International business

Introduction International business refers to the commercial transactions or trade activities that usually take place between two or more countries. Commercial transactions entails a wide range activities that are carried either by the governments of the nations or the private investors who may be conducting business at an international level with other investors in other countries (Rugman brewer 2003, p.105).Advertising We will write a custom essay sample on International business – challenges and opportunities specifically for you for only $16.05 $11/page Learn More On a broader context, international business incorporates all business activities that entail crossing national boundaries through transaction of goods, services or exchange of resources between two or more nations. International trade between different countries is always a mutual relationship that is primarily defined by diplomatic relations that exist between the participating co untries. Different countries have different diplomatic relations with other countries and this significantly determines international trade; bad diplomatic relations between two countries or regional countries impairs international trade between the countries. The foreign policies of a given nation also play a significant role in determining the participation of a given nation in international trade (Feenstra 2004, p. 56). The onset of international business was primarily influenced by the increasing globalization which harmonized global relations between various countries; which saw various companies scale their operations to international levels subsequently leading to the rise of multinationals such as coca-cola. Some companies merged with other companies in different countries so as to use the available opportunity to increase their sales at international level (Gabriele 2008, p. 87). International divisions International divisions play a significant role in determining relation ship that exists among different countries and subsequently affects international business. International divisions are determined by a wide range of factors that are primarily defined by social, political, economic and to some extent geographic factors. The diversity in social and economic factors among different countries plays an important factor in determining the international trade trends between different countries and regional alliances and sometimes affects intercontinental trade (Feenstra 2004, p. 55).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Some of the social factors that that are responsible for international divisions include religion, culture, geographical orientations and governance and economic structures. The international divisions play a significant role in determining the international relationships of a country. The market policies of a given country determine t he international trade patterns that the country undertakes (Pressroom 2010, p. 56). Challenges in international business There are a number of challenges that are associated with international business. Some of the challenges that affect the local business also affect the international business at the same capacity. The challenges are dynamic and vary in nature according to the participating countries and the type of goods and services that the countries trade in. A challenge in itself is the way the participating countries establish strategies to approach the global trade challenges. Global markets are faced with various impediments ranging from the structure of the global financial markets to the foreign policies of the participating countries. Cultural, political and institutional diversities and complexities still play a big part in determining international trade patterns as they have been since the onset of international trade. Other upcoming concerns in the international bus iness include the climatic changes, rise of international terrorism and international fraud, just to name a few. One of the challenges that significantly affect international trade is the formulation of the global trade strategies and the execution of the established strategies. The administrators and policy makers who are solely responsible for facilitating international trade always impair the process of global business (Taylor 2007. P. 39). The various policies always have an effect on the patterns of global business and in most scenarios, the stringent policies does not favor the development of international trade. There are a large number of businesses that have the potential of carrying out their business operations on a world wide scale but on a few manage to gain international recognition due to the lack of proper international paradigms that only tend to favor a few international companies. The main challenge is in the global business management; the present global manageme nt requires more than just ordinary management in order to make international business run smoothly without any impairments. The current trend however is indicating some improvements with the rise of professionals taking up management positions (Taylor 2007. P. 40). Another challenge that greatly affects the international business is foreign politics. Foreign politics largely defines the way a given countries relates with other countries on an international platform.Advertising We will write a custom essay sample on International business – challenges and opportunities specifically for you for only $16.05 $11/page Learn More The present foreign policies that have been adopted by a significant number of countries do not favor the sustainability and growth of international business (Moore Harris 2010, p. 27). The policy makers of international policies put stringent measures such as taxes and rules and regulations that must be followed in order to carry out international business between private investors or the international trade between the participating countries. These stringent rules and measures