The governments across nations generally play the role of the source of risks and costs of doing international business. The main risks and costs brought about by the governments are mainly caused in two ways. Firstly, the government’s regulation and policies on international business will lead to the certain degree of costs. Secondly, the uncertainty and changes in terms of trade will lead to risks for international business. Governments have many instruments of trade policy and many uses for them.
In terms of efficiency, free trade thus means that every state should play to maximise their specialisation of production and to minimise doing less efficient tasks (Kindleberger, 1995). Liberals believe that specialisation will improve the welfare of an individual country and that of the world as a whole if countries specialise in one task according to their comparative advantage (O’Brien and Williams, 2013). Moreover, nation states can expand their businesses with foreign direct investments, and this leads to more dynamic business style. Free trade opens up a door to the world for every single state, and domestic companies can export and import their commodities without paying extra tariffs or tax. Eliminating trade barriers creates a field which people can play a role internationally to compete one another in order to improve national as well as international economy (Balaam, and Dillman, 2011b).
Free trade enterprise has developed and grown through organizations such as the WTO and NAFTA. The U.S. in order to obtain its free trade desires has implemented a number of policies that can be examined for both their benefits and flaws. Several trade policies exist as options to the United States, among these fair trade and free trade policies dominate the world economic market. In order to achieve economic growth the United States has a duty to maintain a global trade policy that benefits both domestic workers and industry. While free trade gives opportunities to large industries and wealthy corporate investors the American worker suffers job instability and lower wages.
Nations as well as business organizations are able to explore new markets and therefore increase their output leading to economic growth. Economic globalization can also lead to exportation of technology that will aid production process by increasing the units produ... ... middle of paper ... ... participation and better economic relations worldwide all parties need to play their role. The ground should be fair and leaders from developing countries should be given as much attention as those from developed countries. Proper utilization of opportunities presented by economic globalization will enable governments to achieve their goals with much easy. Moreover, there should be programs to enable developing countries adjust to economic globalization since this is the vehicle that will ensure that these countries benefit.
‘Trade policy’ is a broad term used to explain how international business is regulated globally. Each nation has its own set of laws pertaining to its trade policy. These laws can vary heavily from country to country. In some countries, governments are actively trying to promote an open economy, seeking to remove any barriers to entry in international markets for their home grown businesses while also allowing overseas businesses into their own markets to encourage competition. However in other countries, governments put legislation in place which is highly restrictive on overseas businesses in order to preserve their home grown businesses.
Many of the ethical issues in global trade are the direct result of varied political, legal economic growth and culture around the world. In parts of the world business practices would also vary. What would be normal in one region of the world or a country could easily be considered unethical or even illegal. In this paper, I will attempt to discuss what should be the norm for international business and optimal resolution for ethical dilemmas that all multinational organizations should adhere to as part of its normal conduct of business. Furthermore, I will discuss how to resolve the dilemma around fair wages paid to its employees, keeping the organization sensitive to various international cultures it operates in and to not let any local corruption and bribery shadow the good efforts and image of the organization.
These challenges often include issues associated with the host countries, the global workforce diversity management, management across cultures, difficulties in competitive global business environment as well as in the process of global planning and controlling. This essay is going to discuss the above international management challenges in a broad sense and giving illustration in aspects of each challenge. The first challenge that confronts managers of multinational corporations is related to the host-country issues. Both the international corporations and the countries that host their overseas operation should mutually share opportunities from any business relationship. Multinational en... ... middle of paper ... ...e located and the human resource management to effectively manage the global workforce diversity.
Analyzing and serving the consumer International marketing is an important factor in serving organizations to develop into becoming globally competitive. Companies who operate within domestic markets purely are having difficulties competing with a global organization. Therefore, what does it take to move an organization globally? According to Cateora, Gilly, and Graham (2013), “international marketing is the performance of business activities designed to plan, price, promote, and direct flow of the companies goods and services to consumers of users in more than one nation for profit” (p. 10). International marketing strategies and its effectiveness assists in the expansion of an organization.
The easing or eradication of these restrictions is often referred to as promoting "free trade." Component of liberalization include • Industrial Liberalization • Trade Liberalization • Financial Liberalization • Fiscal Sector Reform Positive impact of liberalization to insurance sector Foreign insurance companies can improve the efficiency of local insurance markets by providing superior customer services, introducing to new products and transfer technological and managerial know-how. Liberalization increases competition between company and encourages a more prominent specialty according to comparative advantages. Role of foreign participation in promoting financial stability are important. it is also authoritative to facilitating the trade and commerce of developing economies.
For growing economies, Foreign Direct Investment (FDI) has momentous advantages over equity and debt capital flows. Most of the foreign firms that start their conduct of business in other countries, they not only come with capital but transfer modern technology, promote human capital by training the host country’s employees according to the change of technology to those countries, and this is the key for the development of the host country. According to author Direct Investment replicates aspire of acquiring an enduring awareness by an inhabitant body of one economy that is the direct investor in a venture that is occupier in another economy which is called the direct investment enterprise. The “lasting interest” entails the continuation of a long-term relationship between the direct investor and the direct investment enterprise and an important level of authority on the management of the latter. Direct investment involves both the initial transaction instituting the relationship between the investor and the enterprise and all succeeding capital transactions between them and among affiliated enterprises; both incorporated and unincorporated (Duce & Espana, 2003).