PGBM04 International Business Environment

Knowledge:

1. Critically review and apply concepts, terminology & theoretical models associated with international business policies and strategies.
2. Demonstrate understanding of the political, socio-cultural, economic and technological factors that have been found to influence variations in international organisational business structures and leadership and  management styles
3. Critically assess the relationship between national and organisational cultures
4. Relate the conceptual theory of ‘internationalisation’, innovation and competitive advantage to different industries and locations

1.What are the various methods of internationalisation that could be adopted by any major retail organisation in a developed country seeking to expand its operations into large emerging markets to maximise the chances of success and minimise the risks of failure? Critically evaluate each method as explanations of the process of business internationalisation.

2.The PESTEL framework was designed to analyse specific dimensions of a national environment. Critically examine how the framework can be adopted to take into consideration other dimensions and broader scope, bringing in regional and global impacts .

Answer:

Introduction

For a business to be successful, the environment should be conducive and favorable for either a single business or a joint enterprise. Environment being the surrounding of a particular place, the influence in which it has on the people and the activities they do in day to day life, or rather a certain item of interest. Sometimes, one cannot have control over the environment and this affects the activities whether its input or output. All one can do is adjust and try to fit in so as undertake any business. Tebloyeva (2010) Challenges, on the other hand being one of the common factors that affect business negatively yet it can be changed to positive can be turned into opportunities that will affect businesses positively both locally and internationally in different ways like socially, economically, politically and culturally Caprotti (2012). And if at all it’s not then the concerned parties should try and fit in that environment so as to carry out their daily activities and maximize at making profit at the end of the day Bovis (2012).

International business environment

Large Multinational enterprises with much equipped resources, enough capital and experience, trending technology and trained workers that are always kept motivated and appreciated therefore experts in customer services and marketing of their respective companies products are venturing into business with emerging countries to sell market and partner with smaller businesses. The coca cola company for example has its headquarters in United States of America and has ventured into business with very many emerging countries one of them being India Anuar (2015). This has surely been a success since their products have flooded the market and is also very popular. However, cultural challenges have been a hindrance since the country has a diversity of languages, and a very different way of leadership religion,   but in business challenges are to be welcomed and the best drowned from it. Journal of Business-to-Business MarketingPart III:JBBMBook Reviews, (2009)..  Not accepted meaning accepting failure, giving up whenever something crops up since they will always be there Caranta (2013).

 Involvement of nations to doing business internationally is helping its government stay in good shape economically also the citizens will benefit both socially and economically through improving their life standards and socially by sharing ideas with strangers being open minded and innovative Tebloyeva (2010).. Seeing opportunities in challenges and using it to create business opportunities and engage in the growth of the nation and the world at large by being an exemplary example to other emerging countries, influencing them by the success that comes from partnering up with the large international enterprise therefore attracting more nations to engage in such business worldwide. Since two are better than one, the influential country will be able to maintain peace and security within and beyond their borders therefore reducing insecurity that is always a threat to doing business.

Internationalization is the process of increasing and ensuring that local markets and enterprises are involved in international market Journal of Business-to-Business MarketingPart III:JBBMBook Reviews, (2009).. This aims at improving human development by creating employment opportunities therefore improving their life standard so they can be able to afford both their primary and secondary needs and creating mutual understanding across nations which helps to keep peace and giving a hand of help whenever any of the alliances need one, expanding platforms for economic differences and similarities and establishing a common goal of improving economic, social and political standards, increasing trends of employing foreign citizens to work in firms bringing with them ideas as per their knowledge hence fostering innovations. This encourages socialization, embrace of diversity by exchanging ideas, learning new way of life of a people and promoting peace and understanding among individuals.

Cultural challenges facing multinational enterprises in India

Culture is a collective programming of a human mind that distinguishes people of one group from the other for example their dressing code, food, way of worship, interaction, responses to issues in life Bovis (2012). It has a great impact on business especially one that is emerging from elsewhere. That they need to cope with a new environment they know nothing about. Language barrier is one of the major challenges Tebloyeva (2010). India has extreme diversity in terms of society, religion and language. The official language being Hindi, twenty two other languages exists that are actually recognized by the constitution. Journal of Business-to-Business MarketingPart III:JBBMBook Reviews, (2009). Though is also widely spoken and also is the main business language, it would be a bit hard for a foreigner to understand such diverse language but making an effort, one could actually learn from the basics to actually speaking the language fluently depending with the duration of time they will be spending in that particular country

Indians tend to have so many religious festivals where they come together to celebrate and worship to give thanks to their gods. Attending such functions is important, celebrating together and showing them that you at least appreciate their culture is one big step. It would not be an offence to give them free drinks on such a day just to complement their day. This helps marketing the product and attracting more people to like coca cola’ Also it promotes peace and a sense of mutual understanding amongst them. They will always stay positive, speak positive and act positive towards the company.

