A domestic company may extend its products to foreign markets by exporting, licensing and franchising. Initially, the exporting is indirect. It may develop a more serious attitude towards foreign business and move to the next stage of development. International company is normally the second stage in the development of a company towards transnational corporation. The orientation of the company is basically ethnocentric and the marketing strategy is extension. The marketing mix developed for the home market is extended into the foreign markets when a company decides to respond to market differences, it involves into the stage there multinational that pursues a multidomestic strategy. Multinational company’s each foreign subsidiary is managed as if it were an independent city stage. The subsidiaries are part of an area structure in which each country is part of a regional organization that reports to world headquarters. The transnational corporation is much more than a company Continue reading
International Business Basics
What Is International Franchising?
Franchisers sell a defined, proven business format or method of operation, offering a product or service that has sold successfully. An independent business is based on both an untried idea and operation. Franchisees can often buy lower-cost goods and supplies through the franchiser, resulting from the group purchasing power of all the franchises. Franchising provides a uniform system of operation, so that consumers receive uniform quality, efficiently and cost-effectively. A uniform system brings with it the advantages of mass purchasing power, brand identification, and customer loyalty, capitalizing on the proven format. A franchiser also provides management assistance, including accounting procedures, personnel and facility management. An individual with experience in these areas may not be familiar with how to apply them in a new business. The franchiser helps a franchisee overcome this lack of experience. Franchisors help franchisees develop a business plan. Many elements of the plan are standard operating procedures Continue reading
The Advantages and Disadvantages of Globalization
Globalization has become a hot-debated issue in the last ten to twenty years. Globalization is affecting the world from different perspectives, such as political perspective, economic perspective, and cultural perspective. Currently, whether globalization can bring more positive effects or negative effects to the modern world is still open to debate. Different scholars around the world hold distinctive views regarding the definition of globalization, but in this article, the following two definitions are used. Globalization refers to the creation and intensification of global linkages. In addition, globalization also refers to the compression of the world and the intensification of consciousness of the world as a whole. One of the main ideas of globalization is to break the barriers between countries. Everyone can receive information about different events happening in the world instantly. In the era of globalization, breaking barriers between countries is inevitable. Trading, foreign investments, population movements, these activities across Continue reading
Barriers in Cross-Cultural Communication
Cultural noise refers to barriers and impediments to successful communication among people of different cultures. Sources of cultural noise are numerous and could be consist of: Difference in language for instance the same words have different meanings in two languages which can creates noise in communication. Dissimilarity in non-verbal cues such as interpretation of body language. Differences in values such as importance of being on time in a culture. Self-reference criterion (SRC) which refers to one’s unconscious reference to one’s own cultural values when attempting to understand another culture. In the process of organizational communication model, fail in communication at any point can happen. Breakdowns occur when the sender fails to influence the receiver in the ways that are intended or when the receiver fails to do the same. The sender may convey the message in a way which is not received. The receiver might decode the message inaccurately, misinterpret Continue reading
Business-Government Relationships – Meaning, Advantages, and Disadvantages
The success of any business around the world depends on a wide-range of factors, some of which may be from the internal or external business environment. For this reason, business owners and managers have no option but to try and understand the underlying factors, which are essential in defining the progress and future performance of the business. From the manner in which a firm treats its customers, to its relationship with internal stakeholders, it is necessary to underscore how various factors are generally intertwined in any business market. The question we ought to ask is the need for establishing a relationship with the government when running a business. The manner in which governments relate with the business world has remained debatable for several years, presenting two sides of a coin in which debaters view the advantages and demerits of enhancing such relationships in any setup. This is based on the fact Continue reading
Attributes of Sound Performance Measurement System
Multinational Enterprises need to measure performance of all its organizational participants/elements and subsidiaries. Efficacy of organizational control depends on efficient measurement of performance. A right selection of a range of performance measures which are appropriate to a particular company/context is needed. This selection ought to be made in the light of the company’s strategic intentions which will have been formed to suit the competitive environment in which it operates and the kind of business that it is. There are at least three major attributes expected of any good performance measurement system. These are: Reliability, Validity and Objectivity. Each characteristic is examined in detail. 1. Reliability Reliability of a measurement mechanism refers to the dependability or consistency of the measures provided by it. It refers to “the accuracy of the data in the sense of their stability, repeatability, or precision” There are two ways of looking at dependability. One is comparability Continue reading