International concern as defined by Business Dictionary is the exchange of goods and services between groups or persons runing in two or more states ( n.d. ) . Quite frequently the term international concern is used in stead of international trade and hence import and export activities automatically become portion of international concerns. As portion of their scheme concerns go international in order to increase their gross revenues through market enlargement or to cut down their costs and other hazards involved ( UPEI n.d. ) .
International concerns need to take history of a figure of factors such as the costs involved to make concern, the hazards that are posed when making concern with other states, the many jobs associated with covering with other authoritiess, and detailed cost benefit analyses and tradeoff that are involved when making concern on an international degree. All these factors are on a micro degree which any concern faces. However there are some issues on a macro degree that concerns come across such as covering with different civilizations, understanding consumer demands and wants, duty barriers, economic costs, environmental alterations and other planetary events that shape international concerns. International concern schemes involve two chief activities ; import and export. These international trade activities involve a figure of issues. Some of these issues which are on a macro degree are discussed in this paper.
Issues:
Culture:
Culture has stemmed up as an indispensable characteristic in the growing of any company. The failure of acknowledgment of cultural facets may take to serious jobs when concerns operate internationally. It is highly important for concerns to understand the behaviour and outlooks of their concern spouses specially if transverse boundary line exchanges are being made. Cultural differences play a major function in how people operate and see things. Therefore if successful concern partnerships are sought for, concerns should foremost happen out about the concern civilization of that peculiar state and even what their verbal and non verbal idiosyncrasies really mean.
Courses of direction and organisational behaviour help us to larn and use theories related to civilization. One such theory is represented by Geert Hofstede. He has identified 4 major dimensions in his survey which demonstrates the national and regional cultural groupings. The four dimensions viz. are: Individualism versus Collectivism, Large versus Small Power Distance, Strong versus Weak Uncertainty Avoidance and Masculinity versus Femininity. These factors should be looked into when carry oning concerns internationally.
Intellectual Proper Rights:
Another issue related to international concerns is that of trade related rational belongings rights and patents. States want to make concerns on an international degree with the surety that their merchandise or service will be protected and non exploited. For this they require either the merchandise to be patented or copyrighted or registered so that it can non be reproduced in any manner. WTO has formed a subordinate by the name of Trade Related Intellectual Property Rights ( TRIPS ) which is responsible for guaranting that merchandises are patented and if exploited they take the necessary actions ( WTO ) . However an issue that comes out of it is foremost non many states can afford to acquire their merchandises patented. Second many patented merchandises that are exploited like pharmaceutical drugs, me-too merchandises come out in the market shortly, particularly of developing states and non much can go on at that place as their judicial systems are excessively corrupted and it would take every bit long as 10 old ages for the instance to acquire solved.
Last enforcing the patent demand on all states may non be executable for some, particularly developing states, as that would halter their export degree and finally the province of their economic system as that would intend reduced foreign direct investing. Harmonizing to Noam Chomsky the WTO policies on IPR impedes the development and growing of economic systems as it reduces the opportunity of invention and focuses merely on high net incomes ( Shah 2007 ) .
Global Economic Situation:
Global economic conditions greatly impact international trade and international concerns. The planetary economic and fiscal conditions are positively correlated with planetary trade. If the planetary fiscal and economic conditions are non favourable and traveling through a crisis, it can really easy impact international trade and interrupt the imports and exports state of affairs. Recently the universe has experienced a planetary fiscal crunch and this recessive stage is impacting international concerns to a great extent. We ‘ve seen states confronting immense balance of payment shortages, companies have filed for bankruptcy, bailouts are taking topographic point, immense layoffs and other such activities are happening that are all impacting imports and exports negatively. Trade chances do non look excessively good and after decennaries the universe will confront immense diminutions in trade ( Lehmann, 2008 ) . Some of the states that have been severely affected by the current fiscal crisis include Argentina, Thailand, Brazil, Russia, Malaysia, and Korea ( TWN, n.d. ) . A recent study released by WTO quoted a figure of over 10 % which represented the lessening in volume of traded goods in the demand in Europe and North America in 2009. Hence one of the major issues that international concerns face is the alterations that take topographic point in the fiscal and economic environment of the universe.
Duties and Non Tariff Barriers:
Another issue that stems out of the fiscal and economic environment, every bit good as otherwise, are the trade related duty and non duty barriers. These possibly either due to a state ‘s trade policy or due to policies set by organisations such as the World Trade Organization ( WTO ) and European Union ( EU ) . These barriers are normally imposed to protect the trade of place states or in order to protect the trade and labour of peculiar states or parts by their several organisations. We have seen the EU to be most unfastened to merchandise and really frequently is it seen to cut down duty and loosen up other barriers related to peculiar goods and trade goods particularly for industrial goods which are the lowest worldwide ( EEPC n.d. ) . International concerns hence are greatly impacted by these duty and non duty barriers as those trade goods will be traded more that have relaxed barriers and low duties while other merchandises that face high duties such as luxury points will be traded less. Consequently the grosss generated from trade related activities will be more states that produce goods confronting low duties and less for states that produce goods confronting high duties.