When disputed, Indians would prefer settling the conflict by involving the parties to their council who will then decide the fate of the party found guilty or they would rather use the government to settle their conflict. This will be important to be note so as to know how to deal with law breakers within the business in case there are any. It shows respect, value of their way of leadership and appreciation of it other than taking the law in ones hand, its only wise to let the matter to be dealt with by the concerned authority instead.

In India, there is a different class of people ranging to the wealthiest to the less or not wealthy at all. People tend to give respect to the wealthiest and even their way of handling things is different. It is important to know those and keep in mind so as to differentiate between these two classes lest the company is found in trouble. The people of class always have this mentality that they can do anything since they have all the money in the world. This is false because as much as money can buy most good things on earth that help one to live comfortably, money on the other hand cannot by peace nor love nor true happiness nor inner satisfaction. It divides people rather than bringing them together. It kills the spirit of brotherhood and togetherness.

India has many local languages put together while most of them can speak fluently in more than just their mother tongue. They make a point clear by conversing in groups just their way of approach and one may mistake them as talking secretively about them and plotting some God knows what evil. Camillus (2011). It’s hard to communicate when both parties cannot understand each other appropriately. The basic requirement for a successful business is communication. The message first, sender, communication channel, receiver and then feedback is given when the message was well encoded and decoded by the sender and the receiver Caprotti (2012).

Currency challenges whereby the money to be exchanged with the Indian rupee is of high value and when exchanged it loses value or too much of it will be required for business creating very high exchange rates Tebloyeva (2010). A large initial capital is always requiring partnering up with other enterprises “Community Law Requirements for Remedies in the Field of Procurement Damages” (2010). The impact of rupee dollar fluctuation that has greatly depreciated creating negative results for example in February, rupee had decreased and fallen to 68.510 for a dollar. This weakens the economy a great deal making it hard to venture into business or taking a lot of time to recover or it never does at all Bovis (2012). This may cause the price of products to be increased like foodstuff, refineries, only for a few to be able to buy them instead of the large number expected.

The United States central bank that deals with exchange rates plays a big role in such a situation. When it raises or lowers the fed funds, it changes the exchange rates although indirectly. It also has a great influence on business both within the country and outside. For example if it lowers the rates, it reduces the supply of money and drives down the interest throughout U.S banking and as a result, this makes the dollar much stronger compared to other currencies.

Ethnicity and religious India has more ethnic and religious groups than most countries in the world. This includes the Muslims, Sikhs. The ethnic groups are always fighting against each other because of both political and religious differences Caranta (2013). The war that seems unstoppable has left many homeless, poor, full or partial orphans and all this has resulted to decline in economic progress of the country. It has also lead to poverty since people lose their properties whenever such conflicts emerge. A poor people or community slows down the growth of a country and the world at large. They become dependent then over dependent on the government that they don’t contribute to boost its economic status because of frequent misunderstandings among them. They also cannot afford even the most of the basic needs for themselves and their families Solovei?ik & Šimanskis (2017).

Solution to cultural challenges in reference to partnering up of India with multinational enterprise

Learning a few key phrases is a must in a diverse country like India with so many local languages others that have been amalgamated to form a language fluently spoken by the very majority "Re-examining procurement tenders with respect to price: a transaction cost model of Portland procurement agencies" (2014). This is because clear communication is needed for effective functioning and the day to day interaction with customers and clients. It is a requirement that each employee understands the clients and customers’ needs "comparing public procurement auctions" (2018). Although one may not learn the language at a go, depending on the number of clients or customers one works with and also the amount of diversity, learning a few greetings and key phrases can work in the meantime. This will encourage customers to buying or getting services in that particular enterprise. On the other hand, if some employees are dealing with clients of a specific culture, cross-cultural training will be ideal for them to be able to communicate and understand their clients Anuar (2015). It’s ideal to give them books to read in order to understand their clients for example the  kiss, bow or shake hands’’ one of the books that guides one to doing business in more than sixty countries.

Learning the clients culture by researching online for more information to easily discover the basics of their culture or inquiring makes them feel comfortable Kramer (2017). Like what they like and value let’s say their food, their customs and protocols, business practices and what they do for fun. Because of such extra efforts, the people with whom you work with will feel appreciated, valued, wanted and they will be encouraged to recommend you and eventually do business with the enterprise now and the future "Sustainable Procurement: A Compliance Perspective of EU Public Procurement Law" (2017).

