International Business factor

Topics: International trade, Export, Business Pages: 5 (1446 words) Published: April 24, 2014
Since the Second World War, international business appeared as the main economic factor responding to postwar needs. Nowadays, globalisation has increased the facility of international exchange and has risen the multicultural needs.The increase in demand for international products has resulted in large possibilities to do business abroad. However, it is really complicate to import or export without knowledge in this area. Global business is all of the commercial exchanges which involve more than one country. Understanding and applying the major factors of overseas business is crucial. In fact, it is clear that the most important factors involved in international exchange include foreign culture, transport and payment transaction. This essay will demonstrate these essential factors. In the first part, this essay will advance the importance of foreign culture which include the country's background, usual practice and protocol. In the second part it will show important aspects of transport methods and incoterms. Finally, this essay will present the international payment methods of the bank transfer and letter of credit.

An important part of international exchange is to understand the foreign culture of a country in terms of background, practice and business protocol of the country. In their book Morrison and Conway (2006, p. viii) demonstrate how a simple mistake could have irreversible consequences in international trade. As they explain , every country has a different background which influences businesses behaviour. For example, Belarus proclaimed its independence in 1991. Morrison and Conway (2006, pp. 29, 31) state that even though Russia still influences its education and media interest, it is important to consider its own identity. In fact, Belarusians could be intransigeant for some minor mistakes made about their culture. Then, all businesses need to know the overseas companies practice which are indispensable to create and maintain a good relationship with their partner. To illustrate this, Germany is one of the most stringent countries to do trade with. (Morrison and Conway, 2006, p.184). Actually, Lankiest (2013, p. 2) explains that arriving late to a business meeting could mean insult towards German businessmen. He also reports that they usually arrive at their office around two hours before the opening time; therefore, they do not tolerate any delays from foreign businessmen. Finally, some countries have a strong business protocol processes, which is an important factor of a foreign culture. Theses protocols could also impact considerably the business cooperator selection. According to Kermeliotis (2011, para 5), offering a gift to a Chinese trader is crucial to show your respect. They are many rules which need to be respected. For instance, refusal of a present in public could means frailness (Kermeliotis, 2011, para 4). Unfortunately, if foreign protocols are not respected, business collaboration for few years could be suspend. Those three important aspects of foreign culture demonstrate the importance of understanding background, business practice and protocol when companies do international trade.

The second essential factor of doing business abroad for sellers and buyers is to consider every method of transport and incoterms. All import or export companies need to know exactly when their contractor's responsibilities begin. The choice of transport methods involves many factors such as time of delivery, budget, volume of goods and the final destination. There are different ways to send your goods; according to Weiss (2008, pp.141-3), mails or light products are mostly sent by Airmail or Courier Services.She states that although the latter is more expensive than the former, the number of possibilities of global delivery is higher and along with extra free services, track of items for example. Then, Weiss (2008 pp.143-7) argues that every heavy or large product should be distributed by surface...
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