that are deployed at the borders or during the transit or exchange goods and services between the various countries always tend to impair international trade as they do not provide standardized international paradigms. Political disarray significantly affects the nation’s financial system and this greatly affects international trade (Moore Harris 2010, p. 27). Economic and financial challenges also play a significant part in impairing the sustainability and development of international trade. The organization of resources to initiate international business depends vastly on the variations in the international currency rates, international financial crisis or economic depression among the participating countries and especially the host nation, variations in the oil rates at the global arena, international price variatio ns such as rising and subsequent falling off price of various commodities that are known to attract international attention, and the export rules that are associated with the exporting or host country and the import rules that are present on the partnering countries (Oliver 2008, p. 126). All these factors serve as impairment to the development of international trade and its sustainability. A recent blow to international trade is the global recession and economic depression that was witnessed by many countries and particularly the unites states of America and in other European countries; this was accompanied by a major decline in international business activities. Another challenge that international business faces is through the increased cost of conducting international business. Costs that are incurred during international transactions range from the cost of trading the goods or services such as tariffs and quotas to costs that entail direct ownership such as the involvement of f oreign personnel in the global trade, taxations and costs due to corruption in the international business system. The above named factors significantly affect the equilibrium of the international market structure; which is not suitable to sustain and facilitate the growth of international business transactions (Moore Harris 2010, p. 30). In order to beat the challenges that are associated with international business, the various countries have to implement several measures and policies that are directed towards the facilitation and improvement of international trade. The participating countries should therefore abide by a given set of norms that that serve to govern the logistics that are associated with international business transactions (Oliver 2008, p. 123).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Key opportunities in international trade International trade greatly relies on the factors that harmonize global relationships between the various countries. The opportunities that facilitate the growth and sustainability of international business can be viewed from a social, economic, physical and infrastructural perspective. All the factors that attempt to harmonize the equilibrium of the global market serve as an opportunity to facilitate the growth and sustainability of international trade (Diamond 1995, p.36). The onset of globalization was a major significant step towards the realization of international trade. Some key issues that facilitated the growth of international trade include the technological advancements that are associated with the information age of the late 20th century. One of the key opportunities that facilitated the onset, and continued sustainability and growth is globalization. Globalization is fully responsible for the interdependence of countries which ul timately resulted to the integration of business transactions on a global level (Moore Harris 2010, p. 35). Globalizations also resulted to integration of people and ideas at an international level and this provides a healthy environment to sustain the growth of international business transactions and cross border trade activities. The integration due globalization is widely evident due to international investments that various multinationals exploited and cross border financial flows. Evidence suggests that globalization has contributed greatly to the rise and growth of international trade (Moore Harris 2010, p. 35). The onset of globalization harmonized cultural differences between the various countries and this presented an opportunity for exchange of resources between different countries (Diamond 1995, p.36). Another opportunity for the sustainability and development of international trade is the technological advancements that have been associated with the rise of information age during the late 20th century (Sawyer Sprinkle 2006, p.27). The technological developments especially the onset of the internet and the World Wide Web provided a great platform to facilitate international business through the use of online platforms; what is commonly being referred to as e-commerce. Online business defies geographical orientations which may pose a barrier to the development of international trade. Technological advances lowered the costs that are associated with transportation, marketing, and communication at the global basis. Advances in technology made it economically feasible for a multinational company to establish the different phases of production at different nations; this greatly promoted the rise of international trade because it scaled the operations of the various international companies on a global basis (Moore Harris 2010, p. 27). The liberalization of the global markets also presented an opportunity for the development if international business. This paved way for the rise of open markets with fewer government restrictions which in turn increased the private sector involvement in international business transactions (Indira Stone 2004, p. 39). Economic liberalization was due to the need for countries to be globally competitive in terms of international trade which in turn facilitated the development of