Forces in International Business Persuasive Essay

Has its hands in many international product manufacturing. They do are effected on a daily basis by the different forces of international business and ethical issues. These forces were assembled, and one of their ethical issues were evaluated. Forces in International Business There are multiple forces that effect international business.

These forces are calculators forces, natural resources and environmental sustainability, political and trade forces, intellectual property and other legal forces, the international and monetary system and financial forces. All of these forces are things that influence Samsung Co. On a daily basis. Along with these forces, Samsung is also tasked by ethical issues that come imposed on almost every international country. These forces are some of the founding forces that international businesses are built on and effected by on a daily basis.

Calculators Forces The first of the forces covered is the calculators force. In order to understand what Calculators Forces are, we must understand what calculators is. The Merriam-Webster dictionary describes calculators as a combination of social and ultra factors. (“Calculators. ” Merriam-Webster. ) Dictionary. Com defines it as, “the combination or interaction of social and cultural factors”. (“Calculators. ” Dictionary. Com) From these two definitions social and cultural are the two big factors. Are hundreds of different ways to define culture, and it’s a very broad term.

The book, International Business, lays down some good fundamentals about what culture is. The first point that International Business says about culture, is that it is learned, and not born with. This means that Just because you’re born somewhere, soonest necessarily mean you will adapt to the culture, but spending a lot of time around people who are immersed in the culture will allow you to adapt to it. This can be a major benefit or drawback. It does allow people to move to new areas of the world and eventually adapt to their culture, but it can take a lot of time and energy.

The second point is that different parts of culture are interrelated. This second is more of a logical relation of culture, it’s basically defining that you can’t have some parts of culture without others. The third major point that is outlined is that “culture s shared, patterned and mutually constructed through social interactions”. (Ball, Donald). This point is very interesting, and what defines culture. Throughout the world we see many different cultures, influenced by religion, and regions, and we can see how some cultures have greatly impacted other parts of the world and their culture.

Because culture is shared through social interactions, we can actually start to see a lot blending of cultures through the internet. Through the article Blending Cultures via Computer in The International Journal of New Media, it discusses the lending of European art and culture blending into parts of Chinese Contemporary artists. Without the social interactions through online sources, this is something that would have never been possible. The last major point that is made by International Business, is that culture defines the boundaries of different groups.

An example made in that book is how Americans are clock-watchers. A lot of cultures don’t follow a similar pattern, and it makes Americans seem to always be in a rush. This makes them appear unfriendly, arrogant, and untrustworthy, because it’s not something that’s globally accepted. Another interesting point on this topic is how culture varies so much even within a single country itself, and can even vary inside small areas. The best example of this that is very well known, is how people in the younger generation from the bay area in California are known for saying “hell”.

This is something that’s only sprung up within the last few years, but is very common in that culture, and saying it outside of even the bay area of California allows people to determine where you’re from very quickly. A huge part of socio-cultural is the constantly changing of customers preference. Samsung was able to capitalize on one of these changes not too long ago, and was able to help turn the phone industry upside down. Before 2007 Monika was the king of the cellular industry, and had complete market dominance, until apple stepped on the scene which completely changed the phone market.

They added in a whole new experience to the phone market. ” The hysteria surrounding the phone made Samsung sit up and take notice”( Bandit, Rural) Samsung had a share in the phone market, and capitalized on the trend that apple started. They were able to acquire a contract with Google’s operating system, android. Monika refused to adapt to the trend, and Samsung was able to take the leap and Jump ahead of Monika in 2011 as the largest market share of mobile devices.

The article How Does Socio-cultural Environment Impact a Business sums up Samsung success greatly, ” Samsung, the minnow when Monika was the shark, is now the largest handset manufacturer in the world, and in the process, has outdone Apple’s phone, which many consider to be the innovation on which most modern smartness are modeled. ” (Bandit, Rural) Natural Resources and Environmental Sustainability. The second major force is natural resources and environmental sustainability. This force can be split into the two different sections of natural resources, and environmental sustainability.

Along with those two different sections there is geography which plays a semi-significant part on this force, and also Porter’s Diamond to help analyze competitive advantage. Geography has a lot of possible effects on a company. Google gives a great definition of geography, stating that it’s “the study of the physical features of the earth and its atmosphere, and of human activity as it affects and is affected by these, including the distribution of populations and resources, land use, and industries. ” (Natural Resources – Google Search) Geography is very broad, and covers everything from topography of a region to climate.

These things can have a large impact on how a country defines itself. Mountains can separate a entire section of a country from the rest, thus leading them to having distinct cultures, industries and climate. It can even lead to boundaries such as deserts or forests that act as barriers between two separate regions. (Ball, Donald) These barriers cause different needs based on the area, even though they may simply be in the same country. Porters Diamond helps analyze businesses based on four aspects of a country’s economic environment.

The four conditions the assessment is based off of are; factor conditions; related and supporting industries; demand conditions; and firm strategy, structure, and rivalry. Porters Diamond from assess the business with a high emphasis on the countries geographical attributes as a core part of its factors, and those with the most favorable diamonds are going to be the most successful. (Ball, Donald) ( Michael E. Porter) Natural Resources play a huge factor into the economic viability of a company, and owe and where a company can be successful.

Google does well defining natural resources as “materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain. ” (Non-renewable Resource. ” Wisped) In the book, International Business it puts a lot of emphasis on the statement that natural resources are anything that’s supplied by nature which people depend on. This book also relates that both energy and unfelt minerals play an important role to business. Energy is used daily without a though, but is a very valuable natural resource, if not the most valuable..

There are two major types of energy, renewable, and nonrenewable. A non renewable energy resource “is a resource that does not renew itself at a sufficient rate for sustainable economic extraction in meaningful human time-frames. “( “Renewable Energy. ” Wisped) Some examples of nonrenewable energy resources are petroleum, coal, and natural gas. A renewable energy resource “generally defined as energy that comes from resources which are naturally replenished on a human timescale. ” (8) Some examples of renewable energy resources sunlight, wind, rain, waves, and geothermal heat.

