KATHMANDU UNIVERSITY

SCHOOL OF ENGINEERING
DEPARTMENT OF CIVIL ENGINEERING

“ASSIGNMENT OF ENTERPRENURSHIP AND ETHICS”

Submitted By: Submitted to:

Prawal Keshar Khatri Mr. Ananta Mainali
Roll No. 25 Department of Civil Engineering
Group: Civil (4 th year)
Date of Submission: 24 th May, 2020
Abstract
The following business report includes the hurdles that a business organization has to face during
expanding it to an international level. This report suggests the entrepreneur the risk and benefits,
barriers while expanding globally, and ethical challenges before globalizing.
This report also recommends the entrepreneurs the steps before they make the decision to take
their companies global.
Contents
Introduction..................................................................................................................................... 1
Risk and Benefits of Going Global ................................................................................................. 1
Barriers as They Expand Internationally ........................................................................................ 3
Ways to Overcome Barriers:........................................................................................................... 4
Recommendation Before Going Global: ........................................................................................ 5
Ethical Challenges and Way to Mitigate Them .............................................................................. 6
Recommendation on Financial Aspects .......................................................................................... 7
Bibliography.................................................................................................................................... 8
Introduction
The MoMo Shoppe, by Boris Johnson and Carrie Symonds has been expanding its business to
international level. This company has to face certain barriers to expand internationally. This
document contains the steps that a company has to face while going global.

Risk and Benefits of Going Global

Globally, the Internet has created links not just between individuals but also between companies
as they grow their businesses around the world. Aside from quicker and more effective exposure
to news and political events, companies can produce and distribute their goods worldwide. And
while many companies are tempted to grow their businesses globally, the pros and cons of
corporate overseas expansion should be carefully considered.
Risk
1. Strategic Risk:
A firm's ability to make a strategic decision to respond to the forces which are a source of
risk. Such factors are also affecting a firm's competitiveness.

2. Operational Risk:
This is caused by the assets and financial resources which help in daily business operations.
Machinery breakdown, resource and commodity supply and demand, goods and services
shortage, lack of optimal logistics and inventory can contribute to production inefficiency.

3. Failure to recognize local legal system

Each country has different laws which means that it is vital that you spend enough time
educating your company about the legal system of the country you are doing business in.

4. Cross time zone business

It can also be difficult to do business in various time zones. It is hard to be equipped to
provide 24-hour management skills, and customer service. When a significant problem
occurs, such as port of entry difficulty, natural disaster or trouble with local government
authorities, an appointed manager must handle it immediately. Also, day-to-day company
decisions require senior management.

5. Political Risk
It could be catastrophic to assume your target country has the same political climate as
your own nation. Staying up-to - date with developments is important, because political
movements can have a drastic effect on your business – what do you do if international
policy embargoes or outlaws anything on which you rely? As with credit risk, it is an
excellent idea to obtain political risk protection, as it is to create contingency plans for your
most critical supply chains.

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Benefits
1. Accessing New Talent:
The success of a company will reply on the people you work with. Expanding to an
international location will open a company to young, talented new workers and business
partners who will carry your company to the next level.

2. Scaling up your Brand:

Expanding your company out of your home country would make your branding, logo and
culture more recognizable and increase brand value.

3. Enhance Immunity to Trends:

Having a presence in more than one country will help you ride out the winds of trends,
fashions and fads – a product or service dated at one place will still go strong at another,
allowing you time to rethink your approach.

4. Strengthened costumer trust:

One benefit of a physical expansion against selling items to the target country from afar
through e-commerce is that if you have a licensed, localized office or stores in the region,
your customers are likely to have increased trust in the business – particularly if after-sales
support is an important factor in your industry.

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Barriers as They Expand Internationally
Expanding operations to overseas locations is one of the most important obstacles for a company
like The MoMo Shoppe today. For effective entry into foreign markets, such businesses have to
consider and deal with a multitude of diverse and interrelated issues. Companies wishing to enter
foreign business face several obstacles; some are far more serious than others. So, the following
factor demonstrates its impacts on business outcomes in global marketplace:
1. Cultural Differences Affect:
Culture is part of any business transaction as cultural differences that are seen in different
countries reflect the common social values, way of life, and behavioral habits of the people,
that place. According to an individual's concept of transparency, the likelihood of
performance loss can be high from country to country. Accountability and performance go
hand in hand, and differ from one community to another. Quality is the one that pushes
down costs and up profits. Understanding and responding effectively to cultural differences
eliminates obstacles that hinder global development.

2. Impact of Political Environment

The profound set of challenges such as complex taxation, inadequate worker skills and
crumbling infrastructure that inhibits hiring and investment, etc. are some political barriers
for global corporate leaders.

3. Availability of Skilled Labor:

One of today's most important challenges for an organization is to carry out overseas
assignments with professional and experienced workers who appreciate the culture of the
nation they are to work in. This growth will continue to create gaps in global expansion
efforts unless policies that build awareness and talent pools in individual international
markets are implemented.

4. International Accounting:
Accounting may pose a problem for multinational companies that could be responsible for
corporate tax abroad. Different tax systems, rates, and enforcement criteria may pose
significant challenges to the accounting role of a multinational organization.

