The preoccupation that abounds on the subject of international business or globalization, is in the effects that this causes in the economy, politics, culture, values and even the knowledge and skills, in one or more nations, by part of Corporations arriving from foreign countries or going abroad. These effects could be seen as positive or negative, depending on the perspective of which is seen and the perception either by the company, the government, the economists or the people, etc.
Speaking of the perspective of the company, international expansion is a favorable reality when you have a product of general interest. An example of this is technology. Products such as laptops, “tablets”, cell phones and “Smart Phones”. These are products that allow easy, fast, efficient communication that has no boundaries and that everyone wants.
We also see that the company has the potential to cheapen labor and raw material costs, located in countries where this is possible. This situation must occur under agreements in which there are benefits for both parties; The country and the company. So we can see, from this perspective, the positive part of international expansion or globalization.
Positive does not mean easy when we talk about establishing an international business. Since an international business is one that will establish transactions, relationships and activities in a country or several foreign countries, the conditions will not necessarily be the same as in your country of origin. Therefore, before establishing the business in “x” country, demographic, competition, political, legal, economic, socio-cultural, environmental factors must be taken into account; Skills, knowledge and technology. It also becomes necessary to have suppliers, advertising media and customers.
It is imperative to be able to establish an international business, to take into consideration the values as an organization. There must be a structure based on order, harmony, balance and well-being, so that there is a good perception and acceptance of all the interested or involved parties (ie society, state, company, economists, investors, media, etc.). Of this not to be taken into consideration or not to be fulfilled, a negative perception and a business would be created without a strong base to support its structure. This is why it is very important that the company has established the mission, vision, objectives, values, goals and strategies that conform to the place or places where it is established.
On the other hand, although there is concern about the effects of globalization, international business expansion continues to grow. This growth is due to four factors:
Technological advances – Technology has been responsible for the growth of trade since its inception. (Transportation, communication, etc.).
The opening of trade frontiers between countries – Just as computing no longer has national limits thanks to the media such as TV and the Internet, businesses also have no borders. Countries establish free trade agreements that give way to the development of international business.
Economy- The states have integrated institutions in order to facilitate and sustain international trade relations.
Increased global competition – Companies offer greater satisfaction of the changing market, exploiting the knowledge and innovation capacity of the members of the organization.
You cannot conclude this topic so interesting without talking about what is culture and why it is important for international business. The online dictionary of the Royal Academy of the Spanish Language defines the culture as follows:
“Set of ways of life and customs, knowledge and degree of artistic, scientific, industrial development, at one time, social group, etc.”
If we can see regional differences in jargon, customs, degrees of education, and political preferences on an island as small as Puerto Rico, we can expect much broader differences between our culture and that of other countries. Therefore, it is imperative to know the culture of the country or the countries in which you want to venture.
Clothing, greetings, thinking, rest times, religious customs, holidays, economic philosophy, political philosophy and degrees of education and knowledge, among other things, can affect organizational behavior. Disagreements, in relation to the aforementioned, between the administration and the workers, could negatively affect the organization.
Finally, the expansion or movement of a business at the international level can be positive both for the enrichment of the company, and to help poor countries by providing jobs and improving the quality of life. Getting settled will not be easy and requires changes, studies and strategies. It also requires knowledge, for knowledge is power. It also requires tolerance and understanding to understand and adapt to a different culture. We must be well prepared if we want to be successful in international business and understand that it can.