Set Up and Operate a Business in Foreign Country

Topics: Trade union, Economic growth, People's Republic of China Pages: 15 (5676 words) Published: April 15, 2012
Set up and operate a Business in Foreign Country
This paper deals with the international business. It emphasizes on the means to start the business and the cost associated with the initiation of the business. It also describes the most important aspect of managing human resource. Because of the competitive environment, the need to do the business internationally has increased. This paper provides the overview of the two countries i.e. china and South Africa. Broad description of the legal processes that were supposed to be followed by the company to initiate business in the China has been explained. Apart from this, the staffing of local and expatriate staff along with the labor organization and legislation of the foreign country has been described. Therefore, the paper provides detailed analysis of the conditions that should be kept in mind while establishing business in the foreign country. Introduction

International business is a term, which is used collectively to describe issues relating to the firm’s operations with interests in numerous countries. These firms are sometimes referred as multinational corporations. The main area of concern in the international business is the cultural considerations. These considerations include dissimilarity in law and legal systems, living standards, language barriers, climate and many more (Cherunilam, 2005). All these issues need to be overcome for an MNC in order to obtain success in an overseas venture. Nationwide economic growth and globalization of the economy provide an outstanding background for businesses in China as compared to the South Africa. Nevertheless, the growth of the company and sustainability can be hampered by the factors like industry consolidation, economic reform and globalization. The project of building substantial companies and integrating them effectively into the global marketplace is a complicated task. Reasons: Why Company Going Global

Many companies and businesses get into international selling because of the existence of competitive environment. This environment compels the company to move further rather than staying at the same stage and size by just focusing on the quality. Another reason of growth and expansion is the fear of loosing the customers. If the company would not show sustainable growth, competitors would move ahead and chances of loosing of customers will increase (Cherunilam, 2005). Other general reasons for going international are: political changes like changes in the regulation of work and safety and economic changes that include cost of production. If there is an increase in the cost of production at home, company looks for places where cost of production is reasonable. The four major objectives that compel the company to go for international business are: to enlarge the sales, to successfully get hold of the resources, to diversify the sources of sales and to look for the diversifying the supplies (Kazmi, 2002).

China: China is a socialist republic and the most populous country with population over 1.3 billion. It is having 90.9% literacy rate (male: 95.1% & female: 86.5%). The average educational achievement in China is low. South Africa: South Africa is a nation of diverse origins, languages, cultures and beliefs with population over 47-million. It is having 86.4% literacy rate (male 87% & female 85.7%) of total population. The average educational achievement in South Africa is very low. Geographical Location

China: China is located in Eastern Asia bordering the East China Sea, Korea Bay, Yellow Sea and South China Sea between North Korea and Vietnam. China has mountains, high plateaus, deserts in west and plains, deltas, and hills in eastern region. The geographic coordinates of China are 35°00'N, 105°00'E. The total area coverage of China is 9,596,960 square kilometers (land area is 9,326,410 square km and water is 270,550 square km). China is the world's third-largest country in...
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