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When the goods, services, knowledge, or technology move between national borders it is known as international business. International organizations facilitate the trade between the countries.

  • There are various challenges and opportunities in the International Business Environment.
  • For the business to expand, it is important to have some international business. This helps the business to grow.
international business environment

Challenges in the International Business Environment

  1. Different political environment- Politics often determines where and how international business can take place. Political disputes, particularly those that result in military conflicts can disrupt trade and investment. To operate abroad, organizations should be aware of and sensitive to the different political regimes.

  2. Legal politics- Each country has its laws regulating business. Domestic and international laws determine largely what the managers of a company operating internationally can do. Domestic laws include regulations, in both the home and the host country, on matters such as taxation, employment, and foreign exchange transaction. International law in the form of legal agreements between two countries governs how the earnings are taxed by both the countries. International law mat also determines how and whether companies can operate in certain localities. Companies should understand the laws of each country in which they want to operate, as well as how the laws are enforced, to operate profitably abroad.

  3. Behavioral factors- The interpersonal norms of a country may necessitate a company’s alterations of operations. Managers should understand societal values, attitudes, and beliefs.

  4. Economic factors- Economics explains why countries exchange goods and services with each other, why capital and people travel among countries in the course of business and why one country’s currency has a certain value compared to another’s. Also, a manager needs to know different analytical tools to determine the impact of an international company on the economies of the host and home countries and the effect of a country’s economic policies and conditions on the company.

  5. Different geographical influences- Managers need to know the geography to determine the location, quantity, quality, and availability of the world’s resources, as well as the best way to exploit them. The uneven distribution of resources results in different products and services being produced or offered in different parts of the world. The probability of natural disasters and adverse climatic conditions such as floods, hurricanes, earthquakes, tsunamis, or freeing weather makes it riskier to invest in some areas.

  6. Competitive environment- Companies face different competitive situations depending on products, strategies, and countries where they operate. As the competitive environment varies at an international level, so do the international strategies. Also, companies face international or local competition at home and in foreign markets.

  7. mgm30 international business environment assignment help mgm30 international business environment assignment help
  8. Culture- Culture poses a challenge for managers as they have to handle different values, attitudes, and behaviors. Managers have to understand cultural differences and the ways they manifest themselves. To achieve success in international business a manager/organization has to show cultural adaptability, patience, flexibility, and appreciation of other’s beliefs.

  9. Cross-national cooperation and agreements- Trading groups whether bilateral or regional are an important influence on MNE’s strategies. Companies must be aware of the regional economic grouping that encompasses countries and they must change their organizational structures and operating strategies to take advantage of regional trading groups.

  10. Nationalism and business policy- Nationalism is a dominating factor of the social life of the people of the host countries. Nationalism also affects the business operations of the MNC’s dramatically and drastically. The international businesses should be cautious of nationalism and its effects.

  11. National security policies of the host countries- MNC’s should abide by the national security policies of the host country. Sovereign governments enact and implement laws and formulate and implement policies and regulations. The international business houses should follow these to do business successfully.

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