Environmental Sustainability in business has three characteristics that are widely agreed upon; limits, interdependence, and equity. (Ball, Donald) The first of these three characteristics is limits. Limits is a basic term to serve as a reminder on the reality that environment resources are exhaustible, and that they can become toxic. The previous trend of global warming or global climate change is a great example of a limit, and how it’s being impacted. The second characteristic is interdependence. Interdependence is defined as the relationship between ecological, social, and economic systems. Ball, Donald). This book goes on to define that an effect in one these systems will affect the other two. The last characteristic is equity. Equity is essentially applying limits to interdependence. In order of Interdependence to work, there cannot be large differences in the distribution gains. This essentially means that it isn’t viable to go into an area and take extreme profits without eventual resistance. Samsung is a company that takes its social responsibility, environmental responsibility, and sustainability incredibly seriously.

In 2013 Samsung released its 2 page sustainability report, regarding topics such as: “Creating Shared Value and Giving Back with Samsung Products, Social Responsibility: Making Contributions around the Globe, Echo Product, Water Management, and a 50 page green/echo product environmental report” (“Samsung – Global Harmony. ” Www. Samsung. Com) Directly from Samsung engineering website, this is their vision, ” Samsung Engineering seeks to improve conditions around the world through our social contribution programs.

Company-wide, we utilize our strengths and resources to benefit local communities and help children and families in need. Individually, our employees are encouraged to take part in the many volunteer programs offered by the company. ” Since 2006 Samsung has been trying to enhance their energy efficiency, and respectability in their production. They’ve even implemented a “Echo-Design Process” to evaluate the echo-friendless of each new product during the development stage. ” . In 2012, the company set up comprehensive water conservation plans and expanded its efforts to reduce the consumption of water resources around the world. (“Samsung – Global Harmony. ” Www. Samsung. Com) Samsung has not taken being a leader in lobar technology lightly, they’re fully applying a lot pressure to help with the sustainability of their resources, and other resources around the globe. Helping many charities and different organizations to try to help sustain our planet and keep their business profitable. Political and Trade Forces Political and trade forces are Just as important in any country as its culture and environment. This is because of the major impacts that governments can have on firms.

A hospitable and stable government can encourage investment and growth despite geographic or weather barriers, or even the scarcity of natural resources. The exact opposite is true as well. A hostile or unstable government can completely kill of almost any possible investments in an area, regardless of the area’s natural resources of geography. Some of the major points in the political and trade forces are government stability, and trade restrictions. Government stability can have a huge impact on business.

When government stability is defined, there are two different possible definitions. Government stability can be defined as the government’s ability to maintain itself and stay in power, or it can be defined as the permanence of the government’s policies. Ball, Donald) A business is able to be at its most prosperous when the government is able to keep both of these definitions intact. “Instability on the other hand is when a government cannot maintain itself in power or makes sudden, unpredictable, or radical policy changes.

It is hard for business to flourish when government is unstable. ” (Ball, Donald) Business can operate under almost any set of rules and restrictions, though some are much more difficult to operate under than others. The biggest issue is when government policies are constantly changing. The reason this is difficult is cause frequent changes cause business difficulties when complying to rules and regulations. This can cause business to have to change their business models or how they operate almost overnight. With changing policies it can potentially grind some firms too halt.

Trade restrictions can be one of the biggest problems when operating an international firm. There are a lot of arguments for trade restrictions such as: national defense, sanctions to punish offending nations, protect infant industry, protect domestic Jobs from cheap foreign labor, scientific tariff or fair competition, retaliation, dumping and subsidies. Some of these have a much higher impact than others, but all of these are great arguments towards trade restriction. One of the best of these arguments stems from developing nations requesting barriers on imports of competing products.

This allows the developing country to sustain itself and build up it’s on infrastructure while developing products that might be common place elsewhere. The argument is that a new industry needs time develop and gain experience before being forced to compete with worldwide competition. Another good argument is the national defense argument. This argument basically requests hat there are trade restrictions on certain industry imports, and that they’re vital for security, and must be kept operating even though they are not competitive with the foreign suppliers. Ball, Donald) The reason for these vital industries are so that during times of immediate war a country wouldn’t suffer from unnecessary problems because they’re not able to have the proper defense equipment. This could range from guns and tanks, to as simple as shoes. Having an insufficient supply of footwear at times of war can cause a lack of shoes for civilians and soldiers which can lead to unnecessary casualties. These trade restrictions arguments all raise their own valid points and each have their own benefits and negativisms.

Ever since the introduction of Samsung smartness they have been in legal battles all over the world with Apple trying to make it legal for them to sell their phones, and not be infringing on copy right laws. Almost every country has had their own legal battle with Samsung and apple with new ones emerging every day. With Samsung being based on South Korea they were able to have a lot of political influence there. In the article , Korea Fair Trade Commission clears Samsung use of tankard-essential patents against Apple, it refers to how Samsung used its power in Korea to basically influence these decisions.

With Samsung being a massive part of Koreans market they were able to get their essentials patents against Apple cleared allowing them to continue operation as usual. (“SAMSUNG ENGINEERING. ” Samsung Engineering) Intellectual Property and Other Legal Forces The fourth of the international environmental forces is intellectual property and other legal forces. The best way to sum up this section is given by, International Business, saying “International business is affected by many thousands of laws and isolations issued by states, nations, and international organizations. The reason this is a really outstanding summary is because not only are international businesses subject to the laws of the countries they operate in, but also the states and even cities they are based in. The other few main points of this section include international legal forces, international dispute settlement, and intellectual property. International legal forces are governed by international laws. International laws can be divided into two subcategories, public international law and private international law.

Public international law can be defined as the relations between governments, including laws concerning diplomatic relations and all matters and obligations of those nations. (Ball, Donald) Private international law are the laws concerning the transactions of individuals and companies crossing international borders. (“Private International Law. ” U. S. Department of State) International laws come from several different sources, but the main and most important of these are treaties between nations. Ball, Donald) A treaty is basically an agreement under international law, and can also be known as “an agreement, protocol, covenant, invention, pact, or exchange of letters, and all of these forms of agreements are, under international law, equally considered treaties and the rules are the same” (“Treaty. ” Wisped) Some International organizations have been created to provide a forum to help create treaties between different countries. A few examples of these would the United Nations or the European Union.

