Professional Documents
Culture Documents
International Business Environmental Challenges
International Business Environmental Challenges
Business
The Environmental Challenges
Religious factors
Language
Cultural Universals
Irrespective of the religion, race, region, caste, etc., all of us have more or
less the same needs. These common needs are referred to as Cultural
Universals and identified as cooking, dancing, singing, education,
athletic, sports, bodily adornment, joking, kin groups, status differentiation
and dream interpretation.
The cultural universals enable businessmen to market the products in many
foreign countries with modifications. For example, TVs, cars, video games.
Culture is not a barrier to computer software.
As such, computer software industry of the USA, Europe and Australia has
been attracting most of the Indian computer software engineers. Other
examples include diamonds, gold ornaments, flowers which have worldwide
demand.
Many managers felt that Japanese would not eat black food, when
Yamazaki-Nabisco thought of introducing Oreo cookies in Japan. But Oreo
cookies became number one cookies in Japan.
Cultural Universals do not mean that two cultures are not very much close
to each other.
Demographic environment
Age composition
Income levels
2. Technological environment
3. Economic environment
Nature and level of development of economy
Economic resources
Size of economy
(Out of 200 nations, 75% are developing nations having 80% of population. Only 54
nations have high income economies.)
Political parties
Radical differences
Fundamentalists
Govt. system
Liberal or Conservative policies
Trade barriers
Tariffs
Non tariff barriers
Natural Resources
Absolute advantages
Capitalism
Socialism
Communism
Economic
Markets
Freedom to
compete with
right to invest.
Limited
competition with
state owned
industries.
Absence of
competition with
state owned
markets and
industries.
Individual
incentives
Profits and
wages in relation
to ones ability
and willingness
to work.
Profits
recognised.
Wages fairly in
relation to
efforts.
Profits not
allowed. Workers
urged to work
for the glory of
the state.
Capital Sources
Capital invested
by owners who
may also borrow
on credit. Capital
may be reinvested from
profits.
Obtained from
owners and from
state issued
bonds for stateowned
industries.
State provides
all the resources
to start business
owned by the
state.
Capitalism
Socialism
Communism
Labour
Workers allowed
to select
occupation.
State planning
encourages
employment.
The state
determines
ones employer
and
employment.
Management
Managers are
selected on the
basis of ability.
Managers have
freedom to make
decisions.
Managers in
state-owned
industries are
answerable to
the state. Non
monetary
rewards
emphasised
Key managres
must be party
members.
Absence of
freedom to make
decisions.
Business
Ownership
Individuals have
a right to own a
business and to
Capitalism
Risk Assumption
Losses assumed
by owners. May
transfer
business risks to
other businesses
through
insurance.
Socialism
Communism
People assume
risks of stateowned
industries.
Losses taken
from taxes.
Economic
production
owned by the
state. Risks
assumed by the
state. Losses
reduce standard
of living.
Class Exercise
Thank you