Risks and Challenges of Doing Business in Foreign Markets

Running head: English for professional practice
English for professional contexts

English for professional practice
The primary motive of this paper is to outline the risks and challenges that are associated
with companies. The paper discusses that how various risks and challenges that could affect the
business operations and functioning. Apart from this, some suggestions have been given to
overcome the issues and obstacles which are related to the foreign market. More detail of the
paper has been explained below.
In today’s era, each and every company tries to enter in the foreign market to maximize
the profitability and outcomes. Along with this, it also helps to beat and overcome the
competitors in the international market. By entering in the foreign market, an organization has
been able to expand and explore the business activities and operations in the competitive market.
Doing business globally provides ample opportunities to the company for profit and growth. In
addition, the company has been able to attract more and more clients while entering the foreign
market. Various multinational companies are tried to enter in the foreign market for uplift and
increase profits and outcomes. Although, the companies can take ample of opportunities while
functioning ay international level but some issues or challenges are also faced by the companies
(Laufs & Schwens, 2014). Some of the risks or key challenges associated with business in
foreign countries are discussed below.
Legal and political issue: It is one of the biggest and foremost issues that could be
encountered by the multinational companies while conducting business in the foreign market.
When the organization conducts trade in another or foreign country the company needs to be
familiar with that country’s rules, regulations, norms, and policies. Along with this, the company
also will have to pay additional taxes and import duties while implementing the business
activities and operations in the foreign market. The legal complexities of foreign business can be
very tricky and challenging. Thus, the company needs to take advice from the legal advisors to
overcome the competitors in the international market. Furthermore, it has been found that many
people are highly opposed to globalization, outsourcing, and other international business
practices. The company has to face plenty of legal issues and obstacles while trading in the
foreign market. Aside this, if the firm is engaged in the human rights then abuses in other
countries also dealt by the company negatively. If the organization has failed to create new and
innovative ideas then abuses are occurred within the organization. Apart from this, investing in
experienced and knowledgeable corporate counsel can prove invaluable and ineffective at the
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English for professional practice
workplace. Due to competition, the organization is unable to understand and follow the local
laws and regulations. It is noted that political and legal issues may also affect the performance
and productivity of the company in the host country adversely. Unethical practices and bribery
also could affect the efficiency and effectiveness of the company in the foreign market (Vahlne
& Johanson, 2017).
Language and cultural issue: One of the foremost and vital issues that encountered by the
company is language and cultural issues. The language barriers or issues reduce the profitability
and outcomes of the organization adversely. It has been found that many times the employees are
unable to understand and know the language of the foreign country. Thus, the organization might
need to rely on translators when speaking to the business contracts. Sometimes, the customers
are unable to understand the languages of the workers in the international market. It the
organization is outsourcing the customer service to another country, the customers may strive to
understand the people whose first and effective language is different than home country
language. This is the unique and effective issues in the international market. No organization can
survive and cope with rivalries without evaluating and determining the condition of the foreign
market. Due to the language issue, the firm could not able to understand the language of the host
country. Furthermore, it has been measured from the various analysis that different cultures have
different norms, values, attitudes and lifestyle. Culture issues are raised due to cultural
differences in the foreign market. For example, gender discrimination is one of the biggest
common issues that can affect the sustainability of the firm adversely in the foreign market. The
issue is problematic for the foreign market where women are not given equal rights and
opportunities rather than boys (Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014).
The CEO and board of director might find it wondering if the company can safely send
female workers to some specific countries. Moreover, the marketing system of different
countries is quite different as it also may influence the desired goals and objectives in the global
market. In addition, the polite behavior of some countries may be impolite and ineffective hence
it can affect the sustainability and outputs of the firm. It has been noted that some cultures do not
take contracts as seriously as other countries and many cultures give preference to the group as
compared to the individual. Therefore, it is essential to learn the culture of the different countries
before initiating the business in foreign countries. Culture issue is one of the important
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