Handling international laws are great, but without being able to enforce them they lead nowhere, this is where international dispute settlement comes in. Litigation is the process conducted in order to determine and enforce legal rights, this is essentially the investigation process behind laws such as international treaties. This process can be incredibly complicated and expensive, and in addition to the trial itself the process can require a pretrial. A pretrial is essentially an pre investigation which requires all facts and relevant information to the litigation from both sides to come forth. Ball, Donald) The other part of international dispute settlement is arbitration. Arbitration is a process agreed to by both parties that instead of going to court, they will attend a neutral person or party the makes a binding decision. Legal Dictionary gives a great summary of arbitration, saying ” Arbitration is a well- established and widely used means to end disputes. It is one of several kinds of Alternative Dispute Resolution, which provide parties to a controversy with a choice other than litigation.

Unlike litigation, arbitration takes place out of court: the two sides select an impartial third party, known as an arbitrator; agree in advance to comply with the arbitrator’s award; and then participate in a hearing at which both sides can present evidence and testimony. The arbitrator’s decision is usually final, and courts rarely reexamine it. (10) Intellectual property encompasses many different exclusive manufacturing rights. These are patents, trademarks, trade names, copyrights, each which have their own separate meaning and purpose.

A patent in the United States is defined as, “an intellectual property right granted by the Government of the United States of America to an inventor “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time in exchange for public disclosure of the invention when the patent is granted. (11) A trademark or trade name can be defined as, “A shape, a color, design, catchy phrase, abbreviation, or sound used by merchants or manufacturers to designate and differentiate their products. (Ball, Donald) A copy right is, “Exclusive legal rights of authors, composers, creators of software, playwrights, artists, and publishers to publish and dispose of their works” and are protected under the Berne Convention of 1886 which is adhered to by 164 countries. (Ball, Donald) Possibly one of the biggest legal battles regarding intellectual property in history is a battle still being fought today. That battle is Apple Inc v. Samsung Electronics Co. These cases are strictly regarding the design of smartness and tablets.

The spring of 2011 apple began litigation over several patent infringements by Samsung. (United States District Court) Eventually the litigation opened up to 19 different cases pning across ten different countries. (Liableness, Chloe) A basic summary of this case is that apple patented the shape of its phone and the color design and layout of its SO right before the release of the first Phone in 2007. In 2011 Apple opened up some cases against Samsung referring to Samsung breaking patents, trademarks, ND the use of its style over multiple devices. (“Apple Inc. . Samsung Electronics Co. , Ltd. ” Wisped. ) After a few months in dispute apple submitted evidence of side by side comparison between an phone and a specific galaxy model. This evidence turned out to be tampered with which lead to even further investigation. (Liableness, Chloe) Since the cases were opened, there have been multiple trials and appeals. This has lead to some countries fully banning Samsung products, and countries punishing Apple forcing them to essentially pay to Samsung for slandering their name. (“Apple Inc. V. Samsung Electronics Co. , Ltd. Wisped. ) International Monetary Arrangements and Terrorism International monetary system and terrorism have a large impact on how some international businesses are able to operate. One of the major factors in the international monetary system is Foreign Exchange. The reason why this is a large factory is because most corporations like to do business in their own currency, because then they don’t have to assume the risk that can come with currency exchange. (Ball, Donald). This is prevalent because it can cause major problems when converting to other currencies.

Samsung being one of the world largest manufacturers and suppliers of electronics faces themselves working with many different currency on a daily basis. Being the largest Smartened supplier in the world they deal with a large amount of exchanges. This is because some of their phone parts are produced in different nations, and then sold in almost of every country around the world. Ethical Issue One of the probably the biggest ethical issues faced before Samsung is the entire child labor debacle in 2012. In 2012 Samsung was investigated for using illegal labor practices in their Chinese manufacturing facilities.

The claims against Samsung were that in some cases were that employees were working 16 hour days, and also that some employees were under the legal working age of 16 years old. (windcheaters. Com) After the investigations were complete Samsung was found guilty of these practices, but that they were not the ones responsible for these practices. They were able to essentially cover their tracks in these cases and switch a majority of the blame. (Grandson, Odin) Samsung probably didn’t portray Christian values in this situation, as they were not respecting the laws in that country.

This is finitely a large issue in the manufacturing process, as it is able to provide cheap labor for their company. Conclusion Samsung is an international company that is effected by the different international force of business on a daily basis. These forces determine everything from where and when to sell products, how to ship, where to manufacture a long with a multitude of other things. Samsung is also faced with ethical issues. Through the thick and thin Samsung has been able to use these forces to put themselves at the head of the pack becoming a leader in international electronic manufacturing.

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What Is Meant by International Business Ethics

While business ethics emerged as a field in the 1970s, international business ethics did not emerge until the late 1990s, looking back on the international developments of that decade. Many new practical issues arose out of the international context of business. Theoretical issues such as cultural relativity of ethical values receive more emphasis in this field. Other, older issues can be grouped here as well. Issues and subfields include: The search for universal values as a basis for international commercial behavior. Comparison of business ethical traditions in different countries.

Also on the basis of their respective GDP and [Corruption rankings]. Comparison of business ethical traditions from various religious perspectives. Ethical issues arising out of international business transactions; e. g. bioprospecting and biopiracy in the pharmaceutical industry; the fair trade movement; transfer pricing. Issues such as globalization and cultural imperialism. Varying global standards – e. g. the use of child labor. The way in which multinationals take advantage of international differences, such as outsourcing production (e. g. clothes) and services (e. . call centers) to low-wage countries. The permissibility of international commerce with pariah states. Foreign countries often use dumping as a competitive threat, selling products at prices lower than their normal value. This can lead to problems in domestic markets. It becomes difficult for these markets to compete with the pricing set by foreign markets. In 2009, the International Trade Commission has been researching anti-dumping laws. Dumping is often seen as an ethical issue, as larger companies are taking advantage of other less economically advanced companies.

