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
International Business Basics
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
Foreign Direct Investment Incentives
Incentives are any measurable economic advantage afforded to specific enterprises or categories of enterprises by (or at the direction of) a government, in order to encourage them to behave in a certain manner. They include measures either to increase the rate of return of a particular FDI undertaking, or to reduce (or redistribute) its costs or risks. They do not include broader nondiscriminatory policies, relating to the availability of physical and business infrastructures, the general legal regime for FDI, the general regulatory and fiscal regime for business operations, free repatriation of profits or the granting of national treatment. While these policies certainly bear on the location decisions of TNCs, they are not Foreign direct investment incentives. The main types of Foreign direct investment incentives used are fiscal incentives (e.g. reduction of the standard corporate income-tax rate, investment and reinvestment allowances, tax holidays, accelerated depreciation, exemptions from import duties), financial incentives Continue reading
Definition of Globalization – Stages of Globalization
A very commonly used term, globalization can mean different things to different people. At a broad level, globalization refers to the growing economic interdependence among countries, reflected in the increasing cross border flow of goods, services, capital and technical know how. At the level of a specific company, globalization refers to the degree to which competitive position is determined by the ability to leverage physical and intangible resources and market opportunities across countries. “Globalization refers to the multiplicity of linkages and interconnections between the states and societies that make up the present world system. It describes the process by which events, decisions, and activities in one part of the world come to have significant consequences for individuals and communities in quite distant parts of the globe. Globalization has two distinct phenomena: scope (or stretching) and intensity (or deepening). On the one hand, it defines a set of processes which embrace Continue reading
Export Credit – Definition and Types
Credit is an essential requirement for any kind of business. So is the case with exporting also. The various sources available have to be explored by the exporter in order to fulfill the financial requirements of export business. We can define export credit as “the credits required by the exporters for financing their export transactions from the time of getting an export order to the time of the full realization of the payment from the importers.” From the time of an export order is received and confirmed, the exporter needs finance (export credit) at pre-shipment stage and also at post-shipment stage. Finance is required at pre-shipment stage for the following purposes: To purchase raw materials and other inputs to manufacture goods. To assemble the goods in the case of merchant exporters. To store the goods in suitable warehouses till the goods are shipped. To pay for packing, marking and labeling Continue reading