Socio and Economic Factors in Global Business Essay

Socio and Economic Factors in Global Business Essay

Length: 1917 words (5.5 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

Socio and Economic Factors in Global Business

When a company decides to take their business international, there are many different sociological and economic factors that they need to take into account. There are differences in management styles, international laws and treaties that regulate international business, as well as cultural customs that come into play. Each of these are significant and needs to be taken into account in order to minimize potential problems. Many times, lack of knowledge can create serious problems. Although there are a myriad of socio- and economic factors, this paper will focus on three key ones: 1) political barriers; 2) labor practices; and 3) cultural barriers. Additionally, real world examples will be offered on how some businesses have successfully overcome these barriers.

Political Barriers

For purposes of this discussion, political barriers refer to the geo-political situation of a country, as well legal barriers such as tariffs, taxes, etc. Countries set up barriers to foreign entities conducting business within their borders (especially imports and exports) for several reasons. Duties and taxes can create some government revenue. If there is a high tariff then there will be less exporting, therefore more of that product in the country, thus making the price of that product in the country lower since there will be a greater supply. So trade barriers can be helpful to a country. On the contrary, trade barriers can have a negative effect on a country as well. Consumers will have to pay a higher price on imports, and for similar products produced in the country the price will rise due to consumers buying the imported products. In order to regulate the barriers on international trade, there have been organizations formed. GATT (General Agreement on Tariffs and Trade), WTO (World Trade Organization) and NAFTA (North American Free Trade Agreement) are just a few examples (Czinkota, 1999).

Other considerations in overcoming political barriers are the governments themselves. Conducting business in Cuba is virtually impossible for American companies probably until the fall of the Castro regime. Domestic and international pressure on human rights, governments considered to be corrupt or "illegal" may also hamper an organization’s ability to do business in certain regions of the globe. Although these factors...

... middle of paper ...

...zed crime, etc (Fortune Small Business, 2000).

This discussion has highlighted but a few socio- and economic factors that must be considered when deciding to conduct business in a foreign country. As one can demise, the risks are there, but the potential for profit is very alluring. With prior proper planning, the risks can be limited. However, it will serve businesses well to incorporate economic factors into their overall global business strategies.


Czinkota, M., Ronkeinen, I., Moffett, M. (1999) International Business. Fort Worth: The Dryden Press DSN Retailing Today (2001, June 5). Open trade in billion-man market creates empire of opportunity.

Economist (1997, June 21). 99% perspiration. Vol. 43, Issue 8022.

Fortune Small Business (2000, April). East meets Mex.

Hofstede, G. (1984). Culture’s Consequences. Beverly Hills, Ca: Sage Publications.

Orange County Business Journal (2001, April 23). OC companies do business in China over tea, gestures.

Winter, D. (May 2000). Facing globalization. Ward’s Auto World. Vol. 36, Issue 5.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Classical Economic And Socio Economic Essay

- It can be seen that classical economic and socio-economic have a different focus. The school of thoughts might seem contradictory to each other. However, Friedman principle may also be aligned with socio-economic view to a certain extent due to market for virtue and competitive advantage (Orlitzky, 2015; Sandoval, 2015). The “Market for virtue” may exist if society as a whole works as the main driver of Corporate Responsibility (CR). Support from society is presumed to encourage business to conduct in CR manner (Carroll and Shabana, 2010)....   [tags: Corporation, Corporate social responsibility]

Strong Essays
1381 words (3.9 pages)

The Impacts of the Economic Environment in Tom’s Maine Brand Essay example

- ... This takes into account the set of beliefs, customs, practices and behaviors that exist within a certain population. This can be seen quite clearly for the company Tom’s of Maine. Tom’s Maine’s target populations are usually those individuals who feel quite strongly about the environment in general, such as vegans, vegetarians and tree huggers alike. Without this target market, Tom’s of Maine would probably have a difficult time promoting its products or getting people to buy them. It is the drive of these individuals who care for the earth and the environment, that help keep a company like Tom’s of Maine up and running, and by keeping it up and running, they are also helping to produce...   [tags: cost, socio-cultural, regulations]

Strong Essays
865 words (2.5 pages)

