The paper “ Modes of Entry Available to Firms Embarking on a Program of Internationalization” is an informative example of an assignment on business. What specific issues do international business firms need to take into consideration in developing their international strategies particularly those that differ from the issues considered by firms not involved in international business? The business environment in foreign countries differs from the one in the home country. Strategies used, therefore, differ from country to country. This is due to issues arising in those countries that international business firms need to take into consideration when developing international strategies.
International managers must encounter languages and cultures, political systems, multiple national governments, accounting systems, currencies, and legal systems. Language is an issue when doing business in foreign countries. International managers must understand the kind of languages preferred in those countries. English might be used in the home country but local languages may be used in foreign countries. Culture is also another complex issue than any international business must put into consideration. Firms not involved in international business may experience a relatively homogeneous culture at home but expanding internationally means experience diverse cultures within countries and between countries.
The political situation of a foreign country will affect the international business. Countries that are politically unstable might affect the performance of the business unlike at home where politics are more stable. International managers must also consider the economy of a country it would like to do business in. The economy varies between countries and among the countries’ regions. The firms in the home country experience a uniform economy though business cycles change. By analysis of the economic status of a country and its region, an international manager may decide whether to invest in that country or not.
Foreign governments sometimes change rapidly and their policies may interfere with the operations of international business, unlike the home country government that is stable and predictable.
Adapted from Arvind V. Phatak (1989). International Dimensions of Management (2ed). Boston: PWS Kent Publishing.
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