The IMF, World Bank, WTO, and Other Participants of International Business - Case Study Example

Module International Business INTRODUCTION International business typically characterizes operations that have to do with the performance of global trade practices or the exchange of goods and services between people or groups that hail from different nations as well as geographical regions. To oversee these operations, there are regulations created by global organizations such as the World Trade Organization, International Monetary Fund, and the United Nations which are meant to ensure that no nations use illegal means when trading with business partners. The United Nations The United Nations was an organization that was created to preserve international peace while also safeguarding the interests of all of the world’s citizens. The United Nations also has the responsibility of providing a basis for the formation of international law which is meant to promote social as well as economic progress in all its member nations. At present, 192 nations from all over the world are member states of the United Nations. The United Nations regulates international business operations through branches such as the Economic and Social Council (ECOSOC) (Peet 39). The Economic and Social Council is tasked with helping the UN’s general assembly to endorse social as well as financial cooperation in the global scene. This branch has 54 elected member countries, which all serve three-year terms. ECOSOC regularly meets with the heads of other international finance organizations such as the International Monetary Fund and the World Trade Organization with the objective of gathering new information, making financially sound recommendations to its member states, and dispensing with advice. This branch of the United Nations also avails advice concerning policy coherence and the coordination of overlapping operations among the United Nation’s auxiliary bodies (Saner and Guilherme 962). The United Nations organization is at present mostly concerned with overseeing matters concerning the economic development initiatives in various nations, matters concerning the health of citizens all over the world, and the status of refugees in different places. The International Monetary Fund The International Monetary Fund is responsible for monitoring and surveying financial developments before it makes the decision to give loans to mainly developing nations in order to assist in improving their economies. This is beneficial because it helps in advancing global financial stability while also enabling the development of trade between different nations. The IMF also makes it possible for a multilateral structure of payments to be formed for all present transactions. The existence of the IMF is funded by its 183 member nations which are expected to make contributions upon joining the organization. Since 1950, the IMF’s resources have increased from $50 billion to $300 after 2011 (Peet 31). The World Trade Center The World Trade Organization was officially created in1995 for the purpose of facilitating easier operations in the trade industry scene. In addition, the WTO also aimed at ensuring that developing as well as developed nations profited from fair trading practices in the international scene. It is also the responsibility of the World Trade Organization to intervene when member nations experience difficulties and conflicts between them. Whenever multi-lateral contracts are entered into by different nations, it is the World Trade Organization that acts in the capacity of administrator and witness. In the event that one of the partners is forced to deal with unfair business practices, it is the employees of the World Trade Organization who are expected to make investigations so as to ascertain the crux of the problem. The WTO has member nations that are more favored than others. The favored nations can profit from increased access to discounted tariffs, reduced regulations, and fewer trade barriers. The World Trade Organization is mostly made up of developing nations. Its most senior committee which is tasked with decision-making is the ‘Ministerial Conference’. The World Trade Organization and the International Monetary Fund usually cooperate in finding ways of ensuring better coherence in factors concerning global monetary policymaking (Dooley, Folkerts-Landau and Garber). Soon after the creation of the World Trade Organization, an agreement was settled between the two international establishments. Officials in the IMF organization occupy observer status in a number of WTO-affiliated bodies, and are regularly allowed to actively take part in conventions of some World Trade Organization working groups (Saner and Guilherme 973). It is not unusual for trade policy matters to feature in IMF-supported programs. There are more binding arrangements between the two international financial establishments. For example, the World Trade Organization is required to confer with the IMF when handling matters concerning financial reserves, foreign exchange arrangements, and balance of payments. For example, in such agreements, national governments are permitted to implement trade restrictions if they are plagued with hardships in the balance of payments (Dooley, Folkerts-Landau and Garber). The committee of Balance of Payments, which functions under the World Trade Organization, bases its evaluations of limitations in on the IMF’s interpretation of a member nation’s situation concerning the balance of payments. It is an established fact that there are common Informal consultations that take place between the employees or personnel of the World Trade Center and the International Monetary Fund. Such consultations are usually concerned with subjects such as international economic developments, and trade policy. For example, it is quite common for senior personnel from the International Monetary Fund to meet with their WTO counterparts for the purpose of attending discussions on matters of mutual interest. The IMF, the World Bank, and the WTO have frequent meetings to assist