A global perspective is necessary for businesses since it assists in the process of identifying the prevailing threats and opportunities in the contemporary marketing arena. In spite of the fact that it is necessary to safeguard a business against global competition, it is vital to note that firms should seek ways and means of penetrating into international marketplace. For example, Barnes and Nobles bookstore entered into strategic alliance with Starbucks way back in 1993. The rationale behind the partnership was to put in place in-house coffee shops, an alliance that would benefit both parties. As a matter of fact, there are myriad of opportunities that are usually created when businesses penetrate into the global market. At this point, it is often of great importance for a firm to choose the most appropriate entry mode. While there are a host of entry modes that can be chosen by a business organization, it is Continue reading
International Business Basics
Rangarajan Committee on Balance of Payments
Dr. C. Rangarajan, former Governor, Reserve Bank of India who headed the high level Committee on balance of payments submitted its report on June 4, 1993. The Committee made the following findings and recommendations for correcting balance of payments: 1. The Committee stressed the fact that a realistic exchange rate and a gradual relaxation of restrictions on current account transactions have to go hand in hand. 2. In the medium-term care has to be taken to ensure that there is no capital flight through liberalized windows of transactions under invisibles. At the same time there is no escape from a very close control overall capital transactions so that future liabilities are kept under control. 3. The Committed suggested that Current account deficit of 1.6 per cent of GDP should be treated as ceiling rather than as target. 4. The Committee had given number of recommendations regarding to foreign borrowings, foreign Continue reading
Bills for Collection
Under Bills for Collection method of international trade payments, since a bank acts as an intermediary, the seller does not have to depend on the buyer only. But here the bank’s role is only in the process of routing the documents of transport/title along with other documents. The seller draws documents in terms of the contract that it has entered into with the buyer, hands over those documents to the bank with clear instructions as to the mode of collection- whether goods are to be delivered against payment or against acceptance of documents and a bill of exchange on the basis of which he can get payment after due date of exchange and if for instance that bill is not paid for some reason the seller can fall back on the Bill of Exchange law and can take action under that law to get payment. While the buyer does not Continue reading
Theories of International Investments
International investments mean investments beyond borders. International investments refer to investments by entities of a nation in nations other than their own. Foreign investments involve export of capital. The opportunity for International investments is directly emanating from economic reformist policies adopted by most of the countries of the world including centrally planned and command economies. Liberalization, Privatization and Globalization (LPG) are vigorously pursued by the countries giving an up-thrust on investment opportunities. Broadly there are two types of foreign investment, namely, foreign direct investment (FDI) and foreign portfolio investment (FPI). FDI refers to investment in a foreign country where the investor retains control over the investment. It typically takes the form of starting a subsidiary, acquiring a stake in an existing firm or starting a joint venture in the foreign country. Direct investment and management of the firms concerned normally go together. If the investor has only a sort of Continue reading
Managing an International Workforce
Whenever an organization expands its operations to other countries, it tends to become multicultural and will then face the challenge of blending various cultures together. The managerial personnel entering another nation need to adjust their leadership styles, communication patterns and other practices to fit their host country. Their role is to provide fusion of cultures in which employees from both countries adjust to the new situation seeking a greater productivity for the benefit of both the organization and the people of the country in which it operates. Read More: Human Resource Management from an International Perspective Managing Workforce Diversity Managing International HR Activities Selection Criteria for International Assignments Barriers to Cultural Adaptation Managers and other employees who come into a host country tend to exhibit different behaviors and somewhat, see situation around them from their own Continue reading
Global Market Models and Concept Analysis
Managers must be conscious that markets, supplies, investors, locations, partners, and competitors can be anywhere in the world. Successful businesses will take advantage of opportunities wherever they are and will be prepared for downfalls. Evidently, successful managers, in this environment, need to understand the similarities and differences across national boundaries, in order to utilize the opportunities and deal with the potential downfalls. In developing appropriate global strategies, managers need to take the benefits and drawbacks of globalization into account. A global strategy must be in the context of events around the globe, as well as those at home. International strategy is the continuous and comprehensive management technique designed to help companies operate and compete effectively across national boundaries. While companies’ top managers typically develop global strategies, they rely on all levels of management in order to implement these strategies successfully. The methods companies use to accomplish the goals of these Continue reading