What global and international considerations should be made when conducting business?
Respond to classmates discussion post:
There is a plethora of different considerations that need to be made when conducting business on a global and international scale. Often timeâ€™s firms can be weary of growing international for their ignorance on the different reporting standards, taxes, laws, barriers of entry, foreign governments, local competitors and exchange rates with foreign currency. With that being said according to David (2016), â€œA world market has emerged from what previously was a multitude of distinct national markets, and the climate for international business today is more favorable than in years pastâ€. What this means is that these firms should be encouraged and excited to explore these foreign and unknown territories as they can be extremely profitable and rewarding.
Auditing is plays a large role in international or global business and outside firms can be hired to help with this function. Taxes are regulated by the foreign governments just like they are in the United States and just like auditing, a tax firm can be hired to help with this function. It always helps to hire staff members from the foreign country as they will be more familiar with that specific countries taxes. Written laws of foreign governments can almost always be found on the countries website or can be acquired by contacting local authorities. Barriers of entry can include local gangs, crime, language barriers, undeveloped culture and remoteness. These are strong deterrents of companies looking to enter certain new markets. The foreign governments can be extremely corrupt in certain counties. In Mexico for example, the police can be paid off by simply offering them a bribe. In other countries they simply work for the local gangs or mafias. Last, the exchange rate between the U.S dollar and foreign currency can be very difficult for reporting purposes, pricing purposes and expense purposes. There is a huge risk in conducting business internationally because of the risk that the exchange rate fluctuate greatly.
David, F. R. (2016). Strategic management: A competitive advantage approach, concepts & cases (16th ed.). Upper Saddle River, NJ: Pearson. ISBN-13: 9780134167848