INTERNATIONAL

BUSINESS
(ARTICLES RESEARCH PROJECT)

SUBMITTED TO: DR. AKSHAY JOSHI

SUBMITTED BY:
ARJUN BINDRA 80011920031
PRAKHAR GUPTA 80011920085
Article 1 - Why Cultural Differences are Vital for Business

The article talks about the increase of globalization, how there is an increase in the global
market due to the ease of reaching customers worldwide due to the innovation in the
technology, making global partners or expanding to global market provides many
opportunities to the business but also come with its share of problems.
It has become evident that cultural plays an important role towards the success of a business
in a global market.

The Significance of Culture

It is a very important to know about a country’s culture as it not only a sign of respect but
also helps in better communication
Some considerations to keep in mind are as followed:
Cultural Stories: Frugality, trust, and endurance, for example, may be seen differently in
different countries, understanding them may help in better negotiations or forming a business
partnership.
Communication: Different countries have different style of communication both verbal or
non-verbal, words and phrases, to enter into a new market one should be versed in hand
gestures, body language and other cues to communicate.
Decision Making: decision making also varies from country to country, in some nations,
reaching a consensus decision on a contract can take months. Unilateral decision-making may
be the norm in other places.
Time Perception: While punctuality may be anticipated in one culture, it is more likely that a
meeting time will be considered a suggestion rather than a firm schedule in another.
Similarly, certain cultures may place a larger focus on long-term planning and overall firm
health, measuring performance in terms of five-year blueprints rather than quarterly financial
reports.
Overall, for a business to enter into a new global market it is very important to study the
culture of the country and their said and non said practices.

Article 2 - The Growing Importance of Social Responsibility in Business

The article talks the growing importance of social responsibility in business, in today’s world
there has been an emerging trend of businesses focusing more on their social responsibilities,
"Social responsibility," in simple terms, means a business’s obligation to pursue achievable
and good long-term goals for its people and the world at large.

Businesses engaging in social responsibility are helping the people while helping themselves.
How social responsibility helps the business-
CSR can help you attract and retain employees- Employees benefit from CSR activities
since they assist to create a more productive and happy work environment. It encourages
workers to volunteer and make good contributions.
It also helps the business to attract employees.
CSR can improve customers' perception of your brand- It helps in making a positive
brand perception and also increases the brand image and brand loyalty, as people see you
doing good for the society, they start endorsing your brand and make a positive mental image
in their mind.
CSR shows a sign of accountability to investors- Socially responsible businesses may also
look more appealing to investors.
CSR saves money- Because CSR generally necessitates project expenditure, you might not
anticipate it to boost your bottom line, many customers are prepared to pay a higher price for
items from a socially responsible business, and CSR may aid in the recruitment and retention
of personnel. This is important to note since turnover may cost a company thousands of
dollars.
CSR can enable you to better engage with customers- Many types of CSR include
businesses directly dealing with members of the public, who may or may not be clients or
potential consumers. You may obtain clear feedback on what your firm is doing well and
where it needs to improve. Word of mouth advertising can be done by the consumers.
In these changing time businesses not only think about making profits but also to give back to
the society, which in turn helps them too.

Article 3 - COVID-19’s Impact on International Business

The article talks about the challenges and the changes that are happening in the global market
due to the global pandemic COVID-19
These are some changes that happened in the global market due to COVID-19-

Businesses with expansion plans are undeterred- The majority of CFOs survey say COVID-
19 hasn't deterred them from continuing their foreign expansion plans. Within the coming
year, 45% of respondents are either presently expanding globally or are only slightly delaying
their ambitions.

COVID-19 is accelerating change- COVID-19 is hastening the rate of change in companies

around the world; 83 percent of respondents stated they are now considering a remote, global
workforce model as a solution to the pandemic's developments.

Employee health and safety is a top priority- For CFOs focused on worldwide expansion,
employee health and safety are a primary priority. It was mentioned nearly twice as
frequently as the other top challenges, such as innovative company strategies, growing
revenue, and lowering organisational costs, by survey respondents.
Third parties, banks and payroll are among the biggest challenges- When it comes to
additional roadblocks to growth, 83 percent of CEOs are concerned about managing third
parties and stakeholders in a foreign setting when expanding their business. Working with
foreign banks and managing international employee payroll are top concerns for 74% of
respondents.
Using traditional methods for international expansion is a slow process- 86 percent of
CFOs estimate their global expansion will take at least five months, according to the report.
This includes 42% who believe it will take more than a year. It's somewhat unsurprising that
the #1 issue for respondents when planning international expansion was allocating resources
to global operations.
Many businesses are confident and determined that the disruption caused by COVID-19 will
not dissuade them from taking advantage of foreign expansion prospects, with innovation the
businesses are not only trying not to get affected by the pandemic but also to strive in it.

