Important Characteristics Of The Business Environment In The International Environment

INTERNATIONAL TRADING ENVIRONMENT

Worldwide trading is not the same as domestic trading due to the fact that the business setting changes once an organization goes beyond international boundaries. Usually, an organization understands its local environment very well, but is not so used to with the environment in other nations and should spend more capital and time in understanding the new business atmosphere.

Consider the following as some of the essential characteristics of the environment that change internationally –
 Economic Environment
 Political Environment
 Cultural Environment
 Competitive Environment

The economic environment may be totally dissimilar from one country to another. Nations are commonly categories into three

Thus an organization must understand nature and / or the environment of the country that it wishes to operate so expansion of operations internationally would mean a success to the organization.

Another important characteristics in doing business internationally is the political environment. This refers to the countries risks in terms of politics which includes the organization’s relationship with the government and the nature of government. Dealing with various forms of governments, associations, and levels of risk is one of the biggest factors to consider in doing business internationally.

There are various forms of political structures (depends on the country that the organization is dealing with), few examples of these forms includes one-party states, multi-party democracies, dictatorships (military and nonmilitary), constitutional monarchies and so

This is somewhat due to the political, economic and cultural environments. These environmental influences help control the degree and type of competition that is happening in a given nation. Rivalry can come from a diversity of causes. It can be from private and / or public sector, may also originate from large or small organizations, be international or domestic, and stem from old or new competitors. For the local business, the utmost likely causes of rivalry may be well understood. The identical may not be the case when one moves to compete in a different and / new environment. For example, in the 1990s in the USA (United States of America), most businesses were privately owned and rivalry was among private sector organizations, while in the PRC (People's Republic of China) businesses were owned by the government. Thus, a USA organization in the PRC might find itself opposing with establishments owned by government entities such as the PRC army. This might change the environment of competition