International business Policy

International business Policy INTERNATIONAL BUSINESS POLICY Question: Porters note that â€Å"firms, not individual nation , compete in international market†. How does this statement help to explain some of the major challenges facing MNEs? How do the determinants of national competitive advantage help explain how companies can maintain their economic competitiveness? Answer: International business is a exchanging goods and services , conducted between individuals and businesses in multiple countries. Historically, international business activity first took the form of exporting and importing. Exporting is the selling of product ,goods or services supplied from ones own country for use in other countries . Importing is the buying of products ,goods or services made in other countries for use in ones own country. Exporting and importing activities are often divided into two groups. first, trade in goods ,that is, tangible product such as clothing, computers , and raw materials. Second, Trade in services, that is ,intangible products such as banking , travel and accounting activities http://www.businessdictionary.com/definition/international-business.html International business activity can also take others forms . * Licensing * Franchising * Management contract * International business Licensing is a contractual arrangement In which a firm in one country licenses the use of its intellectual property for e.g. patents, trademark, brand name , copyrights or trade secrets to a firm in a second country in return for a royalty payment Franchising , a specialized form of licensing ,occurs when a firm in one country authorized a firm in a second country to utilize its operating system s as well as its brand name ,trademarks , and logos in return for a royalty payment. For example , McDonalds corporation franchise its fast food restaurant world wide . A Management contract is an arrangement wherein a firm is one country agrees to operate facilities or provide other management services to a firm in another countries for agreed upon fees. For example hotel industries. International business as any organization that engages in a cross-border commercial transaction with individuals ,private firms or public sector organization A firm is a commercial partnership of two or more person , especially, when unincorporated. Also the name or designation under which a company transacts business. Any business , sole proprietorship, partnership or a corporation The term multinational entrepreneurs is used to identify firms that have extensive involvement in international business. An another definition of multinational corporation is a firm that â€Å"engaged in foreign direct investment an owns and controls value-adding activities in more than one country† MNEs generally coordinate their activities from a central headquarters but may also allow their affiliates or subsidiaries in foreign markets considerable latitude in adjusting their operation to local circumstances. Some MNEs , such as accounting partnership and Lloyds of London, are not true corporation, Some writers distinguish between multinational corporations and multinational enterprises . Further , not for profit organization ,such as the IOC and the International red cross , are not true enterprises ,so the term multinational organization can be used when one wants to refer to both for not for profit-seeking organization. Because of the common use of multinational corpora tion in the business press, however , Multinational enterprises facing a major challenges , Some of them are as under: †¢ Economics and Currency conversion †¢ Legal systems or Types of system †¢ Culture †¢ Availability of resources †¢ Market withdrawal Government policy †¢ Political legal environment and Government Power In a domestic business strategy, a single country at a specified level of Economic development in a focus of the firms entrepreneurial efforts. The entire country is almost always organized as a single economic system and has the same currency. Creating a business for a multicounty are means dealing with differences in level of economic development, currency valuation government regulation and banking, venture capital and marketing system. One of the biggest problems entrepreneurs have is raising capital. The amount of private equity capital investment varies greatly by the area of the world, and the amount available is significantly less elsewhere than the united state. In addition, the countries may use different currencies, forcing at least one party to convert its currency for another. So MNEs face currency exchange problem. The legal systems may vary or even be in compatible. In different countries used there own system of business. Like many such barter system or third party ar rangement have been used to increase the amount of business activity of the former U.S.S.R. and Eastern and central European countries, as well as other countries in various stages of development and transition .The cultures may differ and the resources may vary. Culture is encompasses a wide variety of elements ,including a language, social situation, religions ,political philosophy, economic philosophy education, and manners and customs. The availability of resources ,For example, one country may be rich in natural resources, but poor in skilled labor. Also e.g. U K, U S A , AND CANADA are well developed in technologically than developing countries like Africa , India, Pakistan Still, the basic skills and knowledge needed to be successful are generally similar whether one is doing business domestically or internationally. Tax competition countries and sometimes sub national regions must compete against each other for the establishment of MNEs facilitates, and the subsequent Tax revenue- a tax is a financial charge upon an individual or legal entity by a state