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Domestic And International Contextual Factors

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Discuss about the Domestic and International Contextual Factors Affecting Business Structures and Strategy.





According to Paul et al (2017), both domestic and international factors dictate organizational structure, strategies, culture, and image. Apparently, organizational structure, culture and image fundamentally manipulate the managerial portfolio, decision-making, work-place regulations, as well as setting the competitive advantage edge. For instance, external factors such as technology, political factors, economy, government laws and regulation, international trade laws as well as natural calamities greatly affect business operations. This paper will highlight and analyses the major managerial and domestic, as well as the international factors, which impact the global business conceptual framework.

The Global Business Arena

According to Roper & Hodari (2015), technological know-how, government regulations and the natural global changes such as the clmiate, dominate the competitiveness, organizational performance and the ease of doing busines. For instance, the tehnological outburts has led to dyamnic competitve market in both marketing and managerial strategies. This has in turn impacted the organizational strctural design, competitive advanatge as well as the workplace productivity portfolio change. Despite the extra updating and in-line costs the technology drags into the business, its results into the business world remains outstanding (Zhang, Zhao, & Ge, 2016). For updated and a proper technology system, firms have to hire expertise, skilled and vibrant personnel to keep the organizational performance, supply chain portfolio, as well as the marketing mix strategies in line with the competition edge.

Moreover, the government participation and impact into the business world cannot be ignored. According to Zhang et al (2016), the ease of doing business culminates from the governmental regulations, policies and signed treaties; all which govern the taxes and policies on the international trade arena. For instance, the increase of import tax, export taxes, and setting the rate of interest rate through fiscal policy greatly affects business operations in any country. According to the previous empirical studies, government interventions into the business policies leads to immediate effects on organizational productivity, the ease of running business operations as well as dictates the completion edge in the country’s economy. To successfully survive the fiscal policy changes, organizations ought to structure a stable and efficient reliable risk mitigation system, establish a proper outsourcing strategy as well as dully adhere to business regulations in respect to the government business compliance policies.

Political stability has its stake in setting the business operations, which dictates the organizational performance, production and growth portfolios. According to Hitt and Xu (2016), a well-table political regime and leadership in a country favors customer’s base index as well as creating growth and expansion in businesses. In fact, the political and leadership regimes manipulate organizational growth, which consequently dictates the economic state of a country. Apparently, the economy dictates the market conditions, which either enhance or slow the market target for investors. For instance, international trade laws like European laws must be adhered to help in achieving the business strategy. However, disagreements in the international treaties may culminate to business drawbacks such as the Brexit, which stirred many controversies globally (Hitt & Xu 2016).


Internal Business Contextual Factors

According Hitt and Xu (2016), internal business factors are manageable, controllable and distortable by the organizational management.  This means that the business can contain them and therefore it is its responsibility to solve emerging issues that may affect the organization. In fact, every business internal affair chronicles around employees, management, and the products/services offered. As assets, employee’s help to propel the organizational goals and objectives. Ultimately, the managerial framework dictates the employee roles, performance appraisals, employee voice, organizational structure and culture, responsibilities, communication channel, chain of command, and the production/operational processes. Ultimately, organizational structure and culture breeds talents through teamwork, recognizes employees both through intrinsic and extrinsic factors, which highly controls the employees performance (Davies, Tikoo, Ding, & Salama, 2016). A business that has invested well and have a pool of sources of income have greater chances of doing well compared to other struggling businesses. Finance is a vital aspect of all businesses because without finances you cannot accomplish anything. Organizational and operational are part of operational and administrative processes (Daniels & H., 2014).

To improve the business structure and strategy, it is important to keep up with competitors through balancing such and deployment of both internal and external factors. Marketing can be a form of innovation, promotional initiatives in training of staffs, welfare, and marketing plan. According to previous empirical study by Danilels (2014), accepting new technology is the only way to keep up with technological changes. Lack of innovation can lead to a serious risk to a thriving business. Innovation will not make a company boring. According Paul, Parthasarathy, & Gupta (2017), company’s culture and image are also domestic factors affecting the business. Good corporate image will attract customers because they will feel good to be associated with it. The culture of an organization also determines how employees relate with others and also how business activities are performed.  A business with good culture will be emulated by other employees, and this will help them perform better in their duties.


Business success solely depends on the both domestic and International factors, which dictate the business structures, organizational structure, and strategies. These factors have a great influence based on their importance and impacts into the management channels as well as the competitive external factors. For instance, as explained under the internal laws, and political climate, the recent changes of Brexit, had direct and indirect business impacts to the EU member states. But other factors such as technology, managerial roles within the organization, national laws affect the business strategies and structures.



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Daniels, J. (2014). International Business: Environments and Operations. Pearson.

Brock, D (2013). Management and International Review. Springer Science & Business Media,.

Davies, M. A., Tikoo, S., Ding, J. L., & Salama, M. (2016). Motives underlying the choice of business majors: A multi-country comparison. International Journal of Management Education. , 14 (1), 50-61.

Hitt, M. A., & Ireland, R. D. (2014). Strategic Management: Concepts and Cases: Competitiveness and Globalization. Cengage Learning.

Hitt, S & Xu, K. (2016). International strategy: From local to global and beyond. The World of Global Business 1965-2015, Journal of World Business , 51 (1), 58-73.

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Zhang, Y., Zhao, W., & Ge, J. (2016). Institutional duality and political strategies of foreign-invested firms in an emerging economy. Journal of World Business. , 51 (3), 451-462.

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