CAUSES & MANAGEMENT OF POLITICAL RISKS

INTERNATIONAL BUSINESS 1
CAUSES & MANAGEMENT OF POLITICAL RISKS
By
Name
Presented To
Tutor
Institution
Topic
Date
INTERNATIONAL BUSINESS 2
Introduction
Improved technology specifically in transportation and communications, reduction in trade tariffs, increased local competition and better political relationships between nations have motivated many business enterprises pursue international expansion and to become more globalized in their operations. In an effort to achieve more profit that guarantees business continued sustainability and profitability several companies are currently engaging in cross border commercial transactions. International business entails across the border transactions of goods, services and resources between two or more nations. Multinational companies transact business in more than one nation and their business approach has a global perspective (The Marketing concept). Business units in different regions are guided by the different business systems in the region. Between nations there exist differences in legal systems, economic policies, language, culture, trade tariffs, trade agreements and living standards amongst other cultural and political differences.
International Business
The company objectives and the manner in which they are executed directs how the company conducts its international operations such as expansion of sales, acquisition of resources and minimization of associated risks. Some modes of international business are importing and exporting, tourism, franchising and transportation among others. International business comprises functions such as marketing, global manufacturing and finance and supply chain management.
Other business means include the business functions such as marketing, supply chain management, human resources and global manufacturing. Overlaying alternatives such as choice of countries, organization and control mechanisms is another means of international business.
International business is influenced by certain physical and societal factors such as political policies and legal practices, cultural factors, economic forces and geographical influences within the host country (Verbeke 2009).
Some of the competitive factors associated with international business include advantages in price, marketing and innovation at the global stage, increased comparative capabilities of competitors and competitive differences by country.
INTERNATIONAL BUSINESS 3
International business is an expensive, risky and involving undertaking. Effective strategies should be implemented in order for the business to compete effectively at the global market level. International business opens great opportunities to businesses as well as to some risks. Business enterprises should take advantage of the prevailing political stabilities as well as trade agreements between nations in the world and engage in cross border trade. When some companies become inter...