Impact of international business practices on future opportunities: A contemporary concerns study

Abstract

Globalization and Liberalization – these two words are the key mantras for the Governments across the world for faster economic growth over the past few decades. It has also been proved time and again that the countries which have opened up for free trade with other countries have had a higher growth rate compared to countries which have not opted for free trade. This is evident from the growth of the South-east countries like India, China, and Singapore etc. which have been very open in accepting the concept of liberalization. Globalization has allowed the major organizations in one country to expand into markets in other countries and has resulted in the “Death of distance” making companies to invest freely in foreign markets. One of the main parameters which played an important role in the success of globalization is the opening up of the financial markets and service markets. The key reason is Foreign Direct Investment (FDI) by Multi-National Companies in the local companies and also establishing their own brands in the foreign markets. However, the process has not been so smooth and companies still face a lot of problems when they enter new foreign markets. These problems have been multi-faceted ranging from cultural issues to day-to-day operations. These problems have arisen due to many reasons. However the important reason was the differences in the business practices across different countries. Some of the aspects are the way in which companies operate and manage, the way in which individuals behave; the way in which companies recruit people etc. varies a lot from one country to another. Hence when a domestic company either does business with a foreign company or tries to enter a new market, the company has to take all the business practices followed in the new territory into consideration before deciding to go ahead.