A business has moral duties that extend well beyond serving the interests of its owners or stockholders, and that these duties consist of more than simply obeying the law. A business has moral responsibilities to so-called stakeholders, people who have an interest in the conduct of the business, which might include employees, customers, vendors, the local community, or even society as a whole. Stakeholders can also be broken down into primary and secondary stakeholders. Primary stakeholders are people that are affected directly such as stockholders, where secondary stakeholders are people who are not affected directly such as the government.

They would say that stakeholders have certain rights with regard to how the business operates, and some would suggest that this includes even rights of governance. Local culture affects ethical issues greatly because this entails managing two cultures, looking at the fact that a French organization moving production to Nigeria will encounter cultural and language barrier. In Nigeria been a multilingual society, civil service employment is done on quota system, as such positions created may be filled by unqualified candidates were as more qualified personnel may be left out.

This is contrary to a French culture were the best hands gets the job. Another ethical issue involves the standard of conducting business in multinational corporations. The US congress and the Securities and Exchange Commission consider it unethical for corporations to make payments to government officials of other countries to promote trade. However, in many countries, for an organization to effectively operate, you need to pay government official usually called kick back. For example the case of Halliburton raised by US congress about their activities in Nigeria.

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Developing Country International Business Environment

International relations are rapidly changing and growing in such a way that even the market economy is dragged into this fast-paced world and more importantly, the domestic and internal affairs of states are greatly influenced. In the same sense, the business world is affected by this constantly transforming world considering that it does not function on its own or in a vacuum. The eventualities happening around the sector also influences the undertakings and decisions between and among the businessmen and women. This idea is called the business environment.

Business environment, according to Vadim Kotelnikov, is a set of “political, economic, social and technological (PEST) forces” which are usually beyond the control of the business sector but have great implications that are both advantageous and disadvantageous to the business community (Kotelnikov, 2008). With the use of the four determining factors – political, economic, social, and technological – of the business environment, and an analysis of each one of them, the landscape of the whole status and condition of the business environment is somehow perceived.

Moreover, considering the varying circumstances faced by the different elements of the business environment as not merely influenced by domestic affairs, the business sector also has to cope up with what’s going on in the international arena or externally. This then leaves the business community in a very difficult and challenging position wherein its stakeholders and players need to surpass and overcome both the circumstances locally and globally while pursuing and assuring the development of their endeavors.

These internal and external conditions could be analyzed in the form of the Strengths, Weaknesses, Opportunities and Threats or the SWOT analysis (Kotelnikov, 2008). This framework looks both at the internal (strengths and weaknesses) and the external (opportunities and threats) circumstances in the business world. Being well aware that states and its business sector is greatly influenced by the changing business environment, it is essential to assess the capacity of these states in overcoming and facing the challenges before them.

Developing countries, for instance, find it difficult to follow the trends of the international community because of some unavoidable circumstances. For the purpose of this study, the business environment of the Republic of the Philippines will be looked at, as part of the developing countries. The Republic of the Philippines The Philippines is a small state with fragmented group of islands. It is located in the Southeast region of Asia between two large water formations known as the Philippine Sea and the South China Sea (Central Intelligence Agency, 2008).

Although geographically small and distant from Western countries, the Philippines is simultaneously conducting diplomatic relations with various states. Because of this international affiliation added to the country’s domestic affairs, it is observable that the Philippines’ business environment have been and will continually be greatly affected. Politically speaking, the Philippines have a very diverse and interesting governmental undertakings.

The country have different political parties and pressure groups that affects the decision-making processes in the country with their different stakes and political power. Moreover, many Filipinos are outraged and downright discontented with how the state actors govern its people. Actually, the country was considered as the most corrupt country in Asia (Conde, 2007). It is also observed that issues such as nepotism and political dynasty are also present in the political structure of the Philippines.

In accordance to that, the Philippines’ political activity encompasses both its bilateral and multilateral relations. Its bilateral relations with the US, European Union and Japan, for example, is increasingly strengthened which is highly favorable for the said developing country. Moreover, with its multilateral relations, for instance through the Association of Southeast Asian Nations (ASEAN), the country is gradually addressing domestic problems like human rights and its concerns on some Overseas Filipino Workers (OFWs) and their security abroad (Arroyo, 2007).

On the other hand, the Philippine economy is observed to be growing in a faster pace as compared to earlier years which enables the country to develop and further enhance its economic endeavor. Although the prices of many goods including oil continues to rise, the Philippine economy is still standing strong owing a big bulk of its finances from the revenue provided by its OFWs (Arroyo, 2007). Aside from that, the Philippines is also one of those countries experiencing great benefits from Business Process Outsourcing or BPO.

With the emerging presence of call centers, web development, and transcription jobs, many Filipinos are alleviated from unemployment and the country’s economy is highly empowered. It was actually recorded that BPOs in the Philippines enabled the country to experience an annual growth excess of 30 percent (BPO Philippines, 2008). In the same manner, the country’s foreign economic relations is seen to be developing and is continually strengthened.

The Japan-Philippine Economic Partnership Agreement or JPEPA, for example, enables the Philippines to send more OFWs to Japan to provide their services and skills in the latter, which will greatly benefit the Philippines (del Rosario, 2008). Aside from the economic activities of the country that affects the business environment, social implications are also reflected. Domestically speaking, the country’s diverse political pressure groups and social movements enable its people to be socially aware and active.

Through this social involvement, the Filipinos are empowered to practice their rights and freedom accorded by its democratic country. In the same manner, this social activism spilled-over in the country’s foreign affairs wherein aside from the Philippines’ involvement in various international governmental organizations, many non-state actors are also simultaneously participating in other international non-governmental organizations like Greenpeace International, which is advocating for environmental sustainability and peace (Greenpeace, n. d. ).

Lastly, for the technological innovations the Philippines is experiencing both domestically and internationally, it is observable that the country is enhancing its technological undertakings through the growing call center offices and even through its information technology programs. Moreover, the country is continually affliating with other states to coordinate in producing technologically advanced materials. SWOT Analysis In all those circumstances, it is perceived that strengths, weaknesses, opportunities and threats emerge in the condition of the business environment.

