Contemporary Issues in International Business

International Business

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................3
Important Contemporary issues which are related to organizations in international business....3
Analyze the global context with in which an international business function in 21st century.....4
Methods to take entry in foreign markets....................................................................................5
Reasons for which company may decide to internationalize and alternative theories of
internationalization......................................................................................................................6
Impact of multinationals on home as well as host nations..........................................................8
Select and evaluate data on country markets...............................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
Books and Journal......................................................................................................................12

INTRODUCTION
International business refers to the organizations which are involve in trade of goods and services
across the geographical borders (Bahoo, Alon and Paltrinieri, 2020). International business is
generally adopted by organization to expand their business and increase their target customer
base. When an organization established a brand image in one country they want to expand it
further to gain more customers for their products and services. Tesco is a large multinational
organization of general merchandise and groceries which established a brand image in the
market of UK. The company operates as market leader in in various parts of United Kingdom
and known for its International expansion. This report contains important contemporary issues
related to the organization in international business and various alternative methods to enter into
the international markets. It also contains several reasons for which a company decide to
internationalize and impact of multinational organizations on host as well as home nations.
MAIN BODY
Important Contemporary issues which are related to organizations in international business
Contemporary issues are the issues which are faced by an organization in the
contemporary business. There are several important contemporary issues which are faced by an
organization in order to be involved in international business. These essential contemporary
issues are given below:
International company structure: Domestic companies and international companies have
different organizational structure. Their business organization decided to enter into international
market the need to establish an international organization structure. It is the major issue has been
faced by many organizations to create an effective international organization structure. In case of
Tesco, the company operates in international market needs to have an effective international
organizational structure. The company has a different organizational structure as compared to
various domestic organizations such as they have a branch manager for every stool which are
located in different locations. Sometimes it became difficult for top level management to manage
each and every branch effectively which affects the profitability of the branch (Bhattacharyya,
2020).

Foreign laws and regulations: Along with the structure of international business a company
requires a good understanding of various laws and legislation which are applicable in the target
market. Every country has their different laws and regulations related to business organizations
and it is required for the organizations to understand and follow those laws and regulations in
their organizations in order to effective working over there. In case of Tesco the company
operates in 11 countries with approximately 7005 stores. It requires the organization to have
better understanding of various tax implications through the trading laws and other legal
requirements which are essential for them to have successful international business. Which is a
challenge for an organization to understand all the laws and regulations which are applicable on
them in the international market and requires a proper legal team to understand laws and
legislations of different countries. They invest in a knowledgeable and experienced corporate
counselor to face this challenge of the organization.
Political risk: Political uncertainty and instability in a country is a also risk factor for any
organization to operate in international business. It is essential for an organization to conduct an
economic and political environment survey to successfully establish there branch in the location.
Unstable policies and corrupt practices is a great problem which is faced in many countries and
cause political instability in the country. It is essential to manage this political risk an
organization face in order to expand their business in international borders.
Currency rates: Different countries have different currencies which are used in the country to
buy livelihood (Carvalho, Galina and Sánchez‐Hernández, 2020). The currency rates are decided
in accordance to the dollars in the market. The fluctuation in the currency rates sometimes cause
a great problem to various organizations operating in international business by giving them
major losses. In case of Tesco they also deal in several countries and uses their currency over
there. Currency rates can also cause loss to Tesco as Rapid changes in the currency of a country
when result in great loss to the organization which is also a major contemporary issue for them to
operate in international market.
Cultural differences and communication barriers: Every country has their different cultures
which are followed according to the population of that country. In order to establish and
international business a company has to deal with a major challenge that is of cultural difference
and communication barriers. Tesco is an organization which was established in United Kingdom