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International Business Activities Report Add in library

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Question:

Differences in finance and banking systems between that country and home country and how these may affect your business and what countermeasures you may need.
Any difference in legal systems between that country and home country and how these may affect your business and what countermeasures you may need.
Important ethical matters of that chosen country and how they may affect your business operations.

 

 

Answer:

Introduction

This report has been prepared on the business strategies for carrying out the international business activities. There are many factors that need to be considered at the time of planning investment on a foreign country. The challenges involved in the method, and the steps that would have to be followed for analysing the cultural differences on a foreign land have to be evaluated. This will help in planning an effective investment scheme. Political differences and its implications have to be analysed as well. This will help in drafting an effective policy that will be useful for carrying out the plan for investment. The finance system and the banking methods have to be also evaluated as this can impact the performance of the investment plan. In this report, the power battery back-up company in Australia has proposed to carry out the investment plan in India. The investment proposal has been prepared after analysing the cultural challenges and availability of the useful resources for carrying out the business activities. The legal obligations has been also analysed as it is considered to be quite important for implementing the business plan. Apart from this, the ethical factors that can affect the business activities have been included in the report (Barnet, & Storey, 2001).

Task 1: Culture of India and how it can affect the business proposal

The economy of India has been recorded to be growing up tremendously. This is one of the prominent reasons, why developed and developing companies tend to negotiate and carry out business activities with India. The availability of affordable labour force, feasibility in the government policies, and others are considered to be favourable for carrying out investment plan in India. At the time of planning for the investment process in India, the management from the Australian country has to analyse the cultural factors. Failure to do so can directly affect the business plan that has been drafted by the authorities. Cultural factors are associated with the method that is followed by the people at the time of thinking, analysing factors, and carrying out negotiations with foreign delegates. The differences in the culture need to be understood as this will help in drafting the best policies that will help the management in carrying out the plans for investing. Cultural factors can impact the negotiation and this can happen regardless of the present of experienced and skilled staffs or executors (Amrani, Rowe,  and Maronnat, 2006). 

1. Set out the negotiation goals

The executors from Australia have to set forth the goals that are related to the business negotiation. The factor that needs to be discussed has to be clearly mentioned. This will help in overpowering the differences that can affect the contract formation. Signing of the deal is quite an important factor as this will provide precise details to both the parties. In India, the cultural practices are to enter into contractual agreement through which the business activities can be carried out.  In the agreement, the parties have to mention the nature of the tasks that is intended to be performed by both the parties. The differences and the expectations have to be negotiated as this will help in arriving at the mutual consent by both the parties. Through the process of negotiation, both the parties tend to know each other and plan to carry out the business activities (Fink, Neyer, and Kölling, 2006). 

2. Style

Styles are classified into two types which are formal and informal. Management professionals in India believe in entering into negotiation and carrying out the discussion through formal methods. This is indeed a part of the cultural factors, and it is seen at the time of entering into agreement. Apart from this, the negotiators believe in discussing the details of the contract and clarify any points that might sound quite confusing. This is done to ensure that the factors are cleared and there exists no ambiguity. The cultural factors also include the method that is chosen for communication. For instance, the professionals from India are quite formal and humble when it comes to dealing with the business contracts. The culture includes the method the individuals are addressed and the process that is followed for negotiating the factors that are related to contracts (Gebert, Boerner, and Kearney, 2006).

Such factors have to be closely evaluated as it can directly impact the plan for investing on a foreign country like India.

 

Task 2: Political and economy condition of the country

India is a liberalised country that has been progressing on a double phase. The country has many states and there are different languages spoken by the people. There are many political parties that have been ruling different parts of the country and states. The economy of the country is growing, due to availability of large number of labour force and other resources that are required for carrying out business on international and domestic level. In the year 1991, the political parties of the country proposed to introduce the economic liberalisation process. This was meant to generate more income and create job opportunities for the people. Through this process, the rules for the entrance of the foreign companies to carry out the business activities in the country were liberalised. This was done with the sole intention of attracting more countries to invest in India. Such a step improved the economic condition of the country. In order to retain the foreign companies the authorities of the country implemented liberalised rules that could make the process for registration quite simple and effective. The federal authorities had imposed several changes in terms of –

  • Reduction in the import tariffs
  • Deregulation of different markets, through which the foreign investors can be attracted towards making investment (CSRwire, 2007).
  • Reducing taxes for foreign investors who are planning to venture with the Indian company.
  • Regularise the rules for encouraging the foreign investors to choose India as the potential prospect.