5. Impacts of Economic Instability:

Since emerging economies are the bulk of today's investment destination, they are the one
most affected by a recession in terms of new investment, which is why investment is low
and affects the business directly.

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Ways to Overcome Barriers:
• Fill the key roles with employees who speak native languages. Creating an environment
where employees can openly discuss conflicts and work things out is necessary.
• To mitigate the political risk, entrepreneurs planning on global business expansion should
research the political context of the respective countries extensively and then conduct only
the business activities.
• In order to battle in difficult times such as recession, entrepreneurs should prioritize
increasing their customer base and should also concentrate on expanding their market in
other countries, so that the deficit can be solved by stronger growth elsewhere.
• Talent pools should be built in individual international markets to reduce the skilled labor
problem. This removes the obstacles to cultural and linguistic diversification.

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Recommendation Before Going Global:
Before expanding their business globally, entrepreneurs like Boris Johnson should take care of
following things:
1. Use your Business Plan
Detailed business plan is a must before any business starts. It will help us understand which
places we might not have been talking of. Also, most banks overseas allow banking
transactions to be carried out under the business plan.

2. Study Possible Competition of Past and Present

Before entering a new market, any entrepreneur must study the competition, but it is vital
not to concentrate solely on those who have been successful but on those who have tried
and failed.

3. Study the local market and culture:

Culture plays an important part in any business. So, as The MoMo Shoppe studied the
Nepalese market and used bronze tools as well as they also studied the interest of Spanish
people in Nepalese cuisines, entrepreneurs should research the local culture that will help
avoid potential mistakes as well as favors business development.

4. Enhancing Quality:
The quality of your product is another enhancing factor for the company. Material
consistency should be taken care of. Also, in terms of quality referring to the case, Boris
Johnson did not compromise, as he used frozen MoMo via refrigerators instead of using
ordinary air-conditioned space.

5. Currency:
For going global, proper assessment on pricing goods and service is to be done. Also, you
should look into banking options that can help you manage your new money form.

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Ethical Challenges and Way to Mitigate Them
Despite of political, cultural and economic issues, ethical issues also plays a crucial role in
international business. Some of which are explained as follows:
1. Employment Practices
In several countries, ethical concerns can be related to work practices. In a host country,
conditions can be much inferior to those in the home nation of a multinational. Many can
say that pay and working conditions across nations need to be identical, but none really
care about the quantity of this heterogeneity. This should be taken care of.

2. Human Rights:
Due to differing cultures, regulations and values at times international business have to
operate in place with compromised human rights. Furthermore, going global also places
the onus of ethical responsibility on the business.

3. Corruption:
In every society in history, corruption is a problem and it continues to be so even today.
There are crooked government officials everywhere. Foreign companies also seem to
benefit from bribing such officials, which is obviously immoral, because they have gained
financial and business advantages.

4. Pollution:
If environmental regulation in the host country is far inferior to those in the home country,
ethical issues arise. Most nations have strict controls on waste, mining, hazardous materials
etc.

5. Religion:
The norms and values of each religion vary from each other; when conducting international
business, it is important to learn and understand.
Mitigation Measures
For mitigation of the ethical challenges faced during globalizing the product, the following steps
should be adopted:
1. Establishing interaction between the employees i.e. high standards of behavior.
2. Developing a code of ethics.
3. Follow governmental and company bylaws to avoid compliance and governance ethical
challenge.
4. Maintain transparency and honesty among the employees.
5. Enhance the culture and religion.

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Recommendation on Financial Aspects
For an emerging entrepreneur, the necessary recommendations pertaining financial aspects for this
business are:
1. Cash flow management:
Running out of money leads various company to fail. So, cash flow management is the key
factor for running the businesses. No matter how good the business idea is it doesn’t work
when company run out of money. Hence, it is important to stay on the top of cashflow.

2. Track and monitor all spending:

With a new startup, there are going to be expenses coming at the company from each and
every direction. So, it is very important to track and monitor all the spending using
accounting software which not only helps with cash flow management but also makes
much easier when tax time rolls around every year.

3. Limit fixed expenses in the beginning:

Keeping the expenses low is the key to longevity at the beginning stages of startup
companies. To allocate the majority of the capital to grow it is very important to operate
the operations of companies effectively by focusing on the right things.

4. Prepare for the worst:

As running businesses is the game of risk and it is very difficult to predict what could
happen to the businesses in future. So, it is very important to prepare for the worst possible
situations. So, being an entrepreneur, it is very important to be responsible by considering
the things like investments, opportunities, strength and weaknesses of the company.

5. Establish financial goals:

Every business is opened with the specific objectives. And the main objective of the firm
is to earn profit. But before that it is very important to establish financial goals which
should be reachable and measurable ones. And knocking out little goals can give the
confidence that keep the powering through the entrepreneurial journey.

The End
Total Word Count: 1900 (Excluding Abstract and Bibliography)

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Bibliography
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Benedí C. & Güemes J. (2009) ‘International Business- Financial Aspects’, Society, 3, p. 464.
Here’s How SMEs can Expand Their Business Globally . Available at:
https://www.entrepreneur.com/article/317491 (Accessed: 24 May 2020).
Norman M. Scarborough and Cornwall, J. R. (2016) Essentials of Entrepreneurship and Small
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Van Rossum, J.-E. (2017) 5 benefits of international expansion - The Business Journals, The
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