Domestic Production
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Domestic production and exports are no longer enough to ensure that a business remains on the competitive edge or its success since the world is always changing in order to support globalization. With the changes in globalization comes new quality standards created to ensure that production for jobs which have been outsourced to a third-party company will still remain to have the same quality in their products; that an abundance of parts can be outsourced and assembly completed allowing for increased productivity, cost reduction, all the while maintaining high standard and good quality. Diversity can cause culture issues for a business even though value has been added on their services and products. Companies can actually benefit from accept diversity and the many different cultures. By doing this, a company can become successful in global operations.
There are some potential issues due to global expansion to the host foreign country such as legal risks, political risks, and economic risks. From a legal standpoint, if a country appears to be at high risk, a company may be hesitant in wanting to create an endeavors or long-term contracts. There are political risks such as riots, demonstrations, and social conflict which cause huge changes in a business environment, which can affect the overall bottom line concerning profit. Negligence by the government can cause economic risks such as social conflict (AIU Online, 2013). Other issues are ethical and cultural issues. Some of these issues are child labor, environmental issues, and bribery. What may be quite normal for the U.S. may not be normal for another country; it may not be accepted and could possibly be illegal. Also, changes in international agreements, conduct codes, and international laws can cause ethical issues (Heizer & Render, 2012).
When dealing with multinational, international, and global organizations, there are going to be diversity issues and cultural barriers to contend with. It is important for a business going global to understand the policies and procedures that each country has for a guide in business matters. There are some issues that a business needs to keep in mind. One issue is social chain of command. One example is that some cultures show women to be secondary to men therefore not allowing women and men to intermingle within the workplace. Every culture views personal space differently. For example, In North America, a persons personal space is also known as there comfort zone which can be anywhere from 2-5 feet but this is different from culture to culture (International Business, 2011).
There is also the issue with language barriers. Some countries have multiple languages as their official language. One example is that Canada has French and English as their official language. In languages, there are also diverse dialects. It is important to learn all the most important phrases commonly used in each country such as please, thank, hello, and good-bye. Non-verbal language, such as a persons body language is different in other countries. One example is eye contact. In some cultures, direct eye contact is considered to be disrespectful and rude. Religion can also be an issue for different cultures. When you are working with other cultures it is disrespectful to inquire about their religion. With some cultures, their religion is their way of life. For example, Muslims pray throughout their work day due to their religious customs. Some customs also dont allow you to work on religious holidays. Personal appearances are also an issue in some cultures, such as your clothing attire, personal hygiene, and how you eat. An example of this is that Muslim women are required to wear a headdress (International Business, 2011).
Sometimes colors, numbers, words, or even phrases can mean different things in different cultures. What one word may mean here in the U.S. be able to mean something totally different when translated in another language. There are behavior, emotional, and cognitive constraints with cultural barriers (International Business, 2011).
Diversity has become important in international scope of business because diversity means there are differences in goals, lifestyles, values, classes, ideas, and cultures. Globalization merges with different cultures for one common reason: businesses. Diversity instructs us to acknowledge differences in other cultures and overlook things such as language, race, color, and culture (Buzzle, 2013).
Diversity issues and cultural barriers can cause global organizations to take a nosedive because they chose to ignore these issues. One issue is known as ethnocentrism which means that each culture views their culture as the correct one and that other cultures are wrong. Having this attitude can cause conflict and can create poor work performance and productivity. This can also lead to discrimination in the workplace (Buchanan, R., 2013).
Political issues with global expansion occur due to technology. Because of the advancements in technology, communication and interaction with countries all over the world have increased. This means that if something happens in one country, it can strongly affect other countries. Two political issues are international crime and terrorism. These issues cannot be resolved solely by each state or country, so global political institutions, such as the World Trade Organization, were made to help set goals to manage these political issues (Yorkshire, T., 2010).
There are economic issues with global expansion. Ecotourism is one of these issues. Ecotourism helps in sustainability but developing countries dont have the capital needed to tourism. An example of a suffering developing country is Cambodia. This hurts the developing countries because they cant grow economically and do not reap any profits. Another issue is pollution. Because some countries are growing fast in the economy, they are creating smog (Thurman, C., 2011). One thing that can help with ecotourism is sustainable tourism. This is a different type of tourism and can give the developing country a better quality of life. Pollution has increased in developing countries. One thing that is being done is enforcing regulations on pollution with laws such as the Clean Air Act. This is a law which controls pollutants such as nitrogen oxide, sulfur dioxide, and carbon monoxide, to name a few (Go Green, 2013).
When viewing the importance and implications of doing an expansion into Germany, there are things to consider. Individuals who work in Germany are protected by labor laws and their wages are higher in Germany than anywhere else in Europe. They have one primary language which