What global and international considerations should be made when conducting business?
Classmates post, Respond to this:
Theoretically, David & David (2017), state that operating businesses internationally is the same as operating businesses on domestic soil; with the caveat that there are additional variables and relationships to consider. Considerations when conducting businesses internationally include:
Language differences. Not all countries speak English and thus, communication must occur with the use of translators.
Culture. Culture varies between countries as well as within different regions of a country It is important to understand the culture of the country and determine if the business venture will be considered a value-added business for the country. If it is not deemed as important or value added, the company is at risk for failure or decreased success.
Labor laws. Each country has their own set of legal and regulatory laws. A lack of understanding of these regulations can jeopardize the company in the foreign country. Many countries also have a high number of labor unions that will impact the cost of labor as well as required work conditions. Union contracts also can have a significant impact on the cost of labor in the other country.
Currency exchange rates. Exchange rates will fluctuate and potentially be seen as a loss.The exchange rate will also impact the cost of items to consumers and could impact sales if the price of items is too costly for the importing country.
Taxes. Tax rates vary from one country to the next. If the country has a high corporate tax rate, it can be a deterrent to expanding into that country whereas countries with low or no corporate tax may chose to be headquartered in those countries to minimize or pay no corporate taxes.
Established companies need to be conscious of any potential changes in all global areas. Companies that are looking to expand must consider all the above factors in their strategic plan.
David, F.R. & David. F. R. (2017). Strategic Management: A Competitive Advantage Approach. (16th ed.). Boston, MA: Pearson.
100 words, aPA, no title page. scholarly reference.
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