Analyzing these SWOT will show how the Philippines is responding to this diverse environment and how the country perceives each one of them. The increase in the revenue stated earlier from the OFWs is a good indicator that the business sector is continually growing. Through these finances, the country’s developmental agendas are given priority and its economic endeavors enhanced. In line with that, being well aware that OFWs are in demand abroad, state actors may provide more training programs to develop the skills of its labor force and strengthen their abilities.

Moreover, through its BPOs, the country is gradually addressing its unemployment problem and giving its people venues to participate in the workforce and contribute, not just to their own growth, but also to the country as a whole (BPO Philippines, 2008). In addition to that, through the technological innovations accorded to the country, the Philippines is able to provide its people with a chance to learn more and follow the trend of modern technology.

This will not directly influence the economy of the Philippines but its long-term effect is observably beneficial for the country since the Filipino’s skills and abilities will be further developed. On the contrary, the Philippines’ business environment is not all encouraging and uplifting. The political bickerings and the continuous corruption in many governmental institutions are highly criticized by the Filipino masses attesting that it destabilizes not just the country’s political growth but even its socio-cultural and economic activities.

The political bickerings among the diverse political parties is hampering the government to focus on development programs and tends to divert their attention towards addressing the egocentrism of some officials. Aside from that, the issue on terrorism is also weakening the Philippine society. Although the use of the word “terrorism” is highly debatable, the Philippines is experiencing internal conflict and violence especially in its Southern region. Some Muslim extremists were reported to be staging violence and threatening the people killing many civilians and increasing national security problem.

This issue weakens both state and non-state actors to promote development programs for the people in the South because tension and conflict continues to escalate in the said area (Anti-Defamation League, 2004). These problems greatly affects the country’s domestic affairs and its policy-making processes. Looking at the country’s international undertakings, its business environment also provides opportunities and advantages. The external implications of the internal strength of the Philippines’ business environment is very much related.

Because of the observed technological ventures, flexibility, and openness of the Filipino people, foreign firms and foreign investors are encouraged to explore the Philippines’ business sector and even its other institutions. Foreigners find it beneficial and a strategic move to partake in the Philippine businesses because of the country’s large laborforce and learning skills. Also, through the training programs provided by the government to its people, Filipinos become highly competitive in the international market offering their services as part of the mobilized capital.

Furthermore, the social movements established by the Filipinos could also serve as an opportunity to affiliate with international organizations and make the country’s advocacy and social activism known across the world. However, the involvement of the Philippines in the international arena and its continuous bilateral and multilateral agreements poses some serious threat in the country’s business environment. With the trade relations of the Philippines, its partner also gives its terms and conditions to pursue the deal.

For the JPEPA, Japan’s condition, as a response to the Philippines’ assertion of better Filipino opportunities in the country, is to transfer its toxic waste in the Philippines (del Rosario, 2008). This is a great threat to the country’s environment since toxic waste poses health risks to the people. Aside from that, the increasing number of foreign businesses and foreign goods in the country may cripple the Philippines’ local production and goods.

Since the benefits are greater in working for foreign firms, may local businesses may be disregarded in the same manner as their products ignored since people would rather patronize foreign goods. Conclusion and Recommendations From the SWOT analysis of the Philippines’ business environment and the circumstances around it, it is observable that the country really needs a lot of improvement and programs to better enhance their positive characteristics and transform the negative ones.

For the strong points of the Philippines’ business environment, more venues and programs for training and skills development should be pursued by the government with the support of non-state actors. Moreover, policy-makers should assure that the OFWs are secured in their work area and that they receive their benefits. Also, a continuous flexibility, openness, and willingness to cooperate with other states should be pursued while taking note of the country’s national interest at the same time.

In the same sense, the civil society should assert the enhancement of a government oversight committee to monitor government spending and assure that the taxes paid by the people are used for developmental projects and not for the personal interests of government officials. Lastly, the government should strike a balance between collaborating with foreigners and enhancing local industries so that the country’s primary products will not be disregarded but continuously developed.

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Case study-Removing cultural barriers for international business

Case study-Removing cultural barriers for international business
Introduction

Midnight Communications was founded in 1992 and fully listed on the London Stock Exchange, SDL International® (London: SDL plc) is a leading provider of globalization technologies and services.  Its contributions, which enable organizations to remove cultural and linguistic problems to international markets, include present-time translation technologies, lingual data management, a great range of in-house consulting and localization services and translation memory.

Objectives

Midnight was appointed by SDL International in Q4 2000 to build the company’s profile – particularly within its target trade publications – and to establish SDL as the UK’s leading globalization solutions provider. Midnight’s initial task was to carry out a media audit to show the current industry alertness of SDL International and the major issues of localization and globalization. The outcomes were startling! Media alertness of SDL International came out to be very low. From these results, a mere 6% claimed to have knowledge about the company’s business. Furthermore, the term ‘globalization’ was generally associated with Anti-Capitalist May Day Riots – a far cry from translation and localization!

Strategy, research and plan

Midnight devised an issues-based campaign to bring life and meaning to the term ‘globalization’, and to educate the market on the importance of effective multi-lingual communication. Midnight defined and clearly stated the fact that translation is not enough and that cultural adaptation is the basic key. The CEO of SDL International and the company itself were positioned as key commentators on content management strategies and global communication. Credibility was generated through informed comment and advice.

Midnight took the opportunity to conduct a detailed research of the region and  size of the translation market, examples of organization that have successfully adapted a general approach to their web site information and the most popular languages on the Internet. Research also focused on cultural issues to be addressed when entering key overseas markets, amusing examples of multi-nationals’ mistranslations and cultural faux pas, as well as analyst research into key emerging markets

Action

In addition to generating quality news stories, Midnight used this research to develop a series of strategic articles, by-lined to Mark Lancaster. The features demonstrated the open opportunities created by a global approach and a practical demonstration on how to carry out a global communications strategy. It was declared that by-lined articles are said to have appeared in six target publications, of which they include: New Media Creative, Industry Standard and Sales Director. Therefore, due to the need for change, Midnight’s media-relations department developed a further 14 features that were responsible for the issue of translation and globalization.

Press Trips & Demos

Midnight organized a number of press trips and product demonstrations to ensure SDL International was introduced to key media; messages effectively communicated, and clearly demonstrated the benefits of SDL’s complex products and services

Case Studies

To support the campaign, Midnight developed a number of case studies of SDL clients who had implemented successful overseas strategies. New client win and partner stories were used regularly to encourage further blue-chip partnerships.

