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Critical Essay On International Business Environment Assignment Sample

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Critical Essay On International Business Environment Assignment Sample


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Because it covers a variety of political concerns, unique cultures, currency exchange risks, and tax and regulatory challenges, “the International Business Environment (IBE) is diverse”. As a result, a nation’s economic success is determined by the global commercial environment (IBE). It is vital to the country’s growth and development. The worldwide marketplace is the framework through which foreign businesses function (Kahiya, 2020). As a result, executives should focus entirely on the components of the global business environment. The significance of the international business environment crucially holds over the globalization that offers some benefits, such as access to cutting-edge technology, infrastructure development, managerial skills, job creation, enhanced service delivery, and the ability to sell investment goods from other nations. The paper will highlight the understanding of the political and economic concept and its principles for their rudimentary application to international business and also it will critically discuss the social responsibility and its implication for multinational corporations.


Political Impact on the international business environment (IBE)

In context to the political aspects of IBE where a political scenario refers to a set of political circumstances and government operations that help or hinder a company's ability to do business in another country. Further, the political situation is determined by the type of government in power, the relationship between the administration and corporations, and the fragility of democracy itself (Rogalska and Opalach, 2022). As a result, doing business overseas necessitates dealing with a diverse set of authorities, as well as relationships and statistical risk.

Political systems have produced inter republics, one-party republics, constitutional monarchies, and authoritarian regimes, to name a few (military & non-military). Finally, when evaluating the political atmosphere, an organization should consider the following factors. The governing class of corporations; Businesses have restrictive or collaborative attitudes toward government Services and incentives offered by the government. Mostly, the licensing rules, as well as reserves for specific sectors such as “public, corporate, or limited, are examples of legal restrictions” (Rogalska and Opalach, 2022). “Import restrictions on technological data, capital goods, and raw commodities.”

“Export restrictions include export limits, pricing and distribution constraints, and restrictions on exporting products and services, to name a few”. When starting a business, various requirements must be followed. The major political impact on the IBE is that it introduced the risp armer in the sector that can suffer the losses or it can minimize the profitability. There might be server reasons for which the political situation might change and it depends on country-specific political norms set by the federal government (Rogalska and Opalach, 2022). Consequently, the international trade will get impacted by the national security that would directly have an impact upon the “import and export” of the particular country. Further, some government uses trade as a punitive measure if another nation is politically unfair. It is by the taxes levy charge which can be either rising or decreasing.

Economic concept to the international business environment

All of the characteristics that determine a nation’s attractiveness to international investors are included in the corporate situation. The economic situation of one country may be significantly different from that of another. The three core types are more established or major economies, less developed or multinational entities, and newly industrializing or emerging economies. Congruently, within each group, there are major distinctions, but in general, the more developed countries are wealthy, the less developed countries are impoverished, and the newly industrialized countries are developing (those moving from poorer to richer) (Dzwigol, Dzwigol-Barosz and Kwilinski, 2020). These disparities are commonly calculated using the gross domestic product per capita (“GDP/capita”). “Economic development is frequently linked to innovations in education, equipment and services, healthcare, and other disciplines”. Besides this, it is focused that the nation’s rate of economic growth, as well as education, infrastructure, and other issues, as well as the extent of government control over the low cost, have influenced virtually every aspect of doing occupational, and a corporation must be aware of this situation if it is to succeed internationally. An organization interested in entering a specific business field should examine the subsequent elements while assessing the business situation for it needs an economic framework to enter the corporate world. The stages exist between industrial success and technological growth. Income levels at the national and per-household levels (Aitken, 2019). There is a direct and indirect tax incidence. The available technology, as well as the obstacles that come with it. “The price of raw materials and components, as well as the ease with which they can be obtained”. “Costs and financial resources available”. Structures of pay and compensation, as well as staff supply (“managerial, technical, and workers”). In response to the economic situation over the global business corporate, it allows countries to expand their marketplace and access the item and services which otherwise might not have been available domestically.

Multinational enterprise and applicable side 

Multinational corporations (MNCs) are businesses that operate across national borders and around the globe. According to commerce, the major goal in a worldwide marketplace is the MNE (multinational business), which is a corporation that concentrates on strategic accomplishment in global production and supply (Cross-border) (Berning, 2019). There are countless successful instances of this type of business. The number of international participants is continuously expanding in the majority of markets. Further, the corporates like RedMi are a market leader in every category, from automobile manufacturers like Honda to fast-food restaurants like McDonald’s to smartphone manufacturers like Samsung has greatly paid their part over the impact of principle business for their portion in globalization and built better economy for the world economy(Berning, 2019). Moreover, the competitive environment of the international business situation has also changed the nations It is partly due to the economic and political factors and the degrees of competition that exist within the particular nations.

Social responsibilties and its implications for mnc’s

Social Responsibility means that an individual and the firm should act in the best interest of their situation and society as a whole. It is that individuals operating in their self-interest have a personal obligation to ensure that their activities do not risk others credibility. Fundamentally, it implies that managers should examine the impact of their company decisions (in terms of business planning and strategic development) on all consumers who are directly or indirectly involved with those decisions and may be impacted by them (Levashova, 2018). The Social responsibility and its implication for MNC’s focus on contemporary societal development of happiness and fairness. In conjunction with several popular organizations, such as municipal, United Nations agencies, and Non-profits in host nations, as well as indigenous social groups, MNCs can play a variety of “roles” and “scopes” Multinational corporations make some of the most visible contributions to host communities through corporate social responsibility (CSR).

CSR is more than a series of “feel-good” activities organized by MNCs for the benefit of the local community and then publicized in the media. It is a well-known concept to donate money, create schools, or plant trees in front of large media cameras. That was a long time ago. There's something to consider. The consideration that implications of MNCs should also state social responsibility for learning and being creative when it comes to CSR.

CSR has the option of focusing on a limited number of societal concerns while neglecting others. “According to one study, the economic repercussions of CSR programs and tools on smaller enterprises’, the position of informal workers, or whether global corporations or large retailers call it quits when one's providers come under scrutiny.” Further, “CSR from MScs in developing nations” are rising over gaining their attention, problems of specific concern to the campaigners are in a developed nation like the “child labor, environmental degradation and sweetshops are those that dominate the “CSR agenda for many MNC’s over the world” (Chen et al., 2020). Social responsibility which one of the most compelling arguments for social involvement in the fact that shifting community desires has changed business aims. A corporation is granted a license to operate by society, which can be changed or revoked at any time if the corporation fails to fulfilled society’s expectations. As an outcome, a company must adapt to societal demands and provide what customers want to succeed in the marketplace. Moreover, the implication of MNCs over the social responsibility can also be measured basis the Leader’s assessment of the success of social programs as part of the firm’s planning process to ensure that they are meeting their goals (Islam, Deegan and Gray, 2018). However, because evaluating the effectiveness of social welfare programs is difficult, the social audit is a management approach that may be used to assess social responsiveness.


Hence to conclude, to adapt to the international marketplace and identify susceptible areas, multinational firms need to collect data on all environmental components. It should strive to provide a healthy working atmosphere and adhere to all guidelines and regulations. Next to imply the IBE The process of establishing a global market in a new country must be approached cautiously. Instead of the country's risk, companies considering a purchase should consider capital formation, commercial, political, social, or constitutional security. Almost every country has encountered a threat at a certain point in its history. The presence of a multinational corporation changes the scenario. As well as the stabilization of economic growth. The country in jeopardy has no competitors in the region. Lastly, as an outcome, international trade benefits. Where more currency in people’s pockets is a result of more employment. Global trade has a very high-profit margin.

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