In the digital era, each individual in the world is connected to another person by using several communication technologies like mobile phones and the internet. This situation suggests that telecommunication empowers the way people communicate and helps business to run their daily activities. The variety of communication devices also enables people to experience different way of communication such as voice communication by using telephone, mobile phones, handy talky etc; data communication by typing in instant messaging, SMS (Short Message Service), or sending facsimile; and video communication through video streaming and video conference.
In addition, the popular BlackBerry smart phones represent this breakthrough as they let users to experience many types of communication. Interestingly, BlackBerry smart phones also represent the globalization and the international business as the products and the accessories are manufactured in different countries. Research in Motion (RIM), the BlackBerry’s brand owner, is a Canadian company that manufactures BlackBerry phones in Mexico or Hungary, outsources the accessories from Chinese manufacturers that employ low-wage labors from India and other Asian countries, and sells to the consumers all over the world while outstripping the market share of a Finnish company, Nokia.
The case of mobile phones industry also happens in other industries and it provides us the lesson that to sustain in international marketplace, a company should keeps pace with competitors. In the following discussion, we will elaborate how a company can compete in the international business by advancing not only the product features and specifications but also paying attention to non-technical issues such as languages, cultural factors, and business ethics. Under such circumstances, we need to understand how the international business works in order to keep updated the recent business practice.
The interesting point of the international business is we can learn several methods of business practices from other countries. In Japan, for example, there is a management system, called Just-In-Time, which helps a manufacturer to reduce the costs of production by managing the supply chain effectively. This method is field-proven to support Japanese automobile manufacturers to gain the competitive advantage in the automobile industry in North America and in Europe. Immediately, American automobile manufacturers respond to the challenges by implementing another method of supply chain management. Meanwhile, Volvo, a Swedish automobile manufacturer, chooses to implement the JIT system in their manufacturing facilities.
The question is then what make the JIT system is so powerful? Basically, Just-in-Time (JIT) concept refers to the Japanese management philosophy that has been practiced in the country’s manufacturing companies since early 1970s. The famous implementation of Just-in-Time (JIT) is in Toyota manufacturing plants when the person in charge for managing the supply chain, Taiichi Ohno, also recognized as the father of JIT, develops and refines the the concept in order to meet costumers’ demands with minimum delay (The Institute for Manufacturing, 2008). Therefore, the implementation of JIT will improve several key success factors in manufacturing such as speeding up the time-to-market of products, costs reduction, and manageability of current resources and plan for future needs.
Business Etiquette and Cultural Differences
Another reason to master the international business is to obtain literacy. Understanding the background of partners and competitors from different countries and companies can help us to earn their respect and confidence as well as give us a competitive edge in dealing with them. Dealing a business with Chinese companies is different from Japanese or Swedish, for instance. Although globalization makes many Chinese businesses to align with western conventional methods, Chinese business etiquettes and cultures are still very dominant in their homeland. Thus, building a business in China will require a certain amount of understanding toward their unique culture and business etiquettes within it.
In addition, Chinese business deals usually start from referrals as the business relationship generally starts from the basis of someone's recommendation. Thus, understanding this nature, a businessperson should respect the value of good reputation while making deals with Chinese businessperson.
Other risks in conducting international expansion are culture and language. According to various studies, culture is often an underestimated factor in managing corporate businesses. These studies also reveal that those companies that are unsuccessful to take culture as an important business consideration often find themselves in a disappointing circumstance (Kwintessential, 2011).
Today, however, realizing the global environment we are living in, companies are becoming increasingly cultural sensitive. There are various examples of corporations that hired people from various backgrounds and discover a synergy within their cooperation.
Ethical Issues in International Business
Another important aspect in international business is ethics. Business ethics refers to various moral and ethical problems that can arise in business activities. A study focuses on how each individual involved within trade activities are burdened with special duties and obligations that must be performed. It emphasizes the importance of ethical guidelines in making business decisions. The importance of ethical guidelines has been increasingly popular because of several reasons. First, there is s growing public awareness that societies have the right to expect business to function within ethical boundaries.
This paper only elaborates three aspects of international business: learning curves, business etiquette and cultural differences, and ethical issues. From these three aspects alone, we already learn that international business greatly influences us in how we take advantages of the diverse marketplaces all over the world. In addition, we also learn that cultural factors have significant influences in the successful relationship with foreign partners. The case of Mattel that subcontracts the manufacturing of toys in China and then are forced to recall their Cars toys due to they contain impermissible lead is one example of the impact of cultural factors. It happens because the subcontractor is found to subcontract to other companies due to the relationship of the companies’ owners.