International Management - Essay Example

So what challenges do international firms face in a global marketplace? What is the nature, and role of INRP that impact international businesses? This essay explores the diverse elements of INRP in terms of the political, economic, cultural, ethical, and social environment prevalent in different countries; and analyses their impact on businesses with examples drawn from different countries, and trade. This paper concludes with a concise summary of the emerging global challenges to international trade, and business imperatives to overcome them.

Globalization has wide encompassing connotations. Whilst the economic integration of businesses has rapidly grown, the political, social, and cultural interfaces across the borders continue to pose challenges to international trade. With maturing economy, institutional transformations become inevitable. In the nascent or emerging phases, economies are often unpredictable and volatile (Meyer, 2001, pp. 357-367). Managing investment and capital in such a market without an understanding of the economic regulations, and trade practices, could turn nightmarish.

Scott (2002) categorized the governing institutions as “regulatory, normative, and cultural-cognitive.” Formal institutions are often characterized by rules, policies, and enforcement laws. Informal institutions on the other hand, are woven around norms, values, and mental models peculiar to a particular geographic region, or country (North, 1994). Such classifications are often useful in international business management for purposes of market analyses. Five decades ago, Hall (1960, pp. 87-96) enunciated five factors that affect bonding of global businesses, which are relevant even in modern day times.

Brief interpretations from Hall’s article in the Harvard Business review are summarised below:- Nuances of time: Time has its own silent interpretations across national boundaries. For instance, a delay