Political Aspects of International Business
Political Aspects of International Business International Business (INBU350) The political aspects regard the International Business has been passing through changes that in one way or another affect the organizations. Countries fighting for defend of their territories against others or internal conflicts to keep the democracy alive; for instance the war between Iraq and Iran, or the citizens of Venezuela fighting for the survival of their democracy. As a result the pressure of the non-business situations stimulated the manner that the entrepreneurs do business internationally.
Politics and the governments own interest have a direct connection with these change. The managerial method to deal with international business has been transform to better understand the foreign government’s politics. (Fitzpatrick, 1983). They have stimulated the evolution of managerial function involves with the assessment and evaluation of the non-business environment that has current relevance. Companies has to start comprehend how the different governments rules and policies works.
Firstly the study of the culture, religion, ethnic, and how others companies making business in that particular country has been successfully. In case of those companies that don’t have the capital to invest in researching companies, can use the internal resources like an embassy together with the local government agencies. Furthermore of the strategy of the organizations to introduce products and services to the foreign nation they have to improve the managerial knowledge about it. Entrepreneurs can avoid unnecessary monetary looses if they watch closely any political movement.
However companies have no control of any political status that can affect suddenly their business. In the meantime by tracking the governments issues can minimize any unwanted situation that directly or indirectly affect the company status. On the other hand is not guaranteed that everything going to be under control. Meanwhile the international business has a grow pattern ascendance that will dictate the future of how to make business. Every political issue has a cause and effect besides it negative aspects.
The important of the globalization and new comportment to make business internationally has transformed the politics, regulations and policies of those restrictive governments. Additionally the endeavor of the international organizations to achieve and regulates the legal system such as ITC, GATT, and others. On the contrary the international law recognizes the right that any country has to accept or refuse any kind of foreign business in their territories. Meanwhile the United States government stimulated companies to establish operations oversea. Government policies can amend and pact relations with international business.
Several reasons may cause governments to modify any deal with the international companies even without notification advance. Politics changes can affect dramatically the manner that international business deal with import, export, and trade with another countries. For example China worked a serious restructuration on their politics and regulations with the international companies, which include better conditions of work for the local employees. (Mcubbrey, 2010) Political and legal risks are two very important aspects of running a business of which an entrepreneur should be aware.
Failure to recognize these risks and adjust accordingly could potentially hinder the performance of the overall business ‘As a result’ all this evidence indicates that companies that are looking for introduce of their operations internationally expect in return more than money invested. Therefore is about research and analyze how the country selected works regard the foreign companies. The entrepreneurs have to work with a serious analysis that need to include a investigation about culture, religions, ethnics, needs of the population, government, policies, issues and restrictions.
Finally the result of this will be a considerable investment of money and resources and will be necessary a good planning to secure, a profitable returns on investments. By studying the international market, analyzing pros and con, and structure a serious business plan companies can prevent loss investments as a consequences of political risk. References Fitzpatrick, M. (1983) Academic of management. Retrieved from: www. jstor. org/stable/257752 How managing political risk improves global business. Retrieved from: www. pwc. com/us/en/risk-compliance/managing-political-risk-improves-business-performance. jhtm