Terrorism:
Terrorism and other similar activities taking topographic point in the universe pose a immense menace to international concern. Terrorist activities such as the September 11 onslaughts on the World Trade Center in 2001 and July 7 bombardment in UK are taking topographic point on a planetary degree. Terrorist webs have spread across the universe and with the usage of engineering these onslaughts are really easy possible. This poses immense issues to international concern and the import and export state of affairs of the universe. Countries find it hard to make concern to and from peculiar states due to closed trade, countenances, or trade trade stoppages and boycotts. After the US embassies were bombed and more so after the 9/11 onslaughts, countenances were put on many Islamic provinces. International concern was non possible from these states which included many developing states. This caused a batch of jobs as states that used to import cheaper goods due to the inexpensive labour in those states were non possible. This besides affected the concerns of these developing states as they could non export their goods which greatly impacted the foreign direct investing that was coming in from the states that traded with them.
Such terrorist activities hamper international concerns as due to such events trade related countenances start acquiring imposed on states. At times states even get blacklisted and their economic system is wholly closed signifier the remainder of the universe. Hence a major issue that international concerns face is due to terrorist activities. The quandary is that even though a state may non be back uping such activities nevertheless because they take topographic point from the land of that peculiar state, it has to confront trade barriers and other import export limitations. Afghanistan, Pakistan, Iran, Iraq, and other states that were involved in such terrorist activities all faced import export limitations whether it was in the air power industry or the consumer goods industry.
Human Rights:
One major issue that international concerns face is in the country of human rights. Child labour and other human rights issues greatly affect international concerns. These issues have been highlighted so much that at times states boycott importing from those peculiar states or halt exporting to them. It has been estimated by the U.S. Department of Labor that about 15 million kids ( 5 % of the universe ‘s kid labourers ) help in bring forthing goods that are exported to the U.S. whereas 80 % of all the kid labourers are involved in agricultural activities ( Child Labor Public Education Project ) . These goods include seafood from Thailand, nuts from India, java from Kenya etc. ( Child Labor Public Education Project ) . Around the same sum of adult females are besides involved in such activities particularly in the development states for which they ‘re non even paid. Even the kids involved in labour are non given the merited sum of salary and are kept in really hapless conditions.
Organizations such as WTO are responsible for explicating policies that protect the rights of labour nevertheless as of now there are no such formalistic policies by the WTO. To a certain extent U.S. Trade Legislation has taken into history the issue of labour and labour rights nevertheless that may contradict the construct of international free trade as laid out by the WTO ( WTO, 2000 ) . Countries that pattern kid labour can ever take the support of WTO under the proviso of international free trade and battle for their justness as WTO states that free trade helps cut down poorness ( WTO, 2000 ) . Hence the issue of human rights remains controversial in the export and import scenario.
Corruptness:
A major challenge international concerns face is that of corruptness, of which graft plays a major function. Bribery deforms economic developments of planetary markets as it distorts the public presentation and quality of concerns that are being operated ( PIIE, n.d. ) . Furthermore it poses as a non-tarrif barrier to companies that want to make concern with other international companies ( PIIE, n.d. ) .
The Power of the Consumer:
States do concerns internationally and indulge in other trade related activities in seeking to increase their state ‘s GDP and GNP and bettering their economic status. However what must non be forgotten is that all trade is taking topographic point for the consumer and because of the consumer. The ultimate power lies in the custodies of the consumer ( EEPC n.d. ) . Therefore it is better if trade and international concern activities take topographic point with both the populace and private sector partnership.
Furthermore it is all about the demands and wants of the terminal consumer who needs to be satisfied. Quality issues, merchandise specifications, and all other considerations stem from the consumer. Hence a major issue that links international concerns is the consumer and what the consumer demands are. The issue nevertheless is that many states do non hold the edification or the expertness to happen out what precisely the client wants whether it is local or international. Today trade has become really sophisticated. The consumer excessively has limitless picks to take from. Therefore it is of import for international concerns be cognizant of client demands and present based on those defined specifications if they want changeless grosss to flux in. Another related issue is that of competition. If international concerns fail to present what the client requires so competition from other concerns is likely to come whether it is on a domestic degree or an international one.
Solutions:
International concerns face a batch of issues when they enter into international trade and import and export related activities. However certain strategic solutions if implemented can turn out to be extremely good for international concerns. First is the enlargement of free trade. This will non merely better the economic state of affairs of states but besides promote societal criterions and take them higher such as an betterment in working conditions due to improved grosss will convey down kid labour ( CATO Institute, n.d. ) .
Another solution is to develop substructure for better communicating or else international concerns and planetary trade will non supply any kinds of benefit. Although international concerns have to confront a figure of issues and jobs, one country nevertheless they can take advantage is in playing a function in countries such as instruction. This is particularly good for developing states where instruction and literacy degrees are rather low. By puting in such countries these concerns can better capitalise on available chances. Furthermore they can indulge in public private partnerships and work towards being in a better place to capitalise on international concern chances.
International concern issues are rather complex chiefly because concerns are runing is on a planetary degree. There are no defined solutions to work out these issues, nevertheless international concerns should work towards beef uping their ain capablenesss and hence use them in capitalising on concern chances.
Decision:
This paper took a broader position of international concerns and some of the many issues that are faced by international concerns and other issues related to international trade. It can be concluded that international concern is non merely mere transportation or exchange of goods and services between parties belonging to different states or for that affair between two or more different states, nevertheless it is much more complex than that. The issues that exist are on a planetary degree hence they will merely be solved if planetary forums are made and these issues are addressed over at that place with proper representation from all international concern communities and states. Merely so will comprehensive and meaningful policies will be developed and implemented.
