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Thursday, December 2, 2010

How does international business differ from domestic business?


Simply put domestic business involves transactions occurring within the boundaries of a single country, while international business transactions cross national boundaries. International business can differ from domestic business for a number of other reasons, including the following.
(1)   The countries involved may use different currencies, forcing at least one party to convert its currency into another.
(2)   The legal system of the countries may differ, forcing one or more parties to adjust their practices or comply with local law. Occasionally the mandates of the legal system may be incompatible, creating major headaches for international managers.
(3)   The cultures of the countries may differ, forcing each party to adjust its behavior to meet the expectation of the other.
(4)   The availability of resources differs by country. One country may be rich in natural resources but poor in skilled labor, while another may enjoy a productive well-trained workforce but lack natural resources. Thus, the way products are produced and the types of product that are produced vary among countries.

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