Challenges Faced by Businesses in International Relations: A Report

This report provides a comprehensive overview of the challenges businesses encounter in the realm of international relations. It begins by highlighting the importance of innovative ideas and the difficulties organizations face in implementing them, including financial constraints, brand awareness, and customer dissatisfaction. The report then delves into specific challenges at both national and global levels, such as revenue mismanagement, time constraints, and leadership issues. It explores how factors like competition, resource limitations, and political and economic environments impact business operations. Several real-world examples, including Chrysler Automobiles, Tesco, and Porsche AG, are used to illustrate these challenges. The report emphasizes the need for effective strategies, such as proper planning, skilled workforce development, and customer loyalty management, to overcome these hurdles and ensure business sustainability in a globalized market. The analysis includes the use of PESTLE analysis to identify external environmental factors affecting international business.

International Relations

Table of Contents

INTRODUCTION
International relations are very important for those Business organisations who performs
its activities at global level so as to making brand image of firm at global level. Apart from that,
all these organisations are mainly based on innovative ideas that is used by them in making
changes in their existing products or making new products so that large number of customers can
be attracted towards offering. These organisations faces several challenges in carrying out their
functions like insufficiency of funds, lower awareness about brand, dissatisfaction among the
customers etc. that influences on the performance of business operations in adverse way. For
overcoming these impacts, organisations have to formulate effective strategies so that negative
affects can decreased effectively. Present report will describe the intense of different
organisations who have faced above challenges at local or international level. In addition, these
challenges are related with sustainability, ethics or technology which are faced by organisation in
carrying out their functions at national or global level.
Ease of developing enterprising and innovative ideas
Innovative ideas are considered as the backbone of an organisation because without these
any firm can't be formed in easy manner. These ideas are generated by organisations so as to
providing fresh or new things to their customers so that their needs and wants would be satisfied
effectively. Whereas, managers or owners of organisation have faces numerous kind of
challenges and issues in implementation of advanced ideas in their functions and also act as
barrier in achieving growth and success in marketplace. Therefore, it is very essential for the
business organisations to identify these challenges that can influence adversely accountrement of
these ideas and formation of business. These issues are discussed as under along with
recommendations for reducing their impact on business operations (Tanter & Ullman, 2015).
According to the Bernard Marr (2017) Competition is rapidly increasing in market
because each organisation wants to take growth and success in market. Due to which they have
to face various challenges during implementation of ideas into business. In which, the major
challenge is of improper planning because without appropriate planning of strategies, allocation
of resources any organisation can't survive in market for long time. As risk is uncertain in nature
which can occurred within the workplace at any time then it is very essential to business
organisations to make proper plans or strategies so that these risks can be identified and resolved

on time. Proper planning is very essential because without it good ideas can't be accoutrement by
business managers that can leads the firm towards failure in market (The 10 biggest challenges
businesses face today). In order to overcome the impact, Managers of firm should hire skilled
and efficient candidates so that their skills of problem solving or decision-making can be used
for overcome these challenges. This challenge is faced by Chrysler Automobiles which is a U.S
motor company. Company face the challenge of improper planning while they have designed,
advertised Chrysler PT Cruiser but didn't consider showrooms for delivering the car (Real-Life
Examples of Poor Project Planning, 2019). These all incidents happened due to improper
planning of management.
Second issue is related with insufficiency of finances because of which business
organisations can't buy the updated resources & machines that are necessary for surviving in
market. Without sufficient funds, business owners can't execute their work in proper manner. In
order to overcome these challenges, management have responsibility to allocate resources for
funds like financial institutions, banks, loan providers, crowd funding etc. For e.g. Peter Thiel
who is now known as successful entrepreneurs in the world but they have face issues of lack of
funds in starting of their business. Third issue is related with skilled workers because without
their efforts any organisation can't take growth or success in market. Talented and
knowledgeable staff members are the important requirement of business because it helps them in
converting ideas into realness. These staff members can provide their efforts effectively if they
have right kind of competencies and efficiencies. For overcoming these kind of issues, managers
or owners of organisation have to provide training to their employees so that good efforts can be
taken for improving productivity of the organisation (Sylvester, 2013).
Challenges faced by the businesses at national level
New organisations are formed on the basis of unique ideas which requires appropriate
time period for getting success in market. Various resources like human resources, updated
machinery, financial are required so as to performing business activities effectively. Apart from
that, if any business can't allocate or arrange these resources they have to face several problems
or issues that can influences adversely on the sustainability and profitability of firm. These issues
can also impact on the business organisations at international or national level. In current
scenario, high competition is prevailing in marketplace and for remain competitive in this
situation, these new ventures have to arrange all resources effectively so that any difficulty