such that failure to pay is punishable by law, employment ,and economic activity. To compete, countries and regional political districts sometimes offer Incentives is a any financial or non-financial factor that motivate a particular course of work to MNEs such as tax breaks, pledges of government assistance or glowed infrastructure and labor standards enforcement. Foreign direct Investment Foreign direct investment made for the purpose of actively controlling property ,assets or companies located in host countries, such as factories, building, machinery, land and mines, grow up of foreign direct investment can be used as one of improvement of economic globalization. Map below show net inflow of foreign direct investment as a percentage of gros s domestic product. The big flows of foreign direct investment occurs between the industrialized countries like, western Europe and Japan, North America. But flow to non-industrialized countries are grows up sharply. Market withdrawal-government policy- Multinational enterprises having a significant impact on government policy because of its size, basically through the threat of market withdrawal, for example , in order to reduce healthcare costs, some countries have tried to force pharmaceutical companies to license their patented drugs to local competitors for a very low fee, so automatically lowering the price ,when faced with the threats multinational pharmaceutical firm have simply withdrawn from the market. Political-legal environment- the multiplicity of political and legal environments in the international market creates vastly different business problem, opening some market opportunities for entrepreneurs and eliminating others. for example , U S environmental standards have eliminated the possibility of entrepreneur establishing ventures to imports several models of Europeans cars. It also involves the price fluctuations and significant increases in oil and other energy products in the last few years. http://en.wikipedia.org/wiki/Multinational_corporation Determinants of nation competitive advantages Michael Porter tried to explain why a nation achieves international success in a particular industry and identified four attributes that promote or impede the creation of competitive advantage: Factor endowments Demand conditions Relating and supporting industries Firm strategy, structure, and rivalry Factor endowments refer to a nations position in factors of production necessary to compete in a given industry. A nations position in factors of production can lead to competitive advantage. These factors can be either basic (natural resources, climate, location) or advanced .(skilled labor, infrastructure, technological know-how) Demand conditions refer to the nature of home demand for the industrys product or service. The nature of home demand for the industrys product or service influences the development of capabilities. Sophisticated and demanding customers pressure firms to be competitive. Relating and supporting industries refer to the presence or absence of supplier industries and related industries that are internationally competitive. The presence supplier industries and related industries that are internationally competitive can spill over and contribute to other industries. Successful industries tend to be grouped in clusters in countries having world class manufacturers of semi-conductor processing equipment can lead to (and be a result of having) a competitive semi-conductor industry Firm strategy, structure, and rivalry refers to the conditions governing how companies are created, organized, and managed, and the nature of domestic rivalry The conditions in the nation governing how companies are created, organized, and managed, and the nature of domestic rivalry impacts firm competitiveness. Different management ideologies affect the development of national competitive advantage Vigorous domestic rivalry creates pressures to innovate, to improve quality, to reduce costs, and to invest in upgrading advanced features Government policy can: affect demand through product standards influence rivalry through regulation and antitrust laws impact the availability of highly educated workers and advanced transportation infrastructure. The four attributes, government policy, and chance work as a reinforcing system, complementing each other and in combination creating the conditions appropriate for competitive advantage

Little Ice Age

Europe had experienced a general cooling of the climate between years 1150 and 1460 and a very cold climate between 1560 and 1850. This event came to be known as the â€Å"Little Ice Age. † This cold weather had impact on agriculture, health, economics, emigration, and art and literature . The term â€Å"Little Ice Age† was named by Francois Matthes in 1939 to describe the most destructive climate drop in Europe. This ice age was consisted of mountain glaciers which brought temperatures as low as 2 degrees Fahrenheit. Numerous people got sick and some were even killed and starved to death because of a famine.Farms and villages were lost due to the cold weather. It is unknown on what caused this â€Å"Little Ice Age. † We do know that this event impacted the people living in Europe. Many people have spotted out that the sunspot activity during this time period was low. This rare occurrence of sunspots triggered a cold sun, also the many volcanic eruptions which th en turned into an ice age. Imagine the fog hugging the ocean waters, cold winds coming in from the north, no horizon, no boundary between the sea and sky, land is frozen, and there you are gazing at a futureless world.Although â€Å"The Little Ice Age† was not a true ice age because it didn’t last long enough to cause ice sheets to grow larger, but it did change the daily life in Europe. At the conclusion of the Medieval Warm Period, the ice age made Iceland