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Write a Short Essay (Half Page) Describing at Least Two Ways in Which Domestic and International Business is the Same and Two Ways in Which they are Different
The first similarity between international and domestic businesses is that they both share the share the business objectives of successful functioning in order to continue its business operations; both international and domestic businesses have the primary goal of functioning profitably (Briscoe & Schuler, 2004). The second similarity is that both domestic and international businesses are bound to comply with the local legal system of the country that they are conducting their business operations. In light of these, both a multinational firm and a domestic firm in the same country will operate under the legal system of that country. The first difference between international and domestic businesses includes the dissimilarity in currencies, implying that multinational firms must follow the existing currency exchange rate for their business transactions to be viable. The second difference entails cultural dissimilarities; an international firm operates in a multicultural environment, and must adjust its business strategies to meet the expectations of the foreign culture (Hill & Cronk, 2010).
Write a Short Essay (Half Page) on why International Trade is Necessary
International trade is necessary for three primary reasons: minimize the risk of an economic collapse; facilitate the acquisition of resources that a country does not have, and facilitates knowledge and information transfer among countries. International trade reduces the risk of collapse of a country’s economy (Hill, 2011). For instance, if one economy is to handle everything, its collapse will lead to the country falling apart. Through international trade, countries depend on another and establish a balance amongst them. Therefore, international trade helps in creating a balance and order in the global economic system. The second reason for international trade is that countries do not have all the resources they require. Because of international trade, countries are able to lower their costs of production and increase their profitability. International trade also facilitates information sharing among countries, which can impose significant benefits for the economies of both countries (Hill & Cronk, 2010).
List and Explain at Least Two Ways in Which Culture Influences Global Business
Cross-cultural differences impose significant influences on the manner in which international business is conducted (Briscoe & Schuler, 2004). The first significant influence of culture is that it shapes the business model adopted by a multinational firm. International firms must adjust their business model, practices and products offered to meet the cultural expectations of the country they are conducting their business operations. For instance, a multinational firm must use a staffing policy that matches the culture of the business environment, and the option for business entry should take into account the cross-cultural aspects of international business environment (Gillies, 1998). The second influence of culture on global business is cultural conflict, mainly because of the cultural differences between the home and host country of the business enterprise. This can jeopardize the success of an international business venture (Peng, 2008).
Write a Short Essay (Half Page) Giving an Example of How Legal Systems and an Example of How Political Systems Can Change in the International Environment
Various types of political and legal systems influence the international business environment. The dissimilarity of legal systems can compel one or more entities to adjust their business practices in order to comply with the local law (Briscoe & Schuler, 2004). On few occasions, the consent of the legal systems serve as a barrier to international trade and are irreconcilable, which imposes significant complications for managers of international businesses. Political systems in international business can change to take various forms including one-party states, dictatorships and constitutional monarchies (Gillies, 1998). In addition, governments change in various ways, which include war, regular elections and occasional elections. Similarly, there is a variation in terms of government-business relationships among different countries. For instance, business can be perceived as an engine of economic growth, or it may be perceived as a negative exploiter of the employees. Therefore, international businesses need the goodwill of the foreign government to be successful (Hill & Cronk, 2010).
Explain the Following Terms
Balance of payments refers to a method used by nations to monitor all international monetary transactions over a given time duration. The Balance of Payments is calculated quarterly and yearly and accounts for both private and public sectors in order to assess the inflow and outflow of money in a country (Gillies, 1998).
Exchange rate refers to the rate at which a country’s currency can be exchanged for another country’s currency, and usually denotes the value of a country’s current in relation to another currency (Gillies, 1998).
International Monetary Fund refers to a global organization with the primary goal of stabilizing exchange rates and aiding in the construction of the global payment system after the Second World War. IMF also surveys the economies and policies of its member states with the goal of improving the economies of its member nations. Overall, IMF aims at ensuring global monetary cooperation, safeguarding financial stability, promoting sustainable economic growth and high employment, reducing poverty levels, and facilitating global trade (Gillies, 1998).
List and Explain at Least Two Ways in Which Human Resources Management is Different in the International Business Environment
International HRM is considerably different from domestic HRM because it entails more functions, requires an extensive involvement of the employees’ personal lives, entails a higher risk level than the average domestic HRM, and is more heterogeneous and influenced significantly by external forces (Gillies, 1998). In comparison with domestic HRM, it is apparent that international HRM needs a much wider perspective because it entails varied issues such s global taxation, staffing policies, international relocation and orientation, selection and appraisal of local and international employees, and the management of relations with the host government.
Explain What, in your Opinion, Personal Characteristics are Required for a Successful International Executive
The personal characteristics required for an effective international executive must ensure the success of the international business franchise in the host country. The first essential personal trait for an international executive is broad-based sociability, which allows international executives to move beyond expatriate circles and establish ties with the locals (Gillies, 1998). The second vital personal trait is cultural flexibility, whereby the international executive must have an open mind to experiment, understand and practice different cultures. Effective communication skills are vital for international executives because of the need to create a healthy relationship between the subsidiary and the headquarters.
Write a Short Essay (Half Page) on the Challenges of International Information Systems
International information systems are different from the typical IS because of the need for conformity with cultures, standards and laws of various countries. Some of the challenges facing international Information Systems include technological barriers, electronic payment methods, tariffs and regulations, variation in terms of language and culture, economic and political considerations, variations in measurement standards and time zones (Hill & Cronk, 2010). Technological challenges arise from not all countries having sufficient IT infrastructures. Tariffs and regulations are a challenge because of the variations in importing regulations and laws of various destination countries.
Write A Short Essay (Half Page) Comparing and Contrasting Domestic and International Marketing
The first similarity between domestic and international marketing is that their success relies on satisfying the fundamental requirement of customers. The second similarity is that both domestic and international marketing aim at establishing the goodwill of the target markets. The third similarity is that they both require the use of Research and Development (R&D) for product adaptation and development (Hill & Cronk, 2010). The primary difference between domestic and international marketing is the scope of the target markets. Domestic marketing strategies have the primary objective of attracting and influencing consumers within national boundaries. Domestic marketing targets the local markets and competes within the country. The focus of domestic marketing is on local consumers and markets with no emphasis on overseas markets. On the other hand, international marketing has no boundary limits and focuses on overseas markets. In addition, international marketing involves political relations whereas domestic marketing does not entail the use political relations. Another difference is that domestic marketing faces no barriers, whereas international marketing faces numerous barriers such as cultural differences, customs and tariffs, currency policies and language barriers (Peng, 2008).
List at Least Two Risks in Conducting International Business and Explain how they Can Be Managed (Minimized)
Some of the potential risks in international business include political risks and country risks. Political risks refer to the political actions and instability that poses a significant challenge for effective business operation to maximize profits. Minimizing this risk requires international businesses to harmonize its political relations with the government. Country risk refers to culture and instability that makes it difficult for international businesses to function safely, efficiently and effectively. Mitigating the country risk entails harmonizing the business relations with the people and the government of the host country (Gillies, 1998).