Article 4-Foreign Direct Investment (FDI) An international business

investment
What is Foreign Direct Investment (FDI)
An investment in the form of controlling ownership in a business in one country by an entity
established in another country is known as a foreign direct investment. A sense of direct control
distinguishes it from a foreign portfolio investment.
Lasting Interest and the Element of Control
If an investment in a foreign corporation creates a long-term stake, it is considered an FDI. The
aspect of control is crucial to foreign direct investment.

Methods of Foreign Direct Investment

 Acquiring voting stock in a foreign company
 Mergers and acquisitions
 Joint ventures with foreign corporations
 Starting a subsidiary of a domestic firm in a foreign country
Below are some of the benefits for businesses:
 Market diversification
 Tax incentives
 Lower labour costs
 Preferential tariffs
 Subsidies
The following are some of the benefits for the host country:

 Economic stimulation

 Development of human capital

 Increase in employment

 Access to management expertise, skills, and technology

Disadvantages of Foreign Direct Investment

Some of the disadvantages of FDI are:

 Displacement of local businesses

 Profit repatriation

Types of Foreign Direct Investment

There are basically two types FDI

Horizontal-When a company spreads its domestic activities to a foreign country, it is known

as internationalisation. In this situation, the company engages in the same activities as before,
but in a different country. Dominos opening restaurants in China, for example, would be
called horizontal FDI.

Vertical- By relocating to a different level of the supply chain, a company can expand into a
foreign country. In other words, a company may engage in a variety of activities outside of its
home country, as long as these activities are relevant to the main business. For e.g., Samsung
opening up its call centre in Bangladesh
An international business investment

Article 5-Export Pricing Strategy 

The article talks about Export pricing strategy, it tells us why pricing plays a major role for
the sales of the company, what are the elements that play a major role for profit making in
export sales, what are the challenges faced and how you determine the pricing.

Pricing U.S. Products for Export

The price at which a product or service is offered directly impacts your company's revenues, just
as it does in the domestic market. All aspects that may affect the price range for your product or
service should be evaluated as part of your company's market research.
 Costs, market demand, and competition are all traditional factors in deciding proper
pricing. Each component must be weighed against your company's goal of accessing the
international market. Export pricing may differ from domestic prices based on a study of
each component from an export perspective.
  Some extra costs are also incurred by the importer which also factors in for deciding
the cost of the goods.

Pricing Considerations 

 The following are some considerations which can be used to determine the best price for
export.

 While making the export pricing strategy you have to keep in mind-

 Product quality in respect to the price

 Market positioning

 Having a flexible and competitive pricing according to increasing or decreasing cost

incurred by the company
Demand in foreign market is flexible or not?

 The attitude of the government towards the price and laws related to the product.
Key Elements of Pricing Analysis  

Foreign Market Objectives  

Your Market objective plays a major role in price analysis, for e.g., long term growth,
penetration of new markets etc.
Marketing and pricing goals can be changed according to specific international markets.

Costs  
The real cost of producing and bringing a product to market is crucial in establishing whether
or not exporting is financially viable. After you've estimated the actual cost of the export
product, you should come up with a rough consumer pricing for the international market.

Market Demand  
The company should adjust their pricing strategy according to the change in the market
demand
Competition  
Analysing the pricing strategy of the competition is very important and allows you to stay ion
the completion.

