ESSAY : Global Interaction

Increased global interaction has been promoted by advanced technology in communication, ideas and culture, which largely encourages and facilitates international trading. Businesses go abroad in seeking better financial incentives, stronger networks, and markets of opportunities. But at the same time, the complexities in terms or risks involved in international operation are more than domestic firms. Respond to the following in a minimum of 275 words:

Discuss how to manage cultural risks and other factors related to a foreign operation of a multinational business. Is cultural, business, or political risk more challenging to overcome than one of the others? Why or why not? How should American standards influence multinational businesses?

SAMPLE SOLUTION

Global organizations face a wide range of challenges. When managing a global company, it is vital to understand and master the art of risk minimization. The best approach for managing risk in a global entity is reducing risk at the source instead of avoiding risk. One, the multinational organization should examine both the political and business environment to develop and implement ways for the business to thrive by obtaining a risk management cover. On the other hand, global organizations can manage risk and other aspects related to foreign business activity by picking the best business partner. This means that MNCs should collaborate with partners with experience and those who have a clear understanding of the host country culture and business operations.
Political, business, cultural, currency or any other type of risk affect a business in different ways. In that case, the most crucial thing is for a multinational organization to understand how to respond and mitigate these risks. Companies will end up losing a considerable amount of investment if they are not prepared for such adverse situations…