and Greenland attractive colonies for many Europeans to emigrate to due to the lack of food and cold temperatures. Even schools of cod, fish were forced out into the western Atlantic Ocean due to the frigid water temperature. Pilgrims followed the cod down the coast of North America settling on Cape Cod.Population increased in Europe during the warm period which left a large amount of people starving and dying during the first year of â€Å"The Little Ice Age,† due to famine. Rain was harsh during this time, it drenched the farmlands. To overcome this dilemma, farmers had plowed soils with long furrows, creating fields that absorbed large amounts of rain without doing much drainage problems. After it was cleared the land became a muddy wilderness. The crops were flattened where they grew. Europeans needed to find a new way to rely on food. One way in particular, was tree bark was made into bread.No longer were they able to rely on crops due to the flooded and frozen grounds. The frozen conditions led farmers to lose their cattle, hunters could no longer hunt for food, and fisherman could no longer fish for food. Villages of people subcommed to the famine. The famine outbreak occurred between the years of 1315-1317 where over 25 million people died from famine or famine related diseases. One in particular known as Black Death. Many of the hungry were also killed by famine diarrhea. This condition was resulted from bad nutrition and changes in the intestines that upset the water and salt balance in the body.The people of Europe were forced to eat the flesh of dead animals as part of their survival. The hungry would abandon their homes and villages and go to hospitals and sometimes even crowded prisons just to survive. In doing so, the large majority of people also brought on many other infectious diseases. People huddled together for warmth. When people died their clothes, including their underwear, were passed on to other people. When these people left their homes they only left with what they wore on their backs. In addition to the impact â€Å"The Little Ice Age† had on human survival, it had a large impact on economics.Increasing grain prices with lower wine production greatly affected the income of many. Property values and loss of taxes were at a decline . Population was increasingly declining due to the famine. With all these factors many of the people suffered much hardship. The lack of production in Europe caused other countries to have bidding wars against one another for cargos of food and imports. â€Å"The Little Ice Age,† caused many people to flee Europe in search of better living habitats and survival strategies. This ice age not only affected humans, but also the wildlife and everything around it.The plants enzymes are failing them and their roots are struggling to find a way through the frozen soil. These plants can’t grow and maintain themselves in these conditions. Pollination is nearly impossible during this time. The plants aren’t able to give off much oxygen into the atmosphere, which we breathe in. The true impact of â€Å"The Little Ice Age† began around 1600 and lasted until the 1800’s. During that time in Europe is when it was at its height. It was considered to be the most significant climate event of the last millennium.Only until recently have climatologist discovered research of climate conditions in historical times. As stated before, no one is quite sure how â€Å"The Little Ice Age† evolved. Climatologist and historians have had many discussions on what they think was the main cause of the ice age. Today they are able to determine the yearly average temperatures, rainfalls, volcanic activity, and the effect of the sun during that period . What we know is that the sun experienced a â€Å"quiet† period, meaning its intensity was not that strong. Therefore, a cooling occurred.Sunspots which determine the suns strength were noted to be in decline. Volcanic activity is to be another known source of the cause. As the volcanoes erupted they shot out particles and gases into the air. With these gases floating in the air it led to an event called the aerosol effect. This had reduced the amount of heat by reflecting it back into space. Europe was not able to get direct sunlight so temperatures dropped. An unscientific way that climatologists were able to determine how extreme the temperatures were and how frigid the air felt was through art. They were also able to determine through these paintings when the colder air was beginning to lift. An interesting fact regarding the ice age is the paintings that were done during that time. Artists depicted people wearing warm winter clothes, all bundled up, and landscapes were covered in snow and ice. The theme of the paintings ended once the climate was starting to get warmer. A man once had studied more than 12,000 paintings in 41 art museums in the United States and 8 European countries to test if this hypothesis was true; that these paintings would accurately reveal the climate.He looked at the color of the clouds and sky in these paintings. By doing this scientist were able to tell when â€Å"The Little Ice Age† was at its peak and how cold it was then. The impact that â€Å"The Little Ice Age† had on neighboring countries such as Greenland and Iceland were extremely dramatic. Greenland, prior to â€Å"The Little Ice Age,† was free of packed ice and Nors e Settlements were well established in the region. During â€Å"The Little Ice Age,† as the temperatures changed and plummeted, Greenland suffered considerably.Increased hardship for families, animals, and agriculture, all do to the conditions â€Å"The Little Ice Age,† brought along. This included flooding and storminess. â€Å"The Little Ice Age† caused major economic disruption throughout Europe. Ice covered seas made voyages extremely difficult. Settlements were either abandoned or died out