wouldn't be faced by organisations. Due to lack of resources, these impacts can become national
and can provide negative impact on the functions and operations of firm.
According to Regan Castle, (2018) the first difficulty that can be faced by organisations
at national level is related with mismanagement of Revenue. It is the most cited challenge for
businesses because without money organisations can't survive in market. Main reason behind this
is the improper management of revenue, Because of improper management of revenues most of
the organisations are facing survival issues in market. This challenge is occurred because
management of organisation have not managed the expenditures properly due to which income is
less and expenditures are high. For e.g. an organisation have decided to launch products in
market for this they have spend a lots of money in its advertisements, designs, research and
development etc. but this product was failed in surviving in market due to which company have
faced unbearable loss. All these losses are faced by organisation because of improper
management of revenue. When organisation will not managed revenue properly then it leads the
organisation towards unsustainable condition in market. In order to overcome this challenge,
revenue management is essential because with the help of this managers or owners of
organisation will spend money according to budget which reduces business cost and increase
profitability of an organisation (Byford, 2012).
Another challenge is of Time. Mismanagement of time can leads the organisation
towards failure in market as if predetermined activities couldn't be executed in pre-determined
time will increases the possibility of losing competitive opportunities. Therefore, appropriate
management of time is required so that all activities should be performed in given time-frame.
Time management is very essential because it can create barriers for the organisation in gaining
competitiveness in market. Main reason behind mismanagement of time is lack of problem
solving and decision making of managers or owners due to which pre-determined tasks are not
completed in given time-frame that increases chances of loss for the organisation. For example,
facing difficulties in executing allocated work due to lack of skills and knowledge causes delay
in work which brings negative outcomes for the organisation. In order to overcome this
challenge, management should frame stages for completion of each and every activity through
developing WBS. With the help of WBS, management will divide the complex or difficult tasks
in smaller components which will be helpful in completion of task on time.

Third major challenge is related with Leadership. As the competition is rapidly
increasing in market then it is essential for the management to use effective leadership because
with the help of it, employees will feel encouraged and provide better efforts in completion of
given task which leads the organisation towards strong sustainability in market. Without good
leadership, employees feels dissatisfied and demotivated at workplace due to which their
efficiency and performance get impacted negatively that also impact on the brand image and
productivity of firm. For e.g. when Steve jobs who was the co-founder of iPad was died then it
was become a very serious situation for Apple as there was unavailability of skilled leaders due
to which firm have faced lots of challenges in maintaining the brand image of company (Apple's
four challenges, 2011).
Another challenge is related with loyalty of customers that can affect the sustainability
of new or old organisation because if organisation is not able in satisfying the needs of customers
effectively then it leads dissatisfaction among them due to which they will be move towards
another brands or the rivals of organisation. Loyalty of customers is very necessary for
organisation's sustainability because when customers stay loyal for an organisation then it will
leads the firm towards enhancing sales or profitability in market. For e.g. Porsche AG which is a
German Auto mobile Manufacturer have implemented cheated devices in their vehicles so as to
passing diesel emission test unethically. Because of this unethical activity, brand image, loyalty
and value of firm in market has been decreased which leads a huge loss for the company. For
this, company have paid around £460million as a fine to the government which was not good for
the brand image of firm. For resolving this issue, company have to regain the customer's
confidence which also leads the firm towards increase in loss because they have to withdraw
their vehicles from market in order to uninstall the cheat devices (Porsche fined £460m over
diesel emissions cheating, 2019).
Challenges faced by businesses at global level
Competition is rapidly increasing in Global business environment because multinational
organisations operating its business functions in more than one nation. These organisations faces
various challenges because they operates their functions at global level (Edkins, 2013). In order
to determining these challenges PESTLE analysis can be used because with the help of this,
several external environmental factors can be identified that can influence business operations at
international level. These elements are technological, social, environmental, political etc. that