Post liberalisation, the country has been successful in attracting the attention of many foreign investors. This is one of the reasons that have been attributed towards the economic development of the country. The ruling parties of the country had imposed rules for introducing reformation programs at the state level. This was done with an intention of encouraging the growth at the faster phase. The required steps were taken to reduce the poverty level and unemployment that had majorly affected the performance of the country. In order to attract the attention of the foreign investors into the country, the authorities had proposed the below mentioned changes –

  • Development of better roadways system, as this made transportation from one place to the other quite easy and feasible (European Alliance for CSR, 2008).
  • Improvement in the telecommunication industry
  • Infrastructure development
  • Analysis of different rules and policies that were imposed for carrying out the business activities.

The authorities of the country imposed rules for controlling the below mentioned factors –

  • Control on the labour laws, which was earlier termed to be quite complex
  • Check on the inflation rate as this had directly affected the performance of the country.
  • Reduction on the poverty level and controlling the corruption. Both the factors had negatively affected the performance of the economy of the country.
  • Improve the consensus amongst different political parties for improving the foreign trade.

The ruling parties of the country majorly concentrated on promoting the foreign trade, which was related to the economic development of the nation. The reasons for the economic crisis were analysed, and the right steps were taken to control the same. Such steps were taken to ensure that there was no negative impact on the process to attract the foreign investors. The process for investing in India was made simple. This was done to attract the attention of the investors from different parts of the globe (Fink, Neyer, and Kölling, 2006).

Such factors had to be analysed, as the company had proposed to invest in India. Awareness of the rules and policies would simplify the process, which is required for carrying out the business activities.

Task 3: Nature of the business system

The company has been manufacturing high quality power battery system, which is used in the electricity generation industry. The prime motive of the company is to invest a plant in India, and manufacture the products at the lowest possible price. Batteries manufactured in India, would be exported to foreign countries that demand for such products. Such a step has been proposed after analysing the below mentioned factors –

  • Availability of the labour market
  • Resources like knowledge, transportation, and other resources
  • Feasibility for setting up of new operational system in the country (Gebert, Boerner, and Kearney, 2006).

The management of the Australian company analyse the challenges that are involved with the setup of new infrastructure, leadership style required, and HRM policies that will help in carrying out the business activities on a foreign land. Such factors have to be essentially evaluated as this will help in analysing the challenges and taking the right steps through which the plan can be executed.

 

In this process, the management has proposed to analyse the below mentioned factors as this can directly affect the performance of the company. Some of the important points are –

  • Leadership - The business proposal has been to be entering into partnership through which the challenges related to the operational activities can be easily overpowered. In this process, the relevance of the leadership style that can positively affect the performance of the company has been analysed. The company has proposed to introduce participative style of leadership. This has been done with an intention of motivating the tem of staffs to perform better at the workplace. In this process, the management will ensure to include the opinion of the staffs and employees at the time of making decisions. This will help in reducing the risks of project failure, as the staffs have better knowledge about the shop-floor. Apart from this, the staffs would feel highly motivated as the opinion provided is considered by the management. Through this method, the company intends to increase the quality of the production activities, and analyse the changes that is required for implementing the changes. This is one of the best methods through which the staffs and their views can be analysed at the time of making important decision (KNIGht and Kevin, 2009).
  • HRM policies - The policies related to the human resource management system has been drafted and implemented in the right manner. This has been done with an intention of catering the needs of the company and ensure that the best staffs re recruited for carrying out the operational activities within the organization. Policies are drafted with an intention of improving the production activities of the company. The management proposes to adopt the best practices that would reduce the cultural differences that exist between India and Australia. Apart from this, an attempt is also made to introduce changes through which the best staffs can be recruited and retained by the company. The management also prospector introduces the best policies through which the staffs would be motivated and encouraged to perform better at the workplace. This is quite an important factor, as the management can then handle the challenges related to the production activities in the best possible manner. Through an effective communication method, the management intends to share the right knowledge, opportunities, and skills that are required for carrying out the operational activities. Through such a method, the management also proposes to increase the commitment that is necessary for improving the performance ( Kumar, 2011).  
  • Change management principles - The Company has proposed changes with the management principles. This will increase the quality of the production activities, and ensure that the best results are enjoyed by the management. The management has proposed to implement the changes after analysing the cultural values and other factors that can directly impact the performance of the business. The cultural practices and beliefs of the people would be analysed and the corrective steps would be taken to implement the required changes. Such a process is required for implementing new or innovative strategies for production activities. The steps that would be followed have to be devalued and communicated with different members of the company. This will help in improving the quality of the services that has been proposed to be rendered to the clients (Jung, Yammarino, and Lee, 2009).