international business between different countries on a global basis. Liberalization of global markets played a significant role in ensuring the flexibility of global financial markets in terms of both trade and capital markets. Liberalization of the market facilitated exports and imports between different countries (Indira Stone 2004, p. 42). Generally other opportunities that facilitated the growth of international trade include the increased privatization, free markets, the development of international financial institutions such as the World Bank and International Monetary Fund (IMF). The development of regional alliance s such as the Common wealth and European Union saw the rise in international trade (Sawyer Sprinkle 2006, p.27). Conclusion International business primarily requires the interaction of different government agencies. This implies that it is mostly affected by the government relations rather than the technological advancements and the onset of globalization. With regard to this, participating countries should establish appropriate policies to govern the foreign relations with other countries. International business is vital for the development of any country through exports and imports which results to foreign income and at the same time facilitating the acquisition of resources that the country lacks (Indira Stone 2004, p. 34). However, care should be taken when balancing the tradeoffs between the imports and exports in order to avoid cases of inflation (Taylor 2007. P. 54). References Alan, M. R Thomas L. B., 2003, The Oxford handbook of international business, London: Oxford Uni versity Press. Diamond, E. D, 1995, Contemporary challenges: American business in a global economy, New York: New York University Press. Feenstra, C. R., 2004, Advanced international trade: theory and evidence, Princeton, NJ: Princeton University Press. Gabriele, G. S., 2008, International business under adversity: a role in corporate responsibility, conflict prevention, and peace, Cheltenham: Edward Elgar Publishing. Indira, C. Stone, P., 2005, International trade law, New York: Routledge. Moore, G., Harris. L., Trade and Technology Policies. P. 27. Web. Oliver F. W., 2008, Peace through Commerce: Responsible Corporate Citizenship and the Ideals of the United Nations Global Compact, Notre Dame, Ind: University of Notre Dame Press. Press room, 2010, Challenges confronting international trade. Web. Sawyer, C. W. Sprinkle, R. L. 2006, International Economics (second Ed), Upper Saddle River, New Jersey: Prentice Hall. Taylor, S., 2007, Major Challenges Confronting the International Trading System. Web. This essay on International business – challenges and opportunities was written and submitted by user Adriana Downs to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. International Business Introduction The term International business refers to companies having business operations in different nations across the globe. Globalization has made it possible for many countries particularly the developing and the underdeveloped nations to expand and receive foreign investments in their countries.Advertising We will write a custom essay sample on International Business specifically for you for only $16.05 $11/page Learn More The WTO alongside the General Agreement on Tariffs and Trade (GATT) among other trade negotiations has largely contributed to reductions of barriers in many nations globally (Ezeani, 2011, p. 120). The World Trade Organization (WTO) has played a significant role in the globalization by ensuring that different nations irrespective of their classes trade with each other without difficulties. Since its inception, the World Trade Organization’s primary focus has been promoting the development of economies and trade across t he world. It has achieved this by developing policies to govern the system of the world trade. The organization also ensures that the countries involved in world trade adhere or follow the rules of trade treaties that the members of the World Trade Organization sign. These rules focus on liberalization. This encourages and guides economic globalization. This paper critically evaluates how the World Trade Organization (WTO) has been successful in achieving its objectives in Jordan. Literature review The World Trade Organization has been successful in achieving its objectives in many countries across the world. According to researchers, there is no other global organization that is involved in rules of international trade apart from the WTO (Bossche, 2008, p. 59). As aforementioned, the organization ensures that barriers to international trade are liberalized to ensure free and easy trade between nations all over the world. For instance, the trade agreements signed by WTO member count ries confirm some of the efforts of the World Trade Organization in its attempts to promote the development of economies and international trade between nations (Langhammer Lücke, 2000, p. 10). The organization’s primary responsibility is policing the system of international trade and ensuring that nations follow the rules signed by the organization regulations is very vital in globalization and international trade. Five years ago, more than a hundred and fifty countries across the globe, which accounted for approximately 97%, were members of the World Trade organization (Hoekman, English, Mattoo World Bank, 2002, p. 78). The World Trade Organization has continued to reduce barriers to both international trade and foreign direct investments. Many companies can invest in foreign countries without difficulties due to reduced barriers of foreign direct investments. This way, these companies view the whole world as their market, and not a single nation as the outlet of thei r commodities.