Introduction Brisk globalization and industrial transformation have affected the lives of every person involved in commerce for no less than the last half of this century. Force alone neither globalization nor technology may possibly have shaped this new world of business, but together they have revolutionized the milieu for every individual, business, and organization around the world. In such instance, the massive involvement of countries in the business arena has also spurred implications that are consequently brought to legal battles (Cooper, 2008).
It is inevitable for two parties to have issues and concerns when it comes to dealerships that revolves around differences of countries and cultures—even though there is an existing umbrella of agreement created by the World Trade Organization. More often than not, these issues serve as a training ground for these tycoons to harness their globalization prowess and hopefully make the international market a more friendly setting for the future success of their companies. Analysis International business is often argued to be a field that is running out of steam.
Even though economic measurement is present in determining the success or failure of a business, still there are no precise conclusions as to how multi-national corporations handle issues that make their journey to success an uphill. The most common issue in this kind of trade and commerce is breach of contract; most likely similar to cases in local business agreements. The world trade organization notes that the agreements—which are expected to be followed—basically those on goods, services and intellectual property.
Aside from that, given the fact that these corporations are communicating with other countries, dispute settlements, trade policies and plurilateral agreements are carefully created to have a balanced and provide a clear basis for participating countries. These agreements though are supervised and analyzed not solely by a single country, but by a committee that is composed of representatives from all participating bodies. This is to ensure that the economic and legal measures do not overpower any country’s perspectives on globalizing their business entities (WTO, 2008). Outsourcing: A Globalizing Business
Ben Worthen in his article “Outsourcing Outlook: Higher Costs Ahead” observes that information-technology activities in India has been one of the most feasible outsourcing activities over the past few years. However, there is a persisting downside to the current outsourcing trends in India: outsourcing is becoming more expensive. The primary reason behind this is that, since outsourcers pay the wages of their employees in terms of the Indian Rupee and since most of the revenues are in dollars, the increasing performance of the Indian Rupee against the dollar translates to lesser revenues.
With the Indian Rupee’s value rising to up to 14% this year alone against the US Dollar, revenues for the outsourcers will most likely fall. In addition, the wages of the employees are also rising (Worthen, 2007). Using the observations of Worthen, it can be argued that outsourcing has its downfall in terms of the performance not only of the local currency in the local market (i. e. its purchasing power in the market of a specific country) but also of the local currency against the dollar especially since most outsourcing activities are outsourced to foreign countries.
Since payment is usually made in terms of dollars, a higher performance for the local currency translates to lesser revenues in terms of the dollar rate when exchanged to the local currencies. India, being one of the developing countries in more recent times, is on the verge of gaining economic development. With its Rupee eventually attaining higher value, the revenue of activities outsourced where payments are made in dollars will proportionally decrease accordingly. Barriers to International Trading International Trade Travelex based in United Kingdom aired their sentiment on the hindrances that surface in multi-national commerce.
Two of the main concerns involve payment problems and the delay of transactions due to time difference. Most cases are tabulated to have provided a large impact on the financial state of their business. Nevertheless, these issues are remedied by a series of amendments on agreement terms and the implementation of advanced technology that improves payment methods and sees to it that communication between business partners is met on time. These barriers as the World Trade Organization states will soon be concealed given that every business entity will come in harmony in following rules.
Breach in International Trade Rules An example of a violation of a law set by the world trade organization is dated August of 2004 where Washington has been sued. In this case, Brazil as well as other developing countries filed the case stating that the WTO was giving an unjust tax premise to multi-national companies based in the US. Tariff dispute is oftentimes the legal battle that is filed every year. The law on trade clearly states that “every participating party must abide to the rules” (WTO, 2008)—hence, in this scenario, it is the umbrella society that has failed the members of the organization.
Hence, this dilemma is already fixed and the persons liable for this trade-related chaos have already been contained following the penalties and sanctions for this form of violation. This issue therefore, has been resolved by going back to the basic, which is, the law. Problems are but a common state of affair in doing business as there are those who will try to be above the law for the benefit of their own, thus it is through these kinds of entities that the laws are strengthened to improve the existing policies and hopefully prevent this situation in the future.
Miscommunication Communication is one of the most important medium during transactions in ay business. One mistake in providing information transmitted to the other party will definitely cause a large chaos. The risk in multi-national companies is tripled since the transactions are following deadlines and the goods and services are overseas (Hunt & Vitell, 1986). The setting though is quite similar to local transactions—ones the goods are shipped, it is considered sold unless there are other conditions that are stated in the contract.
But in international trades, mistakes are crucial as it will cost much and every time wasted for an erroneous transaction will give burden on time and money. The key players in the business transaction will firstly base the necessary actions on the agreement of the companies; secondly abiding on the standards and the rules crafted by the world trade organization. If by any chance, one of the parties decides to not bring up the problem on court, then the written agreement will serve as the condition for retaliation.
Conclusion In the critical analysis of the state of affairs presented, the forecasting methods positioned in obtaining goals are predicted to be beneficial. The inevitability of using simulation for captivating customers widely disagrees with the idea of just and intellectual technique. Causal system, on the other hand, is fundamental which, if used and operated in the most proficient way, shall grant a breakthrough in the ability to adapt with unexpected rise of complications. References Cooper, R.
N. (2008). Economic, Social, and Environmental; The Accelerating Decline in America’s High-Skilled Workforce: Implications for Immigration Policy. Foreign Affairs, 87(3), 142. Hunt, S. D. , & Vitell, S. J. (1986). Marketing Ethics. Macro Marketing Journal, 6(1), 10. Worthen, B. (2007). Outsourcing Outlook: Higher Costs Ahead. Wall Street Journal Online. WTO. (2008). World Trade Organization: Agreement and Legal Texts [Electronic Version], from http://www. wto. org/english/docs_e/legal_e/legal_e. htm