Such factors have to be evaluated and the right option has to be selected by the management. This will help in reducing the differences that can directly affect the performance of the company. The strategies have to be developed after considering the challenges that can affect the business activities.

Task 4: Banking and finance system

Reserve Bank of India is the apex bank that controls the monetary function of the country. The policy makers draft rules for regularising the funds, which also includes foreign investments. There are many nationalised banks that functions as per the rules that has been drafted by the RBI of the country. In this process, the rules are drafted related to the interest rates and other factors that can directly impact the savings for commercial and residential purposes. The investment process of international companies are drafted and implemented by the RBI. In this process, there are many factors that have been taken into consideration. It includes the foreign exchange rates, stability of the economy of the globe, and other factors. The rules drafted by the RBI for foreign investors are communicated to the nationalise banks. The authorities are instructed to follow the rules that have been implemented by the bank. In order to attract foreign investors into the country, the authorities have simplified the rules that have been drafted for increasing the investment process. Any change that has been implemented by the authorities of the RBI is communicated with the nationalized banks. This is done to ensure that the task is carried out as it has been decided (Lee et al., 2009).

In Australia, the apex bank is the Reserve bank of Australia. It was formed in the year 1960 and since then has been performing important tasks that could contribute towards the development of the country. The bank has been vested with the responsibility of issuing notes and also renders useful services to the Government of the country. Payment system board is one of the prime tasks that have been performed by the members. The bank has been vested with the task of controlling the monetary, banking policies, and others that are considered to be necessary for the execution of different tasks within the country.

In this case, it is necessary to analyse the changes that has been implemented by the authorities of the country. This will reduce any sort of complex situation that can directly affect the business performance.

 

Task 5: Differences in the law between Australia and India

There exists a huge difference between the rules and policies that has been followed in India and Australia. The authorities from both the countries ensure to introduce the rules that will secure the people and the companies that intend to carry out the business activities in the respective companies. In India, it is essential to ensure to ensure into legal contract for carrying out business activities between parties from different countries. In this process, the foreign investing party needs to get legal authority from the concerned bank or RBI for carrying out the business performance. In other words, the process for fund remittance and tax allowances has to be informed to the RBI. This can be done though the notification process. Such a step is followed to ensure that the rules are effectively followed by the companies. Also, the strategies related to the implementation of the policies for foreign investment is done and followed in the right manner. The deviations in this case have to be analysed and the corrective steps is implied by the RBI. The federal authorities have the right to cancel the licence of the foreign country, in case the tasks are not performed in the right manner. This is done with an intention of controlling the illegal practices that can affect the country (Lee, 2008).

In the similar manner, the authorities from Australia ensure that the right process is followed by the companies intending to venture into the foreign market. This is done with an intention of minimising the illegal practices that can affect the economic development of both the countries. The rules are reviewed and the corrective actions are implemented with an intention of minimising the losses that can affect the performance.

In order to minimise the effect it is essential to adopt and implement the right steps through which the information can be shared between different parties. This will also help in drafting the best policy that will cater the needs of the company (Lindgreen et al., 2009).  

Task 6:  Ethical factors

The ethical factors play an important role at the time of carrying out the business performance on a foreign country. In this process, it is necessary to analyse, the values of ethical practices that is followed in India. The authorities of the country believe in sharing the right information with the clients and ensure to abide by the rules that have been framed by the authorities. This is done with intent of building long term relationship with the clients and the stakeholders. In this process, the rules are analysed and corrective steps are taken to ensure that the policy is followed in the right manner. In the ethical factor, the management of the company ensure that the rules drafted by the authorities of the country are followed in the right manner. This will help in implementing the changes through which the essential changes can be implemented for carrying out the business performance. The rules associated with the ethical factors are communicated with the members. This is done with an intention of improving the performance for the company.

Conclusion

There are different factors that need to be considered at the time of carrying out the business activities on a foreign land. The challenges have to be analysed and the corrective steps needs to be analysed. This will help in improving the performance and achieving the set target in the bets possible manner. The challenges involved in the process are analysed, and corrective steps are implemented. This is done with an intention of increasing the quality of performance and achieving the target that has been framed by the authorities.

 

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CSRwire, 2007. Landmark Study Finds Global Spread of Corporate Social Responsibility. Retrieved December 23, 2008, from 

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Fink G, Neyer A. and Kölling M, 2006. Understanding cross-cultural management interaction. International Studies of Management & Organization 2006;36(4), 38-60.

Gebert D, Boerner S, and Kearney E, 2006. Cross-functionality and innovation in new product development teams: A dilemmatic structure and its consequences for the management of diversity. European Journal of Work & Organizational Psychology 2006;15(4), 431- 458.

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