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History and Development of International Trade

Autor:   •  July 24, 2017  •  Research Paper  •  8,194 Words (33 Pages)  •  1,032 Views

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Executive Summary

This paper will analyse the history and development of international trade and the social, economic, political, and legal factors that impact on international business and assess the impact of globalisation on countries, companies and managers and appreciate the implications of cultural influences for the management of business organisations

Other aspect to Analyse is how companies operate in international business markets, what are the risks and the aspects to considerate to organization decide to bring the company to other countries and why multinational companies’ organisations choose locations for their various activities.

This report is talking about socio cultural aspects theory applying to Mexico, United States and Ireland. Following by political, economic, and legal issues topics thatconsider the risk assessment that could affect the decisions of any companyto operate in a certain country.

Contents

Executive Summary 2

Introduction 4

Company Background 4

Socio-cultural aspects 5

Hall’s high and low context 9

Hofstede's dimensions 12

Individualism-collectivism 13

Economics and Political Environment 20

Legal Environment 25

The market entry strategies 29

Recommendations 29

Conclusion 30

Bibliography and referencing 31

Introduction

Globalization has become an important issue for the economies on nowdays, more companies are looking abroad to expand their business with the help of technology. Today, manage business operations across international markets has become a challenge for companies, according to Root (1994) the global economy has formed business environments that require companies to look past the traditional thinking of the home market, and start instead looking at business from an international global perspective. There are companies that looking for new ventures and decide to cross boundaries to experiment different geographical markets. According to Osland et al. (2001), small and medium size firms that have taken the decision to internationalize and multinational companies that want to expand into foreign markets are both faced with the challenge of choosing the best structural arrangements.

Nehrt, Truitt, and Wright (1970) suggested that international business research is concerned with the interrelationship between the operations of the business firm and international or foreign environments in which the firm operates, and that more attention is being devoted to the environment of international business.

This assignment is talking about different cultural, political, social and legal issues applying to Mexico and United States; these countries were chosen due to the geographic proximity but at the same time with big differences in these aspects and political conflicts between each other.

Company Background

Real State Start (RSS) is a project for purpose of purchasing houses and renting to generate Passive income, those that do not require a physical presence to occur. This business is taking the opportunity to cover a necessity in the rental housing market by providing well cared and clean homes to well qualified tenants.

The business basically consists of investing in the purchase of a property (house or apartment) without having to pay the monthly payments. This is possible when someone else pay the monthly fees, that person is the tenant.

The idea is to try to acquire a house to be able to later semi-furnished it with relatively standardized furniture to add value to the service, so that the customers perception is pleasant, professional, and considered a professional and serious service.

The investment aims to be in the southern of Mexico, starting with one house in Playa del Carmen (Riviera Maya) to be rented. This city is well known internationally, their mainly economic activity is the tourism, generating at the same time much work in the construction industry, and it is the central city of the Riviera Maya. One of the cities with the highest growth rate, about 13%, with one of the highest densities in the country. Among its resident population are foreigners.

Socio-cultural aspects

Edward Burnett Tylor (1832-1917) wrote: Culture, or civilization, taken in its wide ethnographic sense, is that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society.

Geert Hofstede (1980) describes culture as a collective mental programming of people. He views culture as the software of the mind, how describes how we think and reason and differentiates us from other groups of society. These intangible orientations and attributes shape the behaviour of a person.

Culture includes objective as well as subjective elements. The objective or tangible elements of culture generally include ways of architecture, infrastructure and other physical artifacts. The subjective elements, which are called the intangible elements of culture, consist of norms, values, customs, ideas, beliefs and another meaningful attributes of a society.

Harry Triandis describes culture as an action-reaction approach of similarities and differences; all cultures are very similar in some aspects and very different in others in terms of complexity, simplicity, individualism, collectivism norms, rules and constraints on social behaviour. Culture evolves in each society to distinguish its people from others.

As globalisation gain focus, companies need to expand to gain competitive edge. Most companies find important to be aware about the culture

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