should be determined by managers of organisations so that strategies for overcoming these
challenges can be made accordingly.
According to Ovidijus Jurevicius, (2013) Pestle analysis is a tool that is used by
organisations for determining challenges that can impact on business operations at international
level (Solve problems with PESTLE analysis, 2018).
Political challenges of nation can be determined through determining political elements
for example changes in government policies, tax duties, ruling parties etc. that can influence the
business operations in adverse or favourable manner. For overcoming these challenges,
management of organisations should determine modifications of these elements so that strategies
would be developed for reducing the adverse influence of these issues. These issues are also
related with political situations and atmosphere of nation in which organisation is performing its
functions. For e.g. managers of Tesco Plc. have identified the possibilities of making expansion
in market of India and for this they have developed strategies along with determining the issues
because of which company was able in entering into Indian Market. Through developing
strategies they have identified that partnership is the appropriate option for enter in India and
they have made partnership with TATA which is a big name in market of India. Due to
understanding these challenges and factors, organisation have made its good brand image in
Indian Market in a shorter period of time (Retail giant Tesco plans to enter India; partners Tata,
2013).
Economical challenges are related with economical elements such as exchange and
interest, growth in economy etc. that should be determined by managers of organisation in
decision-making and development of strategies. These issues can arise due to economic
situations of people and nation to whom goods and services are offered by organisation. For e.g.
At the time of recession in UK, Tesco which is a multinational retailer along with headquarters
in UK have faced economic challenges as citizens in UK are not financially capable to afford the
groceries from company. For overcoming this challenge, Management of Tesco have make
considerations on these challenges and make changes in the prices of their offerings so that
customers can easily purchase the products of firm. With the help of this strategic decision,
company have easily improve its brand image and sales figures of firm because their customers
were able in purchasing products of firm at less prices (Volkan, 2018).

Social challenges are associated with taste and preferences of customers, age
distribution, income distribution, etc. that can influences sales and profitability of organisation in
positive or negative manner. These elements should be considered by management of
organisation in marketing or designing of product so that products can be delivered in market on
time. For e.g. M&S is a Multinational firm along with based in UK and have faced social
challenges because of not providing products as per the requirements of customers. As a result of
it, customers feels embarrassed and dissatisfied from products and services of company. Main
reason behind these challenges is indecent design and higher prices of offerings that are offered
by organisation (Penttinen, 2013).
Technological challenge is related with encouragement of technology like adoption of
robotics at workplace, investment in research and development can influence the productivity
and profitability of firm in favourable or adverse manner. These factors should be considered by
management and upgrade their equipments as per the demand of market so that any difficulty
wouldn't be faced by company. For e.g. Tesco sell its 43% of total products through online
platforms like for attaining huge customer base they have make huge investments in up gradation
of technologies. Such as they have recruited highly experienced IT team so that each activity
should be updated on their website. They have also started the option of click and collect for
their customers so that a digitalised store experience can be provided to the customers (Tesco: A
digital transformation, 2016).
Environmental factors are connected with availability of raw materials, natural
climacterics and other environmental targets which are set by government of nation in order to
protect the natural resources. These elements should be determined by management so that
natural resources can be protected and organisation wouldn't face environmental challenges.
When organisation took effective steps for protecting the natural resources it will automatically
improve the brand image and customer base of firm. For e.g. IKEA is a multinational retailer of
furniture products which arranges its 50% of woods from sustainable foresters and 100 % of
cotton from farms that produces standard cotton and they have also implemented 700000 solar
panels in their outlets so as to saving energy, water or other natural resources which have build
its good brand image in front of its customers (10 global companies that are environmentally
friendly).

Legal challenges can also provide adverse impact on business operations of firm which
are related with discrimination, antitrust, discrimination and other laws which are made by
government of nation. These factors should be determined by the organisations so as to
eliminating the legal challenges. Most appropriate example for these challenges are taken of
Volkswagen who pays around 26 Billion dollar to government due to installing cheated devices
in their vehicles so as to passing diesel emission test. Due to this, company was found guilty in
not following of clean air act. As a result of it, company's brand image were reduced in front of
its customers.
Above discussed challenges should be considered by other organisations for smooth
functioning of operations. Through overcoming these challenges business organisations can
easily achieve their desired goals easily.
CONCLUSION
It has been summarised from the above report that several challenges like improper
management of resources, lack of financial resources are faced by organisations so that
innovative ideas can be turned into reality. Challenges related with mismanagement of time and
revenue can affect the profitability of firm at national level. Business organisations should
consider the challenges of political, economical or social while operating at global level so that
revenue issues can't be faced by the organisation.

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