Influential Factors of International Business and International Business Environment

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A Business Growth and Strategy Project



Ankit D Jethani 6937

Business Environment consist of every factors influential to the business operations. These factors are classified into two broad categories. These are:

a) External or Uncontrollable factors of Business environment. b) Internal or Controllable factors of Business environment.

External Factors: The factors those are not controllable at any cost but have to adopt for success of business are external or uncontrollable factors. For example Demography, Political forces, Legal practices, Cultural influences, Technological advancement, competitiveness etc.

Internal Factors: The factors those are related to the internal operations of a business and can be controlled by proper management are controllable or internal factors of business environment. For instance Land, Labor, Capital, Business Location etc.




A Sociological perspective of environment includes the Demographic Status and Trends, the Work Ethic and Personal Values and General Cultural Values. Each of these influences how management accomplishes its jobs. Each country has a unique Social Environment and as business becomes international, management must understand these unique environments.

a. Demography
Demography means the total number of population of any particular territory. They have a greater influence of any business operation. For example in a mass populated area demand of consumer products will be comparatively higher than any lesser populated area. So, we can say that demography has a direct impact on business environment. Because demand direct towards maximization of sales. The higher the value of sales the more would be the profits. The more profits impacts on success business operations.

b. Cultural Forces
Culture is that what we are that means our living, eating, food habit, way of dressing and way of speaking everything accumulated to our culture. For example wearing lungi, eating panta with hilsha fish on Bengali New Year is part of Bangladeshi culture, every Bangladeshi respect or practices this culture. It is usual tasks for Bangladeshi inhabitants. But it is not acceptable in western or European culture. Wearing shorts eating fast food, having wine party are their culture. But it is not acceptable in Bangladeshi culture. As a result demand of shorts and wine is completely higher in the western society than that of in Bangladeshi society.

c. Work Ethics and Personal Value
The importance placed upon work by an individual is known as work ethic. Business organizations counted upon the desire to work in its employees, a work ethic expressed in dedication and company loyalty. However work ethic has changed especially in younger workers and it is obvious that the attitudes of the workers will impact upon the organization as it recruits, trains, rewards, and retains employees.

To help analyze the impact of Social Conditions on Business Environment let us take the following example. The report in Business & Population Monitor from chartered accounting and business advisory firm PKF, in conjunction with Access Economics examines the impact of demographic changes on the Australian business landscape, detailing the anticipated winners and losers across industry types and geographical regions.

The Beneficiaries of ‘Grey Gold’
The report highlights the prognosis that Australia’s working-age population is expected to nosedive in the next five to 10 years, while at the same time, the ratio of over 65s to the 15–64 age group will almost double over the next three decades....
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