Promoting an appreciation of cultural difference for example setting aside a special day where people can come and share their cultural practices and be served with coca cola drinks alongside their meals. They can wear their outfits sing their songs, chant, and celebrate together Voas (2015). This will not only promote socialization but also but also give each person an opportunity to learn a different culture and appreciate it. This will convince people to buy much of the products and when they tell others about it, they actually promote marketing and making it popular among them Duranceau ( 201. Be open also and try new things like when travelling to a new country, eat their food once in a while                                        though you may not like some things about them, making an effort will make them appreciate you a great deal. Accommodate your employees, clients or co-workers needs in the schedule if they have cultural requirements just as you would want someone to respect your culture and appreciate it. Keep an open mind regardless of the business type and find a common ground for everyone to benefit while they understand each other, embrace and respect cultural differences "Informal Economy: Case Study of Street Vendors in Bangkok" ( 2016). If you don’t like something, it’s only wise to politely decline since one does not have to compromise or change to fit in other peoples culture.

Understanding the Indian business culture which aims at building a good relationship and trust among the parties involved and not only focusing on ideas and making profit since a good foundation has to be laid to encourage a good business environment. It is advised to develop a personal relationship with Indian managers for one to do business with them they express their pleasure with a smile or a nod of the head Duranceau ( 2013). They are very much entrepreneurial and always on the lookout for better opportunities. The new India business revolution has changed the country enabling global business practices whose efforts had proven futile generations ago. Traditional values have prevailed although many Indians are beginning to adapt western way of living.  The Indians depend on groups for decision making and way forwards and therefore they tend to respect and stay loyal to these groups or society Tchoukaleyska (2014). The country welcomes all in warmth and at the end of the day, diversity is one of Indians attractive qualities. This kind needs to be understood and being patient is the way to go. Since decision making depends on a council or a group of selected individuals.

Inviting motivational speakers to forums sponsored by coca cola Company to talk and inspire people on holding to the spirit of oneness and not to push away those with less resources or money. Not giving their daughters away to be married to poor individual or allowing their sons to marry girls who come from less fortunate family. Motivating and convincing those with class to embrace the less fortunate and help them so as to promote peace and understanding and eradicate the different classes of the haves and the have not’s. Even if it will take a while for them to come to a realization of segregation of their fellow countrymen, it will be of their good since they would have been told in advance. This prevents creating enmity in a county and equalizing humanity. It will also help motivating others who have such behaviors to change for good.

Ethnic and religious challenges can be curbed by further decentralization of power so that a certain jurisdiction will be able to access their own recourses they are entitled to and those that they process "Eclipsing variables: Catalogue and classification" (2013). This will ensure that no conflicts emerge concerning resources deprival hence people will be able to live peacefully amongst themselves hence creating a good environment to conduct business therefore even boosting their economic statuses since they can be employees in coca cola companies around hence improving their lives standards instead of wasting time and recourses in conflicts that may never end. Also a modern liberal education should be encouraged rather than the special education privileges for example schools for Muslim students only. This will encourage appreciation of culture and religion to the young generation who are the future leaders of tomorrow Avvakumova, Malkov & Kniazev (2013).  

Currency exchange rates should be reduced so that the value of rupee should increase slightly and gradually when they are either sold or bought or use a common currency in business so as to equalize both countries. Journal of Business-to-Business MarketingPart III:JBBMBook Reviews, (2009).. The U.S government treasury department that deals with currency for example should print more money so as to increase the supply and in order to avoid weakening the dollar in turn; they should regulate the money so as to print more when only it’s needed and not all the time. The law of demand and supply explains it all because the less the demand the low the exchange rate and the high the demand the more the exchange rate. To regulate this, the government does it indirectly by setting up arms like the treasury department. Tebloyeva (2010).

Conclusion

Challenges that are accepted always turn into great opportunities for not only the concerned parties but also people around them and the entire world at large "Promenade Among Words and Things: The Gallery as Catalogue, the Catalogue as Gallery" (2015). Taking the example of cultural challenges and behavior of a people of India that seems unconquerable, understanding them and engaging in their activities wisely brings opportunity to market and sell products, socialize and learn new things and it in turn leads to innovation that is either useful now or in the near future. Having a positive mindset even where situation is difficult and complex is the way to be and a teamed up country that engage in business is more likely to create a great impact globally. It will stand as a role model to other countries and as a source of influence and admiration .Both their economic, social, cultural and many more factors will be improved.

 Coming together and sharing ideas that leads to inventions in technology that is actually taking the    place of man power is a great achievement that makes the earth a better place. Fostering peace which eradicates poverty since people will have an ample time carrying out their duties is ideal for human day to day activities Yong ( 2013). Building institutions like international universities where students go for higher learning hence learning to appreciate diversity in culture, socialization and embracing  other people way of living, worship, food, dressing and festivals foster creativity and a spirit of working together since the young generation of today is the leadership of tomorrow "Catalogue de l'exposition / Exhibition Catalogue" (2015).

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