in the exchange of different perceptions among scholars from the civil society and academic disciplines. Why it is Important to Study International Business. There are different reasons why it is important for students to study the significance of international business operations. In the present day’s globalized economy, the function of trade has completely altered the way the world operates. In the past, nations’ boundaries determined the trade operations that most community entrepreneurs would participate in. In the increasingly globalized economy, though, trade barriers such as geographic boundaries of nations, or even of regions, have been forced to give way to the demands of the global economy. It is likely that the reality of open trade will keep challenging even those boundaries that still exist so that, in the final analysis, the metaphor of ‘a global village’’ will actually become a reality. Students, as well as business entrepreneurs, should invest in learning more about international business operations in order to be able to understand all past as well as developing business trends in the global economy. For example, the emergence of economic boundaries in many regions of the world has resulted from the spread of electronic communication methods even in poor countries (Dooley, Folkerts-Landau and Garber). This means that business people in nations all over the world are able to learn about the conditions of the market at speeds that did not exist in past generations. The method of electronic communication makes it possible for business people to benefit from instantaneous knowledge transfer. This means that entrepreneurs can benefit from information about sales trends, manufacturing levels, marketing gimmicks, and even the possibility of outsourcing some of the business functions the moment that it reaches elements of the mass media. This greatly benefits business entrepreneurs because they do not have to invest in courses or programs in which they can be taught about such advancements. There is also the fact that globalization, due to its international influence, facilitates the development of supply chains, considerable distribution networks, and transportation centers which make it easier for goods from any part of the world to be moved. Such broad networks will inevitably result in fewer or less complicated currency problems, and the increased servicing of clients from all parts of the world. Another reason why it is important to learn about international business processes is that it results in reduced barriers- a phenomenon that can be of great benefit to entrepreneurs (Woods 28). In general, it is likely that business students as well as personnel will be affected by international corporate or trade influences. This is because globalization has not left any nation untouched. To be able to compete comfortably with competitors from other more developed as well as more established business operators, the entrepreneurs in different nations have to comprehend the various intricacies of conducting business operations with people from communities that are across their national borders. This involves taking into consideration factors such as the language to be used, the culture of business partners, the political structures in other nations, the socio-economic realities in foreign nations, and the business partners’ corporate practices. In the present era of globalization, it is essential for business officials to conduct in-depth research into one’s business partner in order to realize success in the global marketplace. Another reason why it is important to learn about international business operations and organizations is to gain an understanding of the most important factors in the global business scene. For students today to be considered as experts in subjects such as law, accounting, information technology, marketing, and healthcare, they have to show that they critically understand the factors that regulate international business processes. Studying issues concerning international business helps students to be able to take advantage of assorted business opportunities in different parts of the world. Learning about international business operations also helps students to be able to qualify for assorted career paths in different fields. For example, an individual who learns about international business operations has the opportunity to be able to become a travel director, cultural adviser, diplomatic associate, community developer, or even import compliance specialist. CONCLUSION Essentially, these three organizations- the World Trade Organization, the United Nations, and the International Monetary Fund depend on each other when conducting or supervising international business operations. For example, the World Trade Organization mainly functions by creating regulations that support international trade practices between different nations. The WTO accomplishes this by supporting the formation of global trade contracts and agreements, while also seeking to solve any disputes between nations that involve terms of trade. The IMF works in league with a different branch, the World Branch, which is tasked with supplying nations with low interest loans, and grants which mainly go into improving the infrastructure, and social conditions in developing nations. It can also be claimed that the International Monetary Fund is a significant part of the United Nations. Works Cited Dooley, Michael, David Folkerts-Landau and Peter Garber. “Bretton Woods II Still Defines the International Monetary System.” NBER Working Paper 14731, 2009. Print. Peet, Richard. Unholy Trinity: The IMF, World Bank and WTO, Second Edition. New York: Zed Books, 2009. Print. Saner, Raymond, and Ricardo Guilherme. “The International Monetary Fund’s Influence on Trade Policies of Low-Income Countries: A Valid Undertaking?” Journal of World Trade 41.5 (2007): 931-981. Print. Woods, Ngaire. The Globalizers: The IMF, the World Bank, and Their Borrowers (Cornell Studies in Money). New York: Cornell University Press, 2007. Print. Read More