Question

What do you see as the key issue(s) in international trade? Please provide evidence for your reasoning. Thank you!

Answer 1

When a firm operates in the international business, it is expected that all the businessman must be having the common understanding. But most of the people target towards improving the business profit and reducing the costs and thus the international businessman can observe so many variations that it could surprise him. Different cultures have different business values and practices; If some efforts are made by the business in order to gain some cultural literacy, then it can really help the business to be successful with other businesses and people around the globe.

While working in international business, it is very important for a businessman to demonstrate that he has the understanding of various cultures. This cultural literacy can be quite useful in having the better understanding about how a certain business dealing is observed in ascertain culture. There can be some cultures which deal these business as friendly association while some can view it as merely a profit making chance. Thus if the business understands these minute differences, it can really help it in long run.

Each country has its own unique style of performing a business, is unique sets of cultural values and so on, thus there will be a lot of cultural and demographical variation in the USA and the other country for example India. India is a country with very vast richness in cultural, religious and linguistic diversity. In India, every 200 km the eating habits, language and the customs keep on changing. The manager of a USA based MNC will have the problem of how to manage such a vast diversified employee base.

In order to overcome these issues, it is important for the international manager to, first of all, understand the culture, values and thinking process of different communities in India and depending upon that various teams should be formed. In fact, the team members should be given the training on how to manage conflict, express their opinion and respect the diversified backgrounds of other team members.

Apart from this, the political scenario and the economic situation also poses a greater threat for the firms opting to conduct business in external location. Exchange rates also are a major consideration as with the changing exchange rates, the cost of operating the business can be changed significantly.

Opportunity:- The major risk which can also be a major opportunity for the organization which are operating in different countries can be seen as the cultural difference among the customers. By developing innovative and unique products which are able to fulfill the specific demand of the customers, a company can find out a totally new customer segment and thus it can expand its business. Even these cultural differences also provide the change of bring more innovative changes in the existing products .