Forces in International Business

Topics: Law, McDonald's, Globalization Pages: 5 (1537 words) Published: March 27, 2013
McDonald’s is a corporation from the United States that has done a great deal of business internationally for many years, and is well-known globally. McDonald’s is listed at number 378 on Fortune’s Global 500 list, and brought in over $22 billion in revenues in 2010. Sociocultural Forces

Sociocultural forces include the different aspects of understanding that exist in one culture in comparison to another. These aspects include aesthetics, religion, language, education, etc. It is important to remember that culture is not something that is innate to specific persons, but is rather something that is learned through experiencing the culture. Along those lines, culture is also shared between all of the members of the culture, and all aspects of it are interrelated. In fact, group boundaries are caused by culture and set persons feeling towards different actions. The concept that one’s own culture is better than another is called ethnocentrism. Natural Resources and Environmental Sustainability

The second force encompasses natural resources and environmental sustainability. Natural resources are based upon location within the world and advantages that these resources give a nation relative to the rest of the world. Some of these resources are limited, and over time if taken into account can become depleted or cause harm to the environment in another way. The concern for the sustainability of these resources should be of some concern to businesses operating internationally because it affects their decisions and the decisions of those they are negotiating with as well. Economic and Socioeconomic Forces

Economic and socioeconomic forces also play parts as forces that affect different countries. The economic forces include different levels of economic development; including developed, developing, and newly industrialized countries/economies. Socioeconomics affect the economies of different countries and regions individually based on their own social norms. Power levels can be defined by the strength of the economy that either a country or a business has as well. This concept is also intertwined with the concept of exchange rates. Political Forces

Political forces affect countries and businesses as well. Some political forces include nationalism, national or international conflicts, international organizations, and types of governments such as: communism, socialism, and capitalism. Whether a country is conservative or liberal can also play a part in the politics of a region. Political forces spill into the international legal system too which makes them of great concern to businesses. A major part of political forces in regards to business is trade restrictions or tariffs which cost the business more money to export or boycott their business altogether. Intellectual Property and Other Legal Forces

International business can be influenced by concepts of intellectual property and other legal forces as well. One major legal force that can influence a business’s decisions is international law. International law is divided into both public and private laws. Public international law revolves around relations between governments including the rights and obligations of sovereign nations. Private international law lords over the transactions made by individuals and companies in regards to international borders. Intellectual property comes from a person or company’s intellect, and these ideas are protected by laws which include the use of patents, trademarks, copyrights, and trade secrets. Financial Forces and the International Monetary System

Financial forces including the international monetary system which contains financial institutions, agreements, rules, and processes play a major part in the decisions that businesses make in regards to international markets. The value of a country’s currency as well as the exchange rates relative to either their floating currency or their being on the gold standard is a huge...
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