Creative Photography

To give the story visual impact, creative photography of Mark Lancaster spinning a high-tech globe on his finger like a basketball, was developed. This result came together with the outcomes of the coverage, even in places where no other images were used.

Roundtable Event

To encourage strategic partnerships within the industry, Midnight orchestrated an SDL-branded roundtable discussion forum to discuss the issues central to global content management. This event brought together high-profile players from companies such as Adobe, Accenture, Organic and Media Surface. The roundtable enforced SDL’s position as a leading innovator in the field of globalization, and served to encourage further strategic partnerships

Measurement and evaluation

Midnight has been highly successful in raising awareness of SDL International within its target market, with all key titles now recognizing the company, and media coverage from these publications illustrating not only an understanding of SDL’s business, but also the related issues. The PR campaign that is going on for the company has created excellent trade, new media, IT and Internet results, with great media coverage taking all key trade titles, thus producing over 12 million great opportunities to see. Language and translation have been successfully linked to globalization within SDL International’s target market, with the key message that ‘it’s not enough to translate – you have to consider local culture’ being effectively communicated. Supplementary strategic groupings for SDL and other related IT developments have also been encouraged.

Reference

1.      Schaefer, R.T. (2008). Sociology: A Brief Introduction 8th edition. Columbus: McGraw-Hill.

2.      Leo P. Chall. (1999).  Sociological Abstracts. Sociological Abstracts, inc

3.      Parker M. Holmes. (1963). Readings in Marketing.  Cornell University: C. E. Merrill Books Pub

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Cultural Problems in International Business

Table of contents

Problems

Cultural barriers to integration. The considerable differences between the Spanish and German business practices could have been diminished through a sound pre-assesment made by Martinez Co. Since this understanding process was not pursued, a cultural conflict occured which may significantly hinder the processes of strategic and operational management of the two companies as a whole. The most important barriers of cultural dimension include: Barriers to cultural integration| Suggestion for limiting the impact

  1. Cultural shock’ as a consequence ofstrong cultural diversity of companiesconstituting a holding group;| Cultural transformation, respectingcultural values and customs of a targetcountry. |
  2. ‘Cultural maladjustment’ of boardmembers delegated by a parent company;|
  3. Management through values, systems formonitoring social feelings of the targetcompany. |
  4. Management style differencesbetween companies. | Management through goals as a basisfor work appraisal of the managementpersonnel and employees| Financial issues Martinez Co. ’s representatives are involved in a process of Merger and Acquisition which they discover gradually.

This means that they have allowed themselves to be unaware of the exact risks and implications, especially from the financial point of view, from the moment they accepted a contract that did not contain enough information related to this topic. Now they are facing unpredicted expenses, and the possibility of new ones to occur cannot be excluded. Ensuring that an acquisition is a good fit, not only on paper, but as an integrated business, calls for going beyond traditional financial assessments, to detailed value analysis, especially within an international business context. As Treuhandanstalt rushed the process and Martinez Co. imply went with the flow, requirements that should have been included in the contract are now threatening the Spanish company’s financial capacities.

Causes of the problems

The problem regarding cultural contradiction became difficult to cross due to the following errors: -Martinez representatives’ did not make an appropriate due diligence as no research regarding business practices in Germany had been made. Juan Martinez was sent to conduct negotiation just because he was genuine and had a practical thinking, but his lack of information proved to have a great negative impact on the deal obtained. Their reasoning to expand in Germany is poor. Diego Martinez took into account only the fact that Germans enjoy Spanish atmosphere and often choose Spain as a target market for business. On the other hand, they did not take into account that differences in leadership approach and culture in general can affect their interest. It is very important to be aware that if companies from a specific country conduct successful affairs in your country, it does not necessarily mean that you will benefit from the same success there. The financial problem occurred mainly because some of the steps within negotiating the merger were skipped.

Firstly, Martinez accepted to sign a contract without enough details about Konstrukt’s financial position. They requested, indeed, a Phase Contract which made Germans unclear and, moreover, gave them little perspective about future financial risks. In fact they bought a company without knowing exactly what they are getting. The second main contribution to the synergy’s financial issues was brought by Treuhandanstalt. Although THA must have focused on evaluating the firms, especially their financial soundness and the cost for the buyer, it had, in this case, as main concern the speed of transaction.

Therefore, they pressured Martinez during this process, without focusing on future risks and arrangements for upgrade.

Negative effects that occur

If problems will not be solved The cultural dissonance will have the following consequences:

  • Management will face severe problems in providing incentives for employees, therefore their productivity will go downwards;
  • Employees will become confused about their role in the company so their lack of initiative and responsibility will worsen.

In addition, this synergy attempt will face challenges caused by financial problems:

  • The plans of stability and progress will be severely hampered in the case of Martinez Co. ; if they fail now, they will find it extremely hard to expand even on another foreign market (a financial fiasco would make Martinez unconfident and the idea of international expansion would definitely be seen as a peril).
  • Company might become insolvent if the new expenses emerged are not handled at time and properly. 3.

Solutions

  • Cultural barriers – a first solution would be to map out the chain of command (employees must understand their exact role in the company and must be informed about the participative leadership approach specific to the Spanish company) –communication based
  • Strategic focus – agree on the goal (“enrichment”) and find the right cultural approach to achieve it ( certainty needed, more like Germans)

Mix useful elements from both cultures in such manner that leadership and employees can move together towards their goal ( keep the” all about work policy” but make them involve in decision making through incentives) Financial issues Cash injection , as expense on regulations is compensated by the opportunities offered on this new market ( raw materials at hand, low wages required and brown field investment advantages)

Assess the co’ future growth rate and profitability in order to understand if the acquisition is a good option * Require a renegotiation of the contract, which should imply these extra- expenses.

Implementing the optimal solution

  • Communication: employees must be informed about policies adopted, about their role exactly. This way, they will be less inclined to reject the new management and their approach.
  • Studies of the market ( it has potential since raw materials are available an also is labor) , discussion with experts and third parties.

