Difficult Hurdle that Companies Face When Functioning Internationally
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Difficult Hurdle that Companies Face When Functioning Internationally
Companies operating in international markets may face difficulties in their functioning for different reasons. The difficulties can be internal or external to internal being the business capacity in terms of workforce, resources, and operational capabilities while the external can be the company environment, the industry, and the trends.
A company functioning internationally faces marketing challenges in introducing products and penetrating new markets. Political and legal forces are certain hurdles since different jurisdictions have different systems. Sociocultural and competitive forces are also facts that the company must be ready to come into reality with (Ball, Geringer, McCulloch, Minor & McNett, 2013). The company must have strategies for the markets it operates.
Managing global supply chain is all involving and even with all necessary requirements, there may still be barriers. The product design on another hand can also be a challenge for the supply chain. Added costs, manufacturing systems and the international logistical connections may not be easy. Standardizing operations can boost the supply chain (Ball, Geringer, McCulloch, Minor & McNett, 2013).
Human resource forces and principles vary across borders. Often than not, the companies will absorb what it gets in the markets in terms of workforce other than bringing a whole new team. Quality and quantity of labor varies across borders and remuneration for the services, not standard (Ball, Geringer, McCulloch, Minor & McNett, 2013). Companies must ensure that the labor conditions of the place it is investing in favors its conditions or can adjust to its needs.
International accounting and finance are as complicated as it is. The data for all segments are required by the managers in their accurate state to inform active decision-making (Ball, Geringer, McCulloch, Minor & McNett, 2013). Multicurrency transactions by international companies present the challenge of reconciling statements. Trying to translate the statements into a unified currency can bring about errors due to currency exchange rates and changing values and costs in different states. The paradox of international accounting standards can be a nightmare for the companies trying to unify the standards. Transferring values and managing finances across borders can also be a hurdle for business due to the many variables in it (Ball, Geringer, McCulloch, Minor & McNett, 2013). The financial structure and management of any company must fit its international operations to achieve success.