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Going international is part of the core competencies of many organizations in gaining a competitive advantage over their competitors (Wolfrum, Stoll, Koebele Max-Planck-Institut für Ausländisches Öffentliches Recht und Völkerrecht, 2008, p. 53). Most multinationals easily access technology, skilled labor and gaining different techniques among other resources for their businesses. Initially, the developed countries dominated the power of negotiation, but due to the support of the WTO, the underdeveloped and the developing countries have taken an active part in the negotiations. More than 75% of both the underdeveloped and the developing world are members of the World Trade organization. There are very many achievements that the World Trade Organization has attained since its inception. The organization has eroded both the non-trade and trade barriers (Stoll, Schorkopf Wolfrum, 2006, p. 24). Many countries and multinationals operate their businesses without facing severe challenges like they did before its establishment. The WTO has out-performed the General Agreement on Tariffs and Trade (GATT), considering that it has a wider frontier in governing trade than the GATT (Koul, 2005, p. 104). The world trade organization has added an intellectual property system to its operations, making it overtake the General Agreement on Tariffs and Trade. It has developed policies that enhance economic and international trade development (Wolfrum, 2006, p. 29). The WTO has and is still making the trading environment of its member countries more sustainable than before. Unlike the GATT, the WTO has shown competency of dealing with trade disputes through its rules that govern all operations across the borders (Bown, Pauwelyn, 2010, p. 220). Jordan and the World Trade organization The World Trade Organizati on (WTO) has a significant role to accomplish in changing the economic status and trade in Jordan. In this country, the public sector dominates the economy. However, there have been changes lately, considering that the free market agenda has been introduced by the World Trade Organization (WTO), which reduces the involvement of governments in matters of trade (Hoekman, English, Mattoo World Bank, 2002, p. 55). The policies of globalization outlined by the WTO have ensured that the role of the public sector is reduced, and hence creates an opportunity for direct foreign investments. Despite the fact that globalization awareness is still low in Jordan, the efforts of the WTO have increased the economic growth of the country. Globalization institutions have emerged, and their role is to mentor the economic course of Jordan (Chaudhary Ahmed, 2004, p. 120).Advertising We will write a custom essay sample on International Business specifically for you for only $16.05 $11/p age Learn More This country has had several problems in the past which have impacted it negatively in terms of trade and economy. For instance, the September 11 attacks, recession, political instability, and war with India, among other problems contributed to a decline or slowed economic growth. The Jordan government took several initiatives to curb these problems. It for example, introduced programs of alleviating poverty, allowed private investors in the country and introduced tax and financial reforms in the country. These were aimed at improving the economy (Herdin, Hofbauer, Lang Conference, 2005, p. 59). The primary economic sectors in Jordan include textiles and agriculture (Ingco, 2003, p. 27). The World Trade Organization (WTO) has played a significant role in shaping the Jordan’s economy and improving international trade. The WTO has abolished trade barriers in Jordan and hence allowing foreign direct investors in the country. The policies of the Wor ld Trade Organization require countries to have an MFN status (Stoll, Schorkopf Wolfrum, 2006, p. 39). Through the provision of a Most Favored Nation (MFN) status, countries cannot discriminate others on trade related issues. Jordan is a member of the WTO countries and therefore, has to follow the rules it signed together with the other member countries. There are very many multinationals currently operating in Jordan. This has been instrumented by the efforts of the World Trade Organization (WTO) which ensures that there are no barriers or non-barriers of trading in this country. The WTO’s rules are the primary factors influencing Jordan to reduce its import duties to by more than 50% (Vermulst Graafsma, 2002, p. 336). As aforementioned, Jordan depends on its two principal economic sectors, which are textiles and agriculture. These two account for more than 60% of the country’s export earnings. Settling trade disputes is one of the significant roles that the World T rade Organization plays. This organization ensures that all the member countries enjoy or benefit from a fair and non-discriminative trade. Jordan is a good example to attest this. The WTO ensures that the developed world, the underdeveloped, and the developing world exchange goods and services in a fair and equitable manner. For instance, the influence of the developed nations such as the US on World Trade Policies (WTP) that devastate the underdeveloped and the developing world was abolished (BuÃŒ rca, 2002, p. 34).