Business Management and Strategic Management - PDF

Running head: BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
Business Management and Strategic Management
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1BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
1. Given the advantages of international diversification, why do some firms choose not to
expand internationally?
It is undeniable that there are numerous advantages of internationalization. H0wever,
this is also to note that while there are a huge number of advantages of international
diversification, it is also true that there are few risk factors associated with it as well. The cost
to start entering into the international level is high and also the taxes could also be higher for
continuing to operate the business in international level. It is indeed quite expensive (Abel-
Koch, 2013). The expenses of a company would consist of payroll; start up fees that are
related to start the business and the office space. Along with this, there are insurance fees as
well that tend to be very high for the companies that are situated outside of that very country
where the business is going to start up. Furthermore, there is a high risk based on where the
company set up its business shop, as you never know what the country government will do
along with the wars. Business therefore has to keep in mind the religions and the employees
while setting up in the international market that has the potential to hinder the business
operations.
2. Ventures in foreign countries without strong contract law are more risky, because
managers may be subjected to bribery attempts once their firms’ assets have been invested in
the country. How can managers deal with these problems?
It is true that ventures in foreign countries without strong contract law are more risky,
because managers may be subjected to bribery attempts once their firms’ assets have been
invested in the country. When it comes to the aspect of bribery, it is very vital to understand
the fact that bribery is always a two way street that consists of both giver and the taker at the
same time. Hence, it can be said the companies get the choice when it comes to the question
of paying bribes. In most of the cases, it is really possible to operate the businesses without

2BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
even paying any bribes to anyone, but as it is said that- “there is a cost of being ethical as
well”. The company that opt for not paying any bribe has to suffer in terms of its business,
i.e. it may lose some of its customers and businesses as well as, the approvals that would have
been completed much faster if the company had pay bribe would take much longer time to
get accepted (Selko, 2013). However, if the senior manager or the senior management team is
focused and is determined enough for not giving or taking bribes and if they accept this cost,
it is likely that the company would be successful in avoiding bribing and with the passage of
time, it would develop a reputation in the business market of being honest and ethical, which
in turn will attract more number of people towards its business as they will perceive it to be
true in ever terms.

3BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
References:
Abel‐Koch, J. (2013). Who Uses Intermediaries in International Trade? Evidence from Firm‐
level Survey Data. The World Economy, 36(8), 1041-1064.
Selko, A. (2013, July 24). Dealing with Bribery in Emerging Markets. Retrieved from
IndustryWeek: http://www.industryweek.com/regulations/dealing-bribery-emerging-
markets