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Cultural Barriers in International Business

The business in Middle East is very much dependent on the culture and the trends followed there. Success in international business needs the improvement and implementation of business strategies that are responsive to environments formed in the particular region business is expected. In the Middle East, the economic, social, and political dimensions differ from any other region.

Multinational companies are usually aware of the problems they can face when entering Middle East. The Persian Gulf region has a significant level of international commerce and investment, as represented in part by an estimated $120 billion in exports and the presence of nearly 1,200 foreign-affiliate firms, with approximately $29 billion in investments in the region (Kavoossi, 2000). Recent trends point to increased international investment.

The region’s major international strengths include oil and natural gas, major international airports, ports along the Persian Gulf, high disposable income per household, an educated labor force, a growing high technology industrial base, and world-class financial centers. In addition, the region is home to many international and regional organizations. In the aftermath of the Arab-Israeli peace accord, people feel more confident about the stability of the region.

International weaknesses, however, include a lack of positive image, a serious need for surface transportation improvements, lack of efficient and speedy bureaucracies, a perceived high cost of doing business, inadequacies in the workforce, and the absence of a single entity to promote the region internationally. Challenges & Barriers To market successfully a product or service internationally, one must have a firm grasp of the ways cross-cultural differences in communication influence the creation, implementation, and outcomes of advertising campaigns.

With much of the global industrial expansion and promotion now focused on the Middle East, from direct marketing of water sports equipment and cosmetics, to liquor, tobacco, food and beverage, and health care products cultural differences will affect not only the internal conduct and organization of multinational firms and consumer attitudes toward product “country of origin”, but also affect foreign and domestic marketers’ competitive strategies in relation to advertising in all media. It might be expected, therefore, that cultural differences will also affect competitive advertising strategies used in foreign and domestic markets.

The management of Muslim markets also requires understanding of variations in governmental attitudes toward access to domestic markets. Many Muslim nations have adopted an open-door policy for foreign investors and exporters. This spirit of open access has spread throughout the Middle East, with the exceptions of Libya, Syria, and Algeria. However, private ownership grows in strength in Iran, Iraq, Egypt, Saudi Arabia, Kuwait, Jordan, Morocco, Tunisia, Turkey, and other, smaller Persian Gulf states, including the United Arab Emirates.

Many entrepreneurs in the private sectors of these countries are responding to market demands for modern products. Both foreign and domestic businesses must begin to recognize the need to apply appropriate marketing strategies and to position themselves to capture new market segments through a better understanding of the determinants of consumer behavior in Islamic society. Dimensions of religious and cultural context of consumer behavior must be specifically analyzed to determine the degree of integration of specifically consumer behavior and the dominant Islamic paradigm.

In contrast to non-Islamic capitalist economics, Islamic theory considers the consumer to be a seeker of the good life in this world and the world hereafter. It must be noted that the accumulation and maintenance of wealth is not entirely undesirable or negative. The Islamic system, by virtue of its very nature, maintains a high rate of savings. The inherent forces of the Islamic system make the investment perspective an integral part of the savings decision. Saving is positively related to investment opportunities and expectations.

This relationship implies that at times of declining investment expectations, saving will decline, and consumption will rise. This in turn increases demand. It can be reasonably argued that in most Western industrial free market economies, particularly that of the United States, the dominant societal organizing principle is the foundation of the economics. In Middle Eastern Islamic societies, however, there exists a serious challenge and tension caused by economic forces attempting to dominate the cultural and religious components of these societies.

In short, the societal process is in flux and inherently less stable than in the West. However, it is less unstable than those of many of the newly emerging markets of Eastern Europe. The relationship between language and culture has been a major issue of concern for psychology and anthropology for some time, since Sapir and Crocker (1977) first advanced their hypothesis that language determines, or at least influences, the way we look at our world.

Although a range of studies have challenged the validity of both linguistic determinism and linguistic relativism on empirical and theoretical grounds, recent reconceptualizations of the language culture relationship have focused more on the sociocultural context of language and culture acquisition. Such studies suggest that a more useful approach is to assume there is an interactional relationship between them. According to these views, cognitive processes affect our language use, yet language also shapes our inferences and value judgments, by virtue of its inherent involvement in the process of acquiring cultural practices.

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Cultural Attunement in International Business

German customs are givens for the Germans. For Americans, on the other hand, they may very well pose as major cultural problems. In a world where English is considered the international language that almost everybody is expected to know, German business customs require at least some knowledge of the German language. Ninety nine percent of the Germans speak their own language using a number of regional dialects (“Germany” 2007). A large number, if not the majority of businesspersons in Germany, are uncomfortable communicating in the English language.

It is not unusual for them to claim that they know only a little bit of English and do not understand it especially when a foreigner speaks fast. This is perhaps the biggest challenge for a foreign business to confront when planning to enter the German market. Moreover, German businesspersons do not hesitate in making a foreigner feel foolish for not knowing the German language (Gelsi). If the multinational firm were to send its representatives to German firms to discuss marketing and distribution of its product, the importance of the German language must surely be borne in mind.

Even Wal-Mart Stores Inc. , the world’s largest retailer, striking “fear into the establishment of every new industry it considers entering,” has had to learn the importance of the German language among German natives (Shaw and Tait 2006). Wal-Mart’s business practices have been misunderstood in Germany seeing that the giant simply translated its American writing into German without learning the German language with all its nuances (“Wal-Mart: Struggling in Germany” 2005). This was a major cultural problem faced by the company. According to a Business Week report:

To American eyes, the new ethics manual is standard stuff. But when Wal-Mart Stores Inc…distributed the newly translated code to German employees a few weeks ago, it caused a furor. They read a caution against supervisor-employee relationships as a puritanical ban on interoffice romance, while a call to report improper behavior was taken as an invitation to rat on co-workers. “They have to communicate better,” says Ulrich Dalibor, an official at the ver. di service-workers union, which represents German employees of the Bentonville (Arkansas)-based retailer (“Wal-Mart: Struggling in Germany”).

