Three Current Issues in International Business

THREE ISSUES

Three Issues Currently Affecting International Business

Three major issues currently affecting international business are trade deficits, renegotiating NAFTA, and the global market. A trade deficit can cause unemployment to increase within the country, directly impacting international businesses. If the country relies more on imports than exports, people within the same region will not find jobs. Businesses are meant to produce greater job opportunities for the economy, hence contributing to a better future for the workers. However, a trade deficit would not probably facilitate such situations and adversely affect people’s jobs within the country (Congressional Research Service, 2020).

NAFTA has been a great source of boosting international business as it helped reduce the costs of business, enable investment and growth, particularly for small businesses, and formulated agreements to protect investor rights (Amadeo, 2020). Renegotiations of this agreement require the workers’ rights and protection to be bold and clear so that international businesses and policies do not find loopholes and impose their conditions. International businesses would have to rethink ways where labor provisions must be complied with to avoid any lawsuit. International firms must know while working in other countries. Each region has its law and ways of enforcing them. Thus, encouragement of offshore jobs would only be possible if NAFTA is promised with core rights being observed strictly. Fundamental human rights, labor standards, and equity are all-inclusive in the NAFTA statements, even if they are subjected to terms written in footnotes. Effectiveness of labor action plans could only be conducted once violations are stopped that could further create issues in the international business arena, such as trade unions and threats from human rights activists, etc.

Managing an international business on a global scale is a challenge since there are further concerns that the firms have to look carefully into. Language barriers, cultural barriers, pricing considerations, and managing global teams give a hard time to the international firm’s capacities to succeed in global industrial sectors. Handling cross-cultural business requires the enterprises to make global strategies that should work for all employees or at least the majority of the workforce. The strategizing could only be viewed as successful if political risk mitigation and legal compliance are deemed as the major priorities. A cultural coping mechanism must be embedded in intercultural communication and knowing the indigenous people well to ensure effective performance, especially in global teams (Romani, Mahadevan & Primecz, 2018).

Moreover, language forms a strong part of their culture which enhances an emotional connection with the employees of the foreign country where a multinational company operates. Trust building could be an issue if the company is not aware of its significance, leading to distortion of social identities and organizational power relations, hence the ineffectiveness of the firm’s performance. A larger hindrance would be managing teams globally if the business is not familiar with the importance of shared cultural understanding. It is not only the works but emotions and other unspoken gestures that are part of the language a business needs to be aware of while conversing with foreign teams and their members. Any risk or potential of misunderstanding can create long-term consequences for the business; the enterprise must look over the complexity of culturally-specific terms and colloquialisms. Finally, strategic pricing is the power international business needs to inherit to handle global issues shrewdly (Toni et al., 2017). The internal capacity of the firm to deal with economic and financial intricacies is based upon the firm’s basic systematic interpretation of the global market conditions. It would directly affect the profits and, therefore, must be done by analyzing the perceived value of the product or service, intrinsic costs, and aligning with the competitive pricing within the global marketplace.