Global perspectives on Risk

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Global perspectives on risk
Introduction
Globalisation has played a very important role in the aspect of promoting international business among different countries. Globalisation which refers to integration of different economies through communication, technology and transportation is the pillar for economic, regional, and social growth between the participating countries in international business. Technology is one of the major contributing factors to globalization which influences international trade. The countries participating in international business are influenced by the desire to actively engage in matters of regional growth with a view of exchanging goods and services. In this context there are a number of risk implications associated with international business for international countries and domestic countries.
Major considerations include political, cultural, environmental, social, technological, and economic risk factors. With this brief overview, it is important to consider the relevance of the research paper in matters of international business. A major concern is in the aspect of business and marketing which is related to international trade. Of important concern is an analysis of risk and risk management implications of one aspect of international business which has no influence for business operating domestically (Theil, 2003, p.3). It is worth noting that participation in regional business is influenced by numerous factors as compared to business operations within home country.
To bring out a clear analysis it is important to understand the meaning of international business and certain risk factors associated with the certain type of business. International business refers to a number of terms which are commonly used in marketing a business related transactions. Relevant terms in this scope of business activity include transnational, global market place, multi domestic, multinational, and perhaps globalisation. This relates to the capacity of different countries who exchange goods and services through various means of trading. Transnational business involves participation of different markets from different localities with a view of satisfying different customer preferences and availability of goods and services according to forces of supply and demand regionally.
It is one of the most recent developments which have been enhanced by technological advancement among other key factors. The success of international business depends on more business attributes compared to management of a domestic enterprise. This is true because dealing with international business does not only involve understanding of traditional business functions but also this involves working from global perspective (Kogut, 1998, p.1). Major concerns related to global perspectives include culture, politics, distance, monetary variables, and time. These are important aspects which should be considered by management at international level. In other words, international business covers a wide scope of activities compared to domestic business. It therefore, follows that a number of risks are associated with international business compared to domestic enterprises as the scope of operation is usually large.
Business enterprise in international environment
Operating business internationally entails incorporation of complex attributes in matters of organisation and strategy than management of local business entities. Organisations seeking to advance there business operations find that a diversity of national environmental conditions pose certain challenges which range from economic, legal, and political dimensions to cultural values. However, businesses which are internationally operated have greater advantages in matters of technological influence such as internet than companies dominated by home country regulations. International firms have no optimal size and they cover a wide scope of ownership structures.
In the instance that multinational cooperation is a public company international shareholder, it is possible that a number of international businesses are dominated in home country. The major structure for such multinational companies includes majority shareholders being the governments. The profile of multinational companies in the aspect of profile affects its strategies and culture. The governance corporate system is the major concerned party which relates t matters of making decisions. Theses particular systems of operations vary in the scope of openness to outsiders and transparency process (Kline, 2005, p.103). However, pressures in matters of transparency intensify once companies become internationalised. In addition, companies take stakeholder interests and extend their perspectives to social and environmental matters at global and national levels.
With consideration of certain attributes necessary for marketing or business transactions, international businesses interact with key players in global environment. With this consideration, co-operative alliances are enhanced through facilitation of advances in matters of communication technology. New business opportunities are established as a result of the emerging markets. Additionally, consideration of various attributes such as diversity in culture, cooperation of governments, and influence of technology leads to more opportunities in investment. Diversification of production factors and business related models thus play a very important role in the perspective of globalisation (Davd, 2003, p.20). The major concern for business relates to location of a strategic region where production of goods and provision of services is met with ease. This is the current n trend in the marketing environment whereby entities take advantage of various favourable conditions f business operations. This however, may not be the case of regional marketing which is influenced by several factors. Nonetheless, national markets remain divergent despite the fact of internationalising delivery of goods and services.
The various transactions of regional trade calls for evaluation of several factors necessary to carry on with business for profitability. Major risks involve that of trade barriers exposed by different countries which make the products to be a bit higher compared to products within domestic markets. The distance is a major challenge to participation of transnational markets whereby goods are passed from one country to another. However, this has been a problem of the past due to current development in technology methodologies especially innovation of mobile phones and the internet. Another major positive implication of international trade is the fact that there is exchange of goods and services from one regional to another. This is important because it helps to develop economies especially from developing countries as they are supported by developed countries (Darla, 2001, p.92). Countries without raw materials for manufacturing purposes have the chance of acquiring such products at low costs especially from developing countries. This is thus seen as a major implication for participating in regional markets whereby investment opportunities are created and economies integrated. Of major concern in this paper is the aspect of national culture which influences both domestic and transnational businesses.
National culture
National culture is one of the most critical factor which influences international business across different localities. It is a major risk factor which affects transnational trade but would not normally arise to a great extent for business operating in their home country. Culture refers to collective programming of mind which distinguishes members of one group or country from another. There are different variables related to international culture which makes it qualify as an important factor in promotion of international marketing.
One and most important factor is that culture can be individualistic or collectivist. A second aspect is gender variable whereby certain countries have feminine and masculine culture which determine various products required in a given country. Third variable is context culture which reflects the different observations made by individuals within a given country. Fourth, the power distance is a major variable of culture which relates to movement of goods and services from one location to another (Johnson, Turner, 2003, p.29). Fifth, language is an important consideration for national culture which is a basic consideration for business transactions especially marketing.
Culture in another context could relate to three major components such as country which represents national cure, distinct section of community representing sub-culture, and an organization which represents corporate culture. Culture is always learned in matters of values, norms, beliefs, traditions, rituals, customs, religions and artifacts. Artifacts in this case represent the tangible symbols of culture for instance the Great Wall of China. For international marketing or business to survive in a given country, it is important to consider the local culture. Key among these factors includes language, religion, education, technology, social organizations, material culture, values and attitudes.
Language
Language is an important aspect or factor that influences national culture and should be considered in international marketing. However, domestic business transactions to a large extent are not affected by the factor of language as they have common way of expressing their interests. In this case it is important to consider whether the national culture is predominantly a high or low context culture. This fact relates to verbal and non-verbal communication an important factor in promotion of products (Kline, 2005, p.14). Marketing requires intensive mechanism of convincing individuals about the positive implications of acquiring certain products. Without effective communication marketing of products from different localities becomes a major problem.
In domestic trading or management of an enterprise, it is easy to establish a business in either urban or rural areas as people have common language and communication is no more a problem. In a low context culture, spoken language is the major attribute of communication. This means that people mean what they say and it reflects an easy way of carrying on with marketing or business operations in an appropriate manner. On the other hand, high context culture verbal communications may not carry direct massage. In this aspect, what is said is not what is meant and this acts as a communication barrier in marketing especially for international trade. With high context culture, there is hidden cultural meaning which should be understood as is done through body language. In this context, it means that language is a very important factor in national culture which influences international business but yet has no major implications for domestic business transactions.
Values and attitudes
Another major considerable attributes for national culture include values and attitudes which varies within and between nations. National culture is responsible for influencing belief about behaviours especially to transnational alliance. Values of any given country are influenced by interrelatio...