International Business Basics

Advantages and Disadvantages of Franchising Business

Franchising is a style of business which has a lot of different but same branches throughout the world. Franchising business is an arrangement for a continuing relationship in which one party – a franchisor provides an accredited opportunity to another party – the franchisee to do business using its trade name and offers assistance in organizing, training, producing, marketing and managing a good or service in adherence to certain specifications, in return for monetary exchange. The franchisee usually pays a one-time franchise fee plus a percentage of sales revenue as royalty, and in turn gains instant name and recognition, tried and tested products, standard infrastructural design and interior decor, detailed techniques in running and promoting the business, training of employees and on-going help in promoting and improving the product

The advantages of franchising from the franchisee’s point of view are myriad.… Read the rest

Abey Francis

Cultural Sensitivity is Crucial Factor in Company’s International Business Success

Due to progress in communication, transformation and technologies which have performed in development of world’s economy, people from different nations, cultures, languages and backgrounds are now communicating, meeting and doing business with each other more than ever. As there is increase in business activities between people from different nations, cultures, languages and backgrounds, companies who are operating internationally or which are going to be a global they have to concentrate on many factors to be a successful in international market. One of the significant factors among them is a culture. For the success of any business in variety of countries or regions it requires to have understanding of how cultural differences across and within nations can affect the way business is practiced.… Read the rest

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Costs and Benefits of Foreign Direct Investment (FDI)

Many governments can be considered pragmatic nationalists when it comes to FDI. Accordingly, their policy is shaped by a consideration of the costs and benefits of FDI. Here we explore the benefits and costs of FDI, first from the perspective of a host country and then from a perspective of the home country.

Host Country Effects: Benefits

There are three main benefits of inward FDI for a host country: the resource-transfer effect, the employment effect, and the balance of payments effect.

  1. Resource transfer effects: Foreign direct investment can make a positive contribution to the host country’s economy by supplying capital, technology, and management resources that would otherwise not be available.
… Read the rest
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Family Businesses: Growth Stages and Challenges Faced

Family business can be describe when business own by one or more families members directly or indirectly and have significant ownership and commitment toward the business well being. Family business can be consist of numerous combination of family members such as husband and wife, parents and child, extended family and also multiple generations such as grandfather, father and son. These family members also play roles as stakeholder, board members, working partners, adviser and employees for the company.

Generally there are three different stages of family business had gone through in order for the business to growth from inception to maturity. Different skills are required in each stage and family issues might happen when the business moving from one stage to another stage.… Read the rest

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Methods of Internationalization

In the process of globalization, a firm operates their activities globally and the internationalization process is one of the primary sites of attention. The changes in the technology in the fields of telecommunications and computer lessen the costs of cross border operations and encourage firms to engage in transnational production activities. Internationalization is a sequential process where firms internalize their economic activities characterized in terms of aggressiveness and motivated by either internal or external triggers or a combination of both. It is one of the key strategic decisions for firms to maximize or at least sustain profits to survive in the world of uncertainty and complexity.… Read the rest

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Theoretical Perspectives on Firm Internationalization

After the World War II, there has been rapid growth in international trade in both goods and services, resulting in various transactions across national borders for the purpose of satisfying the needs of individuals and organisations. The result of this global competition has forced organisations to expand their business by finding out new markets at home and foreign countries making them ‘Transnational firms’. Transnational Corporations (TNC) is defined as a firm that has power to co-ordinate and control operations in more than one country, even if it does not own them. The significance of TNC lies mainly in its ability to co-ordinate and control different transactions within transnational production networks, ability to take advantage of distribution factors of production and ability to be flexible in locations.… Read the rest

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