affect the customer cycle, and the international organization faces financial crippling (Cappelli et al., 2021). Hurricanes in places such as Miami, Florida, are affected by hurricanes, and geographically it is at stake because reports insinuate that it could be submerged underwater someday in the future. Therefore, most companies that try investing in the US are advised to invest in buildings that can withstand increasing water levels.
Oil drilling companies have been regularized because the global population is moving away from fossil fuels. The existing companies find it hard to buy oil wells and invest in oil-related energy because various government stakeholders advocate for clean energy (Cappelli et al., 2021). Greenhouse effects have started affecting various countries, and many governments are investing in renewable energy to counter their power shortages and replace them with cleaner energy.
Changes in Uncontrollable Forces
Sociocultural changes have taken place in the last ten years to curb its negativity. People have been educated on the best way of respecting each other’s culture and finding ways of living in harmony. Racial discrimination eradication has taken center stage in the US to reduce its effects on the business environment. People from different races can be employed in organizations that initially distanced themselves from them. Many technical colleges, universities, and learning institutions are built to absorb the growing population (Drori et al., 2020). This means that many kids and teenagers stand a higher chance of finishing school because there are open chances in tertiary institutions. The language barrier has been cut in half because many people are learning the language right from lower educational facilities to synchronize with the population they want to work with.
The economic forces are reversed when government initiatives advocate for better working environments for local and international companies. An enabling environment attracts potential companies hence creating employment opportunities for the locals. Many companies have embraced the latest technologies to compete favorably with other companies (Drori et al., 2020). Based on natural disasters and human-related problems, countries have marketed areas prone to natural calamities and advised companies on ways of neutralizing the calamity.
For instance, China has advised new companies to invest in earthquake-proof foundations to neutralize the chances of a company building collapsing when there is an earthquake. Most countries have embraced clean energy to eradicate greenhouse effects. Countries such as South Africa, Hungary, Netherlands, and Kenya have invested heavily in installing solar, wind, and geothermal energy. Reducing carbon emissions and focusing on injecting more power into the grid will attract more international companies to embrace the same ideology.
Company Adaptation to Uncontrollable Forces
Coca-Cola Company is an international company that is highly ranked in terms of geographical penetration and daily profit. The company has managed to stay afloat by influencing its leadership and managerial ideologies to neutralize uncontrollable forces. In terms of sociocultural forces, the Coca-Cola Company has managed to develop products that everyone can consume. The company has invested in ensuring they have a wide range of soft drinks (Luong et al., 2020). For instance, the company developed Diet Coke with zero sugar to enable diabetic clients to consume it. When the attitudes of the global society started distancing themselves from their drinks, the company came up with Minute Maid to cater to fruit lovers. The global population is in constant evolution, and The Coca-Cola Company has ensured they become part of every evolution they take.
In evading economic forces, Coca-Cola Company has managed to maneuver the legal procedures by localizing their companies. When the company wants to operate within a given vicinity, it influences the local stakeholders and entrepreneurs to register it as a local organization. The parent company supplies the local company with the necessary substances and equipment to manufacture their drinks locally (Luong et al., 2020).
This technique has enabled the company to increase its profits and evade tedious legal procedures or double taxation. Based on natural disasters and human-related problems, Coca-Cola Company has installed solar systems in some of their new plants overseas. Their chimneys filter out harmful gases to ensure they are not part of the greenhouse gas problems. Equally, the company focuses on thorough research before building their plants to ensure they evade earthquake and hurricane-prone areas.
Google Inc. is an international company based in the US, but it has overcome some of the uncontrollable forces to be competitive. The sociocultural challenges do not affect the company because they hire locals to work in their plants. It is easier for a local employee to provide better insights about the country they are hired in hence improving the company’s outlook. Equally, the company established Google Translate, whereby everyone can use their search engines because it can understand their language (Bi et al., 2018). Unlike other search engines, google has voice input to attract clients. Using the latest technologies and modernized maps makes the company have a better market penetration, more so in the taxi business such as Taxify and Uber in every country.
References
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