rajesh yadav c-58

8/3/2019 Rajesh yadav C-58

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NCRDs Sterling institute of

management

Five factor of environment in internationalbusiness

presented To

Prof R.K Srivastava

Presented by

Rajesh yadav

C-58


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BUSINESS ENVIRONMENT

An uncontrollable environment will negativelyaffect anyorganizations efforts whatever they mightbe. You need to have a heavily structured method andenvironment to process information into relevant bitsfor each department to produce results. Teamenvironments are the backbone of any organization.Nothing can work without a collaborative effort on alldepartments.

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POLITICAL ENVIRONMENT Political environment has a very important impact on every

business operation no matter what its size, its area ofoperation.

The most crucial & unavoidable realities of internationalbusiness are that both host and home governments areintegral partners.

International law recognizes the right of nations to grant orwithhold permission to do business within its politicalboundaries and control its citizens when it comes toconducting business.

A change in the government does not always mean changein the level of political risks.


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SOCIOCULTURAL ENVIRONMENT Humans essentially create their own cultural and

social environment.

The increasingly competitive international businessenvironment calls upon exporters to tailor or adapttheir business approach to the culture and traditionsof specific foreign markets.

The task of adjusting to a new cultural environment isprobably one of the biggest challenges of exportmarketing.

For example, the Marlboro Company


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TECHNOLOGY ENVIRONMENT The business in a country is greatly influenced by the

technological development.

The technology adopted by the industries determinesthe type and quality of goods and services to be used.

Advances in technology may also cause relocation of

production. Technological environment of the use facilities etc.

also have very important implication for business.


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FOR EXAMPLE

In many developing countries, including India, the TVarrived very late. Although the color TV had become quitecommon in the advanced and even in some developingcountries when the telecast started in India, in the earlyperiod there was only black and white telecast. The cable

TV came to India only by about the beginning of the 1990s.The late introduction and the slow expansion of thetelecast affected not only the TV business but also theadvertising industry and product promotion.


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ECONOMIC ENVIRONMENT

Economic environment refers to the aggregate ofthe nature of economic system of the country, theeconomic policies of the government, the organizationof the capital, the nature of factor endowment,business cycles, the socio-economic infrastructure etc.The successful businessman visualizes the externalfactors affecting the business, and makes suitable toget the maximum with minimize cost.

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ECONOMIC ENVIRONMENT

Income distribution & discretionary income

Productivity: unit labour costs and labour

compensation costs.Major international debtors

Inflation, interest rates, availability of credit

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LEGAL ENVIRONMENT

Legal environment includes flexibility andadaptability of law and other legal rules governing thebusiness. It may include the exact rulings and decisionof the courts. These affect the business and itsmanagers to an extent.

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EXAMPLE OF LEGAL

ENVIRONMENT

In 1992, the Supreme Court ordered the closure of a

number of tanneries in Kanpur as they were pollutingHoly Ganga.

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rajesh yadav c-58

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