Step 2: Remember: When in Germany, Do as the Germans Do Of course, there are many other business and business communication customs for Wal-Mart and other foreign entrants in the German market to learn. The Business Week report continues thus: …[T]he ethics-code fiasco shows that Wal-Mart is still prone to do things the Wal-Mart way without enough consideration to local customs. Rivals continue to chuckle about the customer reaction when, initially, Wal-Mart offered services such as grocery bagging. It turned out that Germans didn’t want strangers handling their groceries. And when clerks

followed orders to smile at shoppers, male customers took it as a come-on. Also, German companies are used to dealing with workers’ councils, which are easy to organize under German law. Some even say the co-determination system improves communication with employees… (“Wal-Mart: Struggling in Germany”). Of course, the major cultural problems faced by the multinational firm depend on the product it intends to sell in a particular country – in this case, Germany – and the methods it plans to employ in order to sell its product there. Wal-Mart had to learn how Germans behave in grocery stores.

If, for example, the product is a symbol for a certain religion, the culture of the Germans must be respected in that context. In that case, the multinational firm would have to analyze the cultural reaction of the Germans to the product. If, on the other hand, the company intends to establish a subsidiary in Germany, a partnership with a German firm, or simply send its representatives to Germany to market or distribute its product – other aspects of German business and business customs must be learned. Step 3: Learning Business Communication Customs in Germany

Regardless of the nature of the product and the methods that the multinational firm intends to employ to sell its product in Germany, it is essential to learn the behavior and/or communication practices of German businesspersons in order to deal with them effectively. As an example, Germans are often considered stiff-lipped serious by foreign businesspersons (Graff and Gretchen). In actuality, however, Germans are known to place a high value on their privacy. Intimacy is not freely expressed, and so it is not unusual for foreign businesspersons to suppose that Germans are cold.

The business communication style accepted in Germany is always straightforward, succinct and absolutely to the point. Emotions and unneeded verbosity are certainly not welcomed in business. Rather, formality and the rule of ‘mind your own business’ would help the foreign businessperson immensely (“Doing Business in Germany”). Due to its directness, the German business communication style may even be considered confrontational. In spite of this, Germans do not welcome criticism that is directed at people.

In business planning as well as discussions, it is common to openly and freely express criticism that is directed at various aspects of the project, business, or problem at hand. All the same, Germans never mean to express disapproval of persons in this manner, although foreign businesspersons that are unaware of the business communication style of the Germans may suppose that the latter are expressing “personal disapproval” thus (“German Culture Overview” 2007). German businesspersons are used to the telephone for important followup calls. They also use the fax very often.

However, they do not discuss vital business decisions over the telephone. What is more, a German executive should never be called up at his or her home without his or her permission. If permission has been granted, foreign businesspersons must be sure to address the Germans by their full titles. Indeed, Germans are quite attached to the idea of using complete and correct titles, regardless of the difficultly a foreigner may experience in pronouncing German names (“Germany”). The use of the Internet for communication with public authorities is also quite common in Germany.

In fact, one-third of the German people use the Internet to communicate with public authorities through the websites provided by the latter (“One third of Germans use Online Services provided by Public Authorities” 2007). A foreign firm may find this communication custom rather convenient while searching for information about taxes and business legislations in Germany. Foreign companies that would be interested in establishing their branches in Germany also have to know the business communication styles that are especially relevant to the German workplace.

As an example, the German office culture requires the persons of higher rank – that is, persons that hold higher “professional positions in the corporate hierarchy” – to introduce the people that are new to their group (Graff and Schaupp). Also in the German office culture, it is common to shake hands. However, the initiator of the handshake is usually the colleague who has a higher rank in the corporate hierarchy. He or she has the right to either offer or refuse his or her hand.

On the other hand, a foreign businessperson who is introduced to a German group must be the first to extend his or her hand before being introduced to the group. Furthermore, it is part of the German business communication customs to extend one’s hand to the older persons first (Graff and Schaupp). Time is money for the German businessperson. Hence, foreigners that would like to conduct business in the German market must prepare themselves to strictly talk business. Then again, it is best to learn some German so that straightforward communication is possible and little to no time is wasted.

Conclusion It is beyond the scope of this report to discuss all product and/or business related customs in Germany. Once Germany has been chosen as the right market for a foreign product, it is imperative to learn the German language – at least for the people that would be interacting with the Germans directly. Studying German customs related to the product in question is also essential, as the case of Wal-Mart’s groceries reveals. Finally, business communication customs of Germans must be learned in order for them not to present themselves as major cultural problems.

. References “Doing Business in Germany,” Kwintessential Cross-Cultural Solutions. Retrieved Nov 15, 2008, from http://www. kwintessential. co. uk/etiquette/doing-business-germany. html. Gelsi, S. , “Advantages of Knowing German in the Workplace: My Experience Working For an International Manufacturer. ” Retrieved Nov 15, 2008, from http://www. msu. edu/~mittman/simonagelsi. htm. “German Culture Overview,” 2007, Communicaid. Retrieved Nov 15, 2008, from http://www. communicaid. com/%5Ccross-cultural-training%5Cculture-for-business-and-

management%5Cdoing-business-in%5CGerman_business_culture. php. “Germany,” 2007, International Business Center. Retrieved Nov 15, 2008, from http://www. cyborlink. com/besite/germany. htm. Graff, J. & Schuapp, S, 1 May 2007, Mind Your Manners: Tips for Business Professionals Visiting Germany. Retrieved Nov 15, 2008, from http://www. german-business-etiquette. com/. “One third of Germans use Online Services provided by Public Authorities,” 2007, Mittlestands. Retrieved Nov 15, 2008, from http://www. just4business.

eu/2007/07/one-third-of-germans-use-online-services-provided-by-public-authorities. Shaw, H. & Tait, C, 31 Oct 2006, “Wal-Mart eyes banking: Financial services in Canada: It’s a way to strengthen ties with its customers: analyst,” Times Colonist. Retrieved Nov 15, 2008, from http://www. canada. com/victoriatimescolonist/news/story. html? id=a41e0cda-dd28-46df-996d-56dd291e9e63;k=67140. “Wal-Mart: Struggling in Germany,” 11 Apr 2005, Business Week. Retrieved Nov 15, 2008, from http://www. businessweek. com/magazine/content/05_15/b3928086_mz054. htm.

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