Socio and Economic Factors in Global Business Essay -- GCSE Business M

Socio and Economic Factors in Global BusinessWhen a familiarity decides to take their business transnational, thither are many different sociological and stinting factors that they need to take into count. There are differences in management styles, international laws and treaties that regulate international business, as well as cultural customs that come into play. Each of these are significant and needs to be taken into account in order to minimize authorisation problems. Many times, lack of knowledge can create serious problems. Although thither are a myriad of socio- and economic factors, this paper will focus on three key ones 1) political barriers 2) labor practices and 3) cultural barriers. Additionally, real world examples will be offered on how nearly businesses have successfully overcome these barriers.Political BarriersFor purposes of this discussion, political barriers refer to the geo-political situation of a country, as well legal barriers such as tariffs, taxe s, etc. Countries assemble up barriers to foreign entities conducting business within their borders (especially imports and exports) for several reasons. Duties and taxes can create some government revenue. If there is a high tariff then there will be less exporting, therefore more of that product in the country, thus making the price of that product in the country lower since there will be a greater supply. So trade barriers can be helpful to a country. On the contrary, trade barriers can have a negative effect on a country as well. Consumers will have to pay a higher price on imports, and for similar products produced in the country the price will rise due to consumers buying the imported products. In order to regulate the barriers on international trade, there have been organizations formed. GATT (General conformity on Tariffs and Trade), WTO (World Trade Organization) and NAFTA (North American Free Trade Agreement) are just a few examples (Czinkota, 1999). Other consid erations in overcoming political barriers are the governments themselves. Conducting business in Cuba is virtually impossible for American companies probably until the fall of the Castro regime. Domestic and international pressure on human rights, governments considered to be corrupt or illegal whitethorn also hamper an organizations ability to do business in certain regions of the globe. Although these factors... ...zed crime, etc (Fortune midget Business, 2000).Conclusion This discussion has highlighted but a few socio- and economic factors that must be considered when deciding to conduct business in a foreign country. As one can demise, the risks are there, but the potential for profit is very alluring. With prior proper planning, the risks can be limited. However, it will serve businesses well to incorporate economic factors into their overall global business strategies.References Czinkota, M., Ronkeinen, I., Moffett, M. (1999) global Business. Fort Worth The Dry den Press DSN Retailing Today (2001, June 5). Open trade in billion-man market creates empire of opportunity.Economist (1997, June 21). 99% perspiration. Vol. 43, Issue 8022. Fortune Small Business (2000, April). East meets Mex. Hofstede, G. (1984). Cultures Consequences. Beverly Hills, Ca Sage Publications. Orange County Business Journal (2001, April 23). OC companies do business in China over tea, gestures. Winter, D. (May 2000). facing globalization. Wards Auto World. Vol. 36, Issue 5. (www.doc.gov) (www.opic.gov) (www.usatrade.gov)