Question

Demonstrate the ability to critically reflect upon and give good thought to the key factors areas pertaining to the management process of international business?

Answer 1

Management process of international business is quite different from the management process of a domestic business. An international business is spread across different geographic areas and hence the external factor that affects and influence an international business is different as well. As such management process of international business is a quite comprehensive in nature.

The key factor areas pertaining to the management process of international business are business structure, competition, economic and political environment, finance and business issues like taxation, risk etc., employment, cultural norms and use and impact of technology.

The business environment in case of international business is radically different from the environment of a domestic business. As such one of the key areas is with regards to determining overall structure of the business. Based on different factors like location, set of product lines, etc. it will have to be decided whether a joint venture or a wholly-owned subsidiary or licensing will be appropriate.

Environmental factors and economic factors that will have to be considered are economy of the host nation, buying power of the consumers in the new markets, spending patterns, degree of development and degree of industrialization etc. A key focus area will be financial management and it should be noted that financial management of international businesses tend to be highly challenging. Focus will be put on understanding how fluctuations in currency value change international business transactions, use of financial derivatives instruments, taxation laws and issues etc.