International Business Report: FDI, HR, ESG and Leadership

This report analyzes the international business expansion of Retail International, a company based in Malta, planning to expand into Australia. It begins with an executive summary defining international business and outlining the report's structure. The report then delves into a critical analysis of Foreign Direct Investment (FDI) options, recommending horizontal FDI. It evaluates operational considerations for the company's products, including market size, alignment with core expertise, working capital needs, customer response, and technology incorporation. The report also assesses human resource policies, covering recruitment, employment contracts, code of conduct, and leave policies. Furthermore, it examines ESG (Environmental, Social, and Governance) and leadership considerations, recommending the use of an autocratic leadership style. The report concludes by summarizing the key findings and recommendations for successful international expansion.

INTERNATIONAL
BUSINESS

Executive Summary
International business is defined as operating the business in foreign market with the aim of
expanding the business. There are various types of FDI options for the company out of which,
they are suggested to use horizontal options for investing in Australia. Moreover, there are
certain operational requirement of the business which need to be follow by them so that they can
operate and expand its business in the international market. HR polices helps the company to
establish the proper working in Australia and ensures positive working culture in tis foreign
company.

Table of Content
INTRODUCTION...........................................................................................................................3
Critical Analysis..............................................................................................................................3
Evaluate the FDI options that would be open to the firm............................................................3
Evaluate the operational considerations for the company’s products or services.......................5
Evaluate what human resource polices available to the company...............................................6
Evaluate the ESG and leadership considerations.........................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
International business is defined as the trade of goods and services, technology, capital and
knowledge across the national borders at global or transnational scale. This perform the cross
cultural-border transactions of products and services among two or more countries. When an
organisation is expanding its business so there are various factors which is impacting the
business such as geographical conditions, cultural and social factors, political and legal
considerations and economic environment(Kumpf, 2020). In this respective report, Retail
International is the chosen business organisation, it is the headquartered and established in Malta,
Valletta. They are basically generating the average revenue of $64.6M and operating its business
with almost 328 employees in the market. Now, they are planning to expand its business in
Australia. So various FDI options will be analysed for he firms and also elevate the operational
consideration of the company. Furthermore, this report will analyse the human resource policies
which are available to the company and also consider the ESG and leadership consideration as
well.
Critical Analysis
Evaluate the FDI options that would be open to the firm.
Foreign direct investment takes place when the company is controlling in a business entity in
another nation. As FDI directly involved with the day-to-day task in other nations. It is basically
the investment from an organisation in one country into a business or corporation in another
country(Sharma and et. al., 2019). There are various FDI operations which are open to the Retail
International are given below:

Figure 1:Foreign Direct Investment (FDI),2022
Horizontal FDI: It is a type of FDI option in which a business expands its domestic
operations to a foreign country. In this case, a respective business operates its activities similar as
before but in different country. For example, Retail International is operating and expanding its
business to Australia, it is known as horizontal foreign direct investment. In this, manufacturer of
home country operates its business directly to the foreign country as there is no suppliers of their
services.
Vertical FDI: this is the another option by which an organisation can expand its business
in new market. In this a business expands its business in foreign country by moving to a various
level of supply chain in the market. Or can say that, a firm is operating various business
operations in foreign market but such activity is still related to the main business. For example,
Retail International can purchase a warehouse or store in order to operate or expand its business
in Australia. This simply means that all such task is related to the company as they are not

operating their business in the respective market. In such way retail International can expand its
business in Australia with the help of vertical FDI.
Conglomerate FDI: It is business which acquire an unrelated business in the international
market. This is the uncommon situation as it needed overcoming two barriers to entry: entering a
foreign country and entering a new industry or the market(Harlaftis, 2019). In context to Retail
International, they are focusing on having the overall growth of the business which is necessary
for the business as this helps in having the higher growth and success in the target market.
Platform FDI: A business which expands its business into foreign country but the output
from the foreign operations is being exported from the third party. In context to Retail
International, they are planning to have the expand its business in Australia but they can
outsource the raw material from the third party in order to operates its business in the market.
It is recommended to the Retail international to use the horizontal option for foreign direct
investment by which they can directly operate their business in the foreign market without any
interference of supply chain for another country.
Evaluate the operational considerations for the company’s products or services.
As entrepreneurs, it is vital to overlook the growth of the business. Yet, before the business
expands, there are various areas that the owner needs to take into consideration so that they can
effectively expand its business in foreign country. In context to retail international, they are
expanding its business from Malta to Australia. Thus, there are various operational consideration
for the company’s products or services are given below:
 Understand the size of the market: It is vital for the business to analyse every route
access to customers which includes the social and traditional channels in the market.
More exposure is equals to more demand and when the profits has been achieved, it leads
to drives sustainable growth of Retail International.
 Consider Alignment with core expertise: It is vital to analyse whether the new market
segment can be easily operated by the company or not. This is the good practice in order
to identify what makes the unique as firm and analyse the target market for the same.
 Analyse the working capital needs: For every business, working capital is essential for
hiring, marketing, research, lobbying and every tasks of the business are based on the