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The developed nations used to influence the WTO policies to favor them. Jordan faced devastating times when the US led policies that promoted making food available by trading (Hufbauer, Burki Peter, Peterson Institute for International Economics, 2006, p. 74). This made it impossible for Jordan to be self-sufficient in terms of food availability. Compared to developed countries, Jordan lacked enough resources or knowledge on the rules of World Trade Organization. This made it possible for Jordan to incur huge costs paying international lawyers. The case of Basmitti Rice between the United States and India where the DSB of the World Trade Organization favored India confirms this (Wolfrum, 2006, p. 185). With the sole patents, India ensured that the rice exported from Jordan used Basmitti till the patent rights were settled. This clearly shows how trade disputes affect the developing nations. With the support of the Dispute Settlement Body (DSB) of WTO, Jordan, a developing country i s now able to access food from the global market without any barriers (Shaffer MeleÃŒ ndez-Ortiz, 2010, p. 184). It can also actively negotiate and have its’ complaints or suggestions considered by the World Health Organization. The WTO also uses Trade Related Intellectual Property Rights Agreement (TRIPS) in promoting fair and equal trading among the member countries (Babu, 2012, p. 300). The TRIPS also help other corporations in Jordan by protecting their rights. It allows knowledge sharing by both the foreigners and the indigenous people. Jordan has gained a lot from WTO basing on knowledge sharing (Perdikis Read, 2007, p. 100). After eroding barriers of international trade, Jordan has seen a lot of foreign direct investors come into the country with new technologies and ideas. The foreign investors come with finance, technologies, and expert knowledge and experience. The multinationals in Jordan have also in various ways influenced the way people perceive things, and h ence enhanced cross-cultural practices. The foreign nationals also learn a lot from the indigenous population. These exchanges also contribute to the growth of the Jordan economy. Competition of domestic and foreign corporations in Jordan is high due to reduced or abolished barriers of trade by the WTO. This is very significant for the nation, particularly in improving its economy. For instance, it has led to improved infrastructure in the country, the introduction of different goods and services, creation of employment, and improved living standards among others. All these confirm how multinational companies have directly impacted on the Jordan’s poverty level (Macrory, Appleton Plummer, 2005, p. 161). The World Trade organization has been the key facilitator to these achievements. Recommendations and conclusion The WTO plays a significant role in ensuring that all countries’ trade within the global market without barriers, and hence increases the opportunities of tr ade across borders. It is recommendable for the WTO to provide ways and connect with all countries irrespective of their status in providing information and supporting them as they trade internationally. This will help some countries particularly the underdeveloped, and the developing to be treated fairly and equitably in the global market. This will ensure that the strong economies are not the only ones benefiting from the WTO. For instance, the WTO should continue to handle trade disputes to make international trade a success, it should develop laws to govern the international trade and ensure that the developed countries are not the only ones benefiting in the trade. However, it should not only focus on trade; the WTO should include economies so that the whole world can become one in terms of economic development instead of being divided into states. It should attract non-governmental organizations to participate in the trade. Most importantly, the WTO should establish more secre tariats than the current ones as this will help the organization monitor all activities pertaining to international trade and globalization. List of References Babu, RR 2012, Remedies under the WTO Legal System, BRILL, Leiden. Bossche, P 2008, The law and policy of the World Trade Organization: Text, cases, and materials, Cambridge University Press, Cambridge. Bown, CP Pauwelyn, J 2010, The law, economics and politics of retaliation in WTO dispute settlement, Cambridge University Press, Cambridge, UK. BuÃŒ rca, G 2002, The EU and the WTO: Legal and constitutional issues, Hart Pub, Oxford. Chaudhary, MA Ahmed, E 2004, Globalization: WTO, trade and economic liberalization in Jordan, Ferozsons, Lahore. Ezeani, EC 2011, The WTO and its development obligation: Prospects for global trade, Anthem, London. Herdin, J, Hofbauer, I, Lang, M Conference 2005, WTO and direct taxation: [†¦ joint conference†¦ in Rust (Austria) from July 8 – 11 2004], Linde, Wien. Hoekman, B, En glish, P, Mattoo, A World Bank 2002, Development, trade, and the WTO: A handbook, World Bank, Washington. Hoekman, B, English, P, Mattoo, A World Bank 2002, Development, trade, and the WTO: A handbook, World Bank, Washington. Hufbauer, GC, Burki, SJ Peter G, Peterson Institute for International Economics 2006, Sustaining reform with a US-Jordan free trade agreement, Peter G. Peterson Institute for International Economics, Washington, DC. Ingco, MD 2003, Agriculture, trade, and the WTO in South Asia, World Bank, Washington, DC. Koul, AK 2005, A guide to the WTO and GATT: Economics, law, and politics. The Hague: Kluwer law international. Langhammer, RJ Lücke, M 2000, WTO negotiations and accession issues for vulnerable economies, Institut für Weltwirtschaft ander Universität Kiel, Kiel. Macrory, PFJ, Appleton, AE Plummer, MG 2005, The World Trade Organization: Legal, economic and political analysis, Springer, New York. Perdikis, N Read, R 2007, The WTO and the regula tion of international trade: Recent trade disputes between the European Union and the United States, Edward Elgar, Cheltenham. Shaffer, GC MeleÃŒ ndez-Ortiz, R 2010, Dispute settlement at the WTO: The developing country experience, Cambridge University Press, New York. Stoll, PT, Schorkopf, F, Wolfrum, R 2006, WTO – World economic order, World trade law, Nijhoff, Leiden. Vermulst, E, Graafsma, F 2002, WTO disputes: Anti-dumping, subsidies and safeguards, Cameron May, London. Wolfrum, R 2006, WTO – institutions and dispute settlement, Nijhoff, Leiden. Wolfrum, R, Stoll, P-T, Koebele, M Max-Planck-Institut für Ausländisches Öffentliches Recht und Völkerrecht,.2008, WTO–trade remedies, Martinus Nijhoff Pub, Leiden, the Netherlands. This essay on International Business was written and submitted by user Mathew E. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. International Business International Business