The Law of Cross-Border Business Transactions

RUNNING HEAD: CROSS BORDER AND GLOBAL POLICY IN BUSINESS
Title: Business Policy in Developing cross-border and Global Organisation
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1CROSS BORDER AND GLOBAL POLICY IN BUSINESS
Section A:
1. A) Relationship between stakeholders in development of policy:
A stakeholder is generally considered the individual person, organisation, groups associated, or
being affected by the course of action in any organisation. The stakeholder engagement is a key
aspect for the flourish of the organisation. The building of the two-way relationship fosters a
healthy policy formulation that helps both the sides. A business relationship among the
stakeholders develops over time only after undergoing through various stages. In the first stage
of policy formulation, the stakeholders identify their concern and problems. The internal
stakeholders operate largely by their own where their main concern is their business (Kujala,
Heikkinen, and Lehtimäki,2012). In the next step the other stakeholders including the
organisation comes to a pro active ways where one set of stakeholders identify their benefits or
problems and concerns and come into direct relationship with the organisation and the internal
stakeholders in turn respond to their concerns. This relationship fosters the policy-making
strategies as it rules out the chances of any particular stakeholder to dominate in an autocratic
way.
1.B) Impact of Social, economic and political factors on the global strategy:
The international and cross border business is a functional key for boosting up the
business environment. However, this is subject to various social, political as well as economic
factors that affect the strategy formation of the business (Caliguiri and Colakugru,2007). Since
the global organisations develop relationship between various neighbouring states and region, the

2CROSS BORDER AND GLOBAL POLICY IN BUSINESS
form and structure as well as the strategy in the various regions will vary according to the socio
economic and political conditions. The main factors affecting the business are:
1. Social factors: the main social factors that influence the business environment of the cross-
border organisations are communication process, the cultural differences between the nations
involved in the cross border business, educational level and income level of the countries
involved. The attitude towards imported products and the attitude of the nations concerned
towards the customer service as well as the product quality are also the main contributing factors
in the policy formulations. The social factors also is a key pointer for the sales of the products
since it largely shapes the choice and interests of the customers A company will thus, set an
import relationship with an international organisation only when it finds that the product is
socially accepted in the region. For example, Pepsi Co communicates largely through ads that the
people can relate through the festivals of their region and thus form a sense of belongingness
(Vecchiato, and Roveda, 2010).
Economic factors: the policy formation of cross border organisation is largely depended on the
economic factors. The inflation rate, the value of currency, the public debt as well as the
strengths of the economic performances contributes to the policy formulation largely. The
relationship between the two countries is related to the inflation rate. It has been noticed that a
country with a consistently lower rate of inflation has an increased purchasing powers. This
again affects the changing interest rate and currency values. Since a large public debts brings i
higher rate of inflation, such countries become less attractive for foreign investors.
Political: the political factors that may influence the policy and strategy of the global
organisations are the risk of violence, the political uncertainty that in turn leads to economic

3CROSS BORDER AND GLOBAL POLICY IN BUSINESS
uncertainty, confiscation, nationalisation and forced violence that may lead to the tumultuous
situation in any business. Since the political factors are the most unpredictable influences, the
investors generally try to refrain from investing in a politically unstable country. Again the
government’s involvement in the trade unions and the other trade regulatory factors also affects
the strategy formulations.
1.C) Role of domestic, national and multinational interest in strategy making:
The strategy making policies must include the procurement of the national as well as the
multinational interest for all the partners and companies involved. The domestic interests include
the conditions of labours, the economic growth, adhering to the regulations of government and
the increase of the market size (Guo,2007). The business interests can also operate in terms of
trade associations as well as employee association. Any company must see to the fact whether
the merging, acquisition or partnership is catering to the primary domestic interests like the
proper work environment and wage for the employees and labours, or that the domestic laws are
maintained in the course of business. The catering to the domestic interests will attract more
employees in the area. Again, the protection of the natural environment and the resources also
focuses on the domestic interests. The national interests, however, refers to the protection of
social responsibilities, the growth in the national GDP, the rate of employment all over the nation
and the protection of national laws and regulations (Elis,2012). The policy thus, must be
formulated so that the partners concerned can achieve these interests in order to make it
acceptable to the stakeholders. For example, a country where Tobacco Consumption is banned
by terms of law will not attract a foreign investor of any cigarette Company. Similarly, the
multinational interests refer to the flourishing of business in the various nations. For example,