INTERNATIONAL OPERATIONS: ADVANTAGES AND DISADVANTAGES 1

International Operations: Advantages and Disadvantages

Karen Jacques- Huntley

South University

Author Note

This paper will discuss the advantages and disadvantages of engaging in international operations.
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Abstract

To understand the impact of international business globalization the underpinnings of strategic

management. Managers must understand the competitors, markets, prices, suppliers, distributors,

governments, creditors, shareholders, and customers worldwide. Critical questions must be asked

and defined in this paper to gain a clearer understanding of the possible advantages and

disadvantages in international operations. The questions that will be addressed in this paper are:

 How do firms confront different social, cultural, demographic, environmental, political,

governmental, legal, and competitive forces when doing business internationally?

 How do language, culture, and value systems differ among countries, and what barriers to

communication and problems in managing people do they create?

 Why is gaining an understanding of regional organizations often necessary in doing

business internationally?

 How can dealing with two or more monetary systems complicate international business

operations?

 How do foreign operations allow firms to establish low-cost production facilities in

locations close to raw materials, cheap labor, or both?

In this paper it will expound on how managers are confronted with many international concerns,

such as those posed by technology, customers and competitors, ethics and law, the economy,

politics, demographics, and social trends. All organizations should continuously appraise their

situation and adjust their strategy to adapt to the global environment.

Keywords: international business, global trends, labor, politics, economy, technology

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International Operations: Advantages and Disadvantages

To understand the impact of international business globalization and strategic

management; managers must understand the competitors, markets, prices, suppliers, distributors,

governments, creditors, shareholders, and customers worldwide. Critical questions must be asked

and defined in this paper to gain a clearer understanding of the possible advantages and

disadvantages in international operations.

How do firms confront different social, cultural, demographic, environmental,

political, governmental, legal, and competitive forces when doing business internationally?

Companies confront and deal with different social, cultural and political aspects by fully

understanding the concepts of globalization as pertaining to international business affairs.

Gleization is defined as the process of doing business worldwide. To do business worldwide each

company has to employ strategic that uses global endeavors that incorporate company design,

production and marketing within the global market place. I order to remain competitive, global

companies need to understand the international business location, economy ad political climate.

Often if a country has a strong economy and stable political climate, the business ca flourish

unhindered in the global market place, However, if there is strife and poverty, then international

business communications and trade will be poor organized and executed.

How do language, culture, and value systems differ among countries, and what

barriers to communication and problems in managing people do they create?

Each culture has its own communication style and value system. The issue of cultural and

language barriers are the biggest hurdles that many global organizations face. At times manager

find it hard to fully communicate the mission, vision ad purpose of their market product into a

foreign business venture without losing some of the impact of the benefits of the company being
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lost. Language and culture are closely due to the language is the fabric of social and personal

identity of the culture. Culture habits and phrases help to define cultural cues for others of of that

cultural to understand and embrace. These cultural mannerism helps for positive engagement and

appreciation of the cultural difference in business practice. Without engaging in these linguist

hints in global business can harm the relationship between businesses and customers.

Why is gaining an understanding of regional organizations often necessary in doing

business internationally?

Gaining an understanding of regional organization within a foreign country is

monumental concerning building global relationships. In recognizing local customs ad practices,

helps to enable a company to understanding regional customs and beliefs. The building of

harmonious business relationship with host country a vital part of any venture, and such

relationships rely heavily on an understanding of local and national culture. This leads to

productive ad beneficial relationships that lead to log lasting partnerships that benefit the local

venders, and eventual translate to national acceptance of the foreign corporation, Lack of

knowledge of the local and national culture may lead to miscommunication and

misunderstanding. Thus, it is imperative that businesses understand and accept cultural habits

and communication styles to maintain a competitive edge that others may because of their lack

of cultural understanding of the host country.

How can dealing with two or more monetary systems complicate international

business operations?

When dealing with international currency it is imperative that businesses understand the

exchange rate of that currency. The exchange rate helps companies to set monetary standards to

avoid inflation and provides stabilization of the economic standards of that nation. This makes it
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easier to buy, sell, trade and invest in that market. However, the downside on dealing with

foreign coin runs the risk of a poor country failing economically due to famine, war or disease.

All those factors can destabilize the exchange rate and value of the money due to the lack of

sustainable investments and development within the country. Without a stable government and

private investors, the flow of capital gain internally is severely disrupted, thus making it hard for

outside global investors, and business to contribute to that country’s capital gain index. Thus,

these factors make the economy in this country finically unstable, leading to poverty and

political decline.

How do foreign operations allow firms to establish low-cost production facilities in

locations close to raw materials, cheap labor or both?

Globalization has forced may businesses to search for ways to reduce cost to meet the

high demand of product. One of the ways that a company may want to reduce cost is to

outsource production to a foreign country that has a cheaper labor force, in reducing cost in

labor, product completion can be produced at a lower cost, thus saving that company money. The

host country benefits form the international company in ways such as introducing a positive

economic index into an area that previously struggled. With the emerging changes in

globalization, manufacturing competitiveness has reached a higher level. The changes in global

economic trends, along with the increase for higher quality products, has forced may

international companies to search for a smarter work force. An example of this phenomena is

China’s low-cost labor advantages and its status as the largest exporter of goods in the world.

Overall, with the aggressive progression of globalization, there is no foreseeable end to

the supply ad demand rush to produce and deliver. In gaining a clearer understanding of the

impact of international business globalization the strategic management, the critical questions
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pertaining to cultural paradigms of language, politics, economics and goals of the host country

and global company. All these factors must rely on qualitative and quantitative factors related to

both parties involved in the global business venture.

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