Write an Essay on the Economic Legal and Political Environment of International Business

The political environment of global marketing is the set of governmental institutions, political parties and organizations that are expressions of the peoples of the nations of the world. In particular, anyone involved in global marketing should have a deep understanding of the importance of sovereignty to national governments. The political environment varies from country to country and political risk assessment is crucial. It is also important to understand the actions of a particular government regarding taxes and asset forfeiture. Historically, these have taken the form of expropriations, confiscations and nationalizations. The importance of opening an investigation into the local political system and the possible constraints it imposes on the business process may not seem obvious at first glance. However, upon closer examination, it will become clear that locating the major political imbalances within a state is critical to defining the next approach to expanding into the target market and attracting local customers (Daniels, Radebaugh, & Sullivan, 2011). Therefore, inflation rates, when stimulated by adverse economic or political conditions, put an international company at serious risk, as the organization must not make mistakes in any area. Otherwise, the entire business can collapse under the pressure of financial and economic threats.

Daniels et al. (2011) define political risk as the changes in the political environment caused by the shift to another market and the deterioration of operational positions resulting from the above change (Daniels et al., 2011, p. 2011). 150). To be more specific, Daniels warns against threats to underestimate the importance of political change and the impact it can have on an organization operating in a foreign country`s environment. Technical solutions that help accelerate the improvement of Zimbabwe`s aging infrastructure will also meet the high demand. At present, Zimbabweans are very good at using technological innovations to solve their daily challenges. Any company that can provide them with practical solutions for financing, rebuilding infrastructure and mitigating electricity distribution problems can benefit from this environment. (Hill, 2008) Rise of spin festivals – Drivers who drift from cars may need this software that improves engine performance without having to change the engine hardware. The turbocharger was replaced with the “IS 38” type for “Golf R”, and the APR carbon fiber intake system, turbo intake, exhaust downpipe, turbo extinguishing silencer, custom cat-back exhaust system attached.

By tuning the control unit, we managed to demonstrate a maximum power of 350 hp and a maximum torque of 475 Nm, which significantly exceeds the VR 6. This Atlas tuned by APR is said to be all-wheel drive. VW appears to have changed the base vehicle`s engine or modernized all-wheel drive, as the U.S. and Canada did not introduce the Atlas combined with 4-cylinder and 4WD engine. More importantly, inflation changes the principle of international firms` activity, depriving them of the ability to adapt to the rapidly changing environment and maintain their performance potential as high as before changes in the state`s economy began. It is common to find people who are interested in doing business with a country simply because they have read that it is the new “hot” economy. You may know little or nothing about the market or country – its history, the evolution of thought, people, or how interactions in general are handled in a professional or social context. In the past, many companies did not envision new global markets until potential customers or partners approached them. However, trade barriers are falling and new opportunities are rapidly emerging in the Middle East and Africa markets, further flattening the world for global businesses. Companies are increasingly identifying these and other global markets for their products and services and integrating them into their long-term growth strategies. The role of politics in international affairs has long been implicitly recognized, but it is only in recent years that academic interest has focused on this interaction. Events such as the war between Iran and Iraq, the Russian invasion of Afghanistan, the crisis between Argentina and Britain over the Falkland Islands have drawn attention to the influence of non-commercial factors on international trade.

They encouraged the development of a management function focused on the assessment and evaluation of the current significant non-business environment (Fitzpatrick, 1983). As a rule, different types of political risks are identified; The impact they have on international trade varies considerably. For example, catastrophic political risk, which clearly falls into the category of worst-case scenarios, presupposes that an international company may be under pressure from adverse circumstances that can affect the continuation of its activities and even trigger its premature demise (Daniels et al., 2011). It would be wrong to say that an organization has no chance of survival in the area of economic inflation; However, adapting to the above environment requires that every resource in a company is used to the fullest and that every element of the organization works perfectly. The slightest hiccup in the business mechanism, be it the production process, communication problems, marketing strategy, etc., can be destructive to the organization (Gray, 2013). However, public policy changes that occur as a firm moves from its home environment to its integration into another market are classified as systemic political risk by Daniels et al. (2011). Hence the need to make the company`s approach more flexible and thus adapt to the new political environment. Traditionally, international trade is defined as a business that engages in international economic activities.

It can also refer to the act of doing business abroad (peng). Many companies are international or national companies that compete with international companies. A good understanding of what international trade is can help business owners make better decisions, as international trade is a rapidly changing environment. For example, according to market analyst Bert Markgraf: “Environmental factors have a major influence in the West and will become even more so worldwide. Companies must consider the environmental impact of their normal operations. You can try to commercialize environmentally friendly technologies internationally. The advantage of this market is that it is expected to grow faster than the economy as a whole. Therefore, in order to adapt to the rapidly changing international trade environment, it is preferable to understand how international trade works and to be able to take advantage of new emerging markets. The first step in planning the management of a political risk is to calculate the probability of its occurrence. Then an important decision must be made.

It is important to calculate this risk in financial terms. If it is decided to continue the activity despite all the risks, the necessary arrangements must be made for the losses that may result. Political risks differ from economic and financial risks in that adverse political developments usually occur suddenly and the event is preceded by few long-term signs. For this reason, assessing these risks is a very imprecise task that makes it difficult to plan for political risks in advance. Changing the value of currencies can have a positive and negative impact on businesses, and it`s important for financial managers to plan for both. Foreign exchange contracts with different banks can help defend a business if the value of a currency drops significantly and the entire business could be affected. I am sure it is crucial for companies to know the exchange rates at all times and to be able to put financial security instruments into practice if problems arise. While there are some risks associated with exchange rate fluctuations, countries in the regions in which a company can operate have the opportunity to implement exchange controls, which can have an equally overwhelming outcome. By prohibiting the use of a particular currency for intercontinental transactions, nations end up overvaluing that currency relative to the open market, making it extremely difficult to conduct business at a lower cost. Daniels et al.

(2011) define the common law as a set of rules and regulations that “translate the country`s constitution into an open and fair legal system” (Daniels et al., 2011, p. 155). The political forces that influence global business are still present and come in various forms. Ideological forces such as communism, capitalism and socialism play an essential role in the proper functioning of a business and must be discussed when starting international trade. Ideals (communism and socialism) develop difficult situations when engaging in free trade, making it difficult to create business opportunities in the region. Although the basis of capitalism is a free project, it should not be interpreted as a harmonious work environment. The government maintains certain areas where it can control the company with the help of taxes, working conditions, safety, pollution and other areas. Usually, it is clear that socialist and communist nations are the only countries where the government owns businesses. The practice of nationalizing enterprises may involve hiring companies that provide essential but not inexpensive products and services to the country, but also use the enterprise to obtain additional funds.

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