Article 6-Ten Steps to a Global Human Resources Strategy

The article talks about the scarcity of good managers and the ability of HRs to precure them.
There is a growing need of good HR management, in these changing times HR should also
get attention and get a seat at the table. In a multinational corporation, good human resource
management is placing the right people in the right jobs in the right places at the right times
and for the right price. These international managers must then be integrated into a cohesive
network that allows them to quickly find and capitalise on brilliant ideas all over the world.
The lack of managerial mobility and Ethnocentricity play a major role in this.
Many CEOs of multinational corporations have doubts about their HR departments' ability to
screen, review, and develop candidates for the most essential positions around the world. HR
directors rarely have considerable international experience, and their executives frequently
lack business acumen. Furthermore, most HR directors lack sufficient information on the best
prospects emerging from the overseas subsidiaries' ranks.
This article lays out a worldwide human resources action plan based on the strategies
employed by major multinational corporations. The goal is to create a long-term competitive
edge for any firm by attracting and developing the top managerial talent in each of its
markets.
This can be done by implementing the Following 10 steps-
1. Break all the "local national" glass ceilings – The first step that should be taken is
to end favouritism for the managers who are citizens of the company's home country.
Companies prefer to view their headquarters country's nationals as potential
expatriates, while everyone else is not given so much impotence.
2. Trace your lifeline- The HR management should Identify the activities that are
critical to your company's global performance and the jobs that are responsible for
them, based on your company's business plan. Your company's "lifeline" is
represented by these roles. They typically make up around 10% of the management
team.
3. Build a global database to know who and where your talent is-Because
multinational organisations now have many more strategic postings distributed over
the globe and must track the career development of many more managers, the main
tool of a global HR policy must be a global database. Despite the fact that several
multinational organisations have been accumulating global human resources
databases for the past decade, these databases still tend to focus on positions at the top
of the organisation, overlooking intermediate managers in country markets and
prospective stars emerging through the ranks.
4. Construct a mobility pyramid-The company Examine their managers' ability and
experience, as well as their readiness to move to other locations. Most human
resources departments consider mobility in binary terms: "moveable" or "not
movable." However, in today's global marketplaces, this concept should be considered
as a graduated scale that should be revisited on a regular basis due to shifting
conditions in managers' lives and business possibilities. This will encourage many
more managers to accept abroad assignments and will encourage line and HR
managers to look outside the box. managers to diverse approaches to utilising in-
house personnel.
5. Identify your leadership capital-The company should persuade employees to
explain the information in their C.V.S., their management talents, and their potential
on common personal-profile templates to create a database of your company's mix of
 managing skills. To get the process started, have your senior managers and those in
lifeline positions fill out the paperwork first. Others with the potential to move up
from across the world can be added. Functional specialists with general management
potential should be included.
6. Assess your bench strength and skills gap-Comparing each executive's abilities and
qualities to the ideal requirements stated for the executive's present position and
preferred next one is a good concept. Invite each person to suggest solutions to fill
any gaps in their personal abilities, such as in-house training, mentoring, outside
courses, or participation in cross-border task forces. Taking a look at the talents
described in your personal assessments and comparing them to the skills required by
your business plan. This data should serve as the foundation for your management
development and training programmes, as well as indicating whether you have time to
train internal candidates for new job roles.
7.  Recruitregularly-As routinely as the company does in the headquarters country,
they should look for new recruits in every key local market. They should develop a
reputation among graduates of the leading institutions as "the company to join."
8. Advertise your posts internally- The company should be in charge of your own
global labour market. It's difficult to maintain track of the best prospects in a large
organisation.
9. Institute succession planning-Every manager in a lifeline job should be compelled to
nominate up to three individuals who could take over the job in the coming week,
three months, or a year, and their managers should approve the nominations. This
should go a long way toward resolving succession issues, but it won't totally fix them.
10.  Challenge and retain your talent-In every market, a policy should be implemented
that encourages employees to grow with the company. In addition, within the first 100
days of joining the company, every executive should develop a career plan. Plans
should also be reviewed on a regular basis to ensure that they remain aligned with the
company's strategy as well as the individual's desire for job satisfaction and
employability.

CONCLUSION
Except for human resources, most multinational corporations have done an excellent job of
globalising their supply chains for all of their vital raw inputs. This blind hole can no longer
be tolerated by global market participants. The war for talent is heating up, and supply is far
outnumbering demand. Companies will need to implement programmes to recruit, train, and
retain managers in all of their markets in order to have the multicultural skills and vision they
need to succeed. To efficiently manage all of its operating units and growth possibilities, the
company must ensure that it has the necessary talent, management mobility, and cultural mix,
as well as that its managers mesh into a knowledge-sharing network with shared values.
References
 https://www.notredameonline.com/resources/intercultural-management/why-
understanding-cultural-differences-is-vital-for-businesses/
 https://www.forbes.com/sites/forbesbusinesscouncil/2020/11/18/the-growing-importance-
of-social-responsibility-in-business/?sh=273bf9cf2283
 https://middlemarketgrowth.org/the-portfolio-covid-19s-impact-on-international-business/
 https://www.trade.gov/pricing-strategy
 https://corporatefinanceinstitute.com/resources/knowledge/economics/foreign-direct-
investment-fdi/
 https://www.strategy-business.com/article/9967