working capital. Thus. It is vital for Retail International to focuses on its working capital
to expand its business in Australia.
 Determine the potential customer response: Digital offers the opportunity to the cost
effective way in order to test market. Before scaling, it is vital to give the advert link in
the target market from the chosen county and analyse how customer are responding to the
given products and services or the brand(Cherunilam, 2020).
 Incorporate with the new technology: Now a day, innovation and the use of technology
is the vital factors which is retaining the company in the competitive market. Thus, it is
vital for Retail International to focuses on newest technology and eliminate the obsolete
so that they can effectively be the leading company in Australia after expansion.
It is recommended to Retail International to focuses on the above discussed operational
requirement of the business so that they can effectively expand their business in Australia.
This helps them to ensure the systematic approach in the target market.
Evaluate what human resource polices available to the company.
Human resource polices are defined as the formal rules and guidelines that the businesses
use during hiring, training, assessing and rewarding the deserving candidate within the
organisation. When the Retail International is expanding its business in Australia, there are
various human resource polices which needs to be considered by them which are given below:
 Recruitment policy: It is the policy which is considered during the hiring of the
employees, Human resource manager focuses on hiring the potential candidate who is
matching with the eligibility criteria of the recruitment. In context to the Retail
International, they use the external source of recruitment in order to have the talents from
different location and can easily work in the international boundaries.
 Employment contract: In Australian, it is important for the candidate to have the proper
documentation of the employees. The employment contract is the umbrella covering a list
of various HR SOPs and agreements. This helps the Retail International to have the
effective working of the them in the foreign market. With the help of employment
contract, they can specify the job profile, CTC, working terms and various related
concerns to the employment(Chen, Shaheer and Li, 2019).
 Code of conduct: This is the policy which consist of vision, mission and ethics of the
company. These are being created to inform employees about the related polices and the

behaviour which must be established within the organisation. There are company’s rules
which needs to adhere by the employees. Furthermore, this includes the equal rights,
conflict of interest, media policy and effective working environment to the employees.
 Leave Policy: As per the requirement, every organisation must have the good leave
policy in order to provide the clear picture of total leave which can be entitled to an
employee. In context to Retail International, they are offering proper leaves to their
employees so that they can ensures the effective working environment of the employees.
It is recommended to the Retail International to follow all the human resource policy and
train and motivate their employees according to the polices. This helps in effective working
and establishing proper code of conduct within the organisation while expanding it business
in Australia.
Evaluate the ESG and leadership considerations.
Environmental, social and governance(ESG) are the set of standards for the behaviour of the
company which is used by socially conscious investors to analyse the potential investments. In
this, environmental criteria analyse how a company safeguard the entire environment that
includes corporate polices, analysing climate change. Social criteria explore how it manage the
relationship with its employees, customer, suppliers and communities in which they are
operating. Further the governance deals with the leadership style, executive ay, internal control,
shareholder rights and audits of the company(Alsaad and Taamneh, 2019). This helps the
company to have the better working with the proper follow-up of standard operating procedures
and policies of the company. In context to Retail International, they can use ESG criteria in
order to expand its business and complying with all the related factors by which they operate
their business in Australia in an appropriate manner.
Leadership is defined as the process of influence the employees to work more for attaining
the pre-define goal of the company. When taking the consideration of Retail international, they
are expanding their business in Australia, they are recommended to use the autocratic leadership
style by which all the given work can be accomplished with proper code of conduct. This helps
them to establish the centralized working culture within the organisation and they are sustaining
in the market of Australia for longer period of time.

CONCLUSION
From the above report, it is concluded that There are various factors which needs to
considered by the company while expanding its business in international market. There are
various options for FDI out of which company is recommended to use the horizontal method so
that they can directly operate their business in the Australia. Moreover, the business must use the
operational considerations of the business so that they can effective operate their business in the
international market. There are various human resource polices which are being followed by the
company in order to establish the effective code of conduct within the organisation. ESG is the
criteria which helped the companies to ensures the coordination with the environmental, social
and governance aspects of the business and the external environment. The recommended
leadership style of autocratic as they help them to establish the centralised working within th
company while expanding its business.

REFERENCES
Books and Journals
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Amankwah-Amoah, J., Khan, Z. and Osabutey, E.L., 2021. COVID-19 and business renewal:
Lessons and insights from the global airline industry. International Business
Review, 30(3), p.101802.
Chen, L., Shaheer, N., Yi, J. and Li, S., 2019. The international penetration of ibusiness firms:
Network effects, liabilities of outsidership and country clout. Journal of International
Business Studies, 50(2), pp.172-192.
Cherunilam, F., 2020. International business. PHI Learning Pvt. Ltd..
Harlaftis, G., 2019. Creating Global Shipping: Aristotle Onassis, the Vagliano Brothers, and the
Business of Shipping, C. 1820–1970. Cambridge University Press.
Kumpf, I.A., 2020. Registration deadlines Master Thesis International Business (Doctoral
dissertation, UNIVERSITY OF APPLIED SCIENCES).
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buyer–supplier network and its impact on international business performance. Journal
of International Business Studies, 50(3), pp.365-392.
Srivastava, S., Singh, S. and Dhir, S., 2020. Culture and International business research: A
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