Home and host countries evaluate business propositions of Multinational Enterprises (MNEs) from their points of view. The evaluation relates to size, place, product, price, process, people and partnership related issues. Negotiations are take place between MNEs and host government whenever consensus is not reached on major issues. Here comes the importance of business-government relationships. The business negotiations and diplomacy between companies and governments determine the terms of international business operations. MNEs attitude to Governmental Stipulations Multinational Enterprises (MNEs) attitude to Governmental Stipulations may be one of complying. This is highly positive. In a hierarchical view of governmental authority, companies accept regulations as ‘givens’, and MNEs comply with. Occasionally they try to circumvent, avoid or repudiate operating because of the regulations. MNEs comply with Government regulations when the regulations don’t unduly constrain their desired mode of operations, when benefits are sufficiently attractive in spite of regulations, and when they cannot practically Continue reading
International Business Basics
Transport Documents used in International Trade
In international trade, the goods move from the warehouse of the exporter to the warehouse of the importer. The goods may move by land water or air or a combination of one or more of these modes. In international trade, such transport documents are more in number and it is very important to know the significance of each type of document and its nomenclature, etc. One of the important aspects to be remembered with regard to any transport document is that it must show the name of the carrier. 1. Bill of Lading This is a transport document, which represents the movement of goods by water. A Bill of Lading is a formal receipt given by a ship owner or their authorized agents stating that the goods mentioned therein (quantity, quality, description etc.) are shipped on a specified date and vessel and are deliverable to the person mentioned therein or Continue reading
Price Component of the Global Marketing Mix
In any country, three basic factors determine the boundaries within which market prices should be set. The first is product cost, which establishes a price floor, or minimum price. While it is certainly possible to price a product below the cost boundary, few firms can afford to do this for extended periods of time. Second, competitive prices for comparable products create a price ceiling or upper boundary. International competition almost always puts pressure on the prices of domestic companies. A widespread effect of international trade is to lower prices. Indeed, one of the major arguments favoring international business is the favorable impact of international competition upon national price levels and, in turn, upon a country’s rate of inflation. Between the lower and upper boundaries for every product there is an optimum price, which is a function of the demand for the product as determined by the willingness and ability of Continue reading
Multinational Corporations and Technology Transfers
In this world many things can be shared, transformed and utilized which helps to the development of civilization, but knowledge is the rarest of rare wealth that cannot be stolen and it remains intact with a person until it is expressed. Once it is expressed, there is no guarantee how it is used and manipulated. To control this unauthorized use of technology several laws like patent laws, copyright laws etc. were drafted all around the world. Knowledge is recognized as one of the capable resources for dynamic global business environment. Technology transfer is not an easy issue it has potential to influence the political and financial relations of countries also. Multinational companies are having a rare opportunity to transfer the new technology to the developing countries. In recent times the link between the technology transfer and foreign direct investment through multinational companies became central plank of the issue in all Continue reading
How Does International Business Differ From Domestic Business?
It is almost commonplace today to find businesses venturing into international markets. Thanks to advancements in communication and information technology, this trend will most certainly persist for the predictable future. The most domestic organization’s when considering expansion will usually look outside their geographical location. This usually means looking at opportunities in international markets. It is believed that managing and running a domestic business is less complex than undertaking international business for a number of reasons. Nation-states typically have unique laws governing trade and investment, variations in business ethics and culture, different political systems, monetary policies, currencies, and so on. And these are all possible factors that could make international business more complicated and therefore, riskier than doing business at home. In discussing the differences between international business and domestic business, it will make sense to discuss issues involved in doing business internationally that will not otherwise be present or prove Continue reading
Decision Making Process in Management
Decision making process is an important part of new era management. This is the main function of management where the manager responsibility to make a best decision. Efficient decision making involve a series of steps that require the input of information at different stages of the process, as well as a process feedback. According to the rational model, the decision making process can be illustrate into six steps. The first component of decision making process is recognizing the requirement of decision. The requirement can be as a problem or opportunity. A problem can be occurs when the organization performance are below their target and unsatisfied. An opportunity will occur when the manager see the good potential to make their achievement exceed their target. Effective leaders would recognize problem situation and play a vital role in coming up with the best possible solution in the decision making process. The process of Continue reading