when temperatures were at only 2 degrees. In the Norse Settlements, archeologists have discovered the clothing on the bodies of the buried to be in remarkably good shape due to the frozen grounds. Iceland was another country that suffered greatly.Since the fourteenth centaury Iceland’s major economic contributor has been exporting fish. Harsh winter temperatures made it nearly impossible to sustain this industry. Icelanders fished from open boats, not far from land , and tried to survive on local farming relatives that lived close to shore. With the population of 50,000 between the years of 1750-1758, 17,000 people died of hunger or disease. Ireland’s main source of income and stability in their country was the import and export of potatoes. Ireland had adopted the potato from America.Irish farm workers ate nothing else besides potatoes. Later on, the people of Ireland would suffer the worst due to the worst famine Ireland had ever experienced. We need to understand that the ice age has proven to have affected millions of people in the world and many countries. Starvation, hunger, crime, economic hardship, and settlements that were lost were all due to a period in time that we still don’t know too much about. What â€Å"The Little Ice Age† did to many parts of Europe has, and will change the future events that will go on. Because of the ice age tree heights have been altered.Many trees have gone, so the ones that are left are not as big as they used to be. This means the people of Europe will have little supply of wood to be able to make things such as furniture and paper. The disappearance of animals will be affected. Many fish such as cod have traveled to different waters around the world. This lowers the population of fish in Europe which hurts fisherman, trade, business, and food supply. Also that many animals have died and decomposed into the ground, it leaves hunters empty handed with fur to use as clothing and trade.Europe also suffers agriculturally. The harvest supplies that were destroyed during the ice age have led Europe to a decline in crop production today, such as cotton. If warming trends continue in Europe, growing seasons will lengthen, and wine vineyards will be established again in England. Many people have questioned as to whether the â€Å"Little Ice Age† will happen again. For hundreds of years, scientists have been observing the sun, examining the sun spots, wondering i f the ice age could happen again. The scientist are discussing that the number of sun spots should be increasing.Human made greenhouses that help release carbon dioxide is a major factor in keeping the atmosphere warm. In addition, the ocean plays a tremendous part in keeping the climate on track. If melting ice caps and glaciers off of Greenland flows into the Northern Atlantic, it will shut down the Gulf Stream, also known as the â€Å"Great Conveyer. † In this situation, the icy cold water would shut down the Gulf Stream, which now keeps Europe warm. Worst case scenario would be a full blown ice age or a period of harsh winters. Now, if the warming continues and keeps progressing on the right path, then the growing seasons in Europe will lengthen.This is important because the majority of European citizens depend on this to grow food that they need for the upcoming seasons. Farms will be cleared to be closer to the Arctic Circle. In this area the sun is visible through the summer and does not set. Farmers can’t stress enough about having sun on their farm. It is crucial in their growth of their crops. The people of Europe had come a long way to deal with this ice age. Some of the things that they did were to migrate to other countries, away from the cold temperatures, and build houses that were together so that they could keep warm and not disrupt their family relation.If we keep building greenhouse affects and burn fossil fuels, Europe may be able to recover fully and successfully. If â€Å"The Little Ice Age† has taught us anything, it is that climate change and weather are unpredictable, and we should always be prepared for any sudden shift in change. This was the Europeans story of how climate made history. http://science. jrank. org/pages/47813/Little-Ice-Age. html http://www. geocraft. com/WVFossils/ice_ages. html http://www. commondreams. org/views04/0130-11. htm

Chris McCandless is NOT a Hero in the Book, Into the Wild...

Many people have read the story â€Å"Into the Wild† By Jon Krakauer, when mentioning the name Chris McCandless he is either viewed as hero or as a dumb man. The people who view him as a hero tend to believe that he was determined enough to want to do something. Others view him as an idiot who just wanted attention. Him being unprepared and not knowing much about how to survive in the wild made McCandless an idiot, the dumb jerk. Also causing him to be a poor role model to multiple people causing them to end up in dangerous situations that could be threatening to their lives. Having the right supplies for hiking or in Chris’s case going out to live in the wild is critical. Chris was lacking in this category. When Chris was found a few weeks later in the woods it was evident that he didn’t have the food supply he needed to survive. Matthew Power from Mens Journal The Magazine, brings up the point that Chris only brought a few things with him, â€Å"Setting off with little more than a twenty-two caliber rifle and a ten-pound bag of rice, McCandless hoped to find his true self by renouncing society and living off the land.† Chris later proved that even if you intend to live off the land if you are not used to it and living that way it is going to be extremely hard and may even result in death. Chris was on a death mission weather he realized it or not. He went into the wild and is now causing people to unintentionally cause self harm to themselves. Peter Christian added, â€Å"Some like