Socio Technical Systems Essay

- Socio technical systems Systems can be open or closed. Open systems are those that are linked to t he outside environment whereas closed systems have no link to the environment. Socio- technical system consists of both the social system and the technical system. The social segment refers to people and the technical part involves the software itself, the hardware, and the processes. It is said to have been developed by Erick Trist (1911-1993) Social system is a social structure in general refers to entities or groups in a definite relation to each other....   [tags: Open, Closed, Kenya]

Strong Essays
1529 words (4.4 pages)

Essay External Analysis: Global Economic Outlook

- Political Factors Experts argue that in 2014, US domestic legal regulations will follow the trend of 2013 by raising taxation issues and slowing the expansion and growth of online retail (State Legislatures, 2013; Tribbey, 2013). As a result of this emerging political factor, internet retailers should further seek governmental support from US Senate and Congress Commerce Committees in order to receive benefits in regard to taxation. Online retailers therefore should also seek the assistance of local authorities in order to develop the demand for e-commerce to an even more significant level....   [tags: domestic legal regulation, e-commerce]

Strong Essays
1087 words (3.1 pages)

London: A Global City Essay

- The first industrial revolution, evolved in London, allowed many advances in many scopes for the British capital. Actually, those upheavals give her the access to the world’s market, her power spread worldwide, its networks of influence never stopped extending. Now, those stamps pin down London. That’s why, today, London is considered as Europe’s capital, London is a global city, attracting nowadays diverse strategic activities. Firstly, London is a big economic place, contracting the most influential corporations of the world....   [tags: economic, urbanization, globalization]

Strong Essays
633 words (1.8 pages)

Business Ethics and the Chinese Market Essay

- I believe that standard business ethics cannot be possible internationally. Culture varies from society to society. The change in culture varies due to various reasons it depends on economic and legal factors. Political and legal factors play a vital role and that differentiate from one culture to another that is why I believe that business ethics can never be universal. Considering the example of China where government put a check on online information. Google has a big concern over the Chinese market because many web pages were blocked within that region....   [tags: Business Ethics Essays]

Strong Essays
2924 words (8.4 pages)

Understanding Global Cultures: Brazil Essay

- Socio Economic Challenges Overall Brazil's economy has been performing very well in the last decade or so but it hasn’t translated into an impartial earnings allocation. The economic growth miracle of Brazil, like that of Russia, India, and China has not translated into equitable income distribution or poverty eradication. In 2010 poverty was estimated at 26%, mostly in the rural areas. The countless problems with urban and rural poverty and gross income inequality remain largely because of very high concentration of wealth and rampant cases of bribery and other forma of corruption....   [tags: business etiques, economic growth]

Strong Essays
1030 words (2.9 pages)

Business Analysis: The De Beers Group Essay

- The De Beers Group, the dominant agent in the diamond mining, industrial diamond manufacturing and diamond trading sectors, has a significant mining presence in Botswana, Namibia and South Africa. Africa’s recent history is characterised by the West’s inexorable exploitation of African natural resources, resulting in a continent plagued by corruption, violence and slow development. Through committing to the ‘Living up to Diamonds’ initiative, De Beers aims to create lasting contribution to the communities in which the family of companies operate in (ENP Newswire, 14 June 2011)....   [tags: Business Analysis ]

Strong Essays
1151 words (3.3 pages)

Global Expansion in Retailing Essay

- Global Expansion As retailers compete against each other to secure their business presence in their company's home nation, they are also adapting to the retail industry's changing environment by globally expanding through investing in international countries in order to make their business the most profitable and recognizable around the world. Factors Many retailers who are satisfied with the revenue their home nation's company generates do not expand globally as investing in international countries is expensive and the chance of being internationally successful is not guaranteed by the retail industry, although there are many retailers who take the risk anyway due to certain factors....   [tags: investing, business, factors, profitable]

Strong Essays
767 words (2.2 pages)

Business Environment - China Vs India Essay

- Business Environment - China vs India ‘For Australian businesses looking to expand their operations overseas, China is a more attractive location than India.’ To what extent do you agree with this statement. Justify your answer. Introduction In the year 2007, China and India ranked first and second respectively in the list of ideal foreign direct investment (FDI) destinations, according to A T Kearney, a global strategic management consulting firm (The Press Trust of India Limited, 2007a)....   [tags: Business Market Analysis Compare Contrast]

Free Essays
1544 words (4.4 pages)